Wagner Nicky: Local Government Act 2002 Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Wagner Nicky: Local Government Act 2002 Amendment Bill — First Reading 
[Sitting date: 12 June 2012. Volume:680;Page:2843. Text is incorporated into the Bound Volume.] 
NICKY WAGNER (National—Christchurch Central) 
: 
 It is very interesting to listen to the member Phil Twyford and think that there is absolutely no correlation between what he says and what is happening in the real world out there. He has no knowledge at all of what is happening globally or in the economy. As the world changes socially and economically as new technologies develop and as new issues arise how we organise our lives our cities and our institutions needs to change as well. This Government is introducing these local government reforms as part of our focus on developing a more competitive and more productive economy because that is what is going to give us a better future in the long term. We want to use our resources more wisely. We want to get more for less out of our institutions and our organisations. We want to manage our finances better. We want to reduce waste and get better value for money in everything we do.  
The Local Government Act 2002 was supposed to improve local government management and we were assured—if you can remember back to 2002—that it would not add any significant costs but it did. Over the last decade rates have become more and more unaffordable for many more people. In the last decade rates increased by an average of 6.8 percent every year. That is double the rate of inflation. Operational costs have ballooned out. Local government salary costs are significantly higher than central government or private enterprise costs. Local government debt has quadrupled from $2 billion to $8 billion. Whatever you say more debt is bad. It increases uncertainty and increases liability. While households and businesses are being prudent and responsible—they have been belt tightening they have been managing their costs and they have been paying down debt—local government costs continue to rise. In the face of global financial pressure and monetary uncertainty ratepayers are becoming increasingly anxious and concerned about paying their rates and ongoing rate increases. Ordinary households and businesses have absolutely no control over rates. They have no choice but to pay those rates and they want to see councils tighten their belts too as they have done themselves.  
While working on the Local Government Act 2002 Amendment Bill local government Ministers have met with Local Government New Zealand mayors right across the country regional council chairs regional chief executive officers and numerous ratepayer groups in order to understand the issues and to formulate these amendments. This bill is the first phase of local government reform but it really focuses on four main initiatives. The first is to refocus the purpose. It is all very well for Mr Twyford to say that that will not make a difference but ratepayers tell us that what they want from their councils is reliable and effective infrastructure and they want efficient public service at an affordable cost. That is what they want so we are going to reword the purpose to cover that. We are going to say “to meet the current and future needs of communities”—so current and future thinking into the future—“for good-quality” not rubbish but good quality “local infrastructure local public services and performance of regulatory functions in a way that is most cost-effective for households and businesses.” We believe that this will focus councils on the roles and the duties that are of most value to ratepayers but it will still allow for individual differences for those communities.  
Ratepayers also tell us that they want the best possible financial management by their councils and that makes good sense. We want to introduce consistent financial prudence requirements across local governments and that means introducing regulations that will allow for financially prudent parameters and benchmarks. Under present legislation—the famous 2002 Act by Labour—councils already have to exercise prudent financial management and they have to exercise prudent stewardship of their resources. But if we can develop benchmarks for this process—and they will be developed with the consultation of Local Government New Zealand—that will allow a greater understanding for everybody and greater transparencies in finance for everyone. Because financial management will be consistently measured across the country it will be far easier to see when a council is out of step or a council is performing poorly and it will be far easier to identify when a council is struggling and might need Crown assistance or even require intervention. 
Ratepayers also tell us that they want councils councillors and mayors to be more responsible to the people who elect them. We want to strengthen council governance by giving mayors a stronger leadership role so that they can have that role over developing plans policies and budgets and we want to give them the power to appoint deputy mayors and also the chairs of committees so that when they go and take charge of a council they can make sure that what they have promised can be delivered. We also want to give more powers to councillors. When you think about it staffing and salaries are the major drivers of increased costs in councils. Presently councils have absolutely no control over these matters. We want to make sure that councils are able to set employee numbers and salary scales and we want them to report on that salary information in their annual reports. We believe that these measures will make councils more conscious of the cost and more accountable to the public.  
The ratepayers also tell us that they are open to change in the structures of local government if it gives them better efficiency. We want communities and councils to have more flexibility in developing reorganisation proposals. The current process that is being used is lengthy it is complex it is expensive and it is actually rarely successful—very rarely. We want to empower communities and councils to make changes that have the potential to achieve efficiencies and better decision-making. The new legislation will make it easier for the community-led local government reorganisation to succeed and it will also give greater flexibility to the Local Government Commission to develop reorganisation proposals. There is absolutely no doubt that effective and affordable local government is essential for the running of every New Zealand household and business. I think that this amendment bill is designed to provide a better understanding of councils’ roles. It should give us stronger and more effective governance improved efficiency and more prudent financial management. I commend this bill to the House.