O'Rourke Denis: Local Government (Salary Moderation) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
O'Rourke Denis: Local Government (Salary Moderation) Amendment Bill — First Reading 
[Sitting date: 15 August 2012. Volume:682;Page:4456. Text is incorporated into the Bound Volume.] 
DENIS O’ROURKE (NZ First) 
: 
 New Zealand First supports the Local Government (Salary Moderation) Amendment Bill because increasing the salaries of local government chief executive officers has caused strong public protest—very strong public protest—throughout the country. That is especially so in Christchurch. Despite the comments by Nick Smith it is the chief executive officer’s salary that is upsetting people and quite justifiably. It is not the general salaries received by people who work in local government. It is not the general salaries of people who work in local government that is upsetting people. It is in fact the chief executive officer’s salary that is upsetting people. That is a fact. Go and ask them if you do not believe me. 
It is complete nonsense for Nicky Wagner to say that the processes by which councils are currently assessing chief executive officer salaries are satisfactory. I know nobody in the community who knows anything about local government who believes that the current processes are anything like satisfactory. So for Nicky Wagner to say that they are OK is complete and utter nonsense. 
The Christchurch City Council did increase the remuneration of its chief executive officer by 14.4 percent—$68000—to $538000 and that was declined only because of the most extraordinary level of protest that has ever been seen in that city on any subject. This increase was despite the functions of the city council now being more limited because of the role currently performed by the Canterbury Earthquake Recovery Authority. That simply does not seem to have been taken into account in the decision to increase the remuneration of the chief executive officer. 
The council’s performance in Christchurch and especially that of the chief executive officer was widely criticised in Canterbury by both the people of Christchurch and the business sector. They had some justification for that. The performance failures were in fact partly admitted by the council itself and it therefore makes it very difficult for the council to explain the magnitude of the remuneration increase for the chief executive officer in those circumstances. As a result it was only great public concern that led to that increase in fact being declined in the end. 
The Local Government Act 2002 specifies mandatory criteria for consideration by the Remuneration Authority in fixing the remuneration of mayors councillors and community board members but it is silent about the remuneration for chief executive officers. This bill proposes an amendment to the Local Government Act that preserves chief executive officers’ salaries being negotiated and agreed between the chief executive officer and the council but requires that agreement to be approved by the State Services Commission effectively a power of veto. 
New Zealand First agrees with that. But New Zealand First says that that does not go far enough. There is in fact another bill in the ballot in my name which has not yet been drawn that would establish some appropriate criteria for application by local authorities in fixing chief executive officers’ remuneration. Those issues were not addressed by Nick Smith—a glaring omission of substance on his part because it is not just about transparency; it is about the lack of criteria. The sorts of things that need to be included are to take into account special circumstances such as the existence of the Canterbury Earthquake Recovery Authority in Christchurch. It also needs to take into account what the chief executive officer of a local authority should receive in comparison with the chief executive officer of a commercial organisation. That is an extremely important point. 
Those criteria would qualify the words “quite comparable to those that apply in similar positions” as in this particular bill. There is a precedent for such a discount because the directors of State-owned enterprises have what is called the Public Service element taken into account as a discounting factor for their remuneration. 
So New Zealand First would support this bill but at the appropriate time will move a Supplementary Order Paper to insert in this bill the same matters that I have set out as a list of criteria for the assessment of chief executive officers’ salaries in the bill that I have drafted and that is in the ballot. With those qualifications New Zealand First will support the bill going forward. We look forward to further debate on those other issues that I have mentioned.