Local Government (Pecuniary Interests Register) Amendment Bill

Thank you, Madam Chair. Can I, firstly, commend the Governance and Administration Committee for the process that they’ve undertaken in preparing what has come before the House to this point. This was a bill that saw cross-party support, which is pleasing to see, and is about transparency and accountability for publicly elected decision-makers within the local government setting.

I again acknowledge the select committee and its leadership for their diligence. The changes that have come through that process, I think, have been well thought through. I also want to acknowledge the staff that have been involved throughout this process as well.

I know that there are two Supplementary Order Papers (SOPs) on the table, one of which is in my name, which I will come to shortly. But before I do that, I want to briefly go through some of the key changes that are outlined in Part 1. The committee, in its wisdom, sought to renumber the new sections in clause 4 as new sections 54A through to 54I, which I think is a tidy approach, given the number of changes that were suggested. When we turn to new section 54A(1), that confirms the application of this bill to a wider range of elected members, not just those around district council and city council tables but also through regional councils and the extension also to local board members in the Auckland community and community boards where they exist throughout Aotearoa New Zealand.

This is not intended to apply to those who are appointed to committees or councils themselves, and I note that that’s outlined in our SOP 146. This clause also confirms some of the changes that the select committee turned its mind to in the privacy section. It also seeks to maintain the register, but that it’s appropriate for an accurate summary to be publicly available.

New section 54D indicates that the onus remains on elected members to ensure the information is accurate and that it’s also able to be corrected where some of that information is incorrect and it’s done in a timely manner.

New section 54E outlines what’s required in a particular return. The select committee identified a change to the company threshold for directors in that voting capacity would shift from 5 percent to 10 percent, which is consistent with other legislation, and also that property in the description would be general rather than specific. What that means is instead of saying that an elected member lives at 123 ABC Street in Westbrook, Palmerston North, it would be sufficient to say that they held property in Westbrook in Palmerston North.

New section 54F keeps the gifts threshold at $500. But a change that the committee did suggest, which I think is probably a good one, actually, is ensuring that that’s a cumulative threshold as well, that if there was one donor who had made a number of contributions, as soon as it ticked over that $500 mark or threshold, they would be required to disclose that and also a helpful definition in terms of who a “family member” is.

If I now turn to the SOP in my name, which is SOP 146—and I want to thank Parliamentary Counsel Office for their assistance in drafting, and they were obviously aware of what was being sought by the select committee. The SOP, effectively, identifies two particular clauses well, well, subparts to the clause, so that there is an avoidance of doubt. The first actually, new section 54H(3)(a), is a repetition of what is currently in the bill. The amendment is new section 54H(3)(b), which gives some responsibility to the view of the select committee, and it was raised in the second reading contribution as well. It relates to the interaction of obligations under this bill, alongside members’ obligations under LAMIA, or the Local Authorities (Members’ Interests) Act, and it makes it very clear that any interests that are declared under this subpart are not automatically or necessarily captured as a pecuniary interest under LAMIA. The rationale for that, is to ensure there is no automatic contention for the purposes of LAMIA to remove decision makers from around the decision-making table and that they are two stand-alone separate pieces of legislation which each carry their own obligations.

If I can turn to SOP 150 in the name of the ACT member Mr Simon Court, what that would do, as I understand it, is it would seek to extend the coverage of the bill to include council-controlled organisations (CCOs) and other council organisations within the scope of the bill. That is defined in the member’s SOP, but it includes a number of things, and if I reflect on my own community, it would bring into the scope of this bill organisations like the Regent Theatre Trust Board, the Palmerston North Airport Company, Te Manawa Museums Trust, and the Globe Theatre Trust, and these are entities that already have disclosure requirements. Councils do have a due diligence process around the appointment of individuals to those boards and entities. It’s not something that was dominantly raised within the select committee process, and I would suggest that it’s already provided for. Those internal processes, alongside LAMIA, are appropriate for those appointees. This is about publicly elected decision-makers and it’s intended to cover all of those individuals, and that’s why the select committee had suggested the change to extend it to local boards and community boards. Again, I’m very comfortable with the changes.

Thank you, Madam Chair. Thank you, may I just begin, as a member of the Governance and Administration Committee that considered this bill, by congratulating the member in charge, my colleague Tangi Utikere, on what has been a comprehensive process that the select committee has followed. As the member noted in the second reading of this bill, there were a significant number of changes that the select committee made. I just want to put on record my thanks to fellow members of that committee and officials who provided a lot of diligent support to us.

I’ve got a few questions for the member in charge that I would value having a bit more information provided, particularly in relation to Supplementary Order Paper 146 that he has tabled today. That one of the challenges, I guess, for members in the local government area and, I guess, for members of the public is that we do essentially have two Acts that cover off interests and conflicts. There has been some discussion through the select committee process and through the second reading around how those Acts interrelate. So they are the Local Government Official Information and Meetings Act, which, as other members have noted, is the Act that covers local government members’ conflicts when they’re in the decision-making process, and also the Local Authorities (Members’ Interests) Act. I’d be quite interested in hearing from the member about how his Supplementary Order Paper 146 will acknowledge both his bill, but also how those two Acts interact, because it can cause confusion for members in councils. We’ve certainly seen that in some of my own councils where, at times, there’s been misunderstandings around how those conflicts interact.

