Smith Nick: Local Government Act 2002 Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Smith Nick: Local Government Act 2002 Amendment Bill — First Reading 
[Sitting date: 12 June 2012. Volume:680;Page:2849. Text is incorporated into the Bound Volume.] 
Hon Dr NICK SMITH (National—Nelson) 
: 
 Never have I seen a debate in this House that shows how out of touch the Opposition is with the issues facing New Zealand and how much this John Key Cabinet—and I compliment the work of David Carter on this bill the Local Government Act 2002 Amendment Bill—is on top of the issues that matter. I want to start with the core issue and that is whether New Zealanders are satisfied that the 2002 Local Government Act is working. At the core of this argument are the speeches I have heard from Phil Twyford and the Green Party that say that it is all going hunky-dory and that it is all going awfully well. Well I want to begin by quoting what the Labour Government said when it passed the 2002 Act. It said that the rate of rate increases would not change and that the costs of local government would be well controlled.  
Let us look at what has occurred in the decade since Labour rewrote the local government laws. Of all the 164 factors that are included in the Consumers Price Index which one has gone up the fastest in the last 10 years? Has it been the price of fuel? Has it been the cost of food? Has it been the cost of housing? No it has been the cost of rates. The cost of rates has gone up faster than any other area of cost for householders and what the Labour Party and the Greens have said is that they do not care a toss. They do not care about the cost of rates bills for retired families for working families and for businesses. Over the last decade rates have gone up by more than double the rate of the Consumers Price Index.  
The first challenge I have for any member opposite is to please explain for me why it is that in the period from 1992 to 2002 the decade before Labour made those very significant changes the average rate increase was 3.1 percent—3.1 percent for that decade. In the decade since rates have gone up by more than double that rate. I say that it is absolutely right in these financial times for this Government to review how well that 2002 Act is working. 
Phil Twyford 
: He’s just making it up. 
Hon Dr NICK SMITH 
: The member says we are making it up. Let me give you another example. Why is it that households over the last 3 years in response to the global financial crisis have reduced their spending and reduced their debt? Businesses in New Zealand have responded by containing their costs and reducing their borrowing. Equally so we have seen in the farm sector people being more cautious reducing their spending and reducing their debt. In this Government we have adopted that and we have seen that in the Budget that has been set down.  
Why is it that the only sector whose spending is continuing to grow and whose debt is continuing to grow is the local government sector? And members opposite have got absolutely no idea what to do about it. 
Phil Twyford 
: But it’s nothing to do with the Act. 
Hon Dr NICK SMITH 
: Let Mr Twyford deal with some facts. The level of local government debt in 2002 was $2 billion. Do you know what the level of debt is within the local government sector since the previous Government passed the Local Government Act? It has gone from $2 billion to $8 billion—$8 billion. 
Andrew Williams 
: What’s central government gone from? $8 billion to $52 billion. 
Hon Dr NICK SMITH 
: I challenge Mr Williams who is interjecting. If we look at the long-term plans that have been set down by councils for the next 10 years we see that they are going to take that level of debt up to $20 billion. How many members of this House really believe that it is wise in these current financial times when we are seeing countries in Europe wrecked by debt to take our level of local government debt from $8 billion to $20 billion? What we have heard from Opposition members is that they are OK with that. They are OK with the level of local government debt in this country going from $2 billion to $20 billion. 
Phil Twyford 
: His numbers are shonky. He’s making it up. 
Hon Dr NICK SMITH 
: The member interjects and asks whose numbers. Well I have a simple question for Mr Twyford. Has the level of local government debt gone from $2 billion to $8 billion since Labour passed the Local Government Act? He is the man who is shouting and continuously interjecting suggesting my numbers are wrong. I put a very simple question to him and he cannot answer it.  
Let me come to one of the core debates that has been raised by members opposite and that is the issue of the purpose of local government. The touchy-feelies on the Opposition benches think the role of local government should be to provide for the nation’s social economic cultural and environmental well-being. I will ask an honest question. Every one of the needs of our community in New Zealand can be defined into those four areas. Do we really believe that with 4 percent of GDP people can meet all of those needs? It is a nonsense.  
What we need is a well-focused local government sector with a clear framework from Government about what its job is. Is it for instance the job of the local government sector to provide for welfare? No it is not. It is a core responsibility of central government. How many members opposite think that it is really smart that the New Plymouth District Council owns 20 dairy farms in Tasmania? Does Mr Twyford who has had so much to say when interjecting think that it is smart that the New Plymouth District Council has got millions of dollars invested in dairy farms in Tasmania? He is suddenly silent. The reason is very simple. It is that just as we in central government define that we have roles for our courts for our education for our health and for our welfare it is absolutely sensible for Government to set down and say to our councils: “Your job is to provide good quality local infrastructure. It is your job to provide those good important local services like libraries and like parks.” And thirdly it is important—actually a very important role—for our councils to provide efficient local government services.  
I want to deal with the issue of council mergers because that has caused some commentary from members opposite. My challenge to them is this: there have been 14 attempts under the old legislation to reform councils and every single one of them has failed. I have a simple question for members opposite: was it sensible when we had the Banks Peninsula District Council and Christchurch City Council wanting to merge—one Banks Peninsula District Council voted for and one voted against—that that merger was able to be achieved by the Banks Peninsula District Council effectively voting itself hara-kiri? That was the way that that reform occurred. That is under the existing Act. Do members opposite really believe that that is a sensible way in which to advance local government reform?  
Could I test a further idea around democracy. What the Greens have just argued is that you should not be able to have local government reform unless every single district agrees. Let us apply that to a very important referendum we had recently. Should we have a view that we should not have had MMP unless every electorate had a majority voting for it? There were electorates like for instance Clutha-Southland that voted no. They did not want MMP. So should we have said in 1993 when we reformed from first past the post to MMP that unless every single subcomponent of New Zealand agrees there will be no change? It is our view that in these times we do need to be looking at our local government structures to ensure that they are efficient. The track record is that the current system does not work and that it is too resistant to change. I think we have to have an honest conversation. Auckland would never have reformed itself. And for all the noise that we get from Phil Twyford my simple question to him is this: with the existing system which is in the 2002 Act that you are responsible for would you have got that long-overdue reform in Auckland if you had waited for the provisions of the existing Act to work? Every member of this House knows in their heart of hearts that those Auckland councils would never have been able to move forward and move Auckland forward in the way they have.  
I want to make one last point and that is about the intervention powers. It was somewhat ironic hearing from Eugenie Sage about the Minister of Local Government’s power to make decisions. Is it not interesting how Environment Canterbury has performed so well over the last 4 years? We have now got a plan to clean up Lake Ellesmere. We have got a higher level of compliance in resource consents. In fact the biggest level of improvement in resource consent compliance has been in Canterbury. But the point I want to make is this: at the moment the only power the Minister of Local Government has is to fire a council. It is absolutely sensible that this bill gives the Minister lower-order powers— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am sorry to interrupt the member but his time has expired.