Local Government Act 2002 Amendment Bill (No 2)

I move, That the Local Government Act 2002 Amendment Bill (No 2) be now read a first time. At the appropriate time, I intend to move that the bill be considered by the Local Government and Environment Committee, with instruction that the committee report to the House on or before 28 October 2016. This timing will allow councils to make submissions on the bill before the break for local body elections. The intention is to pass legislation in time for the newly elected councils and the Local Government Commission to use these improvements early in the new council term.

Local government touches everyone’s lives. Councils help to build our roads, supply our water, and collect our rubbish. They manage our libraries, our community halls, and our swimming pools. They make decisions that affect the lives of all New Zealanders in their local communities every day. Councils provide essential infrastructure and services to support regional growth, jobs, and community development. They have a challenging task, and their world is changing. The costs of providing local services and managing council infrastructure are rising faster than council revenues. Councils need new ways to manage finances, improve efficiencies, and create better value for ratepayers.

There are currently 78 councils and 66 ward authorities across New Zealand. Some regions in New Zealand are facing rapid growth, while others have to deal with declining populations. As a result some councils are struggling to provide services to their communities at optimal levels. This is because, individually, their rating base is small, and they are unable to attract the necessary levels of expertise within their ranks.

The current legislation focuses on amalgamation to gain scale for shared services. Communities in Northland, Hawke’s Bay, and Wellington have told us that they do not want full-scale amalgamation, but this bill provides a middle ground. Communities will retain their elected councils; the councils, in turn, will be able to work more collaboratively to manage infrastructure and services across our regions. This will deliver more joined-up, cost-effective services and better value for our ratepayers.

I have engaged with councils, iwi, and local government sector groups around the country over recent weeks, and have received their feedback on the Better Local Services reform package. This bill as tabled takes on this feedback and implements this package. First, this bill will allow two or more councils across a region to create more effective council-controlled organisations (CCOs). CCOs are a proven way to deliver cost-effective services and infrastructure to communities. The current legislation restricts the kinds of CCOs that can be created. Through multiple-owned CCOs, councils across regions will be better able to achieve cost savings and improved service delivery of water, transport, and other council services. Multiple-owned CCOs can have the size and scale to enable them to have much greater capability and capacity than can be achieved by individual councils. For example, this bill will allow a water CCO owned by multiple councils in the Waikato area. I know that councils are already exploring options for shared services to run a Waikato water network, and I know Mr Macindoe will be happy about that, too. A multiple-owned CCO could own the infrastructure, do the planning, and manage the network for its shareholding councils.

This bill will also remove some of the barriers to possible transport CCOs. Two models for regional transport multiple-owned CCOs will be specifically provided for in the legislation and, if councils prefer, there is provision to create a bespoke model that will require the approval of the Minister of Transport, and I know in the Canterbury region that will be welcomed. The bill also enables region-wide planning, with joint council committees able to prepare combined plans under the Resource Management Act. This would make life easier for communities and developers, as they would have only one set of planning rules to deal with across a region.

The bill also introduces much stronger accountability arrangements for CCOs. Councils can appoint a joint committee to oversee the management of their CCO interests. CCO planning and delivery documents will be closely aligned with council plans, to ensure that ratepayers get the services and the sustainable infrastructure that they need. Secondly, the Local Government Commission will be empowered to work with councils and communities to deliver local solutions. This bill will expand the processes available to the Local Government Commission. Current processes mean the commission is limited to reacting to reorganisation applications that it receives. The bill will enable the commission to be much more proactive in setting its work programme. Ratepayers and residents will see a commission that is much more responsive to local circumstances, working with local communities and councils, as well as with iwi, to find local solutions.

To balance these enhanced powers the bill will also place greater transparency and accountability arrangements on the commission. Any reorganisations will need to protect the integrity of any council - iwi arrangements. The commission and councils will need to consult with their local communities as well as with iwi on any proposed reorganisation. The commission will be required to provide annual statements of intent and agree the commission’s work programme with the Minister of Local Government at that time. The commission will also be subject to the Official Information Act upon the completion of its investigations, dispute resolutions, and determinations of appeals. They will also be subject to the Ombudsmen Act. It is expected that the commission will have an increased workload as it works with communities on shared arrangements. For this reason I am proposing the number of permanent commissioners be increased from three to a maximum of five.

This bill will make a number of changes to the Local Government Act. It will enable council-led reorganisations for the first time. Councils will be able to develop and implement reorganisation proposals in consultation with their communities and their neighbouring councils. The Local Government Commission will have enhanced powers to work with councils and Government to support reorganisation proposals. But, most importantly, these changes will enable more effective delivery of quality local services that will support regional growth, jobs, and local communities. I urge members to support this bill, and I commend this bill to the House.

💬 Mr DEPUTY SPEAKER: The Minister indicated that he intended to nominate a committee, but he has not done that, so he should.

I move that the bill be considered by the Local Government and Environment Committee, with an instruction that the committee report to the House—

💬 Hon Michael Woodhouse: He doesn’t have to do that.

I can do that at the end of the bill.

Thank you.

Tēnā koe, Mr Deputy Speaker. Otirā, e ngā mema o Te Whare nei, tēnā tātou katoa. Labour has serious reservations about this bill, which I will outline in my contribution this evening. But it is important that those reservations and concerns be tested in a very public manner. So it is for that reason, and that reason alone, that Labour will support this bill to the select committee. Our support, however, is not guaranteed beyond that point.

