Source: Radio New Zealand
Analysis – National’s local government reforms face one of the same problems Labour encountered with Three Waters, with councils at risk of being left out in the cold.
The coalition’s approach offers an illusion of choice which may yet help it avoid the breakdown in relations Labour eventually had to resolve.
RMA Minister Chris Bishop and Local Government Minister Simon Watts on Tuesday delivered their ultimatum to councils: “lead your own reform, or we will do it for you”.
Councils have until early August to do so.
Bishop and Watts have been pushing towards amalgamation as part of Bishop’s RMA reforms, announcing in November a plan to have mayors form boards with some level of government oversight – but consultation suggested mayors would be too busy for that.
Some had already come up with plans to amalgamate – and the ministers presented their plan as a way to enable that, giving councils choice.
The problem is: the solutions one group of councils comes up with could leave others in the lurch.
It is a problem Labour knows only too well from its Three Waters reforms, which also aimed at amalgamating council services and which also struggled to balance effective representation against cost savings.
As I revealed in late 2021, Labour’s Cabinet had agreed to that in June to force councils into its reforms rather than take an opt-out approach – but did not publicly announce it until October.
Cabinet papers showed finalisation of the mandatory ‘all-in’ strategy was delayed to September – with the aim of using the intervening time to build support with the councils, including negotiating with LGNZ to not actively oppose the move, damaging the representative group’s own internal relations.
Waimakariri Mayor Dan Gordon (left), Local Government Minister Simeon Brown, Manawatu Mayor Helen Warboys and Whangārei Mayor Vince Cocurullo give their thumbs to the repeal of Three Waters legislation in February 2024. Supplied / Waimakariri District Council
That secretiveness from Labour, combined with the sustained oppositional campaign led by National, ACT, the Taxpayers’ Union and a breakaway grouping of councils, helped to fuel public opposition.
Of course, the ‘Stop Three Waters’ catchcry also leaned on fears around co-governance and communities losing control of their water assets, but the backlash was effective enough that Labour had to water down its reforms and have Kieran McAnulty visit every council in the country to sell the idea.
By contrast, Bishop and Watts have been relatively upfront about the need for change across the entire sector.
Their warning on Tuesday that oppositional or inactive councils will have reforms imposed on them makes clear the stakes and at least gives some certainty about what the alternative is – a wise move.
But that’s not to say their approach is all sunshine and roses.
Letting councils come up with their own plan may have worked in securing at least acceptance from councils in joining their own water reforms, but it also inevitably meant more groupings and reduced savings.
Applying the same approach to council mergers could end up with some messy, bespoke proposals with their own unique ways of working.
It also risks leaving some councils isolated – without the resources to perform as effectively as their neighbours – and could mean some of the complex structures and processes the reforms aims to eliminate are retained.
The Parliamentary Commissioner for the Environment wrote to Bishop last month warning that allowing proposals to come from the sector could lead to having “many more unitary councils than the 17 regional entities” which could “pose serious problems for functions such as catchment management, that must not be fragmented”.
It seems unlikely to come to that – with all the complications involved, the government is incentivised to make the new council boundaries as simple and streamlined as possible.
Simon Watts and Chris Bishop have issued an amalgamation ultimatum to councils. RNZ
Bishop and Watts were also clear on Tuesday it was Cabinet that would make the final decisions, and while they will take ideas and pay lip service to councils’ preferences, they will also want a solution that best serves all ratepayers.
The shift away from what they had announced in November – where groups of city and district mayors would come up with the plans – is then almost a mirror to Labour’s shift to a mandated approach to water, but with better stage management.
We’re already seeing complications, with LGNZ’s statement on Tuesday warning some regions would face “greater complexity that needs to be worked through”, and asserting that all councils in a given region – including at the regional level – should be included in amalgamation plans.
As with Three Waters, mayors approached by RNZ after the announcement backed the idea of change – but were quick to raise concerns about how they would be directly affected.
What’s more, National faces the problem of having vocally campaigned for “localism and devolution” on the back of Three Waters, but once in government having consistently taken council decision-making powers away.
Think of Christopher Luxon’s speech to LGNZ in 2024, the crackdown on so-called ‘nice to haves’, the legislated change in purpose for councils, and most tellingly the 4 percent rates cap announced last year.
These are actions that fit the mould of “Wellington knows best”, and sharply at odds with the rhetoric of the last election.
Unlike Labour, this government – far more cash-strapped – is also offering councils no additional funding to ensure its reforms are effectively managed.
Where National would surely decry wasteful spending, similarly cash-strapped councils are already feeling ignored with increasingly expensive rates making up only about a 10th of the total tax take – the rest going to central government.
Their repeated calls to have the option to impose a bed tax or to set their own fees and fines have largely faced resistance – although Bishop indicated imminent legislation to enable “development levies”.
The election promise of “regional deals” has also ended up looking relatively ineffectual – Auckland mayor Wayne Brown calling the first one “quite underwhelming” less than a month after signing it, no doubt partly as a result of the lack of funding that had made overseas examples shine.
Regardless of all this, local government reform seems unlikely to become the flashpoint for opposition that Three Waters became.
While Luxon’s pre-election rhetoric is a mismatch with his government’s actions, those moves have been popular with National’s base.
The timing is also far more favourable, with Cabinet not making final decisions on council proposals until 2027 – after the general election, rather than before it – so simmering backlash to any final decisions would come at the start of the next government’s term and land at the feet of whoever is in power.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand