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 third time. This bill marks the first phase of the Government’s Better Local Government reform programme. It is a significant bill that aims to improve the effectiveness and the efficiency of local government in New Zealand. Local government is of great significance to New Zealand communities and to the New Zealand economy. Local government makes up 4 percent of GDP, spends $7.8 billion per year of public money, and manages $120 billion of assets. Councils provide critical services to households, businesses, and communities right across New Zealand. New Zealand communities are affected by the decisions and the actions of their council on a daily basis and are certainly affected when they receive their rates bills. This is why local government reform is so vital. The Better Local Government programme will mean that local government is better positioned to create the environment for local businesses and industry to emerge and grow and for communities to flourish. This bill is a vital first step to allow for this.

The bill refocuses the purpose of local government. Having a clear and defined purpose statement will focus councils on the things that only they can do. It will encourage councils to take a fresh look at the services and infrastructure that their communities want and are willing to pay for. The bill introduces financial prudence benchmarks to be set by regulations. The purpose of these regulations is twofold. They will encourage councils to exercise greater financial discipline. They will also provide a system that the average ratepayer can understand to assess the financial prudence of their council or to compare their council’s performance against other councils. The amendments of the Local Government and Environment Committee to require the inclusion of the benchmarks in councils’ annual reports will further enhance the transparency of councils’ financial management.

The bill strengthens local authority governance tools. There will be a simpler, more responsive mechanism than is currently available for central government to assist struggling local authorities and intervene before situations become critical. The leadership roles of mayors will be strengthened. Mayors will be given governance powers that will match the level of public responsibility they have for council’s decisions and that will support clear, strong leadership by mayors. Elected councils will have an additional tool to control council costs through being able to clearly set policies on staff numbers and remuneration. Ratepayers will have better information on council labour costs as councils will be required to report annually on numbers of staff employed by salary bands.

The bill streamlines the procedures for the reorganisation of local government arrangements. Currently the reorganisation process is ineffective. There have been improvements to this process made since the bill was reported back from the select committee. The Local Government Commission must now assess whether a proposal has demonstrated community support in each affected territorial authority area. The time frame for delivering a petition calling for a poll has been extended from 40 to 60 working days, and a petition calling for a poll now needs to collect the signatures of only 10 percent of electors in any affected territorial authority area. The bill also allows for large urban areas to utilise the two-tier local board model if the community decides that this is the best option to organise its local governance arrangements.

The Opposition members will no doubt attempt to portray this bill as an attack on councils and claim that this bill cuts across local democracy. I completely reject this view. I encourage those members to actually go out and listen to the people in their communities, because if those members did go out and listen to the people in their communities, they would hear how New Zealanders, especially those on fixed and low incomes, are tired of ever-increasing rates bills. Over the last decade rates have increased, on average, by 7 percent per annum. Over this period local government debt has quadrupled, from $2 billion to $8 billion. These trends have to stop. They simply have to stop.

If those Opposition members did go out and listen to their communities, they would hear ratepayers saying that they do not want to be put in the situation that the Kaipara District Council ratepayers are currently in, where a council with a population of 18,000 people runs up debt of $80 million and the community is left with a crushing rates increase as a result. And if those members did go out and listen to their communities, they would be told that it should be communities that decide how they want their local governance arrangements to be structured, and if communities want to change, they should be allowed to change. Since 1989 no local government reorganisation has taken place under the existing rules. The barriers for communities to effect change are just simply too high.

This bill addresses the concerns of ratepayers. It is a significant and important bill for New Zealand communities, for businesses and industry, and for individual households. I believe that these changes will improve the efficiency and effectiveness of local government and help the local government sector to play its part in growing the New Zealand economy. I commend this bill to the House.

I have to say that this side of the House is very disappointed with the debate on this very important bill, the Local Government Act 2002 Amendment Bill. First of all, we had a second reading speech, when this bill was reported back to the House, by Chester Borrows. We then had the Committee stage of this bill when four different Ministers sat in the chair and never answered a single question—not a question. They responded to nothing. Now we get to the third reading of this significant bill, which affects local government in New Zealand, and the Government puts up Maurice Williamson.

The Minister of Local Government has not fronted on this bill, at all. The Minister has not fronted. Why? Why has the Minister not fronted? What he has done is send the perpetrator of this unwanted, unnecessary, and untruthful bill to do his bidding for him—Nick Smith. This is a Nick Smith special, created out of a false crisis that he developed when he became the Minister of Local Government. You see, Nick Smith has got a pattern as a Minister. He got ACC, he developed a crisis, and he cut, under some falsehoods, funding and services to people who had been sexually abused—and found out later he had to change it because he got it wrong. He slashed services at ACC, and then he was found to be wrong.

So what does he do with local government? He creates the same crisis: “There’s a problem with debt.” And we heard it from Maurice Williamson then: “Debt has gone from $2 billion to $8 billion.” Well, Maurice Williamson, have you taken the time to find out what its debt has gone on? Have you taken the time to find out? No, he has not, because if he had he would not have made the stupid speech he has just made. Its debt is overwhelmingly due to infrastructure that it needs in its communities. So Maurice Williamson and his mates over there are saying: “Let the stormwater drains fall apart. Don’t fix your local roads. Don’t do the infrastructure changes that you ought to.” But, you see, local government listened to the National Government. What happened in 2009 was that the National Government held an employment summit, I think it was called—

💬 Andrew Williams: Job Summit.

The Job Summit. It was set up by the National Government as a little exercise, because it has done nothing about jobs, and what happens? The Prime Minister comes along and he says to local government: “You’ve got lazy balance sheets. Bring forward your infrastructure. Start helping in this global economic crisis, and start doing some of that infrastructure. Put it on your balance sheets, because they’re lazy.” So what did local government authorities do? They went out and they started to address some of their infrastructure issues, and now they are called—well, I do not know what the Government is calling them—incompetent, lazy—

💬 Hon Maurice Williamson: I didn’t call them anything.

Yes, you were accusing them, Mr Williamson, of not being responsible local government, and saying that that is why they have to change. Well, this bill is based on shonky figures, and Nick Smith was caught out. He hates this part, so I am going to repeat it. He was caught out telling porkies on the figures—caught out. He put out his Better Local Government document, and he put up the figures in the back of the document. He set out all the figures as to why he was making the changes across New Zealand. Five days later it was taken off the Department of Internal Affairs website—removed, blank, nothing there. You had to be quick to get the two copies. Fortunately, we were quick. We did get two of them. He left his job the day after he put out the document—sacked from his position—and the new Minister of Local Government took over.

So I wrote to the new Minister and asked: “Why have you removed the figures from the Better Local Government paper that were published at the time Nick Smith announced it?”, and he wrote back to me and said there were problems with those figures and they did not accurately reflect what was going on in local government.

💬 Hon Dr Nick Smith: Did not say that.

Yes, he did, and I have tabled that letter. I have tabled that letter—

💬 Hon Dr Nick Smith: Making it up.

