'Slippery slope to mediocrity': Mayors hit back at PM's speech

Prime Minister Christopher Luxon has called for councils to "rein in the fantasies", manage spending, and focus on delivering their core services - but mayors say they already do this.

"Ratepayers expect local government to do the basics and to do the basics brilliantly," Luxon told a conference of local government representatives in Wellington on Wednesday.

"Pick up the rubbish, fix the pipes, fill in potholes, and more generally, maintain local assets quickly, carefully, and cost effectively."

The government has announced plans to remove four wellbeing provisions in the Local Government Act and putting a revenue cap on "non-core activities" to ensure councils get "back to the basics", and introducing performance benchmarks.

New Plymouth mayor Neil Holdom said it should be left to communities to decide "what inspires them".

"A government capping local government's ability to reflect what its communities are asking for is a slippery slope to mediocrity."

The council has been lifting its performance across core infrastructure and found savings, such as a restructure which reduced operating costs by 6 percent, he said.

But rates in New Plymouth climbed by 11.5 percent with just a few "nice-to-haves", like sporting and walkway infrastructure, remaining in its budget.

"Some people would say they aren't core business, but actually, what's the definition? Is it libraries, museums, art galleries?" Holdom asked.

"Because, actually, I believe that they are all core business of council."

The average rates increase across New Zealand is 16 percent with few councils managing to avoid increases in the double digits.

Local Government NZ president and Selwyn mayor Sam Broughton said councils have already gone through budgets to cut spending.

"Councils go, line by line, through our budgets every three years," he said.

"To suggest that we don't already do that - we do. It's very clear and taken very seriously."

Rates in Selwyn jumped 14.9 percent, but Broughton said the cost of delivering council services has increased.

Over the last three years, the cost of building water supply systems and bridges have climbed 27 and 38 percent respectively, while insurance premiums jumped 70 percent.

Porirua ratepayers got hit with a 17.5 percent increase this year.

Mayor Anita Baker said the council scrutinised its budgets to find savings, with staffing changes alone saving $2 million.

"Porirua does stick to its knitting," she said. "We did lose some staff. We cut our village planning, so we got rid of that. We put projects on hold."

Infrastructure spending was 65 percent of the council's budget, but there still needed to have "some kind of wellbeing", she said.

"We still need libraries and pools, because that's how we live."

The removal of the wellbeing provisions was "a little bit of a concern" for Ashburton mayor Neil Brown, who recently lifted rates 11.8 percent.

"We looked after the roads, the waters, the essential things we need for day to day, we cut or didn't increase the fluffy stuff," he said.

"And if there's any buildings to be done, it's on a needs basis."

Nelson mayor Nick Smith said the four wellbeing provisions had "set councils up to fail" by making the scope of council work too wide in comparison with its revenue base.

"It creates an expectation that council is going to do a whole lot of things that it's not funded for."

He supported the prime minister's message to reduce spending and focus on core services which, Smith said, reflected public opinion.

Rates in Nelson climbed just 8.2 percent. However, after a $300 annual charge for the next decade for the city's 2022 storm recovery is factored in, the increase becomes 15.3 percent.

In the constrained economic times, the council had adjusted its ambitions accordingly, Smith said, giving the example of scrapping the proposed $46m riverside library.

However, contained within the city's long-term plan, funding remains for several lower-cost projects, such as a $1.6m arts hub.

"Doing some smaller, smart projects actually is in the community's interest."

Local Democracy Reporting is local body journalism co-funded by RNZ and NZ On Air.