Ministers must measure the impact of their law changes on local authorities, and provide them funding to implement the initiatives. And with these added responsibilities, councillors should be paid more.

“Local comes first.”

That’s the argument of the Future for Local Government Review’s draft report, which has landed with a metaphorical thump on the desk of minister Nanaia Mahuta.

Describing a breakdown in trust between central and local government, it recommends new funding tools to enable councils to do more – and indeed, just to enable them to perform the duties that Government has already heaped on them.

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The report proposes specific changes to the allocation of roles and functions that affect local wellbeing, including in housing and urban development, public health, economic development, waste management, and building consenting.

But in a tacit nod to this Govt’s project to reverse 30 years of devolution, the panel also agrees that some local functions could be centralised, like animal control, sale of alcohol, and building regulations. The terms of reference Mahuta set last year prohibit it from making recommendations on Three Waters or resource management reforms – but nonetheless, it does applaud the greater hapū/iwi participation these reforms envisage.

“The major reform programmes across government, including Three Waters and resource management reforms currently underway, are pushing and pulling the roles and functions that local government undertakes, with a tendency towards the centralisation/regionalisation of functions away from the local level.”

The Three Waters reforms, in particular, would cut councils’ revenue streams from water charges, as well as their ability to borrow against those revenues to build new infrastructure. It’s a vexed issue for incoming mayors and councillors, unhappy at being asked to do more with less.

Because the flipside is that where this Government has devolved powers to councils, it’s been poorly resourced, if at all. Councillors (and yes, Newsroom has surveyed them) object to “unfunded mandates” like new health and environmental standards, national policy statements for freshwater management and controversially, urban development. 

So the Govt must look carefully at key recommendations from the draft report – like paying rates on Crown property. Jim Palmer, the panel chair, tells Newsroom there are some districts where 95 percent of the land is conservation estate, that they can’t rate. Schools and hospitals, too, sit on valuable land.

“Central government, for property it owns within districts, should be responsible for rates and fees and charges. There are parts of country where the DOC estate, for example, is huge. That doesn’t mean that if it’s 95 percent of the area of the district, that it should therefore contribute 95 percent of the rates.

“We struggle to differentiate on a principle basis, why there should be any difference between a building owned by the Government on Lambton Quay and the building next door owned by a business. Why should one be exempt from rates and the other not?

“At the moment, it’s tens of millions of dollars out of the ratepayer purse.”

The report recommends councils all switch from first-past-the-post voting to single transferrable vote – a system already used by some councils like Wellington. It argues that would enhance diversity – as would an improvement to councillors’ remuneration.

“The complexity of the job and, and the amount of time it takes, really limits the ability of people to stand for council who don’t have other independent means,” Palmer says. “It is a substantial commitment that they’re making it to their local community and at the moment, we’ve heard consistently that remuneration is one of the barriers for people thinking about standing.

“Particularly for the smaller and rural councils, even some of the medium provincial councils, the remuneration is not sufficient to be able to support an elected member and their whānau.”

He acknowledges that might not be popular with some ratepayers. “I’m sure there’ll be a number of recommendations that will generate a reaction, one way or the other.”

Palmer says local government plays a vital role in contributing to community wellbeing. “The world that we live in is vastly different to what it was 30 years ago, and is going to be vastly different in 30 years’ time. And if we want a system that’s fixed for the future, we need to think about how our system needs to evolve to support communities and ensure that communities thrive.

“This is not just a review of local government, it’s also it also has many implications  as you’ve noted, for central government, and it’s important all of these matters get careful consideration.”

► The panel is taking submissions on the draft report until February 28, 2023, at It’s required to deliver its final report to the minister in June next year.

Newsroom Pro managing editor Jonathan Milne covers business, politics and the economy.

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