Finishing Auckland and fixing New Zealand

This article was published here in Newsroom.

A big bang approach may yet be possible in reforming local councils nationwide – including the so-called super city of Auckland, writes Mark Thomas

Neither the Labour nor National parties had much in the way of local government policy at the last election, nor much that dealt specifically with Auckland apart from transport promises.

National promised to review the Auckland Council. Labour promised to uphold local decision making and ensure?“major decisions about local democracy involve full participation of locals from the outset”. Post-election, they promptly removed the ability of locals to decide or participate on the issue of Maori wards.

Labour also promised to partner local government on projects including “amalgamation/de-amalgamation or reduction of services”. One of these projects, it transpired, is a fundamental reform of local government.

The Prime Minister?took my advice ?that not having a local government reform policy shouldn’t stop her from taking action when the need was?clear. Jacinda Ardern has taken a page out of Helen Clark’s 2005 election play book where Labour’s policy just said it would work with Auckland agencies to “resolve” Auckland's infrastructure and population needs. This resolution, it transpired, was the start of fundamental reform of Auckland local government with the announcement of the Auckland Royal Commission in 2007.

Eleven years since the Auckland Council was established it has never been comprehensively reviewed and there are well acknowledged constraints on its decision-making ability and funding and unresolved amalgamation issues that a?succession of internal reviews ?have pointed to. However improving Auckland will now be caught up in the two-year Review into the Future for Local Government announced in April.

Making local government matter

It was 1989 that previously saw the biggest change in local government since the largely self-autonomous provinces were abolished in 1876.

Political parties rarely campaign on local government issues and, despite it comprising almost 40 percent?of the country’s GDP, they campaign even less often on Auckland issues. But this is not because everything has been working well. The current local government franchise is on life support. Turnout has declined from a “high” of 56 percent?in 1989 to just 42 percent?in 2019. Auckland slumped to its lowest turnout,?in 2019, at just 35.3 percent. After 11 years of operation, just 25 percent?of Aucklanders trust council decision-making and are satisfied with its performance.

Five of the?15 reports that the?Productivity Commission has completed ?have been on local government issues: housing (twice), urban planning, local funding & financing and local regulation.

To try and address these issues there have been 20 major changes to the Resource Management Act, a new Local Government Act in 2002, a new Building Act in 2004, special purpose legislation such as the Special Housing Areas Act 2013 or the Urban Development Act 2020, an array of taskforces and working parties?and of course the Auckland Royal Commission.

Auckland has often been a focus of these changes because in the past 20 years it has grown by more than the combined populations of Wellington, Hamilton and Tauranga and will do so again in the next 20 years.

But governments have been reluctant to either review the Auckland Council structure or more substantially address the wider local government structural, decision-making and funding issues holding Auckland and the country back. The political risks of taking on 78 Mayors and Chairs and a raft of other stakeholder groups is obvious, as is being seen with the?local government water reforms . Focusing just on Auckland reform again would exacerbate unresolved issues elsewhere, not least in Wellington which tried and failed to amalgamate in 2015.

But there’s a more powerful, often unappreciated, reason. Despite local government issues (housing, transport, the environment and so on) being of great importance to local citizens, local government’s role in them is not as great. The country’s combined councils make up only 4 percent?of total spending in the New Zealand economy and just 11 percent?of public spending, the fourth lowest in the OECD.

New Zealand’s central government has?highly concentrated power and funding levers. When local government issues need action, governments typically focus on the specific policy area or project where they have majority control and problematic power sharing isn’t involved.

Systemic local government change has only come for New Zealand and for Auckland when there has been an acknowledged crisis. The well traversed infrastructure deficits, the antiquated and ineffective council funding model, and, significantly, an inevitability associated with the water reforms seems to have finally persuaded the Labour government to start to act.

A big challenge for the local government review, if it wants to try and avoid this crisis-response cycle, is to find a way to make local government matter more, and for it to operate more effectively.

Better decision-making

But how to do this? Denmark, Austria and Australia have developed models of how nations should treat their large cities - and?greater planning autonomy and funding is provided. Global cities expert Professor Greg Clark says governments are increasingly providing a strong national platform for the development of their cities and also devolving more power and greater responsibility because cities raise living standards and boost a country’s economic development. But best-practice models of nationwide local government are harder to import.

Singapore, a country with one of the highest per capita incomes in the world and a 20 percent?larger population than ours, does not have local government. The city state's so-called Mayors are senior members of parliament whose main role is overseeing the local housing estates.

There are more than 50 cities around the world led by a mayor with a population greater than New Zealand’s five million. We could adapt the Singapore model and centralise more of the key housing, transport and environmental decision-making and funding.

At the other end of the spectrum, another small country Switzerland gives its equivalent of Auckland’s local boards the responsibility for education, health and tax collection. New Zealand could expand the Auckland local board model if a greater influence by smaller communities was a priority.

In the UK, David Cameron’s reforms created metro mayors with commensurate power and funding. We may call Auckland a super city, but we don’t call Auckland’s leader a super mayor and so more expanded mayoral authority for Auckland and other cities could be a review option.

All those previous New Zealand legislative, inquiry and taskforce solutions have generally focused on either giving government more control (which the current water reforms effectively do) or providing councils greater responsibility and funding (the original intention of the Auckland Council reforms). Resolving this issue is the review’s most important task.

Whatever the approach, the outcome for Auckland and the rest of New Zealand has to be a structure where the decision maker has more control of decisions and the resources to more effectively and more quickly deal with the challenge’s cities, towns and regions face.

Two-thirds of New Zealand’s 67 local authorities have populations below that of Auckland’s smallest local board, Waitakere Ranges, at 52,000 (excluding Auckland’s gulf islands). Twenty-two councils have populations below 20,000. If we are going to stick with local government, amalgamation - learning from Auckland’s experience and the failure of Wellington’s - seems essential to improve resourcing, capability and effectiveness.

Citizens are demonstrating by their lack of participation in council business, disinterest in elections and low satisfaction ratings, that they don’t value the proximity to their councils that they currently have. Establishing more unitary authorities like Auckland which combines district and regional council functions seems an obvious step to consider.

In Auckland, and other cities where infrastructure and planning activities have been agreed between the council and government, (such as the 2016 Auckland Transport Alignment Plan) greater delegation to the city should be given for implementation.

The chance of making change

The review report will be delivered to the government six months before the expected date of the next general election. This makes it certain that political parties will campaign on their response to it, as they did on the need for change in Auckland at the 2008 election. As everyone thinks local government needs change, some kind of change is certain and next year's local body elections should be the last in the current format.

The cabinet minister who presided over New Zealand’s once-in-a-century local government reforms, Michael Bassett, concluded three elements were key to effective local government change. First, the public have to both know a problem exists and that it needs fixing. This is widely acknowledged.

Second, any change should impact the whole system. The unresolved Auckland amalgamation, the failed attempt to reform Wellington, and the ongoing council challenges in Invercargill, Tauranga, Wellington and elsewhere over the years highlight this.

Third, the key person leading the change (former Palmerston North Mayor and Local Government Chair Brian Elwood in the late 1980s) has to have the skills to deal effectively with those affected – and the government responsible must hold the line. As it will be the next government who will implement any changes, the ultimate success or failure may rest with who leads this.

Labour has initiated the only two major structural reforms to local government in the past 145 years. But National led the decision-making that produced the Auckland Council and both Judith Collins and National’s local government spokesperson Christopher Luxon know change is needed.

Local government reform promises, so scarce in New Zealand political debate, seem likely to dominate the next few years and Auckland’s future shape and success will be linked to the rest of the country’s.