Borrows Chester: Local Government Act 2002 Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Borrows Chester: Local Government Act 2002 Amendment Bill — Second Reading 
[Sitting date: 15 November 2012. Volume:685;Page:6735. Text is incorporated into the Bound Volume.] 
Hon CHESTER BORROWS (Minister for Courts) 
on behalf of the Minister of Local Government: I move  
That the Local Government Act 2002 Amendment Bill be now read a second time 
. Local government is a crucial component of New Zealand’s economy. The 78 local authorities make up 4 percent of GDP spend $7.5 billion per year of public money and manage around $120 billion worth of public assets. But behind these numbers is the simple fact that most New Zealanders are affected by the decisions and actions of their council on a daily basis and are certainly affected when they receive their quarterly rates bills. 
 Because local authorities have such an impact on the daily lives of New Zealanders and because they are charged with spending ratepayers’ money it is vital that they operate in an effective and efficient manner and this means being financially responsible transparent and accountable to ratepayers. That is why the local government reforms being undertaken by this Government are so crucial to New Zealand’s communities. The reforms will improve the operation of local government in New Zealand. They will focus local authorities on operating more efficiently and effectively by doing things that only they can do. The reforms will encourage local authorities to reduce red tape and compliance minimise rates for households and businesses lower council debt and provide high-quality infrastructure at the least possible cost. 
These reforms are not about bashing councils or imposing constraints on local democracy as suggested by Opposition members. These reforms are about putting in place a framework that means New Zealanders’ rates do not continue to increase on average by 7 percent per annum as they have over the last decade. Over this period local government debt has quadrupled from $2 billion to $8 billion. These trends must be stopped. These reforms are about ensuring that ratepayers are not put in situations like that the Kaipara District Council ratepayers are currently in where a council with a population of 18000 has run up a debt of $80 million and the community is left with crushing rates increases as a result. These reforms are about ensuring that communities can decide how they want to structure their local governance arrangements. Since 1989 no local government reorganisation has taken place under the existing rules. It is a nonsense to suggest that circumstances have not changed in the last 24 years or that communities have not wanted to change. The fact is that the barriers for communities to effect change have been too high. 
The Local Government Act 2002 Amendment Bill marks the first phase of the Government’s programme for reform of the local government sector. It amends the Local Government Act 2002 to refocus the purpose of local government introduce financial prudence requirements strengthen council governance and streamline local authority reorganisation procedures. The Local Government and Environment Committee received over 500 submissions on the bill from individuals organisations and local authorities. The level of interest was significant. 
I am therefore disappointed in the Opposition members on the select committee who turned down an offer to work constructively on this bill and disappointed about the disregard they showed for many constructive submissions. An offer was made by the chair to put some of the contentious parts of the bill to one side and constructively engage on the rest. Unfortunately this offer was not taken up. As a result the bill is returned to the House largely unchanged. 
Because of the committee’s inability to agree I will be tabling an amendment during the Committee stage that will pick up on many of the good ideas from submitters and address the issues that they raised. These include making it easier for communities to exercise their vote in a poll by changing the petition requirements needing 10 percent of voters in any affected territorial authority area and increasing the number of days allowed to complete the petition from 40 days to 60 days. Further amendments will provide clarity around the circumstances where the Government might consider using the assistance and intervention framework and provide for a more flexible structure for communities to reorganise their local governance arrangements should they wish to do so. The proposal will enable some regions to utilise a two-tier structure that will deliver the most effective local governance for the community. 
The few amendments that the committee has recommended clarify the bill’s intent and improve its operation and the Government will be supporting them. One area of the bill where the Government will not be proposing changes is around the purpose statement. I have carefully considered the differing views on this issue but I firmly believe a more focused mandate for local government is necessary. The intention is not to prescribe what local authorities can and cannot do but rather to better define the appropriate scope of their activities. Individual local authorities and their communities will decide what activities matter to them and how much they are willing to pay for them. The new purpose statement will encourage local authorities to take a fresh look at what they are doing and why and to seek their community’s guidance as to what their current and future needs are. 
This bill is an important milestone that will improve the efficiency and effectiveness of local government. It will provide the right settings for the local government sector to play its part in growing New Zealand’s economy. It will develop vital reforms to benefit our communities businesses industries and households for many years to come. I commend the bill to the House.