Local government chiefs are debating how to bring "power back to the people" when Jacinda Ardern's Government is already rolling out the panzer divisions and mounting a major power grab on their patch.

At a Local Government NZ symposium this week, it was obvious many had caught the "localism" bug — a drive for local communities to get more say on what happens — oblivious to what is happening under their very eyes.

This is not the "rolling back of the State" that so incensed Auckland academic Jane Kelsey in the 1980s and 1990s, as successive governments took the State out of business and also devolved considerable decision-making to communities.


That was a euphoric time for those New Zealanders who relished a new freedom to make calls about what should happen in the schools their children went to, or work in a newly corporatised or privatised business without the dead hand of the bureaucracy cramping their style.

It didn't always work, of course.

For instance, the Bank of New Zealand went hard during the 1980s sharemarket boom, piling into a multitude of shonky companies on both sides of the Tasman and unfortunately ending with too many second or third ranked securities over its loans.

It was sold into NAB ownership by the Bolger Government after it hit the rocks.

Air New Zealand swallowed Australia's Ansett and would have itself crashed after the Australian airline closed its doors if the Clark Government had not stepped back in with an $880m recapitalisation.

These were the consequences of liberalisation in an environment where many managers either lacked the skills to operate in a less deregulated world or were too focused on riding the sharemarket tiger to pay attention to fundamentals.

What's happening now is in the opposite direction.

This is the "rolling back in of the State" across many key areas where the Ardern Government believes there has been failure. Take the development of the new i-body — or Infrastructure Commission — which will prioritise major infrastructure projects.


In Auckland, where the local council is running up against its funding limits, it faces a difficulty funding its 50 per cent share of the blowout on the City Rail link.

The commission will be independent of Government but it will also include a Treasury unit which is currently working in this area.

What should be staring Auckland local politicians in the face is that this centralisation will result in Government politicians making the final calls on big projects — not them.

More State control is also in the pipeline as the Government prepares to launch the Crown "mega developer" — the Housing and Urban Development Authority (UDA). This agency will combine KiwiBuild, Housing New Zealand and its subsidiary HLC into a "one stop shop" according to Housing and Urban Development Minister Phil Twyford.

It will also have the capacity to make the calls where local government hasn't, through a range of statutory powers it can use to enable large and complex urban development projects at scale and pace.

These include shortened planning and consenting processes, building and changing infrastructure, funding for infrastructure and development activities, bringing together parcels of land and reconfiguring reserves.

Then there is the consolidation of the polytechnics into one State-led organisation.

There is also the review of Tomorrow's Schools, which promises to break what was originally designed as a partnership between a school and its community together with the government.

This centralisation of power is happening across many parts of the economy.

Then there is Cabinet Minister Shane Jones, frequently in the ear of chief executives whose decisions he doesn't like.

All this would possibly be tolerable if the Government was succeeding on its own patch.

But KiwiBuild is a fail, the billion trees planting programme is woefully under-cooked, students have been dished out money they don't need for a free education — the list goes on.

Nifty lobbying by the NZ Initiative's Oliver Hartwich has resulted in Local Government New Zealand getting on board with the "localism" drive.

The case was made at the symposium that New Zealand's highly centralised political system is failing this country and decision making and power should be devolved to improve community wellbeing.

The Intitiative launched its #localismNZ: bringing power to the people report to illustrate how Beehive-centric decision making has dragged on New Zealand's economic performance and dynamism.

This was followed by LGNZ's localism discussion paper, which put out a framework for devolution and greater local decision-making.

There was much talk about how the devolution of decision-making needs to stop being theoretical and be put into action.

Among the beefs are a number of issues that are being treated with a one-size-fits-all policy, resulting in regional issues: oil and gas decisions that affect Taranaki, polytechs in Invercargill, the national motorway rollout, regional fuel taxes for Auckland but no one else and so forth.

But the crux of the matter is that central government doesn't really trust local government to do its job.