Tonight we will look at the package of amendments that the Minister mentioned. In my contribution I would like to go through the six main amendments methodically and then raise the concerns or reservations that I mentioned in my opening statement. Amendment No. 1 talks about increased powers for the Local Government Commission to unilaterally initiate an investigation into any aspect of local government reform, such as the establishment of multiple-owned council-controlled organisations—commonly known as CCOs—joint governance arrangements, transfer of powers, boundary changes, and amalgamations.

The point labours on around the unelected Local Government Commission and the ability to unilaterally initiate investigations. That is a concern for Labour. It is also important to draw the House’s attention to the Government’s track record when it comes to local government reform. The last time the Government tried this, in 2012, the reforms led to failed amalgamation proposals in Wellington, Northland, and my very own Hawke’s Bay, and the current situation with Auckland Council, and the North Rodney and Waiheke proposals, where those two particular communities want to opt out of the super-city. The Minister of Local Government has not even provided the Local Government Commission with a letter of expectation, nor the public with any assurances around how these increased powers will help councils or improve local democracy. A Government committed to improving the performance and administration of its agencies should be setting out expectations. This can include outlining broader Government policy frameworks and strategic direction, managing risk, and ensuring that the commission acts in accordance with best practice.

Amendment No. 2—the introduction of council-led reorganisations, with the objective of securing the support of all affected local authorities and communities, and endorsement by the commission. No problem with council-led organisation; in fact, this bill should be all about council-led reorganisation. No problem with support of all affected local authorities and communities. The endorsement by the commission, though, begs the question: why?

Amendment No. 3—greater use of CCOs, particularly for water and transport services. That raises three issues for me. One is about accountability. I acknowledge the Minister’s contribution about improving the accountabilities of the Local Government Commission but also accountabilities in relation to the role and expectations of CCOs. We have had examples of what happens when CCOs go unchecked. I have got a very local example of that, called the Hawke’s Bay Regional Investment Co., over the Ruataniwha Dam debacle. When you look at the case of the Hawke’s Bay Regional Investment Co., a CCO that has been allowed to push back the deadline for financial close on the Ruataniwha Dam not once, not twice, not three times, but seven times, and has operated in a secretive manner and with an air of contempt for Hawke’s Bay ratepayers, the perils of vesting too much authority in a CCO are plain to see.

Amendment No. 3—the greater use of CCOs for water and transport services also raises the issue for me around the ownership of assets. Who will own these assets? Will they stay in public ownership or will they be privatised? We hope we can get clarity from the Minister through the select committee process. The third issue I have around CCOs is the elected officials on the board. The Minister, in his briefing to us, mentioned that no elected officials will sit on the CCO boards and gave as one of the reasons managing conflicts of interest. But these will be major, major CCOs. If I just draw the House’s attention to this year’s Auditor-General’s report Governance and accountability of council-controlled organisations, it is mentioned in this report that councils need to be clear about the purposes of CCOs. They need to appoint the right people to govern CCOs and they need to meet the requirements of monitoring the accountability. There is a clause in the bill that talks around having no elected bodies on the CCO board. That is making a decision on behalf of elected councils.

Amendments Nos 4, 5, and 6 all refer to the removal of the ability of local ratepayers to petition their local authorities for a poll on any amalgamation or reorganisation changes. It also mentions the removal of the poll of electors for any council-led proposals on reorganisation and where all affected local authorities agree. It also mentions, in one of its main amendments, restricting the mandatory holding of a poll of electors to Local Government Commission - led amalgamations when a major transfer of water, transport, and/or Resource Management Act functions from one local authority to another is proposed. It is important that the Minister assures ratepayers that this bill does not remove the requirement for a public poll on council-led amalgamations.

We look forward to this bill coming to the select committee to be examined. It is important that I highlight the risk to ratepayers so that we ensure that they are not left carrying the can for changes without them having a say. We also want to make sure that crucial utilities remain in public ownership. The Better Local Services packages must not be used by the Government to force amalgamation and privatise council assets. We have concerns about the additional powers, as I have mentioned, conferred on the Local Government Commission, an unelected body, and how this will benefit local democracy. Enhancing the powers and scope of the unelected Local Government Commission, or LGC, is also risky and at odds with the stated aims of promoting council-led reorganisations.

It is unclear where the justification is for the Local Government Act 2002 Amendment Bill (No 2), or how it will lead to any real community benefits. I have attempted, like I said in my introduction, to identify the reservations I have with this bill, and the concerns I have. I stand by the fact that we will test those concerns and reservations through a public process. On behalf of the Labour Party, we support it to the select committee. We encourage people to have their say so we can help shape this bill to what I think the Minister is trying to do, and allay any fears ratepayers may have with it. Thank you very much.

I am rising to take a brief call on this Local Government Act 2002 Amendment Bill (No 2) in the name of my friend and colleague Hon Peseta Sam Lotu-Iiga. I am delighted to hear that the Labour Party will at least support this bill, at its first reading, to the select committee. As chair of the Local Government and Environment Committee I want to assure that member who has just resumed her seat, Meka Whaitiri, that the committee will give this bill very thorough and due consideration, as we do with every piece of legislation that comes before the committee.

This is, on the face of it, a very good piece of legislation, and I want to just spend a minute or two explaining a little bit about why it will have an impact, once it is passed, in an electorate like mine, the Coromandel. In the Coromandel I represent about 60,000 people in the electorate, as do most constituency MPs—about that sort of number. We have in the Coromandel—I have to deal with five district councils and two regional councils for 60,000 people. That is an awful lot of local government for a relatively small percentage of New Zealand’s 4.5 million people.

