Local Government Act 2002 Amendment Bill (No 3) — In CommitteeText is incorporated into the Bound VolumeLocal Government Act 2002 Amendment Bill (No 3) — In Committee[Sitting date: 29 May 2014. Volume:699;Page:18488. Text is incorporated into the Bound Volume.]Local Government Act 2002 Amendment Bill (No 3)In CommitteePart 1 Amendments to principal ActHon Peseta SAM LOTU-IIGA (Associate Minister of Local Government): Talofa lava Mr Chairman. It is a privilege to speak on this the Committee stage of the Local Government Act 2002 Amendment Bill (No 3). This bill is about encouraging and facilitating improvements in how local government operates. It builds on the Government’s Business Growth Agenda to build a more competitive and a more productive economy. It is about improving housing affordability which is such a big issue across this country particularly in Auckland where I reside but also in places like Christchurch Queenstown and other centres across our country.This amendment bill really is about making amendments to the development contributions regime that has been in place since 2002 when the Labour Government put this regime in place. It is quite clear under the definition of the Local Government Act 2002 that development contributions can be spent on capital expenditure for infrastructure as a result of growth—as a result of growth. It is not to be spent on non-growth projects maintenance or operation. It is not to be double-charged to developers for pet projects. What we have got over time has been an exploitation of that regime with examples like a timber processing mill in the South Island being charged $400000 when all the infrastructure—the pipes the sewerage—was already in place. Development contributions were charged—$400000. That is a tax on jobs. That is a tax on the economy. That is a tax on hard-working New Zealanders. This bill is designed and is framed in such a way that this type of charging of development contributions cannot occur.More recently in terms of residential development in Christchurch—and the Hon Amy Adams will know this—recently there were two apartments in Sumner that were charged a $72000 development contribution. That is just unrealistic.Hon Amy Adams: It is housing affordability shot.Hon Peseta SAM LOTU-IIGA: It is housing affordability shot as the honourable Minister has just said and it is really driving up prices around this country. This National Government has taken to refining this Local Government Act in order that we can get more appropriate charging so that we can improve fairness and transparency around development contributions and so that housing affordability improves across the country. We urge parties across this Chamber to support this bill.We can still charge development contributions on reserves and network infrastructure. Of course these are the essentials—not the “nice-to-haves” but the essentials: water waste water and stormwater. Transport infrastructure is critical. Community infrastructure was looked at in the Local Government and Environment Committee quite intently but in our view—and certainly in my view—limiting the community infrastructure to halls community centres toilets and play equipment is wholly appropriate. Again it is because we are trying to drive down the cost of new homes.Phil Twyford: Show some conviction Sam.Hon Peseta SAM LOTU-IIGA: I urge Mr Twyford to support us. I urge Mr Twyford to support this bill. I see that he has changed his mind on it. I see that he has changed his mind on the bill. I am glad because by limiting the definition of “community infrastructure” we are going to save on average across this country between $3000 and $3500 per section. This bill is very much welcome in Maungakiekie my own electorate. It is very much welcome inMāngere MrSio’s electorate. It will be welcome in TeAtatū which will be MrNgaro’s electorate or MrBridges’ electorate. It means that councils cannot provide this community infrastructure from other sources.Clause 60 of the bill also deals with development agreements. That is about encouraging councils and developers to work together. They can work together on alternative infrastructure provision arrangements. If you talk to developers out in the communities some of them are saying that they can build that infrastructure for less than the council can. If they can do that why not? Why can you not have a development agreement that allows a developer to get on with building new homes new plants and new warehouses and where they are able to go on and do the development with that infrastructure? An example of this is in Hobsonville where developers have said that they can do things cheaper than local government and the council and they went on and did it.If I could finally in my opening remarks just talk about the objection process. That process is about greater natural justice. It is about having independent commissioners who are experts in their field and who can adjudicate on an objections process in an objective way. It is about these commissioners bringing about timely decisions which are cost-effective and not just for councils but also for developers. Again it is about this Government showing leadership in terms of bringing down costs for development and bringing about better housing affordability for our communities who are really demanding that we bring down the costs of construction. It is aligned with the measures that the Hon Nick Smith mentioned earlier today in his answers to parliamentary questions which were about bringing about more supply of land to our communities through housing accords but also about bringing down the costs of materials.Phil Twyford: How’s that going that housing accord?Hon Peseta SAM LOTU-IIGA: Mr Twyford might ask how that is going. Well Mr Smith answered that we have now got record consents we have got record building occurring in Auckland City—Phil Twyford: It’s the market; it’s not you.Hon Peseta SAM LOTU-IIGA: —and Mr Twyford should support that. If we are not doing enough Mr Twyford says it is the market. If we are doing too much he says “Oh no you’re overextending yourselves. You’re intervening too much.” I encourage Mr Twyford to support this bill because again it is about bringing housing affordability to bear. It is good for New Zealanders it is good for our communities it is good for developers and it is certainly good for local government. We have the support of local government. Having spoken to a number of mayors this morning at the Central Government Local Government Forum they were extremely happy about the bill. They were extremely supportive of what we have brought about with this bill and they were particularly impressed that we had inserted transitional provisions in order that they can grandfather the current projects and the assets that have already been built going forward.So again I say to members opposite: support this bill support pro-growth and pro-jobs and the way that this Government has gone about promoting jobs and growth in this economy. Thank you.Su’a WILLIAM SIO (Labour—Māngere): Talofa lava Mr Chairman.The CHAIRPERSON (H V Ross Robertson): O a maioe?Su’a WILLIAM SIO:Manuiafa’afetai Mr Chairman.The CHAIRPERSON (H V Ross Robertson):Fa‘afetai lava.Su’a WILLIAM SIO:Fa‘afetaiua lavaloa.To just quickly respond to the Associate Minister of Local Government—people might think that he has a sore throat but he was choking on those words. He just struggled with trying to convince the rest of the Committee about whether theGovernment really does have any commitment to having more houses. I want to say to the public that the Government has no commitment. You heard earlier from the Minister of Housing and he listed the consents and the various dots on the map but there were not any houses. If you are wanting more houses the Labour Party is the party that you should look to in order to build 100000 houses in the next 10 years and that is what we will do. That is what we will commit to.Can I just briefly thank you Mr Chairman for the introduction in Samoan and with the indulgence of this Committee just briefly pay my respects to a Samoan elder inMāngere who has passed away. In accordance with Samoan Language Week this week may I just pay my respects to this elder by saying:Uagasolosolo aoiTaoaluga maTaoalalo o lemaota eafioaiSatele maouAlo.Uata’ape papaiSi’ufaga o lemaota eafioaiPaitomaleifi.UalagiafoiTuavao o lemaota eafioaiLeota.Uapō lenu’ui le Matua ma leFalefa o le AigaTalimalama maupu ia teoe leFalelua.Uausuia le fonoi leTofaTuigate’e o setasi opoutu o leEkalesia PICiMagele. The chiefTuigate’e TinoElia passed away this week at 83 years of age. He was a lay preacher for the Pacific Islanders Church inMāngere which the Minister would be aware of and a pioneering member of that church. More important to me and the people ofMāngere and particularly to the family he was a staunch Labour supporter going back to the days of David Lange. This man never forgot that David Lange asked him to be a JP and so he become a JP.May I simply give some preliminary comments about this particular bill the Local Government Act 2002 Amendment Bill (No 3) and say that our vision—Labour’s vision not this Government’s—is to ensure that local government is responsible responsive and accountable to local communities affordable for its residents and ratepayers and effective in dealing with local issues. The Government’s reforms to promote amalgamation council-controlled organisations and local boards are concerning not only to us but to the local government sector and to many ratepayer organisations. The true cost of the Auckland super-city reforms still has not been calculated and we should not be pushing that model out on the rest of the country ignorant of the cost to local communities.Local boards do not have the same powers and competence of full councils. Establishing them as a replacement for representation from councillors can shut communities out of the important decisions made about them and that is certainly a strong view expressed by regions outside Auckland City. Although local boards may work in an Auckland context it is felt that the imposition of these on provincial and rural New Zealand will undermine the existing territorial authorities. The ability of the Local Government Commission to impose council-controlled organisations on communities in the process of amalgamation is undemocratic—a view held by a growing number of New Zealanders. Council-controlled organisations significantly reduce the ability of council services to be transparent and be held accountable and although there needs to be flexibility in consultation meaningful input from the community must not be shut out.In our view this bill erodes the consultation that councils have with ratepayers by repealing most requirements to use the prescribed formal process when consulting under the Local Government Act 2002. I have got to ask the Associate Minister of Local Government why the Government wishes to scrap this provision. I have introduced on behalf of our Labour Party five Supplementary Order Papers. The aim of those Supplementary Order Papers is that in our view although we will support this bill there are significant elements of this bill that we would like to be able to improve upon to give us confidence and to give the rest of New Zealand some sense of confidence about some key elements of the bill that we believe ought to be strengthened.I also want to ask the Minister this. Not too long ago a group of local mayors calling themselves the Local Democracy Coalition were concerned about the forced amalgamation agenda being pushed by this Government. This coalition is an organisation that favours regional cooperation on service delivery. It is against the removal of responsible local democracy and particularly it is against the imposition of the super-city structure on them. I want to ask the Minister whether the Government is in receipt of the Supplementary Order Papers that this group the Local Democracy Coalition forwarded to the Minister. I ask whether the Government has a view on that and whether it is prepared to introduce them as Supplementary Order Papers at this particular time.This organisation and other local territorial authorities including I would say in the Bay of Plenty region have very strong cases as to why they feel—and I believe that they are in the right—that they should not be compelled to amalgamate without a cost-benefit analysis being done and they should not be forced to amalgamate without genuine and meaningful input from the ratepayers. They