Reining in local government

March 21st, 2012 at 9:34 am by David Farrar

My blog at is on reining in local government.

In 2002 local councils were given the power of general competence. It meant they could do anything at all, so long as a majority of councillors voted for it. Any amount of spending could be justified so long as it contributed to the social, economic, cultural and environmental wellbeing of their communities.

For the life of me, I can’t think of anything that wouldn’t be justified under those criteria. A local council could probably build its own air force and claim it was essential to their social wellbeing.

I deal with the counter view:

Some have argued that these proposed reforms are undemocratic. They say that a local council should be able to spend ratepayers’ money on anything they want, and it is up to the local voters to keep them or sack them. They say the Government should leave it to local voters.

The problem I have with this argument is that many large items of expenditure that councils approve are not known before elections, and councils proceed regardless. Some of them turn into disasters such as the Hamilton V8s. Yes, you can sack the councillors responsible at the next election, but that doesn’t stop you being left with the bill regardless.

And the bill keeps getting bigger.

17 Responses to “Reining in local government”

  1. JeffW (352 comments) says:

    According to TV One news last night, there is still a general public good test in the new legislation. Meaning that Councils can still do whatever they want with other people’s money. If the TV One comment is true, the proposed legislation goes nowhere near far enough to rein in the egomaniacs running Councils.

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  2. Pete George (24,828 comments) says:

    Local body rates do need to be brought back to a reasonable level. It makes sense to clearly define what is local business and what is national government.

    But if local power is limited and Wellington takes resonsibility for more, then local voices need to work more topgether to be heard in Wellington.

    Less local government requires more local advocacy

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  3. rouppe (1,236 comments) says:

    Exactly. We had Wellington City Council secretly approve a $800,000 expenditure on an artificial turf project (at St Pat’s school no less) and the next day cry about how “cash-strapped” they were and how they needed to raise street parking fees, swimming pool fees etc.

    Those tossers cannot budget to save themselves.

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  4. nasska (16,765 comments) says:

    I have a nasty feeling that the legislation will end up so shot full of exemptions as to be worthless. In any case the problem is systemic…..the gullible fools who end up elected to local bodies are easily groomed by the executive to rubber stamp anything put in front of them. Clones of Sir Humphrey Appleby are everywhere & thriving in local government.

    The only answer is draconian legislation which removes councils’ ability to wander away from core responsibilities such as sewage, water & rubbish & an absolute cap on rate increases equaling the rate of inflation.

    Those dedicated spenders of OPM should be advised to run cake stalls to fund their vanity projects.

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  5. trout (1,132 comments) says:

    Perhaps there would be less anger over Local Body expenditure if the money was fairly collected. Rates are a tax by another name; a wealth tax in fact; a tax imposed on only one section of the community; a tax that is inequitable in imposition and has no relationship to services provided. (The final irony is GST is imposed on this tax). If Councils need to spend money on projects other than core services then costs should be funded by regional sales taxes.

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  6. redeye (730 comments) says:

    I’m in the Tasman District Councils ‘rate collection’ area (not necessarily the same as the serviced area). We’re one of the higher debt councils. We’re about to have a poll on whether we should amalgamate with Nelson City. Anyone interested should look carefully at the overseas research.

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  7. Nick R (949 comments) says:

    The question is whether the Government can come up with a meaningful description of “core services”. So far the signs are not promising. At the moment the definition of “core services” seems to mean “no policies on NCEA pass rates and no V8 races. But yacht races, libraries, arts festivals, tourism promotions and museums are ok”. So where’s the beef?

    The reform will be meaningless unless the Govt is willing to take tough calls. This means telling Councils (and the public) that they must not do some things which are popular and which increase people’s quality of life. That is going to be a hard sell, and I just wonder whether this Government has the stomach for it.

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  8. nasska (16,765 comments) says:

    Nick R

    Core services are easy to define……services which everyone uses or benefits from. The list would be relatively short & definitely would not include car or yacht races or cultural crap such as museums & art galleries. Tourism, business promotions, conference centres & the like benefit private enterprise & should be provided by them.

