Can The Govt Step In To Take Control Over Wellington City Council?: What You Need To Know

Wednesday, 16 October 2024, 6:18 pm
Article: RNZ

Explainer - The question of central government intervening in Wellington City Council's governance or the council's decisions was raised this week, but what is allowed under NZ law, and what point are we at?

Dr Dean Knight, a law professor at Victoria University, told RNZ there is no indication the government could justify stepping in to Wellington City Council's governance, and any attempts to do so could set a dangerous precedent for democracy.

He described the council as operating along a normal state of affairs, and put the calls down to political grandstanding.

What has happened so far?

Local Government Minister Simeon Brown on Tuesday said possible interventions were being considered, including looking into the thresholds where intervention was allowed.

Prime Minister Christopher Luxon said the government was watching the council carefully and that Brown would announce more soon, while Minister of Finance Nicola Willis earlier said the council was a "shambles".

Brown's announcement came after the council voted not to continue with a planned sale of its shares in Wellington Airport, to fund a more diversified investment fund set up to act as infrastructure 'self-insurance'.

But Knight told RNZ that according to the laws governing such interventions, the council had not reached the point where an intervention could be made.

If the government to stepped in now it would set a new precedent, and local authorities across the country should be worried about similar intervention, he said.

Last month Wellington City Councillor Diane Calvert called for intervention in the council, but such calls for intervention were normal politicking, Knight said.

"Those calls for intervention are a part of local politics - it's convenient for some of those councillors to lament what's going on and say everything's gone to hell in a handbasket. But the reality is that what's gone on is not out of place, and not of the degree ... that justifies ministerial intervention.

"I think people that are banging the drums for intervention in Wellington need to take a big deep breath, nothing that's going on there in my view rises to the level of disfunction or failure of government or anything like that that justifies significant ministerial intervention.

"And that's because it's not a significant problem when someone is simply taking a different view on an ideological policy question about whether to keep a particular asset or [release] assets for different types of investments ... that's the day to day life of local democracy."

What interventions are possible, and under what circumstances?

The Local Government Act gives the minister a range of powers to intervene, Knight said.

Those powers could be invoked: "if a local authority is facing a problem - more importantly a significant problem - in their governance."

There is a hierarchy of various tools that can be used, he said, ranging from:

• Requiring information
• Sending in a review team
• Appointing a crown observer (which is more like a crown facilitator).

Up to ultimately:

• Appointing commissioners - effectively sacking the elected members
• Calling another local body election.

"The point is, each of those have a different threshold for ministerial intervention," Knight said.

Types of problem that could warrant intervention into the working of an elected local council could be a situation "impacting on their ability to do their job", a failing council, or even a situation where they were "not acknowledging problems that they have."

"That's a high threshold - it's a high threshold for intervention, and the thresholds are higher for the higher degrees of intervention," Knight said.

The minister is required to consider which level of intervention matches the circumstances. But they are not required to progress through the list from the lesser interventions - they can tailor the level of intervention to the situation.

Has it happened before?

Yes. But there has been very little use of the Act to intervene in local body governance, and there appears to have been significant reasons that were examined before action was taken.

Three councils have previously been placed under the management of a commissioner:

• Commissioners were appointed to take over governance of Tauranga City Council, in 2021, after a review found significant issues and a public breakdown in councillors' relationships (a new council was elected in July this year).
• Kaipara District's council was sacked in 2012 after unlawful borrowing led to a massive budget blowout.
• Environment Canterbury's councillors were replaced with commissioners in 2010 following an extended period of poor performance.

Has Wellington City Council reached a level where intervention could be considered?

"I don't think we've got problems of a significant level," Knight said.

Any problems or disharmony facing the council would need to meet a much higher level "before central government steps in and cuts across local democracy through ministerial intervention."

Doing so had serious implications for the established democratic system, he said.

"Because doing a ministerial intervention will cut across the usual processes for local democracy that sees local elected members held to account by their ratepayers and citizens in their district at three-yearly elections.

"There are many instances where local authorities across the country change their mind on difficult and ideological problems in their Long Term Plan, and also situations where debates and discussions and deliberations about matters that are important to their district get a little bit sparky.

"That's part of the game ... as we see at central government.

"If the minister intervened in this type of scenario, then I think there would be local authorities across the country that would be or should be very worried about similar intervention."

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