I’m quite interested in finding out a bit more from the member about how he sees the provision of the summary of information, and about where we’ve struck the balance, and where that balance lies around how much information is provided for. One of the matters that came up in the select committee, and that does come up from time to time in local government, is that many local government elected members are often working in other roles because actually the wages—sometimes they’re only earning $20,000 or $30,000 or $40,000 a year for their local government role, which means that it’s actually a part-time role. They’ll often hold other roles. Sometimes they’ll be working, for example, as a consultant or as a doctor or as a lawyer, and they’ll have a large number of clients. Sometimes those clients will then present to local government, to their council, either requesting funds or a change in policy, and this is where, I guess, there’s, at times, a need for transparency. But there’s also a need to ensure we’re not ruling people out of standing for local government and putting up too many barriers to them putting their name forward. That was a matter that we heard during the select committee process.

I’d be quite interested just in the member’s thoughts on how we strike that balance and the work that we’ve done, that he’s done, to ensure that we strike that balance in this bill. So, on that note, I may have some more questions for the member as we proceed, but I’m hoping we may hear from other members of the select committee who are part of what was a very comprehensive process. Thank you, Madam Chair.

Thank you, Madam Chair. I thank the member and the deputy chair of the Governance and Administration Committee for her questions. She is quite right in that there are two separate pieces of legislation. I acknowledge Local Authorities (Members’ Interests) Act (LAMIA) as a stand-alone piece of legislation. That is largely based on financial pecuniary interests. It concerns matters where people around decision-making tables are making those decisions that align with that. The point of difference with the Local Government (Pecuniary Interests Register) Amendment Bill that’s currently before the committee of the whole House in my name is that it’s much broader in those non-financial aspects. So, for example, I point out for the member, which she no doubt will be familiar with, aspects around contributions to international travel and international accommodation, but also where they interface with or include and capture family members, which are defined. Thank you to the select committee for their definition in that particular respect.

So it is about disclosure requirements, but the two are quite different. That’s, I think, why the select committee went to some pains in their select committee report to ensure that there was a Supplementary Order Paper opportunity to distinguish between the two approaches.

In relation or response to her second question, yes, it is important that the information is publicly available, but more so, it’s important that the information is publicly available in a balanced way, a balanced way that supports the ideals of transparency and accountability but also maintains, I think, what is a sensible threshold of privacy. In small communities where, for example, someone might undertake some employment—as I think this was referenced in the second reading contributions—as an accountant or a lawyer or something, I do think it is unrealistic to expect someone in that position to identify line by line, ledger by ledger each of the contractual obligations and matters that they have at hand. So, I think the select committee coming through that process has struck a very good balance between accountability and transparency but also making appropriate level of detail available to the public.

Thank you, Madam Chair. I would like to speak to Supplementary Order Paper (SOP) 150 that I have tabled. I think it’s absolutely vital that New Zealanders trust and have confidence in their local government and that its operation is restored. We know that in recent local government elections in some cities like Auckland, the turnout has been in the low 30 percent of eligible voters. What that tells us is that ratepayers and people who live in large cities like Auckland in particular have lost the confidence that their councils represent them and that they can actually deliver on the basic services that people need councils to deliver. More importantly, they’ve lost confidence that when they speak up about the failings of council-controlled organisations and councils involved in procurement and entering into long-term and short-term contracts for works and services—where they raise concerns not just about the performance of those contracts and the delivery of those services but they raise concerns about the potential for corrupt practices and unlawful dealings.

My Supplementary Order Paper extends the requirement to declare interests in companies and other employment by council chief executives, their executive team, boards, and chairs so that we know if they have an interest in companies or organisations that are benefiting from council contracts for works and services. The reason I’ve tabled this amendment is because it’s become clear there is now a pattern of deeply ingrained corruption in the procurement and delivery of local government services. There are a number of very serious cases that the Serious Fraud Office has investigated and found people guilty of indulging in corrupt practices and receiving benefits in their roles as senior managers in local government organisations.

That includes council-controlled organisations like Auckland Transport, where senior managers were involved in, actually, employment in companies that they were signing off invoices for. Now, it seems remarkable that an activity like that, involving employees at Auckland Transport, would contract the services of a consultant that they also worked for and would then be signing off the invoices of that consultant. Well, those practices went on for over six years and cost Auckland ratepayers millions and millions of dollars. They also cost other private sector competitors who could have bid for that work in an open market but were excluded from it because of the corrupt dealings and practices of some very, very shameful behaviours from those council managers.

But the problem is that because there is no register of pecuniary interests for people at executive and senior management level and for boards and chairs, it means this behaviour went undetected for over half a decade, at a cost of millions and millions of dollars to ratepayers and to other competitors, other consultants, who could also have offered these works and services, potentially at a much cheaper rate. In fact, many of these works and services weren’t actually works and services delivered it all; they were just an exchange of invoices, and that money went into people’s bank accounts in a corrupt way.

We have another case right now before the courts, also involving Auckland Transport. We have a case involving an Auckland Council employee in a senior procurement role for IT services. It wasn’t that long ago that a manager at a council on the West Coast of the South Island procured a local cake shop owner to undertake water and waste-water consulting services on behalf of the council.

