NZ: Reforming local government a delicate affair

The Dominion PostMarch 22, 2012


OPINION: Ad-hoc and fragmented reforms of local government by central government in the absence of a strong and clear vision are unlikely to provide durable solutions.

In December 2010, a three-year constitutional review that includes consideration of Maori representation in local government was announced. Then, a short time later, a review of local government called Smarter Government, Stronger Communities was launched by local government minister Rodney Hide.

This week, the Government has released a new set of proposals, called Better Local Government.

They include refocusing the purpose of local government, introducing fiscal responsibility provisions, strengthening governance and facilitating council amalgamations. Will these proposals produce better local government, as intended by central government, or will they weaken local government and democracy?

Strong local democracy is widely recognised by political scientists as enhancing democracy at all levels. It has also often been the catalyst for local action to address social, economic and environmental challenges.

In June, a United Nations conference will mark the 20th anniversary of the 1992 Rio Earth Summit that popularised the slogan "Think global, act local".

Since the 1992 event, local governments and the networks they have formed have been instrumental in responding to community concerns that national governments fail to address.

Without local government leading local action, many initiatives around, for example, climate protection, biodiversity restoration and waste management would not have been implemented. The same can be said for a host of complex social and economic challenges.

While crime prevention, road safety, emergency management and disaster recovery might be able to be supported by central agencies, a local presence is required. With insufficient local knowledge and leadership initiatives are likely to fail.

To the extent that the proposed reforms strengthen local leadership there is reason for optimism. Some commentators have argued, however, that the latest proposals are Mr Hide's reform agenda revisited, albeit in a possibly softer form.

In the background to Better Local Government, the Local Government Act 2002 and its empowering provisions - the power to promote community wellbeing - are considered to be a major factor in rates increases since 2002 and in forecast debt to 2015.

Ad Feedback The forecast debt is based on data in 2009 long-term council community plans.

Already it is clear, from the recently released draft 2012 long- term plans, that councils are reviewing spending levels and priorities in response to economic conditions. Forecast debt in the 2012 long-term plans is likely to be quite different from that in the 2009 long-term community plans.

What is lacking in the Better Local Government background information is rigorous independent analysis, such as that carried out by the Local Government Rates Inquiry in its August 2007 report, of the drivers of debt.

Much debt is related to infrastructure catch-up and rising community expectations of environmental quality, both of which are important for economic goals such as increased international tourism earnings.

The 96 recommendations of the rates inquiry received widespread support from a broad spectrum of business and community interests, but have not been systematically implemented.

In particular, alternative funding sources have not been fully explored.

Some, of course, reject the suggestion that alternative funding is necessary and instead expenditure needs to be driven down.

New Zealand's experience in the 1990s of deferred infrastructure spending, as well as international evidence on expenditure capping, shows flaws in this simplistic solution.

Our two spheres of government, central and local, need to be recognised as complementary.

Local government is better placed than central government to undertake many functions that are related to its traditional role of providing services to property.

Over time, that traditional role expanded, in response to societal changes and community aspirations to include services to people, often focused on improving liveability for residents and economic competitiveness of regions, cities and districts. As well as complementing central government, local government is a vital counterbalance to the weight and power of central government in a democratic society.

Local government reform, if it is to be durable, must reflect central government respect for the independent nature of local government. In New Zealand, local government's relatively high degree of financial independence reinforces the need for central government to respect local government's autonomy.

This was recognised in the Internal Affairs Department December 2011 briefing to the incoming Local Government Minister, highlighting this independence: "Within the Local Government portfolio, local authorities operate autonomously of central government and are empowered to choose which activities to undertake and how to pay for them.

"They make these decisions in consultation with the local communities that supply much of their funding. They are accountable to these communities, not ministers - including the minister of local government."

Christine Cheyne is an associate professor, resource and environmental planning at Massey University and was a member of the Local Government Rates Inquiry that reported in 2007.

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