I resent that. I have tabled the letter and actually read out the words of the now Minister—the person who constantly makes things up in this House is Nick Smith—and he said they did not accurately reflect the situation of local government. And in a moment, if I may, I will table it again. We need to get it on the record, because this bill is based on those shonky figures—untruths—and, in my view, it was a total attack on local government for some petty revenge from Nick Smith. They are shonky figures.

Then we had the cheek of Maurice Williamson asking why we did not go out and listen. Well, Maurice Williamson, why did the National Party not go out and listen to the submissions, because they overwhelmingly said: “Do not change the purpose of the Local Government”—

💬 Maggie Barry: No, they didn’t.

They overwhelmingly said it. All right, let us have a look at some of those who did say “Don’t change it.” In fact, it was unanimous from Local Government New Zealand—that is all local government. Then we have got the Salvation Army. What did it say? It was opposed to changing the purpose of the Local Government Act. Why? Because it works in the community and it works with people in local government.

Then we heard from Auckland Disability Law. What did it say? It said that disabled people will be worse off if Parliament changes the purpose of this Act. This is not self-interest from local government; these are submissions from those in the community. What did Alcohol Healthwatch say? It was opposed to changing the purpose of the Act. But what did Jacqui Dean say about this particular submission? What did Jacqui Dean say about this particular—

💬 Jacqui Dean: I don’t know.

Well, I wrote it down, Jacqui. It is lucky I did, because she said: “This is a wonderful submission.”—a wonderful submission. Here it is, “wonderful submission”. Why was it a wonderful submission? It was because the submission said that the purpose of the Act should not be changed. That was from Alcohol Healthwatch.

OK, so what did the Environmental Defence Society say? It said that changing the purpose of the Act will create significant uncertainty and costly litigation. That is not from local government. What about this? What did the Ethnic Peoples Advisory Panel say? It said: “We are opposed to getting rid of the four well-beings in the purpose of the Act.”

What did the Māori organisation Te Ora o Manukau say about it? It said it was opposed to getting rid of the four well-beings from the Act. What did Grey Power say? It said it was very important to keep the four well-beings because they were needed for a diverse, multicultural community. It said: “We are not in favour of the new definition, because it removes the very elements that allow for social cohesion,”.

So I have brought some submissions from organisations that are not local government—which they are all chirping out about on that side of the House—but are decent organisations in our community that said to the Government: “Listen to us. Please do not change the purpose.” Then Maurice Williamson said we have the cheek of not listening. Well, we did listen. I can tell the National Party that when we become the Government in 2 years’ time, the four well-beings will be returned to the Local Government Act. And I will be very happy to do that, because we have listened to the people.

If those members wanted to listen to just one local council, maybe they could have listened to poor old Kawerau, the smallest council in New Zealand. It has got no debt. This is what the council said when it came to assets. It said it had fixed assets worth $57.2 million, and over the next 10 years it intends to undertake renewals of $22.7 million, including inflation. This is for roading, for water supply, for waste water, and for stormwater. That is what it is spending its money on over the next 10 years. Is that not what local government is meant to be doing? But what this bill does is say that councils are not responsible and that they have to be reined in and controlled from central government. This bill attacks the very democratic basis of local government. It is a bad bill. It ought to be opposed. Unfortunately, those who could have stopped it did not even take part in the debate—did not even take part.

💬 Darien Fenton: Shameful.

I say it is shameful. This bill is shameful on local government, and it is going to come back and haunt the National Party.

That speech from Annette King showed the House that Labour has learnt absolutely nothing from the global financial crisis and its period in Government, when New Zealand’s external borrowing increased by $100 billion and when our public sector grew uncontrollably while our private and exporting sectors stagnated. It reinforces that Labour and parties opposite believe in the nirvana of a big-spending, big-borrowing, all-encompassing public sector, with no thought for those who pay the bills or those who have to repay the debt.

I want to focus my comments on the changes that I initiated to the purpose of local government in New Zealand. The background is that in 2002 the then Labour Government required councils to provide for the economic, social, environmental, and cultural well-being of communities. Labour’s assurances that this new expansive purpose would have no impact on costs have been proved horribly wrong. As my colleague Maurice Williamson has said, average rate increases, which in the previous decade had averaged just over 3 percent, have averaged 7 percent per year, council expenditure as a proportion of GDP has grown by a third, and debt has quadrupled from $2 billion to $8 billion. And if you add up the 10-year plans that councils have just published, they are intending to take that debt from $8 billion to over $19 billion.

No one should be surprised that National does not support this expansive and expensive purpose for local government. Firstly, we opposed it in 2002. Our fears about the impacts of costs proved to be absolutely correct. Secondly, the global financial crisis makes the case for change even stronger. Excessive spending and debt are driving both central and local government in Europe to their knees. New Zealand households, businesses, farms, and central government are all tightening their belts, and being more focused and disciplined—so too must councils.

Thirdly, there is a philosophical dimension to this issue. National believes in limited government. We do not look to government, whether it is central or local, to meet every human need. Government and councils play an important role in society, but so too do the private and community sectors. We on this side of Parliament do not believe it is either possible or desirable for councils to try to meet every single economic, social, environmental, and cultural issue in their communities.

The fourth justification is very practical. For any organisation, success requires that we are clear about who does what. Everybody doing everything does not work. It is true for successful businesses and organisations, and it is true for a country. We have a Ministry of Education to run our schools, we have a Ministry of Justice to run our courts system, we have the Department of Conservation to run our national parks, and we have a health ministry to run our hospitals. It makes no sense for councils to duplicate the role of public agencies, yet the broad current purpose section suggests they have a role in absolutely everything.

As the Minister said previously, councils should focus on things that only they can do, and then do them really well. That is why the new purpose clause focuses on very important local infrastructure like roads, important local services like libraries and parks, and those all-important regulatory functions like building and resource consents.

This new purpose clause for local government does not pedantically constrain councils. It rightly leaves locally elected councils with considerable flexibility in defining the right level of infrastructure and public services for their communities. But the change is still significant. No longer will there be that false expectation on councils that they have to meet every economic, social, environmental, or cultural need in their communities.

Two considerations will be important for councils in complying with the new purpose clause. Councils will need to think carefully about what is a public good or service and what is better done by the private sector, and they will need to think carefully about what the responsibilities of local government are as compared with central government.

These robust arguments for reform have been met by the shallowest of reasons for opposition. Labour has never attempted to argue the big picture. It cannot challenge the global figures from Statistics New Zealand on the record rate increases and the quadrupling of debt. Instead, it has delved into the minutiae. Take the 2000 figures that were published by the Department of Internal Affairs on councils’ numbers, where there were a small number of errors. None of these changed the national figures, but Labour then used them to argue that the whole reform was flawed.

This bill will make an important change for local government. It is the first step in a significant change that is part of this Government’s wider plans to make New Zealand more competitive and productive, and to build the brighter future that National promised.

I seek the leave of the House to table some correspondence between the Hon Annette King and the Hon David Carter, in which the Hon David Carter says “as noted on the website, this was because there were issues with data”—

Order! Is the member seeking leave? Is there any objection to that course of action? [Interruption] I am asking the question. Is there any objection to that course of action? There is.

