Local Government (System Improvements) Amendment Bill

Kia orana, thank you, Madam Chair. Thank you for identifying the fairly late landing of those two Amendment Papers. My first question is just seeking some clarity to help us move through this as swiftly as we can but also in a logical form. The two Amendment Papers from the Minister of Local Government—the most recent ones—I take it that 803 is dealt with in Part 1, and his other one is dealt with in Part 2, but, perhaps, the Minister can assist the committee in terms of clarifying that.

I’ll move on to couple of the issues that I have in terms of wanting to raise them with the Minister. The first is clause 4. I’m just signalling that—certainly as Labour’s local government spokesperson—it is my intention to move through these matters in a chronological clause order, and as I dispense with things, I’ll just move on to the next one, rather than jumping all around the place. If we start with clause 4, this is the amended purpose for the piece of legislation. What it is seeking to do—and this was clarified in the in the select committee in terms of a starting point—is to, effectively, remove a broader approach in terms of what the purpose of local government is.

Now, what we see there is a little bit of a change in terms of the ordering of the language that is there. But my question to the Minister is: why is it the case that the Government intends to simply remove a reference to local government, given they are decision makers and representatives, just like every single person in this Parliament is, of the local community? Why is it that there is a need to remove that reference of, effectively, councils and decision makers playing what is a clear broader role in terms of meeting the needs of local communities and replacing it with what is a much more narrow definition in terms of that focus on infrastructure? This is not to say that infrastructure needs are not being addressed by local government, perhaps, in terms of their consideration. There are other conversations around revenue around that and what the prioritisation might be, but this is fundamentally around what the purpose of local government is in terms of its existence. So my first question is really around why that broad nature of the role has been removed and a pure narrow focus on the issue of infrastructure, on services, and on the regulatory functions that councils undertake.

Thank you, Madam Chair. I will follow Tangi Utikere’s lead in terms of how we’re working through this, but I do very much encourage the Minister of Local Government to engage with us on these late Amendment Papers and where he sees those fitting into the debates—it’s just a very basic process question there. But my question on clause 4, which is “Section 3 amended (Purpose)” is that, as we’ve just heard, there’s now this focus on things—so that is infrastructure, public services, and performance of regulatory functions. And I’m looking at the bill, rather than one of the Minister’s Amendment Papers. So noting that there is this big Amendment Paper 565, and that appears to be the whole bill, but in the Amendment Paper form, and then there are these two newer Amendment Papers released yesterday, and they are 803 and 755, so we might have a bit of jumping around. I’m looking just at the bill as it was reported back from select committee.

As I was saying, the purpose moves on to things, and those things are infrastructure, public services, and performance of regulatory functions. When I looked back at the Local Government Act 2002, there doesn’t appear to be any definitions for “infrastructure” or “public services” or “performance of regulatory functions”. I couldn’t see one in either what is reported back from the select committee or when I’ve been looking at the Minister’s amendments. Could he please comment on whether he expects that there will be interpretations or definitions for them somewhere, that I’ve misplaced, and if there are no definitions for them, then what does he see them in?

In terms of infrastructure, we’ve just had a lot of discussion in the resource management replacement bills about infrastructure and whether or not this can include, say, green infrastructure—so it might be trees that are going to soak up the rain and prevent flooding, can they be considered as infrastructure? That’s a real question.

We’ve had the Aotearoa Circle do a lot of work on the importance of nature-based solutions. Does that fit into the definition of “infrastructure”. Then we’ve got public services, and I note there’s other changes that we’ll get to that talk a bit more about what might be public services. Does the Minister think that a public service would be putting on a Matariki festival. Is that a public service? Or does he see public services as being more about the libraries and the swimming pools? Where are the public services?

I think the simplest one in that list of three is the performance of regulatory functions. I take that to mean—but I’m interested in the Minister’s comment as well—that those are the functions that, at the moment, councils have under the Resource Management Act, that they have under the Dog Control Act, that they have under the reserve management Act, that they have under the Waste Minimisation Act, and under the Litter Act—and all the other pieces of legislation from this House that require councils, and local authorities, to undertake regulatory functions. That one is much more simple, and I’m just looking for the Minister to say “Yes, yes, Rachel Brooking, you’re quite correct. The performance of regulatory functions are those that are required by legislation that comes from this place.”; if not, if it’s anything wider than that.

The second questions relate to those definitions of “infrastructure”—how narrow or wide does the Minister expect it to be? And public services again—how narrow and wide? Are these terms defined anywhere, or does he expect them to be interpreted in relation to the definitions that are found in some other pieces of legislation?

My first question was, again, if he can take us through his Amendment Papers and what parts of the debate he expects those to be covered in.

Thank you, Madam Chair. Like my colleagues, I too want to work through this one clause by clause and also get some clarification exactly where the new Amendment Papers sit in this debate we’re having at the moment.

I do also want to start on clause 4, the amended purpose, which is, obviously, changing section 3(d), which is around the broad role in promoting social, economic, environmental, and cultural wellbeing, and obviously that’s been changed to focusing on infrastructure, public service, and the performance of regulatory functions.

My question is actually whereabouts environmental enhancement and protection sits within that scope, which is obviously quite an important remit that councils have had for a long time, and to remove that visibility from the purposes is concerning. I do have an Amendment Paper that is time stamped 16 September 2026, 09.07, which just adds one wee extra point to this clause, so there will be a (d)(iv) “environmental enhancement and protection”.

I think it’s really an important addition to the purpose, because it does ensure it’s in plain sight, that roles of council will be to look after their environment, because the environment is actually really important in many aspects, including the waterways, wetlands, reserves, that also act as a kind of infrastructure. I know my colleague talked about the definition of “infrastructure”, so it’s important that we do consider what that looks like, but the actual role of councils in environmental enhancement and protection I think is also required into this purpose, to ensure that they have the ability to clearly be outlined with the role of the local government, that that is a core component of the purpose of local government.

My question is: will the Minister accept my tabled amendment around including environmental enhancement and protection, and if not, why not? Thank you.

Thanks, colleagues, for questions, and I will do my best to engage regularly in regards to the back and forth on the questions I’m being asked in regards to this bill.

In regards to the questions asked around the Amendment Papers (APs) from my perspective, Amendment Paper 755 amends both parts of the bill, and Amendment Paper 803 deals specifically with Part 1.

From a point around definition, the definitions included—

💬 Hon Rachel Brooking: Point of Order. Can the Minister put up his microphone? And can you repeat what you said about the second Amendment Paper? You said something; I couldn’t catch it. Thank you.

Amendment Paper 803, which is in regards to development contributions, it does not amend the bill as reported back, it is all new in that context. It is related to Part 1 from my assessment. Obviously, the Clerk may have a differing view but I’m just giving you my view.

CHAIRPERSON (Maureen Pugh): Can I just suggest that the Schedule 2 that is in that AP is in Part 2.

OK, we’re all on the same page on that?

💬 Mike Davidson: Point of Order. Sorry, I also couldn’t hear the very first amendment, so—

I’ll repeat again. Thanks, colleagues, I was just giving you all some kudos, engaging in saying we’ll do so proactively. In regards to AP 803, that Amendment Paper will relate to Part 1. In regards to Amendment Paper 755, that amends both parts of the bill.

In regards to the questions around definitions, I refer the member to section 197, which does include a number of definitions regarded, that was actually some of the feedback from the select committee process, to have more defined terms as part of the legislation.

There was a question in regard to community facilities asked by the member, and the definition of that. The core services are services that the public generally accept as being core council business. In regards to core services related to community facilities—which was an area that the select committee requested to be added to the bill, which we accepted—would include aspects such as libraries, museums, reserves, and other community and recreational facilities.

Thank you, Madam Chair. It’s a pleasure to take part in this committee stage on the Local Government (System Improvements) Amendment Bill. I just had a few questions around the initial clauses for 4, 5, and 6, which, if I may surmise to say that they are looking at, essentially, what the Minister or the Government is amending the purpose of the local government system to be.

The reason I wanted to take a call on this—and I know colleagues have had some very specific questions about this—is to ask the Minister of Local Government this. I stand here as an MP from Auckland and I know that the Minister is also from Auckland, and I reflect on the comments that the Minister and his colleagues have made around the importance of localism over an extended period of time. I wanted to ask; how does the stated role of local authorities fit with the Minister’s—and I know we’re talking about the amendments in more detail today. But in terms of how they fit with the purpose, how does he see the local governments that are working within New Zealand—specifically speaking from an Auckland context—being able to meet the priorities that they establish for themselves and their communities when the Minister and his colleagues have consistently undermined that through making unilateral, unconsented decisions around the internal process that lead to decision making for their community?

