Local Government Act 2002 Amendment Bill

on behalf of the Minister of Local Government: I move, That the Local Government Act 2002 Amendment Bill be now read a second time. Local government is a crucial component of New Zealand’s economy. The 78 local authorities make up 4 percent of GDP, spend $7.5 billion per year of public money, and manage around $120 billion worth of public assets. But behind these numbers is the simple fact that most New Zealanders are affected by the decisions and actions of their council on a daily basis, and are certainly affected when they receive their quarterly rates bills.

Because local authorities have such an impact on the daily lives of New Zealanders and because they are charged with spending ratepayers’ money, it is vital that they operate in an effective and efficient manner, and this means being financially responsible, transparent, and accountable to ratepayers. That is why the local government reforms being undertaken by this Government are so crucial to New Zealand’s communities. The reforms will improve the operation of local government in New Zealand. They will focus local authorities on operating more efficiently and effectively by doing things that only they can do. The reforms will encourage local authorities to reduce red tape and compliance, minimise rates for households and businesses, lower council debt, and provide high-quality infrastructure at the least possible cost.

These reforms are not about bashing councils or imposing constraints on local democracy, as suggested by Opposition members. These reforms are about putting in place a framework that means New Zealanders’ rates do not continue to increase, on average, by 7 percent per annum, as they have over the last decade. Over this period local government debt has quadrupled from $2 billion to $8 billion. These trends must be stopped. These reforms are about ensuring that ratepayers are not put in situations like that the Kaipara District Council ratepayers are currently in, where a council with a population of 18,000 has run up a debt of $80 million, and the community is left with crushing rates increases as a result. These reforms are about ensuring that communities can decide how they want to structure their local governance arrangements. Since 1989 no local government reorganisation has taken place under the existing rules. It is a nonsense to suggest that circumstances have not changed in the last 24 years or that communities have not wanted to change. The fact is that the barriers for communities to effect change have been too high.

The Local Government Act 2002 Amendment Bill marks the first phase of the Government’s programme for reform of the local government sector. It amends the Local Government Act 2002 to refocus the purpose of local government, introduce financial prudence requirements, strengthen council governance, and streamline local authority reorganisation procedures. The Local Government and Environment Committee received over 500 submissions on the bill from individuals, organisations, and local authorities. The level of interest was significant.

I am, therefore, disappointed in the Opposition members on the select committee, who turned down an offer to work constructively on this bill, and disappointed about the disregard they showed for many constructive submissions. An offer was made by the chair to put some of the contentious parts of the bill to one side and constructively engage on the rest. Unfortunately, this offer was not taken up. As a result the bill is returned to the House largely unchanged.

Because of the committee’s inability to agree, I will be tabling an amendment during the Committee stage that will pick up on many of the good ideas from submitters and address the issues that they raised. These include making it easier for communities to exercise their vote in a poll by changing the petition requirements needing 10 percent of voters in any affected territorial authority area and increasing the number of days allowed to complete the petition from 40 days to 60 days. Further amendments will provide clarity around the circumstances where the Government might consider using the assistance and intervention framework, and provide for a more flexible structure for communities to reorganise their local governance arrangements, should they wish to do so. The proposal will enable some regions to utilise a two-tier structure that will deliver the most effective local governance for the community.

The few amendments that the committee has recommended clarify the bill’s intent and improve its operation, and the Government will be supporting them. One area of the bill where the Government will not be proposing changes is around the purpose statement. I have carefully considered the differing views on this issue, but I firmly believe a more focused mandate for local government is necessary. The intention is not to prescribe what local authorities can and cannot do, but rather to better define the appropriate scope of their activities. Individual local authorities and their communities will decide what activities matter to them and how much they are willing to pay for them. The new purpose statement will encourage local authorities to take a fresh look at what they are doing and why, and to seek their community’s guidance as to what their current and future needs are.

This bill is an important milestone that will improve the efficiency and effectiveness of local government. It will provide the right settings for the local government sector to play its part in growing New Zealand’s economy. It will develop vital reforms to benefit our communities, businesses, industries, and households for many years to come. I commend the bill to the House.

I rise to speak to the Local Government Act 2002 Amendment Bill. This bill is a disgrace to this Parliament. It is nothing more than a gratuitous attack on local government, and it has been inspired by a sacked Minister, Nick Smith, who based his so-called reforms on a lot of lies, misinformation, and a handful of egregious examples to denigrate local government and to prove a political point. The political point was that he did not like the 2002 Act because the Labour Government passed it.

This bill, I have to say, was opposed by the majority of submitters who came to the Local Government and Environment Committee. One after another they lined up to oppose the change to the purpose of the Local Government Act 2002. Local government itself, NGOs, Grey Power, the Law Society, individuals, and many others lined up to oppose the change that this bill is making to the purpose of local government. I have to say that none of their submissions will be listened to. I see Colin King looking at me. Colin King comes from rural provincial New Zealand, and I say to Colin King that the mayors and the local authority people in rural provincial New Zealand are disgusted at what this Government is doing to local government. Many of them have worked hard in their local communities and provide services that those communities want, and for very little reason they are being told that there will be a change to the purpose of local government and that they have to change what they are doing.

We strongly oppose this bill. I have already tabled two amendments, and I thank my colleague Charles Chauvel, who, when I asked, immediately had them written. I had them tabled so we can show this Government that we will not support these changes, which are based not on facts or evidence but on a whole lot of myths and a story that has been spun by Nick Smith.

The first of the two amendments is to restore the four well-beings back to the purpose of the Local Government Act 2002—the four well-beings of social, environmental, economic, and cultural, which have been in the Act since 2002. I will talk more about that in a moment. The second amendment will restore the requirement for a poll of electors in an affected area to be held when the Local Government Commission decides on a final proposal for local government reorganisation. The foundation stone of democracy is that you allow local people to have a local say.

We oppose this bill on six major grounds. The first is that there is absolutely no evidence—no evidence—provided by the Government that we need to change the purpose of the Local Government Act 2002. There was no evidence provided that we should get rid of the four well-beings.

💬 Hon Simon Bridges: I would’ve had a list of 10 if I was Opposition.

