Source: New Zealand Government
Ka nui te mihi kia koutou. Kia ora and good afternoon, everyone.
Before I begin, I’d like to thank LGNZ for their invitation to speak here today.
I spend a lot of time meeting with many good mayors and councillors across the country, but this is a great opportunity to speak to so many of you here all at once.
So, thank you to LGNZ for that opportunity, and more importantly, thank you to each of you for stepping into the public square and serving your communities in these roles.
I’d also like to acknowledge Minister Simon Watts and, in particular, Minister Simeon Brown, who are here.
As you know, Simeon is responsible for the Local Government portfolio, has an ambitious reform programme, and has accomplished a lot in a very short period of time. So, thank you, Simeon, for all of your hard work and leadership.
New Zealand faces big infrastructure challenges – Water. Transport. Resilience. And each of those will be absolutely critical to get right.
We know your communities need the tools to sustainably finance the necessary investment. So, we’re making changes.
Through changes agreed by the Local Government Funding Authority, we’re alleviating pressure on council debt caps, which will relieve a lot of pressure on fast-growing councils.
We’re presenting a suite of options for achieving local water reform that will satisfy ratings agencies’ concerns while maintaining local control of water.
We’re also taking a hard look at a range of rules and regulations that incur costs that central government directly loads onto councils. Traffic management is a good example of an area we know desperately needs change.
And Simeon Brown will soon present more detail on our framework for Regional Deals – how they will work, what we want to enable for communities, and, most importantly, what we expect in return.
So, we’re doing our part. And I believe it’s time for local government to do theirs.
Ratepayers expect local government to do the basics and to do the basics brilliantly. Pick up the rubbish. Fix the pipes. Fill in potholes. And more generally, maintain local assets quickly, carefully, and cost effectively.
But nothing in life is free, and ratepayers expect to pay for it in exchange. But what they don’t expect to pay for is the laundry-list of distractions and experiments that are plaguing council balance sheets across the country.
The building we’re in today is a classic example. With pipes bursting and other infrastructure under pressure, Wellington City Council decided to spend $180 million of ratepayers’ money on a convention centre, which, according to public reporting, is now losing money.
It looks very nice, and it’s very nice that politicians like us have another expensive room to deliver speeches in, but can anyone seriously say it was the right financial decision or the highest priority for Wellington given all of its challenges?
Ratepayers are sick of the white elephants and non-delivery. So, my challenge to all of you is to rein in the fantasies and to get back to delivering the basics brilliantly.
Councillors often tell me that they agree with all that, but there’s a problem. They just need more help from central government, usually in the form of cold, hard cash.
I have to be honest with you – the previous government might have taken that approach, but the party is over.
There is no magic money tree in Wellington, thanks to the previous government’s economic mismanagement and vandalism.
Shifting your costs onto taxpayers doesn’t save anyone any money. It means ratepayers pay more tax, and are left with less of their own money, to meet the cost of a slightly smaller rates bill.
Or it means we spend less on health and education so that councils can avoid tightening their belts exactly as Kiwi families, businesses and central government have had to do across New Zealand.
Yes, I’m sure that will be very popular among councillors, who want to spend money without raising rates to pay for it. But if any of you think those will be the terms of a regional deal, it’s time to come back to reality.
We do want to work closer together – and there will be new revenue tools for councils, where that makes sense – but the days of handouts are over.
I know some councils already well understand that new operating environment and they are taking their responsibility to ratepayers very seriously.
Thank you for those efforts, because your unrelenting focus on delivering value for money is making a real difference in your communities.
Finally, if there was any doubt about our commitment to getting local government back to basics, I have some announcements to make today on our local government work programme.
First, Cabinet has agreed to streamline the purpose provisions in the Local Government Act to get councils back to basics.
For Councils, that means abolishing the four wellbeing provisions in legislation and restoring focus on local services and infrastructure.
For ratepayers, it’s simple. The central government focuses on must-haves, not nice-to-haves, and we expect local government to do the same.
Second, Cabinet has agreed to investigate performance benchmarks for local councils, similar to the approach some Australian states apply to their local authorities.
In theory, the Local Government Act establishes the accountability of local authorities to the communities they serve. But in reality, it’s difficult to get consistent, easily accessible and comparable information about how councils are actually performing.
The performance measures we’re looking to introduce are in areas councils should already be monitoring closely, such as financial performance and customer service delivery.
But sunlight is the best disinfectant – and ratepayers deserve to know exactly what they’re getting for their rates.
Third, Cabinet has agreed to investigate options to limit council expenditure on ‘nice-to-haves’.
In some Australian states, revenue caps are applied to non-core activities to control rates increases.
We’re interested in how a similar approach could work here in New Zealand, ensuring the right balance between ratepayers’ interests and councils’ financial positions.
Yes, councils need adequate revenue to fund core responsibilities like roads, rubbish and water, but the value-for-money proposition is more questionable in a range of other areas.
Councils need to examine those areas more closely, and I’m up for any tool – like revenue capping – that makes them do so.
Fourth, Cabinet has agreed to review the transparency and accountability rules that apply to councils.
It’s unacceptable that the rules as they stand today allow unelected officials, in many cases, to prevent elected members from accessing the information they need to represent their communities. We will review those settings.
There have been too many absurd scenarios in which ratepayers are effectively shut out of decision-making because elected members’ rights to access information are treated as a secondary consideration.
My expectation is we find a way to end those practices.
In conclusion, we want a productive and constructive relationship with local government – one that enables your growth and development and gives you the tools you need to pay for it.
But we expect you to spend ratepayers’ money responsibly. In short, localism comes with both rights and responsibilities.
In central government, we’re getting on with the job. We’re stopping wasteful spending, shifting money from the back office to the frontline, setting clear delivery targets and expectations, prioritising what to do and what not to do, and letting Kiwis keep more of what they earn.
My parting message: it’s time for you to do the same.
Go line by line, stop the wasteful spending, remove the bureaucracy, focus on better customer service, and end the projects that aren’t delivering value for money.
Ratepayers don’t expect much – they just want the basics done brilliantly.
We’ll play our part – now it’s time for you to play yours.
I’m confident that working together, we can achieve a lot for New Zealanders – better infrastructure and more resilient communities, all at an affordable price for ratepayers.
Thank you.