We oppose the Local Government 2002 Act Amendment Bill because of its effect: it will weaken and undermine local government. We oppose it because it is based on a lie: Nick Smith’s fiction that somehow councils are out of control and doing things that are racking up all sorts of debt. And we oppose it because it is a textbook study in how not to legislate, rushed through without evidence and without proper consultation.

The National Party is a stranger to the principle of “do no harm”, and I wonder whether one of the doctors in the National caucus should run a little workshop for those members on the Hippocratic oath—principle No. 1, do no harm—because this bill will do harm to local communities and it will do harm to the institution of local government.

The first big harm that this bill will do is by replacing the four well-beings with a narrow purpose clause that talks about providing “good-quality local infrastructure, local public services, and … regulatory functions” at least cost. It will limit the ability of councils to meet the needs of their communities. We have heard some speculation from the likes of Jacqui Dean and others during the stages of the debate on this bill that these words will have no effect and they can stretch to accommodate anything that councils want to do, but we have little doubt that the effect of this provision will be chilling on the activities of local government.

Every council has to choose between competing priorities. None of them are so flush with money that they can do everything they want to do. The threat of legal action by the chamber of commerce or some vexatious ratepayer will be enough to deter councils from undertaking activities that do not tightly fit the new definition. This bill tilts the playing field in favour of a narrow 1950s vision of roads, rates, and rubbish for local government. Action on affordable housing, the Pasifika, Diwali, and lantern festivals, economic leadership by councils desperately trying to cling on to services and jobs in their communities—a question mark is put over all of those things by this bill.

In the last term of Parliament Rodney Hide tried, and failed, to impose a definition of core services on local government. He gave up because one mayor after another beat a path to his door and persuaded him it was an illogical nonsense to impose a straitjacket—a one-size-fits-all policy—on every council in New Zealand. Rodney Hide rubbished councils that were working on educational achievement in their communities, and then he visited the City of Manukau Education Trust, or COMET, in South Auckland, and he was so wowed by its work that he changed his mind. That was all it took, but I am sorry to say that Nick Smith, who is the real architect of this abomination of a bill, does not even have the intellectual honesty of Rodney Hide.

The National members in this House, even though many of them represent rural and provincial communities, either do not care or have turned a deaf ear to the pleas from local councils that it is precisely the rural and provincial communities that need the flexibility of the four well-beings to respond to the needs of their communities. Small and isolated communities do not have big local economies. They do not have a multitude of public services and private providers who can step in when the market does not deliver. The battle to hold on to services in local communities is a fight for survival, and often local councils are the last line of defence, whether it is running a medical clinic in Rākaia or a banking outlet in Bluff, or supporting a community festival that attracts visitors into that town. All over this country, councils are supporting their communities, promoting economic development, and looking after their people. Someone has to do it, because this National Government as sure as hell is not.

The second big harm of this bill is the bill’s confiscation of the rights of New Zealand citizens to vote in a binding referendum on a reorganisation proposal of their local council. [Interruption] That is right. Under the law currently every citizen has the right to vote in a binding referendum if there is a proposal to disestablish or amalgamate their council. Under this bill that right is gone. If you do not want to be part of some super-council, if you do not want your community to be swallowed up by some larger local government entity where your community will have less say and less voice, then the only way you can get a vote is by getting 10 percent of the citizens in that area, that total area, to sign a petition, and that is a very big ask.

Whether or not you think the current law is working—and I think most people would agree that the current legislation is far from perfect: it makes it too difficult to get an amalgamation—I put it to this House that this bill creates a much worse problem. It disempowers citizens by taking away their vote. Is that something that the National members in this House do not care about? Is it just that the democratic principles are not important to them? The bill takes the power from citizens and gives it to unelected bureaucrats in the Local Government Commission. It is just one more step in this National Government’s unfortunate treatment of local government.

The National Party does not give a damn about local democracy. It is not even a “nice-to-have”. It is more a case of who gives a toss. When democracy gets in the way of its dairy-farming mates in Canterbury getting their free water consents, down comes the axe on the elected members of Environment Canterbury. Then National members did not trust the people of Auckland to vote for the super-city, so what did they do? They legislated to take away the right of Aucklanders to vote on the super-city, and then they handed over 75 percent of the new Auckland to hand-picked corporate boards. Well, you can only conclude that the National Party does not trust the people. It prefers to have our communities and their assets managed by faceless bureaucrats, commissioners, the great and the good, and their shoulder-tapped mates.

This is a broken promise by John Key. He said very clearly before the last election that there would be no forced amalgamations under his Government. He said it again when these proposals were released. And this is the most cynical thing about this bill: National members can say “We’re not forcibly amalgamating anybody. Our hands are clean.” But this bill creates the very mechanism that allows for communities—

💬 Hon Dr Nick Smith: Communities can change.

—to be forcibly amalgamated, Mr Smith. The chamber of commerce or anyone can present a proposal and the faceless bureaucrats at the Local Government Commission can shepherd it through, without the local community ever having a vote. That is shameful. This is the cynical, jaded, and duplicitous ratbag behaviour that we have come to expect from the National Party.

We also oppose this bill because of the way it has been done. It is based on a lie. In fact, it is based on three lies. The first is that councils are out of control and are doing all sorts of non-core activities as a result of the 2002 Local Government Act. Never mind the Minister’s own officials saying in the regulatory impact statement that 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. Dr Smith, you might like to listen, finally, in the third reading of this bill—you might like to listen—

The ASSISTANT SPEAKER (H V Ross Robertson): Order!

I said “Dr Smith”. He might like to listen to this evidence from the Minister of Local Government’s own officials. There is no evidence that because of the Local Government 2002 Act, local councils have proliferated their activities.

The second lie from Dr Smith is that all this so-called non-core activity has resulted in an explosion of debt, and this is perhaps the most galling and outrageous thing that this National Government has done in recent times. This National Government is the biggest borrower in New Zealand history ever. Labour ran nine surpluses in a row and reduced Government debt from 40 percent to 18 percent of GDP. Net debt fell to zero under the Labour Government. This National Government in the last 4 years has increased Government debt by more than $50 billion, and the Minister has the gall to criticise the entire local government sector for increasing debt to $8 billion. This National Government should take a look at itself in the mirror. But, no, Nick Smith has peddled the line that council spending and council debt is out of control. He has shamelessly used a handful of egregious examples—as if the financial mismanagement of Kaipara District Council is a justification for reforming the entire local government sector.

The third lie is that this bill will keep rates down. There is nothing in this bill that will make a blind bit of difference to the rates bills that New Zealanders pay. Dr Smith and his National Party colleagues should be utterly ashamed of themselves.

Tēnā koe, Mr Speaker. The Green Party continues to oppose the Local Government Act 2002 Amendment Bill. The passing of this bill will be a very sad day for local government and democracy in New Zealand. That is partly because of what it says and what it symbolises about the relationship between central and local government. As I said at the second reading of the bill, National does not understand, it does not respect, and it does not trust local government and the communities that councils, community boards, and local boards represent. Given the breadth of services and responsibilities that local government provides, its role in environmental management of our lands, our coasts, our air, and our water, and its massive contribution to shaping the places that we live, work, and play in, it is deeply disappointing that the Government does not understand local government and has made such an attack on it through this bill.

