PM Christopher Luxon's speech on waste rubs councils the wrong way

Prime Minister Christopher Luxon announced new plans to tighten the reins on local authorities, in what he says is a war on council waste.

He revealed the move on Wednesday afternoon at a conference of mayors, councillors and officials - who could be heard groaning as his speech went on.

Representative group Local Government New Zealand says they do go through their finances line by line every three years, in consultation with communities, as is legally required through the Long Term Plan process.

Opposition parties say councils are being hung out to dry, and the government's actions simply do not match Luxon's pre-election commitments to localism and devolution.

Luxon's speech called on councils to "rein in the fantasies", delivering a hardline message they should be living within their means and cut spending on the nice-to-haves.

He said the government wanted a constructive relationship with councils, but that "localism and devolution comes with both rights and also responsibilities", a throwback to his announcement earlier in the month cracking down on beneficiaries.

He said the government would abolish the four wellbeing provisions in the Local Government Act, and introduce performance benchmarks that would see councils collect and publish data he said they should already be familiar with: "financial performance" and "customer service delivery".

He also wants a kind of crackdown on council officials keeping information from councillors, and maybe a limit for council spending on so-called non-core projects.

It was about getting local government back to "doing the basics brilliantly", he said.

Local Government New Zealand president Sam Broughton, mayor of Selwyn, took issue with that framing of council spending. He noted councils were investing heavily in infrastructure and did what they could to avoid unnecessary spending.

"Councils go line by line through our budgets every three years, that's what a long term plan is. We do it in a transparent way with our communities with input and consultation from our communities and it's really great to have that level of input. To suggest that we don't already do that - we do."

"At the moment all growth that we produce in the country is based on transport corridors, water and waste water systems and that's all put in by local councils. And yet all of the benefits of that growth accrue in Wellington here, all the GST, all of the income tax comes back to Wellington."

He reiterated his call for councils to be provided with a range of new ways to collect revenue - including tourism levies - as well as councils' desire for a four-year term.

Luxon highlighted Tākina, Wellington's new convention centre, as a prime example of wasteful spending - particularly with yet another case of water mains bursting just down the road, particularly considering its unprofitability.

Wellington City mayor Tory Whanau said it was set up for a different purpose.

"I'm also very proud to be hosting this at Tākina, our world class convention centre, built to bring events like this to our capital city and stimulate our local economy. This event alone will bring in a million dollars to boost our city."

She also won resounding applause from the audience for criticism of the government's Māori wards legislation, passed three weeks earlier, which requires councils to hold a referendum on their Māori wards.

"Localism also means that councils should decide for themselves on the use of Māori wards," she said.

Protesters outside the venue also cried foul over the government's legislation.

LGNZ has been vocal about its own position on the wards, saying other types like rural wards do not require a referendum.

Broughton in April said it was a complete overreach by a "coalition government that prided itself on talking about localism ahead of the election".

Greater Wellington Regional Council chair Daran Ponter on Wednesday had his own message in response: "At this conference, we're leaning into localism and we're celebrating activism," he said - a reference to ACT MP Cameron Luxton's criticism of the "activist mayors" opposing the bill during its first reading.

The referendums will be yet another cost imposition councils say they need new funding tools for, before the year is out.

Luxon has promised more details in the coming months on city and regional deals, one solution National proposed ahead of last year's elections. It will, he says, include how they will work - and what the government will expect in return.

"This year's been really hard for councils, grappling with increased costs, very few funding leavers, as we went line by line through our long term plans and understood costs and the consequences for our communities," Broughton said.

"Our council for example is spending 85% of our capital spend on transport, water and wastewater over the next 30 years. That's where the investment is in councils."

Opposition cries foul over Luxon speech

Labour said the government was hanging councils out to dry.

"The government is ignoring its responsibilities to councils and setting up local elected officials to take the blame for its lack of action," Labour local government spokesperson Kieran McAnulty said.

"The LGNZ conference was an opportunity to give the sector some support into the future. Instead, the prime minister gave local elected officials a patronising lecture. It's completely out of touch."

The Greens co-leader Chlöe Swarbrick was also aghast.

"Some pretty absurd statements about how local government need to live within their means despite just last year a report being tabled which showed that local government has been drastically underfunded, especially based on international benchmarks, for decades," she told RNZ.

"Luxon's rhetoric on localism is hollow, it is absolutely meaningless. And hearing from those who were in the room when he delivered his speech it appeared as though it was completely tone-deaf, and completely out of touch, and completely the opposite of localism."