Local Government (Community Well-being) Amendment Bill

Thank you, Madam Chair. This is perhaps a good bill to follow the Fire and Emergency New Zealand (Levy) Amendment Bill, because as we left off before dinner my contribution was around the potential which the Minister signalled for the levy collection to also take into account local government ratepayers. My comments just before the dinner break were beginning to raise concerns around the impact on ratepayers—[Interruption] I am in fact speaking to the Local Government (Community Well-being) Amendment Bill, but in the context of the previous bill. My concerns are the same in this bill, where the Minister, perhaps rather than indulge in any fresh thinking on the Local Government Act, has merely reinstated—and it says that in the bill—a part of the bill which had been taken out. So when we get to the title and commencement part of the debate, I signal that I will be calling it the “Tit-for-tat Bill”. I don’t see any fresh thinking in this piece of legislation.

What I merely see is a Minister in a Government who needed to get what they felt were some wins on the board quite quickly, which was to just simply reinstate something which had been removed from the bill. We remain resolute that our focus for local government should be on good quality expenditure on behalf of ratepayers and good quality expenditure should be confined to the provision of good quality services, particularly around infrastructure for local communities. We make no apology for that and that remains our position. The well-beings are being put back into the bill. It sounds great, you know—great applause!—but I’d ask: what does it really mean? What does it really mean? Isn’t it the function of each local authority mayor and councillors and those people who spend the time to attend meetings and submit on various proposals and have their view, as they should do—they are part of a community, so by definition a local authority is the community that it serves.

So merely putting the words back into the bill—I’d like to hear from this Government what in fact that adds rather than “Thank goodness, it fills up the Order Paper for them, which otherwise is looking a little bit thin.” It’s not putting something on to the Order Paper which is new and refreshingly exciting. No, it’s not. It’s simply, you know, hauling something from 2007 and reinstating it. Well, that’s the start and finish of it, from what I can see.

I do go back to my comment that our position was, still is, and always will be good decision-making by local authority mayors and councillors and chief executives and all those involved in providing good quality, well-considered expenditure on those things that their community needs.

I will make further comments around other aspects of this bill in in due time. But I want to return to my first point, which is the point I was raising in another aspect of a piece of legislation which had an impact on local communities, and that was the signalling of Tracey Martin, the Minister, that she was considering placing local government ratepayers squarely in the frame for funding for a fire service levy.

CHAIRPERSON (Poto Williams): Can I just ask the member to come back to this specific bill, please? Thank you.

Thank you, Madam Chair. So in the context of the local government bill and the impact on ratepayers, that means that there will be a cost to ratepayers. And if there’s one thing that we in Parliament should be doing and should be focusing on, if there’s one thing, that is providing good quality services and infrastructure to ratepayers. But things like the fire service bill and now this bill, in placing the well-beings back to the purpose statement of the bill for no good reason other than they need to fill up the Order Paper, I would say are a threat to that good governance philosophy which local government should hold dear. Thank you.

Thank you, Madam Chair. I’d just like to make a contribution also to the Local Government (Community Well-being) Amendment Bill in the committee stage tonight.

My colleague the Hon Jacqui Dean has coined a lovely turn of phrase for the title of this bill—I’m sure she’ll speak to it again—the “Tit-for-tat Bill”. Labour introduced these well-beings into the Local Government Act and then in 2012 National took them out. So now Labour is putting them back in again, hence the tit for tat. But the reality is that the removal of the four well-beings—the social, economic, environmental, and cultural well-beings—did not prevent councils from actually doing any of them. It didn’t stop councils or prevent them from taking account of all of those individual well-beings when they were planning or when they were investing. So in actual fact there is very little point in putting them back in, except if we are going to impose a whole other level of compliance and reporting.

I would argue that everything that councils do is actually done via the lens of how the communities and the environment are impacted. So councils make decisions based on the demands of their community, the demands of their infrastructure and growth, and also the impact on the environment. So already the councils are in effect doing what it is that these well-beings are setting out to do without the added compliance and reporting, and I’ll cover that compliance and reporting in a bit more detail.

