Sage Eugenie: Local Government Act 2002 Amendment Bill — Third Reading 
Text is incorporated into the Bound Volume 
Sage Eugenie: Local Government Act 2002 Amendment Bill — Third Reading 
[Sitting date: 29 November 2012. Volume:686;Page:6962. Text is incorporated into the Bound Volume.] 
EUGENIE SAGE (Green) 
: 
 Tena koe Mr Speaker. The Green Party continues to oppose the Local Government Act 2002 Amendment Bill. The passing of this bill will be a very sad day for local government and democracy in New Zealand. That is partly because of what it says and what it symbolises about the relationship between central and local government. As I said at the second reading of the bill National does not understand it does not respect and it does not trust local government and the communities that councils community boards and local boards represent. Given the breadth of services and responsibilities that local government provides its role in environmental management of our lands our coasts our air and our water and its massive contribution to shaping the places that we live work and play in it is deeply disappointing that the Government does not understand local government and has made such an attack on it through this bill. 
It is local government decisions about what sorts of services should be provided that are often the most direct and concrete expression of democracy. It is very disturbing to see the changes that this bill makes to that and to the relationship between central and local government. In New Zealand we have a fragile democracy. We may have a proud history of suffrage our country being the first where women gained the right to vote but we do not have a written constitution we do not have a second Chamber and we do not have a supreme court that can overturn legislation. The fact that Parliament is sovereign means that at the moment when we have a strong and independent local government arm that represents a check and a balance. This bill in undermining the independence of local government by increasing the powers of ministerial interference and intervention compromises that independence and compromises the check and balance that local government provides. 
It puts councils under the thumb of Wellington. It will have them looking through the benchmarks to see how they are performing in relation to the Minister of Local Government’s opinion rather than directing their relationship primarily to the communities that they represent and that elect them. As the Auckland District Law Society said in its submission “the proposals for intervention are not only unnecessary they are constitutionally untenable and strike at the heart of the notion of a separate institution of local government.” Local government should be accountable primarily to its community through the consultation it does through the representation function and through the election and the power of the ballot box every 3 years. It is elected councils that work closely with their communities that are best placed to decide the services and the range and scope of those services that they should deliver not central government. It was the Local Government Act 2002 that recognised that by putting at its core the purpose of enabling democratic local decision-making by and on behalf of communities and by promoting the community’s social economic environmental and cultural well-being. 
National is taking an axe to both elements of this purpose and to the operation of local government through this bill. It is doing that through the deletion of the four well-beings and through the new purpose which requires councils to meet the need for good quality infrastructure which is defined through cost-effectiveness as if dollars were always the fundamental assessment of value. Of course cost-effectiveness is important but it should not be the sole criteria by which local councils make their decisions about what sorts of services they provide because that risks the decisions being focused on what is cheapest it risks challenges to those decisions and it risks an under-investment in infrastructure and infrastructure maintenance. The change that this bill represents to local government is potentially the most significant change in the sector since the major reorganisation in 1989. 
The other major change is these powers of ministerial intervention in relation to “significant problems” as defined by the Minister and the ability for the Minister to appoint a Crown observer a Crown review team a Crown manager or of course commissioners. It should be the local councils deciding where they need assistance and getting it from independent agencies not the Minister intervening. We know that the Government has included this part of the bill because it wants to spare itself the embarrassment of bringing to the House legislation like the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill which we have before the Local Government and Environment Committee at the moment and the 2010 bill which interfered in a council and replace elected councillors with its self-appointed commissioners so that it can ensure it gets the right decisions at the regional and local level. It is very rich for Minister Williamson to talk about listening because the Local Government and Environment Committee had over 500 submissions and the submissions overwhelmingly opposed the change to the purpose of local government. It is enormously corrosive of people’s faith in the democratic process when those submissions are given so little weight. 
The other major thrust of the bill which we have heard from the Hon Dr Nick Smith is about rates rises and debt rises and the need for the benchmarks to improve financial management. By international standards there is a very high level of financial management in terms of the rigour and transparency of that in local government. We have draft annual plans being put out for public consultation—draft 3-year plans. Councils have to do an annual report. A financial strategy has to be prepared in terms of changes to and increases in rates. All of those measures and the fact that they are reviewed by the Office of the Auditor-General promote transparency and rigour. We do not have a draft Budget being put out by central government for consultation by people. The focus on rates is partly because these rates are paid out of people’s net after-tax income. It is not like the PAYE tax which is paid before people receive it. That is why there is so much focus on rates in the community—because they come out of the net income. 
 This whole proposal of establishing benchmarks—fortunately by a Supplementary Order Paper there has been a change so that the benchmarks are no longer tied to the intervention powers. But the Auckland Council was very clear that the benchmarks and the soft cap that they will potentially impose on rates will not improve the council’s financial management. Potentially they make it much more difficult because they will degrade rather than enhance the council’s ability to manage its affairs in a financially and fiscally prudent manner because they potentially lead to a change in the credit rating. The security against which councils borrow is their ability to raise rates to meet their debt obligations. If you have soft caps that reduces the value of that security and potentially leads to a change in the credit rating and an increase in the cost of borrowing. As we keep saying to the Government borrowing spreads the cost of new infrastructure across several generations. Councils’ costs would not be rising if they were not investing in infrastructure which helps provide the basis of the economy. It makes sense to invest in infrastructure. 
The other reason this bill is wrong is that it is completely out of step with what is happening internationally. In the United Kingdom with the Localism Act you are building a capacity in local government to facilitate the building of stronger communities you are getting stronger community governance and you are getting more commitment to participation by the community in everyday decision-making. This bill runs completely counter to international trends. This bill is about the centralisation of Government. It is about having councils that are more distant from their communities and it is about trampling on local democracy through the reorganisation provisions. 
In conclusion the proposal in the bill for the changes to schedule 3 is eroding the democratic rights of citizens to decide how they will be governed. It will shift the onus from local government consulting with its citizens about whether reorganisation should occur to putting the burden on citizens to seek this petition to get a poll. It is much more onerous and it puts a great deal of power in the hands of the Local Government Commission rather than leaving the major decision-making in the community’s hands. That is why we oppose the bill.