Good afternoon and thank you for the invitation to address you today.

I have been asked to talk to you on the topic of Making Auckland greater - a long term investment plan for Auckland, touching on some of the areas, such as transport, that I think will be of interest to you. I will also talk about some of the general reforms we have planned for the local government sector, as these reforms will have an impact for infrastructure.

The importance of a strong infrastructure can never be overstated. Auckland's infrastructure is not as good as it should be, although there have been some positive individual initiatives.

Infrastructure development is high on the Government's agenda and the governance changes in Auckland and other reforms in the local government sector will help drive this priority.

If Auckland's economy thrives, New Zealand thrives.  That's why the Government is determined to set up a governance structure that enhances the productivity and competitiveness of Auckland's businesses, and ensure the region's assets and facilities maximise economic development, tourism, and cultural and social events.

Government arrangements for the Auckland region have been a concern of successive governments for fifty years.

We can even go back as far as 1919 when Michael Joseph Savage campaigned for Labour supporting a single Auckland Council.  And fifty years ago Sir Roger Douglas's grandfather, Bill Anderton, Minister of Internal Affairs, called on Aucklanders to unite with a single council.

So the idea is not new, but delivering it is. 

As part of the National-led government I am delighted to be driving the reform programme, developed from the Royal Commission on Auckland Governance, which reported in March this year.

The goal of "making Auckland greater" underpins the Government's response - enabling Auckland to become a truly world-class city.

Auckland's future depends on critical decisions being taken at a regional level. Our view is that critical decisions must be supported by region-wide governance arrangements to overcome the competing interests, parochialism and factionalism that have held the region back for far too long.

The Government agreed with the Royal Commission that there should be a unitary authority governing the entire region to foster a common identity and purpose.  A unified Auckland Council will consolidate and streamline services such as administration and office systems, finance, human resources, information technology and delivery of services.
We have also enhanced the Royal Commission's recommendations in respect of community representation.

Just as regional issues need regional solutions, the functions that are best performed at the local level should have local advocacy and decision-making.

To ensure we have strong community representation we are proposing 20 - 30 local boards, to develop local policies and advocate to the council for community needs. Work is still underway to determine what statutory roles and functions these local boards will have. 

The Special Select Committee into Auckland Governance will report back on this and other issues in the next couple of weeks. 
I've been very impressed with the engagement we've have from Aucklanders, with nearly 1500 submissions being received by the committee.

The bottom line is we want the local boards to have some real power and some real say in their local communities that make up the Auckland region.

Transport, as you will appreciate, is one of the biggest issues facing Auckland.

The Royal Commission identified a lack of integration between transport modes, slow decision-making and the complicated nature of current governance arrangements. It recommended establishing one Regional Transport Authority with responsibility for arterial roads and public transport.
The Government has decided that local authority transport functions should be managed by one entity to overcome problems of fragmented decision-making.

I believe this will provide the incentive and momentum to develop a much needed world-class transport infrastructure across the Auckland region.

The Government has made an ‘in principle' decision that a Regional Transport Authority has responsibility for local authority transport functions.

We have modified the Royal Commission's proposal by ensuring the responsibility for the rail corridor and state highways stay with the relevant central government agencies.
This recognises the fact that there are national networks that are nationally funded. 

We have also proposed including local roading operations within the Transport Agency.

However, special and local planning roles will be retained by the unitary council and the local boards to ensure community input to the planning processes.

One consolidated local government transport body will result in more integrated provision of local road transport services.  It will also provide a clear and simple transport governance structure, solving many of the current problems of fragmented, costly and drawn out decision-making processes. 

Roles and responsibilities between national and regional levels of transport administration will be simpler and clearer - a critical factor in making faster and better transport decisions that have far ranging implications for the country's economy beyond Auckland.

We appreciate that there are a range of views around the value of a Regional Transport Authority. These issues are complex and require further consideration before final decisions are made on Auckland transport governance.

The Government has agreed that the final decisions on Auckland transport governance will be made in the course of developing the third Bill, which comes before Parliament in November.

