Minister hints at council reform

Hawke's Bay councils may be asked to work harder at reducing debt and look at possible "reorganisation" as part of the major goals set by the new Minister of Local Government Nick Smith.

New Zealand's 78 councils were responsible for $100 billion of public assets, employed 23,000 people and spent $7.5 billion each year of public money. Over the past decade average rates across the country had increased by 6.8 per cent per year or by more than twice the rate of inflation.

Council debt had roughly quadrupled from $1.8 billion to $7 billion over the past decade leading Mr Smith to say that "debt is the issue of our time" in his maiden speech to parliament recently.

"My ambition is to work with councils to ensure they are a help not a hindrance to New Zealand getting ahead," Mr Smith said.

"My number one concern is about spending and the financial burden of rates on household businesses," he said.

The government had previously put debt limits on council but they were repealed two decades ago.

"This may need to be reconsidered," Mr Smith said.

Council amalgamation could be one way to achieve an efficient local government organisation, looking at the Auckland council model as an example.

Mr Smith is also the MP for Nelson where the Local Government Commission is considering a plan to merge Nelson and Tasman councils.

"We want to facilitate a sensible dialogue on reform," he said.

Hastings Mayor Lawrence Yule, who is also the president of Local Government New Zealand, said he had spoken to Mr Smith earlier this year on what the new minister's goals would be for the new term.

"The government has signalled it's not going to force council reform but now communities and regions are being asked to find better ways to operate," he said.

"I think it's probably going to look at efficiencies in delivering services such as building, compliance type services, maintenance of roads, better alignment between central and council."

Hawke's Bay Regional Council chairman Fenton Wilson said he had no formal approach from Mr Smith regarding suggestions that reorganisation would include abolishing regional councils.

"It's early days yet," Mr Wilson said. "Mr Smith is fairly new in his role as local government minister and hasn't had enough time to see for himself how we operate.

"I don't think regional councils are an extra layer over the district and city councils. Regional councils actually hold a lot of information, data and wealth of knowledge of water and land issues and I can't see how you could lump that into one council."