Across the country we have 78 councils—district and regional—and 66 water authorities. That is surely not, by any measure, the most efficient allocation or distribution of intelligent resource at a local government level. This bill is all about trying to create an environment where local government, the Local Government Commission, local communities, and local interests can ensure better supply of service to ratepayers in a way that gives real, meaningful value to those ratepayers and also to the councils that operate at a local government level.

There are three main objectives of this bill. Firstly, this bill will give more options for councils to create jointly owned council-controlled organisations. The council-controlled organisations that we know today were, essentially, established for the Auckland super-city, and that was what we know as a forced amalgamation. There is nothing in this bill that will in any way provide for further forced amalgamations. That is not a model that this Government wants to pursue. It may be something that the Labour Opposition and its memorandum of understanding partners do want to pursue, but it is not something that this Government wants to pursue.

The second objective of this bill is to give the Local Government Commission greater powers to support councils when they are, in fact, creating those council-controlled organisations, and when councils want to look at options for reorganisation across regions such as mine in the Coromandel.

The third and important objective of this legislation is that the bill will ensure that there is greater and more statutory oversight for the guidance of the Local Government Commission. I was delighted to hear the Minister make the point that he is intending to increase the membership of the commission to a maximum of five members. I think that is a very good move and something that will be welcomed not only by the hard-working current members of the commission but by anyone who has dealings with them.

This is a bill that is about lifting local government performance for all New Zealanders and ensuring that ratepayers get good value for their hard-earned ratepayer dollars. I know that there will be many councils, many individuals, and many stakeholder organisations that want to make submissions to the Local Government and Environment Committee, and I want to assure all of those organisations and individuals that they will get a good hearing from the committee. We are interested in hearing what their thoughts, views, and opinions are. I know that as we work through the select committee process this bill will come out of the legislative process—that is, the way we do things in this Parliament—as a good bill and one that is suitable and fit for purpose. I thoroughly commend it to the House.

It is my pleasure to take a call in the first reading of the Local Government Act 2002 Amendment Bill (No 2). For me, one of the most significant parts of this legislation relates to the possibility of using council-controlled organisations (CCOs) for shared services across different district or regional councils. I am personally glad that we seem to be passing the point where we are going to force amalgamations of councils down the throats of populations that do not want them. I have always thought that local government should be local, and the more local it can be the better.

Indeed, if I think back to some of the local government reorganisations that we have had over recent decades down in the region that I come from originally, which is Otago, I am not sure that we have actually got the balance right by going for ever-larger geographic conglomerations of formerly small councils into one bigger council. Councils used to be, effectively, organised relative to geographic barriers—hills and ranges—and they were small enough so that the job of running a council was normally taken on by the most capable people, or some of the most capable people from within those societies, who were willing to pay back their debt to the community by doing some civic service, effectively working part-time for close to free as mayors or councillors. Once those jobs became larger because those councils were forced to amalgamate into larger bodies, I think in some ways we actually ended up with a subset of people who were willing to put in that longer period of time because some of those who were willing to do something part-time for civil service were not willing to take on the bigger job, which just about turned into a medium-paid full-time job, but not a particularly well-paid full-time job relative to the skill sets that those people had to bring to bear. So I am quite pleased that we might, as a country, be ending the phase where we bring to an end the amalgamation of councils in large geographic areas.

I think it is a different case when it comes to amalgamation of councils within a conurbation, a larger metropolitan area. I can see why it was wise to bring together the councils of Auckland, which the prior Labour Government started a royal commission on and the current Government finished off, but in respect of rural areas, I do not think we need to have more amalgamations.

Having said that, there are also efficiencies that can be attained sometimes if there is sharing of services between more than one council. That is already starting to happen in some areas. In some areas of the North Island we are already starting to see the sharing of some services, be those waste disposal services or waste collection services. I think at some time in the future other services, like water reticulation and maybe sewage treatment, will maybe have more cooperation between councils. If, in order to facilitate that, we need some changes to the Local Government Act 2002 in order to have councils cooperating across boundaries, I think that is a good thing. So I am interested to support this to the select committee and hear submissions from councils to that effect.

I would say that we need to be careful we do not force councils to use CCOs, because one of the disadvantages of CCOs is that there is less political accountability for their decisions. Given that through local democracy we are voting for councillors to—on behalf of their voting population and their ratepayers—exercise democratic power for the benefit of those areas, I do not think we should be so paternalistic, or maternalistic, as to tell those councils that they must use CCOs, because on occasion they might want to have services delivered by the council itself, rather than by a corporate that is running a purely commercial model that the council may not as directly control because there is a board of directors who sit between the council-controlled organisation and the council. I can see why, if things are not going well, sometimes councillors would want to say: “I’m sick of this. I want to take control of this as the local elected politician.” And, in those situations, if that is what the mayor and councillors decide—that it would be better if it actually, for a while, came back within the council organisation rather than being in a council-controlled corporate organisation a little bit further out from the council—I think councils should be able to do that too.

I will be interested to check in the select committee that, with this legislation, we are not imposing, through a codified approach, the obligation or the ability of a Minister to impose council-controlled organisations by regulation, because, of course, that is what the current Government did in regard to the Auckland Council. It did legislate that some services had to be delivered through CCOs, rather than just that they could be, and I think that was a step too far.

For me, that is the most important issue that is raised by this bill. I look forward to hearing submissions from the many stakeholders, be they councils, be they infrastructure providers, be they ratepayers, be they environmental groups, or be they business groups. I think they will all have valid perspectives that will aid the select committee in its deliberations. I do not think I have much to add to that. I look forward to the progression of this bill through the House.

