Speech to Taradale Rotary Club

Good evening. Thank you for the invitation to speak to you about regulatory reform, and the reform of local government in New Zealand.

I am very proud of the Government's work programme in the areas of local government, Auckland governance and regulatory reform.

We also have a programme of work underway to remove inefficient regulation and to reduce the costs and constraints imposed by regulation.

As Minister of Regulatory Reform, I'll talk about the Government's work in this area.
 
Changing my ministerial hats, I will say a few words as Minister of Local Government about my proposals to increase the transparency, accountability and fiscal management of Local Government and the reform of Auckland governance. Both are  top priorities for me and the government right now and of interest to you, I'm sure.

My ministerial colleagues and I are committed to better and less regulation. That's how we will make New Zealand a better place, contribute to a more business friendly environment and create new jobs.
 
Better and less regulation is vital to boost New Zealand's productivity growth, international competitiveness, living standards and human potential.

You may know that a Regulatory Responsibility Taskforce was established in April 2009 to provide independent advice on the Regulatory Responsibility Bill that was considered by Parliament's Commerce Select Committee in 2008.
 
This taskforce has now made recommendations to improve the original Bill. They include requiring Ministers and Chief Executives to certify whether a regulatory proposal is consistent with good practice regulatory principles, and to justify any departures from them.

They also recommend that the political and economic costs of new legislation and regulations be made clearer, to allow more accurate and informed governmental and public debate before legislation and regulations are introduced.
 
Cabinet has already made changes to improve regulatory processes and ultimately lift the quality of regulation in New Zealand.

From November 2009, departments and ministers have been required to back up their regulatory proposals with evidence and analysis that prove, rather than assume, the need for intervention.

We are committed to addressing the high compliance costs that hamper the efforts of businesses to create jobs and support our economic growth.
 
Specific examples of work being done in regulatory reform include the Resource Management Act 1991 and the Building Act.

Environment Minister Nick Smith and I recognise that the uncertainty and delays created by the requirements of the Resource Management Act 1991 - otherwise known as the RMA - are affecting New Zealand's economic growth and productivity, causing huge frustrations for applicants and councils alike.
 
RMA reform is an important part of the Government's work programme and the Government is making good progress on this. The Resource Management (Simplifying and Streamlining) Amendment Act, which will reduce unnecessary red tape without compromising environmental protections, has passed into law.

Already people are telling me how this change is making life easier and business easier to do.
 
Phase Two of the RMA reform will include looking at issues such as aligning legislation like aquaculture reform, urban development and water allocation.

Building and Construction Minister Maurice Williamson is reviewing the Building Act 2004.

The Building Amendment Act 2009, which came into force in August, will speed up the building consent process and reduce costs.
 
It also introduces multiple-use building approvals that will reduce duplication and fast track the consent process for group home builders building homes on sites across the country using the same, or similar, designs.

The Act also defines a new, streamlined process to manage minor variations to building plans after the consent is used, thus saving time for applicants and councils, and making project information memorandums voluntary.

The review will also look at other longer-term issues around improving the allocation of risk and liability, and the greater use of insurance and warranty products to better manage risk.

Work is progressing on establishing the concept of a New Zealand Productivity Commission.  This body would contribute to the goal of increasing productivity by having independent power to investigate barriers to productivity and look at ways of improving New Zealand's performance.
 
The important point about the Commission is that it will act completely independently of politicians.  It will be objective, independent and provide the potential for real progress on the productivity goal.

I'd like to now talk about the Government's work on improving transparency, accountability and financial management in local government.

I started this work because it very quickly became clear to me, from letters I received and the public meetings I attended, that ratepayers are concerned about constantly increasing rates, and many are struggling to pay these increases.
 
These concerns are well founded. Recent analysis by the Department of Internal Affairs on data from the 2009 to 2019 long-term council community plans (LTCCPs) shows public debt for the local government sector is forecast to increase by 97 per cent and interest expenses by 91 per cent.

Even more concerning is that the cumulative increase in rates per head over the next 10 years is 49 per cent, and that rates funding will increase as a proportion of councils' operating receipts.

It is ratepayers, including commercial ratepayers, who are expected to pay for most of the increases.
 
More effective and responsive local government and a brighter future for ratepayers are most easily achieved by improving the Local Government Act 2002, essentially making it more ratepayer focused.

The decisions recently made by Cabinet will help ratepayers and residents to understand council costs, rates and activities a whole lot better so they can exert greater influence and control during planning and decision-making.
 
The three underlying principles guiding this work are:

• local government should operate within a defined fiscal envelope


• councils should focus on core activities


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

Cabinet has made decisions on which of my proposed reforms the Government supports and I plan to introduce legislation into the house to implement them early this year.
 
Once these reforms are implemented, long-term council community plans (LTCCPs) will be simpler and more strategic in focus, financial disclosures will be in plain English, and councils will have more flexibility in choosing effective and efficient delivery methods for water services.

Currently, Councils vary widely in their presentation of financial and performance information. Even something as simple as rates income is reported in three different ways in council plans and reports.
 
With my proposed changes, council reporting will become consistent across the country so that residents and ratepayers will be able to make comparisons between different councils.

From 2013, every council will produce a pre-election financial report. Pre-election financial reports will compile existing information, giving an account of activities over the previous three years, and identify proposed items of expenditure for the next three years.
 
