"Smart Government – Strong Communities"

Thank you very much for inviting me along today.

But more especially on behalf of all New Zealanders may I thank each of you for your leadership and your service. Thank you.

I have enjoyed every job I have had, but I have never enjoyed a job as much as this one.  The best part has been getting to know your communities through your representation and advocacy.  It's a great privilege to be the Minister of Local Government.

It's been a very steep learning curve for me.  I have very much appreciated your help, your support, your advice and your patience.  I greatly value the professional relationship and friendship I have developed with President Lawrence Yule and Chief Executive Eugene Bowen.

We are very fortunate to have Local Government New Zealand to provide an excellent and professional conduit between local and central government.

Of course, we don't always agree.  But we always talk and I don't doubt the sincerity and integrity of the views of Local Government New Zealand.

Every day I try to be the best MP that I can be for Epsom.  In addition, I now get up every morning determined to be the very best Minister of Local Government.

I have been learning on the job.  That has meant a lot of listening and a lot of getting out on the road.  I want to thank you for the hospitality you have shown me and your openness and honesty about the challenges you and your communities face.

Our shared mission is to use our very privileged positions to advance the collective interest of our communities and our country.

For my part, and to that end, I have three big jobs underway.  The first two have been well canvassed and debated.  I will touch just briefly on them.  I believe the third job is the biggest and most significant of the three.  It's that job I want to focus on today.

The theme for this year's conference is "Building Prosperous Places."  It's a brilliant theme.  We undoubtedly need to lift our great nation's economic performance.  And that means dramatically lifting our performance both in local and in central government.

We all want to improve the social, cultural and environmental outcomes in our communities.  But it takes money to do that. That's why boosting prosperity matters.

Increased prosperity enables people to more readily and more easily achieve their goals and realise their aspirations.  Prosperity matters.

The changes to Auckland's governance structure are designed to greatly boost the performance of local and central government in the Auckland Region.  We will have a governance structure for Auckland with a jurisdiction that matches the geographic reach of the challenges confronting the region.  In designing and staffing the new Auckland Council we have focussed laser-like on customer service.  We are committed to a major step-up in service levels, fiscal discipline, transparency and accountability.

That's what the people we represent and who pay our way demand.  That's what we need to build prosperous places. That's what we will deliver.

The second job I have underway is the reforms contained in the Local Government Act 2002 Amendment Bill.  These are designed to improve local authorities' ability to set their direction and to improve the ability of ratepayers and residents to influence and assess their councils.

I believe we can and we must do better if we are to build prosperous places.  I am very much looking forward to submissions and the work of the Select Committee. The Parliamentary process now underway provides the opportunity to improve significantly the legislation within which local government operates.

My third job is the biggest and most significant.

With your input and assistance I want to produce next year a first-principles discussion document of the proper constitutional status of local government in New Zealand, how its proper function and structure should be evaluated and assessed, and how central and local government can better mesh both their decision-making and their work programmes to improve the service we provide in the communities we represent.

The purpose of the discussion document is not to declare policy.  The purpose is to establish what the issues are and to seek feedback on how we can better operate.  The purpose is to advance the debate and understanding so that the new government and new Parliament post the 2011 General Election are both better placed to work and interact with local government.

I have tentatively called this project "Smarter Government - Stronger Communities".

It's an exciting project because I believe central government can do much much better.  The project is an opportunity to explain how.

The project has bubbled and grown as I have travelled the country, listened to your concerns and those of ratepayers and residents, and as I have learnt on the job.

The first issue was how central government in the future would respond to local pressure for further amalgamations in the wake of the reform of Auckland governance.  We are seeing some of that debate underway already.  Some of it very heated and potentially polarising.

The worry is that central government responds to any political pressure for further amalgamation in an ad hoc way rather than in a principled manner.  The danger is that we make one-off decisions around the country and lose national coherence and sound principles of governance.  It seems to me that we need to think carefully about the principles of good governance that drive any change in geographic jurisdiction, or structure and function of local government.

I am not a fan of amalgamation for amalgamation's sake.  One of my best days this year was with Opotiki Mayor John Forbes. His council showed me the value of a small council that knows it community and, more importantly, a community that knows their Mayor and council.  Travelling around Opotiki with John was a treat.  The great community feeling that truly local government produces and having the Mayor knowing everyone on the street was for me a demonstration of the value of the local in local government.  We need to value that. We must protect it.

It's not about bigger.  It's about better.

That's why we need clear and transparent principles and criteria against which to judge and assess calls for any further amalgamation.  We cannot afford to chuck out what is good and great about local government simply on a political promise of something better.  We need public discussion of the principles and criteria that should govern future reform.

That's how the project started, but I believe we can do more.  Together we can revitalise local government in New Zealand.  I don't believe that it is hard. Local government is more responsive, more practical, and closer to people and communities than central government. We need to recognise that.

We need to build on that.

What local government needs to thrive and prosper is better central government.

We can, through better central government, achieve much better local government.  Moreover, through better local government, we can achieve much better central government.

The problem is that central government and local government don't mesh well. The result:  unnecessary frustration and waste.

