There’s a famous – probably untrue – story from classical history about the tiny island of Melos, which boldly demanded fair treatment from the mighty Athenian empire. The Athenians replied that they didn’t have to be fair because Melos was weak and Athens was powerful, and the way of the world is that “the strong do what they can and the weak suffer what they must”.
This was the essence of PM Christopher Luxon’s dramatic speech to Local Government New Zealand. Councillors and mayors may see themselves as democratically elected representatives, empowered by their constituents, but Luxon cheerfully explained that his government believes local government is empowered to pick up rubbish, fix pipes, fill in potholes, maintain local assets like pools, playgrounds and libraries, and not much else. Because central government can rewrite the Local Government Act any time it likes, local government is doomed to suffer what it must.
It is unlikely to suffer in silence, though. Wellington’s Green mayor and councillors were outraged by Luxon’s speech. Tory Whanau rebuked him for punching down, another regional politician lamented their mana being diminished – and that will suit the Prime Minister just fine. The nation has been in recession almost the whole time he’s been in power: his administration needs more scapegoats. It still attempts to blame nearly everything on Labour, but Chris Hipkins is proving a frustratingly evasive Opposition leader, operating a hit-and-run strategy where he launches lightning attacks on ministerial blunders and then fades back into the trees.
The Australian banks, the power companies and poor regulatory agencies have come under attack in recent weeks – but the councils are an irresistible target. Especially Wellington’s. Luxon gleefully pointed out that on the day of the LGNZ conference, the capital’s streets were flooded with more burst water mains, gridlocking traffic while the mayor and councillors preened in their gleaming new convention centre, which cost $180 million but operates at an enormous loss. Most households have just experienced the largest rates increases of their lifetimes – an average of 16% around the country, far higher than the rate of inflation – cancelling out National’s tax cuts and then some. They’re the perfect enemy.
National blames the sorry state of the nation’s councils on Labour’s 2019 Local Government (Community Well-being) Amendment Act: This empowered local body politicians to promote the social, economic, environmental and cultural wellbeing of their communities but didn’t give them any additional money to accomplish these worthy goals.
This expanded scope made local government more attractive to aspiring left-wing politicians, who then blew out the budgets with their bike lanes and bus stop roof gardens, and now they’re forcing Kiwi mums and dads to indulge their reckless ideological experiments. Or so the story goes.
Systemic problem
This isn’t completely wrong. Some councils spend a lot of time debating climate emergencies and ceasefires in Gaza and the like, and this is hard to take when their burst sewage pipes are repeatedly discharging into the rivers and seas.
But the water infrastructure crisis entered public awareness in 2016, when contaminated bores in Havelock North led to 5500 people becoming ill.
It is a long-term systemic problem, and councils place much of the blame on central government. It collects 93% of the nation’s tax revenue, while rates account for a miserly 7%. Inland Revenue even charges GST on rates – a tax on a tax! – and keeps the billion dollars a year.
And all the while, successive governments have pushed more and more regulatory responsibilities onto councils, creating a mounting administrative burden but no additional funding. Of course core services have suffered.
Luxon acknowledged this in his speech and accepted that the unfunded mandates had to end – but he also raised the spectre of dramatic changes to the scope of local government.
The four wellbeings will be no more; cabinet is investigating revenue caps on “non-core” activities and benchmarks that will measure how councils are performing and make the information available to ratepayers. It will also reform the rules around transparency and accountability.
Wellington’s local politicians will quietly welcome this. During the past few years, they have become increasingly aware that the senior staff of the council run nearly everything, and the councillors effectively serve as their press secretaries, defending a series of poor choices and increasingly unpopular decisions. They will have more agency over their own organisations – just as their ability to use it is snatched away.
Localism gone
National campaigned on delivering localism to government: an antidote to Labour’s centralising tendencies, with its inclination to solve problems by merging everything into massive bureaucracies.
But centralisation is also emerging as a grand theme of this coalition’s approach. It is imposing it via legislation, or even direct rule from the Beehive. The educational curriculum is being standardised and the health system is ruled by a single commissioner, who seems to be locked in mortal combat with his own executives.
Local Government Minister Simeon Brown is moving ahead with plans to impose congestion charging and toll roads across the nation’s urban areas, and he has signalled that future revenue streams for councils will come through city and regional deals: infrastructure and planning arrangements negotiated between local and central government, in which the latter will hold all the power.
When National abolished Auckland’s regional fuel tax, Mayor Wayne Brown growled at the Beehive, “This is my city, not theirs.” But he’s quickly learning that all of it is theirs; under New Zealand’s highly centralised political system, even the mayors have to suffer.