Does the Minister think that local authorities—when we look at their purpose and when we look at how they must “play a broad role”, as it states in clause 4, “in meeting the current and future needs of their communities”, are they able to make independent decisions, as local representatives, about the types of views and perspectives that they take into account before setting their priorities? It’s all very well to say that local government must, as a purpose, meet the current and future needs of their communities, but how, Minister, are they meant to be able to do this when they have central government coming in and stating that the way that they choose to make their decisions and the people that they choose to be involved in what they determine is important for their local communities are unilaterally—according to central government—not good enough?

Thanks, Madam Chair. Well, firstly, I strongly refute the statements made by the member in regard to this Government. What we inherited as a Government was a situation around the purpose of local government that was “wellbeings”. Well, no one in this country can define the scope of wellbeing. It, basically, includes everything, and, as a result of that, we’ve got councils as monopolies spending local community and ratepayer money on everything. We’ve got so many examples, including if you go down the road in Wellington here, of just wasteful spending.

I make no apology for narrowing the definition in the purpose statement, in regard to new section 3(d) in clause 4, to say that they need to meet “the current and future needs of their communities for good-quality, cost-effective, and local—(i) infrastructure; and (ii) public services; and (iii) performance of regulatory functions.” I make no apology for being very specific on what local government should deliver and what it should not, and one of the challenges that we inherited was that the definition was so loose and wide that councils did not have clarity of what their core purpose was. The changes that we’ve made—which were recommended through the select committee process—in regard to clauses 4, 5, and 6 have defined that.

We should have “cost-effective,” in the definition. We should ensure that councils are delivering services to their community in a cost-effective manner. I mean, that sort of, for many, is common sense. I appreciate that many on my left don’t have that same common sense, but that is the reality and that’s what we’re doing.

Thank you, Madam Chair. I wondered if the Minister of Local Government would like to elucidate a little further on wasteful spending. Does he think wasteful spending includes buying the land and then the building for the Tākina conference centre, which is surely fundamental to economic wellbeing? Does he think wasteful spending in Wellington would include the support for Zealandia and for Predator Free? Or does he think that supporting World of Wearable Art, as an event that brings a huge number of people and a huge amount of positivity to the city, would be an example of wasteful spending? If not, does he think that local communities are incapable during consultation of saying what they think is important for a city or a district?

Thank you, Madam Chair. I think I infer from the Minister of Local Government’s most recent exchange—I was going to ask him what evidence there is around the previous definition there, basically, preventing councils from operating effectively. I infer from the Minister’s response that it’s because this definition of wellbeing is something that can’t be kind of measured. That’s what I’m hearing from the Minister, and so I’ll move on to my next question.

When we’re looking at the purpose, which we know is the overriding focus of local government and what it can, can’t, should, or shouldn’t do, the question for the Minister is: how does this suggested change outlined in clause 4 as the purpose provide any assistance to councils in the sector who are dealing with a whole range of issues that, on first glance, you may actually think are not perhaps covered? Some aspects of that are things like community safety and how councils are going to address issues of community safety outlined under the proposed purpose here. If it’s still possible, where would he see that fitting in?

Another example could be around the engagement of young people, or homelessness in terms of the approach that that might bring for councils—and I see the responsible Minister is just in the Chamber here today. How are these sorts of things going to be able to be undertaken by councils, given the change in definition?

We could go a little bit further and talk about climate adaptation. Yes, there are aspects of infrastructure there, but if councils are not either pre-emptively or responsively undertaking some infrastructure piece but are doing pieces of work to mitigate or to adapt, where does that fit in terms of the proposed change outlined in clause 4? It might be that maybe the Minister actually thinks that those are things that fall outside the purpose of local government, and so I think it is important to get some clarity around whether that is the case or not.

I would like to also just focus on economic growth, and Celia Wade-Brown has just touched on that. Where in clause 4 is the provision for councils to have, as their purpose, economic growth opportunities for their communities? Where there are communities where there is potential population decline, how are councils able to turn their minds to effectively doing work in that space, if at all?

Actually, it would be interesting to hear whether the Minister sees that there is a role for local government in that regional economic development space. If I think about my own community, our council, alongside our neighbouring Manawatū District Council, effectively funds the local economic development agency, CEDA—the Central Economic Development Agency. Where would those sorts of spending decisions or priorities fall within the purpose, because I think that there is an acceptance—certainly, in my community—that the work they do is really important in terms of generating opportunities. Where does economic development sit within the purpose? It would be helpful for the Minister to identify that.

Thank you, Madam Chair. Now, going back to my question about definitions of infrastructure, public services, and performance of regulatory function, the Minister of Local Government mentioned in his answer to me before “section 197”, and I presume he means section 197 of the principal legislation, the Local Government Act 2002. That says, “In this subpart, and Schedule 13,—” and then it lists some definitions. I can’t see any amendments to section 197 in this bill, although they might be in an Amendment Paper that I haven’t picked up. But those definitions in section 197 are limited to that specific part of the Act, and that part of the Act has to do with things like development contributions.

Then, there’s more, because not only does that not apply to the purpose section; it also doesn’t use the same words. Some of the words are familiar. The word “infrastructure” is used, but only with the word “community” in front of it, and that “(a) means land, or development assets on land, owned or controlled by the territorial authority for the purpose of providing public amenities; and (b) includes land that the territorial authority will acquire for that purpose”. Because that definition is “community infrastructure”, and is what is applied to development contributions, it is different from infrastructure, which I presume would be wider. Maybe the Minister was saying, well, community infrastructure is a subset of infrastructure and infrastructure, in fact, includes much more than community infrastructure—because also defined at section 197 of the principal Act is “network infrastructure”, and that means “the provision of roads and other transport, water, wastewater, and stormwater collection and management”. But there are still many types of infrastructure that we can argue over that would not be included in either network infrastructure or community infrastructure.

I note, going back to these Resource Management Act debates that we’ve had recently, we’ve been told by every provider of everything that they are critical infrastructure and should be considered infrastructure. I think we even got to the level of private early childhood centres being infrastructure. So it is really important that we are clear about what this definition of “infrastructure” means in the purpose of the Local Government Act and if it is wide or narrow, because the Minister has told us that it’s important that we get rid of the wellbeings because they are not specific enough. He said, “We’re being very specific.” This definition is not very specific; it could mean a whole lot of things. And I have heard, I think, this Minister, or definitely other Ministers from his Government, say that a garden on the roof of a bus stop is terrible wasteful spending. Now, when I have seen gardens on top of bus stops, they have been stormwater infrastructure. There is a whole lot of science behind this, as well. They are there to slow down the water getting to the roads and causing flooding. Is that included in the definition of “infrastructure”? Sorry, his answer before gave me no help whatsoever.

And then, public services—they’re not defined in section 197 of the principal Act, either. Neither is the “performance of regulatory functions”. I know he went over the page to new section 11A, inserted by clause 7, where there is this change so that museums are specified—something else is specified; I can’t see it now—but that does not address my question of the definitions of these words. Do we look to other legislation? Is he saying that existing section 197 is it? Are there any other changes to section 197? Does he take my point that, if these are left undefined, then, in fact, he is undermining his own objective, which is to be very specific? By having these terms undefined, it’s not specific and, therefore, it will be important for the Hansard that he gives some indication of where he thinks they will go. And do those public services include the festivals that have now been mentioned a couple of times? The Minister has not answered that question.

Thank you for that. If I could just ask—if you could mention the clause that you’re referring to, it will help me to be more specific with my answer in regards to that. There are 22 clauses in this part, and I know that we’ve just focused on one so far.

The purpose question related to clause 4: the new purpose does not stop any councils from doing these things. The question was related to economic growth more broadly; however, the new purpose does force councils to prioritise on that purpose first and foremost. One of the aspects is obviously infrastructure, and infrastructure investment enables economic growth. We don’t want the legislation to try and legislate for every single activity that one can imagine and think of. We know that that is not practical nor going to be possible. Any legislation, including this, uses broader terms which are outlined very clearly in the clauses, which talk about community purpose, the cost-effective aspect of that, and the delivery of the public services. I’ll leave it there.

Thank you, Madam Chair. I just want to continue the conversation with the Minister of Local Government in relation to his Amendment Paper 755, amended clause 5(1A), when we’re talking about the clause that defines “cost-effective”. I think this is a very interesting intervention on behalf of the Government and I have a few questions for the Minister around this.