Ratepayers and residents will then have up-to-date information about the performance of the current council and the status of the books, and a clear understanding of the issues the incoming council will need to consider.

Greater scrutiny of councils books will also result in better prioritisation of essential infrastructure projects and clearer identification of the cost of council proposals.
 
I am hoping that this will encourage well-informed debate about expenditure priorities, and electors will have a chance to put the hard questions to candidates about past and proposed expenditure.

I believe the consultation requirements on councils at the moment are unnecessarily onerous and complex. Worst of all, they are largely incomprehensible to ratepayers.
 
Most LTCCPs are bulky documents running to hundred of pages and often more than one volume. This makes it difficult for residents to identify the things that really matter to their communities, and can also deter them from taking part in decision-making processes.

I plan to remove a lot of the more descriptive, highly technical and non-strategic material from LTCCPs to produce a document people can more easily understand.
 
The community outcomes process will be merged with the long-term council community plan. LTCCPs will be renamed "long-term plan" and will have a more strategic focus thereby eliminating the costs and inefficiencies of running two separate long-term planning processes.

These changes are ultimately about enhancing local democracy by giving electors more say in what activities their councils are involved in. This is what I mean by increasing local government information transparency and accountability.
 
It is not for me, as Minister of Local Government, to direct councils on how to prioritise their specific spending, but it is my intention to ensure councils carry their local communities with them on decisions affecting ratepayers.

It is important that local decisions continue to be made locally, rather than by central government.
Council activities and decisions should match the priorities of ratepayers who foot the bill.
Local elections have not had a high turnout in recent years.
 
Access to clear information on issues facing a council and the sorts of decisions that need to be made will do a great deal to stimulate greater interest in local government amongst voters, businesses and the media. Greater participation is in all our interests.

These reforms are about giving councils, in consultation with ratepayers and citizens, the ability to do a better job by prioritising expenditure locally and staying focused on the provision of essential services.
 
These changes will be provided for in the Local Government Amendment Bill, which I plan to introduce to the House early this year. There will, of course be a chance for public input through the Select Committee process, and I encourage people to make their views known.

As you will be aware the reform of Auckland's governance is a top priority for the Government. We will have the new arrangements in place in time for the 2010 local body elections and we are moving fast and effectively to achieve that goal.
 
This is important not just for Aucklanders but for all New Zealanders.

Auckland is home to more than a third of our population, and the engine room for New Zealand's economic growth.

We all have a stake in the region's growth and prosperity, and the Government wants the Auckland region to attract both people and investment.
 
A region-wide focus in Auckland will result in better infrastructure decisions which will have a flow on impact for the rest of the country.

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.

In short, we are confident the changes will lead to more cohesive and effective governance of Auckland, and, in the longer term, better results for Aucklanders and the rest of New Zealand.
 
Two bills were passed in 2009.

The Local Government (Tamaki Makaurau Reorganisation) Act passed into law in May. It established the Auckland Council and the Auckland Transition Agency.

A second Act, the Local Government (Auckland Council) Act, which was passed in September, dealt with the Auckland Council's representation arrangements, including local boards and Auckland's boundaries. 
 
These will be decided by the Local Government Commission and announced in March this year.

The Act also allowed for the Auckland Transition Agency to approve a process for, and oversee, the planning and management of the integration of Auckland's water supply and wastewater services by Watercare Services.
 
A third Bill was introduced in December.
 
It provides for the ongoing governance structure, functions, roles and powers of the governing body and local boards of the Auckland Council, and will complete the detailed legislative framework for governance arrangements. The Select Committee will soon commence hearings on the Bill.

This Bill amends the first Act to make further and full provision for the establishment of the Auckland Council.
 
It will also provide for the interim operation of the Auckland council from 1 November 2010 until it develops its own long-term plan, and rating and financial policies.

Public submissions on this Bill close tomorrow, and the Select Committee will report back to the House on 4th May.
 
We expect the new unified Auckland Council to provide many benefits for its residents and ratepayers and serve as a positive example for other regions to follow in the future.  It is all about making Auckland a truly world class city.

Further down the track, we will consider the implications of the review of Auckland's governance for local government generally.

Currently, the government has no plans to amalgamate the councils in the Hawke's Bay region. However, I am aware that the Hawke's Bay councils have been discussing this. I know Lawrence Yule is in favour of amalgamation and is planning a referendum in 2012.

I am always encouraging councils to find new ways of working together efficiently and effectively and I encouraged that your region is collaborating on new ideas.
 
It's good to see, for example, that councils in the Bay are already working together on projects like the Heretaunga Plains Urban Development Strategy that will bring a coordinated approach to urban development across the Heretaunga Plains.

Another great example is Hawke's Bay Airport, which is operating as a company with the Crown, Hastings District Council and Napier City Council as shareholders.
 
Legislation or ministerial intervention is not a requirement if local communities decide they are keen to investigate the prospect of council amalgamation. 

The process for proposing local government re-organisation or boundary changes to the Local Government Commission is set out in statute.  If you are interested in this issue, I encourage you look at the Commissions website and familiarise yourself with the process.
 
Any request for the Government to consider special legislation for a reorganisation proposal for a specific region would need to explain why the existing provisions for reorganisation under the Local Government Act 2002 are not sufficient.

Thank you for the opportunity to talk with you today. I am looking forward to hearing your views and answering some questions.

ends