It is local government decisions about what sorts of services should be provided that are often the most direct and concrete expression of democracy. It is very disturbing to see the changes that this bill makes to that and to the relationship between central and local government. In New Zealand we have a fragile democracy. We may have a proud history of suffrage, our country being the first where women gained the right to vote, but we do not have a written constitution, we do not have a second Chamber, and we do not have a supreme court that can overturn legislation. The fact that Parliament is sovereign means that, at the moment, when we have a strong and independent local government arm, that represents a check and a balance. This bill, in undermining the independence of local government by increasing the powers of ministerial interference and intervention, compromises that independence and compromises the check and balance that local government provides.

It puts councils under the thumb of Wellington. It will have them looking through the benchmarks to see how they are performing in relation to the Minister of Local Government’s opinion, rather than directing their relationship primarily to the communities that they represent and that elect them. As the Auckland District Law Society said in its submission, “the proposals for intervention are not only unnecessary, they are constitutionally untenable and strike at the heart of the notion of a separate institution of local government.” Local government should be accountable primarily to its community through the consultation it does, through the representation function, and through the election and the power of the ballot box every 3 years. It is elected councils that work closely with their communities that are best placed to decide the services, and the range and scope of those services, that they should deliver, not central government. It was the Local Government Act 2002 that recognised that by putting at its core the purpose of enabling democratic local decision-making by and on behalf of communities, and by promoting the community’s social, economic, environmental, and cultural well-being.

National is taking an axe to both elements of this purpose and to the operation of local government through this bill. It is doing that through the deletion of the four well-beings and through the new purpose, which requires councils to meet the need for good quality infrastructure, which is defined through cost-effectiveness, as if dollars were always the fundamental assessment of value. Of course cost-effectiveness is important, but it should not be the sole criteria by which local councils make their decisions about what sorts of services they provide, because that risks the decisions being focused on what is cheapest, it risks challenges to those decisions, and it risks an under-investment in infrastructure and infrastructure maintenance. The change that this bill represents to local government is potentially the most significant change in the sector since the major reorganisation in 1989.

The other major change is these powers of ministerial intervention in relation to “significant problems”, as defined by the Minister, and the ability for the Minister to appoint a Crown observer, a Crown review team, a Crown manager, or, of course, commissioners. It should be the local councils deciding where they need assistance and getting it from independent agencies, not the Minister intervening. We know that the Government has included this part of the bill because it wants to spare itself the embarrassment of bringing to the House legislation like the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill, which we have before the Local Government and Environment Committee at the moment, and the 2010 bill, which interfered in a council and replace elected councillors with its self-appointed commissioners so that it can ensure it gets the right decisions at the regional and local level. It is very rich for Minister Williamson to talk about listening, because the Local Government and Environment Committee had over 500 submissions and the submissions overwhelmingly opposed the change to the purpose of local government. It is enormously corrosive of people’s faith in the democratic process when those submissions are given so little weight.

The other major thrust of the bill, which we have heard from the Hon Dr Nick Smith, is about rates rises and debt rises, and the need for the benchmarks to improve financial management. By international standards there is a very high level of financial management, in terms of the rigour and transparency of that in local government. We have draft annual plans being put out for public consultation—draft 3-year plans. Councils have to do an annual report. A financial strategy has to be prepared, in terms of changes to and increases in rates. All of those measures, and the fact that they are reviewed by the Office of the Auditor-General, promote transparency and rigour. We do not have a draft Budget being put out by central government for consultation by people. The focus on rates is partly because these rates are paid out of people’s net after-tax income. It is not like the PAYE tax, which is paid before people receive it. That is why there is so much focus on rates in the community—because they come out of the net income.

This whole proposal of establishing benchmarks—fortunately, by a Supplementary Order Paper, there has been a change so that the benchmarks are no longer tied to the intervention powers. But the Auckland Council was very clear that the benchmarks and the soft cap that they will potentially impose on rates will not improve the council’s financial management. Potentially, they make it much more difficult because they will degrade, rather than enhance, the council’s ability to manage its affairs in a financially and fiscally prudent manner because they potentially lead to a change in the credit rating. The security against which councils borrow is their ability to raise rates to meet their debt obligations. If you have soft caps, that reduces the value of that security and potentially leads to a change in the credit rating and an increase in the cost of borrowing. As we keep saying to the Government, borrowing spreads the cost of new infrastructure across several generations. Councils’ costs would not be rising if they were not investing in infrastructure, which helps provide the basis of the economy. It makes sense to invest in infrastructure.

The other reason this bill is wrong is that it is completely out of step with what is happening internationally. In the United Kingdom, with the Localism Act, you are building a capacity in local government to facilitate the building of stronger communities, you are getting stronger community governance, and you are getting more commitment to participation by the community in everyday decision-making. This bill runs completely counter to international trends. This bill is about the centralisation of Government. It is about having councils that are more distant from their communities, and it is about trampling on local democracy through the reorganisation provisions.

In conclusion, the proposal in the bill for the changes to schedule 3 is eroding the democratic rights of citizens to decide how they will be governed. It will shift the onus from local government consulting with its citizens about whether reorganisation should occur, to putting the burden on citizens to seek this petition to get a poll. It is much more onerous and it puts a great deal of power in the hands of the Local Government Commission, rather than leaving the major decision-making in the community’s hands. That is why we oppose the bill.

The Local Government Act 2002 Amendment Bill provides clarity around the role of councils. It provides for stronger governance. It provides for improved efficiency and more responsible financial management by local authorities. The reforms in this bill are intended to sharpen councils’ focus on what they appropriately provide, rather than the wide-reaching responsibilities brought in by the 2002 Act. This Government is drawing the focus back to providing local infrastructure, local public services, and regulatory functions.

The new purpose of the Local Government Act has been much debated, both in this House and during the select committee process. So I want to remind the House of section 12(2)—members opposite might care to have a look at that for the first time—of the 2002 Act, which says: “For the purposes of performing its role, a local authority has—(a) full capacity to carry on or undertake any activity or business, do any act, or enter into any transaction;”. Sections 11 and 12 are not amended by this bill. The contention that local authorities will be prevented from undertaking new activities or litigated endlessly are simply not true. They will, however, after consulting with their communities, be able to continue supporting activities like their community house, albeit with an enhanced weather eye on its ongoing cost and impact on its ratepaying community.

The debate on this bill, particularly in the Committee stage, has taken on a Chicken Little aspect. If one believes the Opposition, the sky is about to fall in on local government. I can tell New Zealand First, the Greens, and what is left of Labour that it will not. Although I can accept that the spendthrifts opposite cannot get their heads around the need to focus on the provisions of good local infrastructure, regulatory functions, and public services, this Government can. Local government, like central government, needs to deliver better services for New Zealand within tight financial constraints. When talking to the president of Local Government New Zealand last night, Lawrence Yule, I was assured that local authorities will be getting on with it, and good on them.

I want to finish by acknowledging and thanking Nicky Wagner, the chair of the Local Government and Environment Committee—she is unable to be here today; I am probably not allowed to say that—for her excellent work in shepherding this bill not only through the House but also through the select committee. Thank you.

