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Home / New Zealand

Cameron Brewer: Local government conference needed to commit to managing soaring costs

By Cameron Brewer
Herald online·
22 Jul, 2015 01:47 AM4 mins to read

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Herald on Sunday Photo / Jason Dorday
Herald on Sunday Photo / Jason Dorday

Herald on Sunday Photo / Jason Dorday

Opinion

The hundreds of delegates in Rotorua for the 2015 Local Government New Zealand Conference have been focusing much of their energy and discussion around further smoking bans, eliminating supermarket shopping bags, and finding more funding with the latest release of LGNZ's funding review 10-point plan.

I am one of those in and around local government who's instead advocating for greater and urgent focus to be placed on containing council costs and, if required, rationalising their expansive role in our lives.

The country's councils spend about 10.5 per cent of all public expenditure in New Zealand but raise only 8.3 per cent of all public revenue. As well as that gap, infrastructure and construction costs keep soaring.

The year-long local government funding review promotes new measures, levies and local taxes to raise new revenue which would require legislative change. Earlier this year Prime Minister was quick to pour cold water on any suggestion of more taxes.

Also quick out of the blocks was no nonsense and new Local Government Minister Paula Bennett. She believes councils should take a look at their own spending before seeking out more funding or introducing new taxes.

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So too do many ratepayers. A 2015 LGNZ survey of New Zealanders' perceptions of local government showed the public and business sector overall dimly view councils' performance around financial management and their ability to deliver ratepayers good value for money.

Some of us were hoping to see a shift away from some councils operating like big state governments when the Better Local Government reforms were passed in Parliament by National a couple of years ago.

Those reforms sought to repurpose local government to deliver on core business efficiently without overstepping into activities already undertaken by central government.
The four well-beings were removed. From 2002 they had enabled local authorities to play a broad role in promoting the social, economic, environmental and cultural wellbeing of communities. Subsequently during the 2000s, expenditure and rates soared as the role of councils expanded into new areas.

The amended Local Government Act focuses councils primarily on the provision of good- quality local infrastructure, local public services, and the performance of regulatory functions. However many councils haven't heeded the call nor reined in their role.

At Auckland Council I despair at the fact we've financially supported to the tune of up to $30m the construction of a white-rafting facility which is now under construction in Manukau. Then we've got staff posted overseas in some kind of Auckland trade and investment ambassador role, not to mention the millions we're putting into youth education and training over the next decade.

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In short at Auckland Council our residential rates keep rising because our operational costs keep rising, with in-house staff costs alone set to balloon by 29 per cent to nearly $1 billion in the coming decade.

My council colleague Mike Lee, who was chair of the Auckland Regional Council for a number of years, points to another cost Auckland needs to desperately control.
He has conducted and published some careful analysis on the comparison of rail operational costs in Auckland and Wellington.

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Both networks carry similar numbers of passengers but in the 2013/14 year the Auckland rail network cost around $139m gross to operate whereas Wellington's gross cost was just over $85m. At the same time fare revenue for Wellington was about $43m while in Auckland it was around $30m, leading to a major difference in the net cost per passenger.

Auckland Transport responded with a two-page explanatory document, but as we know explaining is losing and the difference remains.

However all is not lost in the issue of cost containment at Auckland Council. Our tendering and procurement processes are achieving greater efficiencies across the parent and council-controlled organisations. At the same time most departments are having to deliver budget savings every year.

However there's still plenty of opportunity in any council budget to demonstrate continuous improvement. What's there remains in most councils a raft of feel-good bureaucratic programmes that soak up resource and deliver nothing tangible to ratepayers.

Not only is the Government calling for a greater focus on core business and spending by local government, the public is increasingly demanding it with even LGNZ now openly acknowledging the poor public perception of councils needs to be turned around.

I'm disappointed delegates representing many of New Zealand's 78 district, city and regional councils in Rotorua dreamt up more ways to rate and tax the public, rather than focused on an agreed commitment to ensure controlling costs would be LGNZ's new and greatest priority. That would've been music to many ears.

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Cameron Brewer has been the Auckland Councillor for Orakei since 2010. He also owns a communications consultancy.

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