I am sure you will agree that the issue of water is one that needs to be carefully addressed.  The current system for control of water and waste-water is fragmented and has resulted in sub optimal planning and investment. 

We need more integrated planning that will result in more efficient decisions being made across the region.  Ultimately we need to ensure that Auckland's water infrastructure is looked after, and that users can benefit from better environmental management and cost savings.

As you are no doubt aware, the Government has a legislative programme underway to deliver the Auckland governance reforms.

The first piece of legislation, which came into force in May, established the Auckland Transition Authority and its governing body.  This Act enables the current form of local government to transition to the proposed Auckland Council by 1 November 2010 - just after the local body elections.

The second piece of legislation - the Local Government (Auckland Council) Bill, covers the establishment of the council and twenty to thirty local boards, empowers the Local Government Commission to decide ward boundaries for the Auckland Council and local boards, and provides for the integration of Auckland's infrastructure.

A third bill will be introduced later this year to provide for the ongoing governance structure, function, roles and powers of the council and local boards, and detailed legislative framework for governance arrangements. As I said earlier, this Bill will deal with transport issues.

I am pleased with the progress being made by the Auckland Transition Agency, under the very capable leadership of Mark Ford, formerly from Watercare.  A strong Board and staff are working hard to manage the transition to the new governance arrangements for Auckland by 2010.  They have a huge challenge ahead, but it is an exciting one.

Reform of Auckland governance is part of a wider overhaul of local government that I am currently leading.

We face some clear choices and important decisions.  Local government expenditure has risen faster than inflation, and  the sector predicts this trend will continue. 

We can't go on like this.  The burden on businesses and ratepayers is too high.

Councils must improve the efficiency of service delivery and consider the quality of all their expenditure.

We have a raft of actions underway to achieve a more streamlined, efficient and responsive local government sector.

Officials are working on a review of the Local Government Act (2002) to ensure that ratepayers and citizens have better tools for controlling costs, rates and activities. The review also aims to improve transparency, accountability and financial management.

Let me be very clear that this work is not about prohibiting local government from doing things. 

It's actually about enabling the sector, but with greater involvement of ratepayers and citizens in authorizing what is spent on their behalf.  We must never forget that ratepayers' money provides the funding.

The work is also about reducing the amount of central government direction to local government - giving ratepayers a greater say.

The work is being guided by three principles:

• local government should operate within a defined fiscal envelope,


• councils should focus on core activities, and


• council decision-making should be clear, transparent and accountable.

To ensure better fiscal management and focus on core activities, councils need to take a strategic approach to budgeting by first establishing limits on expenditure, rates, and debt, and setting priorities within those limits.

Local government should be about enabling democratic local decision making and action by and on behalf of communities.

The sector needs to shift the emphasis of decision-making from ‘on behalf of' citizens and ratepayers to ‘by' citizens and ratepayers.

As part of this work, we will be looking at the circumstances in which referenda and polls can be effectively used as decision-making tools. Referenda have already been used by some councils to gain a mandate for council spending and particular initiatives.

You will be aware of the recent publicity on the question of core council services. 

Since last year's election I have received thousands of letters and comments from ratepayers unhappy with a particular decision of their council. I am determined to oversee a better relationship between local authorities and their electors.

There is currently no formal definition of local authority core services. Officials are working on defining what are, and are not, core services.

I am not suggesting that the Government stop councils from doing things - despite what you might hear on the news. 

Nor do I want to tell local authorities what they can and cannot do. What I am proposing is that councils focus on core services and seek a citizen mandate for activities that are non-core services.

This will encourage greater local democracy and I think a better connection between councils and ratepayers.

I know that many of you here today are infrastructure constructors and developers, asset owners and operators and service providers. 

Through your engagement with local government, I believe you will see, over time, direct benefits from the transformation of Auckland governance and the wider local government sector.

Some good opportunities will flow from a better, more unified Auckland, and a more transparent and responsive local government sector.

Thank you again for the opportunity to talk to you today. I am looking forward to your questions and comments.

ends