Ā, mauri ora, e Te Mana Whakawā. It gives me pleasure to stand in support of the Local Government Act 2002 Amendment Bill (No 2). Just briefly, just to cover off again, which was done quite admirably by our chair of the Local Government and Environment Committee, this particular bill gives a lot more options for councils to create a better delivery of core services. It also gives the Local Government Commission more support around councils, and it gives the Local Government Commission more oversight and statutory guidance.

One thing that I thought was interesting, particularly, from the Minister who introduced the bill, Hon Peseta Sam Lotu-Iiga, is that there has been quite a lot of consultation already around this new legislation, and particularly with local authorities across New Zealand; iwi, which to me is really important; Local Government New Zealand; the New Zealand Society of Local Government Managers; the New Zealand Council for Infrastructure Development; chambers of commerce; and also Business New Zealand.

This particular piece of legislation is another very, very typical piece of legislation that has been introduced by this Government. It is very common-sense, it is down to earth, it is logical, it is practical, and it is realistic. I commend this bill to the House. Kia ora.

After such a comprehensive contribution from the Government member Nuk Korako, I am not sure how to follow that act. I will do my best to try to live up to it.

I am pleased to be able to take a call on the Local Government Act 2002 Amendment Bill (No 2), which has been presented to this House. The Green Party, at this stage, shares, actually, a lot of the reservations that were raised by the Labour spokesperson on local government, but those reservations or concerns have led us not to be able to support the bill at this stage.

I do recognise the Minister of Local Government is presenting this as empowering legislation to address the funding constraints that, we hear from councils, are ultimately limiting their ability, sometimes, to provide core infrastructure, maintain it, and ensure their systems are resilient. In the discussions, though, with the Minister in the reading of the documents, we are yet to be convinced that the solution is not a funding-based solution rather than an amalgamation-focused solution. There is no doubting that councils are in a very difficult position at the moment in terms of the limitations on their funding base and their ability to be able to secure their infrastructure into the future, but we are concerned that although we are being told this is empowering legislation and it is not about forcing amalgamations, the context of this is that this is the first piece of legislation after the failure of three amalgamation attempts.

We have increasingly been hearing some quite strident comments from this Government in relation to local government. There have been, I would almost go so far as to suggest, threats being made to Auckland Council that if it does not free up more land, then the Government may step in, which I think is clearly the Government trying to distract from its own failure and that. Actually, the housing issues in Auckland are not a result of Auckland Council, but can be clearly sheeted home to this Government. But, actually, that kind of rhetoric of coming in and suggesting that central government will take over—I have heard the same comments being made approaching Wellington City Council in terms of the Wellington community’s resistance to the flyover. So we are in a context in which this Government is not giving local government the respect the Green Party believes it deserves.

For us, appropriate decision-making, which is decision making that is made at the level closest to the people affected by the decisions, is one of our charter principles. It is one of the absolutely fundamental beliefs that guide all of our decision making. We are very concerned, in particular, at the increased powers for the Local Government Commission that are contained within this legislation. The Local Government Commission, with this legislation, will be able to initiate investigations around transfer of functions between local authorities, joint governance arrangements, areas of common shared interest, and greater use of jointly owned council-controlled organisations (CCOs). I think it is worth remembering the Local Government Commission is appointed by central government. This bill will provide for an increase in members on that commission.

Although we are told that to balance the increased powers that are being given to the commission there will be increased checks and balances, some of those checks and balances are that it will be required to produce detailed accountability documents, such as annual plans and reports, and consult the Minister of Local Government when establishing its priorities. That is an accountability that goes back to central government. When our concern is a possibility of increased central government imposition on local government, an accountability back to central government does not allay our concerns.

We are being told that another check and balance is that the commission will be guided by criteria that are being set, again, by central government. Also, there is a concern for us that this is echoed in the CCO models, in the provisions that are being provided in the bill. So CCOs, which are a step away from democratic control, are set up as companies, and the Government’s rationale for promoting and privileging the CCO model over other shared service models is that it is efficient and it will save money. That is not universally true and that needs to be put on the table in the first place.

But even if it was that it saved money, then we still have to acknowledge that there is a removal of local democracy in that model, and that this bill will restrict and prevent any local councillors from sitting on the boards of those CCOs, as is very common practice at the moment. The argument given for that is that it is a potential conflict of interest. But we do have concerns that this is another quite significant step in removing local democracy. This will also provide for the CCOs to be able to comment on long-term local authority plans before a local authority starts the consultation process, so that is actually giving these company structures an additional point of influence in the democratic process. So although removing democratic involvement in their model, it gives them extra control and input into the democratic process.

You know, it has been a longstanding concern about how the public actually communicates with the CCOs and actually makes sure—we have seen examples in Auckland recently with Auckland Transport and the Ports of Auckland clearly getting it wrong in terms of reading the will of the people. This is one of the problems with the model and it is very hard for the council to then turn that round. The Minister has said: “Well, that can be sorted out by giving clear enough directions to the CCOs when you’re setting them up.”, but we are yet to be convinced that that is going to do the trick.

Further, the bill provides that the constitution of a CCO must not preclude the organisation from using any particular form of charging or source of revenue. So that is central government dictating the conditions around the establishment of a CCO. Take the example of charging for water—a deeply, deeply political issue. In the community I was living in when they were talking about putting in water meters, the local response was: “You put them in; we’ll smash them.” It is a very political issue and there needs to be political accountability to it. This legislation says that a council cannot set up a CCO with the provision that it will not charge for water. That is off the table, according to central government.

