Local Government Act 2002 Amendment Bill (No 3)

Thank you for the opportunity. May I just respond briefly to some statements made earlier by the Associate Minister of Local Government when he said that about $3,000 of savings will be made to developers per unit as a result of the Local Government Act 2002 Amendment Bill (No 3). I have to ask the Minister whether he can take a call and guarantee that those savings will be passed on to homebuyers. We heard from the Tauranga District Council also that in its estimation there could perhaps be savings of about $750 per unit. Mind you, Auckland Council submitted that the savings it was estimating would be about $1,000 per unit. If I were the developer, I would be asking myself whether I could realistically pass those savings on to the homebuyer.

That is the challenge we want to put squarely on the forehead of that particular Minister now. He needs to provide guarantees. We will help him by supporting this bill, to make sure that he lives up to the Government’s promise of building more houses. As shallow as these savings might be, we want to be able to ensure that people who need homes are able to access affordable homes. I know that earlier today, when my colleague Phil Twyford asked the Minister of Housing how he was going with building houses in those locations that are set apart in Auckland, that Minister said they were moving at a cracking pace. That was after how many years in Government?

💬 Hon Member: 6 years.

Six long years. That was also after the Government had recognised that there is a housing crisis. If that is the Government’s cracking pace, and still there are no houses being built today, then we need to know whether it is quite serious about it. I want to come to the Supplementary Order Papers—

The CHAIRPERSON (Lindsay Tisch): The debate is not about housing, all right?

I beg to differ.

The CHAIRPERSON (Lindsay Tisch): No.

OK. Look, let me then go to Labour’s Supplementary Order Paper 460, in my name, where we are asking this Committee to pass into legislation this Supplementary Order Paper, which ensures that one of the schedules in that clause—

The CHAIRPERSON (Lindsay Tisch): No, the schedules are in Part 1. We are on Part 2. We have covered the schedules in Part 1, and we had the debate on clauses 4 to 73 and schedules 1 to 10—

Part 2, “Amendments to other enactments”.

The CHAIRPERSON (Lindsay Tisch): —so you can talk to amendments—

Under Part 2, there are amendments to the Local Electoral Act, amendments to the Local Government (Auckland Council) Act 2009—

💬 Eugenie Sage: I raise a point of order, Mr Chairperson. Could I seek some clarification. You said that the schedules are in relation to Part 1, but Part 2 actually refers to schedule 8, schedule 9, and schedule 10, so are some of the schedules not related to Part 2?

The CHAIRPERSON (Lindsay Tisch): I am just seeking advice because my advice differs, and I do not want to put you wrong. Can you just bear with me a moment. The member may well be right. Just to clarify the points that have been raised by the point of order, the schedules that can be included in Part 2 are schedules 8, 9, and 10—all right? OK?

In terms of schedule 8, “Amendments to Local Electoral Act 2001”, there were some issues raised in terms of whether a person can hold more than one position if they are on a local board and also hold a position on the licensing trust, as opposed to holding a position on another local board. I want to say that I do not think that this bill goes far enough in ensuring that conflicts of interest are avoided when a person who holds a local board position in one area holds another position on a local board of a subsequent area. There was also debate, in public submissions relating to that particular part of the bill, on whether a person holding a local board position can also hold a council position, and whether a person holding either one of those positions can also hold a position on the district health board. I ask the Minister whether he would like to get up on his feet and make some comments about how we prevent potential conflicts of interest in terms of people who may hold more than one position on a local board, the council, or the district health board. That is a significant part of that particular schedule.

In terms of schedule 9, “Amendments to Local Government (Auckland Council) Act 2009”, the proposal by the Government is to replace section 12(3) with a new section 12(3) that reads: “A local board does not have separate legal standing from the Auckland Council and therefore, without limitation, may not,—(a) acquire, hold, or dispose of property; or (b) enter into contracts; or (c) appoint, suspend, or remove employees; or (d) commence, or be a party to, or be heard in legal proceedings.” After section 12(3) this schedule will insert: “(4) Nothing in this section limits the responsibility of a local board to make the decisions of the Auckland Council that are allocated to it in accordance with section 16.” I suppose that that needs to be made clear.

There were submitters who raised the concern that by imposing local boards as part of this Government’s amalgamation agenda throughout the country, what is happening is that there is the potential for this Government to, therefore, replace competent, democratic existing district councils and local territorial authorities with a local board. Although Auckland Council might now be finding its way through that particular structure and learning that, yes, it is giving local boards certain amounts of powers—probably a little bit more than the old existing community boards had—they definitely do not have the same powers as those held by a council. So the fear and the concern that was raised by some submitters was that they do not want to have this Government impose local boards as a replacement for existing, competent district councils. In fact, it goes back to the argument that there is strong and growing opposition to this Government’s amalgamation agenda. It also goes back to the earlier discussion that we had in Part 1 about this Government looking to ensure that it imposes its will on local government in terms of service delivery.