Every aspect of council activity will need to be addressed and assessed in terms of the four well-beings. We know this because councils have been through this in the past. So I would like to have some assurance from the Minister around what this reporting and compliance might look like once these four well-beings are implemented back into the bill, because I can tell you that this is a huge cost and a huge compliance for local councils, especially for those smaller ones—so just some confirmation of that from the Minister about how that will be reported and assessed once implemented.

I know that there are probably some idealistic reasons for wanting to have these four well-beings back in the bill, and we can assume, then, that if there is deemed to be such a need, there is a problem to be solved. So I would like to know from the Minister what it is exactly that the councils that are not performing at the moment—what it is that we’re setting out to improve or achieve in terms of these four well-beings going back into the bill.

I do recall recently at a select committee process that the Government members on the select committee were adamant that they did not want performance targets inserted into the piece of legislation that we were debating—the bill that we were debating and working on at the time—and the rationale behind not wanting those performance measures or performance targets inserted into the bill was that it would distract from the actual performance of the agencies that would be responsible and that they would focus their attention simply on ticking the boxes rather than focusing on the real issues that needed addressing. So, on the one hand, the Government says, “No, we do not want to have performance targets or performance measures, because they will turn into a box-ticking exercise.” and yet, at another level of legislation, we are doing exactly that. So I think there is probably a little bit of a dichotomy there.

I just wonder how this bill is actually going to encourage anything other than box ticking, whereas I’ve explained previously that the actual implementation of the four well-beings is happening regardless of whether it’s embedded in legislation or not. It certainly has not prevented councils from investing in the things that this legislation seeks to implement, which are things like swimming pools and libraries and sports grounds.

Another aspect that I’d like to explore is how developing these performance measures and reporting against these performance measures will actually be implemented and how we will explain it to ratepayers, as the Hon Jacqui Dean has pointed out, because by default it’s the ratepayers who will be funding this new level.

I also seek from the Minister some confirmation around the consequence of this bill and the need for independent auditing of these performance measures in this bill. I presume that will be done by Audit New Zealand as the independent auditor that most councils do use, and also, in terms of developing those performance measures, will we then be expecting councils to have to employ additional staff to undertake the work of developing those performance measures and then reporting on them? In the previous iteration of this legislation, there was a whole department required to set it up, because the reporting has to be done in such a robust way that there are multiple levels of compliance required.

For instance, we have to be able to prove that the community has some degree of satisfaction with how the council is performing in one particular area, and it may be that this is assessed in some way. Usually there would have to be a community survey, where a survey goes out and the community is asked to grade the performance of the council. There could be up to five levels of performance, as we’ve had in the past. Whether there is intervention required perhaps is an example. The second one could be that they don’t actually meet a target, that they do meet a target, perhaps that they exceed a target, or even that they achieve excellence.

So that assessment has to be done for every single aspect of council activity. I just wonder whether the Minister can give some reassurance to council that this is not going to add extra compliance as well, because if all we’re doing is asking Audit New Zealand to undertake extra work within council—the invoice that is sent to every local government for their audit so far is usually around a six figure sum—and if we’re asking ratepayers then to move to even more added cost, I tell you they will not be happy with that. And I would just like some reassurance from the Minister of Local Government, if I could, that the level of compliance is not going to be onerous and that the performance measures are going to be realistic and simple to comply with. Or is every council going to be asked to develop their own set of performance measures and reports, survey, and then make public those outcomes?

I do then also just want to touch slightly on the purpose of any reporting that Audit New Zealand may do and whether we are looking towards having some kind of a grading system for local government—whether we’re expecting for Audit New Zealand to start ranking local government performance and, if that is the case, then perhaps we need to understand that up front and that would be appreciated. Thank you very much, Madam Chair.

I’d like to take a brief call as we are going into the committee stage of the Local Government (Community Well-being) Amendment Bill and just highlight and recapitulate, really, what local government wanted, which was to restore the four well-beings back into local government legislation because it did give greater emphasis and focus on what councils actually see as their day-to-day tasks, which is beyond roads, rates, and rubbish.

If I come to the reason why we elevated the four well-beings within the purpose of this particular legislation, and Part 1 in particular, it was to ensure that in the current long-term planning cycles that councils are engaged in, as well as in the annual plans, greater focus would be given to the four well-beings council by council as they tried to rearticulate back to the community the things that community wants and sees as essential to their quality-of-life aspirations.