When we are looking at “cost-effective”—and I appreciate his comments that it’s not possible for the Government to legislate for every different type of activity that the local government may do; of course that’s the case. But what the Government has decided to do is to put a definition into a bill that governs the actions of local government and put that definition of “cost-effective” in, but it isn’t clear to me—and I’m interested in the Minister’s answer to this question—who is the arbiter of whether or not a decision is cost-effective, because there are a few things and, reading the clause, there are issues that the clause itself raises in terms of the types of functions that local government could be involved with—for example, infrastructure; for example, public services—that may have decisions that need to be made on the basis of common sense and the basis of knowledge of their community. It may be that there are infrastructure decisions that might be more expensive than the cheapest possible option, but that infrastructure is likely to last longer. That infrastructure is likely to require fewer repairs, therefore saving the ratepayer over the long term. Those types of decisions are a matter of judgment, and what we have seen with this Government and the attitude to local government is a refusal to allow local government a respectable level of autonomy to be able to make those types of judgments.

What I want to know is, when he talks about “cost-effective”, is it in his view what is cost-effective, or is it in the view of what the local council considers to be the most cost-effective, accepting that they are elected and they have the right to make decisions on behalf of their community and they may have more awareness than central government? Or is it an objective standard that some third party will be able to able to impose? Or, conversely, is it something that would only apply in situations where there is such a clear lack of compliance with this particular clause that that would be the only place or the only time that there would be a challenge in relation to the cost-effectiveness of local government? Or is this simply meant to be a directional instruction from central government, which we know delegates responsibility to local government to say, “Well, you should be cost-effective, but we’re actually not going to follow up on this.”?

There’s a lot in here, and there are a few examples that I think the Minister may want to think about. In Auckland, we know that we had devastating floods in relation to the Auckland floods in 2023. We know that the city wasn’t prepared for the amount of water that came down, and we had terrible consequences for the people who died in that tragedy, we had terrible consequences for homeowners, and we had terrible consequences for infrastructure. It was a tragic event and it was near to Cyclone Gabrielle, which also had impacts on Auckland, but it was generally a very, very disruptive and terrible chapter in relation to how our infrastructure was able to deal with the effects of climate change - induced severe weather events.

If the Auckland Council is making decisions that are more expensive but do provide greater resilience for their communities in relation to flood protection, will they be compliant with this clause 5(1A), which sets out the definition of “cost-effective”, or won’t they be, and who will be the judge of that? When we look at decisions that council makes that may be a choice, a judgment call, is the Minister saying with this clause that he’s going to be stepping in and involving himself in those judgment calls, or is he going to allow local government the respect to be able to make decisions in the best interests of the community that are cost-effective in the short or the long term?

I thank the member for the question in regards to clause 5(1A) on page 4. That clause actually includes the definition that the member is referring to it. So it is a defined term and it outlines, clearly, what we are referring to in regards to what is cost-effective. Again, the member can see that it’s also based on the definition of “public value” in the latest Government procurement rules. So we have taken that consistency. It is important to be clear and concise in regards to what we expect of local government to deliver, and, again, that is more helpful than something that is undefined and, therefore, is open to significant interpretation.

But the points that the member has raised in regards to infrastructure, such as waste water or stormwater, to prevent flooding, which I acknowledge to the member, and for many in the room, is a significant issue and concern for our communities. The definition clearly states that when these decisions are made, they need to be considered from a perspective of value for money. They need to be using resources effectively and economically and without waste, and taking into account the total costs and benefits. So I don’t think those are, again, at all unreasonable, but, at the moment, those checks and balances aren’t specified in a way in which we are intending they are here. As a result of that, local governments can proceed with decision making in a more robust manner than what they have been able to do in the past.

Thank you, Madam Chair. I’ll move on to clause 5 now as well, which is the interpretation. I’m just wondering about community outcomes, which is defined, again, in relation to that infrastructure, public services, and performance of regulatory function. But what I’m interested in is the link between the outcomes that the local authority aims to achieve and meeting the current and future needs of communities for those infrastructure, public services, and performance of regulatory functions. So just if the Minister of Local Government can clarify that those outcomes are quite different and if he could explain how it is that the outcomes are different from the underlying infrastructure, public services, and performance of regulatory functions. Would an example be that you have infrastructure and the public service to provide public transport, but the outcome you are looking for is people using buses? Is that how he sees that link between the outcome and his listed three things that go to the purpose of local government?

And then a subsequent follow-up question from the definition discussion, if we can call it that. The performance of regulatory functions, does he consider that it includes biodiversity functions that are included in the Resource Management Act? That’s a specific question on that performance of regulatory functions that wasn’t in the list—well, I mentioned the Resource Management Act, but I was actually thinking more of the consenting functions under that Act, rather than the biodiversity—also biosecurity functions as well. Thank you, Madam Chair.

Thank you, Madam Chair. I also have some questions on clause 5(1A). They’re different questions to what we heard before around “cost-effective”. My questions relate to 5(1A)(a) and 5(1A)(b). The first one is where it talks about “using resources effectively, economically and without waste”. That’s actually a very strong term, “without waste”—“using resources effectively, economically and without waste”. I think it’s really important to establish what this actually means. Are we saying that cost-effective means that councils need to aim for zero waste in their delivery of infrastructure and public services, given those words “without waste”? Because, if that’s the case, that’s actually significant legislation. It’s very rigid, it’s not flexible—it’s rigid; it says “without waste”.

So it would be good to get some clarification on that, because the way that can be interpreted is that, actually, councils need to look at their projects and actually do them as zero waste projects, which is actually good, but it would be nice to know if that’s the case when he refers to “without waste”.

The other part of that is 5(1A)(b). Taking into account the total costs and benefits of decisions or actions, and, obviously, benefit-cost ratios (BCRs) are very topical in councils and especially transport projects. I’m curious if the Minister has any thoughts on: if you look at a transport project, is there a BCR in mind—a threshold—that a transport project should meet for it actually to be considered cost-effective? For example, maybe, two? That’s getting real value for money; if for every dollar you invest, you get benefits of two. So it’d be really good to know if there is, I guess, a threshold the Minister would recommend, and, actually, BCRs should meet, when councils take into consideration costs and benefits.

The other question I have around 5(1A)(b) is, I guess, the total cost. For clarity, do the total costs mentioned in this new definition refer to the total cost of the infrastructure of public services delivered over time or just in the short term, and what would that look like in practice for a new infrastructure project like a bridge?

So there’s three questions I’m asking around that definition of “cost-effectiveness”: one is around the definition of “without waste” and whether that means that councils need to be aiming for zero waste in their projects; the other one is around the BCRs, and does the Minister have in mind, when we’re looking at transport projects especially, a BCR threshold that councils need to meet for transport projects before they are considered cost-effective, which I think is, actually, a really important clarification to make so councils can actually know what to aim for when they’re doing their projects.

Lastly, is around the total cost and actually are we looking at total costs for short term? Are we looking long term over the span—especially infrastructure projects which are designed to last for four generations. So they’re my three questions around clause 5(1A)(a) and (b) around the interpretation of cost-effectiveness.

I thank the member Mike Davidson for his questions in regards to clause 5(1A)(a) and (b)—three questions there. The question in regards to total costs relates to the long-term view.

In regards to the questions around specific examples on the benefit-cost ratio for transport projects, it is not the intent of the legislation to be definitive around the specific threshold points in which is deemed appropriate. Those mechanisms in regards to assessment already exist within the transport arena. The purpose, here, is to ensure that there is consideration around any deployment of investment with those rigour, and, obviously, at the moment, some parts of our system already have that but other parts don’t. So this is to ensure we have consistency.

Lastly, the question in regards to “without waste”. That doesn’t mean zero waste, but it does imply and mean that councils, when making decisions in regards to investment decisions, that they should do so in a way in which is, obviously, minimising waste as much as possible. At the end of the day, the assessment or the mechanism—to the member’s point around who will judge—at the end of the day, that will be the ratepayer in the community that will have that assessment judgment. Again, the precedent here is to apply that that needs to be a consideration. I think some of the feedback that we’ve had from councils as is, you know, the ability to be quite specific around expectation, and having that within legislation, then ensures that through their processes and procedures that apply, that they have those questions as part of a formal decision-making process. And a result of that, the intent is that the finite amount of capital that is available to be deployed by councils to a wide range of projects, which communities want, will be best targeted or more efficiently targeted than the status quo.

