Hide Rodney: Local Government Act 2002 Amendment Bill — In Committee Third Reading 
Hide Rodney: Local Government Act 2002 Amendment Bill — In Committee Third Reading 
[Volume:660;Page:15582] 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 I move  
That the Local Government Act 2002 Amendment Bill be now read a third time 
. The purpose of this bill is to improve transparency accountability and financial management in local government. Before the development of this bill the Local Government Act 2002 contained few mechanisms to apply the principles of transparency and accountability which it seeks to promote. Although it resulted in a lot of information being made available by councils it was not always easily accessible to ratepayers or easily understood. 
The accountability mechanisms are retrospective so do not provide ratepayers with any effective ways to control their councils. With this bill I hope to change all that. It includes a number of new measures to improve transparency and accountability. Having a financial strategy for example makes transparent the overall effect of council proposals on rates debt investments and services. It sets limits on rates and borrowing which creates an accountability mechanism. Further transparency and accountability are then provided through the pre-election report. This will compare actual rates rates increases and borrowing and returns on investments with the limits and targets set out in the financial strategy. Voters will receive this and other information about their council’s finances and proposed projects at the time they are best able to hold members to account—the local election. 
There is more focus on financial information and management. A basic understanding of council finances is crucial if people are to ask better questions or indeed any questions of their council. Not everyone is an accountant which is why having plain English financial information and standardised reporting is so important. Standardised information is particularly useful for infrastructure services. The ability to fund investment in infrastructure is the biggest factor affecting councils’ financial sustainability and is where the most money is spent. 
Providing ratepayers with comparative data on the levels of service for things like roads water and waste water helps to inform them about what they are getting for their money. It also helps them to ask questions about their council’s performance and the issues they are facing relating to these services. The Government takes seriously infrastructure and its important links with economic growth. Ensuring councils provide good information about their infrastructure assets and services is essential so that neglect does not hinder economic performance. 
The proposals in this bill can go only so far in making a difference though. What happens next is up to councils individuals and communities. The bill provides for better quality information so there are more transparent processes for making decisions about strategic issues. Councils will be left to establish and run these processes for themselves. However no one can force ratepayers to take advantage of this new information or to be more actively engaged in local debates and decision making. It is up to them to choose to participate. On that note I do not think fears that there will be a lack of consultation in the future are warranted. 
Community engagement is not just about making a submission as part of a formal consultation process. People should be encouraged and enabled to make their views known whenever they like. Having better information about a council’s finances and proposed projects about how much services will cost to deliver and about what they are getting for their money—and being able to compare this with information from other councils—will put ratepayers in a better position to put their views across to their council more clearly and more comprehensively. It should mean that when consultation does occur the public will be in a stronger position to participate. It should mean that when councils are required to make themselves aware of and have regard to the views of communities as the Act requires they can generally give effect to this principle. 
During the course of developing and enacting this bill much has been made of the concern that it encourages the privatisation of water and other council services. The bill does not privatise anything. The councils and their ratepayers will make their own decisions. If at some point in the future they decide that some private involvement in their services is the right thing for them that it is the best way for them to pay for these services and keep them affordable for local people then that is up to them. If the bill makes it a bit easier for them to make these decisions then I say it is great. If they do not make any change at all then that is their choice too. 
Likewise if councils want only to provide so-called core services and their communities are happy with that then that is up to them. If councils want to provide more and they have community and ratepayer support that is their choice as well. But ratepayers have a right to challenge the council if it wants to spend their money on something that is not a core responsibility particularly if it might take priority over other more essential local services. Having the core service provisions in the Act will help to guide councils and communities when they are debating these issues. That along with the financial strategy and other new information will empower ratepayers to question council decisions and to discuss trade-offs on a more equal footing. 
As I have mentioned throughout my speech this bill is about choice. It is about giving councils and communities more flexibility to choose to deliver local services in ways that are right for them. It is about giving ratepayers better information about their councils so they can choose what kinds of services they want and how they want to pay for them to choose how and when to be involved in decisions and how and when they need to hold councils to account for those decisions. 
Councils will start developing their first long-term plans using the provisions of this bill early next year. I hope councils and ratepayers will choose to take advantage of the new opportunities the bill introduces. I thank the House for its support.