Now, if there was one thing that was highlighted to me very early on when I came into this portfolio, it was the importance of ensuring a broader lens was applied to the role and function of local government and the work that they did. I did hear the question posed around extra costs. While it’s not intended that this will create any further cost, in fact what it does will provide a greater focus and emphasis on what councils generally do on a day-to-day basis—which is beyond roads, rates, and rubbish—to be able to provide for the types of things that help a community grow and thrive.

Let me just highlight a couple of those things, because it might actually help focus why the four well-beings are so important: things like facilities in your community that young people can have access to. In many community engagements, when they were going out and speaking to their community about what they wanted to see—and it’s very, very local and simple for many districts, small communities in particular, who don’t have access to big recreational facilities: a skateboard park, some opportunities for young people to go and play, sports grounds that are enhanced to enable other activities, a recreational facility.

Look, just the other week, I was down in Westland and their recreational facility is a fantastic—fantastic—example of a community facility which has a multi-purpose benefit and is about place making. Now, that was done with a broader ambition in mind, and that’s actually the four well-beings. It didn’t just focus on the aspects that members of the Opposition would have council focus on—roads, rates, and rubbish—but that broader aspiration around bringing the community together, having a multi-purpose facility, fundraising to be able to do added things in the community.

There’s another advantage of having the four well-beings within the local government legislation, and that’s how you reflect what you value in your community. Actually, the creative sector is a big contributor to this. When we look at the way in which communities and districts have demonstrated their relevance and the link of the diversity of their communities—they’ve had art installations and pieces—their art galleries and museums and their public facilities have been a focal point to be able to ensure that the values of that council can be reflected in all sorts of ways. These are the types of things that councils want to be more involved in.

There was also a point made about performance measures. Well, actually, what we want to ensure with councils is that they operate in a best-practice environment—so all the time councils are sharing their experiences, what benchmarking starts to look like when they’re involved in a whole lot of different things.

I was in the Hutt some months ago looking at what they were doing to ensure that the social interaction of their community was going to be more engaged, because they had a proportion of their population that wasn’t engaging in the community and was seen to be, I guess, causing problems. The way that the council responded is outside the ambit—if we were to take on board the views of the Opposition—of that greater well-being aspiration. But I say, more and more, councils need to be involved in the day-to-day fabric of what makes a community tick. That’s why the four well-beings are so important. Environmental restoration projects are just another example of how the four well-beings can create social cohesion and greater inclusion into the way that our councils are engaging with their people.

Madam Chair, thank you. It’s amazing how small a world this is, because I remember—almost a lifetime ago, actually—in 2002, when the Local Government Act, or the latest version of the Local Government Act, first came into being. I was a mayor, and I’m pretty sure the Minister in the chair, Nanaia Mahuta, was not far from being the Associate Minister of Local Government, and, the two members beside me, they weren’t even there. But I think—

💬 Hon Member: Who is the stallion?

—it’s worth making the point—Lawrence—that whilst I can see some very good reasons for encompassing all the well-beings in local government decisions, and I think local government does that anyway, I think the issue that we’ve got with Part 1 of this bill is that bringing the four well-beings so clearly to the forefront really encourages our communities to advocate to their councils for expenditure that really should be taking place from central government not local government. And I think that’s the key issue for us on this bill.

Obviously, I’ve been involved in local government almost longer than I’ve been involved here. That’s long enough. But I think that the issue that we face, and it doesn’t matter what part of government you’re in, is that at the end of the day we have to make decisions and we spend taxpayers’ or ratepayers’ money. And the thing that I found difficult with the four well-beings—as I said a minute ago, I didn’t really mind the four well-beings—was the amount of money or the demand that was placed on councils that probably should have been placed on central government, and, therefore, we, effectively, transferred spending from central government to local government.

So councils have the ability, irrespective of the well-beings, to make decisions around sporting facilities and around social infrastructure, actually, irrespective of what the Act said, and they could have done that. What the 2002 Act did was emphasise councils’ abilities to act in, I guess, all four sectors of the well-beings, but it also gave our community an opportunity, and a whole lot of new people started advocating to council for council expenditure in areas that have never been really advocated before, because if you look at councils prior to 2002—and I could probably blame some of those councils for the rapid rates increases that we faced in the 2000s because they didn’t spend any money at all and now our infrastructure deficit is clearly showing that.

