Thinking locally, who is the government?

A year ago a disastrous series of misapprehensions was in train which eventually scythed the top off Local Government New Zealand (LGNZ), the local bodies’ umbrella organisation.

It was all about how the Prime Minister came to be double-booked for the local government conference in July and for one of her sacred holiday breaks. Innocent and guilty alike sizzled in the conflagration.

Development of the much-vaunted “partnership” between central and local government slowed while LGNZ regrouped.

This June there is no misunderstanding. The Prime Minister will speak at next month’s annual conference. Moreover, tomorrow [subs: 14 June] the government will issue a discussion paper proposing for councils a wide “power of general competence”.

The occasion will be the third “six-monthly” forum between top ministers, led by Helen Clark, and the LGNZ council.

The first was in March 2000 and the second in November, so the schedule is a bit adrift. But the intention is intact. Central government is trying, for the first time, to take local government seriously. LGNZ has been intricately involved in drafting the discussion paper.

Centrepiece of this paper is the “general competence” notion, to be enshrined in a new Local Government Bill.

At present councils can do only what a sprawling act of around 800 pages prescribes. “General competence” would permit anything not specifically banned.

And a very broad purpose is proposed in the councils’ new bill: to “enhance the community´┐Żs social, economic, cultural and environmental wellbeing” for both the present and future generations.

This definition carries two important messages.

One is that it endorses the concept of environmental sustainability embedded in the Resource Management Act, recently reinforced by rejection of the previous National government’s proposed reforms. Councils will be encouraged to adopt triple-bottom-line accounting.

The second, subliminal, message is that local councils are, in certain respects, genuinely the governments of their territories and not delegates of central government on a short leash.

Since the forced amalgamations of the 1980s and the disappearance in the 1990s of other locally elected governmental organisations, such as hospital boards, some local councillors have begun to assert that “we are the government here”, with a representative role for their areas’ interests and wider responsibilities far beyond the traditional lean and limited roles.

That’s one theory.

But not all councils are so ambitious. Some think they don’t need nor can handle “general competence”. This broadly, but not solely, reflects an urban-rural divide once embodied in separate lobby organisations which LGNZ has not yet fully bridged.

There is also a residual reluctance in central government to let local councils off the leash. This is partly because now and then a council goes bad, as Rodney did, and someone bigger needs to sort out the mess.

And there is a tendency in Wellington see the “partnership” as a sort of cooption, extending the central government’s catchment for ideas and energy, rather than genuine devolution. Jim Anderton’s ambitious regional economic development plans depend partly on councils’ initiatives. So the discussion paper suggests regional councils should have the same range of powers as district councils.

More important, it is a matter of money.

A rewrite of the Rating Powers Act is due in Parliament soon. It will be a limited reform, retaining rates and ruling out local GST and income tax and reaffirming that central government properties are not to be rated, though they do pay for services.

This looks very much as if the old theory still holds, that local government is still just the central government’s delivery kid for fiddly local services — a most un-general competence.

Maybe not. Clark says the exemption is needed to stop councils using the central government as a captive cash cow. Conservation estates would be unaffordable if freely rated. She is not opposed in principle if safeguards can be devised.

Maybe. New Zealand is a tiny country, smaller than many foreign local government political entities. If the central government is genuinely to increase local councils’ real power, it is likely to be only incrementally.