The role of local government

Local and central government are set to go head to head when the issue of what councils would like and what they can afford to provide for their communities is debated as part of the Better Local Government law changes before Parliament. Prime Minister John Key has called for local authorities to cut spending to keep rates affordable and has said the Government would like to see more council mergers. Speaking at the Local Government New Zealand conference in Queenstown last week, Mr Key told delegates the job would not be an easy one. They faced high expectations - but "we all have to face up to making difficult choices".

That is correct, of course. Businesses and households make difficult choices every day. And decision-makers must realise increases in public spending often put pressure on those who can least afford it. There is no doubt council spending on big-budget projects, viewed by many as "non-core" council business, fuels frustration in communities. But it is a balancing act. While some rage against what they see as monuments to council excess, others believe sports stadiums, museums and galleries, swimming pools and the like are vital in providing a well-equipped community a variety of assets to be enjoyed by us, our children and grandchildren.

So, how to balance a community's wants with what its ratepayers can afford, and are willing, to pay?

The Dunedin City Council managed to keep its rates rise for the next financial year to 4.9% after setting a self-imposed rates cap of 5%. Ratepayers had faced a possible 11.9% rates increase, fuelled in part by the shortfall in dividends from Dunedin City Holdings Ltd and increasing rates to reduce the original stadium loan term. There was a "price" to pay in order to achieve the mark. Dunedin Mayor Dave Cull said in May he understood there would be people in the community unhappy the council had not been able to give them any funding for the next financial year. Similarly, Central Otago ratepayers originally faced a potential 20% increase in rates, forecast in its previous long-term plan, which were trimmed to an average 7%, and finally set at an average 5.8% increase for the coming year. This was done by "prioritising spending to focus on core services".

Should local councils stick to water and sewerage upgrades, or is a community built on more than just underground pipes?

And is the Government's desire for more merging of local authorities a way to help get more for less?

"Savings" and "efficiencies" are touted by the Government as reasons for creating unitary councils. Local authorities - perhaps not surprisingly - are against the idea.

Speaking after the Local Government New Zealand conference, association president and Hastings Mayor Lawrence Yule said changes to who was responsible for the wellbeing of communities would severely constrain councils.

"We are responsible for the social, cultural, economic and environmental wellbeings and the Government is trying to change that. We do not support the Government's position."

The Dunedin City Council and Otago Regional Council in May confirmed they were considering the potential benefits of merging.

Public consultation will be needed before any merger goes ahead, but ORC chairman Stephen Woodhead has already said he doubts "drivers for change" exist in the lower South Island. In May, Mr Cull and other mayors agreed there was little appetite for amalgamations between neighbouring councils, but instead wanted to investigate greater regional co-operation. Yesterday, it was reported South Island councils will create a strategic alliance to provide a "stronger and more unified voice" on central government initiatives and to look for opportunities to reduce service costs for ratepayers. The grouping would be a "coalition of the willing" rather than any structured governance or management structure - for whatever that is worth.

One thing is certain: if local authorities are against changes to their structure, and communities remain as divided about such matters as whether ocean-side drives should be for pedestrians or vehicles (or even dog sleds and skiers), the regional debate about those issues - let alone rates, priorities and costs - will surely drown out the current discussions in Parliament.


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