have proposed I think at least two or three Supplementary Order Papers. I take it that they were in the name of the Hon Paula Bennett as the Minister of Local Government. I just want to ask the Minister in the chair the Associate Minister of Local Government whether he is in receipt of those and whether it is the Government’s intention to table those for our debate.Can I go through the Supplementary Order Papers. I will just briefly say that Supplementary Order Paper 456 amends Part 1 and schedule 5 to restore the four well-beings. I think that this is important because the four well-beings in my view and in the view of the Labour Party are the foundation of why we do things. We do not do things just to keep count of how many councils there are. We do not do things to keep count of what our gross national product is. We do things for the sake of people. We do things because we are trying to achieve social economic environmental and cultural outcomes. I think that as long as the four well-beings which are at the core of the Local Government Act remain intact in the Resource Management Act I am asking this Committee to consider that we have also got to ensure that they are put back into the foundation of this particular bill.We will support Supplementary Order Paper 458 from Eugenie Sage of the Green Party. It is very similar to my Supplementary Order Paper 459 with the exception that it provides one further technical change. We are asking that we restore the definition of “community infrastructure” that can be funded by using development contributions. Those members of the Local Government and Environment Committee who sat through the public submissions would have heard strong and passionate advocacy from local government local boards mayors chief executives and a range of organisations that have serious and genuine concerns about what we then do with local infrastructure. Many of those people who were quite angry with the changes that this Government is proposing are in actual fact members of the National Party. I know that because I did ask one or two of them who turned up in Auckland. They were paid-up members of the National Party but they were very angry with the proposition by this Government to change the definition of community infrastructure.Supplementary Order Paper 460 is a Supplementary Order Paper in my name from the Labour Party to amend schedule 2 to remove the ability of the Local Government Commission to impose council-controlled organisations during the process of local government amalgamation. We believe that councils already have the ability to create council-controlled organisations outside an amalgamation and simply legislating that you are now going to force councils to do this is something that I think we need to correct in this piece of legislation.EUGENIE SAGE (Green): The Green Party strongly opposes the policy basis for the Local Government Act 2002 Amendment Bill (No 3) because it undermines local democracy it deprives councils of significant and important revenue from development contributions and it compromises their ability to fund and provide basic community facilities. We do not regard libraries sports centres and swimming pools as “nice-to-haves”; we regard them as part of a civilised city or town and something that the community benefits from.This whole bill encapsulates National’s lack of respect for local government. It continues the approach that National adopted with the 2012 amendments to the Local Government Act 2002 when it centralised power gave more power to Ministers to override local government and constrained local government with a whole raft of requirements that do not apply to central government agencies. The Green Party believes that citizens’ ability to elect local representatives and to make decisions about local matters is a fundamental democratic right and that this bill—like so much of National’s meddling with local government—actually overrides those rights and shows quite a lot of contempt for them.National says that this bill is part of its Better Local Government programme but we cannot see how it is promoting better local government if you are weakening the democratic base of councils weakening their capacity to represent their local communities and increasing the regulatory burden on them—because this bill is another 128 pages of law on local government. The Local Government Act 2002 has already grown in recent years from being about 350 pages long to 465 pages. How can it make local government better by adding another 128 pages? The Government is taking away the power of local councils to make the decisions that affect their communities. As the size of the Act increases so does the regulatory burden and so do the costs faced by councils charged with its implementation. That shows the shallowness of the Government’s efficiency agenda. As the Green Party has said before it would be so much better if the Minister of Local Government and the Department of Internal Affairs worked with Local Government New Zealand and councils to provide good guidance rather than using this sledgehammer of new law to impose its wishes and additional requirements on councils.In this first call I would also like to talk about development contributions. The Minister says that development contributions will lead to more affordable housing. That is quite at odds with a lot of the submissions that the Local Government and Environment Committee heard. The Tauranga City Council and developers associated with the city council opposed the changes to development contributions. They opposed this very narrow definition of “community infrastructure”. The Tauranga City Council said that the bill would do little if anything to promote the delivery of more affordable housing because of course development contributions make up only a very small portion of the costs of developing new sections and houses. The council thought it was quite unlikely that any reductions in development contributions would actually be passed on to consumers by developers. They make up only 4 percent of the total cost of a new 145 square metre house and land package in Auckland and in Tauranga which is another high-growth area the council estimated that these changes might reduce the cost of a new house by $750. That is chicken feed when you look at the overall cost of houses of around $400000.The whole purpose of development contributions is to enable councils to recover from developers a fair and equitable portion of the costs of the capital expenditure that is needed to cater for population growth. They are a way of ensuring that new ratepayers pay their share of putting in new infrastructure to service them rather than that all falling on existing ratepayers and they help reduce the pressure on rates revenue.I am intrigued that the Minister said that councils are supporting this bit of the bill because Local Government New Zealand in its submission said that the development contributions aspect of the bill was the most concerning to councils because of the way in which it restricted the definition of “community infrastructure” to which development contributions could be levied and applied. We think it should be councils that anticipate where growth is going to occur and what sort of facilities should be provided to cater for that growth whether it is libraries swimming pools parks museums art galleries or the like. It is their responsibility; they are elected to represent their communities. It is very patronising that under this Government Ministers in the Beehive think that they know best and intervene to restrict the ability of councils to decide what sorts of facilities should be funded through development contributions.The changes that this bill makes are in marked contrast to what is happening in the United Kingdom where they have a Conservative Government. It recently legislated to give councils the right to levy development contributions for community infrastructure including libraries and swimming pools based on its view that those facilities are essential to community well-being not “nice-to-have” as the Minister says. These clauses in the bill are going to have quite a major impact on councils’ ability to fund community infrastructure.It was estimated by officials that it could have an impact of $510 million to $900 million over the next 10 years. In Christchurch the council estimated that it would reduce its revenue by $32 million compounding the financial challenges that that council faces. You have Ministers in the National Government railing against councils increasing their rates yet through this bill they are offloading additional costs on to ratepayers because you will not have development contributions as a source of funding for new swimming pools and the like.When you combine that with the oppressive requirements around the objection process for development contributions where property developers and others not only can make submissions on the council policy of how development contributions should be set but also now have the right to object on the actual amount of those contributions for particular developments it is going to mean that councils get very shy of investing in infrastructure that is going to be needed for future growth. That is where developers in the Tauranga area were very critical of the bill. That infrastructure that needs to be planned for the future needs to be invested in now so that development can occur. What this bill could potentially do is constrain future subdivision and development and constrain the supply of land for housing by making councils wary of planning for new facilities and looking to finance those through future revenue raised through development contributions.The bill is also really unwise because councils such as Auckland Council have engaged in considerable consultation with developers and others to finalise their development contributions policy. What the bill does is it cuts right across that. It is very short-sighted. It will provide a short-term gain for some land developers and property developers. But it is very short-sighted because it is not planning for the future. It is not going to accommodate and provide good facilities in new areas around Auckland Tauranga and other centres. It will increase rates quite substantially by reducing the ability of councils to use development contributions for some quite basic community facilities.We will talk in other calls on some of the other failings in the bill in terms of the way it overrides our competent councils by replacing them with local boards. But this issue around development contributions is providing for short-term needs and it is not looking to the future. It will potentially lead to some of our new subdivisions and developments being much more like ghettos than real communities because the facilitieswhere communities can gather where children can play will be much more difficult to fund and build.PHIL TWYFORD (Labour—TeAtatū): Talofa lava Mr Chairman. It is very good to have that renowned expert on housing affordability Peseta Sam Lotu-Iiga in the chair for this debate because he knows a great deal about housing affordability. I know this because he appeared on prime-time television last year onThe Vote programme on TV3.Su’a William Sio: What did he say?PHIL TWYFORD: He said to the public of New Zealand that there really was not a housing affordability problem in New Zealand and in fact in his electorate—is Carol Beaumont here by any chance? No. He said in his electorate there were plenty of affordable houses and that all any aspiring first-home buyer needed to do was just go on TradeMe where there were dozens and dozens of affordable houses. I think if I recall correctly about 80 percent of New Zealanders in an opinion poll a couple of days later disagreed strongly with the Minister. It is good and I hope the Minister will take a call and express similar such opinions about the state of housing affordability in Auckland in his electorate because I think we would all be interested to hear that.A prominent economist a few days ago referred to the Government’s housing policies as being itsy-bitsy. It calls to mind a line from a song I think from the 1960s: “itsy-bitsyteenie weenie”. It was a very good description I thought of the Government’s housing policies. The provisions in this bill the Local Government Act 2002 Amendment Bill (No 3) which purportedly are setting out to save money for first-home buyers and drive down the cost of new homes by reducing development contributions