There are existing local government bodies today, I want to say, that have strong arguments and a strong case put forward as to why they should not be amalgamated, because they are currently able to deliver services in a shared way without the imposition of this Government legislating that for them. I name the Bay of Plenty region, in particular. The concern that it would have is that it has a strong case that it is able to work together, manage its assets, etc., but by imposing amalgamation on it without meaningful contribution or input by the residents and ratepayers, what we are essentially telling it is that its existing way of doing things is no good. Well, who is this Government to judge that particular region when it is managing multibillion-dollar assets in terms of the ports and is able to sustain itself? Who are we to make that judgment?

What I can say, based on the Auckland Council experience, is that if this Government continues in its relentless, misguided attempt to amalgamate and to force those amalgamations on the region, what the Bay of Plenty can look forward to is the loss of expertise, the loss of the environmental expertise that it currently has, the loss of leadership, and the loss of the vision for that particular region. This Government does not have a vision for that region let alone a vision for the country, so how on earth can it do that? I say that it would be wrong for this Government to continue along at this pace without making those required amendments to improve on this bill.

As I said at the beginning, we want to help this Government to keep its promise to build more houses. We have laid down the gauntlet in a challenge to it to build 100,000 houses within 10 years. We want to see that happen rather than have the rhetoric that it has been trying to fool New Zealanders with.

In terms of Part 2 and its references to schedule 8, which amend the Local Electoral Act and the way in which boards are to be elected, the Local Government Act 2002 Amendment Bill (No 3) is quite Orwellian in some of the language it uses. In Part 1 of the bill it sets out the purpose of local boards, which is to enable democratic decision-making by and on behalf of communities within the local board area. Part 1 sets out the functions, duties, and powers of boards and their decision-making responsibilities and their funding policies. In Part 2, in the relationship to the schedule, it sets out how they are to be elected.

But there was quite a lot of concern among some submitters that it would be all very well and good, and it may well strengthen democratic decision-making if the local boards were an adjunct to the existing governance structures, particularly as community boards have got very little recognition in the Local Government Act 2002, but this bill does not do that. It does not add them to the existing council structure. It is actually proposing that local boards are able to be used by the Local Government Commission in any reorganisation proposal to replace existing, independent, and—as Su’a William Sio said—competent councils. There were quite a few submitters who expressed concern about this. One, Dr Robin Gwynn, a former city councillor of the Napier City Council, said in relation to Napier—and, he thought, in relation to a large majority of other places in New Zealand—that the purpose of enabling democratic decision-making would be better achieved if the Government did not proceed with this part of the legislation.

We have seen in Part 1, where it sets out the powers of local boards, that those powers are quite limited. A local board does not have separate legal standing from the unitary authority, it cannot hold or dispose of property, it cannot enter into contracts, it cannot appoint, suspend, or remove staff, and it cannot be involved in legal action. The schedules also make that clear. Nor can a local board levy rates or make by-laws or other regulations; it has got only recommendatory powers. The experience with these boards in Auckland is that collectively they control only 3 to 5 percent of the budget of the Auckland Council, but they have a lot of responsibilities imposed upon them by the council for the delivery of services and functions.

What we are seeing is the Government’s very ad hoc approach to local government—ad hoc reorganisation proposals in the Hawke’s Bay, Northland, and Wellington—without any clear vision for what the relationship should be between central government and local government, except that this Government wants more power in the Beehive and more power centralised, and local boards are a way of quite significantly reducing the strength and democratic powers of local government.

Where you get a unitary authority, you get boards replacing the district and city councils. In Northland, where you may have had around 35 elected councillors, they would be replaced on the unitary authority with 10 councillors and a chair, and you would have local boards as well. Those councillors would be representing many more people, so you are centralising power in that unitary authority. When you combine that with the changes elsewhere in this bill—overriding the special consultative procedures, which reduces the abilities of councils, and removing the requirement for councils to use the special consultative procedure on significant decisions such as the establishment of council-controlled organisations—then you are reducing the consultative requirements, you are centralising power in the unitary authorities, and you are providing boards with very limited powers. That is a major undermining of democracy.

We are surprised that Labour is actually voting for this bill, because, of course, it was Labour that in 2002 established those special consultative procedures and sought to strengthen democracy. These parts of the bill—Part 2 and schedule 8 in relation to the local boards—substantially reduce democracy by replacing good and competent councils with local boards with much reduced powers.