And let me tell the member, who knows nothing about this bill, otherwise he would not be chirping, to go and read the regulatory impact statement from your own Government department, which wrote on this bill—and I will read it—“There is no clear quantitative evidence to suggest that the [Local Government Act 2002] has resulted in a proliferation of new activities, or that local government is undertaking a wider group of functions.” The very reason Nick Smith gave for changing the purpose was that local government had got way outside its scope and was providing services it ought not to. There is no quantitative evidence, and that comes from the Minister’s own department.

I had a survey of local government around New Zealand and asked what it had added to its core services since the passage of the 2002 Act. One council—one council—replied that it might be doing one thing that might not be considered a core service of local government. There is no evidence to change the purpose. If a Government ever listens to submissions, if it takes even the slightest bit of notice of submissions over—

💬 Hon Simon Bridges: We’re always listening.

Always listening. Well, I will look to see whether the member for Tauranga votes with this side of the House on putting back the four well-beings. The member for Tauranga needs to know that nearly every submission to the select committee said to leave the four well-beings alone. Local Government New Zealand itself, at its conference in Queenstown this year, voted unanimously to leave the purpose of the Local Government Act alone. Will the Government listen? Mr King, have you had any influence on the Government? Have the rural members had any influence over this Government? I predict, not a dicky-bird. They will not change a thing when it comes to the purpose of this Act.

The second thing is that it has been based on misinformation, and it has been based on a very small number of egregious examples as to why we should change local government. Some of those examples were around the debt and the cost of local government. We have been provided with information as recently as October 2012 from research that was done by the New Zealand Institute of Economic Research, entitled Is Local Government Fiscally Responsible?. That report states that the data from the last 10 to 20 years suggests that the local government sector, as a whole, has not been fiscally irresponsible. Rates and spending have risen, but the increases are not startling relative to GDP or property values. At an aggregate level, investment and borrowing cannot be said to be irresponsibly high. Debt levels—debt is low relative to assets. Capital spending is steady relative to the asset base. Debt servicing costs are at a responsible level. That is not the Opposition saying that, that is not local government saying that; that comes from work—comprehensive work—done by the New Zealand Institute of Economic Research. That blows out of the water this argument that local government has been fiscally irresponsible and that it needs to be reined in.

The third reason is that this bill has been rushed. It was written before there was sufficient evidence gathered to support the changes, and that is in the regulatory impact statement from the Department of Internal Affairs. It said there is a risk as to whether the proposals will even work. It said there would be significant sector reaction, that the time frame in which the proposals had been developed has restricted the ability to assess multiple options, and that the assumptions have not been tested or have been only partially tested. That is what this bill is based on—partially tested or untested assumptions. It has not been properly thought through. It is based on the idea of Nick Smith, who wants to punish local government.

The fourth reason is that the whole bill has been done back to front. It is an eight-point plan from the National Government called Better Local Government. The first four parts of its programme are in legislation; the last four parts of its programme are to do research, to have a task force, and to look at what changes are needed to be made in local government. So we put the legislation in first, and then we find out what we really need to do. I have never seen a more back to front way of undertaking legislation.

The fifth reason is that anti-democratic changes are being made in terms of the removal of the ability for local people to have a local say on whether they will be amalgamated with another, bigger local authority. We are opposed to weakening local decision-making by local people, and many, many submissions were also strongly opposed to it.

Finally, we believe that this bill leads to far greater interference in local government by the Minister than is warranted by the evidence. We have only two forms of government in this country: central government and local government. We are not bound up with many Houses and many different forms of government. It is very simple in New Zealand. We are not over-governed, and we rely on local government to do the job at a local level. It does a good job by any measure, and this interference is unwarranted. We will strongly oppose this bill, and we will be joined by thousands of New Zealanders who agree with us.

The member who has just resumed her seat, the Hon Annette King, is very concerned about what the local government sector wants. Let us, though, talk about what ratepayers want. Ratepayers want reasonable rates, and they want those rates well spent. Ratepayers want their local authority to provide a good supply of clean, safe drinking-water. They want reliable stormwater and reliable sewerage. Ratepayers want footpaths, they want kerb and channel, and they want their potholes fixed. Ratepayers want reasonable library charges, they want meeting halls, they want swimming pools, they want recreational facilities, they want their building permits and their liquor licences processed in an efficient and timely manner, they want playing fields, and they want public gardens. Ratepayers are never happy with the sum on their rate demand—that includes me and probably my colleagues. And they are very clear: they want their rates spent responsibly, and if they choose to, they want to have a say on how that money should be spent.

The Local Government Act 2002 Amendment Bill delivers the framework for all those services that the ratepayers want. The bill draws the focus back on to providing local infrastructure, local public services, and local regulatory functions. That is what ratepayers want. The refocusing of the purpose of local government has caused much consternation within the local government sector, with the misinformed view that removal of the four well-beings will prevent the councils from doing anything new, or that if they propose a new activity, it will tend to be endlessly challenged through the courts. Well, my belief is that that expressed fear is more about what they want, rather than what is good for their ratepayers.

Section 11A of the Local Government Act 2002, “Core services to be considered in performing role”, states—and I will read it—“In performing its role, a local authority must have particular regard to the contribution that the following core services make to its communities:”. They are listed as network infrastructure, public transport services, solid waste, the avoidance or mitigation of natural hazards, and libraries, museums, reserves, recreational facilities, and other community infrastructure. Section 11A of the Local Government Act 2002 is not amended by this bill, and those expressed fears from the local government sector are unfounded. The local government reforms will provide clarity and efficiency around the role of the councils, stronger governance, and more responsible financial management.

Local government, like central government, needs to deliver better services to all New Zealanders, whether they are taxpayers or ratepayers, within tight financial constraints. The Local Government Act 2002 Amendment Bill delivers, and I commend it to the House at its second reading.

I want to pick up where the Hon Annette King left off, actually, because it was an excellent contribution she made. She talked about local government in this country, and she made the point that local government in New Zealand basically works. It is a part of our society, our nation, and our system of Government that functions effectively, and I think any reasonable or objective person would agree with that. Councils, by and large, are close to their communities. Mayors, councillors, and council staff are people who are, generally, motivated by a sense of civic service and of public-mindedness. There is certainly no glamour or wealth to be had from a career in local government. Local councils do what their communities require of them. There are a few egregious examples. We know that the citizens of Kaipara have been unduly saddled with a debt because of the blowout of cost on the Mangawhai Heads water treatment scheme. But, generally—and we know this from a number of credible studies—local government in this country is run well, it is administered sensibly, and its finances are not out of control.

