Carter David: Local Government Act 2002 Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Carter David: Local Government Act 2002 Amendment Bill — First Reading 
[Sitting date: 12 June 2012. Volume:680;Page:2839. Text is incorporated into the Bound Volume.] 
Hon DAVID CARTER (Minister of Local Government) 
: 
 I move  
That the Local Government Act 2002 Amendment Bill be now read a first time. 
 I nominate the Local Government and Environment Committee to consider the bill. At the appropriate time I intend to move that the Local Government Act 2002 Amendment Bill be reported to the House by 15 October 2012. 
Can I start by acknowledging the excellent work of my colleague Nick Smith and his work in developing the Better Local Government reforms. 
New Zealand’s 78 local authorities are a significant component of the New Zealand economy. They make up 4 percent of GDP spend $7.5 billion per year of public money and manage $100 billion worth of public assets. They deliver a wide range of critical regulatory functions and local public services that directly impact the lives of New Zealanders every day. Central government has a part to play in creating an environment in which local government is better able to contribute to building a more productive and competitive economy and to deliver better local public services. Local government can then be better positioned to create the environment for local businesses and industry to emerge and grow and for communities to flourish. This Government’s programme for reform of the local government sector aims to improve the operation of local government here in New Zealand. It will focus local authorities on operating more efficiently and effectively by doing things that only they can do. It will deliver settings that will encourage local authorities to reduce red tape and compliance minimise rates for households and businesses lower their debt and provide high-quality infrastructure at the least possible cost. 
The Government’s programme for reform of the local government sector comprises two distinct phases. The first phase will refocus the purpose of local government introduce financial prudence requirements for local authorities strengthen local authority governance provisions and streamline local authority reorganisation procedures. The second phase of the reform programme will consider the report of the Local Government Efficiency Taskforce which I announced last week. It will also develop a framework for the interface between central and local government regulatory roles investigate the efficiency of local government infrastructure provision and review the use of development contributions. 
This bill the Local Government Act 2002 Amendment Bill amends the Local Government Act 2002 to give effect to the first phase of the Government’s reform programme. Firstly the bill refocuses the purpose of local government. The purpose in the bill provides for local authorities to meet the current and future needs in their communities for good quality local infrastructure local public services and performance of regulatory functions in a way that is most cost-effective for households and businesses. Having a clear and focused purpose statement is necessary for the efficient running of local government in New Zealand. 
The second area of reform is the establishment of financial prudence requirements for local authorities. In line with central government and households and businesses councils must restrain spending keep costs down and run as efficiently and effectively as possible. In building a more competitive and productive economy it is critical that both local and central government take a prudent financial approach to public money. This bill provides for regulations to set benchmarks for the prudent overall management by councils of revenue expenses assets liabilities investments and general financial dealings. 
The bill contains three mechanisms to strengthen local authority governance provisions. There will be provision for a simpler more graduated mechanism than is currently available for central government to assist struggling local authorities and intervene before situations become critical. In particular the new mechanisms can be used where local authorities are failing or are close to failing the new financial prudence requirements. The leadership roles of mayors will be strengthened in line with that of the Auckland mayor under the Local Government (Auckland Council) Act of 2009. Mayors will be given governance powers that will align with the level of public responsibility they have for council decisions and that will support clear strong leadership by mayors. Elected councils will be specifically enabled to determine policies on staff numbers and remuneration and they will be required to report annually on staff employed by salary bands. 
The fourth area of reform in the bill is the streamlining of local government reorganisation procedures for the union abolition and constitution of districts and regions and the creation of unitary authorities. Currently such reorganisations can proceed only if they are supported by more than 50 percent of the votes cast in each affected district or region and reorganisation involves a long and complex process. This bill will make it easier for communities and local authorities to apply for a local government reorganisation and it will give the Local Government Commission more flexibility in considering applications. Reorganisation applications will need significant community support before the commission can progress them. 
The Local Government Act 2002 Amendment Bill is an important milestone in progressing the first phase of the Government’s programme for reform of the local government sector. These reforms are important for New Zealand communities for business and industry and for individual households. I believe that these changes will improve the efficiency and effectiveness of local government and provide the right settings for the local government sector to play its part in growing the New Zealand economy. I commend this bill to the House.