I rise to take a call on behalf of New Zealand First on the Local Government Act 2002 Amendment Bill and to give the members on the other side of the House, the members of the National Party, perhaps a small history lesson. I hope they have got their pens ready and I hope they are ready to take notes, so that when they go back to their National caucus next week they can perhaps recite some of these quotes.

The first quote I have is from the Local Government New Zealand conference of 16 July 2012. It was the Rt Hon John Key, Prime Minister of New Zealand, who said: “the relationship between central and local government is incredibly important. There are many areas where we work together productively. You are also responsible for administering many of the laws we write, such as the Resource Management Act.” He then went on to say: “New Zealand’s 78 councils make up 4 per cent of GDP, spending $7.5 billion of public money each year.”—so we know where Maurice Williamson got his speech from—“And they manage $100 billion worth of assets.” He then said: “They also perform a huge range of regulatory functions that affect households and businesses—from granting resource and building consents, to issuing dog registrations. Councils have a role to play in creating an environment that is conducive to sustained economic growth—just as central government does.” That was this year.

I then jump back 1 year, to 11 July 2011—the same Rt Hon John Key, Prime Minister of New Zealand, and former money trader of Merrill Lynch in New York, but now Prime Minister of New Zealand. He said on 11 July 2011 to the Local Government New Zealand conference: “Local government already makes a valuable contribution to our economy. You contribute four per cent to New Zealand’s GDP. You have infrastructural assets worth $89 billion. And you employ more than 22,800 people. Our”—listen to this, the Hon Nick Smith—“joint commitment to economic growth is crucial for New Zealand’s success. Together, we are an enabling force for the private sector to generate jobs and economic growth. New Zealand needs a more competitive economy to grow.” So there was the deal—the partnership between central and local government. That is 2 years in a row.

Let us go back a year to 26 July 2010, when the same Rt Hon John Key, the Prime Minister of New Zealand and former Merrill Lynch trader from New York, said: “You, in local government, can also contribute significantly to economic growth. As we look to improve infrastructure and go for growth, we’re conscious of the role that local government also has to play. … I know that the actions”—this is what he said—“of central government have a direct impact on local government. Sometimes that can mean increased costs, as we’ve seen in the past.” So there he was in 2010 admitting that local government is taking on increased costs from central government.

We go back a year earlier, to 27 July 2009 at the Local Government New Zealand conference—same person, same John Key, the same money trader from New York. He said: “We appreciate the challenges you face. Both central and local government need to keep improving”—need to keep improving—“the services we provide to our constituents at a cost that is affordable. I’d like to thank Local Government New Zealand for the constructive work you are putting into this review. I am confident that with your help, we can make some real progress. Infrastructure is another area where we can achieve a lot together. Boosting infrastructure investment is a priority for the government.” That is what he said: boosting infrastructure investment is a priority for this Government.

He said: “Meanwhile, councils expect to spend somewhere around $30 billion over the next decade, on roads, water services, and other assets. By working together, we can maximise the return our communities get from these investments.” Then he went on to say: “The Government knows that councils face”—[Interruption] Hang on, listen to this. Listen to this. This is a good one. He went on to say: “The Government knows that councils face a big spike in costs over the next decade in infrastructure investment. And some of this will quite rightly be financed by debt.” Oh! Is that not incredible?

So in 2009 the Rt Hon John Key said: “My goodness, some of this joint thing between central and local government is going to have to be financed by debt.” But what did we hear from the Hon Nick Smith just a short while ago? He was criticising local government for going from $2 billion to $8 billion of debt. Boy, I think you need to go and speak to your Prime Minister, your leader, and say: “Excuse me, leader—excuse me, leader—but I went down and actually sort of stabbed you in the back a bit by criticising your comments from these conferences, because I said that debt is bad.”

Anyway, let us go back a year earlier, to 26 July 2008, when he was not the Rt Hon John Key. He was just John Key, Leader of the Opposition and former Merrill Lynch trader from New York. So he was pretty fresh off the block then. He was the Leader of the Opposition and trying to become the Prime Minister. He said: “In particular, central and local government face the challenge of investing in infrastructure to secure New Zealand’s long-term sustainable growth. We have to get this right, because if we want to enjoy living in a First World country we need to have First World infrastructure. Right now, we have a serious backlog in infrastructure investment.” Are you listening to this, Dr Smith? He said: “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”—this is John Key, who was the Leader of the Opposition at the time, and who was wanting to become the Prime Minister—“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 that central government has much to learn from local government when it comes to infrastructure planning, investment, and management.”

Is that not interesting? Over 5 consecutive years—5 consecutive years—you have got the Prime Minister and the Leader of the Opposition absolutely begging local government to respond to help economic growth, to grow jobs, to grow opportunities in the country, to improve our standing, and to bring us back into First World status, and it does—it responds. It tries to leverage its lazy balance sheets, as I recall, and it responds. And what happens? This National Government just kicks it in the teeth and puts it down. The former local government Minister, Nick Smith—who is going to be the future local government Minister as soon as Dr Lockwood Smith goes off to London and David Carter, the current Minister, goes and takes up the chair with the sheepskin up there—will be back and he will have his hand so far up the back of Lawrence Yule and all the other mayors of New Zealand and all the councils. He will be so far in there, he will be, you know, doggy deep—doggy deep—in local government, and he will be telling them, and he will be putting in his Crown managers, his Crown spies, his Crown advisers, and you name it, and half of them will be from Federated Farmers, because it was really only Federated Farmers and Business New Zealand that came along and supported the bill. Of the 775 submissions that came along to the Local Government and Environment Committee, only the chamber of commerce, Federated Farmers, Business New Zealand, and a few other National Party shonkies came along to support it. The vast majority opposed it.

What I am saying is this bill is going to go through—it is going to go through—but rest assured the communities of New Zealand need to be aware that they are not going to be hung out to dry. The minute the Hon Nick Smith becomes the local government Minister, we are going to be watching him like a hawk. If he tries to interfere and pull the puppet strings of local government, and if he thinks that we are going to an Eastern bloc regime where central government basically controls every little local town and authority in New Zealand, then he has got another think coming, and we will constantly remind him that his leader—his leader—for more than 5 years set the challenge. Local government picked up the challenge, and it will continue doing that.

I can in closing just say well done to all the councils of New Zealand. You are doing a very good job, and if you keep going the way you are going—and, of course, we always look for efficiencies and economies wherever we can, and all councils do that—then New Zealand can perhaps get back to a First World country and be a great place to live. But it certainly will not be if we are going to have some sort of Stalinist central government that is absolutely going to control everything from the office of Nick Smith.

That was a speech from the failed former Mayor of North Shore. The mayoralty of Andrew Williams was a failed mayoralty. The good people of North Shore in the last election he stood in gave him a grand total of 900 votes. Maggie Barry got 22,000 votes in that same election. The good people of North Shore appreciated his mayoralty so much that they gave him 900 votes. I can understand why he is so fixated on John Key. It is because John Key would not reply to his text messages at 3.30 in the morning—3.30 in the morning after a hard night out on the town, interacting with trees along the way home.

