Local Government Reform – background and misconceptions

A common misconception about local government in New Zealand is that we are ‘over governed’. In fact the reverse is the case when we compare ourselves to the rest of the developed world.

Another misconception is that bigger is cheaper. There are plenty of examples of the ‘diseconomies of scale’ and Auckland is starting to illustrate a local case of bigger costing more. As organisations grow they add in more and more management layers which inevitably cost more.

Before the 1989 reforms we had around 880 councils, boroughs and boards in New Zealand. A major reshaping saw the number reduced to around 88 and now sitting at 72. This was accompanied by major legislative overhaul which saw 57 Acts and 17 regulations combined into the Resource Management Act. This “integrated management” approach was the legislative basis for the reform. I think we got it about right as opposed to some thinking now that maybe twelve or fifteen councils would be good.

Looking at others can help us but it is what we think at the end of the day that really matters.

The wealthiest people in the world are the Swiss, their population is similar to ours and a chunk of their economy is based on dairy cows. They have around 2,000 councils. France has 32,000 mayors and the average council size in the USA is 9,000 people. Even Sydney, just across the ditch has more than 40 councils making up the city. England and Wales have councils nearly twice our size but as well as the usual services they are also delivering police, education and health. Internationally we have less local government (bigger units) than most other countries.

So what is right for New Zealand?

We have a sparsely populated long narrow country divided by mountains. It is geographically diverse and largely dependent on rural based primary industries.

It is my view that Local Councils play a vital role in supporting their local communities and economy. The infrastructure that enables the economy to function is largely owned and managed by local communities. It is well understood by locals as it has largely been built and maintained by them. The roads and bridges, water supply systems along with liquid and solid waste disposal, flood control, animal control, and up until relatively recent time, electricity networks.

There are a myriad of other functions like sport and recreation facilities, building and environmental controls, local bylaws, cemeteries, in fact forty eight different things for this small council, Opotiki. They all contribute to the proper functioning of a rural town that provides support in a number of ways for our rural economy.

The obvious are the schools, health services and social outlet a local town can provide. Probably more important are the direct services, engineering and mechanical serving and repairs, fuel and tyres, fertilizer, stock feeds and seeds, tools and equipment, transport logistics, labour supply and so on. The labour required to pick and pack our kiwifruit crop here in Opotiki needs to be housed and looked after when it is brought in for six months of the year to do the job.

Small towns and even provincial cities around the world have been struggling to hold their own as people gravitate to larger metropolitan centres for the economic opportunities and cultural stimulation they provide. Provincial decline comes at a cost when it begins to diminish the services required to support rural industries.

Amalgamating smaller councils if there is no cost benefit to ratepayers only hastens the demise of other services they rely on. The leadership, local knowledge and local decision making processes that local councils provide are critical to the ongoing wellbeing of rural and provincial New Zealand.

In my opinion the amalgamation proposals that are currently being considered in parts of the country are unnecessary. In fact they have the potential to make Local Government worse and they will cost ratepayers more in rates.

John Forbes

Ends

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