Further, it provides that shareholders of the CCO may impose additional accountabilities, including the requirement to describe in its statement of intent how the organisation will contribute to the objectives and priorities of the shareholders and the Government. So in the structure of them they will be accountable back to central government, and the Minister has said clearly that he sees that this is about getting the economic agenda of this Government moving more quickly.

Well, I believe that that should happen bottom-up—that the councils and communities negotiate their economic agenda and plans, that they should be making the decisions about what form and structure are best going to be able to deliver on their local aspirations, and that central government should be listening to them and supporting that. The Minister has said that Local Government New Zealand is very supportive. It told us it was told about the changes rather than being involved in any significant way. Again, another concern.

I rise on behalf of New Zealand First to take a call, and in doing so I need to acknowledge a wonderful contribution from the member across the other side of the House—a man whom Matt Doocey said this evening should be on only half his wages because he was a list MP. So, Nuk Korako, I think you need to talk to your man over there and maybe explain to him that you are just as hard-working as he is.

Speaking of hard-working, the piece of this legislation that annoys some of us more than anything is what I would describe as the “PNS”—something that the National Government seems to suffer from—which is patronising nanny State syndrome. That is all over this bill. If I look at the legislation—let us go to paragraph 2 of the explanatory note: “New Zealand’s local authorities need to adapt their governance arrangements and structures to lift performance and respond to emerging challenges.” Really? Is that true? Where is the evidence of that? It continues: “Councils need more options to co-ordinate and combine networks and scarce resources across regions and towns, especially for large-scale infrastructure.” Really? Is every council—and I have attended quite a few Local Government New Zealand conferences over the years and I do not hear, and I have never heard, Local Government New Zealand—[Interruption] I raise a point of order, Mr Speaker. I think you know what I am referring to. It is just a little distracting.

The ASSISTANT SPEAKER (Lindsay Tisch): Well, I am not sure what you are referring to, but I certainly know what I am. There is too much noise over here, because I cannot hear the speaker. So I would ask members to quieten down. Your point of order, Ron Mark?

That was exactly it, Mr Assistant Speaker. Thank you very much.

I do not recall Local Government New Zealand standing up and chorusing those words. What worries New Zealand First is that this piece of legislation, which supposedly has all been put together for the benefit of local government to enhance local government, has not actually been put together by local government. This is another attempt by the National Government—which simply hates local government. I do not understand why it has this syndrome. It has had MPs like Mark Blumsky here, it has three former mayors sitting in its ranks, but it seems to have this view that Local Government New Zealand forever needs to be told what to do and how to do it. So if we want to talk about council-controlled organisations (CCOs) and providing the capability for councils to come together and work together, maybe this Government should have taken time out itself to read the combined Wairarapa councils’ report and their own proposal for amalgamating the three councils in the Wairarapa—something that the Government and the Local Government Commission rejected.

The funny thing about certain councils around the country is that they are already doing this. Wairarapa—Masterton, South Wairarapa, and Carterton—is still the only region in New Zealand where you have a combined district plan. Do we need new legislation to make it possible to have a combined plan? No. In fact, the Wairarapa district councils—Masterton, Carterton, and South Wairarapa—were given an award for their innovative approach to producing a combined district plan. Do we need new legislation? No, because it has already happened. It has been done.

Do we need to be interfering at central government level on shared services arrangements? Well, actually—and it is interesting that we have got so many National Party MPs sitting here blabbering and chattering away to themselves and not listening; if they listened they might learn something—there are right now a number of shared service contracts in the Wairarapa. If the Government members would care to get off their lazy backsides, drive across the Rimutaka hill, and sit down with Mayor Booth, Mayor Patterson, and Mayor Staples, they would learn that, already, the three councils in the Wairarapa are doing this. One, they do not need to be told, and, two, they do not need to be told they are useless and that they should be doing this sort of thing. They have already done it.

If one listens to Local Government New Zealand carefully—a skill that this National Government seems to have lost; a skill it seems to have abandoned—one will find out that local governments are already working together in shared services. The Watercare Services contract here in Wellington—did it need this legislation? No. Did it manage to put together a joint venture involving all of the councils under the regional councils? Did the regional councils manage to do this without giving away the asset to a CCO that subsequently then denied the ratepayers the opportunity to have a say in how that asset should be managed? No, they did not. So what is this piece of legislation? This piece of legislation appears to New Zealand First to be just another underhand, dirty way of trying to force through the corporatisation of local government. It is about removing the word “local” out of local government, removing local democracy out of local government, taking away decision making from duly elected people who are given a mandate by their ratepayers to get on and do the job, and giving it to a bunch of appointed corporate suits, who then run their asset like a business and, dare I say, if they choose to do so, decide to sell it off.

The thing that stands out as glaringly obvious, and you do not have to look too far—I mean, look at Ports of Auckland and the controversy that arose as a result of its decision to ignore the ratepayers’ wishes in Auckland and set about its plan to change the way in which the Auckland ports are run, the way in which that real estate is managed. If we go back to—when was that? 2015—March 2015? Had we ever seen a situation where corporates, highly respected yachtsmen, sports people, and ordinary ratepayers came together as one to protest about the way that that CCO was managing that asset? No, we had never seen anything like that before.

New Zealand First is highly suspicious of this piece of legislation. We have not seen any sign of sincerity in the Government in the way in which it has handled local government up until now. In fact, we have seen derision and scorn heaped upon local government year after year after year, Minister after Minister. We might accept that there need to be some changes in the way that the Local Government Commission (LGC) operates, because over in the Wairarapa we were frustrated by the fact that the LGC would not listen to our proposal. We have heard countless times how, supposedly, the Auckland super-city model was going to deliver lower rates, reduce rates increases, and better its performance, and thus far none of the evidence suggests that at all.

