The Future of Local Government Review has landed, with part of its Māori name relating to a broad vision that includes a diverse range of views.
However, anyone struggling with diminishing public transport in Auckland, having trouble getting into the housing market or concerned about whether their council is “value for money” will find their views not so well represented in this study.
New Zealand’s local problems
The problems within New Zealand local government are so well known that even National’s then local government spokesperson Christopher Luxon called it timely and necessary when the government announced the review in April last year.
Council delivery issues; funding shortfalls; infrastructure deficits; weak Māori, ethnic and youth engagement; low trust in councils, poor satisfaction with many services, value for money worries and voting participation decline.
It’s quite a list. Some of what councils own and do is well regarded: libraries, parks and sports grounds. But too much is not.
The review’s headline responses are to establish an expanded “wellbeing” role for councils and to create a new Te Tiriti local government framework with expanded Māori decision making. It also has solutions to improve citizen participation and voting and proposes new council funding options – presumably to pay for all the new work.
The word “Māori” is mentioned 530 times in the 260-page draft report and “Te Tiriti” 230 times. “Wellbeing” features on 280 occasions and “participation” (in some form) 220 times. By contrast, “housing” is mentioned 25 times, “transport” 17 and the phrase “value for money” just twice.
It’s hard to disagree with South Wairarapa Mayor, and former NZ First Cabinet minister, Ron Mark who said the review missed the mark on addressing the key issues negatively impacting all councils.
The review’s view
The review is bold in the areas it has prioritised.
It says local government’s future must involve a much stronger focus on what it calls wellbeing, defined broadly as “a wide spectrum of interconnected social, cultural, economic, and environmental outcomes.”
Yet a core council service such as water, quite important to wellbeing, is planned to be removed by the Government because of the poor job it believes many councils have been doing operating and investing in it.
In housing, another aspect of wellbeing that councils have a crucial role in, Parliament voted to replace existing council housing intensification plans because it felt not enough “wellbeing” was being delivered.
This continues a Government trend of reducing the decision-making power or services councils’ control. Local government accounts for less than 5 percent of the country’s GDP – one of only six OECD countries this low.
The review response to this is to shift councils from “narrowly” focusing on delivering services and infrastructure to focusing on holistic strategies to improve wellbeing – to replace what is being lost. Many city and town transport users or aspiring house owners would say fixing delivery of these core council responsibilities would improve their wellbeing the most.
Local Government NZ most recently surveyed New Zealanders perception of local government in 2017. Our collective councils were rated only 28 out of 100. The areas most needing improvement were making value for money spent, trust in spending decisions and managing finances well. All of which seem quite important to sustainably improving wellbeing but receive scant attention from the review.
The review is even bolder with its proposal for new Tiriti-related legislation to better value the Māori world view and embed co-governance. It recommends retaining the Māori electoral wards but says these are inadequate by themselves and councils will need to appoint additional Māori capability to decision-making bodies.
The review is right to be concerned about Māori participation in council. Voting by Māori is even lower than the low numbers in the general population. In Auckland’s 2019 local elections, only 25 percent of Māori voted compared with 36 percent non-Māori.
However, Māori wards increased from nine in 2019 to 67 at the 2022 elections with 45 percent of councils establishing them. The impact of this momentous change should be considered, and the views of these new Māori ward councillors heard before such significant change is advanced. Pacific and other ethnic participation in council is also low, but this gets very limited attention from the review.
The review rightly says the relationship between central and local government is strained with a lack of trust and confidence on both sides. It presents interesting thinking on enabling greater co-investment between central and local government and other parties, referencing the well-regarded Southern Initiative, an Auckland Council sponsored social innovation agency, and the City Deal approach used in Australia and England to fund priority local projects.
However, the review oddly makes no specific recommendation to help focus feedback. It also neglects any discussion on the role cities now have internationally, missing consideration of the World Economic Forum and others’ advice that countries should empower cities to help better solve the nation’s biggest problems.
The review is on stronger ground with its consideration of the broken local government funding system.
New Zealand relies more on rates as a funding source than other OECD countries, but this still makes up only 60 percent of councils’ average total income.
The review joins the Productivity Commission in saying additional funding sources are essential. The solutions proposed are familiar: congestion charges, new value capture targeted rates and visitor levies. All of these have been much studied and talked about, yet the review just recommends another government review to enable them.
The review also has some sensible but well-travelled suggestions to boost citizen engagement in councils and to improve the antiquated council voting process. Auckland’s University research centre Koi Tū, working with Auckland’s Watercare, has already successfully piloted the participatory democracy activity the review supports. A succession of parliamentary Select Committee election reviews has recommended several of the voting system changes now contemplated. The review recommends a further government review to implement these changes.
Spectacularly missing are clear recommendations to make the existing council structure more efficient (the word efficient only gets 11 mentions in the report). More than 10 percent of New Zealand’s territorial authorities have a population under 10,000 and 33 percent have fewer than 20,000. Such small populations have too small a rating base to fund the growing demands on them.
There are references to possible new options: a greater number of unitary councils (like Auckland and the five others in New Zealand), or establishing combined regional councils, as in parts of England, where locally elected representatives would also serve as members of the regional authority. One of these may end up a final recommendation but, after 18 months, why not propose the preferred option for comment now?
If the review was concerned about local government’s reaction to an amalgamation proposal, it could have proposed the option David Cameron used with his localism reforms: if regions want to merge and receive the related additional central government funding that came with it, voters must approve it.
The review is clear the existing local government structure is not sufficient for the future. But after 18 months its authors are undecided about whether to recommend structure change in NZ’s local government system or, astonishingly, to leave that to a future reform.
A final sobering reflection is that of the 3.9m New Zealanders eligible to vote, the review has received just over 5,000 online responses and submissions in its 18 months of operation. This may explain why more of the issues people are most concerned about do not feature.
Star gazing
The review document begins: “Fundamentally different and new ways of thinking and working are imperative.” Some vastly different ways of operating are indeed proposed but the review’s preoccupation with only part of the local government agenda is a serious deficiency.
It says meaningful change is needed, with a new system of local government. But curiously, there is little sense of haste or clarity in many of the recommendations. Remarkably, the word “urgent” does not appear once.
It contemplates a major expansion of the role of local government and very significant change in how it operates. Yet without framing this as a solution to the top priority problems impacting voters, there appears little chance any government would take much of it forward.
The Māori name of the review also relates to looking at a distant, celestial star. That’s appropriate. Back on Earth, a much more immediate focus will be needed to make any substantial progress on the growing cluster that is New Zealand local government.