We are passing this legislation because the ratepayers of New Zealand are crying out for help. If Mr Williams wants to give us a history lesson, let me give people a history lesson on the North Shore. Mr Williams likes to talk on his website about the rates increases he had under his mayoralty. During his mayoralty in 2009, the CPI was 1.9 percent. The CPI in 2010 was 1.8 percent. Mr Williams increased rates in North Shore in those years at three times the rate of inflation—three times the rate of inflation. We are dealing with problems in this country in local government because local government in the past 10 years has been spending up large under legislation that was passed by the Labour Government in 2002.

I want to read out some of the submissions, because we heard from Annette King and Phil Twyford about submissions on behalf of individuals who submitted to the Local Government and Environment Committee. If you listened to their comments, you would think that everybody is allowed a view in this matter except the poor people actually having to pay the rates bill.

Let me read out some of the comments from the people paying the rates bill. I have got one here from Grey Power in Waitakere—the very area that Mr Twyford is from. It said in its submission: “We call on The Government to restrain local government spending …”. It also said that the spending problem could be remedied by the removal of the power of general competence and the four well-beings.

What about Wellington? Annette King is from Wellington. What do the ratepayers down there say? The Wellington Chamber of Commerce said: “The four wellbeings have been a factor behind this explosive”—I will use the word again, explosive—“growth in council spending, rates, and debt over the past decade …”.

I want to say congratulations to the Hon Dr Nick Smith and the Hon David Carter on the work they have put into this bill and on the relief that ratepayers in this country are going to be getting after this bill passes. Ratepayers want councils to focus on good quality local infrastructure, good quality public services, and the maintenance of their regulatory responsibilities in an effective and an efficient manner. That is what we are delivering to the ratepayers in New Zealand.

The decade of bloated council rate increases, the decade where we saw debt quadruple from $2 billion to $8 billion, is coming to an end. The ratepayers in New Zealand, the people paying the bills, are welcoming the Local Government Act 2002 Amendment Bill, and I look forward to it passing its third reading.

It has been an extraordinary year for legislation in the House. Just when you think it cannot get any worse, just when you think you have hit a real legislative low, along comes Dr Nick Smith with his spade and digs even deeper, because this bill, the Local Government Act 2002 Amendment Bill, is just about one of the worst pieces of legislation I think we have had before the House. I say to Jami-Lee Ross that clearly he was not on the Local Government and Environment Committee, because if he was he would know that in fact the submissions we received in favour of the bill were about as apathetic and lukewarm as you could possibly get. Yes, submitters liked what Dr Smith said the bill was going to do, but when they were actually pressed by members of the committee to show how it would achieve the claimed outcomes, they all had to admit that in fact they had no guarantees of that. I do not think I have ever seen some of these groups as underwhelmed about a piece of legislation that they support as they were about the Local Government Act 2002 Amendment Bill. This will do nothing about rates increases—absolutely nothing. The great claim that it is somehow going to reduce rates and make it more affordable is a load of codswallop, and Dr Smith knows that. There is no mechanism in this bill to reduce rates and there is nothing in this bill that is going to result in a reduction of costs to councils.

Let us be clear. Where have the increased costs on councils come from that have been passed on to ratepayers? From infrastructure. They have come from infrastructure and from requirements put on councils by central government to meet new standards without the attached funding—without the attached funding. So when you look at the infrastructure, as Mr Williams pointed out, John Key has been telling local government for years that it needs to spend more on infrastructure, that its debt levels are so prudent that it is in the position that it can do that in a responsible manner, that our economic development as a country cannot go forward if local government does not come to the party and increase its spending on infrastructure, and that he wanted to partner with it to ensure that both central and local government were investing in this infrastructure. Local government went ahead, it did what the Prime Minister asked it to do, it did it in good faith, and then what happened? Nick Smith turns round and kicks it in the guts for doing exactly what the Prime Minister asked it to do, and uses it as a reason to pass a piece of legislation that will completely gut local government in New Zealand.

Was John Key setting up local government? Was this all part of some big plan to set local government up, so that it increased its debt because the Government asked it to spend more on infrastructure, and Nick Smith could then swoop in and blame it for increasing its debt to pay for the infrastructure that John Key asked for? Or is this just complete ineptitude, where one hand of Government does not know what the other hand is doing? Well, I always favour cock-up over conspiracy, so I suspect that Nick Smith and John Key just did not even talk about this. While John Key was travelling around the country asking councils to be more responsible and to invest in infrastructure, Nick Smith was slowly crawling along behind him, wringing his hands in pleasure, thinking “This is going to give me the reason I need to do what I have always wanted to do, which is to centralise power and control over local government in New Zealand.”

And it is a tragedy, because this bill removes the four well-beings. We heard from Jacqui Dean, who said: “Oh, it does not matter, because they can still do everything they already wanted to do under the new purpose clause.” Then why remove the four well-beings? If the intent was not to limit what local government can do, then why did we have to remove the four well-beings? The fact is that Jacqui Dean knows very well, and Nick Smith knows very well, that this is all about telling councils what they can and cannot do. This is all about restricting their activities. Dr Smith is nodding. He might want to tell his colleague Jacqui Dean, who said the exact opposite of that.

Dr Smith, as well as being the former “Minister for Manufactured Crises” is also the former “Minister for Manufactured Outrage”. He stood up today and he gave a great speech on just how dreadful it is that local government has gone into all these areas that it should not be going into, that it is out of control, and that it is just crazy what it is doing. What a load of nonsense. As Nick Smith well knows, the figures that he used to justify this legislation were so shonky that the Department of Internal Affairs had to take them down off the website, but not before we managed to print off a copy of them to show just how shonky those figures are. He constantly refers to the one council that is having financial difficulties at the moment—and very serious financial difficulties—which is the Kaipara District Council. One out of 78 councils. One out of 78 councils, and apparently we have to gut the entire system because one council at the moment is in trouble. It is no wonder that 100 percent of local authorities voted against this legislation—all oppose it, all say it will not work, and all say it will do more damage than good.

And it is all, apparently, to arrest rates increases, which this bill will not do. It will not do that at all, unless the message that the Government is now sending to local government is “Stop investing in infrastructure, because we don’t want you to do it.” Let us just remember that this is at a time when the Government is pulling back support for local government. It used to help out provincial councils with their local roads. Well, that funding has been cut. That funding has been cut right back. Where does Nick Smith think that those councils are going to get that money from? In order to bridge that gap, where central government did partner with local government, it will have to turn to ratepayers. Then Nick Smith will blame local government for having to turn to ratepayers to bridge the gap in funding that his Government has cut. Well, there is a word for that.

Local government knows very well the dangers of this piece of legislation. Nowhere is the impact of this going to be more serious than in provincial and rural New Zealand, where the councils rely on the flexibility of the four well-beings so that they can determine for themselves what their priorities should be as a council, in consultation with their communities. It is not Nick Smith sitting in Wellington telling them what their priorities will be; it is those councils deciding for themselves. So you look at the example of the Ashburton District Council, which is providing health services in Rākaia because the Government is not doing that. Those communities would not have access to those services without their council. Look at the running of festivals around the country for communities of interest; look at the work Mayor Meng Foon in Gisborne has been doing, trying to support the Gisborne to Napier rail line; and look at Mayor John Forbes in Ōpōtiki, who has been running an economic development strategy to get more aquaculture to provide hundreds and hundreds of jobs to employ the people of Ōpōtiki. Todd McClay should know. The Mayor of Kawerau is an absolute advocate for that community, and the work he has done leading a response to youth suicide in that community has been incredibly valuable in that community. If you look at the Mayors Taskforce for Jobs—

💬 Todd McClay: What’s his name?

