Election 2020

The Council-Government divide

The Finance Minister has expressed his surprise at the disconnect between councils and government but a local government expert says it's nothing new

Like every first-term councillor Jenny Condie turned up to her Wellington City Council council meeting with grand plans. 

Condie holds a phD, was a former Treasury employee and university lecturer.

"We can choose whatever colours we want, but the picture is drawn by central government."

She ran for Mayor, lost, but got enough name recognition in the process to beat the odds and unseat a sitting councillor in the process.

"I thought that I was pretty well prepared. I've got an accounting background and I understand management, governance and public service.

"You think council is just going to be 'mini-Parliament' in a way, but it's completely not.

"We have to colour inside the lines...We can choose whatever colours we want, but the picture is drawn by central government."

'There was virtually no interaction'

Finance Minister Grant Robertson believes the disconnect goes the other way as well.

Speaking at "Constructive" - the NZ Construction Industry Forum - he expressed surprise government officials couldn't produce a list of upcoming local government infrastructure projects on their own after Covid-19 hit.

"We need a much greater partnership between central and local government.

"One of the most extraordinary things for me was the lack of information that central government had about what local government was doing in terms of what projects were coming through.

"There was virtually no interaction there."

Councils not a priority

Local government think tank director Peter McKinlay said the disconnect between local and central government was nothing new. 

Councils were simply not a major priority for central government politicians.

"If someone turns up to your electorate office to talk to you about the council, it's highly unlikely they're coming to tell you what a wonderful group of people they are."

And when the two interacted it was often via an enraged constituent who would walk into a MP's office with a complaint of some kind.

Something which did little to endear central government politicians to local ones.

"There's been a long-standing relative disregard for the capability of local government within central government.

"If someone turns up to your electorate office to talk to you about the council, it's highly unlikely they're coming to tell you what a wonderful group of people they are."

The disconnect formed a big part of a Productivity Commission report released with little fanfare in February.

In a summary of the Commission's previous work in the area it lambasted the lax skills of councillors, the central-local government disconnect, debt-aversion, and a rates burden councils kept artificially low despite increased infrastructure needs.

"Few central government staff have sufficient in-depth knowledge and understanding of the local government sector," they said.

"A recurrent theme across the Commission’s inquiries has been the poor state of relations between central and local government.

"This failure arises from a lack of understanding of each other’s roles and of the constitutional status of local government."

A council is not a household

The Productivity Commission report also criticised the skills and experience levels of the councillors themselves which hampered their ability to make informed decisions on important issues like infrastructure.

"One of the ways this shows up is in the perennial misunderstanding around local government debt.

"It’s common to see councillors campaigning on a platform of low or no debt, as if a council has a budget to be managed like a household’s grocery bill."

An unwillingness to take on extra debt - despite many councils not having hit the outer limits of their debt covenants - had lumped future generations with failing infrastructure and a housing crisis.

Although the refusal of most councils to raise rates has also played a major part.

Central government has ramped up its tax take from less than 10 percent of GDP over 100 years ago to more than 30 percent today.

Local government rates are still sitting at the same levels they were - as a percentage of GDP - in 1895 when Queen Victoria was head of state.

McKinlay said rates rises were a lot more difficult to pull off politically than tax hikes - at least in the current century.

A worker might not feel a Pay As You Earn (PAYE) tax as it's deducted from their bank account, but a property owner has to go out of their way to pay a rates bill.

"Rates are a particularly obvious tax ... you've got that piece of paper coming in an envelope saying to you 'give me a big cheque please'.

"Except they don't say please."

The Productivity Commission report noted councils faced pressure from homeowners to keep rates low which prevented the necessary infrastructure investments being made to keep housing affordable.

And the influence on homeowners caused other problems on the housing front including stemming the supply of land and blocking changes to density rules.

"Homeowners have considerable influence in local body elections and are often strongly represented in community consultation processes," they said.

"Their influence promotes council decisions that restrict urban intensification and the supply of new land for housing.

"The interests of existing residents, homeowners in particular, are prioritised over other interests, including renters and new households."

Role of councillors more demanding today

A lack of skill, expertise and experience amongst councillors had left many clueless as to where the line was between what they could get involved in and what they couldn't do.

Equally, many weren't equipped with enough knowledge to be able to challenge council staff according to the Productivity Commission report.

"It can mean that elected members become overly dependent on advice from council staff, which further blurs the lines between governance and management, and weakens accountability," they said.

The role of a councillor had also grown more demanding over the years, but didn't have the same sort of support services other similar governance roles did. 

McKinlay said councillors didn't have independent staff - like ministers did - who could advise them on the issues being presented.

"Today people will virtually crawl over broken glass to get a board appointment on even a relatively modest company.

"But you line them up and say 'Look there's this great local business. It's got turnover of a couple of hundred million a year .. the salary's pretty good.'

"They start to look pretty interested. Then you say it's the local council. That's often the showstopper, and that tells you something."

'Frustrating'

The Productivity Commission report suggested better training opportunities for councillors could be a way forward. 

Jenny Condie said she had a long induction process, but other Wellington City Councillors had told her their experiences weren't anywhere near as comprehensive.

"That speaks to the fact that it can be quite different even at the same council over different terms."

McKinlay noted councillors could end up frustrated once they came to the realisation they didn't really have the same ability to set a strategic direction other governing bodies did. 

He believed some of those frustrations were on display at Tauranga City Council (which is one of two councils under observation due to internal divisions). 

"What we are seeing in a way is symptomatic of the relative disempowerment of elected members over the years."

Condie said the most surprising thing for her as a new councillor was just how difficult it was to do something as simple as putting an idea on the agenda.

"You kind of imagine that you get elected and then you can just work on whatever issues you want to work on.

"But actually it's surprisingly hard to get something on the agenda if it's not already there."

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