Thank you. Minister, I have a question on clause 5, but just on clause 4, I do have an Amendment Paper 651 that the Minister of Local Government hasn’t indicated whether he supports it that not. So I’ll just park it with him. I also have an Amendment Paper relating to amending clause 5, which is Amendment Paper 652. It will seek to delete subclause (1) in its entirety. I think I know what the Minister’s view on that might be, but I’ll give him the chance to indicate that. But just in terms of clause 5, section 5 amended, when we’re looking at the definition of community outcomes, the word that’s used there on behalf of the local authority is where it “aims” to achieve something. Now, we all know that the definition of “aim” can be aspirational in many regards, from community to community. That does, obviously, depend on context. But I take on board the responses that the Minister has given around who makes these decisions. It sounds as though it’s a little bit up in the air there.

But I’m interested in his thoughts around the definition in clause 5, permitting or encouraging councils to, effectively, prioritise lower-cost options about anything—a whole range of different things—over what might be a higher-cost option but it could provide a more durable, longer-lasting solution to something. Now, we’ve already touched on climate adaptation, for example, where some of the costs could be perhaps not the lowest-cost option, but still could ensure longevity in that the investment is such that you’re actually saving money in the long run because you are mitigating against particular decisions that most of us know in this House will naturally happen over time.

So I guess it’s just from the Minister—and maybe the saving word is around “good-quality”, so maybe it is a qualitative view on a particular decision to be taken by a council, which financially, in terms of the raw dollar cost, might not be the cheapest option, but, in the greater scheme of things, might still be the better option for the community in the long run. So I just wanted to get some clarity that this is not going to fully constrain council’s democratic ability to make decisions in that particular sort of vein.

Thanks, Madam Chair. Just for the member Tangi Utikere’s feedback, I do apologise, but I won’t be accepting his Amendment Papers, nor for the member from the Greens either. They are not consistent with the Government policy.

In regards to the member’s question around cost-effectiveness and does this, in effect, mean lowest cost, the answer is no in that regard. This is about—as the definition notes—value for money. The clear definition in regards to effective and economic and in regards to the point around waste, it’s an “and, and, and” consideration. This is about value for money. Obviously, when we think about adaptation or, say, flood resilience projects, then the total cost and benefit across the project needs to be considered, including the fact is that investment going to be effective, economic, and reducing waste. So in that context, that is for the council to decide in terms of the appropriateness of deployment of that investment to meet the needs of the problem they’re trying to solve.

Thank you, Madam Chair. Just following on from the Minister’s response to some of those questions, I thank the Minister, the Hon Simon Watts, for being engaged in this committee of the whole House stage.

💬 Hon Rachel Brooking: Not with my questions.

Well, excepting that there are some questions on the table.

The answer that the Minister gave in relation to my previous questions on clause 5, amended section 5(1)(a), appeared to be that there will be no necessary way of checking or enforcing cost effectiveness, apart from the election that all local government representatives are subjected to anyway. I’m happy to be corrected, but that appeared to be his response to that question. So that, essentially, is the status quo, that members of the public are able to hold their elected representatives to account if they don’t like the spending decisions or the decisions that they make collectively for the community.

So I wanted to know what then is the purpose, apart from signalling that this is something that the Government thinks is good—which may be a legitimate policy or legislative flag—is there any other way that this is actually going to be effective? Because what he’s just described is what happens currently at the moment. There is a tiny fish-hook to that, which is when you put obligations in legislation, there is a much clearer pathway for individuals who may want to challenge the decisions of their locally elected authorities through mechanisms such as judicial review determinations to take those particular cases—they may not like a project, they may not want to wait until the next local body election in order to cast their vote for someone else, who stands for something different. So they may take matters into their own hands and they may say, “Council, you are acting inconsistent with clause 5, amended section 5(1)(a) of the Local Government (System Improvements) Amendment Bill. I am going to take a judicial review and I am going to get you to respond to that, because you’re not being held to account.”

So if we think about the use of public money and the Minister’s stated objective here of making sure that every cent of local government spending is used in the most cost-effective way possible, that outcome appears to be contradictory to that, because that would mean that local government is spending money justifying decisions that they’ve already made. The reason that they’re able to do that is partly empowered by the change that the Minister has put in place, which, essentially, allows, in his summation of the effectiveness, exactly the same procedure that currently exists in terms of holding democratic elected members to account. So just wondered, from the Minister, if I was correct.

Thanks to the member Camilla Belich for that question. I mean, look, the reality of what we are doing here is to set a very clear expectation through legislation around what the purpose is of local government. It is therefore the role of local government to take that on board and get on with it and deliver those services to their communities.

The Minister of Local Government, as the member will be aware, does have a range of powers to intervene in local government matters, as and where the threshold is met, which is generally a very high threshold for intervention. But there are powers that, from time to time, Ministers in this role across Governments do utilise where the governance mechanisms within council are not delivering upon their purpose and therefore there is intervention. I think that is the subtle balance that one is operating here. What we are doing here is being very clear and concise on what we require as the purpose of local government. As a result of that, that clearer definition around purpose ensures that what they do do will be delivering services that communities expect in a way in which delivers value for money. That versus the status quo is an important point of difference.

CHAIRPERSON (Barbara Kuriger): I’m just going to make a point before we carry on. Obviously, at the beginning of this committee stage, we talked about how a few hours before the House started sitting there were some Amendment Papers, so I’m not wanting to rush this section. I’m just wanting to say that we’ve spent quite a bit of time on clause 5, so if anyone wants to take a call if there’s anything to round up on clause 5, we could then move forward again, OK.

💬 Andy Foster: Madam Chair—Madam Chair.

CHAIRPERSON (Barbara Kuriger): Hon Rachel Brooking—oh, sorry, I know; I’ll come to you. I’m aware you want to take a call.

💬 Andy Foster: That’s OK. It’s a question.

CHAIRPERSON (Barbara Kuriger): Great, thank you.

Thank you. A small question on clause 6, section 10 replaced, which is the new purpose of local government, rather than the purpose of the Act, and then I’ll move on to clause 7.

On clause 6, at replacement section 10(c), I’m wondering if subsection (c) is just totally redundant or not, and if the Minister can explain why it’s not redundant. That is because of the use of the phrase “by fulfilling”. So subsection (c) is about supporting local economic growth and development—excellent. Then is says, “by fulfilling the purpose set out” above, which is the needs of the communities for infrastructure, public services, and performance of regulatory functions. So is that use of the word “fulfilling” supposed to restrain the purpose of local government with regards to local economic growth and development? Because it’s only doing that growth and development where it’s carrying out its functions regarding infrastructure, public services, and performance of regulatory functions. Or are they able to do more than that as well? Is the use of the word “fulfilling” constraining the work supporting the local economic growth, or am I over-reading that? But if I’m not over-reading it, if it is constrained, then what is the point of that subsection (c)? It would seem redundant.

Now, moving on to clause 7, inserting new section 11A, and the Minister of Local Government was referring to it a little bit before. These are the core services, and the core services are listed at subsection (1)(a) through to (e), and I think it’s the same on the Amendment Paper—yes, it is—but what I’m interested in is how these new paragraphs (a) to (e) differ from subparagraphs (i) to (iii) of section 10, replaced by clause 6, that we’ve been talking about in the preceding clause. All the purpose language is about “infrastructure”, “public services”, and “regulatory functions”. Yet here the language is different and its “network infrastructure”—presumably, that is a subset of infrastructure—it is “public transport services”, etc., and I note that, “In performing its role, of local authority must have particular regard to [these] core services”.

Could the Minister explain to us why it is that those core services are chosen and how they differ from the infrastructure, public services, and performance of regulatory functions? And if the particular regard is just to say, “Oh, if you’re wondering whether or not something does fall under section 10(b)(i) to (iii)—‘infrastructure’, ‘public service’, or ‘regulatory functions’—and you’re not sure if it is, don’t worry because you can still have particular regard to it under new section 11A if it is a public transport service, for example.”, is that how it’s supposed to link? Or is it actually acting in totally the reverse, and is it meant to be a narrowing of those subparagraphs (i) to (iii) —“infrastructure”, “public services”, and “regulatory functions”? Is it saying, “Actually, when you’re performing your role, council, what we really want you to look at is just these core things, even though we’ve just told you that your purpose is wider than that”? My question is about that interaction, the systems interaction, between the purpose of the local government, which is for all infrastructure, versus the core services, which is not all infrastructure—it is restricted to network infrastructure—and then there’s other things that are listed. That is a sort of structural question.

Then I have one other question on this, and that is at new section 11A(1)(e), inserted by clause 7, where the Minister referred to the specification here of “libraries, museums, reserves and other community and recreational facilities.” I’m particularly interested in that word “facilities”, because that sounds like it must be a thing to be a facility. My question here is a specific one and that is: is subparagraph (e) only related to CapEx? Is that only capital development for the library, the museum, and the reserve, or is it also for the operational expenditure of those things; if so, should “facilities” include some other word like “functions” or “operations” as well?

