Government mulls dramatic reform of local government, slashing number of councils — Thomas Coughlan

Minister Chris Bishop pictured on a shared path that will connect two Wellington councils. Photo / Mark Mitchell

THREE FACTS:

• NZ First’s Shane Jones publicly questioned the role of regional councils, pondering whether “there’s going to be a compelling case for regional government to continue to exist”.
• Prime Minister Christopher Luxon told Newstalk ZB the Government was looking at local government reform.
• Those remarks follow years of reforming local government roles in water services delivery and planning.

What is it about the word amalgamation that seduces politicians?

Is it the libidinous cadence of its five long syllables that languidly roll off one’s tongue? Who can resist smacking one’s lips and lingering on those long double “M”s — an eyebrow-raising bilabial consonant of all things — certainly not someone with an unhealthy regard for the sound of their own howler, someone like, say, an MP.

BusinessDesk isn’t the sort of publication you turn to for blue copy, but that’s exactly what it doled out this week, reporting the Government is considering the amalgamation of several large Wellington ministries: Transport, Housing, and the Environment. Though not reported in that story, parts of the Department of Internal Affairs would also be touched by the merger.

The result would be a mini mega ministry, with all of the agencies grappling with planning and land use under one roof. This Government, like the last, and the last before that, is pulling its hair out at the number of agencies required to get anything done when it comes to planning and building. With angsty fingers grasping at now denuded follicles, ministers have no choice but to burrow further, deep into the Cabinet’s collective cerebellum in search of something, anything, to get stuff done.

That solution runs much deeper than the amalgamation of a handful of Wellington departments, much deeper indeed.

The Prime Minister was very far from those departments — in the Hague in fact — when he let slip that he was open to the idea of scrapping regional councils. This comment, that scrapping regional councils was “something that we can explore” as part of Chris Bishop’s RMA reforms, was made almost by accident, after his Cabinet colleague, Shane Jones, fulminated against Otago Regional Council online.

The commentary the remarks sparked missed the mark.

The Government isn’t looking at abolishing regional councils so much as it’s mulling at amalgamating almost all councils into greater, unitary authorities, combining the responsibilities of regional councils with their territorial authority counterparts.

If this were the case, regional councils would be abolished but their rohe would logically become the basis for a much smaller number of larger, more powerful, unitary authorities, like Auckland’s Super City. Almost all 78 councils in the country, bar Auckland and the other five unitary authorities, would be touched by the plan, leaving the country with a tiny number of councils, perhaps just the 16 regional or unitary authorities.

The Government is considering this, and seriously.

The germ for this idea began during the last Labour government’s Hindenburg era, when it belatedly realised that having stripped councils of their responsibility for water through the ill-fated Three Waters reforms and dramatically reduced their control over planning through RMA reforms, they’d left councils with precious little to do apart from run buses, collect rubbish and annoy the Taxpayers’ Union — and much as most MPs love nothing more than to annoy the Taxpayers’ Union, that’s not quite a good enough reason for leaving a whole layer of government unreformed.

You might ask what the last Labour government would do when faced with a problem such as this — you might ask, but for the fact you know the answer already: it established a working group (technically a review).

Like almost all of that government’s working groups, this one was asked to find a way for local government to “improve the wellbeing of New Zealand communities and the environment, and actively embody Treaty partnership”.

Despite the woolly terms of reference, the review delivered some interesting, useful, recommendations. Although it kept its powder dry on amalgamations, it did propose a new model of unitary council and more regional networks with a strong hint that councils and central government might want to get cracking.

None of that mattered because the final report was delivered to ministers in June 2023, months before an election that government was bound to lose.

When the coalition took office, it scrapped the Three Waters reforms, which mandated water services amalgamation, in favour of its own reforms, which very strongly encourage water services amalgamation.

The coalition also repealed Labour’s RMA reforms which elevated most planning to the regional level and are in the midst of their own planning reforms which are set to, well, elevate most planning to the regional level (territorial authorities will still have individual chapters within these large plans).

The coalition is beginning to see that all of this leaves New Zealand’s Balkanised territorial authorities with very little to do and where the last Labour government, true to its instincts, called in the consultants for a working group, this Government is, true to its own instincts, is fast making up its mind about what to do, and deciding how to get it done.

Resources Minister Shane Jones grumbled about a moth that threatened a mine. Photo / Mark Mitchell

It’s no secret that the battle over the Regulatory Standards Bill is currently putting pressure on the coalition, particularly between NZ First and Act. Local government, however, is one area where everyone is mostly aligned.

NZ First’s Shane Jones, nerves already rattled from battle with frogs and kiwi that have frustrated his resource ambitions, flew into a rage last month when he discovered a regional councils’ affection for a rare moth, orocrambus sophistes, threatened a gold mining project in the South Island. That was enough for him. A moth sophistes is one thing, a sophist council using the moth to advance an anti-jobs agenda is something else. Jones and NZ First came on board with reform as a result.

There’s form in a Government almost accidentally finding itself in the middle of simultaneous resource management and local government reform. Doing one almost forces you to do the other.

Before the RMA, resources were managed by a patchwork of 78 statutes and regulations. In the late 1980s, Environment Minister Geoffrey Palmer and the Fourth Labour Government, having a taste for bold reform by that point, hit upon the idea of rolling them all into one. Once passed, the RMA repealed those 78 statutes and rationalised them into a single resource management regime.

Across the Cabinet table, Palmer’s colleague, Local Government Minister Michael Bassett, was keen on reforms of his own. He appointed former Palmerston North Mayor Brian Elwood to run the ruler over local government, which then consisted of about 850 different bodies. Bassett slashed these to just 86 by 1989. The reforms were a neat companion piece to the RMA, which followed soon after.

Again, there is the need for reform, and again, the Government has, almost by accident, found itself doing it all at once.

In about October, the new RMA bill will be introduced to the House. By that point, the Government will need to have made up its mind about what kind of councils will use this new law. There will be some sweeteners. At a Local Government NZ meeting earlier this year, Bishop talked at length about new funding tools for councils.

The Government might not move all at once. Amalgamations probably need to happen slowly — very slowly. Some wiling councils may be chosen to move ahead of others. There are immense policy and political problems too. Ratepayers in parsimonious councils may have their balance sheets merged with their profligate neighbours. Some people’s rates may go down, but others’ may go up. There may need to be referendums, too (and what happens if they’re lost?).

The biggest challenge for the Government is likely to be the charge of hypocrisy. It wasn’t that long ago that the country was blanketed with hoardings promising to stop Three Waters in the name of localism. Well, those water assets are now safe in council hands, but councils, under the coalition, may be about to get a whole lot less local.

Labour has every incentive to bang this very same drum if the coalition decides to force amalgamations. Its experience of Three Waters is that even when faced with compelling arguments about lower rates and better services, voters will still opt for local control. The only thing different about these amalgamations, however, will be the absence of co-governance, which might be enough to get it over the line.

Then again, there is bubbling appetite from surprising quarters in support of amalgamation. Hutt City Council, in Bishop’s own electorate, will this year ask voters to support exploring amalgamation with other councils in the region, a proposal that was put up by the council’s Labour Mayor, Campbell Barry. Nearby Porirua is doing something similar.

Those polls will take place in October, right as the resource management reforms are introduced to the House.

Amalgamation is a very seductive idea — and it would solve so many of the problems both central and local government would solve. But as with all great seductions, amalgamation may also exchange problems of the present for problems in the future, trading a policy challenge for a political one.