are I think another one of these itsy-bitsy policies that fit into a pattern that we see very clearly from this Government. It is about Nick Smith the Minister of Housing trying to look as if he is doing something about the housing crisis. What we will see as we look in more detail at the bill is that it is better than nothing but that is a very very low bar given the fact that homeownership rates in this country are the lowest they have been in 50 years—50 years. The average house price in Auckland is now more than $650000. First-home buyers have been shut out of the housing market because the Reserve Bank was forced into these loan-to-value ratio restrictions because the Government had utterly failed to get a grip on the housing crisis. A generation of New Zealanders now are consigned to renting because of the skyrocketing cost of houses in Auckland and Canterbury in particular.The spill-over effects of the Government’s failure in Auckland and Canterbury have meant that all over regional New Zealand first-home buyers have been afflicted by these loan-to-value ratio 20 percent minimum deposits and all over New Zealand homebuyers are having to cop thousands and thousands of dollars on their mortgage repayments because interest rates are going up because the Government has failed to deal with the Auckland housing crisis. It could hardly be worse. The poor old National Party members on that side of the Chamber had to put up with the indignity the humiliation of Nick Smith being forced to concede at question time that 1 year after he announced the Government’s flagship housing policy the Auckland Housing Accord not a single new house has been built in the special housing areas—not one; zero nada zilch. There is nothing to show for 12 months of Nick Smith wittering on about the Auckland Housing Accord and how this was going to solve the housing crisis. So what are we left with? We are left with rats and mice—rats and mice.In the Budget the great announcement was that the Government was going to lift anti-dumping duties from varnish nails andGib board. Hold the front page! The whole of New Zealand stopped in their tracks amazed at the boldness of this new initiative. I put this in a similar category to trying to drive down development contributionsbecause it is on a similar scale. The Government estimated with no calculations to back it up that lifting of the anti-dumping duties on varnish and nails might save $3500 off the cost of a new house with no assurance to the New Zealand public that that saving even if it did eventuate would be passed on to the homebuyer. In an overheated market what possible incentive is there for the developer or the builder to pass on that little saving to homebuyers? The same point applies to this.The other thing I want to say about this is that the Government’s main policy about the housing crisis has been to try to blame other people for it—a sort of blame-shifting policy. It blamed the banks for lending too much money to first-home buyers with too-small deposits. It blamed developers. It blamed the fifth Labour Government—we hear that every day. It blamed the building supply companies for being anti-competitive. It blamed the Reserve Bank for loan-to-value ratios because it is the Reserve Bank’s fault not the Government’s. But the organisations that have most come in for the blame for the housing crisis by this Government are councils. Bill English famously remarked that 20 town planners at Auckland Council were holding the macro-economy to ransom. Twenty town planners in cardigans and walk shorts with their tea trolleys of teacups full of tea were holding the macro-economy to ransom.Hon Jo Goodhew: That’s a bit cruel.PHIL TWYFORD: I say to Jo Goodhew that I am quoting directly from the Minister of Finance. This is the National Government’s policy—to blame everybody else.To be honest it has run out of scapegoats. It has run out of people to blame. The motivation behind this bill is to try to attach blame to councils for pushing up the cost of houses by charging development contributions to developers. That is the fundamental political driver behind this bill. What does the bill do? It inserts into the legislation an appeal process which will allow developers to challenge councils and challenge the actual levy of development contributions in case they can be argued to have contravened councils’ policies. Secondly it restricts the definition of community infrastructure and councils now will no longer be able to levy developers for a contribution to libraries swimming pools and community facilities like that. So it is going to make it harder for councils to build that kind of infrastructure in new residential developments.I would argue that in the context of the housing crisis it is perfectly legitimate for the Government to look at how it can reduce development levies. As Eugenie Sage pointed out on average from the Government’s own figures development contributions amount to about 4 percent of the cost of a new standard house. That may not seem like much—4 percent—but it is still significant. When you add development contributions to all of the other expenses in infrastructure and services that developers have to invest in a new development that can add anything up to $60000 $70000 or even $80000 to the cost of a new dwelling. The Government is doing the right thing to attempt to do this but I would argue that this is a wasted opportunity. It could have done so much more. This is a shallow limited tinkering approach that is likely to deliver at best a very small saving to the homebuyer who purchases a new home. Let us be clear that although development contributions are levied on developers virtually the entire cost of those levies is passed on to the homebuyer. That is the person in this equation whom we should be trying to help here.The effect of this is going to be extremely limited. If it saves $3000 as I think the Minister said—and I would invite him to take a call in this debate to share with the Committee the calculations and the rationale for those savings; I think we would be very interested to hear precisely how much money will be saved—that is the equivalent of 2 weeks’ house price inflation in Auckland. So by the time this bill is signed into lawthat saving even if it does eventuate will have been swallowed up at least in Auckland by the runaway house price inflation that is going on there. The downside of this very limited shallow approach to reforming development contributions is that communities will be built without the fundamental community infrastructure and social infrastructure like swimming pools and like libraries which those communities need. I say that this is consistent with Bill English’s and Nick Smith’s recent statements. They want to see more shoebox apartments built in Auckland. They believe that driving down quality is the way to save money.JACQUI DEAN (National—Waitaki): I moveThat the question be now put.BRENDAN HORAN (Independent): Excuse me a minute I—Hon Member: Lost for words.BRENDAN HORAN: I am not lost for words. I take a call on Part 1 of the Local Government Act 2002 Amendment Bill (No 3). I must say that I agree with much of the comments of the previous speaker Phil Twyford. It is quite amazing that in this day and age when all over the world people are going with decentralisation this Government is continually pushing on with the centralisation of government. We have some real issues facing us in the next few years with the massive advances in technology and with that people will be carrying their laptops and theiriPads with them as we do today. But with all of the digital literacy that is coming on board it is actually “Goodnight CBD” and that is why we need to go to decentralisation not centralisation.The intent of this bill is to attract developers to Auckland. It is very bad for nearly every council in New Zealand except for Tokoroa because Tokoroa did away with development contributions and it is quite happy. But for every other council it is going to cost them and the country as a whole and ratepayers at the very end of it tens of millions of dollars. We need to have these contributions because we need to be building facilities. We need gymnasiums and swimming pools for our senior citizens. We need schools and universities for our younger citizens. We need to upskill our senior citizens our children our young people and our existing workforces. I am very concerned that Auckland Council has said that doing away with the contributions will mean it will have to increase rates by 8.5 percent which is incredible.But I do not want to take up too much time so I would like to speak to Supplementary Order Paper 463. It proposes three quite specific and technical amendments and I thank Mayor Stuart Crosby of Tauranga and his offices for raising them with me. I would also like to thank Dave Cull the Mayor of Christchurch. The first change would allow the development contributions—Phil Twyford: You mean Dunedin.BRENDAN HORAN: I am sorry; Dunedin. Thank you. He is from Dunedin.Hon Amy Adams: Somewhere down south. It’s all the same to you northerners.BRENDAN HORAN: No it is not. Look I have not even started on Christchurch but I will. I will get to Christchurch. The first change would allow the development contributions to rise in line with changes in the producer price index—that is inflation as it affects the building industry—and that means that development contributions will be kept constant in real terms. Importantly my Supplementary Order Paper means that councils would not have to go through a formal consultation process. As I read the bill councils would otherwise have to embark on formal consultation processes. On its own that might sound reasonable but councils are being strangled with consultation requirements and people and developers have numerous opportunities to have input throughout the year. Allowing councils to ensure contributions stay constant in real terms should not incur extra cost to councils and ratepayers so I propose amending clause 36. There is a consequential change to the regulation-making powers in clause 65.The second change to clause 53 is to ensure that cumulative effects of multiple developments on infrastructure will be taken into account. In new section 199D(a) and (b) inserted by clause 53 the word “or” is twice changed to “and.” And yes that would raise the bar for making an objection under section 199C. That is the intent and it provides a more appropriate test that would have to be met.Finally in schedule 1 I would insert a savings provision new clause 5C amending new schedule 1AA. Councils do not collect contributions at one point in time; they collect them over time—indeed as developments happen. Councils then fund and build community infrastructure when they have the money. So what has happened is that councils such as Auckland have collected some development contributions so you could say that the jam jar is half full when all of a sudden the Government is just changing the goalposts. Yes some purposes some community infrastructure purposes that are allowed now will not be allowed in a month or so when this bill comes into effect. But councils have acted lawfully and properly and reasonably in collecting moneys and that has led to the jam jar being half full. The amendment to the schedule will remove any doubt and allow councils to keep the money already lawfully in the jam jar and apply it to the new definition of “community infrastructure”. That would seem to be a reasonable and fair way to cover off this transitional matter. By having to refund developers it is going to cost Auckland Council alone tens of millions of dollars for money that it has lawfully collected and to change the goalposts—I mean earlier today I asked the question about whether the Government could move forward free medical care for children under 13. I was given a reason why they had to wait 13 months so to bring this law to fruition in such a short time is unreasonable.Finally I would say that with the 39000 houses that are suggested for Auckland alone that is over $30 billion worth of development. Who is going to build them? Thank you.KANWALJIT SINGH BAKSHI (National): I moveThat the question be now put.POTO WILLIAMS (Labour—Christchurch East): Thank you very much Mr Chairman for the ability to take this call on Part 1 of the Local Government Act 2002 Amendment Bill (No 3). I want to refer to some of the matters that other members have raised particularly around the development contributions and what that does