Smith Nick: Local Government Act 2002 Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Smith Nick: Local Government Act 2002 Amendment Bill — In Committee 
[Sitting date: 27 November 2012. Volume:686;Page:6782. Text is incorporated into the Bound Volume.] 
Hon Dr NICK SMITH (National—Nelson) 
: 
 I look forward to participating in the Committee stage on this important bill the Local Government Act 2002 Amendment Bill because there are thousands of New Zealanders who are concerned about the compounding increase in rates and costs of local government who are genuinely concerned about the level of debt and who want to see a Government that has got the courage to make some of the changes in this important sector to ensure it supports this Government’s plans for economic growth. 
I want to make a number of key points. The first: does this bill have strong support amongst New Zealanders? 
Hon Members 
: No. 
Hon Dr NICK SMITH 
: Well members opposite say no. Let me just give a couple of examples. In my annual newsletter to every one of my constituents I include a questionnaire. It covers issues on gay marriage and on euthanasia. It includes questions on things like mineral developments and I have to say to members opposite that gay marriage is pretty close actually. My community is pretty evenly divided. In respect of— 
Hon Phil Goff 
: What percentage of people returned the survey? 
Hon Dr NICK SMITH 
: Actually over 2000 responses Mr Goff. And do you know that 87 percent of my constituents supported the need for this reform? Then let us look at an organisation like the New Zealand Council for Infrastructure Development an organisation that was championed by members opposite. Did we see the release from the Council for Infrastructure Development last week? Its survey showed that 80 percent of New Zealanders wanted to see a Government pass legislation that would result in a lower— 
Hon Annette King 
: How many returned the survey? 
Hon Dr NICK SMITH 
: The question members ask is what level—well let me give you an example. I have done a survey of my electorate every year that I have been a member of Parliament. Do you know this year’s response of over 2200 was the highest response ever? I challenge— 
Hon Phil Goff 
: 2000 out of 50000. What about the other 48000? 
Hon Dr NICK SMITH 
: If you have got 48000 households in your electorate Mr Goff you are obviously the guy who has been doing the numbers on Labour’s housing policy because you are out by more than half. 
Then let us come to the numbers. I have heard speech after speech from members opposite that say the numbers do not support the Government’s reform of local government. Well let us go through them. Statistics New Zealand says that over the last 10 years the Consumers Price Index for rates has gone up faster than any other component of the Consumers Price Index—faster than food faster than fuel faster than electricity faster than clothing faster than insurance faster than any other—at 7 percent per year. Do members opposite dispute those figures? 
Hon Annette King 
: Yes because it’s not a fair comparison. 
Hon Dr NICK SMITH 
: Oh Annette King says—well there are actually two sources for those figures. The Consumers Price Index shows the 7 percent per annum compound increase and at the same time we know that Statistics New Zealand’s actual addition and reporting specifically on local authorities match up with that 7 percent compound figure. 
The thing that is really interesting is this. In the 10 years prior to 2002 when Labour rewrote these government laws and provided these general powers the average increase was just 3 percent per annum. Did you know that if rates over the last decade had followed what they had been doing for the previous decade New Zealanders today would be paying $1 billion a year less in rates or $500 less for every single household? Members opposite say that I do not care about that stuff. Well actually they are completely out of touch with the real issues that are facing New Zealand households. It is pure fluff for them to be shedding crocodile tears about New Zealanders not being able to afford housing and then in the next breath not caring about the very large increase in costs in things like rates and other expenses that are making that dream of wanting to own a Kiwi home so much more difficult. 
Then let us look at the issue of debt. When Labour passed its massive reforms of local government on debt in 2002—go back and read the  
Hansard 
—it said there would not be any increase substantially above historical trends in either rates or debt as a consequence of its changes. That is what it said. That was the assurance that the Annette Kings and the Phil Goffs gave the people of New Zealand in 2002. Well what has happened? The level of local council debt throughout New Zealand in 2002 was $2 billion. Today it is $8 billion. That is a fourfold increase. But the more concerning fact is this. If we look at the 10-year plans that have just been published by our councils throughout New Zealand they show that level of debt which had gone from $2 billion to $8 billion going from $8 billion to $19 billion—to $19 billion. What do members opposite say about the level of council debt in this country going from $8 billion to $19 billion? They say it does not matter. I say open your eyes. Look at the world and the damage that is being done by toxic debt. Do you not take on board the real necessity—whether it be farmers households Government or councils—to get debt under control? That is why I say to members opposite that this will—well the deputy leader of the Labour Party is nodding his head. Is he comfortable with the 10-year plans that have debt in our councils going from $8 billion to $19 billion over the next 10 years? 
Grant Robertson 
: I’m comfortable that it’s already at prudent levels. 
Hon Dr NICK SMITH 
: He says he is all OK about it. Well that is good because when we go to the next election New Zealanders will know that the Labour Party is more than happy to have rates continuing to go up by 7 percent per year just as they did when it was in Government. New Zealanders will know that if they vote for Labour they can count on even more local government debt and count on it continuing to go up. 
It is true that this bill changes the purpose of local government. We are very up front about what we stand for: we stand for limited government. We do not think government should be involved in every possible endeavour across every field. But let me test members opposite because the local government spokesperson for the Labour Party has said that she agrees that there should be a limit on what local government can do. Well that is very interesting because do you know what Crown Law advised the Local Government and Environment Committee about the level of limit that is provided to councils that can provide for social economic cultural and environmental well-being? The advice is that it provides absolutely no limit at all. If the council wants to buy a steel mill a corner dairy or a farm—if it wants to do any business it likes—the Labour Party says that that is OK. Well we do not. We are saying that councils need to be focused on providing good quality local infrastructure that they need to be focused on providing those important local services that only councils can do and that our councils need to be focused on providing really good quality regulatory services so that people can get sections subdivided and so there can be new homes at affordable levels rather than trying to do all things on the planet for mankind. 
You see this bill is about a very necessary change in local government. It is about the sort of change we need to get costs under control in that local government sector so that we can get the growth in the private sector where there are real jobs and the real creation of wealth for this country. This is a Government that is committed to sensible reform that will see New Zealand doing better. Council reform has to be part of that and that is what this bill is all about.