So I ask this Government, and I ask the National Party members on that side of the House, what is it with you people? Why are you messing with a part of our system of government that basically works? What is it that you do not like—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! Order!

Sure. What is it with these people? What is it about them that makes them want to stick the boot into local government and to put up a bill like this, the Local Government Act 2002 Amendment Bill, which is a shallow, populist, political attack on an institution in our society that is valued and that serves local communities? I do have a theory about why they are doing this. I do have a theory, and I will seek to sort of draw that out over the next 5 or so minutes.

If the National members were being honest with the people of New Zealand about why they have brought this bill to the House, and why they are making such an unwarranted and unjustified attack on the institution of local government, they would say something like this: “Look, we know that local government is working fine. Everybody agrees that the finances are well managed. But we know that people out in the public are concerned about their rates, so we are going to cook up a bill and justify it with shonky numbers as a way of somehow trying to say to New Zealanders that we are on your side and we know that you don’t like to pay the rates bills.” I do not mean you, of course, Mr Assistant Speaker; I mean the members on the National side of the House. That is utterly dishonest.

This bill is based on a lie. Annette King proved the point by reference to a number of credible reports that have, I think, made the case very persuasively that there is no evidence to back the claim that local government has expanded its mission and its remit, and that it is doing more things than it used to before the 2002 legislation came in. Firstly, there is no evidence that local government is out of control and doing a whole lot of things that it should not be doing. Secondly, there is no evidence that the spread of activities that local government is undertaking has anything to do with the increase in debt.

All of the credible analysis and data in the public domain show that there are two reasons, actually, that debt has increased. One is the infrastructure deficit.

💬 Hon Annette King: Who they were asked to—

That is right, and local councils have been required by central government to address the infrastructure deficit. And second is the number of unfunded mandates that have been imposed on local government by central government. Even former local government Minister the Hon Rodney Hide had the honesty to admit, actually, that that was the reason for the increase in debt and the increase in council spending.

This bill is based on a lie. Nick Smith has come to this House, he has cooked up a shonky campaign to suggest that councils are out of control—they are charging too much in rates, they are borrowing too much, they are racking up all this debt—and that it is because councils are doing all sorts of things that they should not. So it is based on a lie about what the problem is, but it is also based on a lie about the solution. This bill will do nothing to reduce council rates. There is nothing in this bill that will make a difference to the rates bills that go into the letterboxes of New Zealanders all around this country. It is an utterly dishonest bill and it is shallow populism.

It actually would not be so bad if the Government had applied the “do no harm” test—if this was just, in fact, a shallow piece of electioneering, trying to make some kind of rhetorical point, pretending to make a difference and do something about rates, but actually it will do some harm. It undermines councils, local government, and local democracy around this country.

When this bill came to the House, we took one look at it. On the face of it, it looked like the bill was harmful and that it took away the democratic rights of communities to have a say on amalgamations of local government. We said that the narrowing of the purpose of local government and the abolition of what we have come to know as the four well-beings—economic, social, cultural, and environmental well-being—and replacing them with a narrow definition based on public services and cost-effective infrastructure did not, on the face of it, look good.

But you know what? You go to the select committee, and you hope that debate, and evidence, and public submissions—you are in the fresh light of day, and you hope that you will look at the bill, give it a good scrutiny, and then be prepared to revise your view and come back to the House with a more informed perspective. But it was overwhelming that at the select committee one submitter after another came to the select committee and said: “Don’t do away with the four well-beings. These are the negative consequences for our communities. Don’t do it.” Councils said it unanimously, and dozens and dozens and dozens of other submitters came along. The only people, by and large, who agreed with the Government’s proposal to narrow the purpose of local government were a handful of organisations that have an entrenched political agenda about small government and reducing the rates. By and large, everybody else said: “Don’t compromise the ability of our elected councils to meet the needs and aspirations of our communities.”

That is one of the things that I struggle to understand about the National Party’s policy in this area. It is the rural and provincial councils in areas by and large represented by National MPs that are most vociferous about the fact that they need the ability, the freedom, and the flexibility to respond to the needs of their communities. I was in Ashburton talking to the council there about the way that the Government is cutting the funding for local roads in that part of the South Island. They told me that the council runs a couple of medical centres, clinics, in Methven and Rākaia, which, they believe, could be jeopardised by the change to the purpose statement of local government. If the local council did not run those clinics, no one would, and the people of that community would be far worse off. The Government is not prepared to provide those services; it is willing only to mandate local government to do what it wants to do. It wants to stop local government having the flexibility to respond to the needs of their communities.

Why does the National Party hate democracy so much? What is it? What is it afraid of? What is going on with the members on that side of the House, when every year that I have been in this Parliament they have come to this House with some kind of attack on the democratic rights of local communities? They denied Aucklanders the right to a referendum over the establishment of the super-city, in the face of massive public protests. They came here and abolished democracy in Canterbury, and they have recently suspended for several more years democratic elections for Environment Canterbury. We have seen in every single local government bill that has come to the House in the last 4 years that they have wound back the democratic rights of local communities. The provisions in this bill that take away the right of communities to vote up or down an amalgamation proposal are nothing more and nothing less than an attack on local communities. It makes it very clear that, in spite of John Key’s promises that there would be no forced amalgamations, the agenda of this National Government is to force amalgamation through, whether communities like it or not. Increasing the number of days that communities have to get a petition together is not going to solve this problem.

This bill is an attack on local government. I do not know why the National Party has such a problem with local communities and local democracy, but it is getting a very bad name.

National does not understand, respect, or trust local government. That is obvious with this eccentric bill, the Local Government Act 2002 Amendment Bill. It is obvious in the lack of any robust analysis supporting the changes to the substantive Act, and it is obvious in what the Government has done in Canterbury. The Local Government and Environment Committee was hearing submissions in Christchurch this morning. We got a palpable demonstration of the frustration and sense of disempowerment that Canterbury residents feel through the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act 2010 and the new Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. It is the same sense of disempowerment, of Wellington coming in and trampling on local communities, that is at the heart of this local government amendment bill.

Local government should be accountable primarily to its communities through the consultation it does, through its councillors and board members representing their constituencies, and through a right to vote every 3 years. It is this bill, the removal from the purpose of local government of the promotion of the four well-beings, and the increased powers of ministerial interference that fundamentally change the relationship that local communities have with their councils. It puts those councils under Wellington’s thumb, and it will certainly have councils and their staff looking over their shoulders to what the Minister thinks in Wellington. That is one of the reasons why the Green Party is opposing this bill.