So it’s absolutely vital that we extend the requirement for transparency in the pecuniary interests to not just elected members but to those members of council-controlled organisations and those senior executives and people in the leadership team who are involved in signing off procurements for works and services to the tune, in some cases, of tens of millions of dollars. Madam Chair?

CHAIRPERSON (Hon Jenny Salesa): Before I give the member further speaking in terms of the debate today, can I just remind the member that matters that are subject to judicial decision that are still before the court—Standing Order 116. There are limits to what it is that you can refer to that are still under consideration, so please tread carefully.

Thank you, Madam Chair, and I do appreciate your guidance in that matter.

However, let’s come back to the real issue here. The real issue here is that New Zealanders have lost trust and confidence in local government to deliver basic works and services. Now, there are a number of reasons for that. One of them is that councils are trying to do too much stuff that they just don’t know how to do, and they’re ignoring their responsibilities to deliver basic services like roads, like waste management, and like delivering on clean water and stopping waste water getting into our rivers and on to our beaches. They are wasting money and they are not delivering, and there is nothing that this Labour Government has done that will help that. All of the proposals around three waters and around actually making people pay for roads that they’re actually not getting—I mean, this Government’s only planning to spend 23 percent of the National Land Transport Fund on roads. All the money it takes off motorists—only 23 percent of it going on roads. That is why we need to restore trust and confidence in local government.

My SOP, my proposed amendment, to the Local Government (Pecuniary Interests Register) Amendment Bill will require not just elected members but will also require boards, chairs, chief executives, and their senior leadership team to declare an interest in businesses, to declare alternative employment, to declare what assets they own, in a way that means when those individuals are making decisions about procuring works and services, not just the auditor, not just the accountant, but actually ratepayers and the people who live in these towns and cities can be confident, firstly, that they’re not getting ripped off; secondly, that, actually, the money that is being spent on works and services is being spent wisely, that there’s no fattening of the invoices, that there’s no secret handshakes or secret agreements to inflate the value of works and services.

I mean, it’s true that there is significant inflation right now in the input costs of construction materials and labour, and so much of that has got to do with other aspects of very poor Government policy, like the Resource Management Act, stopping quarry operators from doing the earthworks to get to the blue rock because they can’t get consents. It’s got issues to do with ports like Port of Tauranga, which can’t get consents to build their new wharf, even though there’s a fast-track consenting process. They’ve been kicked out of that. They’ve been booted out of the fast-track consenting process and sent back to the Environment Court to beg for permission to be able to build a wharf.

But what we could do to restore trust and confidence in local democracy is to incorporate the amendments that I propose to make sure that when council-controlled organisations are procuring works and services, they are doing so in a way that is transparent so that their competitors in the private sector know that they’re not being excluded by shady deals, by backroom agreements between people who work in senior roles and should know better and businesses that are getting an unfair advantage because the relationship between those businesses and council executives is not clear. So that is the purpose of my Supplementary Order Paper.

I’ll read this—clause 4, new section 54A: “For the purposes … in relation to a council-controlled organisation or council organisation, means the chairperson, directors, the chief executive, and executives who report directly to the chief executive … of the organisation.” The purpose of that is so we can be clear that people involved in procuring long-term contracts for works and services know that if they think they’re going to be doing side deals and they think they’re going to be taking advantage of ratepayers and taking advantage of the goodwill that we have for local government—whatever remains; in Auckland only 30 percent of people turned out to vote. The ACT Party believes that this is one way to restore trust and confidence.

We ask the Government and we ask the member to support this amendment if they really want to restore trust and confidence in local government. We ask the Labour Party, we ask the member, we ask the Government to support this amendment. And if they don’t, then the people of New Zealand will have to ask themselves, does the Government really care about stopping corruption and making sure ratepayers’ money isn’t wasted, or do they not care? Thank you, Madam Chair.

Thank you very much, Madam Chair. I want to make a brief contribution to what we’ve heard—three points, if I may.

Firstly, thanks to the member Tangi Utikere for bringing Supplementary Order Paper (SOP) 146 up. National will be supporting this, it’s sensible, no issues around that. So there we go.

A quick question, if I may, for the member around new section 54A(1)(a), which covers members of the local authority. I just want a little bit of clarification that that includes—well does it or does it not?—appointed and elected members, because subsequently to that, paragraph (b) refers directly around members that have been elected, so just a little bit of clarification on that one—section 54A(1)(a).

And just in reference to the member Simon Court’s point there, look, I think it would be fair to say where we would share concerns is around areas of local government across this country which are not performing and not delivering the outcomes that their communities need and require, and the concerns in terms of why that is the case.

I think anything in regards to increasing and enhancing transparency to remove the risk around conflict of interest in principle sounds sensible, but I am aware that the select committee did discuss this briefly in terms of their points. I think this stage of the process, of the bill, is not the appropriate point at which we should be trying to introduce something like this. I think we should be seeking that through the select committee process in which we can get submissions and aspects such as that. So while in principle, the concept which you’re raising around transparency and that is something that we would agree with, we won’t be supporting this SOP on the Table today—SOP 150.

That’s all I’ve got to contribute, and I’ll leave it there. Thank you.

Thank you, Madam Chair. Can I thank the members for their questions. In response to Mr Watt’s question, I thank him for indicating support for my Supplementary Order Paper (SOP).