in terms of supplying us with those social facilities those community facilities that we very much need. These matters speak very much to the heart of my colleague Su’a WilliamSio’s Supplementary Order Paper 456 where he talks about restoring to the Local Government Act 2002 the four well-beings which were removed at some point earlier. The four well-beings were the notion that local government actually has a responsibility to its community around supporting the social and community functions. Looking after the four well-beings is more than just removing waste providing water or collecting rates; it is about looking at what the heart of the community needs in order to thrive.I would say that local government is the place where the community can have that voice and it should have that voice. Local community boards and local councils actually know and have a better idea of what is required for their communities than we necessarily do sitting here in Parliament. So I would recommend and suggest that my other colleagues look at that Supplementary Order Paper and consider it to be a very useful addition to this amendment bill. But I want to talk specifically about clause 16 which amends section 56 of the Local Government Act 2002. It is a matter that is very appropriate to Christchurch and the Canterbury MPs. Section 56 is about the consultation process and consultation is currently being initiated by the Christchurch City Council regarding the housing accord.The housing accord looks to the development of affordable and social housing options in our city. It is a great initiative—goodness knows we need more housing ataffordable rates for our people particularly those on low incomes and I am sure that getting more stock into the mix will be of benefit. But what I want to talk about is this particular process. The Local Government Act 2002 talks about the processes of consultation. What I want to raise in this matter is something that the Minister of Housing talked about yesterday at the estimates meeting that the Social Services Committee had. He made it very clear that access to temporary housing was high on his agenda particularly for those people who are now entering the phase of rebuild or repair for their homes. As part of the housing accord that he cited there were three initiatives including those on the Awatea Road andWelles Street sites which were intended for temporary relocation of our population and then at some point in the future they would go on to be sold as affordable housing. However he did not when I questioned him know when the developments would be completed and therefore be available for people to occupy.It misses the point for me if the Minister who claims to be sympathetic to the development of temporary accommodation for our population actually does not know when this accommodation will be developed and when it will be ready for people to move into. This also contradicts his statement yesterday but it stacks up alongside the cuts to the appropriation for temporary accommodation. There is a specific service in Canterbury called the Canterbury Earthquake Temporary Accommodation Service which has had its appropriation cut by two-thirds. It is obvious that the need is now and it will be around for some years to come but in order to inject that affordability and availability back into the Christchurch housing market you need the supply right now.In reference to this bill in particular I want to speak to subpart 1A inserted by clause 15. Within subpart 1A I am looking at new section 48J which looks at the decision-making responsibilities of the governing body. I also want to speak to new section 76AA inserted by clause 18 and new section 93A inserted by clause 29 which speaks to the consultation process and I refer to an earlier comment I made. It is very pertinent as currently there is a proposal in the public consultation process initiated by the Christchurch City Council to consider a social housing option that sets up a separate entity to manage the social housing facility that currently resides with the council. Much of our social housing property was damaged and I know that the council is still waiting for the insurance payout.MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti):Tēnā koe Mr Chair.Tēnātātou katoa. I am happy to take a call on the Local Government Act 2002 Amendment Bill (No 3). My take is that it is one of those bills that in my considered opinion contains so many complex issues and it is a piece of legislation that I think has been poorly thought through and has too many big issues in one bill. For me it is symptomatic of a Government rushing through poorly drafted legislation to meet its economic growth agenda. This amendment bill on reading it definitely talks about doing exactly that. We have seen plenty of examples in local government where that is actually occurring—where the local voice the voice of democratically elected councillors is getting sidelined to ensure that economic growth and development opportunities are pushed through.When I look at the provisions of this bill I see for example talk about the transfer of responsibilities which is about allowing regional councils to transfer responsibility to territorial authorities and vice versa. I can see that practically that is going to create a whole lot of confusion out there for people in terms of who is being held accountable for regional and local government issues and the fact that you could transfer your responsibilities. For me there appear to be some shifting sands when you have the ability to transfer responsibilities. I think a lot of our public out there expect that whenthey elect their local councillors at the end of the day they are where the buck stops. So faith in the democratic process is utmost in a lot of our people’s minds.Turning to the local boards we see the reorganisation the creation of local boards as determined by the Local Government Commission. To me that speaks of a lot of forced amalgamations that we are seeing around the country. I think earlier speakers have spoken about bigger often not being better. Removing the local voice from having a say on whether amalgamation is the right thing to do around the country is I think an injustice. We need to ensure that how local communities shape themselves is determined at that local level and not forced by this whole need to rationalise and bring them into a single unit. Again we are not a large country and the unique differences that communities bring to decision making is I think overlooked when we look at local boards.The one provision in the bill that I really want to take some time on and give some thought to is around consultation. Again we have seen plenty of times when we have got that so wrong. I spoke earlier on in the debate on this bill about my own local project theRuataniwha Water Storage Scheme which is taking place as we speak in Central Hawke’s Bay. From my observation of that process and the people who came to submit to the board of inquiry the paramount thing that came up in those hearings which were over 26 weeks in length was the fact that no consultation occurred with people who had an interest in that area. That was a sad thing to hear time and time again. The board of inquiry on that particular matter telling the Hawke’s Bay Regional Council to enter into an open consultation process goes to the heart of saying it did not get it right in the first place but was going back to do it again.So any bills that come through this House that in my view undermine the importance of consulting widely on critical and large issues like building a dam and like building other local infrastructure require—JOANNE HAYES (National): I moveThat the question be now put.DENISE ROCHE (Green): Councils are basically in the business of planning for the future planning for their populations and the development contributions policy that a council has is a crucial part of that planning. The idea is that development contributions through a levy on developers who are extending housing opportunities across territorial authorities will pay towards the new infrastructure that is needed to create communities and create housing. What development contributions do is create the assets that communities need to make a community. Those assets include things like libraries swimming pools recreational facilities and sports fields. We have a grave concern that this legislation the Local Government Act 2002 Amendment Bill (No 3) sets out restrictions on that.In the next 10 years the Auckland Council estimates that there will be 270000 extra people living in Auckland and the council needs to be planning for them. The council also expects to take around $2.1 billion in development fees. The development contributions policy that Auckland Council has in place at the moment has taken years to get to. We had to standardise across the eight previous legacy councils which all had different development contributions policies. So it has taken years of negotiation to find a pathway that met both the developers’ needs and the greater needs of the Auckland Council as well but we have achieved that in Auckland. In Auckland there is a vision that the council has which is to create the world’s most liveable city. We cannot do that unless we have participation from those who are developing the housing as well and that includes the development contributions fees.We have heard from previous speakers what it would cost homebuyers. It is without doubt that the cost of the development contributions is passed on to those who buy the houses that are developed but the cost of that is on average about $750 per housewhich in the scale of things is not that much. But when you consider that if you removed development contributions fees in Auckland the ratepayers would have to bear the cost of the infrastructure that needs to be put in place in order for those houses to be created in the first place it is not fair that ratepayers should have to pay for that when the new ratepayers should play their part as well.Without development contributions in Auckland the cost of that to ratepayers would be an increase of about 8.5 percent in the rates. At the moment the Auckland Council is still trying to standardise rates across the eight previous legacy council areas and what that means is that in some areas rates increases at the moment are at around 10 percent. That is incredibly difficult for people who are on fixed incomes in the community where I live Waiheke Island. They are facing rates increases of around 6 percent and upwards at the moment. So if we were to take development contributions away from councils and look at putting an 8.5 percent increase on top of that we are getting into a situation where it will become unaffordable for people to own their own homes or to stay in their own homes in the areas where they want to live.I have to say that this Government is probably the first to criticise councils for rates increases. Rates increases and the cost of rates have been used time and time again in this House in previous legislation as a reason for taking away some of the role that councils play. I think it would be irresponsible of this Government to put in place legislation that increases the costs to councils which they then have to pass on to ratepayers. In this legislation there are also the costs around the fact that developers can oppose the contributions policy that the councils—ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on the Local Government Act 2002 Amendment Bill (No 3). New Zealand has two tiers of government: central government and local government. Both tiers of government rely on either taxes rates or other forms of income to operate. It is most important that local government has every tool at its disposal to ensure that it can provide that second tier. Over the last decade or so development contributions have gone through extensive litigation through the courts through processes of local government through central government involvement and that has resulted in a system that has allowed local authorities to impose development contributions and levies on growth in their areas. That growth creates increased demand on the infrastructure of a town or city or district and it means that those who are coming into that particular region or district contribute to the expanding growth that is required.In this particular instance the Government is talking about removing a portion of those development contributions: the element around community