Thanks, member, for the question. I refer the member to correspondence from the chair of the Governance and Administration Committee, Camilla Belich, on 17 November, which outlines all of the background on the questions of which the member is asking in regards to that. That is on public record.

Thank you, Madam Chair. You did invite us to continue a little bit on clause 5, so I wanted to—

CHAIRPERSON (Barbara Kuriger): I’d rather the member didn’t, because I asked just before if anyone had any questions on clause 5 and we moved forward, so I’m not taking calls on clause 5.

💬 Mike Davidson: Point of order. I agree that you did ask that, but we still had stuff we wanted to discuss on clause 5—

CHAIRPERSON (Barbara Kuriger): I asked that question at the time—

💬 Mike Davidson: —and we stood up, but then a member stood up and went straight to clause 6, which didn’t give us that opportunity to—

CHAIRPERSON (Barbara Kuriger): No, no. On the point of order, there were about five people standing up and I said, “Does anyone have anything on clause 5?”, and no one indicated that that was the case, so we moved on, and I’m not taking—

💬 Mike Davidson: Sorry, just speaking to the point of order.

CHAIRPERSON (Barbara Kuriger): No, I don’t want you to trifle with the Chair. I asked the question and nobody who was standing at the time gave me the indication that they had any more on clause 5, so we’ve moved forward. That is my ruling. We’re moving forward. Celia Wade-Brown, you’re welcome to take a call if it’s after clause 5.

I would be delighted to, thank you. I have to say I appreciate the Minister of Local Government trying to make it clear, but I actually find, even with the changes, that there is a lot of repetition. We’re talking about the purpose of local government to meet the current and future needs, and then in clause 7, it talks about “Core services to be considered”, and they’re almost the same, but they’re not quite the same. I think that this, whether it’s going to be a judicial review, whether it’s going to be debated at the council table, is going to be very difficult. I wondered if the Minister could give me some answers on two things.

How many mayors or councils or organisations like Local Government New Zealand or Taituarā actually supported the changes in clause 6 that replaces section 10, the “Purpose of local government”, which says it’s “to enable democratic local decision making”, which is awesome—that’s real localism—but how many submissions actually supported that? I would also like to find out a little bit more—it was touched on by my Labour colleague—about “local economic growth and development”. I do acknowledge that the Minister of Tourism has put out a very useful road map. I have great respect for her in that role, though not in every ministerial portfolio she holds, but she’s been very positive—

CHAIRPERSON (Barbara Kuriger): Well, go back to the purpose of the bill.

It says “local economic growth”—does that definitely include funding regional tourism organisations that are pretty critical to spreading our tourists out around the regions and supporting local economic growth? Or will some do it and some not? And will the Minister be likely to intervene in either case as to whether they should support regional tourism organisations or not?

I also wanted to ask, where you say to meet the current and future needs of communities for good quality, cost-effective, and local public services—which might mean library assistance and lifeguards—does he have any view as to how requiring a council making their local decision to pay the living wage, both for social reasons but also because people who are paid enough not to have to work three jobs can actually participate, can support their children, and so on, does he feel that paying the living wage is a perfectly reasonable thing to do under good quality, cost-effective local public services?

Thanks, Madam Chair. I refer the member to when questions in regards to submissions were received, I mean that’s all outlined in the Governance and Administration Committee report back, so I’m not going to cover that. The other question I answered around libraries; I’ve provided responses already, so I’ll be replicating myself again in that. The question in regards to “Should councils be paying a living wage?”, well, first and foremost, we have a minimum wage, which is a legislative requirement in this country, and I expect councils to be complying with the law. I also expect that councils are delivering value for money for their ratepayers. The fact that they feel like they want to be spending more for whatever reasons needs to be on the basis that their ratepayers are of the view that that is value for money. I would expect, first and foremost, that they meet the requirements under the law, which is minimum wage, and at that point, over and above that, will be based on the performance deliveries of the functions of that council.

Thanks, Madam Chair. There are two areas I wanted to ask questions about, if I can, on this part. The first one of them is that we specifically identify there in the legislation—and that’s stayed there, I think, right the way through the select committee process—the “supporting local economic growth and development”, which are obviously two separate things. I’m really interested, because that’s specifically been identified as different to all the other ones about infrastructure, public services, and so on. Although, you could regard it as a public service. But I’m specifically interested in how that interfaces with—we’ve already had the question. I don’t think I heard an answer about RTOs—support of regional tourism organisations—but also how that interfaces with arrangements that might be between the Crown and local government in terms of regional deals, because there are going to be significant elements of that which are about economic development. I’m really interested to understand because that’s been specifically identified there so it doesn’t get lost. I can see separately we’ve got the rates-capping legislation. I would argue that they should have been together, but that might be one of the casualties. Councils could quite easily go, “How can we save some money? We’ll do it there.” I would take that the intention of having it identified here is that that doesn’t happen, and we’re saying, “Actually, that is important. It’s important that councils are involved in the economic development growth of their area.” So I’d really like some feedback on that as to what you’re anticipating there.

The second one is just in terms of the core services. Again, we’ve got the rates capping, and one of the issues that councils have brought up time and time again is the concern that rates capping could erode their ability to be able to manage core services and to maintain assets. We’ve got an issue across the board, and we know that the Crown is more guilty than local government in terms of asset management and maintaining hospitals, education facilities, and so on. We know that’s really, really important, so we’ve been driving towards that. The Infrastructure Commission has said that’s really, really important, and we’ve all said, “That’s great. That’s really important.”, but what I’m really interested in is: what does the core service mean in terms of the rates capping? If the council is rates capped at a certain level and it can’t manage to maintain those core services, those core assets, what happens and what gives? What is the penalty, effectively, for councils? What’s the regime that a Minister might say, “Well, actually, you’ve spent money on things which are not core services there; you’re not managing the core services.”? What is the regime going to be there, and is there an ability to make sure that councils are going to be able to manage those core services so we don’t end up with them being continued to be depreciated, which has happened not only in local government but also in central government over many years? I look forward to the answer. Thank you.

I thank the member Andy Foster for his questions. Obviously, you’ll be aware that the rates-capping legislation is in front of select committee, and so that is something that will be considered in that regard. But the interrelationship point around the definition is the point that the member is raising. The purpose of this legislation is to clearly define what are the core services that local government should deliver. It links back to the member’s first point around whether activity A or B is in or out, and I answered that question earlier today, so I don’t wish to repeat myself, but it is an important point to note that the legislation here does not prohibit any specific activity X or Y. However, it does prioritise what the activities are that local government must deliver first and foremost before anything else. That is the important point of detail in regards to that, which does not exist in the current model where community wellbeing is the definition of what councils must deliver. As the member will be aware, that is a much broader definition of “delivery of services and activities” than what is being proposed.

In regards to the questions around decisions that councils will need to make in an area where they are needing to meet a rates cap threshold versus the services they deliver, again, that will be down to respective councils and the way in which they manage their affairs, and it will be upon them to ensure that they structure themselves to deliver the core services first and foremost. Then that will take them to a position, and then they will need to, obviously, consider where they are at in terms of their ability to sustainably deliver any other core services that are over and above that. Of course, there will be challenges for some councils. We have 67 councils, so there will be a range of differing views around that, but the important point here is that we need to make sure that they are focused on the delivery of core services first and foremost.

Thank you, Madam Chair. Now, my question to the Minister of Local Government is: what is this letter that he talks of? This letter that he talks of from the former chair of the Governance and Administration Committee. I’ll tell you one thing: if it was from Ms Belich, I know it would be very, very good letter. But what is it? It’s not on the Table, and we are in urgency, and it might be part of the public record. The reason I’m asking you, Minister, is that given the answer to the questions that have been raised, for example, from my colleague the Hon Rachel Brooking around the facilities component being capital expenditure or operational expenditure. If we could just have a little bit of clarity around this letter.

Now, can I just also have a look at clause 7? This is the proposed new section 11A. Now, when it comes to (1)(e), this is the “libraries, museums, reserves, and other community and recreational facilities.” Now, further down in new subsection (3), if you do a bit of a cross-check, you can see that the definitions are for many of those items actually referenced in other pieces of legislation. For “civil defence”, that’s no problem, and also for “reserve”, and “waste management and minimisation”, but it does beg the question: what does “community and recreational facilities” actually cover and capture if we’re looking at other parts or terms that have been identified in that section being cross-referenced by a legislative definition in another piece of legislation? Could the Minister just provide some understanding of what particularly the “community and recreational facilities” would actually seek to lead?