On the second point, which is in relation to section 54A(1)(a) and the clarity, this, as currently drafted, would not apply to appointed members; it would only apply to elected members. This is something that the select committee did turn its mind to, and the parent legislation, as I understand it, specifically identifies who is captured. It was a good point, though, that the select committee was able to ensure that what was captured were those local boards and community boards. But for clarity, it does not extend to appointed members, and I might touch on that in a moment.

Can I just respond to the member from the ACT Party Simon Court. I have to say, you know, it’s a bit rich hearing from a member of a party that professes to be the stalwarts of cutting red tape and bureaucracy, but when it comes to doing something about housing, on a bipartisan and cross-Parliament approach, they’re far from it. For the member, it’s a big call that he’s made—it’s a very big call that he’s made—to suggest that, you know, carte blanche confidence in restoration is required within the sector. That is an absolute slight to the many, many community representatives who are elected by our communities who do hard, hard work, Mr Court—a huge slight. And to suggest that there is this huge level of corruption—that is not what this bill is about. This bill is about accountability and transparency.

But I will respond to the member’s SOP, because a lot of the premise in approaching this bill is to ensure that there is some consistency with the approach for elected members of Parliament and the approach that’s taken for parliamentarians. When we draw parallels between our own parliamentary approach and what is proposed for the local government sector, here in Parliament, the requirement to disclose is only for elected members of Parliament. We are the ones who are elected to this House. We are the ones that are required to disclose accordingly.

Local government—the intention of this bill is also that it would apply only to publicly elected officials. They are the decision makers, they are the individuals who have been elected on behalf of their communities via a public electoral process.

In terms of the appointed members concept, that was something that the select committee did think about. They did receive some specific advice on that particular point; however, they didn’t promote that as a change, because they believed that the Local Authorities (Members’ Interests) Act—“LAMIA”—still applied to appointed members.

My final point for Mr Court is I draw his attention to section 54C(2)(a) in the bill, because even if this were to extend to members of council-controlled organisations or council organisations, under the provisions, actually, because they are extra individuals who are not actually elected—they are non-elected members—which actually means they don’t really fit into the schema of the premise of this bill, it means that they wouldn’t actually be able to submit a return, because they are not captured by section 54C(2), specifically, paragraph (a), which references the Local Electoral Act in that they’re required to submit 128 days after the date. So even if they were captured—well, included—there would not be, as I understand it, based on advice from Parliamentary Counsel Office, an opportunity for them to actually file one. So it’s pointless, in that sense.

Thank you, Madam Chair. It’s a pleasure to take a call on this bill. The Governance and Administration Committee has spent a lot of time mulling over the details and having a lot of input from not only the officials but also from the member who sponsored the bill, Tangi Utikere. I want to congratulate him for getting his bill to this stage, and I thank him for all his involvement in the whole legislative process. His own personal experience has really helped guide us through this whole process. Obviously, I just want to recognise all the work that Ian McKelvie, the chair of the select committee, has done.

I just wanted to make a contribution on two things, and one is the Supplementary Order Paper (SOP) in the name of the member from the ACT Party. During the select committee process we had actually already traversed this issue. We had not only received submissions but we had discussed them with officials, and I think the answer, already given by the member who sponsors this bill, is extremely adequate and thorough and why we’re not going to support that SOP.

I just wanted to make a reflection on the time that I was—my colleague Vanushi Walters sat on a community trust board. We had this practice—which I want to encourage for all organisations, whether they’re governed by a board, a council, executors—whereby at the beginning of every single board meeting we would pass around the room a clipboard with our names and our pecuniary interests or our conflicts of interest, because we were looking at granting funding. Those practices, as recommended by organisations such as the Institute of Directors of New Zealand and Governance New Zealand, I would recommend to every single organisation—that we do have internal systems set up to make sure that we rid ourselves of, or at least are transparent, in terms of our conflicts of interest or particular interests when we are sitting at a decision-making table.

But putting it in this legislation is not appropriate. It’s not that we don’t support transparency—far from it. We want to make sure that the public sector in New Zealand is being transparent in the jobs we do and the other influences that we have in our decision making. But there are other means to do it, and so I would encourage all of the council-controlled organisations and other organisations to look at their internal practices and ways of doing this.

There was another issue that was raised during the select committee process that I wanted to particularly give awareness to, and I think the member who sponsors this bill would like to comment on it as well. It’s about the fact that the responsibility of declaring your interest and removing yourself from situations where there is a conflict of interest would solely fall on the person with that conflict of interest. It is not a chance for particular, I guess, bullies, for want of a better word, to use this as a way of making a vicious and malicious attack on council colleagues around the table. This would solely be like the way we do some things here in Parliament, for instance in the select committee process where the sole responsibility would be on the person with that perceived conflict of interest. So I will leave that to the member.

Thank you, Madam Chair. I thank the member for her question. Clearly, she is someone who is connected and aware of her own local community—a good hard-working member of Parliament, and also a member of the Governance and Administration Committee. Thank you too Ms Chen for confirmation that the select committee had actually traversed this issue. It’s always good, I think, to remind some members who perhaps hadn’t heard it first, second, or fifth time of that fact.

She is quite right in that this is an opportunity to explore what is good practice in terms of internal systems, and that’s why councils will be expected to apply that as a particular regime or approach for council-controlled organisations, for council organisations and for council-controlled trading organisations as well. There are other means to capture that, and the member has outlined that.

