That ”D” Word: What Are We Voting for This Week?

Listener 10 October, 1998.

Keywords: Governance;

The new Minister of Local Government, Tony Ryall, began his first address with “Local Government is an important part of our economy. It’s 3.5 percent of our country’s GDP. Local government can either help the country or it can hinder. With the problems of Asia bearing down on us, every part of the economy has a role to paly in helping our nation weather the storm. Local Government must contribute to the international competitiveness of New Zealand exporters through good infrastructure, efficient regulation, and control over costs.”

Well, yes. But in a reflective speech there was not a single reference to the “D” word. Local government may be a part of the economy, but it is also a part of our democracy, whose role is increasing under MMP. Jenny Shipley’s government’s first parliamentary defeat was over the bill to reform the Auckland Regional Services Trust. Instead of the government imposing on the people of Auckland, she had to consult with their representatives to obtain a solution which reflected Auckland’s rather than Wellington’s preferences.

This will not be the last occasion. Under the winner-takes-all government of FPP, central government could domineer the local tier. Neither the central government politicians nor the bureaucrats had much respect for local democracy, so they did. Recall the bullying local government reforms of the late 1980s, and the raft of prescriptive local government legislation since. But under the non-majority-party government of MMP, the government can never be sure of its majority in parliament, so it has to be more responsive to local desires.

We are already seeing this in those parts of the government’s program which affect local government. Roading reforms, which would have commercialised the local government network, are being modified. The government’s enthusiasm for privatisation of water supply and waste-water (sewerage) has hit the reality of public antipathy. Interest group proposals to change the Resource Management Act in their favour appear to be on hold.

It is not just that the public may have different views from the Wellington-based government, views which are reflected in the people they elect to their local councils. The views often vary greatly across the country. Auckland City’s roading aspirations are quite different from those in the Bay of Plenty which Ryall represents. Christchurch’s water and waste-water system is very different from those of the Hurunui Council a few miles to its north. The environmental concerns of Hamilton may be quite different from those of the West Coasts
That is why local government exists. Local circumstances and local concerns require local responses. There is a central government anger against the heterogeneity of the region of New Zealand. It does not celebrate the differences, recognizing the role of local government as a means of giving expression to them, and providing effective responses to local problems. Proper consultation commits the participants to the policy, instead of central government imposing policies which nobody owns (and often do not work).

This anger has meant the obvious solution to the economic role of local government has been ignored. In the row between the Business Roundtable and the People’s Republic of Christchurch, the Roundtable overlooked that local authorities are competing for business and employment opportunities for their citizens. If the Roundtable is correct, businesses will flee to those centres which pursue the wrong policies. If the Roundtable is wrong, they may not. This places a discipline on local authorities which is much more effective than the whining of the Business Roundtable.

Ryall is one of a number of promising young Ministers. The Prime Minister has given him the key portfolio of local government, requiring the developing of effective and mutually respecting relationships between the central government and all the local authorities. A first step would be to create a separate Ministry of Local Government, which was not obsessed only with economic issues, and which had some affection for the D word.


Towards Regional Policy Again?

Before 1984 there was a fearsome debate about whether the government should attempt to influence the distribution of population. Interest in regional development collapsed as the ideology of “the market knows best” came in vogue. But the market poorly handles congestion costs and other such externalities.

The recent Auckland regional growth plan raises the prospect that the city may come to a standstill from population pressures. (One summary of the plan was that many houses will be destroyed to put in roads required for the increased traffic. Aucklanders wont need the houses because they will be sleeping in their cars as a result of traffic gridlock.) There will be some funding relief from Infrastructure Auckland. Even so it would be wise to consider the alternative strategy of lower population growth and a better quality of life. (Land speculators and property developers may complain. Their financial returns exempt them from having to live in the congestion they create.)

Alternatives include satellite cities near Auckland, growth in the secondary urban ring of Whangarei, Hamilton, Rotorua and Tauranga, or attracting some population much further south.