But the challenge, I think, that we had as councils was suddenly we went from being, basically, infrastructure-based councils to being all things to all people. That was the challenge, I think, that the National Party, and the National Government later on, had with the four well-beings. They accentuated expenditure in that area and caused councils, in my view, to go into places that probably central government should have been managing. The moment councils go into those areas, central government, effectively, abdicate and find other ways of managing that expenditure for the local ratepayer. So, virtually, it really causes a transfer, I think, of expenditure from taxpayers to ratepayers, and it is an expenditure that taxpayers should be responsible for not ratepayers. That’s the interesting issue that we have with the well-being, particularly with social well-being.

I know in my time in local Government, whilst I was interested in that area, it was a challenging area for a council to get its head around, because we were in some cases sharing funding with central government to the same entities. Really, I don’t think the ratepayer was responsible for that. I think, at the end of the day, the Government should have been responsible for that and should have maintained responsibility for it.

So that’s the reason, primarily, that we’re opposed to the well-being in the terms that this Government has brought them back into the Local Government Act. I think that whilst, as I said earlier, I kind of support councils’ ability to be general and all things to all people, they can’t be all things to all people with respect to expenditure. There are places they should be advocating to central government in. There are places they should be leading the expenditure in, and social well-being, and to some extent cultural well-being, actually, are not those areas, in my view, and that’s the challenge we’ve got with this.

I don’t know where the right balance is, because there will be a right balance in this, and I’m not sure we’ve ever got to that point. And, obviously, when we get to Part 2, there’s a whole different discussion that will take place. But I find it really interesting this whole discussion. I’ve found, in my time in local government, that the real challenge was to say no to things that, frankly, central government should have been funding when we were getting the demands put on us. Interestingly, I notice in my community now that same demand is still being put on councils, and they’re unable to front with the cash because, simply, they don’t have the resource to be able to fund some of the things that I think central government should be funding. It’s a matter of opinion as to how they fund those. Thank you.

E Te Māngai, tēnā koe. Tēnā koutou e Te Whare. It is a privilege to stand and speak on the Local Government (Community Well-being) Amendment Bill because I am incredibly excited about local government. I don’t know if the tone of the debate thus far as heard by members in this Chamber or by members of the public who may be so fortunate as to tune in would hear that same level of excitement resounding across the Chamber, but I hope to bring some of that excitement and passion in my contribution to the debate today. I just wanted to say, first and foremost, that it is frequent in this Chamber that we hear members of Parliament stand and speak about the character of their local communities: what makes their local communities so special; what makes their cities, their towns, or their regional areas so wonderful.

I want to ask members of Parliament—because it was a point raised by Ian McKelvie—about the balance between what local government and central government should do. That there should be greater centralisation, he believed, or he proposed, of funding, or rather of the decisions that are made on the allocation of funding for what are, essentially, local government projects.

For example, I’m from Auckland—Tāmaki-makau-rau proud—and things like lantern festival or pride parade simply would not be funded at a central government level. So if we are to really follow the line of logic that has been proposed thus far by National Party speakers, are we to completely erode any of those cultural or social well-beings that are provided by that form of local government spending? So too are things that we take almost for granted quite frequently in our local communities—the likes of public art, which are maintained, I would note, by local governments.

It was raised by a former National Party speaker as well, the issue of how we rank or how we establish some form of accountability for local governments with regard to these four well-beings that this bill seeks to reinstate. I would ask the member that addressed, or rather raised, these questions: the same question applies to central government—how is it that we rank the performance of our elected members in central government? It’s through elections. If we are not seeking to apply that same standard to our colleagues in local government, then we may as well be upfront about it in that we intend to astroturf over them and remove local democracy, but I do not think that that is the intention of any member of Parliament, perhaps—although, my colleague frequently in yellow, but that’s a side point.

So also the point was raised by National Party members, who were worried about the impact on ratepayers when councils take up these four well-beings, when they look at social, economic, environmental, and cultural well-beings of communities. If that’s the case—if they’re worried about the impact on ratepayers, if they’re worried about the impact of rates and rate rises—then I would, perhaps, like to suggest to my colleagues in the National Party that they may very well support diversification of income for local governments. If we are to compare New Zealand’s performance to other OECD countries when it comes to expenditure at a local government level, internationally the benchmark of Government revenue that is spent at a local government level is 30 percent. In New Zealand, it is less than half of that, at 11 percent. So perhaps that’s where the National Party, the Opposition, should be focusing their energies.

