Mahuta NanaiaLOCAL GOVERNMENT ACT 2002 AMENDMENT BILL (NO 2)Third ReadingHon NANAIA MAHUTA (Minister of Local Government): I move That the Local Government Act 2002 Amendment Bill (No 2) be now read a third time.The bill makes a number of improvements to the Local Government Act to help lift the local government system. Implementing the changes will assist the Government in working constructively alongside local governments to improve community wellbeing at the local level. The bill's main amendments address the role of the Local Government Commission local government reorganisations and council-controlled organisations. These amendments will reverse changes proposed by the previous Government.Our approach to reorganisation removes the threat of amalgamation from local authorities. We will do this by reversing the previous Government's changes which enabled anyone to request an investigation. Local authorities will still be able to request a reorganisation themselves through the Local Government Commission or undertake it themselves through the new reorganisation process. Reorganisation proposals made by members of the public will need to demonstrate significant community support at the outset through a petition of 10 percent or more of the local affected people. Additionally once our bill is enacted all reorganisation requests except for those already accepted by the Local Government Commission will need to meet the new requirements for significant community support.The previous Government's bill enhanced the powers of the Local Government Commission and increased its accountability to central government. Our bill has removed these measures because they would not achieve better outcomes for the system of local government. The legislation represents the start of a programme to look at the role an independent central body can play for the local government sector. Interim measures are introduced to constrain large-scale reorganisations that alleviate the local government sector's concerns about the threat of amalgamation and to provide breathing space while new arrangements are developed.Stage two will consider new ways of carrying out necessary ongoing functions. It will be undertaken in partnership with local government because working with councils is the best way to design effective reforms to the local government system.Secondly the bill makes amendments to council-controlled organisation provisions. Some of the key changes are: the Local Government Commission will not be able to transfer council services to council-controlled organisations; proposals to create an elaborate system of council-controlled organisations to deliver water transport and other services are withdrawn; and provisions to enhance the transparency and accountability of council-controlled organisations to councils and communities are added.The original bill made extensive provisions to force council-controlled organisations especially council-controlled organisations jointly owned by a number of local authorities on councils. This included council-controlled organisations with water and transport functions. Local authorities deeply oppose this approach and my proposal is to remove all of that material from the bill. Additionally the bill retains existing provisions to improve planning and reporting arrangements for council-controlled organisations and further strengthens accountability mechanisms. These provisions aim to improve council-controlled organisations' responsiveness to local authority direction transparency to the local authority transparency to the public and responsiveness to Māori.Lastly at the request of the Minister of Transport the bill also includes a provision to enable transport functions to be transferred between regional councils and territorial authorities. There is interest in Canterbury in transferring these functions between Environment Canterbury and the Christchurch City Council.This bill demonstrates the Government's partnership approach to working with the local government sector. Reform will not be imposed centrally but will be addressed in conversation with local government to ensure that both arms of government are working together to benefit local communities.I commend the Local Government Act 2002 Amendment Bill (No 2) to the House.