—Malcolm Campbell—that is a scheme that has had far more success in addressing rising youth unemployment than anything this Government has done in its 4 years. Look at the work that Dale Williams has been doing, the Mayor of Ōtorohanga, in running that. All these things I have mentioned are now no longer going to be the mandate of local government. Well, actually, it should be up to local government. It is democratically elected. It is democratically elected, just like members of this House. It should be up to them to decide what is right for their communities, not for the National Government and its support parties to dictate down from on high.

One of the most worrying parts of this legislation—and Canterbury members know this all too well—is that when we have a reorganisation of local government at the moment, where a council is being removed or amalgamated, currently all the communities involved have the right to a referendum. So if you are amalgamating four councils, they will have a referendum in each of those councils. If one of those councils votes against it, it does not go ahead. What this means is that all that groundwork has to be done beforehand to address all the issues, all the concerns of the communities involved, before it gets put to a referendum. They know that if there is one district that feels as though its views and priorities and needs are going to be overlooked in a much larger council, then the whole thing could fall apart. That is what happened in Dr Nick Smith’s own area of Nelson-Tasman. Now that is going. Now there is no longer an automatic right to a referendum. So we will see—or we could see, and I think we will see—the subsuming of the interests of smaller councils by much larger councils without that protection that was in law to ensure that no community, no matter how isolated it is and no matter how small it is, will have its needs overridden by the views of a much larger voting bloc somewhere else in the district.

You only have to look at Canterbury, where the Canterbury Regional Council is not democratically elected. My colleague Megan Woods, who represents the electorate of Wigram, tells me that her constituents would love to be allowed to have an election for their regional council next year.

💬 Dr Megan Woods: Please.

Please, sir, Dr Nick Smith, can we have an election like everyone else in the country is going to have? But what we are actually seeing in this legislation, if you look at the Wellington region, is that it is clear that Dr Nick Smith is setting this up so that he can defer the Wellington election next year. So you will not be alone, Canterbury, in not having an election, because I suspect Wellington will also not have elections. The voters out there in Wellington at the moment could have, under this legislation, a power handed to the Hon Dr Nick Smith, when he takes back his role as Minister of Local Government, whereby he could just say: “You know what? Be damned with democracy. You don’t get to have your election, because I am on a tight time frame and you’re actually interfering with it, with all your needs for elections and elected members and such annoying things. So I’m going to defer your elections.” And who knows when they will get their election back? Who knows when they will get their election back?

This is not how local government needs to operate in New Zealand, and the worst aspect of all of this is that there is no mischief that needs addressing here. Local government ain’t broke. Dr Nick Smith has broken it now. It was not broken. It was working well. It was meeting the needs of all communities around New Zealand, not the ideological desires of one man, the Hon Dr Nick Smith.

We on this side of the House support effective, responsible local government, and that is why this piece of legislation, the Local Government Act 2002 Amendment Bill, is so important. The four well-beings have really been a tool that has enabled irresponsible and incompetent and inept local councils. It has given them the excuse that they need to overspend and to put ratepayers in a difficult position.

The spectacularly failed former Mayor of North Shore knows a lot about that. As my colleague pointed out earlier, rates went up under his watch much faster than the CPI. So, frankly, for the guy who has put the North Shore in such a bad position and who then congratulates the most profligate spenders in local government, I think his credibility is suitably well defined. My constituents on the North Shore tell me repeatedly that they are completely sick of the rates rises and the difficulties that they are facing. They are on fixed incomes, they are hurting, and they need some relief.

This legislation will give responsible local governments the ability to actually manage their resources and to manage what they have well. If they do choose to support events, activities, or anything of that kind, then they are able to do so, but it must be financially sustainable. Focus and discipline are what the ratepayers of New Zealand require of their local councils. They have the right to do that. But focus and discipline, unfortunately, are pretty well unknown territory for the Opposition parties. Local government really needs to take a grip and to be refocused, and we are giving it the tools to do that.

I must say that it has been entertaining, really, listening to the contributions of the Greens. We had one member the other day who called this piece of legislation “eee-vil”. I think that was how it was pronounced—“eee-vil”, it was. This was from an individual who never once came to a meeting in all of the submissions and all of the hearings, yet she gets—

💬 Jami-Lee Ross: Who was that? Who was that?

Oh, I do not know. She is someone over there. Denise somebody or other—I cannot quite recall.

Anyway, “Ms Evil” has really not looked too carefully at things, because what is evil about being clear about the role of councils in our communities? What is evil about being concerned about the escalating level of council rates and debt? What is evil about enabling the Government to intervene earlier with councils that have got it wrong so that we do not end up with the appalling situations like the poor ratepayers of Kaipara are currently being forced to endure? What is evil about giving elected councils far more control over the salaries of their executives and requiring more open disclosure of staff salaries? They have got it out of kilter. They have got it all wrong. This is a very important piece of legislation. It is only the first of the reforms that we are going to bring in to allow local government to do what it does best, and also to relieve ratepayers of the terrible burden that profligate spenders are giving to them.

So for the third time—this is the third call that I have taken on this bill—I would really like to commend this bill to the House. I believe in it. I believe in the John Key - led Government, and that we are heading to a brighter future. The Opposition parties have proved once and for all that they are out of touch, that they are not listening to the people. I commend this bill to the House.

This is a split call—5 minutes.

What is evil is Maggie Barry in her usual scathing way dismissing questions about what is going to happen on the North Shore. What she has not answered, what her party has not answered, and what she will need to answer to her constituents on the North Shore is whether the vast amount of council and local board funding will continue for arts and culture centres in her electorate. Will they be safe? Will there be money for flower gardens and events and—

💬 Maggie Barry: Yes, if they’re viable. If they’re viable, there will be.

Well, she says they will be. Can the member guarantee that? Will there be Sculpture OnShore? What about the art house, what happens to that? That is council-funded. What happens to the art house? What happens to the Michael King Writers’ Centre? Maggie Barry needs to tell the truth. Will Devonport’s heritage be protected? Will the Lake House Arts Centre be secure? These are legitimate questions that people in her electorate have been asking me, because she has been out there bullying them and telling them that the Government knows best. Sam Lotu-Iiga and Alfred Ngaro turned up for the North Shore Pasefika Festival last week, another festival with funding help from the local board. Will it go ahead next year? I have been to the North Shore Pasefika Festival every year since it began 6 years ago. Will it be able to go ahead if the local board cannot help fund it, and if Nick Smith says from Wellington that it is not a priority? Will Jonathan Coleman still be able to come to the Chinese New Year and moon festivals at Northcote Central and sit on the stage like he does every year, even though his Government does not believe that councils should be involved in the cultural well-being of communities?

