Infrastructure Report: Change by consensus

Stephen Selwood, NZ Council for Infrastructure Development CEO.

All New Zealanders need to be involved in a review of local government, says Stephen Selwood.

If councils are to pay heed to Local Government minister Paula Bennett and focus on jobs and growth, it will require a fundamental change in the purpose and resourcing of local government. It will also require reform of the complex and disintegrated legal system in which local government operates and which is a major obstacle to integrated planning, funding and delivery of infrastructure and job creation.

Despite decades of amendment, land use planning and resource management decisions under the Resource Management Act are disconnected from funding decisions made under the Local Government and Land Transport Management Acts. Consequently there is weak integration between planning and investment.

Though the RMA is New Zealand's pre-eminent environmental law, since its enactment 24 years ago environmental outcomes have actually been poor. Adverse cumulative effects have led to a slow but significant deterioration in the quality of monitored streams, rivers and lakes. Leading environmentalists describe New Zealand as being at the point of a biodiversity crisis.

The Act was amended in 2004 to address climate change issues, but reforms have failed to have any significant impact. Development of national environmental policies and standards will help but, if that were as simple as many suggest, it would have been done a long time ago.

Councils face intense political scrutiny to keep rates increases to a minimum, and are required by law to comply with the maze of statutory processes. Consequently, local government attention is focused on administration, managing negative effects, balancing the budget, and dealing with the costs of growth, not going for growth.

How can councils now suddenly turn their focus to jobs and growth and why would they, when growth provides so many more headaches and problems and has little reward?

From a local democracy perspective, legalistic consultation processes are a barrier to meaningful community engagement rather than an enabler. Councils and councillors are bogged down with procedure instead of meaningful participation. Plans to standardise planning templates will improve consistency, but add more process for councils to churn.

Business growth is where the jobs will come from. But inconsistent rules, the sheer number of councils involved and the complex planning and decision-making processes required make it unnecessarily difficult to do business. Similarly, fragmentation and complexity hinders collaboration between central and local government and the business community.

Looking into the future, local government, especially small rural councils, face immense challenges in managing demographic change, rapid technological change, rising consumer expectations and the need to respond to climate change and improve resilience of core infrastructure. Affordability challenges today will become a serious problem in the future. Rather than continuing with a constant churn of legislative change, a first principles review of the planning framework and purpose, structure and funding of local government provides a much stronger opportunity to place local government at the centre of regional growth and development in partnership with communities, iwi, business and central government.

What's needed is a fully-integrated planning, governance, funding, regulation, delivery, and resource management system that will drive regional social and economic development, improve environmental outcomes and strengthen local democracy and community engagement. More importantly, councils will need the resources and incentives to go for growth.

Change of this kind needs a consensus approach. It requires participation by all New Zealanders. It cannot be led by councils themselves or any single government department. It is almost impossible in an MMP environment for politicians to take the lead. NZCID therefore recommends that an independent Royal Commission inquiry into local government and planning law reform in New Zealand is a better way forward.

The commission would undertake a first principles consultative review of the planning framework and the purpose, structure and funding of local government in New Zealand. It would report back to Parliament in early 2018, following the 2017 general election, and provide recommendations to the incoming Government on a preferred option for transformational reform.

• Stephen Selwood is CEO of the NZ Council for Infrastructure Development.