Can I move on to clause 8. This is looking at subclause (2) in clause 8. There’s a change there which seeks to basically remove “environmental wellbeing” as part of that. It’s simply saying, “the social, economic, and cultural interests of people and communities;” This is something that at a principled level, the principles would relate to the functionality of local authorities. Now, why is it that environmental wellbeing has, essentially, been removed as part of that, and does, actually, the Minister accept that environmental considerations specifically go to the heart of infrastructure cost implication considerations that councils might actually need to be making? It seems very strange that you wouldn’t have a reference to environmental aspects for consideration. You’re expecting councils to be focused on infrastructure. I understand that as one of the tenets outlined in the purpose, but when we’re looking at clause 8, the only one that would go would be environmental if we’re looking at the four wellbeings that are contained there. So I do want to know how councils are expected to turn their minds to the environmental considerations and, in particular when thinking about infrastructure, where that responsibility or priority might lie?

I was referring to a letter from the Department of Internal Affairs to the chairperson of the Governance and Administration Committee, dated 17 November 2025, titled “Local Government (System Improvements) Amendment Bill—Responses to information requests”. This letter can be found on the parliamentary website

💬 Hon Rachel Brooking: And what does it say?

💬 Tangi Utikere: What does it say?

Thank you. The question is: what—

💬 Hon Simon Watts: Google it!

Oh, I’m just being told to google it. Is it what the Minister just—

💬 Hon Simon Watts: It’s on the parliamentary website. It’s publicly available. I’ve said that about three times.

OK. I just want it to be on the record that the Minister is telling me to google it. I’ve asked him specific questions about wording, and he’s referring me somewhere else rather than answering them here in this Chamber when those answers would be in the Hansard for everybody to look at when they’re trying to work out what these words mean. That is shameful, and that is the approach of this Government. It is callous; it is reckless. It is a reckless approach to lawmaking to refer off to some third document rather than answering the question: are operating expenses included? It’s a simple question. Yes or no? It’s easy. Just tell us, please.

I’m going to move on, though, because the Minister wants to be reckless. I do not want to be reckless, and I want to get to these big parts that the Minister’s just dropped on us this week. However, I’m not there yet. At clause 10, “Section 39 amended (Governance principles)”, I’m interested in this term—and we’ll come to more of this, I think, later on in the bill when we’re talking about how councillors work together. But this is this term that a local authority “should foster” the free exchange of information and “should foster” the responsibility of its elected members to work collaboratively. My question to the Minister is: what weight does he think that this phrase “should foster” should have? There are a lot of shoulds here. Is it a term already used in legislation, or is this a new term that comes with these amendments or not?

Does the Minister agree with me that “should foster” is a subjective term—that it’s an apple pie type of term? I’m not saying that I disagree with it, but if he could comment on how subjective it is, how apple-pie it is, and if there is any other reference to “should foster” in legislation—and what his expectation is that this requirement of “should foster” will lead to. Is it just to give a council some comfort, if they’re having a meeting with people to share some information, that if somebody tries to take some sort of review against the council for its decision-making processes, the council will then be able to go back to this amended section 39 and say, “Hang on, we’re supposed to foster this, and this is what we’re doing, so don’t give us a hard time.”? Is that why it is included, or is it included for some other reason?

I know we’re going to get to—I think, in the other part—the code of conduct. Again, I’ll be interested in asking the Minister what happens if councillors breach the code of conduct—we’re not there yet—and also, what happens if there is no fostering of the exchange of information. It’s not “making”—because “making” is a requirement—it’s a “should”. It’s not at the “making” level. What happens if the council doesn’t foster elected members to work collaboratively? What happens then? Is there any consequence for not fostering, and why is it in here? What is the mischief that the new clauses here are trying to deal with? Is it a well-known term that I’ve just not noticed before, or is it a new one? I think it would be useful for the Minister to give us a little bit of clarity on what his expectations are and the reason for including these amendments to section 39.

Thanks to the member the Hon Rachel Brooking for the questions in regard to clause 10. The purpose, and the broader intent here, is to ensure that we have a standardisation of these expectations, to provide greater consistency and transparency for councils across the country and to provide clear expectations for elected members.

In regards to the question in regards to the governance principles that was asked before, the aim of the principles is to set out the high-level expectations on local government to provide for the good governance of local communities and the accountability of councils to their communities. Obviously, the interpretation is left to councils, in terms of how they deliver those.

Thank you, Madam Chair. I just note that my colleague the Hon Rachel Brooking just spoke to clause 10; however, I haven’t had a chance to speak to clause 7.

CHAIRPERSON (Barbara Kuriger): That’s fine.

Excellent; thank you very much. I do have just one call to make on clause 7, because I think it’s quite an important clause. Obviously, it’s creating a kind of hierarchy for what councils need to focus their mahi on, especially when you take that together with the eventual rates cap. There’s obviously going to be less room for councils to move, so this is actually a really important clause, and it’s really going to, in a way, dictate what councils can and cannot do.

A number of us from the Green Party have put forward a number of amendments, just to see if we can add a little bit more there, because it is quite prescriptive and it is really important that nothing is missed that is actually really important to communities and what councils do. When you look at clause 7, new section 11A(1)(e), it does list “libraries, museums, reserves, and other community and recreational facilities.”, which, I assume, will be like community halls, gyms, etc. There are some definite things that are missing there, and a lot of these are captured within our amendments. We’ve done them separately because we don’t want the whole lot put into one and then all ruled out of order. We’re not quite sure why, in this space, we’re missing things like public spaces—it’s not a reserve; it’s a public space—like a street mall, like the square in Christchurch, spaces that don’t actually fit in here but are really good public spaces. I note that we have got libraries and museums, but we don’t have art galleries, and also missing from that is heritage, as well. There’s nothing around economic development and, also, adaptation. This is why, I say, we’ve done these amendments separately: to ensure that, actually, if there is something where the Minister says, “Oh, actually, that should be in here”, we can have a look at that one tabled amendment and potentially include it.

I’ll quickly just go through what we have added as amendments for the Minister to consider—and potentially, he may recognise that that was missing from there—because it is a little bit concerning, when we do list things like libraries and museums, that suddenly we’re ruling out—and I take what the Minister said; it doesn’t technically rule things out. But, when you put a rates cap on, it means things will fall right to the bottom, and therefore the pressure on councils will mean that stuff won’t get looked at. So we have amendments and, if it’s OK, Madam Chair, I won’t talk to the time stamps, because that will take a lot of time—because there are several amendments—but they are all dated 16 September at 9.09, and then a few seconds after that.

The first one is around public spaces, which I spoke about earlier. That just makes sure it gives local government particular regard to pedestrian malls and town squares. The next one is around natural hazards and the activities that improve resilience to natural hazards. Then there is one around community support, to ensure that councils actually look at community support. There is another one around environmental enhancement and protection, which I think is quite important Then there is another one around facilities. It’s actually putting the words “and activities”—so “facilities and activities”. We have one that is to add “art galleries”. I see art galleries are excluded from this—and, as I mentioned earlier, also heritage. They are the extra additions that we’ve put in amendments individually for, and it would be great if the Minister could actually have a look at those amendments and say, “Actually, that one probably should sit within there, because it makes sense that councils need to prioritise.”

That could be art galleries or something, but I think it’s really important. We know councils have a responsibility in that space, and then suddenly, by legislation, they’re not allowed to prioritise an art gallery, when we say they have to prioritise a museum. Or the town square, for example—that’s something that doesn’t get prioritised. I think we’re going to see, from that, councils and communities actually being worse off. Those are my questions for the Minister on clause 7. Thank you.

I thank the member Mike Davidson for the questions. I think the member’s questions relate to similar questions that I have provided a response to, where I said clearly that the point of the definitions is not to prohibit but to prioritise.

Again, on this side of the House, we make no apology that the impetus, in terms of the need for change, is driven by the double-digit rates increases that we’ve seen across the country, in some areas up to 20 percent year-on-year increases. That is not affordable for communities, nor ratepayers, and the need to prioritise is something that I think all New Zealanders have to do as part of their daily life, as a result of the realities of the fact that their income needs to match what their expenses are.

I appreciate that, in prior lives, some in this House may have been in a position where there was a bottomless pit of money. That is not the reality in which we are operating now. We need to prioritise, and so does local government. I make no apology for that.

CHAIRPERSON (Barbara Kuriger): I’m just noting that, up to about clause 10, we’ve taken quite a few calls. We’d just like to finish off that section, and also just make sure that people know there is an Amendment Paper from 11.37 a.m. today, which you may or may not have seen.

