Good afternoon, and thank you for the invitation to speak to you today.

Auckland is the engine for New Zealand's economic growth, so it's important to all New Zealanders that the region prospers.  While Auckland performs strongly now, we believe it has enormous potential to significantly improve its productivity and growth and become a truly world class city.

That's why the Government is determined to set up a governance structure that supports the productivity and competitiveness of Auckland's businesses, and ensures that the region's assets and facilities maximise economic development, and enhance tourism, and cultural and social events.

We are working to provide a much better environment for Auckland's people and businesses to interact with local government.  Strengthening Auckland's governance will make the city a better place to do business.

Reform of Auckland governance is a top priority for the Government. 

After decades of endlessly discussing the problems, we are actually delivering solutions - and it's a great privilege to be leading the charge. 

We are on track to have the new governance arrangements in place in time for next year's local body elections.

There is broad agreement in Auckland that the existing local governance is hampering the region's growth and prosperity and impacting residents. 

The reforms are about reducing local government inefficiencies and weak, fragmented regional government in greater Auckland.

The Local Government (Tamaki Makaurau Reorganisation) Act was passed into law in May this year, establishing the Auckland Council and the Auckland Transition Agency.

The recently-passed Local Government (Auckland Council) Act, deals with issues such as Auckland Council's representation arrangements, including local boards and Auckland's boundaries. 

A third Bill, to be introduced later this year, will fill in the detail of the ongoing governance structure, functions, roles and powers of the governing body and local boards.
 
The Bill will also deal with water, transport, spatial planning and resource management issues.

The key elements of the new Auckland arrangements are:

- a unitary Auckland Council, with the powers of both a regional council and a local authority;

- one Mayor for Auckland with enhanced governance powers, and elected at large by the region's residents and ratepayers;

- 20 councillors elected from wards;

- the mayor and councillors together forming the governing body of the Council; and

- 20 to 30 local boards across the region forming the second, complementary, tier of governance.

The Auckland Council as a unitary authority will be the centrepiece of change in the governance arrangements.  It will represent the interests of the entire Auckland region and foster a common identity and purpose across the region.

The Auckland Council will be responsible for all assets, regional infrastructure, and employing council staff.  As a unitary authority it will be well positioned to provide cost-effective and efficient essential services and facilities to its residents. 

A new unified Auckland Council will consolidate and streamline services such as administration and office systems, finance, human resources, information technology, and delivery of services. Each council currently operates its own systems, so there are savings to be made here.

The new set up will minimise the transaction costs for businesses and individuals who deal with the Auckland Council. 

The Council will develop one set of financial plans and policies for the region.  It will also provide administrative services for itself and local boards for back-office functions, resulting in cost savings.

A unified rating system will be developed and progressively implemented as part of a new planning and budgeting cycle from 2012.  The Council will decide on the specific distribution of the rating burden. 

The select committee's report on the Local Government (Auckland Council) Bill noted that a significant number of submitters favoured ward-based arrangements to provide for the best possible representation of the diverse communities of interest in Auckland.

After considering the report and the views of submitters the Government decided that:

- the mayor will be elected by all Aucklanders using the first past the post voting system for the first election;

- all 20 members of the Council will be elected from wards, also using the first past the post voting system for the first election.

The role of the Mayor of Auckland will be critical in leading Auckland to be a world-class city and implementing the vision we have developed for Auckland. 

The mayor's role will be to:

- articulate and promote a vision for Auckland;

- provide leadership for the purpose of achieving objectives that will contribute to that vision;

- lead the development of plans, policies, and budgets for consideration by the Council; and

- ensure there is effective engagement between the Auckland Council and the people of Auckland.

The mayor will have the following powers:

- to appoint the deputy mayor;

- to appoint the chairperson of each committee of the governing body;

- to establish and maintain an appropriately staffed office of the mayor, within the budget set;

- to establish committees of the governing body of the Council; and

- to establish mechanisms for effective engagement between the Council and the people of Auckland.

The Local Government (Auckland Council) Act provides for 20 to 30 local boards to function as the second tier of governance.  Local boards will provide effective and meaningful local representation with the powers, status and funding to serve the communities they represent.

The exact number of boards, number of board members, and the exact boundaries of these boards will be determined by the Local Government Commission, by March next year. 

The Act sets out the local boards' decision-making powers, budgetary arrangements, accountability measures, and bylaw-proposing powers.  We want to ensure that the boards are sufficiently empowered to adequately represent, advocate for, and make decisions on behalf of their communities. 

By serving local interests, local boards will allow the Auckland Council to focus on critical regional issues. 

This is a delicate balance, however, as the Government does not want the local boards to undermine the Auckland Council's decisions on regional matters. 

The legislation that Parliament has passed will ensure that decision-making by the two tiers of the Auckland Council will be allocated according to clear principles, and that the governing body of the Council and the local boards will sit alongside each other and have distinct roles, rather than operate in a hierarchical relationship.

The Government believes that the structure strikes a balance between enabling co-ordinated decision-making on the big regional challenges while providing for a strong community voice and representation.

An improved regional focus will result in better infrastructure decisions, including more integrated decisions on functions such as roading and land use. 

The structure will also ensure better value from rates and central government funding, by reducing duplication and delays in previously intractable problems such as transport issues.

Merging all the existing water providers will improve the way that Auckland's water infrastructure is looked after and will lead to better demand management, better environmental management and cost savings.

Various reviews of the Auckland water services industry have concluded that amalgamating the existing operations would lead to annual cost savings of up to $10 million.

Cabinet has confirmed that a Regional Transport Authority (or RTA) will be established, with functions, powers and duties that will include planning and delivery of public transport.

The RTA will be able to provide a greater focus on transport issues than the Auckland Council can. 
The RTA will be responsible for public transport, including buses. 

It will be accountable to Auckland's ratepayers and citizens, rather than to me as the Minister of Local Government, for its specific actions and decisions.  More detailed decisions on transport policy issues will be included in the third Auckland governance bill. 
The new Auckland Council will be responsible for delivering community services, but we expect local boards will be closely involved in developing, proposing and advocating on the nature and type of services to be provided within their areas.

I appreciate that any major reform process will cause some uncertainty. 

Tenders and similar processes now under way with existing councils will continue unless there is a clear reason to change in the light of the Auckland Council proposals. 

The Auckland Transition Agency will be working with councils to ensure tenders and similar processes support the new structure and the anticipated needs of the whole region.

Where a council has given a formal commitment (of a type that would be enforceable in law) to a community or individual, this commitment will continue to be enforceable under the new structures.

Where a commitment is not of a type enforceable by law, Auckland Council will be accountable to its communities for acting in a responsible and honourable way.

Supported by the hard work of high calibre officials, and the great engagement we've had from Aucklanders, we are on track to delivering the new governance structure in time for next year's local body elections.  It's a challenging time frame, but one the Government is committed to meeting.

I am happy to hear your comments now and answer any questions you have.  Thank you again for the opportunity to join you here today.