This piece of legislation worries New Zealand First. We see it as the thin edge in a drive towards the corporatisation of local governance. We see the removal of local democracy, the removal of the ratepayers having a say in how their assets will be held and managed, and we will not be supporting this legislation to the select committee. We know that it will go to a select committee, but at this point we are simply saying to the Government: prove it—prove that this legislation is required, prove that it is going to achieve what you say it is going to achieve, and prove to us that this is not just another underhanded way of “nanny Stating” and taking over and directing local government, which actually should be left as the duly elected people to determine their own future. If there is a need for any more changes to the Local Government Act 2002, they should be the people who should be writing that legislation, because, quite frankly, if we applied the same standards that this Government is applying to local government to this Government itself, this Government would get a fail at every turn.

I stand to take a short call on the Local Government Act 2002 Amendment Bill (No 2) in the name of the Hon Sam Lotu-Iiga, in its first reading. It is common knowledge that councils currently face a number of challenges due to the demographic changes, economic shifts, and the environmental pressures that they face. Technology is changing, and so too must councils. This is what this bill is all about. It is not about building up shared services; it is about the provision and the ability to have a number of council-controlled organisations to help them all.

We have heard from Ron Mark, the member across the way there, about the councils in the Wairarapa and what they are doing, but not all small councils do that, and this bill will help enable them to do that. It will allow them to take responsibility for developing, refining, and consulting on the reorganisation of the council and on the proposals that are coming through that they will receive. It will equip them with a number of tools without them losing sight of the local preferences. This is a good start. It is a good bill. I welcome it to the select committee.

I want to also support the words that were spoken here tonight by the Minister in his opening kōrero, and I also want to support the words that came from the chair of our Local Government and Environment Committee. I think it is a good way forward and I commend it to the House. Thank you.

The next call is a split call. I call Eugenie Sage—5 minutes.

Tēnā koe, Mr Assistant Speaker. I am pleased to take a call on the Local Government Act 2002 Amendment Bill (No 2). Local government has got a critical role in ensuring a democratic society. It provides a check and a balance on the power of central government, and the Green Party supports effective democratic processes at that local level and governance arrangements. But we do not think that this Government trusts local government and we see that in this bill. It continues the centralisation of executive power at the expense of local democracy and at the expense of the public having a say in decisions that affect them. Although I would like to be as confident as a previous Labour speaker that we have seen an end to forced amalgamations, the powers that this bill gives the Minister to direct the Local Government Commission are quite significant, and that is one of the reasons that the Green Party is opposing it.

We have got the Local Government Commission, as my colleague Jan Logie noted, being appointed by Ministers, and in clause 16 we have got the commission getting a notice from the Minister that sets out the Minister’s expectations as to how the commission will perform its functions and exercise its powers. The commission then has to take account of the Minister’s expectations in developing its statement of intent and its work programme. It has got to report to the Minister on the extent to which it has met his or her expectations, and the Minister can write to the Local Government Commission and direct that it have regard to any relevant Government policy. It can review the commission—how it is operating and how it is performing—when in our view, it would be better if Parliament did that, and the commission has got to report annually to the Minister.

So what we are getting, with this power now for the Local Government Commission to initiate reorganisation proposals and for the commission to be under the thumb of the Minister, is, effectively, central government promoting its amalgamation agenda and using the Local Government Commission to do that. I think we saw that in Scott Simpson’s speech when he talked about, essentially, New Zealand having too much local government. National obviously wants big, centralised councils where there are fewer people making the decisions. So it is not an end to amalgamation; it is giving the commission significantly more powers to do that through initiating proposals.

One of our other major concerns is the reduction in public participation. The public is not going to have the certainty of there being a poll on reorganisation proposals, because if those proposals are initiated by councils and the councils agree, there is no need for a poll, and the previous provision for 10 percent of electors in a district to be able to request a poll is being removed. So, certainly, polls have to occur if the Local Government Commission is doing the amalgamation or reorganisation, but not if councils are doing it. We agree with the Mayor of Wellington that encouraging councils to do this while circumventing a poll is wrong and is not in the public interest.

The Minister of Local Government is also wrong in claiming that there are checks and balances on the powers of the Local Government Commission. The bill, through removing much of the work of the commission from the Official Information Act, is actually making its work much more opaque. It prevents the Local Government Official Information and Meetings Act from applying to any documents that have been created or received by the commission in the course of an investigation, a resolution of a dispute, the termination of an appeal, or an amalgamation proposal. So that is actually reducing transparency, and reducing a significant check.

The other major area where we have got a lot of concern is around council-controlled organisations (CCOs) and the corporatisation agenda that is potentially behind this bill. The Local Government and Environment Committee recently considered a petition raising significant concerns about the accountability or lack of accountability of CCOs in Auckland, and that is despite the fact that there are more requirements on those CCOs in terms of being accountable and the Auckland Council being able to set additional accountability requirements to those that apply elsewhere in the country. We have major concerns about this bill and we oppose it.

I call Su’a William Sio—5 minutes.

It is a sign of a Government that has become so arrogant and out of touch with our communities when we have a national housing crisis that ought to be fixed and instead what we have got is legislation that I do not believe local government asked for. I would have thought that a Government that had a heart and that cared about the community would spend our energy in this House finding the right solutions to fix the housing problem so that we do not have families sleeping in cars this cold winter.