Let me follow on from Eugenie Sage in discussing Part 2, which includes some of the schedules that relate to provisions that are about facilitating—as my colleague Su’a William Sio described it—National’s forced amalgamation agenda. The one I want to point to particularly is the amendment to clause 43 in schedule 3 of the Local Government Act 2002, set out in schedule 2 of the Local Government Act 2002 Amendment Bill (No 3). It sets out the powers of the Local Government Commission in implementing a reorganisation proposal and gives to the Local Government Commission the extraordinary power to impose council-controlled organisations on a newly reorganised local authority. We find that offensive. There is no reason that I have heard—certainly not from Government members—why the hand-picked bureaucrats on the Local Government Commission should be given the power to corporatise the assets, services, and affairs of a local government authority. Why should they? Why should they have the power to override the democratic will of the people in a local authority area and corporatise them?

This is basically the Rodney Hide Auckland model. What Rodney Hide did on behalf of the National Government was to corporatise a good three-quarters of the new Auckland Council and constitute those activities and assets into council-controlled organisations, which do most of their business behind closed doors. They are unaccountable, and it is a mystery to me why the National Government thinks this is a good idea.

I want to speak in support of the Supplementary Order Paper from Su’a William Sio, Supplementary Order Paper 460, which would remove this ability from the bill. It makes no sense. There is no justification for it. Why not trust the people of that area? If they choose to corporatise some of their assets and activities into council-controlled organisations—that is a misnomer if ever I have heard one—why not let them do it? Let the elected representatives decide. But, no, National knows best.

💬 Andrew Little: The National Party doesn’t trust them.

It does not trust the people. It always knows best, and, as it did in Auckland, it steamrollers over the wishes of the local people and it decides. In fact, in Auckland Steven Joyce went as far as actually legislating that Auckland Transport must be a council-controlled organisation. He does not trust future generations of elected councillors in Auckland to decide whether they want that particular part of local government activities in the main body of the council, or whether they would prefer to see it run as a council-controlled organisation. So we are utterly opposed to that provision. We think it makes no sense at all. In fact, it is a retrograde step.

I support what William Sio said about the provisions in this bill that essentially reflect a rolling out of the Auckland model, such as it is, around the rest of New Zealand. Although there is a certain logic to the way local boards fit within the new Auckland Council, it is highly questionable whether they are suited to the rest of New Zealand, where you have got dispersed and often isolated communities, which this National Government wants to forcibly amalgamate into bigger local government units. Those local boards are simply not suited. They have very, very constrained powers. When the communities around New Zealand that now enjoy democracy—being able to elect their local representatives and having full decision-making power over the affairs of their communities—are forcibly amalgamated into bigger governance units under this Government and under the provisions of the earlier local government reform bill, they will find it unsatisfactory that all they can rely on to express the views of their local community is through having a say on these boards. We are critical of that.

I want to come back to the development contributions provisions—various transitional provisions are included in Part 2—to just make the final point that this is classic, kicking-the-can-down-the-road National. It pretends to be doing something about development contributions, but really it is just kicking the can down the road. With National, it is all about managing the politics and the optics of this issue. It is trying to look like it is doing something, but it is not doing anything substantial about the problem. It could have done a much more fundamental and thoughtful review—

I am quite keen to talk on Part 2 of the Local Government Act 2002 Amendment Bill (No 3) because of its association with the provisions in the Local Electoral Act and also the Local Government (Auckland Council) Act of 2009, which I was very familiar with at the time. I am one of the survivors of the super-city in Auckland. In 2009, when I was in my role as an Auckland City councillor representing the ward of the Hauraki Gulf, we waged a very, very ferocious campaign against the Government’s desire to collapse our local democracy and introduce local boards. We did this because we did not believe that local boards would give us the sort of local democracy that we wanted, and, in fact, what we wanted was more decision making, not less. Originally, the smaller communities of the gulf—Great Barrier and Waiheke—were not going to have any representation of their own at all. They would have been collapsed into a local board based in central Auckland.

After 4 years of this amalgamation, of this model that this Government wants to roll out to the rest of the country, I have to say that the local board model has not developed more powers for communities. Without a doubt, those who are elected to local board positions do so with the best of intentions to represent their communities and to have the ability to advocate on behalf of their communities at the governing body level, but they do not have access to the funds. I agree with the previous speaker on the powers that were stripped from councils through the legislation, which are still in this legislation, which was when the National Government introduced council-controlled organisations. How that has played out in Auckland is that local boards struggle—they absolutely struggle—to be heard by these unaccountable and corporate organisations, which control more than half of the entire council’s assets.