On her second point she is also correct that the responsibility does lie with the individual elected member, and there are two things that I would like to draw to the committee’s attention on that. The first is that it is not the responsibility of other elected members to draw to an elected member’s attention the nature of a pecuniary interest. The legislation is quite clear and that is the premise behind the select committee’s intent in including that in its report to the House. That’s why the Supplementary Order Paper in my name is seeking to distinguish that—that they are two separate pieces of legislation and the declaration under this bill cannot be held over the head of an elected member under the guise of LAMIA, the Local Authorities (Members’ Interests) Act to force them from the decision-making table.

The second point I wish to make on that—and it does also touch on something that I know the Green Party had referred to in first and second reading contributions—is the role of the registrar. The role of the registrar is to collate the information and to make the information publicly available by way of the amended accurate summary. It is not the responsibility of the registrar to check the details and the accuracy of the information that is disclosed. That responsibility, that onus, still rests with the member, which is very similar to the approach taken here in Parliament.

Thank you, Madam Chair. I acknowledge the work Tangi Utikere has done on this bill and also the work of the Governance and Administration Committee. The Green Party will be supporting the Supplementary Order Paper in Tangi Utikere’s name; it’s a quite sensible clarification.

But just on that point about the role of the registrar, I wonder if I could ask the member—and it is something I’ve raised in previous speeches on the bill. Given that Parliament has an independent registrar, but my understanding about the way this bill will work is that the chief executive of each council would simply designate someone in the council to act in that role of registrar, just whether he sees the opportunity for any registrar to operate nationally or for councils to come together to provide an independent person of standing, in the same way that the registrar for pecuniary interests operates at Parliament, to have more capacity to provide advice to members—specifically new members—just because the work of collating the material around members’ declarations can take some time. The interplay that the registrar of pecuniary interests has at Parliament with MPs, checking with MPs that that is accurate before it’s published—there is still work in that. So whether the member thinks that there is potentially in future some opportunity for this to be done in a more collective way nationally.

I just wish to raise a couple of points in respect of this bill and the Supplementary Order Papers (SOPs). I’m going to address the SOP from Simon Court first. Perhaps Mr Court will answer this himself; perhaps Mr Utikere might have something to say in respect of it. It is the distinction between elected members and employees. I think my colleague Ms Chen referred to this earlier as well. I just wish to check if Mr Court understands that elected members—elected representatives—are responsible to those who elected them, and, that is, the people who you might declare your pecuniary interests to—

💬 Simon Court: Well, they’re disappointed now, aren’t they? I mean, clearly, they’d be disappointed in who they’ve elected.

—to the people who elect them. However, employees of an organisation are actually—I’m sorry about the yammering from the seats over there. The people to whom employees are responsible—the employees of council-controlled organisations and the like—are, in fact, the elected members. It is up to the elected members to hold employees of council-controlled organisations to account. So perhaps Mr Court might like to address that at some stage and clarify his understanding of what the relationship is between employees and elected members and the public who elect the elected members. So I think, from his SOP, he quite clearly doesn’t understand that, and, of course, we won’t be supporting that SOP.

I wish to address a question as well to the member who brought this excellent, excellent bill to the House, Mr Utikere. Again, it follows on a little from what Ms Chen has been saying. It’s particularly to do with the extent to which elected members are placed at risk because they declare their pecuniary interests. What concerns me, in particular, is in amongst the pecuniary interests is the fact that, as we do here in Parliament, an elected member must declare any real property they own, which is going to be likely to be if they own their own home. Now, we all know that all politics is local, but local politics can get particularly personal at times. I have seen this in my own community, that my own local elected representatives sometimes face questioning from their constituencies that perhaps I am not quite so subject to, because an MP is a little more removed—down in Wellington half the time. But our local elected members often get some quite personal contact from people; people who want a footpath, or they want some bollards at the beach, or they want some funding for their community organisation—all quite reasonable things to ask of an elected member. But now we’re asking that elected member also, more or less, to say where they live. I think, on the whole, it is the right thing for people to declare their real property. It will just be the degree of specificity that we expect when people declare their real property.

If this does place our elected members, well, at a degree of risk from an aggrieved constituent—as it turns out, I have found that, despite all the turmoil of recent times, that, on the whole, my constituents are really good to me. They are delighted to see me down at the shops and around the place. Plenty of my constituents do actually happen to know where I live, not because I advertise it; because they just happen to know. It’s a community. I’ve had people drive past saying, “Hey, Deb.”, as they drive past. That’s kind of cool, but there can be some risk in this as well. On the whole, I accept that risk. On the whole, I know I can do things to protect myself. We possibly have greater resources in Parliament to do that than our local elected members do. So it is an issue that I think we need to consider carefully. I think we’ve got the balance right in the Governance and Administration Committee that it is something that we should be declaring, but I would be keen to hear from Mr Utikere whether he thinks we’ve got the balance right as well, and, on the whole, whether we’ve got the balance right in terms of declaring interests to our constituents so they know where we come from and what might or might not be influencing us.

