King Annette: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
King Annette: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 20 March 2012. Volume:678;Page:1060. Text is incorporated into the Bound Volume.] 
4. 
Hon ANNETTE KING (Labour—Rongotai) 
 to the  
Minister of Local Government 
: What recommendations from at least three government reviews of local government since 2006 are yet to be implemented and if any have not been implemented yet why not? 
Hon Dr NICK SMITH (Minister of Local Government) 
: 
 There were two reports in this period to the previous Labour Government and one to this Government. The report to this Government was from the royal commission of inquiry into Auckland governance. It had 169 recommendations and we have largely implemented these. The debates at the select committee and in Parliament record why some recommendations were not implemented. The previous Government received two substantive reports. The first was the rates inquiry done by former Labour candidate David Shand in 2007. The then Government did very little with it and I am not privy as to why. A key recommendation was that central government provide a share of GST to local government. Sadly when we came into office the cupboard was bare and that was not an option. We also believe the answer is not in shifting the costs but in actually getting the steep rise in local government costs under better control. The third report was also received by the former Government and contained no substantial recommendations regarding legislative change. The one legislative change this recommended is included in yesterday’s announcements and that is in respect of greater flexibility about the sizing of rural wards. 
Hon Annette King 
: Is he aware the Local Government Rates Inquiry panel said that although it received submissions suggesting amendments to the Local Government Act 2002 have led to increased costs because councils have moved into activities outside their core business the panel could find little evidence to support this; and what new evidence has he received since last Tuesday when he told me that he had no reports from local authorities on new core activities? 
Hon Dr NICK SMITH 
: The rates inquiry in 2007 concluded that the very steep increase in rates between 2002 and 2007 was the transitional cost of implementing those new 2002 Act requirements and that it expected in future years the rates increases would taper off. In fact in the 5 years since we have seen rates increases continue to compound at 7 percent every year and the conclusion that this Government comes to is that the 2002 very politically correct Local Government Act which was put in place by members opposite has proved to be a very expensive experiment for New Zealand landowners. 
Hon Annette King 
: When he said on radio this morning that councils’ job is not to replicate the private sector or the role of the Government but to “focus on those things only councils are able to provide” will councils now need to sell their housing bus services and ownership of airports and ports and remove subsidies for early childhood centres and so on because these are all activities the private sector is involved in; if not where is the list of services that are in and those that are out? 
Hon Dr NICK SMITH 
: The current provision in the Local Government Act is that councils are to provide for social economic environmental and cultural well-being and that is why councils can do absolutely everything: buy farms in Australia be involved in greenhouse gas targets run schools run hospitals. The new provision in the law is going to be simply this: the core role of councils is to provide good quality local infrastructure to provide local public services and to provide regulatory functions. My view—and interestingly the widespread comment I have heard from all around New Zealand today—is that change is being broadly welcomed. 
Hon Annette King 
: I raise a point of order Mr Speaker. I used the Minister’s own quote on what local government would do and then asked him would it now mean that local government will have to sell its housing bus services and ownership of airports and ports and remove subsidies from early childhood centres because they are provided by the private sector; if not what is the list that they would do? The Minister raved on about what was in his proposal— 
Mr SPEAKER 
: Order! The member was not doing too badly until she accused the Minister of raving on. [ 
Interruption 
] Order! The Minister said that the new bill if I heard correctly would lay down what local government would be involved in and that the list included local public services—and local public services cover a number of the issues that the member included in her letter. I cannot ask the Minister to answer in any particular way but I think he made it pretty clear what his proposal would cover. 
Hon Annette King 
: Did he decide to include fiscal responsibility requirements in his eight-point reform plan on the advice of his coalition partner the Hon John Banks who in his last term as Mayor of Auckland oversaw a trebling of the Auckland City Council’s debt from $135 million to $738 million excluding debt associated with the formation of the super-city; or was it just a lapse of judgment? 
Hon Dr NICK SMITH 
: My colleague John Banks has been one of a group of Ministers particularly in his role in regulatory reform who have advocated for stronger fiscal discipline within local government. I would just suggest to the member opposite that since the 2002 Act which Labour put in place local government debt across New Zealand has grown from $2 billion to $8 billion. I ask members opposite to reflect on the assurances they gave ratepayers in 2002 that their changes would not result in increased rates—and they have done exactly that. 
Hon Annette King 
: Does he think it is fair to criticise councils for increasing their debt from $2 billion to $8 billion in 10 years when his Government holds the record for increasing debt from $8 billion to $50 billion in just 4 years? 
Hon Dr NICK SMITH 
: When we came to Government we faced a decade of deficits from the fiscal mess left by the profligate Labour members opposite and I must praise the Minister of Finance and the team that works in that area for setting out a clear plan for debt reduction. The difference between local and central government is that local government’s debt is projected to continue to increase whereas this Government has set out a very clear plan to reduce borrowing. 
Mr SPEAKER 
: I say to members that a little bit of steam has been let off but the noise is—[ 
Interruption 
] Order!—unacceptable. 
Te Ururoa Flavell 
: Tena koe Mr Speaker. Kia ora tatou katoa. Can the Minister confirm that one of the outcomes from the review of local government was that local bodies should consult with whanau hapu and iwi in matters of mining licences to prospect explore and develop for example the East Coast of the North Island; and what evidence would he expect to be available to ensure that this happens? 
Hon Dr NICK SMITH 
: I want to acknowledge the representations that the Maori Party has made to me as Minister of Local Government and as Minister for the Environment and also to my colleague Phil Heatley around the importance of Maori being included in decisions around resources such as minerals. I know that there are specific consultation provisions that have been set down in respect of minerals. The member would also be aware of the very specific provisions that have been included in the exclusive economic zone legislation that has also been a consequence of the strong advocacy of the Maori Party. 
Hon Annette King 
: Is the difference between council debt and Government debt that councils have borrowed for vital infrastructure within their communities whereas this Government has borrowed to give tax cuts to the wealthiest in New Zealand? 
Hon Dr NICK SMITH 
: It is ironic that members opposite have repeatedly objected to every measure this Government has taken to get fiscal costs under control and that they have continuously argued including in the election campaign for more Government spending not less. So I do not think there is any question in the House that it is members on this side of the House who represent fiscal prudence both in central and in local government.