infrastructure. It is not talking about removing it from other hard infrastructure like roads sewerage and all that sort of thing; it is talking about removing it from community infrastructure. In that respect it is a retrograde step by this Government to do so because a society and a community is not just reliant on roads sewerage footpaths and hard tarmac - type areas. It is also reliant on what the community has to offer in the way of community infrastructure. That community infrastructure includes sportsgrounds recreational facilities swimming pools libraries playgrounds for children—all sorts of areas of community infrastructure that are important for the good balanced lifestyle that we would expect in New Zealand.Therefore if this portion is going to be removed it will put greater imposition on local authorities to try to fund that community infrastructure from other sources. That means going to the ratepayers and charging them higher rates to pay for that necessary community infrastructure because they are not just going to stop putting it in even though in the Local Government and Environment Committee at least one of theNational Government members made the comment that councils do not need to put in all this stuff and that they can just stop putting it in if they cannot afford it. Do we in New Zealand want to live in a society where we end up with housing ghettos and housing estates as some parts of the UK and the United States and Europe have had where basically the community is not living in a reasonably good lifestyle environment? Do we want that? We do not. I do not believe that any of us would really want that. But this Government seems intent to take this tool out of the local government tool chest and make sure that it will charge it by another means which is rates.In the case of the Auckland Council—and it was one of many many councils that came and submitted on this—it said that it has budgeted for $450 million in revenue over the next 10 years from that community infrastructure levy. If that is removed Auckland Council will have to find that $450 million somewhere else and that will mean an increase of 8.5 percent in rates in Auckland over the next 10 years. You can imagine at the end of 10 years if rates have gone up by an additional cumulative 8.5 percent over that period to achieve that just so children’s playgrounds can continue to be put in and sports fields put in for the growing population—another 40000 or 50000 people every year arriving in Auckland. They need more places to play sport more recreational facilities more libraries and more swimming pools. Just so Auckland Council can continue to do that it will have to find that $450 million or else Auckland will certainly not be heading towards being the most liveable city in the world. It will be on a downward spiral.So this is a retrograde step and it is incredible that the Government still cannot see sense even when developers came along. One large developer from Tauranga came to the select committee and disagreed with this as well. He said that it was madness to remove this community levy. He said that he has sold over 2500 properties in the Bay of Plenty and Tauranga and the wider area and he said that people come to the area because of the sorts of community facilities that are there and the lifestyle environment that is offered in that area. He said that it worked out to something like $750 per property developed in the Tauranga area that you were talking about removing and he said that that was a false economy. He said he would far rather pay that extra $750 in the development to ensure that the council had sufficient funding going forward to put in the required community infrastructure. But if you look on the other side of the ledger if the Tauranga City Council for instance loses $750 from every property that is going in and every new section and every new subdivision of every property in the Tauranga area that adds up to a lot of money for a council to have to find somewhere else to continue trying to carry out its programmes.So this is not wise. We hope the Government will see sense in this. I know there are a few Supplementary Order Papers along these lines to change this but rest assured that this will be one thing that will be repealed under a Government that New Zealand First takes part in. We will repeal this and we will ensure that it goes back to how it should be because we have heard from councils all over New Zealand and we have heard from submitters all over New Zealand who say that this is not in the best interests of local government. We cannot understand why this Government continues to kneecap local government continues to say that it has to keep rates within affordable levels for all New Zealanders and why it criticises local government for the way it operates and for its spending levels. Local government is doing its very very best to maintain and provide a huge range of services in towns and cities and regions throughout New Zealand and to then take away yet another means of income for them to provide for New Zealanders is wrong. This Government is not acting in the best interests of New Zealanders in doing that so New Zealand First will not be supporting this bill.Hon PHIL HEATLEY (National—Whangarei): I moveThat the question be now put.A party vote was called for on the questionThat the question be now put.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Motion agreed to.The CHAIRPERSON (Lindsay Tisch): Members we have a number of amendments. The first amendment in the Minister’s name is set out on Supplementary Order Paper 457. The question is that the Minister’s amendments be agreed to. Those of that opinion will say Aye to the contrary No. The Ayes have it. The Ayes have it. Party vote? I just remind members that if you want a party vote you must ask for a party vote. I will allow it to happen this time. A party vote has been called for. I will ask the Clerk to conduct a party vote.The question was put that the amendments set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes109New Zealand National 59; New Zealand Labour 34; Green Party 14; ACT New Zealand 1; United Future 1.Noes11New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Amendments agreed to.The result corrected after originally being announced as Ayes 110 Noes 10.The CHAIRPERSON (Lindsay Tisch): There is just one point. I do not know where the call for the party vote came from. I think it was from Holly Walker. If you are agreeing when I say the Ayes have it you cannot then call for a party vote. A party vote is to challenge the Chair’s decision all right? I do not know whether it came from you or not but I was looking at you because you voted for this. If you are voting for it you do not then call for a party vote. I do know that the New Zealand First Party voted against it but I do not know that it actually asked for a party vote. Just bear that in mind.HOLLY WALKER (Green): Apologies for the confusion there. The Green Party did vote in support. We called for a party vote to record the opposition of the Mana Party and then incorrectly recorded its vote in favour so can I seek leave to correct that vote now please?The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose to correct that vote. Is there any objection? There is no objection. The record will be amended accordingly.The question was put that the amendments set out on Supplementary Order Paper 456 in the name of Su’a William Sio to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes57New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.The question was put that the amendment set out on Supplementary Order Paper 461 in the name of Su’a William Sio to Part 1 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes57New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendments set out on Supplementary Order Paper 462 in the name of Su’a William Sio to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes57New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.The question was put that the amendments set out on Supplementary Order Paper 458 in the name of Eugenie Sage to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes57New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.The CHAIRPERSON (Lindsay Tisch): The amendment set out on Supplementary Order Paper 459 in the name of Su’a William Sio is out of order because it is the same in substance as Supplementary Order Paper 458 which has been lost.The question was put that the amendments set out on Supplementary Order Paper 463 in the name of Brendan Horan to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes16Green Party 14; Mana 1; Independent: Horan.Noes104New Zealand National 59; New Zealand Labour 34; New Zealand First 7; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.Part 1 as amended agreed to.Part 2 Amendments to other enactmentsSu’a WILLIAM SIO (Labour—Māngere): Thank you for the opportunity. May I just respond briefly to some statements made earlier by the Associate Minister of Local Government when he said that about $3000 of savings will be made to developers per unit as a result of the Local Government Act 2002 Amendment Bill (No 3). I have to ask the Minister whether he can take a call and guarantee that those savings will be passed on to homebuyers. We heard from the Tauranga District Council also that in its estimation there could perhaps be savings of about $750 per unit. Mind you Auckland Council submitted that the savings it was estimating would be about $1000 per unit. If I were the developer I would be asking myself whether I could realistically pass those savings on to the homebuyer.That is the challenge we want to put squarely on the forehead of that particular Minister now. He needs to provide guarantees. We will help him by supporting this bill to make sure that he lives up to the Government’s promise of building more houses. As shallow as these savings might be we want to be able to ensure that people who need homes are able to access affordable homes. I know that earlier today when my colleague Phil Twyford asked the Minister of Housing how he was going with building houses in those locations that are set apart in Auckland that Minister said they were moving at a cracking pace. That was after how many years in Government?Hon Member: 6 years.Su’a WILLIAM SIO: Six long years. That was also after the Government had recognised that there is a housing crisis. If that is the Government’s cracking pace and still there are no houses being built today then we need to know whether it is quite serious about it. I want to come to the Supplementary Order Papers—The CHAIRPERSON (Lindsay Tisch): The debate is not about housing all right?Su’a WILLIAM SIO: I beg to differ.The CHAIRPERSON (Lindsay Tisch): No.Su’a WILLIAM SIO: OK. Look let me then go to Labour’s Supplementary Order Paper 460 in my name where we are asking this Committee to pass into legislation this Supplementary Order Paper which ensures that one of the schedules in that clause—The CHAIRPERSON (Lindsay Tisch): No the schedules are in Part 1. We are on Part 2. We have covered the schedules in Part 1 and we had the debate on clauses 4 to 73 and schedules 1 to 10—Su’a WILLIAM SIO: Part 2 “Amendments to other enactments”.The CHAIRPERSON (Lindsay Tisch): —so you can talk to amendments—Su’a WILLIAM SIO: Under Part 2 there are amendments to the Local Electoral Act amendments to the Local Government (Auckland Council) Act 2009—Eugenie Sage: I raise a point of order Mr Chairperson. Could I seek some clarification. You said that the schedules are in relation to Part 1 but Part 2 actually refers to schedule 8 schedule 9 and schedule 10 so are some of the schedules not related to Part 2?The CHAIRPERSON (Lindsay Tisch): I am just seeking advice because my advice differs and I do not want to put you wrong. Can you just bear with me a moment. The member may well be right. Just to clarify the points that have been raised by the point of order the schedules that can be included in Part 2 are schedules 8 9 and 10—all right? OK?Su’a WILLIAM SIO: In terms of schedule 8 “Amendments to Local Electoral Act 2001” there were some issues raised in terms of whether a person can hold more than one position if they are on a local board and also hold a position on the licensing trust as opposed to holding a position on another local board. I want to say that I do not think that this bill goes far enough in ensuring that conflicts of interest are avoided when a person who holds a local board position in one area holds another position on a