National's local issue with its minister

How local is local? How much governing should local government do? Rodney Hide has strong ideas on both. But will he carry the cabinet?

A fashionable 1990s theory was that decisions and actions should be taken, as far as practicable, at the level nearest those affected. The national government would deal with something affecting everyone in a country. Local or regional councils would deal with things primarily affecting people in a locality.

In New Zealand the result was 2002 legislation giving local and regional councils a “power of general competence” and responsibility for the economic, social, environmental and cultural wellbeing of their communities.

It changed councils’ brief from a prescribed list of permitted actions to permission to do anything not proscribed.

In fact, not much has changed, except that rates have gone up and ratepayers periodically grumble. Hide backs the grumblers.

There are two governmental reasons why rates go up. One stems from what councils decide to do and how efficiently they do it. The other stems from what Parliament tells councils they must do, for which the central government does not always supply enough funds.

So councils have had to meet higher water supply quality standards. In the wake of the leaky buildings scandal, they have had to apply higher building inspection standards, on pain of liability if they muck up and building owners want redress.

National ministers are sympathetic. Environment Minister Nick Smith has pushed back the water quality deadline. A review of the Building Act is likely to ease councils’ burden.

But Hide, who is Minister of Local Government, set out to go much further. He put up a cabinet paper in early April (supported by speeches in June) setting up a review he characterised as “guided by the principles that local government should operate within a defined fiscal envelope, councils should focus on core activities and decision-making should be clear, transparent and accountable”.

His aim was simpler long-term plans so people can relate to them, financial strategies to limit rates, debt and spending and to prioritise spending in place of a “wishlist”, pre-election fiscal updates, a less costly service performance reporting system and an option for ratepayers at election time to “tick a box and thereby control council spending to, say, the rate of inflation”.

He thinks many council CEOs in effect run their councils and has mused on giving mayors executive powers to counter them.

Some of Hide’s ideas, such as on central governments’ onerous requirements, resonate with many councillors. But more of his ideas — and his general characterisation of councils as weak or spendthrift — have dismayed or angered them.

The risk for National is a repeat of the late-1990s estrangement, with conservative councillors as much as with left-leaning ones. That was not fully repaired until the current National Associate Minister of Local Government, John Carter, once a county council CEO, went visiting councils on John Key’s orders.

Tied in with this is Hide’s hard-driving one-Auckland council approach. Having initially endorsed Hide’s plan, including its speed and its rejection of a need for consultation on the ground that the royal commission had done enough consulting, National ministers were quickly on the back foot as opposition mounted, both to Hide’s substance and his style. Carter said in June he had learnt a great deal from the public meetings organised to quell the outcry and had changed some of his thinking.

The Auckland experience made National ministers wary of Hide’s out-in-front, in-your-face (though also, in person, engaging) style. One senior minister counselled agitated council grandees not to publicly counter-attack because that would give Hide ammunition to pitch to disgruntled ratepayers.

Staying polite would enable National more easily to adjust the programme behind closed doors and get Key and Hide on message — by, they hoped, the local government conference late last month. (Run your own ruler over that.)

Much of Hide’s ambition doesn’t quite fit other government objectives. For example, the home insulation job-creation package involves councils. Much that is “core” activity serves national needs: Arts Minister Chris Finlayson advocates council support for the arts; John Key wants a national convention centre, which will need local partnership; community safety programmes, such as CCTV cameras and community patrols, supplement police work. Are they “core” or not?

And National does not want California-style rate-capping by popular (populist?) referendum. Tax-capped California has gone bust. National doesn’t much like referendums anyway.

So how local is local? That’s for local judgment — and national political management.