Lees-Galloway Iain: Local Government Act 2002 Amendment Bill (No 3) — First ReadingText is incorporated into the Bound VolumeLees-Galloway Iain: Local Government Act 2002 Amendment Bill (No 3) — First Reading[Sitting date: 03 December 2013. Volume:695;Page:15160. Text is incorporated into the Bound Volume.]IAIN LEES-GALLOWAY (Labour—Palmerston North): It is a pleasure to take a call on the Local Government Act 2002 Amendment Bill (No 3) which Labour does support. We have some reservations about this bill but we do support it going to the Local Government and Environment Committee and we look forward to plenty of public consultation on this matter. I am sure that most councils will want to come to the select committee and have their say. I am sure that Local Government New Zealand will be preparing its submission as we speak. I should imagine that there will be representatives of developers and representatives of communities who will also want tohave their say on this legislation. We look forward to the debate and to considering all the different provisions.The stated aim of this bill is to amend the Local Government Act 2002 to enable councils to be able to “play their part in creating an environment conducive to sustained economic growth … [by providing] effective processes and governance arrangements fair and efficient decision-making and charging practices and sound asset management planning.” That all sounds very positive. It is almost impossible I should think to disagree with a statement like that. Of course it does not really tell us very much about what the bill actually does. But so often these motherhood and apple pie statements are designed to do exactly that. They are often in fact designed to hide things that might be a little bit more controversial and that might have some ulterior motives behind words that everybody agrees with and everybody can support.So what are some of the provisions of this legislation? The bill provides the option of the creation of the local boards as part of any reorganisation of local government by the Local Government Commission. Labour does believe in local democracy. We actually do believe that communities should get to participate in their local democracy. We do believe that local government should be free to make as many decisions as possible without central government clamping down on it and usurping its local authority in the manner that this Government has done time and time again. So the idea of local boards where they are appropriate is a good one but what is behind this is the Government’s desire to see a “reorganisation” of local government—i.e. more amalgamations of local councils. There may be communities that do want to have amalgamations and assuming that they are done appropriately assuming that there is good reason and assuming that it will create efficiencies that the local communities support that is something that central government should not get in the way of.But what we are opposed to on this side of the House are the kinds of forced amalgamations that we are starting to see—the system being set up where one community can essentially force an amalgamation on another. We are seeing in Hawke’s Bay that central government is trying to strong arm local government into an amalgamation and there certainly is not universal local support for that type of amalgamation. The provisions in this legislation are designed I think to enable more and more of those amalgamations to happen. What we do not support or certainly what we are wary of on this side of the House is central government dictating to local government what its territorial area should be and where it should amalgamate with other councils. We go into the select committee wary of that being behind some of those local board provisions.Development contributions have been a vexed issue for some time. I know there was a while when a previous Minister of Local Government seemed quite enthusiastic about getting rid of development contributions altogether. The effect of getting rid of development contributions would have been that costs that are currently borne quite rightly by developers for infrastructure that councils provide in order for a new development to be able to fully function are moved to ratepayers. Whether it be the provision of water waste water or roads—all the fundamental infrastructure that any development requires—the responsibility for that would have been taken from those developers who are developing those sites not out of any altruistic value but because they want to make money out of that development and moved on to the ratepayers. So widows paying their rates on a house that may be of some value but where they have very low income and are struggling to pay the rates would have ended up having to pay more rates in order to subsidise the profit-making developers.I am glad to see in what I have read of the Cabinet paper that the current Minister of Local Government Chris Tremain took to Cabinet that he has diverted the Governmentaway from this idea of eradicating development contributions altogether. That is a sensible decision by Chris Tremain. I am glad that Cabinet appears to have supported that. But what the Minister does plan to do is to try to somehow restrict development contributions. It would be very interesting to work out through the select committee process what the real practical impact of that is actually going to be on councils and on ratepayers because any restriction on development levies does not mean that councils do not need to find the money from somewhere for those capital developments. That money still has to come from somewhere. So if it does not come from the developers through the development contributions where will it come from? What we are concerned about on this side of the House is that that will be yet another cost that the ratepayer has to bear So it will take from the—Hon Anne Tolley: Think of what it will do for house prices.IAIN LEES-GALLOWAY: Well the Minister opposite Anne Tolley is saying: “What about house prices?”. Well I would love to see something in this legislation—a cast-iron signed-in-blood guarantee—that states that any reduction in cost for the developers will be passed on to the purchasers of those houses. If there was that guarantee built in to the legislation then I might believe what the Minister is saying when she interjects from the other side of the House. But that guarantee does not of course exist in the legislation and there is a real risk that any reduction to development contributions will end up going in the pockets of the developers—possibly ending up in the coffers of the National Party through the contributions made by the developers to say thank you for the additional profit that they make out of those developments. It is possible. It is quite possible. We on this side of the House are wary of low-income and middle-income taxpayers and ratepayers ending up bearing more costs so that the National Party’s mates can make more profit.There is another underlying issue here that I think we need to be wary of and that is the privatisation agenda from the Government. It states quite overtly in the supporting material that it finds it desirable for greater use of private investment for building infrastructure. Alongside that is a desire for greater use of council-controlled organisations and for those council-controlled organisations to control infrastructure across a number of councils. If you pull all this together what you get is independent organisations in control of a significant amount of capital investment. That makes those entities ripe for privatisation. It creates something with enough critical mass that the private sector would become interested in purchasing those council-controlled organisations and taking private control of that infrastructure. The problem with that of course is that this is monopoly infrastructure which is at the moment owned by the users of that infrastructure. Therefore the owners being the users will make sure that the costs to the users are kept to a minimum. If you take that monopoly infrastructure and hand it over to the private sector you then have owners who are interested in making a profit and who are not interested in giving the best result for the users of that infrastructure. That ultimately drives up costs for the taxpayer and the ratepayer as well and creates quite a nice little earner for the National Party’s mates.So we need to be wary about what this legislation actually does. We do support it. We will support it going through to the Local Government and Environment Committee. We will listen to what people say when they come to the select committee—The ASSISTANT SPEAKER (Lindsay Tisch): Sorry but the member’s time has expired.