Good afternoon and thank you for inviting me to speak to you today.
both a privilege and a pleasure to be here with you at my first Local
Government New Zealand Conference. I’m here for a full day and a half so
I can engage with as many of you as possible and discuss the issues
facing Local Government.
When I first took up the Local Government
portfolio, I was very clear that the relationship between myself as
your Minister and local government needed to be strong if we were to
take the country forward together.
Over the last six months I have
travelled around the country attending zone meetings, meeting with
councils from the big to the small, and working closely with both LGNZ
and SOLGM. In saying this I understand that a strong relationship is not
built by just visiting and having meetings. Fundamentally it’s built by
ensuring that we are on the same page with our core goals and
objectives or at the very least we understand what each other is trying
to achieve, even if we disagree on some issues.
In this regard I
think we did not initially sell the benefits of our reform agenda to
Local Government as well as we could have. We painted wider local
government with a sometimes negative broad brush when in fact there are
outstanding examples of excellence in your sector.
I think we’ve moved both the discussion and the relationship forward.
his speech this morning the Prime Minister reflected on the
Government’s four key priorities for this term. I believe that these
objectives are actually shared by local government.
- To return the government books to surplus;
- To build a stronger more competitive economy;
- To build better public services; and,
- To rebuild Christchurch.
first goal, having the books in surplus, is about good financial
management. It’ssimple economics: spend less than you earn, and keep
your borrowing under control. In this regard central and local
government should be on the same page.
Both taxpayers and
ratepayers expect us to be sound economic managers of their investment
in us. Cost control is critical in both central and local government. To
this end we are well on track to be back in surplus by 2014/15.
in the same breath I am pleased to see one of the lowest average annual
rate rises across local Government in recent years. Well done.
The second goal, building a stronger more competitive economy, should be fundamental to us all.
growing economy creates more jobs, lifts wages and improves the quality
of life for New Zealanders. The Government has recently released a
series of reports entitled the Business Growth Agenda, which clearly lay
out the framework for growing New Zealand.
Hand in hand with the
Business Growth Agenda is the recent release of sectoral and regional
data which allows us to compare and contrast what is working well. Local
and central government should be joined at the hip in our desire for
economic growth across the country.
The third goal, to build
better public services, is crucial to our success both in central and
local government. Both taxpayers and ratepayers expect that their
investment will return ongoing and better services for the same or
similar funding. Unless we can demonstrate significant service
improvements they will not (and should not) stomach significant cost
At the core of the Government’s drive to improve
services have been our Better Public Services targets. From child
welfare, to education, to crime and to online services, government
agencies have been challenged to deliver more with less.
forced prioritisation, some tough decisions to stop some services to
free up resources, strong benchmarking, and harnessing the power of ICT
to deliver better public services.
As a result of this I believe
we have seen a transformation in the public service, and a new attitude
of constant and improving services in tight fiscal times. No doubt many
of you in the room today have faced the same challenges as you too seek
to deliver better public services to ratepayers while at the same time
limiting rate increases.
The Better Local Government reforms,
initiated by my predecessors and carried on by me, are focused very much
on helping to deliver Better Public Services. I will talk more about
the progress of these reforms later in my speech.
The Government’s fourth goal, to rebuild the beautiful city of Christchurch, is also one that I am sure we all share.
this goal sits more broadly as a partnership between Canterbury and
central government I know that many of you in the room have provided
direct support to Christchurch and will continue to do so in the future.
Thank you for that support.
I would also like to acknowledge the
earthquakes in Wellington over the last five days, and the
responsiveness and leadership shown by local government during this
A culture change
Fundamental to the achievement of all these goals is a culture of constant and never-ending improvement.
culture requires us to benchmark ourselves against others, to compare
and contrast, to identify excellence and to replicate it where we can.
At a national level we are benchmarked as a nation by the IMF, by the
World Bank, by the OECD and by literally hundreds of other
non-government organisations and think tanks.
Whether it is GDP,
poverty, transparency, ease of starting businesses, education or health
we are benchmarked. This increases the transparency of our performance,
holds us more accountable to taxpayers, and allows us to improve our own
performance in a positive way.
Some might argue New Zealand is
much smaller, geographically disadvantaged and has a different economy
to other countries, and as a result we can’t be benchmarked against
I hear the same arguments from some in local
government who say it is not fair to compare small councils with large,
or rural with provincial. But rather than put up defences, let’s
measure, compare, and put our performance into context to see where we
stand, and look at ways of doing things better.
In my time as your
Minister I want to help champion this discussion. I want to work with
you to enable a culture of continuous improvement in local government. I
think the future offers some real opportunities for shared thinking and
Centre of Excellence
this regard I am excited by the idea framed by your President, Lawrence
Yule, about a Centre of Excellence for Local Government.
I think this is a superb opportunity to collaborate towards lifting the bar across the Local Government sector.