    It would be amazing what facilities people would happily do without if they had to “pay at the door” rather than have everyone else subsidise their wants.

    I do agree that the wailing by the sporting & cultural bludgers would dull the will of central government to have a cleanout of the same parasites.

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  9. Brian Smaller (4,332 comments) says:

    An average of 70% increase in rates in the last ten years. Can anyone honestly say that they have had any sort of improvement in services that justified that? Surely any expenditure above a certain level for new projects should be put to the ratepayers. Not just residents – but people who actually pay the land taxes levied on them to live in the place.

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  10. Viking2 (14,374 comments) says:

    Given that Nick the Nutter is in charge (for the moment), don’t expect anything at all. He still supports the RMA as it is currently and that as much as councils,. is responsible for holding NZ back.

    Hopefully Key will find the balls to give him the shove today.
    Time this time serving Greenie was sent back to the back benches till he retires.

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  11. flipper (5,301 comments) says:

    Heh folks it is a start.

    Young Nicky has a phud in landslips. Just scraped thru, so insiders tell me.

    He has already demonstrated his stupidity. There is not, that I could see, any substantiasl reference to the link between the LOC Govt leg and the RMA.

    Fundamrentally, the RMA is the problerm and one which must be resolved before all else.

    As the late Owen McShane said (often): “The Act, per se, is not the problem. It was/is the case law (arising from RMA decisions) which has driven all the idiot decisions such as those that would deny land owners the exercise of ownership rights.”

    Get rid of the the RMA and the Loc Gov spendthrifts at the same time.

    Having said that, I would not place too much reliance on the bullshit headlines of the media. They would not know the difference between what they write and clay.

    Sad, but true.

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  12. tvb (5,518 comments) says:

    What Smith is telling, yes telling local government is “we don’t trust you”. He is the wrong man to sell this message and we may find out more soon.

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  13. Other_Andy (2,678 comments) says:

    Thanks for bringing that up again!
    Everytime I get my ‘rates’ (Tax) bill from the council it makes my blood boil.
    I pay through the nose and don’t have sewage and wastewater disposal, no footpaths, no street lighting, no stormwater drains, no public transport, no swimming pools while people who don’t pay a cent or considerable less in rates (taxes) get it all.
    The GST on the council tax is just adds insult to injury.
    It is the same with fuel where you have to pay taxes (GST) over Government taxes and levies.
    Its nothing more than legalised theft.

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  14. DJP6-25 (1,782 comments) says:

    Remove ‘competence’. Disestablish all the ‘works’ units, and require them to be tendered out. Cap council rates to inflation. Introduce term limits. Dump the RMA, and ‘smart growth’.


    David Prosser

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  15. Michael Mckee (1,262 comments) says:

    WCC lied their heads off about the indoor sports centre.
    It was a finale from Kerri Predergast.

    The figures kept changing and even now they don’t tell us the true loss each year they expect as it will never pay it’s way.

    Besides which it was never for local sport as they trumpeted as it takes 30-40 mins driving time from half of Wellington.

    Nowhere did they ever look at using existing facilities and build additional structures in the Wards.
    I know I did an LGOIA and read through reams of paper to see.

    The sods lied and obfusecated about the monies and upkeep.
    The running costs incl the rebuild in 30 yrs are 2x what it takes in..

    They all along wanted a national venue for national and international events.
    so much so they have a resource consent to have 3-4 3000 people dinners
    All those who voted for it I have and will not vote for again.

    Sadly no integrity on this issue with our money as they never truly gave us the figures, even Andy foster which is really sad.

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  16. wiseowl (2,288 comments) says:

    Well in Hastings the Mayor (and chair of local government nz) wants ratepayers to cough $3.5m for a special turf for hockey!
    He has a total grip on his council and goes from project to project on a never ending spend.

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  17. wiseowl (2,288 comments) says:

    The report in the Dominion this morning relating to a cr sending an email using the f word (in HB) sums up another elected member who has made an ‘error of judgement’ …he should resign.

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