Thank you very much. I do have a question, and it’s a new amendment I’ve got—it’s actually a new clause 9A—but, before I go on to that, I just want to quickly touch on something. The Minister of Local Government, just in his response, talked about double-digit rates increases year on, year off, and I just want to get some clarification around that. What were the drivers that were actually creating those double digits? There is a lot of blame being put on councils for being out of control with spending, but my understanding is that the drivers for that, Minister, were actually things like inflation in the construction industry—because, obviously, councils don’t buy cereal; they build roads—and interest rates as well. I think we need to be a little bit clear with people who are watching that, actually, there are a lot of drivers that were outside of the control of councils, and it’s unfair, I think, to blame elected members and councils for putting rates up when a lot of that was out of their control.

I’ve tabled an amendment to insert new clause 9A. I hope the Minister is really responsive to this, because he mentioned so in earlier discussions that we’ve had in this House. Obviously, what we’re aware of through his Simplifying Local Government reform is that there are a lot of councils that are going through this reform at the same time they’re having to representation reviews, which comes at a significant cost to the councils—a cost that actually may be absolutely pointless, because they may not exist. This tabled amendment actually just alters section 24A. What it does is it says, “After ‘Schedule’, insert ‘or if a council has a proposal submitted under the Head Start process as part of Simplifying Local Government reform’ ”. It’s basically going to exempt them from going through that process. The amendment is timestamped 15 September 2026, 4.45.00 p.m.

I hope the Minister really takes this amendment under consideration, because I know he expressed some concern at the time about this extra cost that’s going to be placed on councils for something they probably don’t need to do. I was working through it and trying to work out, well, what could be an amendment that we could hang onto this system improvements bill now to actually ensure that they don’t have to go through that, and then we can get that sorted right now, and it’s done. I think this is a really good win for the councils—and for the Minister if he accepts this amendment—because, actually, this is about saving money and not doing something that is just not needed.

It would be great if the Minister could take really good consideration of that amendment, because I think he would see some really good benefit in it, as well as local governments, and there are a number—a number—of councils that are forced to go through this representation review at a significant cost when there is absolutely no point of doing it, because they’re going through a reform that the Government have initiated right now. I would like the Minister to consider that and hopefully accept that amendment. Thank you.

Just in regards to that last point around representation reviews: I won’t be proceeding with the member’s tabled amendment as part of this legislative process. However, I have made statements in regards to the feedback that we’ve seen through the proposals on Head Start, which, again, is out of scope of this, but just to the members point, it is something that we are taking advice on, and we’ll have more to say on that later.

Thank you, Madam Chair. Thank you for drawing our attention to the recent Amendment Papers—this is just terrible process from the Government, given that this reported back from the Governance and Administration Committee in, I think, November of last year. Anyway, we’ll get to that one.

Look, just for clarity, the Labour Party does support Mr Davidson’s tabled amendment that he just referred to. I know you said clause 10—

CHAIRPERSON (Barbara Kuriger): I’m just sort of nearing the finish of up to that point, so if you have another question, I haven’t closed that point off just yet.

I actually want to ask a question on clause 9 that I don’t think has been addressed yet. These are related to what are commonly known in local government circles as section 17A reviews. They are often looked at in terms of a council going through a particular process to identify whether a way of doing something is the most efficient and not necessarily cost-effective but effective for the community. It is, as the Minister of Local Government knows, often similar to the special consultative process in terms of the consultation, and councils, from time to time, do utilise section 17A reviews—often to think about whether a council-controlled organisation is the best away of delivering for a library service or a museum or something like that.

This is a proposed change that seeks to repeal section 17A, subsections (1) through to (4), and just talks about more of the infrastructure and public service but removes the localised aspect to it—which I find fascinating, given that the modus operandi of this Government taking office was about localism, and yet they want to strikethrough a lot of these aspects here. I mean, day by day, it just gets worse.

My question to the Minister is: how will councils still have an ability to determine whether the delivery of services, whether they’re in-house or otherwise, is still efficient and effective? These are changes to section 17A in terms of the review of how the delivery of services is actually undertaken, so my question, fundamentally, is why is this change being promoted, and what can councils and therefore their communities expect in terms of an ability to participate in any consultative process that councils might choose to adopt to review?

Now, I think this is actually quite a—section 17A reviews, as they are currently, are a very good way of councils engaging with the community to check how they are achieving the particular delivery of certain services. That’s important. That also aligns with the point of democracy that we’ve already covered, back in clause 6 replacing section 10, the “Purpose of local government”, which talks about the enablement of local decision-making for that to be democratic. I just want to get some clarity from the Minister around what is the only change, as I understand it, to the way in which section 17A is delivered.

In regards to the questions on the removal of the requirements under section 17A around service delivery reviews and the impact of that on cost-effectiveness of council services, we’ve covered that extensively in earlier conversations around the definitional changes that include cost-effectiveness within that definition and the reality that, actually, undertaking service delivery in a cost-effective way should be a business-as-usual expectation for local government. That is the purpose of the changes that we are making there. Removal of the strict rules around these reviews will allow councils to carry out this work in a way that is most cost effective for each of them. The new “Purpose” of the Local Government Act, which we talked about earlier, around clauses 4 and 5 that we’ve moved on from, makes it very clear around that definitional change and will ensure the delivery of more cost-effective public services.

Madam Chair, may I just check before I start, am I able to ask a short question on something on clause 8?

CHAIRPERSON (Barbara Kuriger): Yeah—and then I think we’ll move on to clause 11 forward, but I’ll let you have a question there, because we haven’t closed that piece off yet.

Thank you, Madam Chair. My question to the Minister of Local Government is really—we’re talking about amending section 14 in clause 8. We talk about replacing section 14(1)(h)(i) with “(i) the social, economic, and cultural interests of people and communities”, which sounds fairly close, may I say, to the four wellbeings, but it misses one of them out.

CHAIRPERSON (Barbara Kuriger): I think we’ve had that question, so is it a different question on that point, because someone over here in your team asked that question before—I think it was Mike Davidson—about the environmental wellbeing.

💬 Hon Rachel Brooking: It was Tangi.

CHAIRPERSON (Barbara Kuriger): Oh, it was Tangi Utikere—sorry. I remember the question. Sorry, I apologise if I didn’t get the right member, but I think that question has been asked.

I didn’t hear an answer that explained why “environmental” was missing, other than the general disregard for the environment.

CHAIRPERSON (Barbara Kuriger): I’m going to take a call now from Lemauga Lydia Sosene, but we are moving forward—clause 11 onwards. Thank you.

Thank you, Madam Chair. I’ve been listening really carefully to the questions on the different clauses but also the Minister of Local Government’s responses—it’s really important.

I do have a tabled amendment with regards to clause 16 amending section 57, which is to delete clause 16. I wanted to ask the Minister, in terms deleting clause 16, for clarification on the skills of directors of council-controlled organisations. I’m interested because the actual section—section 57(3)—talks about “When identifying the skills, knowledge, and experience required of directors of a council-controlled organisation, the local authority must consider whether knowledge of tikanga Māori may be relevant to the governance of that council-controlled organisation.” The Minister has explained very clearly that the Government is moving to restrict or reduce in terms of local government functions, and the Government is wanting to focus on the specifics.

Minister, I wanted to ask: what advice did officials give to you with respect to when directors are being considered for CCOs—the skills that they bring to the table? Because, in my view, specifically within Auckland Council, we hold a very strong view in supporting the knowledge of tikanga, the knowledge of local iwi and hapū, which is really important. Why this is important in decision making of the governance side of council bodies is the understanding of whenua, the understanding of iwi participation, the understanding of hapū, and the Māori communities that are embedded in our local communities.

I’ve been listening in very carefully to the Minister’s answers to the different questions around community participation, but for directors, in terms of the skill set that they bring to the table when making decisions with local councils, can the Minister advise, please, the House and for those listening, how the expectation or the skill set of removing tikanga expectations or knowledge benefits local communities? I’ve understood that the Minister has been very clear around the Government’s intention to move towards a very definitive skill set. That is important, but so is tikanga and so is knowledge of iwi and hapū participation from those communities. So if the Minister could answer those questions. Thank you, Mr Speaker.

Yeah, I thank the member Lemauga Lydia Sosene for the question, and the member is correct that under the changes in this legislation, it will no longer require councils to consider the relevance of tikanga Māori knowledge in council-controlled organisation (CCO) director appointments, affecting Māori participation and council decision-making.