Thank you, Madam Chair. Thank you to members for their questions. Can I start with Dr Russell and thank her for firstly actually pointing out that distinction between elected members and employees. Because, you know, as a former council elected member, all councillors know they have one employee. Willow-Jean Prime, your previous experience in local government, you’ll know that as well, that it’s the chief executive, and then you have the rest that follow there. What concerns me now with the ACT member’s Supplementary Order Paper (SOP) is that ACT now seem to be seeking to politicise that employee relationship between employees and the chief executive.

💬 Simon Court: What a load of rubbish.

Well, it’s not a lot of rubbish, Mr Court. It’s come from your SOP—come from your SOP. So that does concern me even more now that the member has raised that for the committee.

In terms of the extent to which the risk exists for elected members, one of the, I think, balanced changes that the Governance and Administration Committee obviously turned its mind to was around the need for elected public officials to disclose the extent of real property, but also to balance that with what are expected standards or norms around your own privacy. I think where the select committee landed is actually a very nuanced but balanced approach where the requirement now is not to say, “I live at this specific address.”, but simply that “I hold property interests in this particular city or suburb.” I think that is a very wise approach from the select committee. The other point I’d make on that, Dr Russell, is that, you know, councils are very supportive of elected members, even if elected members perhaps have different views than the council organisational staff may wish, but they no doubt will be supporting them through this process as well.

Can I turn to the questions that the Hon Eugenie Sage raised, and can I thank her for raising these points in the first and second reading as well. I have to say, it didn’t seem to be an issue that the select committee had a number of issues of that ilk before it. But I do note that Auckland, Christchurch, and Dunedin councils were submitting in support, generally, of the bill, with a few tweaks that the select committee have taken up. The parliamentary approach, which this is looking to align itself with, is slightly different in that the registrar is appointed by different means. Currently, there is no entity or organisation where you could nationally appoint someone to that role. What does give me some confidence is that the officials, through the select committee process, did indicate that if this bill was successful, they would be looking to work alongside two specific sector organisations. The first is Local Government New Zealand, in terms of that governance arm, which the member will be familiar with. The other is dealing with the operational, which is Taituarā, previously known as the NZ Society of Local Government Managers. They will work alongside those two organisations to ensure that there are some minimum standards and that there is some consistency. So my response to the member is I think it’s, perhaps, a little bit too early or premature to think about how this might be rolled out on a national level or domestically, but the approach of trying to address this in a way that’s not going to put more pressure on local government is really important. That’s something that was discussed by the select committee, and I think at this stage they’ve got the balance right.

Thank you, Madam Chair. I’ll just congratulate the member Tangi Utikere for this bill and doing a great job in bringing this before the House.

Look, I’m just interested in the comments the member made earlier about the distinction between appointed members and elected members, and the member indicated that he may return to address that more fully later. He said it was a matter considered by the Governance and Administration Committee, so I’d be interested in the member just explaining why there was a decision to make a distinction between appointed members and elected members in terms of the pecuniary register.

Thank you, Madam Chair. Yes, very briefly, in response to Mr Mooney, it’s because the focus on this is on publicly elected officials and bringing it into line with local boards, community boards, regional councils, and other local territorial authorities. There are already processes in place for appointed members. Members who are appointed to roles have to go through a process, and, as I’ve said earlier, the due diligence and expectations that councils as part of that appointment process would undertake or adopt mitigates that concern. So this is about capturing those who are, effectively, elected by the public.

Thank you, Madam Chair. Look, I do appreciate the opportunity to explain to Dr Russell and to the member Tangi Utikere sponsoring this bill, exactly what the relationships are between elected members, officers, and employees of councils and council-controlled organisations, and why it’s so important that, in fact, we understand the pecuniary interests of people spending ratepayer money on works and services entering into long-term agreements for contracts worth tens of millions of dollars, where there is a risk that if the relationships are not understood, as was the case at Auckland Transport for many, many years, over six years of individuals engaging in corrupt practices—the Serious Fraud Office took them to court. They said if there’d been a way to detect it earlier, we could have saved ratepayers millions of dollars, but we never knew what the interests were that these people held and that’s why they got away with it. That’s what my Supplementary Order Paper (SOP) 150 is designed to do. It’s designed to make sure that people involved in procurement and making decisions about ratepayers’ money are held to account.

The member Tangi Utikere claims that the ACT Party was seeking to politicise the debate through my tabled amendment. The ACT Party is seeking to politicise the debate. So let me educate the members opposite where the word “political” comes from: the Greek word, which is the origin of “policy”, public policy. And what we’re advocating for is better public policy to actually restore confidence and trust that people should have in local government. But they’ve lost it, and they’ve lost it because for decades and decades, rather than local government focusing on the basics—rubbish, rats, roads—they’ve veered off into all kinds of cultural pursuits, wasting money on things that ratepayers don’t want them to spend money on and failing to deliver basic services.

The other problem that’s caused a loss of trust in confidence in local government is that many, many organisations—dare I say, large ones like Auckland Council—have council-controlled organisations that compete with the private sector, whether it’s in the events area, hiring out venues and event spaces in competition with the private sector; whether it’s councils like Christchurch, which operate road maintenance and facilities management companies in direct competition with the private sector. All of these council-controlled organisations competing with the private sector, undertaking business activities, are far from the scrutiny of ratepayers, far from the scrutiny of elected members, making decisions which not just affect ratepayers and the way that their precious funds are used.