Centre of Excellence is one way to bring together existing performance
improvement tools and approaches, and to develop and deliver new ones in
a coordinated way across local government.
A Centre of Excellence
would showcase local government projects of best practice, both from
within New Zealand and from outside. The aim would be to encourage the
adoption of best practice for the benefit of ratepayers around the
I am keen to work closely with LGNZ to find ways that we
can partner and contribute towards projects that will help to lift the
performance of the local government sector.
Financial Prudence Requirements
towards this is one of the reforms the Government introduced in last
year’s Local Government Amendment Act. That enabled us to implement
financial prudence measures to compare and contrast the performance of
local government in New Zealand.
I see the financial prudence
regulations as part of our commitment to help promote excellence in
local government financial management. I think the benchmarks will be
useful to you.
They will provide elected members with early
warning signals of risks, which will help to avoid the need for central
government intervention in the way that happened in Kaipara. They also
have the potential to shape a better public debate about local
government finance as opposed to allowing others from outside the sector
to shape the debate, as is currently the case.
I am committed to
collaborating with you in establishing these financial benchmarks. This
work is being done now with LGNZ and officials are working through the
steps necessary to have the benchmarks ready to be used for the 2013/14
Can I take this opportunity to thank councils who
have contributed data for this project. Thanks to Taupo, Palmerston
North, Tauranga, and Kaikoura for providing data to make our trials more
practical and realistic.
Performance Improvement Framework
in hand with the Centre of Excellence and the financial prudence
measures I am keen to work towards a Performance Improvement Framework
specifically designed for local government in New Zealand.
departments have all been through this process with a specially
designed framework. The process has helped to lift performance across
the state sector. I want to work closely with LGNZ to establish a
framework that works for local government.
Regardless of how it is
rolled out, we will be looking for volunteer councils to trial the
framework to ensure that it does deliver for local government before we
roll it out on a wider basis.
Better Local Government Reforms
now like to take some time to discuss some of the other Better Local
Government reforms which go to the heart of assisting with the goals I
discussed earlier: fiscal prudence, stronger local economies, and better
Phase one of the reform programme was completed with the passage of the Local Government Amendment Act in December last year.
new legislation provided for a new purpose statement, the new financial
prudence requirements I just discussed, a new assistance and
intervention framework, and changes to the reorganisation procedure.
new assistance and intervention framework has proven to be very
effective. A case in point is the recent issues with Christchurch City’s
building consenting functions. Without the wider intervention options
now available under the amended Act we would have been far more limited
with sensible options to address the situation. The option of a Crown
Manager we were able to utilise in this instance is to the benefit of
all the parties involved.
Phase two of Better Local Government
two of the Better Local Government initiatives aims to squarely assist
councils to reduce red tape, and, at the same time, better enable your
ratepayers and communities to understand what you do on their behalf.
This goes to the heart of improving public services.
My aim is that a further Local Government Amendment Bill will have a first reading before the end of this year.
ideas for many of these reforms have come directly from you in the
room. As a result I have worked closely with LGNZ and SOLGM on the next
phase of reform. I genuinely see this as an opportunity for the sector
to reduce your compliance costs and to provide elected members with the
ability to get on with the job more efficiently and effectively.
of the clear messages I’ve heard is that community engagement is
important to councils. You value local input and would consult your
communities even if the legal requirements were removed from the Act.
would be beneficial, however, is more flexibility about how you
consult, and for how long. You’ve told me that the Special Consultative
Procedure can be useful for some matters, but is unnecessarily onerous
As a result the new Bill would remove requirements to
use the Special Consultative Procedure, except in relation to long-term
plans and new or significant changes to bylaws. This will enable
councils to consult in ways that are appropriate to different matters
and local circumstances.
The Efficiency Taskforce commented on how
the Special Consultative Procedure is old fashioned and doesn’t enable
the use of technology. The Bill will therefore include changes to
accommodate new technology for communicating and consulting with the
public, and a variety of alternative ways for hearing submissions.
councils, such as the Far North District Council, have been asking
whether elected members can use technology to participate in meetings
without being physically present. The law isn’t clear about this matter,
so we’re going to address that in the Bill. This will mean councils
that want their elected members to participate remotely will have this
flexibility – subject to appropriate limits, and to any local
arrangements they put in their standing orders.
also heard concerns that long-term plans are often not useful to the
public, and aren’t an effective basis for consultation. They tend to be
very long documents, with a lot of complex technical information. This
limits their use for many ratepayers.
To improve this situation,
we’re proposing a new consultative document. Councils would use this to
consult on matters in the long-term plan, instead of publishing a full
draft and a summary of that plan.
The consultative document would
tell a simple story, and focus only on explaining the key issues and
choices the council and its communities are facing. It wouldn’t contain
complicated technical or financial information. The final version of the
plan would, however, still need to contain these details to maintain
transparency to ratepayers.