As a new member of Parliament, I had understood that select committees were the workhorses of Parliament, and that they were the one place where you could get some sensible, constructive debate, rather than the sometimes purely oppositional debate that we get in this Chamber. There were more than 510 submissions from individuals and organisations on the bill. People took a lot of time to write thoughtful, constructive submissions, and many people appeared before the Local Government and Environment Committee’s hearings.

The vast majority of submitters opposed the bill, yet have there been any significant changes to the bill? No. This failure to respond to community views undermines trust in democracy, and undermines trust in Parliament, when the Government is so unresponsive to public opinion. But it was certainly a privilege to hear those submissions from councils, community organisations, residents’ groups, and local board members, outlining the scope of activities that councils were involved in, and the way in which small amounts of council funds could often leverage work that community organisations, early childhood centres, and artistic organisations were doing in the community to promote our well-being. It was all about creating attractive, safe, and healthy places to live, and that is what the promotion of well-being is all about.

I want, on behalf of the Green Party, to pay tribute to all of the work that councils, councillors, and their staff are doing throughout New Zealand to create good places to live. That is the benefit of having a purpose that is focused on the promotion of community well-being.

Hurunui District Council was one of the many councils that came along to describe the breadth of its services, the way in which it responded to community needs, and the way in which that is imperilled by the change of purpose. As Mr Twyford mentioned, Ashburton runs health centres. So does Hurunui—it has four health centres. How can these be described as core services or core infrastructure? Yet they are providing for a fundamental community need because they attract general practitioners and health professionals to a large rural district, and they make sure, by being there, that residents have easy access to those health services. That sort of service—and the housing for elderly that Hurunui and other councils provide—is potentially jeopardised by the change in purpose and by commercial organisations being able to challenge the direction of council funds to things such as health centres.

Hurunui has another example. It owns and manages the Hanmer Springs Thermal Pools and Spa. It is the revenue from that business, which again is not a core piece of infrastructure—it is not a core service—that significantly offsets rates. If a commercial provider wants to buy up that complex, can it use the change in the purpose that this bill is promoting to push the council to sell up?

The Green Party opposes the bill also because of the substantially increased powers for the Minister to meddle in local government, as the Government has done in Canterbury, and to undermine democracy by doing that. Just as this National Government is selling off our State assets—our energy companies—there is a real risk that a National and ACT Government would use the increased ministerial intervention powers in the bill combined with the financial performance benchmarks to pressure councils, particularly the Christchurch City Council, to sell off their assets to avoid any increase in rates.

The Minister of Local Government, David Carter, in around May in an interview on Q+A talked about the ability of central government to interfere with local government decisions around rates as “very, very limited”, and that “we wanted more ability for central government to work more closely” so we could manage some of these things. He went on to promote the sale of shares in airport and port companies. That is the ideological agenda behind the bill, to put pressure on councils through the ministerial powers of intervention and through the performance benchmarks to actually sell a lot of their assets. One of the reasons for that is the very loose way in which “significant problem”, which is the trigger for ministerial interference, is defined. It is very, very broad.

One of the other reasons the Green Party opposes this bill is the agenda of super-sizing councils, and the provisions in the bill for reorganisation. Again, those deny democracy, because they deny communities the automatic right to vote in any reorganisation or amalgamation proposal. They put the burden on the community to have a petition signed by 10 percent of electors before there can be a poll, and when there is a poll, it has to be across all of the area affected by the amalgamation, not each individual area. As we saw in Nelson and Tasman, where individual residents were able to vote, they sent their opinion loud and clear, and they did not support amalgamation.

It is this agenda for streamlining proposals that actually cuts the voices of local communities, and their ability to have an automatic right to decide their governance structures for their communities. This Government has a think-big agenda in local government. It has an agenda to take the “local” out of local government and to have it dominated by Wellington and the Wellington agenda. It is an agenda that we oppose.

As other members have said, the bill is back to front with the changes it is making, because we have not seen the Productivity Commission review. And when the majority of public submissions were against the bill, it is a breach of trust for the Government to continue with the bill without making any substantive changes to it, without reinstating the well-beings, reducing the ministerial powers, and allowing an automatic right to vote on any amalgamation proposal.

We heard a lot of submissions on this bill, the Local Government Act 2002 Amendment Bill, in the Local Government and Environment Committee, and I congratulate the chair, Nicky Wagner, on conducting that in an appropriate fashion.

It was a very thorough process, and we heard a lot of incumbent mayors and councillors coming along to tell us—in the main, their message was: “There is no problem. Leave us alone. Let us continue what we are doing.” We also heard from many groups of ratepayers, and they had a different story. I remember the Howick Residents and Ratepayers Association. An elderly woman at the select committee hearing was in tears about the relentless increase in rates that she has had to pay on a fixed income, and that she would be forced from her home. So I am bound to say I had a lot more sympathy for those ratepayers.

💬 Hon Annette King: There were very few of them who came to the select committee.

There were quite a large number of them. Those struggling ratepayers have no choice. They have to pay those rates.

I am amazed to hear from members on the other side of the House that there is no issue. “There is no issue.”, they keep telling us. Well, since 2002, when these mysterious four well-beings came into place, council debt has quadrupled from $2 billion to $8 billion, and over the same period council rates have gone up on average 7 percent per year, far outstripping inflation. They might say: “Oh, well, it’s only 7 percent.” Well, inflation has been a lot less than that, and we cannot continue to do it.

We hear the defenders of big spending all say: “Oh, there’s no evidence that these four well-beings have led to an expansion into new areas.” Well, if that is the case, if they want any evidence, take a look at this document I am holding. This document is not a German art photo book. It is the Auckland Plan. I will briefly, if I can indulge the House very briefly, just tell members to look at the sorts of things they are getting into here: ensuring all Auckland children can have access to a primary school within 30 minutes. Well, that is crucial stuff! Thank goodness we have got Auckland Council focused on that!

That is why we need to get this focus back, and that is why this bill is the sort of stuff—[Interruption] Well, I think we need to move on, but it is important that this bill is passed as quickly as possible. I stand for this bill, and I think it is an appropriate one that will help serve the communities of Auckland, and throughout New Zealand, in local government in the best possible way. Thank you very much.

