7. A couple of matters should be noted. The discussion document contains a graph that suggests that the advent of the Local Government Act 2002 was the cause of massive rates increases. The implication is that this is because of inappropriate Council decisions. Although the advent of the 2002 Act may have caused an initial jump in rates increases this was because of the new requirement to fund depreciation. Councils were required to set aside funds to pay for the future replacement of current assets. I can recall in Waitakere City we passed a 12% rates increase of which a 10% increase related to the requirement to fund depreciation alone.
8. Increasing regulatory obligations placed on Local Government by Central Governmnet are also a factor. And the advent of leaky buildings have had a significant and detrimental effect on TLAs’ balance sheets and rating levels.
9. The Regulatory Impact Statement’s two areas of concern (Hamilton City Council’s staging of a V8 race, and Kaipara District Council’s cost overruns in its provision of a sewerage scheme in Mangawhai) would not have necessarily been addressed if the proposed changes had already been made. I note that the Government has recently entered into an arrangement with Auckland Council whereby V8 races in Pukekohe are going to be run by the same promoter so the inappropriateness of Councils being involved in this sort of activity needs to be questioned. I also note that the Kaipara DC cost overruns are in the provision of essential infrastructure and this will not be affected by the proposed changes.
10. What evidence is there that the proposed changes will actually address what are described as the problems? I note that the Regulatory Impact Statement relating to the bill contains the following passages:

    “There is limited evidence to inform the development of these proposals, and the timeframe within which the proposals have been developed has restricted the ability to assess multiple options. As a result, the problem analysis and option assessments of specific proposals rely on assumptions that are not, or only partially, tested. The extent of the uncertainties and risks are identified and discussed for each proposal.”

    And further,

    “[t]here is no clear quantitative evidence to suggest that the LGA02 has resulted in a proliferation of new activities, or that local government is undertaking a wider group of functions.”

11. A further point is that Auckland has already been through a severe and recent shakeup of its Governance arrangements. Amongst the new provisions recently enacted is the requirement for Auckland Council to prepare a spatial plan, which it has done. The applicable legislation (section 79 Local Government (Auckland Council) Act 2009) states the goal of the plan is “to contribute to Auckland’s social, economic, environmental, and cultural well-­‐being through a comprehensive and effective long-­‐term (20-­‐ to 30-­‐year) strategy for Auckland’s growth and development.” If Council is no longer able to consider the four well beings then what will happen to the Auckland Plan?

What is being affected in this Bill

12. The proposed changes are to the following areas:

a. Purpose of Local Government
b. Fiscal responsibility requirements c. Council Governance changes
d. Reorganisation procedures

Purpose of local government

13. Currently under section 10 of the Act
    “The purpose of local government is—
    to enable democratic local decision-­‐making and action by, and on behalf of, communities; and
    (b) to promote the social, economic, environmental, and cultural well-­‐being of communities, in the present and for the future.”
14. Subsection (b) can be regarded as reflecting one of the conclusions that arose out of the UN’s Earth Summit in Rio de Janeiro in 1992. One of the strong themes of the summit was that to address the world’s environmental problems action at a local level was vital. It is a principle that the former Waitakere City embraced. It sums up the essence of “Eco City”.
15. The four well beings neatly summarise all of the important features of a local community. If you properly care for a community’s economic, environmental. social and cultural wellbeing then you are most if not all of the way there to creating an ideal community.
16. It is proposed that subsection (b) is changed to

    “(b) to meet the current and future needs of communities for good-­‐quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-­‐effective for households and businesses. “

    Essentially the four well beings will be replaced by more limited considerations of infrastructure, local public services

17. The new phrases are not defined. A restrictive interpretation will mean that many activities now funded may no longer be able to be funded.
18. For instance out west there are two community organisations that have historically engaged heavily with the Council. Eco Matters Trust is an entity that provides all sorts of localized support for environmental projects. Community Waitakere provides important support and representation for a diverse range of community groups based out west. Both organisations perform important roles with limited support and are able to tap into the good will of local individuals and other organisations. But whether either entity is involved in the provision of “good-­‐quality local infrastructure, local public services, and performance of regulatory functions” is debatable.
19. What is a “local public service”? If it is no more than libraries, footpaths, sewerage, water and garbage collection then EMT/CWs future scope will be considerably limited.
20. One program that EMT provides is Trees for Babies. This involves local families planting supplied trees at local reserves as part of a celebration. It instills environmental values in the children and gives their families a sense of place as well as providing environmental benefits for the parks. And it supports a sense of community. The cost of providing this is very modest and the overall benefits considerable.
21. Using a four well being approach the program provides environmental, cultural, social and arguably economic benefits. But under the proposed regime it will struggle to be considered as meeting a current/future need for “good-­‐quality local infrastructure” or “local public services”. Its future may be in doubt if the Act is changed.
22. In more general terms, why shouldn’t a Territorial Local Authority, if it is the democratic wish of its community, act to improve NCEA results, address climate change or reduce child poverty?
23. The Committee is urged to recommend that the proposal to amend section 10(b) not be proceeded with.

Fiscal responsibility requirements

24. The Bill proposes the development of financial parameters & benchmarks in respect of rates and debt.
25. The Government rationale is the concern at rapid increase in rates & local government debt. I accept that in following the passage of the new Act there was a significant rates increase. But the increase was not because of the reason suggested.

26. The trouble with “fiscal prudence” is that it can mean all sorts of things. For instance in California where local tax increases have been capped the effect has been a serious underfunding of local services. Flexibility is necessary. If a City is growing then it is vital that infrastructure is planned now. “Fiscal prudence” may result in inadequate provision for growth.

Governance Changes

27. The Bill proposes that some of the powers of the Auckland Mayor are extended to other Mayors. These include the provision to lead development of Long Term Plans and other plans, and provision to appoint the deputy mayor and committee chairs. There is no evidence to suggest that these changes will result in more efficient local government. I suggest that this proposal be deferred until the Auckland experience can be properly assessed.
28. The Bill also proposes more prescribed reporting requirements around staff remuneration and a greater role for elected representatives in setting staffing policies.
29. The Government rationale is that the provision is a response to recent public concern at salary levels for senior management staff. Costs are a significant portion of budget & elected representatives should have more say.
30. I submit that this is purely an organisational matter and should be left as one.
31. Another new proposal is to loosen the grounds on which a Minister may intervene in the running of a power to intervene well before a crisis occurs. The Government rationale is that the current system is too focused on responding to crises rather than prevention of them. The new system introduces less drastic forms of early assistance for when problems first emerge.
32. The question has to be asked, why should there be power to intervene unless there is a crisis? Local Authorities deal with potential crises all the time and there is no analysis suggesting that change is required.

Reorganisation Procedure

33. The Bill proposes a simplified process whereby any individual or group able to propose a reorganisation. Any proposal must demonstrate significant public support and evidence the proposed change will promote good local government.  The Local Government Commission retains an adjudicator role.

34. The proposals are theoretically far reaching. A well funded ginger group could easily provide a proposal for change with a suggestion of public support through the provision of the results of a poorly worded opinion poll.
35. A referendum is the best way to assess public support. There is no evidence that the current proposal is not working. It is submitted that the current arrangements should be retained.