Bye bye Local Government 2

National’s Local Government Act 2002 Amendment Bill will do significant damage to local democracy as they seek to restrict councils to “core” services, put in fiscal constraints, put power into fewer hands and override local concerns with amalgamations.

Overall the legislation is shoddy.  The Regulatory Impact Statement on the Government’s proposals from the Department of Internal Affairs makes interesting reading.  It raises issues such as:

– Risk as to whether the proposals will work;
– Significant sector reaction likely;
– The time frame within which the proposals have been developed has restricted the ability to assess multiple options; and
– The assumptions have not or only partially been tested.

The focus on roads, rubbish, sewage and street-lighting is to remove the wider remit Labour allowed in the 2002 Bill, which allowed councils to work on environmental issues and social and economic development.

So instead of local communities getting a say on what environmental standards they want locally; what social housing they feel is needed; what business support would benefit their town – central government gets to tell them what to do.  Or more likely (under National) just bars anyone from doing anything.  Local people who have the best understanding of local issues are overruled by far-flung politicians.

New Zealand has the lowest regional gathering of funds in the OECD and our local government’s spending is only 3.88% of GDP – one of the lowest.  In Aotearoa we tend to centralise, and this law will exacerbate that, as it cuts councils’ remits and tightens fiscal contraints.

National say councils have made bad decisions – but as they embark on the economic vandalism of asset sales, they hardly set a good example that they will make better ones.  Councils – with fewer people to listen to – can be more responsive to their constituents concerns than central government – if they have the remit.

And indeed one of the first edicts from John Key – that his Cycleway will apparently be “core” council spending – hardly sets the best tone for what is allowed and what isn’t.

In fact, in recent years non-“core” council spending is hugely down.  “Sport, recreation & culture” is the category that covers almost all non-“core” spending, and that has fallen from 18% to 13% of budget (including cycleways) since 2008.  Councils don’t have the resources to fulfil these objectives as it is.  Local health and culture is probably suffering because of it, as local councils are constrained to spending on infrastructure.

So National’s push for fiscal contraints, with a soft cap, are somewhat redundant in purpose, but will be disastrous in practice.  Councils aren’t profligate, even by National’s standards.

Rate rises have been steadily falling as councils catch up on the infrastructure deficit that National created in the 90s.  From an average 10% rise the year after Labour changed the law to less than 5% now – even though many of councils’ raw costs, like bitumen, rise in price much faster than the household groceries we measure inflation against.  Rates as a proportion of household spending has stayed constant at 2.25% for a number of years.

Council spending on employees has dropped from 29% of budgets in 1993 to 23% now, with local government labour costs rising 7% since National came to power in 2008 compared to a 7.5% increase in costs for a central government cutting the public service.

So the desire to limit local government’s already very low income and expenditure is purely ideological.  The desire to keep government small enough to drown in a bathtub, combined with the desire to keep power in central hands.

It leads to severe pressure on councils’ finances, which allows National to push other ideological measures like asset sales.  This gives them cover for their own asset sales, and the pressure has been particularly intense on Christchurch after the earthquake.  Gerry Brownlee as Minister of CERA has requested a list of assets that could be sold, including the town hall, AMI stadium, and Christchurch City Council’s shares in Orion Energy and the Airport.  Key wants a “grown-up conversation” about the mix of assets for the Council (which is in stark contrast to his lack of desire for a grown-up conversation about Super…).

Having already got rid of ECAN, National’s bill also makes it a lot easier to get rid of future councils they disagree with.  The Minister will simply be able to make an Order in Council, instead of having to take it to Parliament.  Then they can appoint the people they want and bingo we have asset sales.  Delayed elections are similarly provided for in the legislation, so there is no need for a quick return to democracy.  If you feel like our system of governance is being undermined – you should.

The plans to give Supercity-style mayoral powers on each council also suits National’s autocratic ways.  Much as the Supercity revolted and elected Len Brown on a platform of public transport and not selling assets, that won’t be the case everywhere.

The mayors will get to appoint their own deputy mayor, have their own staff & budget, and make the council plan.  A lot of power for one individual.  The Supercity has the advantage of size and press scrutiny to provide some checks and balances, but that won’t hold true everywhere, where there’s likely to be a serious lack of accountability.  And even in the Supercity, who knows how many assets would be gone by now if John Banks had got in…

The last major change I’ll mention is the removal of barriers to amalgamating councils.  By barriers I mean concern for what locals think of amalgamation.

The rules will change so that there is no need for a referendum or parliamentary act for amalgamation to happen – it can proceed with a Local Government Commission say so, and locals would need to raise a petition with 10% of the community to get a referendum.  Currently referenda are mandatory.

While it makes sense for some smaller councils to merge to get the economies of scale etc, this should be through winning the community over by persuasive argument, not railroaded through.

The Local Government Bill – like so much controversial National legislation – is now being rushed through parliament; trying to get passed without sufficient scrutiny and attention, lest it have time to breed unpopularity and become another policy millstone.  If you’d like to submit on the bill, Labour have created an easy website for you to have your say: http://www.labour.org.nz/localgovernment