I take a call on behalf of New Zealand First on the Local Government Act 2002 Amendment Bill. We also oppose this bill. I would like to quote from John Key, MP and National Party leader, on 28 July 2008—6 months before he became the Prime Minister: “Right now, we have a serious backlog in infrastructure investment. Much of our infrastructure needs upgrading or replacing. Some is at the end of its expected lifespan. Low-quality infrastructure has become a bottleneck to a growing economy.

Local authorities have identified in their Long Term Council Community Plans a required investment of around $30 billion over the next 10 years. Most of this goes to pay for roading, and the so-called ‘three waters’: drinking water, waste water, and storm water. Central government is also facing an infrastructure spend of about the same magnitude over the next decade. This makes infrastructure a $60 billion issue, and we have to have the right approach to dealing with it.

It’s my view”—and this was the view of John Key MP, leader of the National Party, prior to becoming the Prime Minister—“that central government has much to learn from local government”—

💬 Hon Member: What?

—much to learn from local government—“when it comes to infrastructure planning, investment, and management.”

💬 Phil Twyford: Who said that?

Who said that? One Mr John Key, as the Leader of the Opposition. But it gets worse for the National Party. He then went to subsequent Local Government New Zealand conferences—not just in 2008, but in 2009, 2010, and 2011, and, I think, even in 2012, but to a much lesser degree.

Mr Key said that a partnership was required with local government in New Zealand if this country was going to pick up and lift its economic performance. He talked about a partnership between local government and central government. What happened? Local Government responded to the former Opposition leader, Mr John Key, in July 2008 and it lifted its performance, and it carried on lifting its performance in order to help meet the infrastructure deficit in this country. What happened? Of course, the Shand report—the report from the Local Government Rates Inquiry—which came out in around the same period, 2006-07, said that the New Zealand local government authorities had lazy balance sheets and that they should leverage their balance sheets to a high level.

John Key reaffirmed the fact that they had lazy balance sheets and should leverage their balance sheets higher. So what did they do? They had balance sheets showing only $2 billion in debt—only $2 billion—with close to $100 billion in assets. So they have got $100 billion in assets—and, sure, a lot of those are roads and footpaths—and $2 billion in leverage, and the Government is saying “We have got a $60 billion infrastructure shortfall.”, and the Prime Minister is saying “We have got to do something about this to lift our economic performance.” Then the Shand report comes out and tells all the councils “You should leverage your balance sheets.”, and they do. They respond to all that, and they take their balance sheets from $2 billion to $8 billion, over a period of about 9 years, while this Government takes its balance sheet from about $16 billion to $55 billion in deficit in 4 years.

In half the time that local authorities took their balance sheets from a $2 billion deficit to an $8 billion deficit, this National Government, in 4 short years, went from $16 billion - odd to $55 billion in deficit. And it gets worse—it gets worse—because it is projecting to go to a $75 billion deficit. The Government is criticising the councils, which are trying to meet the partnership deal with central government—the challenge laid down by John Key, the Leader of the Opposition, in July 2008, as we all remember. They responded to the challenge, and in the meantime the Government increased its deficit so many times more. It is just unbelievable. Yet local government is the one that is being criticised. Well, quite frankly, I am appalled.

Further, at the local government conference this year, 78 councils—as we heard before, and I recall this—voted against what the Government was doing in terms of removing the purpose of the Local Government Act around the four well-beings. I want to quote from Lawrence Yule, the president of Local Government New Zealand.

💬 Hon Annette King: He’s a National Party supporter.

He is a good National Party supporter and possibly a future candidate for the National Party in the electorate of Tukituki—maybe, but who knows?

💬 Grant Robertson: Foss is gone.

Exactly. But anyway, Lawrence Yule, a good National Party man, a supporter of the National Party, said at this year’s conference: “It’s been a challenging year—for Local Government New Zealand and for our sector. We all look at ways of delivering more for less, and being more efficient and effective.” And councils do. I can tell you, having been a councillor and a mayor and a community board member, that councils do. They are always looking to try to deliver more efficiently.

Lawrence Yule goes on to say: “Our sector is doing its bit to make sure New Zealand Inc is a success. Local government and central government are partners in this journey. Local Government New Zealand does have some concerns with the Government’s Better Local Government reform agenda. But there are also some areas we agree with central government on.”, such as the regulatory area. We all agree that the regulatory side can be tidied up and it can be improved.

We all agree there are efficiencies to be made in some areas. “But”, he says, “Local Government New Zealand questions the proposal to refocus the purpose of local government in the Local Government Act 2002 Amendment Bill with the removal of the four wellbeings. ... We believe this fundamentally undermines the integrity of the relationship local authorities have with their communities.”

💬 Hon Annette King: Did Lawrie say that?

A good National Party mayor and future candidate for the National Party in Tukituki said that. Further, he says: “Part of the purpose of the current Act ensures outcomes must be delivered to communities. If one of the reasons for the changes is to limit the role of local government then we question this approach.”

They question that approach. So even National’s own supporters are questioning them. A lot of the mayors of the 78 councils around New Zealand—and I can tell you that a lot of them are National Party mayors—are saying that you are wrong. I look across at the benches there and I count the number of people who have had involvement in local government. I am just trying to think whether Maggie Barry did. No, I do not think so. Did anyone on the backbenches? No, I do not think so. Did anyone over here? I do not think so. How many of them have actually had local government experience? Yet they come out and think they are experts. They think they are experts. Well, I can tell you that if you do not understand what a community is about, if you do not understand what a city is about, if you do not want to understand what a district is about, and if you do not understand that here in New Zealand—

💬 Maggie Barry: I raise a point of order, Mr Speaker. I do not know that you need to be on the receiving end of so much of this nonsense.

💬 Mr DEPUTY SPEAKER: The member will just mind his pronouns.

Thank you very much, Mr Deputy Speaker. I am sure that you, Mr Deputy Speaker, do know what a city is about and what a region is about and what a district is about. At the end of the day, we have only two tiers of government—

💬 Phil Twyford: I raise a point of order, Mr Speaker. I am not sure it is within the Standing Orders for the member for North Shore to refer to Mr Williams’ speech as nonsense in a point of order, is it?

💬 Mr DEPUTY SPEAKER: Order! That is a debatable point. I am not upholding that.