Auckland Transport, for example, is very difficult to deal with. A resident of Waiheke quite recently wrote to Auckland Transport to complain about the fact that when it had done maintenance on Seaview Road on Waiheke Island, which has no footpath, it had made the road less safe for walkers, less safe for cyclists, and less safe for horse riders. This person—his name is Michael Tavares—asked Auckland Transport what he should do if he is faced with a car that has sped up as a result of Auckland Transport’s maintenance, which was actually a redesign of the entire road. The letter he got back said that basically he should jump in the ditch, because that would be his only alternative.

Our local board has been trying and trying and trying really hard to work with Auckland Transport on some design specifications that would fit with our particular community, because that is what a local board does. It advocates. Our local board representatives have had very little and no response from Auckland Transport because it is not accountable. It is not run by elected representatives. So we are faced with ridiculous comments from our Auckland Transport people, saying to go and jump in a ditch. That kind of sums it up. That is how local government will play out once you remove the decision-making powers of local boards and local councillors from local democracy.

It is very, very disturbing to see that this Government wants to roll out more amalgamations across the country, because it does diminish democracy. When we are paying rates, then surely we should have a say in what kind of representation we should have. I believe, and I am sure most of the people in this Chamber believe, that we should not have taxation with no representation. But this is what can certainly happen when you roll out the local board model and you force amalgamations. What happens is that there are fewer locally elected and accountable representatives. There is less control of the assets, and there is a weakening of the powers that local representatives have in their communities.

We have to question why the Government’s agenda is to roll out amalgamations across the country. Could it be that it wants to force not only the corporatisation but also the privatisation of council property and council assets? In Auckland, one of the council-controlled organisations we have that came about as a result of the forced amalgamation is Auckland Council Investments Ltd. That organisation controls most of the major properties around Auckland that the council owns, including the Ports of Auckland. We have seen time after time elected representatives attempting to get information from the Ports of Auckland, from Auckland Council Investments Ltd, about what sort of costs it has had to bear in a fairly nasty and unpleasant industrial relations dispute that has been carrying on for the last couple of years. The ability of local representatives to get that information about how much it is costing the ratepayers of Auckland for a very unpleasant industrial dispute—that information has not been forthcoming.

The elected representatives have very little power to take on any kind of scrutiny of the accounts because they are just simply not presented. The only way councillors in Auckland can administer any kind of scrutiny of the Ports of Auckland is through the Auckland Council Investments Ltd’s statement of intent, where they get to ask questions of its chief executive there every 3 to 6 months. That is outrageous. These are assets that are owned by the people of Auckland, and yet they have no say and no control over them. Certainly, there is very little accountability.

Local boards are not a panacea. They are not a way of increasing democracy; they are a way of decreasing powers for communities. We have some very good, competent councils throughout New Zealand, and to collapse them into local boards and governing bodies is to continue the mistake that was made with Auckland. We could be so much better in Auckland. We could have so much more democracy there. We could have far more engaged people taking an interest in what our council does if we could have more transparency and accountability. But to force amalgamations on other centres is unacceptable. It is anti-democratic and it is not something that I think this Government should be rolling out throughout New Zealand.

There is a principle in democracy that says you do not have taxation without representation. That phrase comes to mind in this situation, where a part of the Local Government Act 2002 Amendment Bill (No 3) suggests that the Local Government Commission will have the right to impose council-controlled organisations on any re-amalgamated local body, once that has been put in place. That is not really, I believe, what New Zealanders would expect. There is a requirement to streamline some areas of local government, and there is a requirement to look at better ways of delivering services, but it should not be for some Wellington commission to determine for a particular area how that local area should itself fully operate. It should provide the tools and it should provide the mechanisms for the local people to determine how they will operate in their particular regional area, but it should not impose that on them.

In such a situation—and I look at a situation like Hawke’s Bay—it should not be the right of people distant from the Hawke’s Bay to say to Hawke’s Bay: “We’re going to put you all into one new council.”, covering an area that will be over 150 kilometres in length.” It takes up to 4 hours to drive from the Māhia peninsula down to Takapau, which is an extensive area of the country. And it should not be the right of that commission to then say: “Not only are we taking your democratic rights away and imposing a new council on you but we’re also going to impose council-controlled organisations to control half of your assets.” That is not right. I do not think the people of Hawke’s Bay would put up with that one little bit. Locals should have a right to determine what they are going to do in terms of their own democracy.