And, remember, a lot of ratepayers are people on fixed and low incomes who actually depend on council delivering basic services, making sure that the potholes are fixed, making sure that the street lights are on at night so that they can walk safely around their communities. They depend on councils engaging in contracts for works and services for the basics like road maintenance, collecting the rubbish, making sure the lights stay on in their streets and not engaging in corrupt practices by awarding contracts to favourites and having council-appointed executives in senior management personally benefiting from contracting. That is what this amendment that I have tabled is designed to do.

So, yes, ACT is politicising it because ACT believes that the current public policy settings are wrong and that they need to be improved. That is why we challenge the Government to put petty political differences aside and to support this amendment. This amendment is one of the few things brought to the committee this year that will actually make an improvement in the lives of people who live in towns and cities. This means transparency. This brings back confidence. That’s the purpose of the bill, according to the member, Tangi Utikere. The ACT Party just wants to make it better, and we think that we’ve found the way to do it.

Now, the member pointed out that, in fact, there is another clause of the Local Government Act 2002, the amendment 54C, that members are to make a pecuniary interest return. And, look, it’s correct that in my Supplementary Order Paper, I talk about boards, shares, board members—[Time expired]

Thank you, Madam Chair. Thank you for the opportunity to take another call on the bill. Look, I just want to respond to a few comments from the member opposite, because—particularly around the process we’ve taken to get here—sitting on the Governance and Administration Committee, one of the things that we value around that committee is that we’re a very collegial committee. At times we have our disagreements, as we should, but through the select committee process, the committee actually took a real deep dive into a lot of the issues that members opposite have raised and actually discussed these in detail.

My understanding is that members of other parties can attend that select committee and actually contribute into that debate. My disappointment, in the comments from the member opposite, is that—

💬 Hon Michael Woodhouse: Name the member!

Yes, I will name him, Mr Woodhouse, because my collegial member of the committee Mr Woodhouse is right to point out that—I will name the member, Simon Court. My disappointment in the comments from the member Simon Court, from the ACT Party, is that the committee spent a detailed, long amount of time looking at these issues. I want to point out that specific differences that we actually have talked about. Some of this commentary came through in the second reading as well.

Mr Court’s Supplementary Order Paper (SOP) clause 4 inserting new Section 54A(1) after paragraph (c) wants to insert “(d) members of a—(i) council-controlled organisation: [or] (ii) council organisation.” The difference, where we discussed this, was around the difference between a council-controlled organisation and appointees to standing committees or subcommittees of a council. An area where there could still be an opportunity to make some changes in the future to this area very much could be around appointees to subcommittees and standing committees of council.

For example, at Nelson City Council, the Audit, Risk, and Finance and governance committees do have independent appointees. That could be—and say, could because all of these matters need to be traversed properly with advice from officials, advice from Parliamentary Counsel Office around the enforceability of those types of changes actually has to come through the select committee process. This is not the point in the process to introduce an SOP that would fundamentally change elements of the bill, is not enforceable as my colleague Tangi Utikere has already pointed out because it doesn’t cover elected members who need to make their disclosures after they’ve been elected. It actually would become unenforceable. So the member Simon Court hasn’t actually been through and looked at other amendments he would need to make to the bill in order to make his SOP actually workable and enforceable.

I just want to make a couple of responses around the role of local government and the work of local government, in particular the hard work of a number a staff and elected officials at a number of territorial authorities across the country who have worked for, in very difficult circumstances, for a very long time, doing their best for their communities. It is disappointing for them essentially to be brought into disrepute today for a bill that is actually designed to do some alignment between local government and central government.

Our committee took our responsibilities to make this bill as good as it could be very seriously, we worked very hard, we worked very collegially. I would encourage members of the ACT Party, if they do wish to contribute to further select committee discussions on bills that come through, if they have interest in local government, to please contribute at that stage. We are very willing to have these conversations and to come up with practical, pragmatic responses that work for the sector, but to suggest that somehow we’re ignoring the needs of local government by not voting for the member’s Supplementary Order Paper today is just quite wrong. So thank you, and I appreciate the call.

I move, That the question be now put.

Madam Chair, thank you for the opportunity to make another comment on this bill, which has been a really fascinating one. Look, I really did want to have this further call because I want to address something that Mr Simon Court said in his last speech in support of his Supplementary Order Paper (SOP) 150. It struck me as a very odd thing to say. He seemed to imply—and I can’t remember the exact words, but let me just get the gist of what he was saying—that it was a concern that, I think it was, Christchurch City Council conducted its own road repairs. I was gobsmacked by that—that Christchurch City Council somehow should not have employees that conducted their own road repairs. I don’t know, perhaps I shouldn’t paint my own house—who knows?

But it did seem an absurd thing to me, and it became clear a little while later in Mr Court’s speech when he asserted, without evidence—and this is an empirical question—that we’d get a better result if we employed private firms to do so. Now, that is actually an empirical question; it’s not an ideological one. The assumption from Mr Court, I think, underpinning his speech was that private firms were necessarily better in terms of completing work, and so he was very concerned that the Christchurch City Council had its own organisations that would repair their own roads.

