'The local has gone out of local government' - LGNZ

Local Government New Zealand (LGNZ) president Stuart Crosby says the "local" has gone from local government.

Crosby was responding to the Future for Local Government review released yesterday, which provided 17 recommendations for how to improve how councils function.

These included changes like having a four-year election cycle and councils having stronger relationships with Māori, increasing councillors' pay in order to encourage candidates from a wider range of backgrounds, and lowering the voting age to 16 as a way to increase voter turnout.

The government-commissioned review said while rates should still be the main source of revenue, a significant contribution was needed from central government, which could include a funding pool of $1 billion a year and the Crown paying rates on its properties.

Crosby, along with Central Hawke's Bay Mayor Alex Walker as LGNZ's rural chair and Productivity Commission chair Ganesh Nana, spoke to media on Wednesday morning about what it would mean.

Crosby said the report as a whole was "a bit of carrot and stick".

"It says if you want to put the local back into local government you also have to do it in an efficient and an effective way," he said. "Clearly the local has gone out of local government probably over the last 20 years through various pieces of legislation. We're certain that governments believe they know best and they've legislated to centralise a lot of activities, and we've been pushing back hard on that for actually a number of years."

One example would be in housing, which he said governments had often legislated to require certain types within a certain time without understanding the nature of the systems involved.

"The trick is how you go about it, how you go about bringing not just the councils along on that conversation but also whole communities - because at the end of the day that's who we represent."

However, he said the report could and should lead to more effective use of both taxation and rates, and sharing those tools between local and central government into the future.

"If you look at all the revenue that both the local and central government collect, in my view - and there needs to be a lot more analysis around this - that we can deliver a lot more effective and efficient services together without increasing either the taxes or the rates base."

"The level of service and what we have to deliver has gone up significantly as well and yet we're still using the same tools, and I would argue we're just about at peak rates in many areas already.

"We need to reconnect. We need to share and we need to trust each other. Central government need to trust local government, local government really need to have the trust of their community and I wouldn't say at this point in time those connections are all there."

Walker backed that view, describing the relationship between local and central government as a massive power imbalance.

"We end up with an Oliver Twist syndrome of 'please sir, can I have some more'," she said. "The trust is not there, so we have a power imbalance when it comes to funding, function and trust."

She said the strengthening of models and funding could be very powerful for helping councils work together with each other and central government.

"The current system is not well-equipped to support us to do that."

However, Nana said residents often saw little difference between the different branches of government, and argued there was a loss of trust not just between central and local government - but between communities and their councils as well.

"The missing voice in this conversation is the voice of communities and in terms of those communities that don't engage with local or central government - and there are many that don't actually make the distinction.

"That voice needs to be heard so that we can build that trust and relationship and have the delivery of resources... rather than the rather one-way relationship that government knows best, whether it be central or local."

The other missing voice was that of future generations who were not at the table, he said, but affected by the decisions made now.

Crosby however said while allowing 16-year-olds to vote in local elections may make some difference, there was a broader disconnect that needed to be looked at.

"You're better to focus on why people are not voting at all ages."

He agreed there was too much local government in some areas and too little in others, like the Far North - and warned if councils failed to move forward on that themselves there was a risk of amalgamation being forced on them.

Nana also warned that change was needed.

"The current models are unsustainable, change is going to happen. It's a question about whether you want to contribute to that change from a positive perspective, putting aside the parochialism, recognising that this is change for future generations - it's not for now... or do we have change imposed on us from on high, or from external forces that aren't going to abate very quickly."

Walker however noted the report did not specifically mention amalgamation, and said it was important to maintain local leadership in some areas.

"If there hadn't been autonomous local leadership in places like central Hawke's Bay or Wairoa, then the consequences to the local communities there would have been far different," she said.

"We see this as a system problem, and we need to look at all 17 recommendations as a package so we can unpick all of them and see what really needs to be done."

Chair and Minister give views on report

Panel chair Jim Palmer told Morning Report the annual transfer of central government, set initially at $1 billion a year, would make a signficant difference to the way local government operated and how it could deliver better for its communities.

"We understand the tight fiscal constraints that are on New Zealand at the moment. Our task was to look forward to the next 30 years."

Local communities were not well served by the current relationship between local and central government, he said.

"Local government and central government need to work more effectively together and identify what are the priorities that exist in communities and for them to align their work and resources, and that may require central government to reconsider how it invests in local communities, and apply money to local councils."

Local Government Minister Kieran McAnulty told Morning Report the government wanted to hear the sector's view on the recommendations and discusss them after the election.

McAnulty said he did not expect the suggestion for statutory requirement to ensure councils formed partnership frameworks with Māori to be controversial, since most were doing that already.

Funding councils with rates alone was unsustainable, he said, and the proposals on GST may work for some councils but not help others longer-term.

"We could enable councils to do things like charge a levy on tourist beds - that would be great for Queenstown, it's not going to be great for places I represent like Dannevirke where it's not going to bring in too much revenue."

On reducing the number of councils, the minister said the government would not force amalgamations on regions.

"That will be up to them, it has to be a local call."