What’s the point again?

Written By: - Date published: 9:12 am, May 25th, 2009 - 20 comments
Categories: auckland supercity - Tags:


Remember – March against National’s undemocratic supercity today 25th, noon, Queen St [More info]

Accepted truths are funny things. For example, everyone has just accepted that the local government mergers in 1989 saved money and that costs are out of control now. From these premises, it flows that the further merger of Auckland’s councils into a supercity will save some of these unacceptably high costs.

I for one hadn’t thought to question these facts until the other day someone asked in one of our threads if the last round mergers really had saved money. Fortuitously, StatsNZ has a series including local government administration costs from 1972 to 2005:


My look at what the graph tells us is this: local government costs were decreasing anyway before the last mergers were forced by central government. In fact, the expense of the mergers pushed the cost of local government up for several years after 1989. Cost reductions did resume in the early 1990s but they follow a track that was in place before the mergers. Did the government forcing local bodies to merge really save money? Hard to say but it’s certainly not clear they did. There’s no drop unambiguously associated with the mergers. (It’s worth remembering some savings in administration costs can be illusionary if a council turns its water department into a wholly-owned company, the cost of administrating the water supply instead becomes a cost of purchasing services.)

The other thing to note is that the cost of administration of local government is low, much lower than it used to be, and not increasing. So it makes one start to wonder where this sudden supposed crisis in Auckland local government is. It’s not in the cost of administration, it’s not in transport planning because there’s already a unitary body for that, and it’s not water, which also has a unitary body already.

If not cost savings and coordinated planning that is happening already, what exactly is a supercity going to provide?
-Marty G

20 comments on “What’s the point again?”

  1. Anita 1

    Do you have a link to the data set? I’m curious about whether unitary authorities have lower admin costs than TLAs ad RCs.

  2. tsmithfield 2

    Notice that its costs as a percentage of GDP, a proxy for population. There are obviously natural economies of scale at work here. As the population increases, then costs as a percentage of population size will probably decrease, even without any focussed effort to reduce costs. So, the graph above might not be as impressive as you think.

  3. jcuknz 3

    Perhap the point is that the savings come from a reduction in expected increases. Then there could be the expectation with the reduction in friction between numerous little councils the city will progress under one authortiy. Your graph shows a pretty good reduction I think.

  4. I’m sure John Key will be being very careful not to make the same mistake Helen Clark made over the Foreshore and Seabed issue labeling protesters “haters and wreckers”. Even so I can already see National’s pundits and grassroots activists trying to discredit the Hikoi with some conspiracy theorists going as far as to blame it on the left as a whole. While I know this is most certainly not the truth I can’t help but say “our turn!” since it was the right wingers who ground Auckland to a halt last year. Am so glad I wasn’t flying anywhere that day.

  5. Rich 5

    I think Russel Norman makes the real reasons for the supercity quite clear here:

    • Swampy 5.1

      It would be really good if Norman could be prosecuted for lying when all his reasons will be shown false. But of course he is a politician, he is just saying what his fringe supporters want to hear. It behoves the 90% of us who didn’t vote for his party to remember that.

  6. Zaphod Beeblebrox 6

    You can get whatever savings you like from local government but the bigger question is- whether we are getting value from money for rates. Has anyone ever provided quantitative or qualitative measures of how local government is performing? If we cut costs and pay peanuts we will end up with monkeys running local government. I haven’t heard anyone (on either side) talk about providing quality staff, who are well rewarded and well trained.
    If the the new Auckland council provides a crap service, it will end up costing us all. Shouldn’t we be asking for a better local government not a cheaper crappier one.

    • r0b 6.1

      Has anyone ever provided quantitative or qualitative measures of how local government is performing?

      According to this post, quoting National’s 2005 policy, there have been surveys of resident’s satisfaction with councils. Smaller councils have “some of the highest” ratings.

    • Swampy 6.2

      Well, you know, councils are bloated with people they have no business employing and that is the most important point that is missed.

      For example today I saw council flats being visited by an electrician, with his van all fitted out, The difference being that the van had the council logo on the side of it. I’d ask what business the council has employing in-house a person in a specialised trade like an electrician when the council’s core business has nothing to do with electrical repairs. Obviously some do-gooder or unionist has come along and said the council has enough repair work in their flats to keep an electrician going full-time, that means the council should employ that person. They conveniently forget to mention that the council has to employ and pay extra administrative and support staff to administer employment agreements, OSH requirements and professional standards and legal certification for a specialised profession.

      So I have no problem at all with people suggesting the council should stick to its core business, the reason that costs rise is because the council gets bigger, they see how much rates money they can rake in and they get involved in stuff they have no business to be involved in, it just gets bigger and bigger, it is purely about empire building and in a lot of cases, political power.

      I’d like to see some debate for example why councils are building fitness centres subsidised to compete with the private sector, and what this has to do with core local government business. I’d also like to see some debate about why efficiency gains never result in actual rates being cut.