If the people of Napier, which is a very proud and longstanding community in this country, feel that they are big enough, ugly enough, and sufficiently robust enough to operate in their own right, they should have the right to continue to do so. If the majority of the people of Napier say: “We’re happy as we are, thank you very much. We have no debt.”—and Napier City Council has no debt—“We operate an efficient council. Our people are happy. They are all content. They have good services. They have good community infrastructure. They have good service infrastructure.”, and that sort of thing, then the people of Napier should have the right to say that they wish to continue in that manner. It should not be that the rest of the people around the Hawke’s Bay, Hastings, Central Hawke’s Bay, and further north have a vote and outnumber them, and then they roll into town and say they are taking over the city. That is not right at all.

This country went to war—and we are coming up to the 100th year since the start of the First World War. We went to the other side of the world to stand up for democracy. We went to stop perpetrators coming from other countries into other lands and taking them over against the people’s will. We went to defend that right of democracy. Yet, here within New Zealand, this National Government is basically setting up a mechanism and changing the Local Government Act 2002 to allow exactly that. Basically, outsiders and people with bigger strength and bigger muscles, sworn to the Government and all that sort of thing, can just basically come in and take over local interests. That is not on, and that should not be allowed in a good, democratic country.

We have seen huge failings in Auckland with the structure that Rodney Hide, John Key, and the National Government put in place there. There is huge resentment towards what has happened there and towards the loss of local democracy there. There are instances where those council-controlled organisations simply have no interest in working with communities at all. Auckland Transport, which is constantly being criticised, is a classic one. It moves into areas and just simply puts in things without any consultation with locals, and the locals have to suffer it and businesses have to suffer it. I can recall cycle lanes being put in on Rosedale Road on the North Shore. They just appeared overnight—they just appeared. There was no consultation, and lots and lots of parking spaces for all the local businesses were taken out. The local businesses could not believe that it had happened right under their noses, and yet that is how these council-controlled organisations work. That does not happen with good city councils that are working on behalf of and with their people.

In this respect, we do wonder what the long-term agenda of this Government is, when Local Government New Zealand and local authorities throughout New Zealand have been working very, very hard to look at all areas of improvements and services at local government level. We have seen huge strides in terms of shared services. Our Local Government and Environment Committee heard submissions over the last year or two on a number of the amendments to the Local Government Act 2002. We heard from councils how there are so many more shared services occurring in the likes of the Waikato and in the likes of the Bay of Plenty. We were hearing about it happening in the councils in the Wairarapa, in Hawke’s Bay, and, indeed, across Canterbury, where there is so much more work going on between the councils, and down into Southland and Otago. All these councils are working so much more collaboratively to share services and get the best that they can. They are sharing management, sharing expertise across councils, and bringing in experts to assist across a range of councils—regional councils and territorial authorities.

We do just wonder why this Government does not want to work in partnership with local government. We have only two tiers of government in New Zealand, central and local government, whereas Australia has three with the addition of the State Government. Many other jurisdictions and sovereignties around the world have two or three tiers of government; we have just the two. It is a shame that this Government, everywhere it turns, seems to want to remove the ability of local government to perform. It wants to remove very, very skilled people from local government—people who have dedicated a lot of time over many, many years, and who are leaders in our community. The Government wants to just basically take them away.

It is quite surprising that so many of them support the National Party. The mayors and so many of those councillors are what you would describe in many cases as National Party supporters, and yet they come to me and say: “Goodness knows why we continue to support the National Party, because all it does is intend to basically kneecap us.” I would say to a lot of the mayors and a lot of the councillors out there around New Zealand that if, as National supporters, they to continue to support and vote for the party again this year on the basis that they think that it is doing a good job for local government, then they are sadly wrong. It is time that more and more people in local government woke up to the fact that the National Government is out to basically centralise the power back to Wellington. It is out to control the local authorities around New Zealand. It wants to divide and conquer. It wants to make sure that it pulls all of these authorities into bigger entities and then turns half of them into council-controlled organisations with people whom it can appoint to the boards, it can control, and it can influence. Probably half of them are members of the Cabinet club who get on to some of these boards, so that National can basically control them with the big strings from the bureaucracy in Wellington.

Well, that is not what is good about local democracy. That is not what New Zealand stands for. We go overseas to fight in wars to stand up for democracy in countries where they do not have that level of democracy. We stand up for local people having the right to determine their own destiny, and in this case New Zealand First will not be supporting these changes. Again, we will say that after 20 September we will ensure that many of these things are turned round and put back how they should be, on behalf of the good democratic country of New Zealand.

Part 2 agreed to.

Schedule 1

The question was put that the amendments set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to schedule 1 be agreed to.

Amendments agreed to.

The question was put that the amendment set out on Supplementary Order Paper 463 in the name of Brendan Horan to schedule 1 be agreed to.