💬 Phil Twyford: But to describe another member’s speech as nonsense in a point of order is, in fact, a debating point itself, is it not? It is not a point of order.

💬 Mr DEPUTY SPEAKER: I think the score is now about even.

What I can say, from real experience, is that if those members do not understand that the second tier of government—and we have only two tiers of government in this country: central government and local government—is the social fabric of our communities, the glue between those communities, and the catalyst for so much happening in our communities, then we are going to live in a very sad society. Those members need to understand that if the second tier of government in New Zealand is not able to continue delivering for the needs of communities, whether they be rural communities, city communities, or small townships, then we are going to live in a very sad society in this country. If those members do not understand that, we will live in a very sad society.

Sure, we can all find efficiencies and we can all find savings, but it is not the time or the place at the moment to start gutting communities, gutting local authorities, and gutting local democracy. We went to Christchurch today and we saw how democracy is being gutted down there. This is another case of central government, of the National Government, putting the knife and the boot into local government. We do not need it, and the people of New Zealand do not need it either.

I raise a point of order, Mr Speaker. It does not seem right that there are no Ministers taking calls in this debate—

Order! And it is certainly not right that the member parades that as a point of order. That is not right either.

To the member who has just resumed his seat and took a call on this, Andrew Williams, I say that we need to put in context his contribution. He was so successful in his previous role! He was what? He was the lowest-polling mayoral candidate, below everybody else. Nor was he elected for the local health board. So when we look at his authority, when we look at his ability to actually convince the people of the North Shore of his enormous knowledge of local body politics and his enormous authority, he fails utterly and dismally. Let the record stand that this is not the kind of man whom people listen to or believe in. That was proved on the North Shore. He is hardly an authority.

When we look at what this bill, the Local Government Act 2002 Amendment Bill, is trying to do—others have outlined its provisions—we see it is very much about the ratepayers and about the extraordinary amount of extra spending that has come in since 2002. We campaigned consistently against it, and we will continue to because of the extraordinary amount of extra spending that has come into effect since the four well-beings came in. In the past 10 years, council debt has quadrupled from $2 billion to $8 billion, and council rates have gone up on average by a very large amount indeed, 7 percent a year, far outstripping inflation.

This has to stop. The ratepayers of New Zealand deserve better, and this Government is going to deliver these reforms. They will be able to make councils more fiscally responsible. They will strengthen council governance provisions and streamline council reorganisation processes. This is not a difficult concept to grasp. I believe that many of the councils and local authorities are doing a good job and will do an even better job once these go through.

I must say too—it is irresistible, really—that when I listened to the phrases dripping from the lips of the member for Te Atatū, I thought “ ‘Shallow populism’—oh, really?”. That is something he knows a great deal about. “Pretending to make a difference”—that is also an area of expertise. Perhaps when Phil Twyford is no longer the member for Te Atatū, he can pursue a career on the stage because he certainly does a very convincing line in faux outrage. I commend this bill to the House. Thank you.

There was some controversy earlier in the process of the Local Government Act 2002 Amendment Bill about what was in and what was not in if the four well-beings were out. What could local government do? John Key was asked a number of questions about it, and he said that the Hamilton V8 Supercars were out. That was not good enough. That was out. But, surprisingly, he said that the Ellerslie Flower Show was in. We can now reveal that Maggie Barry finally has an achievement in politics. The Ellerslie Flower Show was in, because Maggie Barry lobbied for it. That was it. Her career is complete, because that is the greatest contribution that we will get from Maggie Barry in this debate.

From time to time in this House National Party members bellow across to us that we are the party of big government—that we are the party that wants everything to happen in Wellington. This is what happens. Maggie Barry occasionally raises that issue, that it is big government on this side of the House. Well, all I have seen from National members when it comes to looking at local government is their desire to take control away from local communities and drag it back to them, here, in Wellington. As Phil Twyford said, every year since we have been MPs in this House this National Government has said: “We’re going to take power off local communities, drag it back into Wellington, and be big government over there.”

There is no better example of that than this Government’s cancelling of the elections for the Canterbury Regional Council, or Environment Canterbury, and then for it to come back and extend that out—to say that the people of Canterbury will have no say over their representation at a regional council level until at least 2016. That went against the advice of officials, it went against the advice of the commissioners themselves, and it went against the will and interests of the Canterbury people. But that is the kind of big government that that party over there thinks is the right thing to do: to centralise that power, and take it off local government. We saw it with Auckland, we have seen it with Canterbury, and now, in this bill, we see it again.

Let us be absolutely clear. If we want one specific example of whether this Government actually believes that local residents should have a say over their own communities, how is it right to take away the right to an automatic referendum where there is amalgamation? That is what this bill does. It says that the National Government knows best. The National Government knows best, and local people do not have a right to an automatic referendum if there is to be an amalgamation. That is taking away democratic rights. That is the pattern of this Government, and that is what this bill does.

Other colleagues have talked about the importance of the four well-beings, and I just want to highlight some of the activity of local government that this Government could take a look at. The work that the Mayors Taskforce for Jobs has done over a number of years has done far more for growth and employment, far more for opportunities for young people, than any of those members over there will ever be able to claim credit for. Mayors like Dale Williams, and Bryan Cadogan down in Clutha district, have actually got in there in their communities. These are people who I think I would say are soft Tories. That is a nice term; it is a term of endearment. Local government has a lot of people who are supporters of the National Party in it, and this Government comes to this House today with this tawdry bill to trash those people—people like Dale Williams, like Bryan Cadogan—who have done the work to get people in their communities into jobs and to get young people into training. Yet this Government says: “We’re better at that. We’re better at that; that’s not what local government should do.” Well, actually, the Government is not—7.3 percent of this country’s workers are unemployed. There are 175,000 people out of work and looking for jobs. This Government has got no idea of how to make sure that there is employment growth, yet it comes to this House with a bill that says: “We’re going to take away the four well-beings. We don’t think local government should be responsible for economic, social, cultural, and environmental well-beings.” That is shameful.

Most of the submitters on this bill came to the Local Government and Environment Committee and asked: “What are you doing, removing those four well-beings? What are you doing, taking away from councils the ability to deliver to their communities the services that their communities want?”. No, National knows best. The National Party era of Wellington-based big government is alive and well, as it takes away the rights of New Zealanders at the local level.

