Sage Eugenie: Local Government Act 2002 Amendment Bill (No 3) — In CommitteeText is incorporated into the Bound VolumeSage Eugenie: Local Government Act 2002 Amendment Bill (No 3) — In Committee[Sitting date: 29 May 2014. Volume:699;Page:18492. Text is incorporated into the Bound Volume.]EUGENIE SAGE (Green): The Green Party strongly opposes the policy basis for the Local Government Act 2002 Amendment Bill (No 3) because it undermines local democracy it deprives councils of significant and important revenue from development contributions and it compromises their ability to fund and provide basic community facilities. We do not regard libraries sports centres and swimming pools as “nice-to-haves”; we regard them as part of a civilised city or town and something that the community benefits from.This whole bill encapsulates National’s lack of respect for local government. It continues the approach that National adopted with the 2012 amendments to the Local Government Act 2002 when it centralised power gave more power to Ministers to override local government and constrained local government with a whole raft of requirements that do not apply to central government agencies. The Green Party believes that citizens’ ability to elect local representatives and to make decisions about local matters is a fundamental democratic right and that this bill—like so much of National’s meddling with local government—actually overrides those rights and shows quite a lot of contempt for them.National says that this bill is part of its Better Local Government programme but we cannot see how it is promoting better local government if you are weakening the democratic base of councils weakening their capacity to represent their local communities and increasing the regulatory burden on them—because this bill is another 128 pages of law on local government. The Local Government Act 2002 has already grown in recent years from being about 350 pages long to 465 pages. How can it make local government better by adding another 128 pages? The Government is taking away the power of local councils to make the decisions that affect their communities. As the size of the Act increases so does the regulatory burden and so do the costs faced by councils charged with its implementation. That shows the shallowness of the Government’s efficiency agenda. As the Green Party has said before it would be so much better if the Minister of Local Government and the Department of Internal Affairs worked with Local Government New Zealand and councils to provide good guidance rather than using this sledgehammer of new law to impose its wishes and additional requirements on councils.In this first call I would also like to talk about development contributions. The Minister says that development contributions will lead to more affordable housing. That is quite at odds with a lot of the submissions that the Local Government and Environment Committee heard. The Tauranga City Council and developers associated with the city council opposed the changes to development contributions. They opposed this very narrow definition of “community infrastructure”. The Tauranga City Council said that the bill would do little if anything to promote the delivery of more affordable housing because of course development contributions make up only a very small portion of the costs of developing new sections and houses. The council thought it was quite unlikely that any reductions in development contributions would actually be passed on to consumers by developers. They make up only 4 percent of the total cost of a new 145 square metre house and land package in Auckland and in Tauranga which is another high-growth area the council estimated that these changes might reduce the cost of a new house by $750. That is chicken feed when you look at the overall cost of houses of around $400000.The whole purpose of development contributions is to enable councils to recover from developers a fair and equitable portion of the costs of the capital expenditure that is needed to cater for population growth. They are a way of ensuring that new ratepayers pay their share of putting in new infrastructure to service them rather than that all falling on existing ratepayers and they help reduce the pressure on rates revenue.I am intrigued that the Minister said that councils are supporting this bit of the bill because Local Government New Zealand in its submission said that the development contributions aspect of the bill was the most concerning to councils because of the way in which it restricted the definition of “community infrastructure” to which development contributions could be levied and applied. We think it should be councils that anticipate where growth is going to occur and what sort of facilities should be provided to cater for that growth whether it is libraries swimming pools parks museums art galleries or the like. It is their responsibility; they are elected to represent their communities. It is very patronising that under this Government Ministers in the Beehive think that they know best and intervene to restrict the ability of councils to decide what sorts of facilities should be funded through development contributions.The changes that this bill makes are in marked contrast to what is happening in the United Kingdom where they have a Conservative Government. It recently legislated to give councils the right to levy development contributions for community infrastructure including libraries and swimming pools based on its view that those facilities are essential to community well-being not “nice-to-have” as the Minister says. These clauses in the bill are going to have quite a major impact on councils’ ability to fund community infrastructure.It was estimated by officials that it could have an impact of $510 million to $900 million over the next 10 years. In Christchurch the council estimated that it would reduce its revenue by $32 million compounding the financial challenges that that council faces. You have Ministers in the National Government railing against councils increasing their rates yet through this bill they are offloading additional costs on to ratepayers because you will not have development contributions as a source of funding for new swimming pools and the like.When you combine that with the oppressive requirements around the objection process for development contributions where property developers and others not only can make submissions on the council policy of how development contributions should be set but also now have the right to object on the actual amount of those contributions for particular developments it is going to mean that councils get very shy of investing in infrastructure that is going to be needed for future growth. That is where developers in the Tauranga area were very critical of the bill. That infrastructure that needs to be planned for the future needs to be invested in now so that development can occur. What this bill could potentially do is constrain future subdivision and development and constrain the supply of land for housing by making councils wary of planning for new facilities and looking to finance those through future revenue raised through development contributions.The bill is also really unwise because councils such as Auckland Council have engaged in considerable consultation with developers and others to finalise their development contributions policy. What the bill does is it cuts right across that. It is very short-sighted. It will provide a short-term gain for some land developers and property developers. But it is very short-sighted because it is not planning for the future. It is not going to accommodate and provide good facilities in new areas around Auckland Tauranga and other centres. It will increase rates quite substantially by reducing the ability of councils to use development contributions for some quite basic community facilities.We will talk in other calls on some of the other failings in the bill in terms of the way it overrides our competent councils by replacing them with local boards. But this issue around development contributions is providing for short-term needs and it is not looking to the future. It will potentially lead to some of our new subdivisions and developments being much more like ghettos than real communities because the facilitieswhere communities can gather where children can play will be much more difficult to fund and build.