      • Pascal's bookie 6.2.1

        It’s called democracy swampy. It may shock you, (seeing you seem to believe that a silent majority exists that thinks just like you), but the evidence of elections shows that people actually like their governments to provide services. Lot’s of them. The core is not fixed, and you don’t get to define it, society does.

        Now paying for all these things people want costs money. Obviously, people don’t like getting the bill, who does?

        But, (and this is the important part), when pollies cut services in any way serious enough to substantially reduce that bill, they lose their jobs. This fact is so evident to politicians, (who run focus groups and polling etc), that they go to all sorts of lengths to suggest that they will not cut services.

        This fact about politicians behaviour is fairly strong evidence that people actually like the services more than they hate the bill. It also explains why the minority of people that feel the other way, who would like a smaller bill and less services, find themselves arguing stupid things like ‘trickle down’ and ‘supply side’. These are attempts to square the circle, and have govt services, with smaller bills. They are also theories that have been tried in many countries over the last 3 decades, without what scienticians like to call, ‘any real success’.

        Sorry, but that’s democracy for ya.

  7. The Baron 7

    “Did the government forcing local bodies to merge really save money? Hard to say but it’s certainly not clear they did.”

    Based on the data that you yourself provided, I suggest it is pretty bloody clear actually.

    More factually wrong, biased ranting from the worst author on this blog. Jesus christ Marty – I now understand why you used to call yourself the mathemagician – you just pull this stuff out of your hat/ass rather than out of your brain.

    • Quoth the Raven 7.1

      Greater and greater central planning always works out well doesn’t it Baron just ask the Ruskies.

      • Pascal's bookie 7.1.1

        Aristocrats eh Quoth.

      • The Baron 7.1.2

        According to this data – yes, yes it does.

        Oh, but then again, it “was going down already”, like it was some sort of metal slide or something. How’s that for cause and effect from the dullest knife in the block.

    • felix 7.2

      According to the graph above it would seem that the major turning point was in 1982.

      From then it’s been steadily downhill all the way apart from a brief but noticeable upturn between 1988 and 1991 (temporary costs of restructuring?).

      Anyone know what happened in 1982?

  8. Jum 8

    Zaphod Beeblebrox

    You’re absolutely right. But since NAct haven’t even done the costings of the cost of new Auckland governance changes, I doubt quality costing will get a look in. When you want to sell off local government assets you want them to look bad not good otherwise JKeyll and Hydra’s business mates will have to pay too much for them.

  9. Jum 9

    Illuminatedtiger saidMay25,2009at9:49am‘Keywillbebeingverycarefulnottomakethesamemistake HelenClark madeovertheForeshoreandSeabedissue labelling protesters “hatersandwreckers’.’

    Correction: Helen Clark labelled the organisers haters and wreckers not the protestors – huge difference. She was also right.

    Tariana Turia for example had an agenda in mind when she entered Parliament and it wasn’t to end up being attached to Labour forever. She and others used that countrywide desire to retain NZ coastline in New Zealand hands not private hands to advance their agenda.

    Once, Maori wanted to be the guardians of New Zealand for future generations. I respected that because Maori stood up for New Zealand autonomy when other New Zealanders would not. I would have happily agreed to special rights for Maori guardians and other caring parties (not just Maori care!) over New Zealand land and water, with funding and authority to achieve ‘clean and green’.

    But, now, it’s all about ownership for Maori; it’s about money and power over others. That is a human failing. When Maori enter that domain, they have no right to special treatment.

    A quick research of land ownership in New Zealand will reveal the huge amount of land Ownership by Maori. Shame many urban Maori don’t see the benefit of that land Ownership. I would like to be proved wrong there. Also, treaty claims are still proceeding which will add to that stock.

    Labour held the foreshore and seabed in trust for all NZers; I don’t know why Maori seem to think Labour stole it from them. I think they will find that rich landowners (seldom Labour voters) are the ones who have actually taken land from all New Zealanders. Check out the high country rorts.

    The seabed and foreshore grab by Maori was for commercial purposes. The finer minds amongst Maori wanted to protect NZ’s children’s future. The scary thing is always ‘who will win the haters and wreckers or the country’s genuine protectors’? We have a National/Act/Maori party in control of NZ and Auckland/Governance is just the start of the Great NZ Carve Up. I already know who has won The governing haters and wreckers.

    BTW, where were Maori when Labour wanted to open up coastal walking tracks around NZ?

    BTW, is it in writing that there will be no charge to access beaches in New Zealand under Maori ownership?

    My point here even Maori are human!

  10. r0b 10

    I’m sure John Key will be being very careful not to make the same mistake Helen Clark made over the Foreshore and Seabed issue labeling protesters “haters and wreckers’.

    Key has already made that mistake, labelling Waterview protesters “cold and desperate”

  11. Swampy 11

    Mergers can save costs, as they do in many situations. The reason they don’t is that the councils get the usual self inflated idea of their own importance and set out building bigger empires to themselves.

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