local board of a subsequent area. There was also debate in public submissions relating to that particular part of the bill on whether a person holding a local board position can also hold a council position and whether a person holding either one of those positions can also hold a position on the district health board. I ask the Minister whether he would like to get up on his feet and make some comments about how we prevent potential conflicts of interest in terms of people who may hold more than one position on a local board the council or the district health board. That is a significant part of that particular schedule.In terms of schedule 9 “Amendments to Local Government (Auckland Council) Act 2009” the proposal by the Government is to replace section 12(3) with a new section 12(3) that reads: “A local board does not have separate legal standing from the Auckland Council and therefore without limitation may not—(a) acquire hold or dispose of property; or (b) enter into contracts; or (c) appoint suspend or remove employees; or (d) commence or be a party to or be heard in legal proceedings.” After section 12(3) this schedule will insert: “(4) Nothing in this section limits the responsibility of a local board to make the decisions of the Auckland Council that are allocated to it in accordance with section 16.” I suppose that that needs to be made clear.There were submitters who raised the concern that by imposing local boards as part of this Government’s amalgamation agenda throughout the country what is happening is that there is the potential for this Government to therefore replace competent democratic existing district councils and local territorial authorities with a local board. Although Auckland Council might now be finding its way through that particular structure and learning that yes it is giving local boards certain amounts of powers—probably a little bit more than the old existing community boards had—they definitely do not have the same powers as those held by a council. So the fear and the concern that was raised by some submitters was that they do not want to have this Government impose local boards as a replacement for existing competent district councils. In fact it goes back to the argument that there is strong and growing opposition to this Government’s amalgamation agenda. It also goes back to the earlier discussion that we had in Part 1 about this Government looking to ensure that it imposes its will on local government in terms of service delivery.There are existing local government bodies today I want to say that have strong arguments and a strong case put forward as to why they should not be amalgamated because they are currently able to deliver services in a shared way without the imposition of this Government legislating that for them. I name the Bay of Plenty region in particular. The concern that it would have is that it has a strong case that it is able to work together manage its assets etc. but by imposing amalgamation on it without meaningful contribution or input by the residents and ratepayers what we are essentially telling it is that its existing way of doing things is no good. Well who is this Government to judge that particular region when it is managing multibillion-dollarassets in terms of the ports and is able to sustain itself? Who are we to make that judgment?What I can say based on the Auckland Council experience is that if this Government continues in its relentless misguided attempt to amalgamate and to force those amalgamations on the region what the Bay of Plenty can look forward to is the loss of expertise the loss of the environmental expertise that it currently has the loss of leadership and the loss of the vision for that particular region. This Government does not have a vision for that region let alone a vision for the country so how on earth can it do that? I say that it would be wrong for this Government to continue along at this pace without making those required amendments to improve on this bill.As I said at the beginning we want to help this Government to keep its promise to build more houses. We have laid down the gauntlet in a challenge to it to build 100000 houses within 10 years. We want to see that happen rather than have the rhetoric that it has been trying to fool New Zealanders with.EUGENIE SAGE (Green): In terms of Part 2 and its references to schedule 8 which amend the Local Electoral Act and the way in which boards are to be elected the Local Government Act 2002 Amendment Bill (No 3) is quite Orwellian in some of the language it uses. In Part 1 of the bill it sets out the purpose of local boards which is to enable democratic decision-making by and on behalf of communities within the local board area. Part 1 sets out the functions duties and powers of boards and their decision-making responsibilities and their funding policies. In Part 2 in the relationship to the schedule it sets out how they are to be elected.But there was quite a lot of concern among some submitters that it would be all very well and good and it may well strengthen democratic decision-making if the local boards were an adjunct to the existing governance structures particularly as community boards have got very little recognition in the Local Government Act 2002 but this bill does not do that. It does not add them to the existing council structure. It is actually proposing that local boards are able to be used by the Local Government Commission in any reorganisation proposal to replace existing independent and—as Su’a William Sio said—competent councils. There were quite a few submitters who expressed concern about this. One Dr RobinGwynn a former city councillor of the Napier City Council said in relation to Napier—and he thought in relation to a large majority of other places in New Zealand—that the purpose of enabling democratic decision-making would be better achieved if the Government did not proceed with this part of the legislation.We have seen in Part 1 where it sets out the powers of local boards that those powers are quite limited. A local board does not have separate legal standing from the unitary authority it cannot hold or dispose of property it cannot enter into contracts it cannot appoint suspend or remove staff and it cannot be involved in legal action. The schedules also make that clear. Nor can a local board levy rates or make by-laws or other regulations; it has got only recommendatory powers. The experience with these boards in Auckland is that collectively they control only 3 to 5 percent of the budget of the Auckland Council but they have a lot of responsibilities imposed upon them by the council for the delivery of services and functions.What we are seeing is the Government’s very ad hoc approach to local government—ad hoc reorganisation proposals in the Hawke’s Bay Northland and Wellington—without any clear vision for what the relationship should be between central government and local government except that this Government wants more power in the Beehive and more power centralised and local boards are a way of quite significantly reducing the strength and democratic powers of local government.Where you get a unitary authority you get boards replacing the district and city councils. In Northland where you may have had around 35 elected councillors they would be replaced on the unitary authority with 10 councillors and a chair and you would have local boards as well. Those councillors would be representing many more people so you are centralising power in that unitary authority. When you combine that with the changes elsewhere in this bill—overriding the special consultative procedures which reduces the abilities of councils and removing the requirement for councils to use the special consultative procedure on significant decisions such as the establishment of council-controlled organisations—then you are reducing the consultative requirements you are centralising power in the unitary authorities and you are providing boards with very limited powers. That is a major undermining of democracy.We are surprised that Labour is actually voting for this bill because of course it was Labour that in 2002 established those special consultative procedures and sought to strengthen democracy. These parts of the bill—Part 2 and schedule 8 in relation to the local boards—substantially reduce democracy by replacing good and competent councils with local boards with much reduced powers.PHIL TWYFORD (Labour—TeAtatū): Let me follow on from Eugenie Sage in discussing Part 2 which includes some of the schedules that relate to provisions that are about facilitating—as my colleague Su’a William Sio described it—National’s forced amalgamation agenda. The one I want to point to particularly is the amendment to clause 43 in schedule 3 of the Local Government Act 2002 set out in schedule 2 of the Local Government Act 2002 Amendment Bill (No 3). It sets out the powers of the Local Government Commission in implementing a reorganisation proposal and gives to the Local Government Commission the extraordinary power to impose council-controlled organisations on a newly reorganised local authority. We find that offensive. There is no reason that I have heard—certainly not from Government members—why the hand-picked bureaucrats on the Local Government Commission should be given the power to corporatise the assets services and affairs of a local government authority. Why should they? Why should they have the power to override the democratic will of the people in a local authority area and corporatise them?This is basically the Rodney Hide Auckland model. What Rodney Hide did on behalf of the National Government was to corporatise a good three-quarters of the new Auckland Council and constitute those activities and assets into council-controlled organisations which do most of their business behind closed doors. They are unaccountable and it is a mystery to me why the National Government thinks this is a good idea.I want to speak in support of the Supplementary Order Paper from Su’a William Sio Supplementary Order Paper 460 which would remove this ability from the bill. It makes no sense. There is no justification for it. Why not trust the people of that area? If they choose to corporatise some of their assets and activities into council-controlled organisations—that is a misnomer if ever I have heard one—why not let them do it? Let the elected representatives decide. But no National knows best.Andrew Little: The National Party doesn’t trust them.PHIL TWYFORD: It does not trust the people. It always knows best and as it did in Auckland it steamrollers over the wishes of the local people and it decides. In fact in Auckland Steven Joyce went as far as actually legislating that Auckland Transport must be a council-controlled organisation. He does not trust future generations of elected councillors in Auckland to decide whether they want that particular part of local government activities in the main body of the council or whether they would prefer to see it run as a council-controlled organisation. So we are utterly opposed to that provision. We think it makes no sense at all. In fact it is a retrograde step.I support what William Sio said about the provisions in this bill that essentially reflect a rolling out of the Auckland model such as it is around the rest of New Zealand. Although there is a certain logic to the way local boards fit within the new Auckland Council it is highly questionable whether they are suited to the rest of New Zealand where you have got dispersed and often isolated communities which this National Government wants to forcibly amalgamate into bigger local government units. Those local boards are simply not suited. They have very very constrained powers. When the communities around New Zealand that now enjoy democracy—being able to elect their local representatives and having full decision-making power over the affairs of their communities—are forcibly amalgamated into bigger governance units under this Government and under the provisions of the earlier local government reform bill they will find it unsatisfactory that all they can rely on to express the views of their local community is through having a say on these boards. We are critical of that.I want to come back to the development contributions provisions—various transitional provisions are included in Part 2—to just make the final point that this is classic kicking-the-can-down-the-road National. It pretends to be doing something about development contributions but really it is just kicking the