Now, I don’t see the problem with the city council deciding that it is more effective to have its own organisations that repair their own roads, instead of contracting it out to the private sector, and, actually, the question could go either way. Perhaps it would be better going to the private sector, or perhaps it would be better being done in-house. But whatever else it is, it is not an ideological question. There is no obvious right answer here. It is an empirical question, and Mr Court has not presented the evidence to show that private firms are necessarily better. Show us the empirical evidence, please, Mr Court—empirical.

It goes to his SOP, when he took great care to explain to me—oh, thank you, Mr Court—the difference between an elected representative and a CEO and an employee, because, apparently, I didn’t know, and I thought it was actually quite precious of him to explain it in detail to Mr Utikere, who has been a very senior member of a city council. He’s been a deputy mayor, so he actually has the experience of being an elected member versus a CEO versus an employee. So, Mr Court, I’m sure Mr Utikere is terribly grateful for that explanation.

But, in all seriousness—and I think it was something that Ms Boyack pointed out very well—there was ample opportunity for the ACT Party to attend the Governance and Administration Committee hearings. Now, they don’t have a member on that select committee—that’s fine; that’s not a problem—but any member of Parliament is entitled to attend any select committee meeting and is entitled to ask to speak and be heard at that select committee meeting, or, in fact, a member of Parliament can even put in their own submission to a select committee and ask to be heard at the select committee. So all those procedures could have been followed, rather than this business of coming to the Chamber with a tiny little SOP with very little explanation attached to it, very little argument attached to it, and very little understanding attached to it of the difference between elected members and CEOs and employees.

So I am going to invite Mr Utikere perhaps to have just a final word on that matter. I would be interested to hear how he feels about the explanations from Mr Court. I know that I was perhaps not as appreciative of him as Mr Court thought I ought to be.

Thank you, Madam Chair. Yes, I am happy to take up that opportunity to share my own reflections on Mr Court’s explanation. But before I do, I just want to reflect on some of the contributions that have been made to date. I do echo the sentiments around the way in which the Governance and Administration Committee is able to function. I was able to spend a short period of time as a member of that select committee and was able to witness that myself. I think it’s worth noting that the chair of the select committee was someone who has had previous experience within the local government sector himself. Mr McKelvie spent a number of years as the neighbouring Manawatū district mayor, so he gets it. Perhaps Mr Court would like to explain it to Mr McKelvie so that everyone is purely clear around what the distinction is.

I’m really disappointed that the ACT Party value transparency, accountability, opportunities to see where the council-controlled organisations and council organisations fit within this process so much that they didn’t even bother to participate in the select committee process for this bill—didn’t even bother. For something that was in front of the select committee for—how long?—six months, actually right up to the last moment before the report was due back in the House, the ACT Party did not send a single member of the caucus to talk about, to tease out, to share some of the concerns that they clearly are in touch with! Yet as part of that select committee process, the committee was able to be more informed through the submissions of Christchurch, of Auckland, of Dunedin and others that are keen in this game, yet they did not even bother. Perhaps it’s reflective of the fact that we need to continue to tell or mention things five, six, seven times before they get it. Maybe they needed the invitation to attend the select committee meetings or more than one occasion.

But what I would say in response to Mr Court, I am not suggesting that debates should not be politicised. Again, if the member was actually listening to what I had said—

💬 Hon Peeni Henare: Oh, no. That’s a rarity, that’s right.

There we go; that’s right, Minister Henare, that’s right. But if the member listened, what I was saying is that my assessment is that the ACT Party are seeking to politicise the employment relationship between an employee of a council and the body of individuals who are elected by their community to make decisions. And that is a very, very, very dangerous path that the ACT Party seem to be advocating for the future of local government, that employees who are holding “Go”, “Stop” signs, employees who are working in our community libraries, who are working in our community swimming pools would be subject to the political whim of those people who are around the table. That’s what the member’s SOP is all about, and that’s why we will have no part of that, on this side of the House.

I want to finish my contribution just by indicating that members have talked about the ongoing piece of work that’s happening. And I think it is important to signal that this is an ongoing conversation that the issues that the Green Party and the Hon Eugenie Sage raised will be considered, no doubt, as we embark upon the future of local government. I mean, there’s a sense of clarity around that. But when we get back to what the premise and the understanding of this particular bill is about, it is about ensuring that there is consistency throughout Aotearoa New Zealand as to what the expectations are for individuals who are elected to public office, not those who are seeking election, those who are elected to public office who are already in the seats around the decision-making table, that there is consistency around what they are required to declare, the extent and nature of those declarations, and the timeframes within which those declarations should be, or must be, made.

I welcome the feedback from members this morning, and I know that when we think about the premise of the legislation, there is much to be gained from the parallels alongside the parliamentary approach. But I think that this is a piece of legislation that came out of the select committee, as I said at my second reading contribution, in a much better shape than when it went in, and I think anyone around this Parliament will suggest that that is the exact role of a select committee and a good one.

I move, That the question be now put.

Motion agreed to.

The question is that Tangi Utikere’s amendment to clause 4 replacing section 54H(3) set out on Supplementary Order Paper 146 be agreed to.

Amendment agreed to.

Simon Court’s tabled amendment and amendment set out on Supplementary Order Paper 150 are out of order as being outside the scope of the bill. The question is that Part 1 and Part 2 and clauses 1 to 3 as amended stand part.

Part 1 and Part 2, and clauses 1 to 3 as amended agreed to.

I will report this bill with amendment.

House resumed.