This Government introduced this legislation arguing the efficiency argument. Whenever it uses that word “efficiency”, and argues efficiency, we are supposed to believe that something better will come of this and that there will be savings. It has used the argument of efficiency to remove trade union workers’ rights and to enable flexibility—actually, it is to shift the balance of power from the people on to a few. Tonight it does the same. It uses the argument of efficiency to take away the balance of power from the general public and shift it into the hands of a few. So my colleague Meka Whaitiri is correct. We have serious concerns about this bill, and although the Minister has said that he has consulted with a range of organisational stakeholders, my belief is that he has simply gone around and said: “This is what I intend to do.” That is it. There has been no request for input and there has been no participation by these groups in how this bill has been written.

When the Government uses the efficiency argument I cannot help but remember that it also did this when it imposed the super-city amalgamation, and it imposed it suggesting that somehow the amalgamation of Auckland would provide some savings. Today there have been no savings. Ratepayers continue to receive increased rates every year. It also used the efficiency argument for the reason why we should develop more council-controlled organisations (CCOs). Auckland has a phrase for CCOs. It is “corporate-captured organisations”, because you are taking away the power of elected representatives of our community and instead appointing certain people, who become no longer accountable to the general public but who are accountable to the masters who appoint those people on those CCOs.

I believe what the member from New Zealand First said. Already many local government bodies share and collaborate. There is no need to impose legislation that forces them to set up a new structure that then imposes additional costs on the ratepayers, because not only do you have to—let us say, for example, Watercare Services. Once upon a time in the former councils of Auckland we used to get a water bill every 6 months. Today we receive a water bill every month. Those costs have gone up. When this Government uses the efficiency argument, we are supposed to think that something better will come of it. People in Auckland know, through the super-city experiment, that big is not going to be cheap.

The argument that my colleagues from the Green Party said about the polls—that is crucial. We have not yet had a proper debate in this country since this Government has come into power about how important the role is that local government bodies play in our communities. They are genuine partners with central government in terms of delivering well-being—social, economic, and cultural well-being—to our communities. Since this Government has come into power, it has been focused squarely on controlling local government, and the amalgamation, I have to say, smells suspicious. This Government has had its chance at Auckland—imposing amalgamation there. It attempted to do it here in Wellington and it failed, and now it is doing it again in a roundabout way. So I will be looking towards our general public to make strong submissions on this bill in the select committee process.

It is a pleasure to rise and speak in support of the Local Government Act 2002 Amendment Bill (No 2) in its first reading. After those contributions from the Opposition, I would just like to return to planet Earth. I feel like every time we talk about local government, the conspiracy theories come out, the tinfoil hats get put on, and we hear very much about the “Roswell Area 51 Coalition”—hearing about what is happening out there in the wide universe. But back on planet Earth—

💬 Tracey Martin: How much are you paid?

Thank you, Tracey Martin, for being my main fan club member, and who thinks we are still on Back Benches.

But I would just like to say what a fantastic bill this is, and what a great initiative from our Minister of Local Government this is. As a very hard-working electorate MP—

💬 Tracey Martin: Ha, ha!

—as Ms Martin will know, one of the biggest issues that comes through the office is that constituents are very concerned, you know? They want to get the economy right from their rates with local councils, and they want to ensure councils are taking every step to improve their efficiency and to get good outcomes with their services. This legislation will give them a vehicle for councils to work smarter, more economically, and more effectively.

Look, in Canterbury there are a range of territorial authorities. I do not think anyone is looking for amalgamation. We are all pretty parochial and proud of our patches. But what we can do around economies of scale—especially in my area, which is quite rural. We look at Hurunui and “Waimak” joining together to deliver better services, and, pretty much, this is what this bill is about.

We have got some great learnings post-earthquake in Greater Christchurch, and we have had some really strange outcomes when we were looking at implementing new roading infrastructure for Greater Christchurch. You have one council investing heavily into a new motorway and then you have another council that is voting down the motorway’s extension into the city, and it is just not good for all the people within those jurisdictions. They expect better from their councils, and that is why these council-controlled organisations will allow more integration, they will allow more economies of scale and, overall, I think they will provide efficiency and effectiveness for ratepayers.

I commend the bill to the House.

It is a pleasure to speak on this bill and to support the comments by my colleagues Meka Whaitiri and David Parker and Su’a William Sio. Local government is always an issue that we like to talk about in this House, because it is very interesting to think about what a troubled—troubled—relationship this National Government has had with local government in the last 8 years.

I think it is important to consider the backdrop to this bill, which is the very vexed history of policy that this Government has had in regard to local government, starting with the forced amalgamation of Auckland. It took a good idea and made a hash of it, legislating away the right of Aucklanders to have a say, and to exercise their democratic rights that are enshrined in the law for all citizens in regard to local government amalgamations. It was not very long that it had been in office before it basically closed down democracy for Environment Canterbury, for the Canterbury Regional Council, so that its corporate dairy farmer mates could basically pillage the water resources in Canterbury. National was quite happy to shut down democracy in Canterbury and it still has not restored it properly.

The next thing the Government did was it stripped the four well-beings out of the Local Government Act 2002, basically, and narrowed the focus of local government considerably, against the wishes, I think, of most communities around New Zealand. It made it easier for councils to privatise municipal water utilities and then, really over the last 2 or 3 years, we saw this kind of comedy of errors as successive local government Ministers pursued this policy of forced amalgamations. Well, what a resounding success that was! It was given short shrift in Northland, in Wellington, and in Hawke’s Bay. It was a total disaster. So to hear Scott Simpson, the chair of the Local Government and Environment Committee, stand up and say that this Government’s policy is not to have forced amalgamations, he seems completely oblivious to the fact that that has been its policy for the last 3 years.