It has been said by other speakers in this debate before that this bill is based on a lie. This bill is based on a lie. My colleague Annette King saw that, because she saw that the statistics that Nick Smith put up alongside his Better Local Government paper were wrong. They were shonky. They were not accurate, and all of a sudden they disappeared. Annette King wrote to David Carter and asked what was going on there. David Carter wrote back to Annette King, and this is what he said to her: “You note that the Department has removed the tables from its website. As noted on the website, this was because there were issues with the data”—issues with the data—“both in terms of its accuracy and in terms of the picture that was being given for some councils.”

I will translate for the members. The “issues with the data” were that it was wrong. It was a lie. It was wrong, and that is the fundamental basis for this bill—perpetuating a lie about what local government has been doing. So not only does this bill take away from local communities the ability to decide what they will do but also it is fundamentally based on a lie. It is fundamentally based on undermining the ability of local communities to decide what they do.

I want to return to the question of amalgamations and the role of local communities in what happens in amalgamations. In the community I live in, in Wellington, there is enthusiasm in some quarters to create some kind of larger, super-city - type structure. That debate is worth having, but what is wrong is that when the Local Government Commission, under the provisions of this bill, decides on some kind of amalgamation process, the people of this region will have 40 working days to try to get 48,000 signatures to actually have a referendum on a proposal—to actually have the right to have a say. That is an unacceptable limit on the rights of local people to decide how they are governed, and there is not much that is more fundamental in our community than local people being able to decide how they govern their communities.

Once again, the National Party comes to this House and says: “We know better than local communities. We will control how those amalgamations take place.”, and the notion that there will not be forced amalgamations—a commitment made by John Key—is thoroughly undermined by the provisions of this bill. The agenda for local government that is being driven by National is one of greater central control, and I do believe that it is looking towards forced amalgamations.

Throughout the community, people have looked at this bill and said that it is wrong. It is not just the mayors, as some of the members opposite would say. It is local communities, which know and respect their councils, but it is also fair-minded people who look at this and ask how it is fair: Christine Cheyne, who said that this would be an ad hoc and fragmented arrangement; Rod Oram, writing in the Sunday Star-Times, saying that it was wrong-headed, illogical, and based on “gross distortions of the truth” and “a handful of egregious examples”. That is the basis for making law that will define how local communities are organised and governed in the future in New Zealand—on the basis of illogical, wrong-headed arguments and gross distortions of the truth.

This bill is disrespectful to this Parliament, and it is disrespectful to the people and communities of New Zealand. It takes an approach that is arrogant, that is undemocratic, and that gives the lie to the belief that New Zealanders would have that they have control over how they are represented. This Government is showing no respect for democracy at a local level throughout New Zealand. National is the party of big government and control when it comes to how New Zealanders are governed at a local level. This is a shameful bill, and it should not pass.

This bill, the Local Government Act 2002 Amendment Bill, should pass, and it is certainly not a shameful piece of legislation. We have heard a lot of talk about democracy and constitutional stuff, and it has to be said from someone who knows a bit about constitutional stuff—because, you know, I use the technical term—it is absolutely all made up. It is wonderful, “shameful” rhetoric, but to use those words “illogical”, “wrong-headed”, and “arrogant”—those are the arguments that we have been hearing from the Opposition.

My electorate—it is just one part of Auckland, Tāmaki—is facing almost an average of 7.6 percent rate increases year after year; the most was 10 percent. To fund what? To fund documents pages long with sort of waffling text. Others, I think, on the waste management of Auckland at the moment want to integrate metaphysical and religious reasons for how we should be running our waste in Auckland. That is not what government is about. We have heard about the importance of democracy. We in the National Government have been listening to the people in our constituencies across New Zealand, who have had enough of councils running around, not following their core purposes, and spending as if their ratepayers, their taxpayers, are eftpos cards.

I return again to my electorate. They have said to me, person after person, week after week, that they have had enough of local councils continuing to spend without restriction and to spend in ways that are not within the core purposes of what councils are about. So this is a democratic action. This is the National Government listening to the people and exercising its democratic mandate to make sure that councils operate democratically, fairly, and in a way that is entirely appropriate.

This is good constitutional work. This is good democratic work. This is about listening to people, and that is what this Government is about.

This is a split call—Raymond Huo, 5 minutes.

💬 David Bennett: Here are the big guns!

Yes, indeed. In the light of the excellent speeches delivered by my colleagues, I will need only 5 minutes to unleash my reasoning and anger to oppose this bill, the Local Government Act 2002 Amendment Bill. As a member of the Local Government and Environment Committee, I had the privilege of hearing the submissions, not only in Parliament but also in Auckland, Christchurch, and other regions when the select committee had special sessions there. Meeting with those local government representatives and listening to their submissions was very rewarding. The submissions from those 518 or so individuals, organisations, and local authorities were thoughtful, responsible, and constructive. The vast majority of the submissions opposed this bill. I should say that this National-ACT Government is very brave in ignoring those submissions and rejecting proposals to introduce sensible amendments.

As the Hon Annette King has emphasised, Labour stands for effective and efficient local government. We believe in local democracy, local empowerment, and local choice. Labour opposes the Local Government Act 2002 Amendment Bill on six major grounds. First of all, we agree with the vast majority of submissions and strongly oppose the changes to the purpose of local government in the principal Act. The four well-beings—namely, the social, economic, environmental, and cultural well-beings—are what local government is all about.

💬 Hon Simon Bridges: Which is most important.

We agreed—yes, indeed, Mr Simon Bridges—with the Auckland District Law Society that the new purpose statement, which is narrow and more restrictive, will cause legal confusion and uncertainty, and risks legal challenges to council decisions. Secondly, the bill is based on misinformation and a very small number of examples, particularly in relation to rate increases and debt levels of councils between 2002 and 2011. For the information of Mr Simon O’Connor, who touched upon the issue of rates increases, I can tell him that rates increases—for example, for the Tasman District Council and other councils—are more the result of—

💬 Jami-Lee Ross: He’s from Tāmaki, not Tasman.

I cite it as an example. As I said, I had the privilege of hearing the submissions not only in Auckland but also in the South Island. Rates increases are more the result of the provision of infrastructure, addressing historical deferred maintenance and additional regulatory responsibility imposed on councils by that member’s central government, than a result of the purpose of local government in the principal Act. Thirdly, the bill has been rushed. It was written before sufficient evidence had been gathered to support the changes. Fourthly, the so-called Better Local Government, Dr Nick Smith’s approach, the so-called reform proposals are being implemented in a back to front way, with a number of reviews aimed at gathering evidence and information, and providing advice due to be reported after the passage of this bill.