The member will be aware, I recall Mike Hosking—I think it was—on the radio the other morning making commentary in regards to this, and again, the purpose of the changes here is to remove this requirement, but removal of that requirement does not prohibit councils from considering the relevance of tikanga Māori knowledge. Instead, it provides the flexibility for councils to determine the appropriate skills and knowledge and experience that are best required in order to guide and deliver the objectives of that CCO. As the member will be aware, we’ve got some CCOs that are delivering and are responsible for billions of dollars of assets, and the appointment of the directors for those CCOs needs to be a matter of precision around timing and capability and experience. It is not this Government’s view that we should be letting the law get in the way of councils making good appointments to deliver services in regards to those areas. That is the change that we’re making, and that’s the basis for it.

Thank you, Madam Chair. Madam Chair, I am ready to move on to this Amendment Paper 803, which is about new clause 18A. I don’t know if you want to check with other members, or if you’re happy for me to press—

CHAIRPERSON (Barbara Kuriger): No, it’s OK. You go ahead.

Thank you. This Amendment Paper is one of two amendments on the amendment, and this is the one—Amendment Paper 803—that deals with development contributions and how they apply to fast-track approvals. That is what I have a range of questions on; I’m happy to come back to them if we want to jump back and forth.

But I would like the Minister of Local Government to comment on this. This is a substantive policy change that has just come into the House dealing with an issue that the select committee that I was on in 2024 was advised of by local government submitters: that there was a gap in the local government legislation around development contributions. My understanding is—and I’m happy for the Minister to tell me if my understanding is wrong at all—that there are many areas that are zoned something like rural, but they’re certainly not zoned for housing development. That has meant that those councils do not have development contribution policies to apply to those parcels of land, because it is not anticipated that there would be development there and, therefore, it hasn’t been anticipated that there would be a need for development contributions for those areas. Of course, we all know that the fast track just jumps over any community planning.

Am I correct in that statement? And is the purpose of this Amendment Paper 803 to fix the problem that I’ve just described and to enable development contributions to be applied to those fast-track developments that don’t have appropriate policies in relation to those particular areas of land? That’s the bigger question. I know that when we get to the Part 2 debate, then we will be—and Madam Chair, you weren’t in the Chair when we discussed this, but we discussed that Schedule 2 of this Amendment Paper is in Part 2 of the debate, and that relates to the transitional provisions. Why that is relevant, and I won’t ask questions on it now, is that the transitional provisions mean that whilst this might be a fix for future fast-track applications, it isn’t a fix for those applications that have already been determined or substantively determined. But we’ll get into that later on. That was my big-picture question.

Then if we come to new clause 18A, which is “Section 102 amended (Funding and financial policies)”, this is quite a messily written clause, because it says—just listen to these words: “In addition, subsection (4) does not apply to a development contribution policy to the extent that the policy provides for a development in relation to which a resource consent approval has been granted under the Fast-track Approvals Act”. On the face of it, it’s difficult to understand what that clause means with all of those words like “does not” and “to the extent” and “in relation to”. I take it to mean—and the Minister can tell me, again, if I’m wrong—that what this particular clause is doing is saying that where section 102(4) has a requirement for consultation to amend or develop a development contributions policy, that requirement for consultation does not apply in relation to this fast-track approvals part fix/not fix.

So my question is, am I interpreting new clause 18A correctly? And then I’ve got more questions on other clauses, but those are my first two questions. So, overarching, they are: why are we here in urgency and debating this Amendment Paper that was tabled yesterday; and second question, am I correct that new clause 18A, the first substantive clause in this Amendment Paper, is just to say that that requirement for consultation does not apply?

Yeah, I thank the member the Hon Rachel Brooking for the question and reference to the Amendment Papers that were tabled yesterday at 9 and 9.30, which is an important context. The change, particularly around the fast-track portion, is obviously in response to the need for the ability for councils to be able to obtain the support and mechanisms from developers to be able to ensure that we can recover those costs in order to put in place infrastructure needs to support some of these fast-track aspects. There’s been some clear feedback from the sector that this change will provide significant benefits for that enablement of infrastructure to occur ahead and with these fast-track projects, so that’s the purpose of that. I will, as a member noted as we come to the end of this part, cover off more aspects around that specific portion in later parts, as has been highlighted.

Thank you, Madam Chair. I’m surprised that Government members are wanting to speak on this part. I hope they’re not trying to close the debate, because we are in urgency and we have just—

CHAIRPERSON (Barbara Kuriger): Yeah, and I’ve made the point that there’s a new Amendment Paper, so I’ve got no intention of taking any closure motion at this point.

Thank you, Madam Chair.

💬 Dr Lawrence Xu-Nan: Auckland MPs.

Yes, maybe the Auckland MPs want to talk about their Auckland issues. I don’t think the Minister answered my question about whether that new clause 18A, which is amending section 102 of the principal Act, is just to remove that requirement for consultation for the development contribution policy, so when he answers the next question, he could go back to that. I think it’s a yes; I think it will be easy for him to say.

Now, another big question, then—thank you for answering my first question about why we are here in urgency with this amendment—is that if he can also talk us through why the amendments are needed when already the wording in the principal Act around development contributions has various different trigger points. There is the trigger point of when a resource consent is granted under the Resource Management Act, there’s also a trigger point of building consents, there’s also the PIMs—the property information memos—and also service connections, and so there’s a range of different trigger points for the development contribution to be invoiced, to be requested, if the policy applies for it.

My question is, given that there’s been a resource consent or deemed resource consent granted under the fast track, why is it that we cannot rely on those other triggers—the later triggers—because, of course, you get your resource consent first, then you would get your building consent and build your house, and then you are going to plug in to some pipes. Why is it that we need this change to apply at that first stage, or at the consent stage, rather than at those later stages? That’s one question, as well as my previous question about the consultation.

Then at what is proposed clause 18B, “New section 102A inserted (Development contribution policy in relation to resource consent approval under Fast-track Approvals Act 2024)”, I’m interested in the tense here. So at new section 102A(1) it says, “This section applies to a territorial authority if a resource consent approval is granted under that Fast-track Approvals Act”, and it’s the tense of “is granted”. Does this mean and is it the scheme of the amendment that before the council can initiate a change to their development contributions policy, there has to be a grant under the Fast-track Approvals Act—and I think that is the answer, and is that why “is granted” is there?

If the Minister can put his mind to being a council—let’s pretend he’s Queenstown and, say, the Queenstown district council doesn’t have a development contributions policy in effect for its rural zoned land. To then amend that policy, does it have to wait before it can amend it until a fast-track proposal is approved, and then it amends its development contributions policy, or is there an ability when it sees that a fast-track project is listed or it’s been referred for it to start that process?

Why I’m asking this is because the word “the” development is used throughout this clause, and so is the scheme of this that it’s fast-track development by fast-track development leads to then a consequential change to the development contributions policy? So the project has to be in the fast track and it has to be approved under the fast track, and once that happens—and we’re not talking about ones that have already been approved—then it’s for the council to amend its development contributions policy without consultation, I think, and within six months, because “6 months” is referred to in new section 102A(3), and it goes through development by development.

So if the Minister is Queenstown Lakes District Council—and we know there’s one. I’ve visited Ridgeburn, outside of Arrowtown by the river there, in rural zoned land, and then I visited, on the same day, one in Fernhill, and so it’s quite a different part of the town. It’s above an established area, but at high, rocky altitudes, and so it’s very expensive to build on. Would that Queenstown Lakes District Council then have to do two different changes to its development contributions policy for those two different projects?

That’s my question. There is the use of the word “the”—so if you look at section 102A(2)(a) and (b), it says, “to require a development contribution for the development;” and then “the development.” What is the sequence of when things pop into the fast track—this is my bigger question. When something goes into the fast track, it seems here, under subsection (1), that approval has to be granted. It has to be all the way through the fast track, and then that is the moment and that is the mechanism for the council to be able to say, “OK, you’ve gone specific project—project by project—you’ve gone through the process, and now we have the permission to amend our development contributions policy to include you.” That’s the question there.

Look, I thank the member Rachel Brooking for the question. I think it’s important to note that Amendment Paper 803 on the Table is putting in place a different trigger than is required for a resource consent under the fast-track approvals process.

The answer in regards to the amendment of the development contribution is, yes, it is amending the development contribution after a fast-track resource consent process. I think in regard to the member’s questions in regard to how this will interact between the developer and the council, it would be for the developer and the council to also have the ability to be able to establish a development agreement at any time, and so that will provide the mechanism and the flexibility around that.

CHAIRPERSON (Barbara Kuriger): Members, the time has come for me to leave the Chair for the lunch break. The committee is suspended and will resume after question time.

Sitting suspended from 12.57 p.m. to 2 p.m.

House resumed.