This bill that comes to the House today aims to facilitate the development of shared council-controlled organisations (CCOs) and shared arrangements between councils, and it makes a few relatively subtle tweaks to the processes and the rules around amalgamations and the powers of the Local Government Commission. This bill and the so-called Better Local Services policy package is a direct response to the abject failure of the National Government’s local government policy, which was all about forced amalgamations and was comprehensively rejected. So it has been a very troubled relationship that National has had with local government.

The other thing that characterises the National Government’s policy has been the persistent scapegoating of local government for every imagined ill. The one that we have heard most about in recent times is the Auckland housing crisis. If you listen to what the National members say about the housing crisis, the main thing that they like to do is blame the Resource Management Act and blame Auckland Council for the failure of their own policy.

The rather pathetic whimper that we were greeted with a couple of weeks ago when they released their national policy statement, which they promised 8 years ago in a campaign manifesto—it has taken them 8 years to deliver on that promise. They came up with a national policy statement that I know Paul Goldsmith, who fancies himself as some kind of libertarian, must be cringingly embarrassed to be associated with. It is a national policy statement that does nothing to improve or fix the restrictive land use rules that are a significant factor in driving up land prices and house prices in Auckland. So that is the rather desperate and parlous state of the National Government’s local government policy.

What it has done with this bill that we are debating tonight in the first reading is bring together a package of measures that are designed to encourage councils—if we are not going to go down the forced amalgamation route, perhaps we can encourage councils to set up some shared assets. So what this bill wants to do is to facilitate and make it easier for the establishment of multiple-owned council-controlled organisations—for example, for setting up a jointly owned transport organisation or a jointly owned water authority. We have direct experience of this already, and, as David Parker pointed out, the National Government imposed on Auckland a legislated transport CCO—it is in the legislation; if Auckland Council wants to bring the transport agency in house, it cannot because it is legislated in the Auckland super-city founding legislation—and it also set up Watercare Services.

I think, on the face of it, you would have to say that there is some logic to the idea of regionally or multiple-owned CCOs for these purposes. There is a proposal circulating that is being discussed in the Waikato. The Council for Infrastructure Development released a report recently that projected that if the Waipā, Waikato, and Hamilton councils created a joint water utility, they could save half a billion dollars over the next 30 years and $107 million over the next decade. Well, if that is true, those are pretty impressive savings.

You would have to look at the experience of Watercare Services in Auckland, and although many Aucklanders will complain that their water rates have not gone down, and in some cases have gone up, the establishment of a publicly owned, non-profit water utility has probably delivered some significant efficiencies in Auckland and allowed the creation of an organisation that has the balance sheet, the professional skills, and specialisation to properly manage the asset management of billions of dollars’ worth of waste water and drinking water infrastructure for one-third of the country’s population.

There is no doubt that many of the smaller and dispersed local authorities around the country have really struggled to meet the clean water standards and to invest in the plant and the technology that is necessary to deliver the environmental protection and the water quality standards that everybody in this country deserves. Probably the textbook case of a small rural council that failed in this duty was the Kaipara District Council, which got into a terrible mess in borrowing a whole lot of money for a water treatment plant at Mangawhai. I think we all do not want to see that sort of stuff continue.

Previous speakers have pointed out that in many areas around the country local councils are already doing a very good job of cooperating. I want to pay tribute to the councils in the Bay of Plenty. The Bay of Plenty Local Government Futures project, which has a track record both through that initiative, and also Smart Growth, which has been going on for the best part of a decade, including Tauranga and Western Bay of Plenty councils and others, are doing some really fantastic work in that area managing land supply, infrastructure, and land for both business and residential. It is a very, very impressive example of regional cooperation by local territorial authorities. So this bill has not invented the idea of shared services and shared assets, but it is something that is worth considering.

I want to spend the rest of my time talking about the proposed proposals to reorganisation procedures and to register our concern that what this bill does is it removes the ability of local ratepayers to petition their local authority for a poll on any amalgamation or reorganisation changes. We do not support that, and we will be arguing very strongly at the select committee and scrutinising those proposals. We do not support the removal of a poll of electors for any so-called council-led proposals on reorganisation, even where all of the affected local authorities agree, because local people and local ratepayers deserve and demand a say in the structures of representation and decision making in their communities. That is fundamental.

We have real concerns that this bill should not be used as a back-door attempt to pursue the same old National agenda of forced amalgamation. We support this bill going to a select committee, but we will be very closely scrutinising it.

Tēnā koe e Te Mana Whakawā. In taking a brief call on the Local Government Act 2002 Amendment Bill (No 2), a bill in the name of my hard-working and, I think, very pragmatic colleague the Hon Peseta Sam Lotu-Iiga, I just want to say that this is a very sensible measure. It was a bit rich to be lectured by the member Phil Twyford, who has just resumed his seat, in such supercilious tones about scapegoating local government. I do not think we on this side need to be lectured about scapegoating from that particular member.

There are examples of these measures in place. You can look to the Wellington region, where you can see the efficacy of leveraging off region-wide cooperation in utilities—in water, for instance—but you can also see massive room for improvement. For instance, our regional council has a woeful track record on transport within our region. Unfortunately, the leadership of our city council here in Wellington has not been ideal. We have not moved ahead as a city. There is an opportunity to correct that in the local body elections at the end of the year, but this bill also goes a very long way and is very positive. I, for those reasons, commend it to the House.

on behalf of the Minister of Local Government: I move, That the Local Government Act 2002 Amendment Bill (No 2) be reported to the House by 28 October 2016.

Motion agreed to.