Further, the reorganisation proposals for local government are anti-democratic, with the removal of an automatic poll for voters in an affected area. The bill leads to far greater interference in local government by the Minister of Local Government than is warranted by the evidence. Currently, the law guarantees to all citizens the right to a say in the binding ballot of any proposed reorganisation or amalgamation of their local council. This bill takes away that right. It is the confiscation of the democratic rights of New Zealanders.

Ngā mihi nui ki a koe me tēnā koe ki te Whare tēnei.

I would like to start my speech by acknowledging some people in the gallery: Lorna and Barry Stansfield, who are my partner’s parents. I am acknowledging them because they are voters, they are ratepayers, they live in Auckland City, and they care about local government. Lorna, particularly, has been a frequent visitor, submitter, and petitioner to her local community board and to her council. She is well known by local councillors—some of them fear her. She is very, very vocal in saying what she as a ratepayer deserves in her community that should be paid for by her rates. Basically, they take advantage of local democracy. Kia ora.

I also want to acknowledge in this House today those who have represented their communities as representatives on their local councils, their local boards, their community boards, and as mayoral candidates and mayors as well. These are the people who actually signed up to the principles of the Local Government Act 2002. They will have sworn to serve their communities to the best of their abilities and to serve those communities’ interests. Like me, they would have been bound by the purposes of the Act. The purposes in the Local Government Act 2002 include the provision for local authorities to play a broad role in promoting the social, economic, environmental, and cultural well-being of their communities, taking a sustainable development approach. Those are the four well-beings. This bill, the Local Government Act 2002 Amendment Bill, seeks to remove the four well-beings from local government.

The Greens will be voting against this bill because it rips the heart and soul out of the Local Government Act 2002. That was a carefully crafted Act that has stood the test of time. It allowed local communities to determine their own priorities without central government interference. This bill addresses a problem that does not exist, and this is backed up by the regulatory impact statement that was provided to the Local Government and Environment Committee. On page 1 it says: “There is limited evidence to inform the development of these proposals,”. The regulatory impact statement confirms that this is a rushed job by the Government, and that in its haste to carve up local government for its own ends, for its own agendas, it could well create more mess-ups. Local Government New Zealand agrees that these reforms are based on a beat-up by the Government, and it is justifiably disappointed that it was not consulted at all in the drafting of this bill.

Local Government is right to be worried about this meddlesome bill and the Government’s agenda. Not satisfied with taking the “local” out of local government, now the National Government is trying to take the “government” out of local government, as well. How else can you describe the provisions in this bill that allow central government the right to intervene in local government or set the financial parameters and benchmarks, the proposal to remove citizen participation in council reorganisation proposals—and we have seen that already in Auckland—or the provision around remuneration and employment policy that will deliberately fudge the line between governance and operations, and will also eliminate any attempt at good-faith bargaining for local government staff?

This bill fails to recognise that local government is about locals for locals—locals like Lorna and Barry, and the local people whom they democratically elected. This Government, not content with dismantling democracy in Canterbury, not content with forcing a massive amalgamation in Auckland, is set on rolling out a scheme to interfere with and micromanage all the councils in the country.

This is nanny State behaviour. This is Government acting like a control freak. We will be opposing this bill.

The Opposition wants to characterise this bill, the Local Government Act 2002 Amendment Bill, as an attack on democracy. Well, I want to tell the Opposition that for the last 10 years local government in New Zealand has been attacking the pockets of ratepayers. That is why we are implementing this legislation. The ratepayers in New Zealand are calling out for relief. The ratepayers in New Zealand are calling out for assistance. After 10 years of having to operate under legislation passed by members on that side that let local government do absolutely anything it wanted to do—and saw rates go through the roof nationwide—ratepayers are calling for change. Ratepayers want something to be done about the awful local government legislation that they have had to endure.

Since 2002 the average rates increase in this country has been 6.8 percent—6.8 percent. In that time CPI has been 3 percent. Auckland at the moment has put its rates up by 3.6 percent. Can anyone tell me what the CPI is running at at the moment?

💬 Michael Woodhouse: 1.1?

It is 1 percent. Actually, in the last quarter it was 0.8 annualised. The Auckland Council is putting its rates up by 3½ times what the current inflation rate is at the moment.

💬 Hon Simon Bridges: That’s terrible.

That is awful, and ratepayers are calling out for some relief. Let me tell you that in the Auckland Plan the biggest expenditure is transport. I absolutely agree with that—it is 34 percent. The second-biggest area of expenditure in the Auckland Council’s plan is on lifestyle and culture. Twenty-two percent of my rates, and every Aucklander’s rates, is going on lifestyle and culture. I have absolutely no idea what “lifestyle and culture” is supposed to mean, and I do not know why local government is involved in lifestyle and culture.

My colleague Paul Goldsmith read out a couple of targets in the Auckland Council’s plan. The Auckland Council wants to see all school-leavers achieving National Certificate of Educational Achievement level 2 by 2020. That is an honourable goal, but why is local government trying to get involved in education? That is what people pay their taxes for. The Auckland Council also wants to reduce greenhouse gas emissions by 20 percent by 2020—

💬 Hon Simon Bridges: Hey, that’s my job.

—based on 1990 levels. That is Simon Bridges’ job. It is not local government’s job. Aucklanders do not pay their rates for the Auckland Council to try to do what the Government should be doing, to try to get involved in reducing greenhouse gas emissions. Ratepayers have been telling Parliament that local government has been out of control, and it needs to be brought back in line with what reality is.

We are implementing this legislation to bring about some sense to local government, to try to narrow the focus of local government. The Opposition thinks that ratepayers are sitting at home crying because the four well-beings are being taken away. How many ratepayers actually know what the four well-beings are? Ratepayers want to see good quality public services. They want to see good quality public infrastructure. They want to see local government implementing its regulatory responsibilities in an efficient way. That is what this bill is all about. I do not understand why the Opposition hates ratepayers and wants to support the spending desires of a couple of hundred local body politicians over the ratepayers of this country. They are the ones calling out for change. They are the ones we are supporting with this bill.