can down the road. With National it is all about managing the politics and the optics of this issue. It is trying to look like it is doing something but it is not doing anything substantial about the problem. It could have done a much more fundamental and thoughtful review—DENISE ROCHE (Green): I am quite keen to talk on Part 2 of the Local Government Act 2002 Amendment Bill (No 3) because of its association with the provisions in the Local Electoral Act and also the Local Government (Auckland Council) Act of 2009 which I was very familiar with at the time. I am one of the survivors of the super-city in Auckland. In 2009 when I was in my role as an Auckland City councillor representing the ward of the Hauraki Gulf we waged a very very ferocious campaign against the Government’s desire to collapse our local democracy and introduce local boards. We did this because we did not believe that local boards would give us the sort of local democracy that we wanted and in fact what we wanted was more decision making not less. Originally the smaller communities of the gulf—Great Barrier and Waiheke—were not going to have any representation of their own at all. They would have been collapsed into a local board based in central Auckland.After 4 years of this amalgamation of this model that this Government wants to roll out to the rest of the country I have to say that the local board model has not developed more powers for communities. Without a doubt those who are elected to local board positions do so with the best of intentions to represent their communities and to have the ability to advocate on behalf of their communities at the governing body level but they do not have access to the funds. I agree with the previous speaker on the powers that were stripped from councils through the legislation which are still in this legislation which was when the National Government introduced council-controlled organisations. How that has played out in Auckland is that local boards struggle—they absolutely struggle—to be heard by these unaccountable and corporate organisations which control more than half of the entire council’s assets.Auckland Transport for example is very difficult to deal with. A resident of Waiheke quite recently wrote to Auckland Transport to complain about the fact that when it had done maintenance on Seaview Road on Waiheke Island which has no footpath it had made the road less safe for walkers less safe for cyclists and less safe for horse riders. This person—his name is Michael Tavares—asked Auckland Transport what he should do if he is faced with a car that has sped up as a result of Auckland Transport’s maintenance which was actually a redesign of the entire road. The letter hegot back said that basically he should jump in the ditch because that would be his only alternative.Our local board has been trying and trying and trying really hard to work with Auckland Transport on some design specifications that would fit with our particular community because that is what a local board does. It advocates. Our local board representatives have had very little and no response from Auckland Transport because it is not accountable. It is not run by elected representatives. So we are faced with ridiculous comments from our Auckland Transport people saying to go and jump in a ditch. That kind of sums it up. That is how local government will play out once you remove the decision-making powers of local boards and local councillors from local democracy.It is very very disturbing to see that this Government wants to roll out more amalgamations across the country because it does diminish democracy. When we are paying rates then surely we should have a say in what kind of representation we should have. I believe and I am sure most of the people in this Chamber believe that we should not have taxation with no representation. But this is what can certainly happen when you roll out the local board model and you force amalgamations. What happens is that there are fewer locally elected and accountable representatives. There is less control of the assets and there is a weakening of the powers that local representatives have in their communities.We have to question why the Government’s agenda is to roll out amalgamations across the country. Could it be that it wants to force not only the corporatisation but also the privatisation of council property and council assets? In Auckland one of the council-controlled organisations we have that came about as a result of the forced amalgamation is Auckland Council Investments Ltd. That organisation controls most of the major properties around Auckland that the council owns including the Ports of Auckland. We have seen time after time elected representatives attempting to get information from the Ports of Auckland from Auckland Council Investments Ltd about what sort of costs it has had to bear in a fairly nasty and unpleasant industrial relations dispute that has been carrying on for the last couple of years. The ability of local representatives to get that information about how much it is costing the ratepayers of Auckland for a very unpleasant industrial dispute—that information has not been forthcoming.The elected representatives have very little power to take on any kind of scrutiny of the accounts because they are just simply not presented. The only way councillors in Auckland can administer any kind of scrutiny of the Ports of Auckland is through the Auckland Council InvestmentsLtd’s statement of intent where they get to ask questions of its chief executive there every 3 to 6 months. That is outrageous. These are assets that are owned by the people of Auckland and yet they have no say and no control over them. Certainly there is very little accountability.Local boards are not a panacea. They are not a way of increasing democracy; they are a way of decreasing powers for communities. We have some very good competent councils throughout New Zealand and to collapse them into local boards and governing bodies is to continue the mistake that was made with Auckland. We could be so much better in Auckland. We could have so much more democracy there. We could have far more engaged people taking an interest in what our council does if we could have more transparency and accountability. But to force amalgamations on other centres is unacceptable. It is anti-democratic and it is not something that I think this Government should be rolling out throughout New Zealand.ANDREW WILLIAMS (NZ First): There is a principle in democracy that says you do not have taxation without representation. That phrase comes to mind in this situationwhere a part of the Local Government Act 2002 Amendment Bill (No 3) suggests that the Local Government Commission will have the right to impose council-controlled organisations on any re-amalgamated local body once that has been put in place. That is not really I believe what New Zealanders would expect. There is a requirement to streamline some areas of local government and there is a requirement to look at better ways of delivering services but it should not be for some Wellington commission to determine for a particular area how that local area should itself fully operate. It should provide the tools and it should provide the mechanisms for the local people to determine how they will operate in their particular regional area but it should not impose that on them.In such a situation—and I look at a situation like Hawke’s Bay—it should not be the right of people distant from the Hawke’s Bay to say to Hawke’s Bay: “We’re going to put you all into one new council.” covering an area that will be over 150 kilometres in length.” It takes up to 4 hours to drive from theMāhia peninsula down to Takapau which is an extensive area of the country. And it should not be the right of that commission to then say: “Not only are we taking your democratic rights away and imposing a new council on you but we’re also going to impose council-controlled organisations to control half of your assets.” That is not right. I do not think the people of Hawke’s Bay would put up with that one little bit. Locals should have a right to determine what they are going to do in terms of their own democracy.If the people of Napier which is a very proud and longstanding community in this country feel that they are big enough ugly enough and sufficiently robust enough to operate in their own right they should have the right to continue to do so. If the majority of the people of Napier say: “We’re happy as we are thank you very much. We have no debt.”—and Napier City Council has no debt—“We operate an efficient council. Our people are happy. They are all content. They have good services. They have good community infrastructure. They have good service infrastructure.” and that sort of thing then the people of Napier should have the right to say that they wish to continue in that manner. It should not be that the rest of the people around the Hawke’s Bay Hastings Central Hawke’s Bay and further north have a vote and outnumber them and then they roll into town and say they are taking over the city. That is not right at all.This country went to war—and we are coming up to the 100th year since the start of the First World War. We went to the other side of the world to stand up for democracy. We went to stop perpetrators coming from other countries into other lands and taking them over against the people’s will. We went to defend that right of democracy. Yet here within New Zealand this National Government is basically setting up a mechanism and changing the Local Government Act 2002 to allow exactly that. Basically outsiders and people with bigger strength and bigger muscles sworn to the Government and all that sort of thing can just basically come in and take over local interests. That is not on and that should not be allowed in a good democratic country.We have seen huge failings in Auckland with the structure that Rodney Hide John Key and the National Government put in place there. There is huge resentment towards what has happened there and towards the loss of local democracy there. There are instances where those council-controlled organisations simply have no interest in working with communities at all. Auckland Transport which is constantly being criticised is a classic one. It moves into areas and just simply puts in things without any consultation with locals and the locals have to suffer it and businesses have to suffer it. I can recall cycle lanes being put in on Rosedale Road on the North Shore. They just appeared overnight—they just appeared. There was no consultation and lots and lots of parking spaces for all the local businesses were taken out. The local businesses couldnot believe that it had happened right under their noses and yet that is how these council-controlled organisations work. That does not happen with good city councils that are working on behalf of and with their people.In this respect we do wonder what the long-term agenda of this Government is when Local Government New Zealand and local authorities throughout New Zealand have been working very very hard to look at all areas of improvements and services at local government level. We have seen huge strides in terms of shared services. Our Local Government and Environment Committee heard submissions over the last year or two on a number of the amendments to the Local Government Act 2002. We heard from councils how there are so many more shared services occurring in the likes of the Waikato and in the likes of the Bay of Plenty. We were hearing about it happening in the councils in the Wairarapa in Hawke’s Bay and indeed across Canterbury where there is so much more work going on between the councils and down into Southland and Otago. All these councils are working so much more collaboratively to share services and get the best that they can. They are sharing management sharing expertise across councils and bringing in experts to assist across a range of councils—regional councils and territorial authorities.We do just wonder why this Government does not want to work in partnership with local government. We have only two tiers of government in New Zealand central and local government whereas Australia has three with the addition of the State Government. Many other jurisdictions and sovereignties around the world have two or three tiers of government; we have just the two. It is a shame that this Government everywhere it turns seems to want to remove the ability of local government to perform. It wants to remove very very