Who is going to pay for the citizenship ceremonies that they front up to? Who is going to pay for the Anzac Day ceremonies? Are they priorities for councils? Do they come before local infrastructure, which the Government has forced local councils to pay for? We do not know. Should the local board give funding to the Northcote Point Community Creche, for example? You see, Jonathan Coleman said yes, and he has a special interest in that. I think he should be a little bit concerned about that. The Birkenhead Northcote Glenfield (Kaipātiki) Community Facilities Trust—run by Jill Nerheny, who received a QSM last year—is council-funded, and it fits under the four well-beings. How safe is the work it does? What does it do? It organises events, it does education, it does crime prevention, and it has Ministry of Social Development contracts for strengthening families. It is run out of its council-funded building. All of her work and all of the work that I have listed helps save ratepayers and taxpayers money, because it makes our communities great places to live and work in. It ensures that our local areas are vibrant, socially inclusive, and active.

The biggest lie around this bill is that the four well-beings are costly. There is no evidence of that. The evidence does not stack up. Rates are still going to go up—rates are still going to go up—and communities will lose their hearts and souls. What this bill is—as we all know—is another Nick Smith - manufactured crisis. It is part of his agenda that he has managed to convince the rest of the Government is a good idea. The Minister of Local Government, David Carter, who succeeded Nick Smith, has not been seen anywhere near this bill. He has not participated in any of the debates. He has been lazy. He has just picked up the work that Nick Smith did. The Minister has just picked it up and gone along with it, because he cannot be bothered listening to what people said.

I think the saddest thing about this bill is that the Government has not listened. All 78 councils throughout New Zealand oppose this bill. Of nearly 500 submissions, the majority were overwhelmingly in opposition to this bill. I cannot express enough my disappointment about this bill, but I am not surprised. The descriptions that have been given about the Government’s determination to destroy this part of our democracy have been many and varied, but for me it is just a demonstration of how this Government has become arrogant, smug, and know-it-all, and the people in our communities will end up paying for it.

It is my privilege to take a short call on this bill, the Local Government Act 2002 Amendment Bill, for the Greens. As the House will be aware, we will be opposing this bill. The reason for opposing it was determined by a financial crisis that is not happening. It was purely fabricated, and other speakers have actually spoken about that. There is no financial crisis in local government. The level of debt that is frequently referred to was imposed by central government on most local governments, and the ability of councils to be able to find income to augment that infrastructure build was actually dismantled by this Government. So, for example, in Auckland one of the first things that the National Government did when it came into power was to remove the ability of the Auckland Regional Council to develop funds through a regional tax raised on petrol. This is not fair.

This is not a fair bill. This is a bill that the Government is pushing through, despite the fact that it is deeply unpopular. As referred to before by colleagues on this side of the House, not one single council has actually said it wants this to happen.

It has been really clear through the process of this bill travelling through the House that this Government does not understand what local government does. Certainly, that was the impression I was getting from Maggie Barry and from other members on that side of the House who think that rates will go down, because they will not. That is not what this bill is about. It is about the Government getting control of the spoils, if you like. If this Government did have an understanding about what local government was about, there would be no way that this Government would remove the four well-beings out of the Local Government Act, because when you take those out you rip the heart and the guts and the soul out of local communities—you take it away.

What does this mean for Auckland? What it means for Auckland is that, having been through an undemocratic amalgamation—which, again, this bill wants to force elsewhere—all the work that it was required to do under the legislation that this Government passed to force that amalgamation will be for nothing.

I have here the Auckland Plan—one part of it. It was a requirement of the legislation that Auckland Council would develop a 30-year vision for Auckland City for those seven amalgamated councils. It is fantastic. The legislation set time frames. There was a huge amount of work that was done by both councillors and local board members and by the staff, who were under incredible pressure, and this is what they delivered—an amazing 30-year plan.

The cornerstone of this plan is the four well-beings: the cultural, the social, the economic, and the environmental well-being of the citizens of Auckland. It says in the preamble by the mayor: “The gap between those who have and those who don’t is growing by the day. This is not the society Aucklanders want, nor does it auger well for the future. The Plan contains strategies and actions that address these socio-economic trends. There is a particular focus on our children and young people—our parents and leaders of the future.” It is visionary stuff. It is amazing stuff. It is the four well-beings in action. If you take away the four well-beings, you take away the ability of Auckland Council to deliver on what it has set out to do—what it was, actually, originally forced to do—and when you do that, you undermine the communities in Auckland.

Not only that, but we need Auckland to do this. We need the council to do it, because the Government is not doing it, and that is what the rates are paying for. The rates in Auckland, in Maggie Barry’s electorate, are also paying for the forced amalgamation that this Government forced on to her electorate.

We will be opposing this bill, not only because of that but also for all the other reasons that have been listed by my colleague Eugenie Sage and by the people on this side of the House, too. We are also really worried about what this does to local government staff and what it does to good-faith bargaining in this sector. Thank you.

It is my pleasure to speak on the third reading of the Local Government Act 2002 Amendment Bill, which is all about showing that local government, like central government, needs to deliver better services to New Zealanders within tight financial constraints. These Better Local Government reforms provide clarity around the role of councils, strong governance, improved efficiency, and more responsible financial arrangement.

A lot of the debate has been around these mysterious four well-beings, and I sat through a very large number of submissions on these through the select committee process. I remember them well. There were a lot of submissions, as has been said, from mayors and councillors saying: “There is no problem. No need for change. Local government should continue to be free to promote social, economic, environmental, and cultural well-beings. No problem here, look the other way.” We also heard a lot of scaremongering about a great list of things that local government has been doing for decades, well before 10 years ago, when these four well-beings materialised, and that somehow they would not be able to do those. Well, they did them in the 1960s and 1970s, so why would they not be able to do them now?

But we heard some very different stories from the ratepayers’ associations. I remember very well a little old lady from Howick, who came along and wept in front of the select committee—

💬 Dr Cam Calder: Wept?

—wept, she did—because her rates had been going up, skyrocketing, over the last few years. She is on a fixed income, like many people. She had lived in the house that her husband had built after the War. She did not have extra money to keep on paying 10 percent more a year because Len Brown had chosen to distribute the rates in such a way as to see her rates going up by 10 percent. She was at her wit’s end, and that is what this Government is about doing. That is why I am so focused on restraining local government spending. Of course, before anything can be spent it must first be taken from people’s pockets, unwillingly.

The point about the four well-beings, as stated in the 2002 Act, is that they do not just allow councils to get into every activity under the sun; it is more than that. It is that councils have to promote the four well-beings. I have been a councillor on Auckland City Council and I have seen how it works. It is not just an invitation to do these things; it is an incitement. It is an instruction to broaden the gaze of local government into a whole lot of new areas—mostly areas that have been dealt with by central government already. That is why rates have gone up well beyond the rate of inflation over the past 10 years since these well-beings were introduced, it is why debt has quadrupled, and it is why, if unchanged, rates will continue to rise. Bringing in this bill is an important way to stop the gusher that we have seen in local government spending over the past 10 years, and I commend it to the House. Thank you.