But finally, in my points raised on this Part 1 of the Local Government (Community Well-being) Amendment Bill—that being to restore the four well-beings to the Local Government Act—I just really want to raise the question of why people live where they live, to end where I started off. We all decide to live in our towns and cities and neighbourhoods and communities because of the things that make those places special. I can tell every member in this Chamber, and every member in this Chamber actually probably knows for a matter of fact, that the reason that they decide to live where they live is not simply, solely, an economic decision. They take into account the best form of life that they can have for themselves and for their families, and that is at the core of the restoration of social, economic, environmental, and cultural well-beings in the Local Government Act. Kia ora.

Well thank you, Madam Chair. I wasn’t planning to take a call but my friend in green gave me some interesting thoughts, and I got to thinking about subsidiarity and centralisation.

It is true, the member who just resumed her seat is correct, that New Zealand, amongst developed countries, has one of the most centralised systems of government of any of them. In fact, only the United Kingdom, last I checked, spends more of its money in its central government vis-à-vis local government than New Zealand. That is an artefact of our history. We once had provinces, which, interestingly enough, roughly resembled the territories of the five Super Rugby teams. I put it to the committee that that was a much better way to do things. It was subsidiarity on steroids. It allowed local people greater control on how their taxes were spent, but it also created inter-jurisdictional tax competition, which, as we see in places such as Switzerland, can be a great boon to reducing the overall tax burden placed on any group of taxpayers.

I represent the Epsom electorate, an electorate which some people tell me—I don’t know if this is true or not—pays more in net taxation than every single electorate held by the Labour Party, and certainly more than every single electorate held by the Green Party. And why shouldn’t an electorate such as the Epsom electorate—

💬 Hon David Bennett: And New Zealand First.

David Bennett is correct. The Epsom electorate pays more in net taxation than every single electorate held by New Zealand First—he’s correct about that too.

CHAIRPERSON (Poto Williams): I hope there is a point to this, Mr Seymour.

I think as we just debate introducing four well-beings, more centralisation, more dictate from Wellington about how people should run the communities that they love, it is a very good time for this committee to consider the possibility that we got it right in the 1880s, that we got it right when we had provinces and had subsidiarity—that we had it right.

💬 Hon Damien O’Connor: Next it’ll be the Magna Carta.

Well Magna Carta, as the member points out, is a very fine document. We had it right at that time.

Let me say another thing: the Prime Minister has also given me a very important thought in her speech that resumed this session of Parliament. She said that we do things collectively that we cannot provide privately. I can tell you that many people in the Epsom electorate and other prosperous, aspirational people outside that location would like to see local government, in particular, get back to providing genuine public goods—goods that are non-rivalrous, and goods that are non-excludable, that cannot be produced by any private market. We’d like to see them do that. We don’t want to see Auckland Council starting to consider education. We don’t want to see Auckland Council becoming a social enterprise. We want to see Auckland Council providing the roads, the rubbish, the rates, and the public health infrastructure that does not get produced in private markets.

So in conclusion, I want to thank the Prime Minister and I want to thank Chlöe Swarbrick for putting forward some excellent ideas for limiting government in this country, for returning us—they suggested, I’m not sure they meant to, but it came out—to subsidiarity federalism and inter-jurisdictional tax competition, so that those of us who pay the taxes and fund the country are able to have some more say on which of those goods are produced in our local community.

I’d be very keen to see this bill amended in such a way that each electorate has its own taxing power and perhaps its own ruler so it could decide how it used the funds provided by its particular taxpayers. I think that is a superb idea.

I’ve decided that being in agreement with Chlöe Swarbrick is a lot more fun than I could ever have imagined previously. I actually think, in all seriousness, that central government imposing a template of four well-beings on local government is terrible folly. It does reduce inter-jurisdictional competition about what local government can and can’t offer. It does mean that we get frustrated with diminished quality of the real things that we want from local government. It does mean that our rates and our costs of government are higher than they would be if there was more competition amongst government and more flexibility for people to elect local governments they prefer. Thank you, Madam Chair.