Many of you believe that central government treats local government like a government department.  It's easy to see why.  Councils increasingly find they are being pushed towards becoming purely administrative bodies, forced to realise central government directives first, and following the will of ratepayers second.

The dramatic example to me is Treaty of Waitangi settlements and the Waikato-Tainui co-management deal this government inherited.  That was a deal between central government and Iwi with Waikato's local governance just one of many bargaining chips that central government brought to the negotiating table. The people of Waikato and their councils had next to no say.

It's wrong to negotiate the governance of natural resources in secret with local Iwi without clear principle and without the involvement of local people. That to me illustrates the problem.

Too often local government is required to act like a government department owned and directed by government. They are not. To be a vital part of our constitutional make-up and democracy local government must be recognised as an autonomous level of government fiercely independent of central government.

To me local government is a distinct tier of government, focussed on a particular set of core services, but not a subservient level of government.  The political difficulty is that central government sets the law in which local government must operate. It gains further power through subsidies for operational and capital spending.  But even within that political reality we surely must be able to improve the interaction between central and local government.  We certainly need central government to formally recognise and respect local government as independently elected community representation, autonomous and legitimate in its own right.

The new Auckland Council will drive change.  It will shift the balance of power in favour of local government.  The new Auckland Council will represent one third of the population.  It will be politically very potent.  Central government will have to respect Auckland local government; it won't be able to ride roughshod over it.  What we must do is to ensure the respect that the new Auckland Council commands translates into a respect from Central Government for local government as a whole.

That's why the "Smarter Government - Stronger Communities" is so important.  We can't allow Auckland Council to overshadow Opotiki.  We must use the opportunity that Auckland presents to leverage up all of local government.

I have taken the side of ratepayers and residents angry over rate increases, red tape, unacceptable delays and bureaucratic bungling.

I am proud to do that.  And I am determined to keep at it.

But what I have learned as Minister is that the problem starts with Central Government.  Virtually every government policy impacts on local government.  It seems every new Minister's initiative means more costs for local government. New programmes, new initiatives, new rules just rain down on you from above.

It's too much.  It's overwhelming.  And it's costly.

It seems to me that the left hand of government doesn't always know what the right hand is doing. And central government's policy making too often adds up to an impact on local government that lacks coherence and clear direction.  We can do better.  And we must do better.  We need to discuss how we do better.

That's why we need the debate.

We need to discover mechanisms to better co-ordinate central government's policy making, so that for local government it has coherence, consistency and clarity.

We also need greater transparency on the costs that central government decision making shunts to local government and therefore on to ratepayers. 

"Smarter Government - Stronger Communities" will consider mechanisms and approaches to ensure we know the costs central government has imposed on local government and properly consider what tier of government should bear what cost.

Local government has a great advantage over central government. You know your communities and their needs better than central government.  You are closer and more connected.

It seems to me then that central government can greatly improve its "bang for the buck" in your communities by better listening and working with local government.

For example, the new Auckland Council will spend $3 billion a year in Auckland.  Central Government spends $18 billion in a year in Auckland.  If Central Government works with the new Auckland Council to improve the effectiveness of its spending by just five percent, that's almost a billion dollars of value. And that five per cent improvement shouldn't be hard.

That improvement of spending that we can achieve in Auckland, can also be achieved in Opotiki District.  We need to think creatively about how we can better mesh the cogs of government for better service to communities.

That's what "Smarter Government - Stronger Communities" is designed to do.

Some of the big issues "Smarter Government -- Stronger Communities" must grapple with include:

• are we clear about why we have local government? Why and for whom does it exist?
• What principles should guide what functions and decision-making should rest with central government, and which should rest with local government, and, indeed, which ones should rest with individual citizens, and how should the costs be distributed?
• how should local government be constitutionally established and protected, and to what extent? 
• how do we ensure that we have stable, durable local government institutions while allowing communities genuine opportunities to change structural arrangements from below?
• Should central government actively monitor and intervene in local government, or is it better to enhance the ability of local ratepayers and voters to hold their councils to account?
• what would the outcome be if local government was a fully respected partner of central government?  Would we need elaborate and formal cooperation mechanisms like those in larger jurisdictions, or could we agree on some fundamental principles and just "get on with it" in way that suits New Zealand? 
• How can we build council boundaries, powers and governance arrangements that reflect local communities and, as section 10 of the Local Government Act 2002 says: "enable democratic local decision making and action by, and on behalf of, local communities"?

The project "Smarter Government - Stronger Communities" will take two to three years. Once we've determined the parameters of the work a discussion document will be drawn up and the sector will be fully consulted. 

The review will be of value only if we get on the table all the issues that concern local government and confront them honestly and openly.  I am pleased that President Lawrence Yule is committed to closely working with me on this project.

I am going to need a lot of help and assistance.  Thank you Lawrence and Local Government New Zealand in advance for that.

It's a fantastic privilege being Minister of Local Government enormously.  With your help I am making a positive difference.

I believe our most important work is ahead of us.  With your help we can revitalise local government.  To do that with must sort out central government's interaction with your sector.

I am excited by that prospect.  I hope you are too.

I am looking forward to your questions and comments today.

Thank you for listening to me.

Ends