skilled people from local government—people who have dedicated a lot of time over many many years and who are leaders in our community. The Government wants to just basically take them away.It is quite surprising that so many of them support the National Party. The mayors and so many of those councillors are what you would describe in many cases as National Party supporters and yet they come to me and say: “Goodness knows why we continue to support the National Party because all it does is intend to basically kneecap us.” I would say to a lot of the mayors and a lot of the councillors out there around New Zealand that if as National supporters they to continue to support and vote for the party again this year on the basis that they think that it is doing a good job for local government then they are sadly wrong. It is time that more and more people in local government woke up to the fact that the National Government is out to basically centralise the power back to Wellington. It is out to control the local authorities around New Zealand. It wants to divide and conquer. It wants to make sure that it pulls all of these authorities into bigger entities and then turns half of them into council-controlled organisations with people whom it can appoint to the boards it can control and it can influence. Probably half of them are members of the Cabinet club who get on to some of these boards so that National can basically control them with the big strings from the bureaucracy in Wellington.Well that is not what is good about local democracy. That is not what New Zealand stands for. We go overseas to fight in wars to stand up for democracy in countries where they do not have that level of democracy. We stand up for local people having the right to determine their own destiny and in this case New Zealand First will not be supporting these changes. Again we will say that after 20 September we will ensure that many of these things are turned round and put back how they should be on behalf of the good democratic country of New Zealand.Part 2 agreed to.Schedule 1The question was put that the amendments set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to schedule 1 be agreed to.Amendments agreed to.The question was put that the amendment set out on Supplementary Order Paper 463 in the name of Brendan Horan to schedule 1 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes16Green Party 14; Mana 1; Independent: Horan.Noes104New Zealand National 59; New Zealand Labour 34; New Zealand First 7; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.Schedule 1 as amended agreed to.Schedule 2The question was put that the amendment set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to schedule 2 be agreed to.Amendment agreed to.The question was put that the amendment set out on Supplementary Order Paper 460 in the name of Su’a William Sio to schedule 2 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes56New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Abstentions1Independent: Horan.Amendment not agreed to.Schedule 2 as amended agreed to.Schedule 3agreed to.Schedule 4The question was put that the amendment set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to schedule 4 be agreed to.Amendment agreed to.Schedule 4 as amended agreed to.Schedule 5The question was put that the amendments set out on Supplementary Order Paper 456 in the name of Su’a William Sio to schedule 5 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes56New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Abstentions1Independent: Horan.Amendments not agreed to.Schedule 5 agreed to.Schedule 6agreed to.Schedule 7The question was put that the amendments set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to schedule 7 be agreed to.Amendments agreed to.Schedule 7 as amended agreed to.New schedule 7AThe question was put that the amendment set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to insert new schedule 7A be agreed to.New schedule 7A agreed to.Schedule 8agreed to.Schedule 9The question was put that the amendments set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to schedule 9 be agreed to.Amendments agreed to.Schedule 9 as amended agreed to.Schedule 10agreed to.Clauses 1 to 3The CHAIRPERSON (Eric Roy): We move to clauses 1 to 3. The question is that clause 1 stand part. Those of that opinion will say Aye—[Interruption] Did you want to debate this?Su’a William Sio: Yes.The CHAIRPERSON (Eric Roy): I am sorry—you are wanting to debate clauses 1 to 3?Su’a William Sio: Yes.The CHAIRPERSON (Eric Roy): I had a momentary pause. If it was not long enough I apologise. The Chair recognises Su’a William Sio.Su’a WILLIAM SIO (Labour—Māngere): Thank you Mr Chairman; I appreciate that. I know that the Government is trying to live up to its cracking pace of establishing houses but the Local Government Act 2002 Amendment Bill (No 3) is an importantbill and I want to acknowledge that there are some very significant views that need to be heard in terms of this particular bill.There are a few themes that I just want to outline. I mean it is a shame that despite our efforts to give much support to this Government to live up to its promises of building more affordable houses it has not recognised the grave reservations we have in terms of the particular bill here and the fact that there are elements of this bill that are worrying to the wider community. We have tried to outline that as best as possible but I do not think that this is the end of the battle.I think that come the next few months leading up to the general election the Minister in the chair the Associate Minister of Local Government is going to face a barrage of criticism coming from the local government sector the length and breadth of this country. He needs to take the time and meet with the local democracy the councils that wanted to meet with him in the first place and these are mainly National Party supporters and National Party members who do not feel they have been heard.We have attempted to do our best to impress upon the Minister and his Government how they are failing to recognise the value of local government in terms of our democratic system. They have fallen into the trap of attempting to regard local government as a Government department and that is not so. Local government is democratically elected by local residents who are choosing people to stand up and defend their rights in their local community. This Government has taken an approach and a view that local government will do as it is told. That is the message it is sending to local government. In fact the title of this particular bill could have been made that way. The Minister said earlier today that the Government was trying to show leadership. On the other side of the coin the perception is that this kind of leadership is bullying tactics. It is attempting to impose its will when the public is saying that enough is enough.There were questions we raised in the debate that I would ask the Associate Minister to take a call on. I would ask him to guarantee to this Committee that the proposed savings that arise from this bill in terms of savings to developers will be passed on to homebuyers.Grant Robertson: And then there was nothing.Su’a WILLIAM SIO: And then there was nothing. So that is the worrying dilemma—despite all our best efforts to be a responsible Opposition and to try to impress upon this Government that it must live up to its promises create more houses make houses more affordable and treat local government with respect. The Government’s rhetoric might say all that but in actual practice its actions do not translate that way. I hope that the mayors and councillors who are members of that party and who have grave concerns about the treatment they are receiving from their Government take the appropriate action come the 2014 election.I want to also say that the way the Government has drafted this bill in terms of giving greater power to the Local Government Commission to continue down the pathway of treating everybody the same by imposing the Auckland super-city structure on all of our regions is wrong. What needs to happen first and foremost which the mayors have written more recently to the Minister to say is that there needs to be a cost-benefit analysis about that amalgamation process. There is no overall framework or vision for what this Government is doing. It is simply trying to impose its will on local government.The Government really needs to be quite up front with local government and stop diddling around and pretending that it is doing something. In actual fact as we heard earlier today from Minister Nick Smith despite the numerous things that he outlined that he was doing when he was asked how many houses were created as a result of hisactivities the answer was zilch. I fear that despite the Government’s promises of savings at the end when it passes this legislation come September this year again the answer is going to be zilch when we ask how many affordable houses it has created.But as I said earlier the most worrying thing for most people who value local government in New Zealand is that there does not seem to be an overall coordinated framework for how the Government is imposing the amalgamation agenda. All it is doing is simply holding up the Auckland super-city structure which it imposed on Aucklanders despite Aucklanders opposing that particular agenda. There is no vision in terms of where we are going with this.The example of local government structures in Sweden for example. With a population similar to our own it has more democratic structures in place to allow greater and fuller participation by its residents than we currently have now. It would be a shame if we go all the way which is what the intent of this Government is and undermine and bully local government—to back it up against a corner simply because the Government does not recognise that local government mayors local government councillors have a democratic duty to perform for those people who elected them into those positions.On the local board structures the Government has again removed the consultative process that allows the wider public to participate fully and provide more meaningful input into those significant changes. Again that is what our Supplementary Order Papers were all about. They were about reinstating the opportunities for fuller and meaningful participation of the community in the decisions that are made by local government that will have an impact on the lives and the quality of life of our residents. It does not seem that those elements are important to this Government. Despite its rhetoric we have seen time and time again that it is failing to recognise the value of the greater input that local government can have not only in achieving greater well-being for our general public but also in assisting central government in delivering greater outputs in terms of jobs in terms of income in terms of affordable housing. Those things—and I know you might not like us repeating these things Mr Chairperson—are important because they are fundamental. Without those basic essentials of jobs of incomes of affordable housing which local government has a huge stake in—without the delivery of those things to our residents how on earth can you expect people to provide a more meaningful contribution to the future of this country?The fact that this Government opposed our Supplementary Order Paper 456 on injecting the four well-beings back into the legislation means that it is not worried at all about giving confidence to local government about its role and its responsibility. It could not care less. The pattern that we have noticed from this Government since it has been in power right from day one is that it feels that it is strongly mandated and it can do whatever it wants despite opposition and despite the wise counsel that members of the Opposition would give them and the wise counsel from the local government sector throughout our country.So the title of the Local Government Act 2002 Amendment Bill (No 3) hides a litany of areas that this Government fails to recognise as being important in our democratic system and important for local government organisations in order for them to have a greater input in a meaningful way.Clause 1 agreed to.The question was put that the amendment set out on Supplementary Order Paper 457 in the name of the Hon Peseta Sam Lotu-Iiga to clause 2 be agreed to.Amendment agreed to.Clause 2 as amended agreed to.Clause 3 agreed to.Bill to be reported with amendment presently.