We need to work together not only
through the development of these proposals, but also through their
implementation. The Government can streamline legislation but it’s up
to you to put these changes into practice.
further area of reform, which will be delivered in this year’s Bill, is
enhanced two-tier governance across New Zealand. Once again this
initiative delivers on a request from local government and it provides
the ability for local boards to be established more widely as councils
are reorganised or amalgamated.
Last year’s Local Government Act
allowed for the Auckland two-tier model of governance to be copied in
some circumstances – that is, where a proposed metropolitan unitary
authority has a population of more than 400,000 – but it did not enable
this for smaller populations.
Auckland’s local boards are working
well. They are contributing effectively to the governance of the whole
region and the communities within it.
Local boards have a genuine
statutory role in the governance of a local authority, and cannot be
disestablished unilaterally by the parent council. However, it is also
important to note that they are not proposed to replace community boards
– both options should be available.
The sector has asked for the
ability for local boards to be available to smaller regions. We will
deliver this in the upcoming Bill.
It will be up to the Local
Government Commission in consultation with communities to determine when
the addition of local boards is justified and desirable. It may be the
case that local boards exist in only part of a district. In rural areas
other arrangements, such as community boards or less formal bodies,
like area sub-committees, might provide a local voice.
Economies of scale
will not be for everyone. The Government, to date, has been clear that
amalgamation is a community decision. In saying this I can personally
see huge benefits for ratepayers when councils collaborate, share
services and expertise.
I’m aware of many positive examples of
this happening already, and want to encourage it further. The Auckland
amalgamation has delivered genuine savings for ratepayers. The BOPLAS
shared services model is an excellent example of savings without
The Efficiency Taskforce and the Infrastructure
Expert Advisory Group noted the potential for efficiency gains by
changing the scale at which services are planned, funded or delivered.
This can be achieved by:
- The reorganisation of councils
- Collaboration between councils
- Transferring responsibilities from territorial authorities to regional councils
The new Bill will improve on the provisions that currently deal with these matters.
issue which is at the forefront of both central and local government is
housing affordability. As part of our work in this area we are
reviewing the framework within which Development Contributions are set.
am keen to see development contributions made more transparent and more
tightly confined to infrastructure used in the development.
I want to thank everyone here who responded to the discussion document released earlier this year.
was strong support for the need to update and enhance guidance and
training to councils on development contributions, and for consolidating
and clarifying the current legislation.
I am currently working
with officials on options for development contributions. Let me make it
clear today that we are not proposing to abolish development
Legislative decisions from these work streams will be implemented in the second reform bill later this year.
of you will also be aware that the Productivity Commission has recently
reported on its inquiry into local government regulation. The report
focused on the need to improve the interaction between central and local
government over the regulatory framework.
I agree that it’s
important that powers are exercised at the appropriate level. As
evidence of this last month the Government gave councils greater powers
over how you manage more than seven thousand reserves around New
This is a positive change which recognises that councils
are better placed to make decisions on local reserves than central
government. Working together we will get the best outcomes for the
Lotteries Significant Community Projects Fund
I’d like to think this latest round of reforms indicates that we are
listening with the aim of delivering reforms that will genuinely assist
In that regard one of the things that I have
repeatedly heard from Mayors around the country is the importance of
funding for significant community projects. Many of you have commented
that the Lotteries Significant Community Projects Fund had provided a
pool of funding for large-scale projects in the past.
result the Lottery Grants Board has recently relaunched the fund with a
$30 million investment available for significant projects. While an
independent committee decides which projects get funded I know that this
fund will significantly assist many local communities around New
Zealand over the next year.
While I am discussing Lotteries,
please don’t forget the $17 million World War One commemoration fund.
$10 million of this is for projects of national significance, and $7
million for restoration, commemoration, and education. Make sure your
communities know about this fund so they have the opportunity to apply
for funding for local commemoration projects.
I know that many of you are interested in online voting at future local
elections. Can I acknowledge Mayor Leggett from Porirua for his
leadership in this area.
I am very keen to make this happen and
the Department of Internal Affairs has now started initial work on
voting methods for local authority elections.
practice is to introduce online voting gradually, allowing time for
creating a robust framework, evaluating the system, building public
trust and confidence, and testing and mitigating its vulnerabilities.
Trials are part of the development process.
I hope to be able to announce a plan for implementing online voting shortly.
closing, I would like to emphasise again the similar goals between
elected members of New Zealand’s two arms of government. We all care
about financial prudence, we all want to grow our local economies, we
all want to deliver better services for our communities. We are here
because we care about making New Zealand the best place it can be, and,
while this can be very hard work, it can also be deeply satisfying.
Ladies and gentlemen, I am excited about the future of this wonderful little country.
Can I thank you all for the huge role that you play in our local communities. It is hugely appreciated.
Enjoy your conference and thank you for the opportunity to address you.