Managing Rodney: a local test for Key

Will John Key and Rodney Hide be on roughly the same page in their speeches to the local government conference on Monday and Tuesday? For National’s sake, they have to be.

Hide has picked up where Maurice Williamson left off in the last National-led government. One get-together of predominantly conservative local government grandees was — until wiser counsel prevailed — itching to pass a vote of no-confidence in Hide.

The wiser counsel went thus: councillors agree with some of Hide’s concerns (such as central government dumping new duties on local government without commensurate funding); Hide is not the whole government and the National party has been trying to be nice; and attacking Hide will be grist to his populist mill.

What worried local body grandees was that Hide might be a stalking horse for National ministers wanting to be more daring but not quite daring to be. Not so, was the word behind the scenes: the issue was one of political management. The government is still learning that art.

That learning curve bent upward in the super-Auckland misfire. Hide produced a quickfire proposal which the cabinet bought and thereby also bought a storm. Key had to do his trademark soothe and appoint Associate Local Government Minister John Carter, whom in 2007 and 2008 he had sent round the local body traps repairing Williamson’s damage, to chair a special select committee.

Large adjustments to Hide’s Auckland blueprint are likely.

Changes are likely also to Hide’s April cabinet paper on reforming local government, which is what riled the grandees.

Floating in local government circles is a critique of this paper which in essence says the paper owes more to rhetoric drawn from ideology and hearsay than to analysis based on principle and evidence.

Example: the cabinet paper refers to “widespread concern”, “numerous complaints” and suchlike without sourcing or quantifying them. That does not gell with Hide’s insistence, as Minister for Regulatory Reform, on rigorous cost-benefit analysis in advance of regulatory or legislative change.

Example: the paper bemoans above-inflation residential rate rises in a sample of councils but those rises reflect, at least in part, the rebalancing of business and residential rates, central government impositions, the difference between council cost rises and consumer price rises and the need to fix infrastructure backlogs. The Shand commission in 2007, which projected 10 years of rate rises to pay for infrastructure, said rates would rise only to the same percentage of GDP as in the 1980s.

Example: the paper sought lower compliance costs but tougher financial transparency and accountability which would add compliance costs; it wants less onerous consultation on long-term plans but more ratepayer participation in deciding what councils do.

Example: at the core of that cabinet paper is a demand that councils stick to “core services” but did not define the core and nor has Hide in his speeches; he has said he knows what is not core.

The act under which councils have to operate charges them with their communities’ economic, social, environmental and cultural wellbeing. That suggests a wide “core”.

But Hide didn’t need a definition. He has a mechanism: ratepayers (and not other voters?) would be able to “tick a box” to cap rate rises to the rate of inflation. That’s democratic.

National is not keen on this. It notes California’s travails because of a tax cap imposed by binding citizens-initiated referendum.

So to get rate caps or spending cuts or a retreat to “core services” voters will have to do what they did to several councils in 2007: vote out big spenders and put in smaller spenders.

Council rates and spending were in fact issues of concern and complaints — and debate — in the 2007 elections. They no doubt will be in the 2010 elections. People don’t like paying rates, especially for things they don’t want councils to do, though one ratepayer’s/voter’s undesirable activity is another’s desirable activity, which is the sort of disagreement representative government is designed to resolve.

So there is much for Key and Hide to iron out between them.

The word is that they have exchanged notes and, while there might be some light between them, their speeches will be reconcilable. That’s political management.

In other words, while Hide is engagingly bouncy and blunt and Key more measured and conciliatory, they broadly agree on promoting council efficiency, collaboration and containment of costs and rate rises.

National, for example, is keen for councils to take much further the collaboration some have initiated, in drawing up plans, in borrowing, in purchasing and in delivering services. Wairarapa’s three councils have one district plan. In Canterbury and Southland councils share many services. Hide backs all of that.

The challenge for Key’s management is that Hide leads with the ideas but Key must be in charge. That is what to watch for on Monday and Tuesday.