ACT Party Leader Don Brash today labelled the Auckland Council’s proposal to change the ‘Metropolitan Urban Limit’ into an even tighter ‘Rural Urban Boundary’ ridiculous and discriminatory, saying it would lock the young and the poor out of housing in Auckland for the next 30 years.

“The Auckland Council is effectively ensuring that unless people are wealthy, the Kiwi dream of owning their own home will always be out of reach. This will be a massive blow to a generation of Aucklanders trying to get ahead.

“Housing affordability for our young people is a real concern. They are the very people we are desperately trying to keep from abandoning New Zealand and this is just one more strong incentive we're giving them to leave,” Dr Brash said.

The new boundaries, which will ban urban development outside the rural-urban line, will see 75 percent of new housing over the next 30 years built within the existing already built-up areas, and Dr Bash says this could have a devastating effect on housing affordability. 

“According to research by respected economist Arthur Grimes the existing limit has already made land immediately inside the MUL between eight and 13 times more expensive than land immediately outside the completely arbitrary line.

“It defies belief that instead of rectifying some seriously poor public policy, the Auckland Council is planning to make the situation worse. The ACT Party believes we should be introducing policy to make housing more affordable not less,” Dr Brash said.

Dr Brash identified the Resource Management Act as another huge nation-wide obstacle to housing affordability.  He points out that, relative to incomes, house prices have doubled since the introduction of the RMA in 1991, and says that this staggering increase has seen home ownership decline in every census since 1986.

“A major priority for ACT in the next Government will be to make housing more affordable for all New Zealanders by eliminating arbitrary restraints on the availability of land for residential development” Dr Brash said.

In a major campaign speech to the ACT Auckland Regional Conference, Party Leader Don Brash will expose the alarming reality that home ownership has now become a pipe dream for many New Zealanders.

The 'quarter-acre paradise' that used to describe every Kiwi's aspiration is now a myth, with housing now unaffordable not just for the young and the poor, but for middle New Zealanders generally.

Noting that relative to incomes it is now more expensive to buy a house in New Zealand than in Great Britain, Dr Brash labelled the situation bizarre and entirely avoidable, especially considering how sparsely populated New Zealand is.

“Only 0.7 percent of New Zealand is urbanised, yet we have some of most unaffordable housing in the English-speaking world. Who would have thought it would be harder to get on the housing ladder here than in the US, the UK, Canada or Ireland?

“Relative to incomes, house prices have doubled since the introduction of the Resource Management Act in 1991 - that’s a staggering increase and has seen home ownership decline in every census since 1986.

“ACT wants to reverse this alarming trend and make housing affordable for all New Zealanders. A particular concern is our young people – the very people we are desperately trying to keep from abandoning New Zealand. This is just one more strong incentive we're giving them to leave."

Dr Brash said the onset of unaffordable housing was a direct result of the myriad of constraints placed on what and where we can build.

“Take the example of Auckland’s Metropolitan Urban Limit. Land immediately inside the MUL is between eight and 13 times more expensive than land right beside it across an arbitrary line.

“This is policy straight out of the ‘so stupid it’s hard to fathom’ file.

“Auckland planners’ latest buzz term is ‘densification’, but a recent survey shows young people’s number one fear is apartment living – it’s no wonder they’re leaving.

“Housing affordability is a major part of a ‘long slow emergency’ that will eventually cripple New Zealand if bold action is not taken,” Dr Brash concluded.

In his speech, Dr Brash will set out the origin of the housing crisis and outline ACT’s policy for how it can be reversed.

ENDS

President of LGNZ Lawrence Yule, Chief Executive Eugene Bowen, other members of the LGNZ National Council, ladies and gentlemen – thank you for the opportunity to speak to you this afternoon.  I would like to thank Local Government New Zealand for organising this event and bringing us all together.

This looks to be my last Local Government New Zealand National Conference.  There’s been regime change in my own Party and my time in politics appears over.

I set my goal to be Minister of Local Government well before the last election.  I figured Auckland Governance was broken. And that it would be a good job for me to fix it.

I also realised that local government has a big impact on people's lives and our nation’s prosperity.  It seemed to me too that, for years, central government hadn’t taken local government seriously.  I believed I could do something very positive for New Zealand in the role.

It has been a tremendous privilege being Minister of Local Government.  I have especially enjoyed getting to know and working closely with Lawrence and Eugene.  They do a tremendous job on your behalf and I have been very fortunate as Minister to have had their help, their friendship and their counsel.

I would like to thank all of you too for making me welcome in your districts and explaining for me your issues and challenges.  You made me aware of the diversity that is local government and just how far away your communities are from Wellington and the bureaucratic BS that too often can consume us.

I had a great weekend with Mayor John Forbes and his council. Walking around with him, I realised that everyone in Opotiki knows John.  But what’s more, John knows everyone in Opotiki.  That’s the local in local government.  We must never lose that.

John’s council built an aquatic centre.  Not bad for Opotiki.  And it didn't cost the council a cent. 

One of John’s councillors has heavy machinery.  He dug a mud slide down a hill and diverted a creek for a great ride at a dollar a pop for local charity.  The kids – and adults – had the best fun – as much as in any $20 million facility I have seen.  There was a great community feel.  And the local charity did well too.

We must never lose sight of the Opotikis, the Kaikouras, and the Buller Districts when thinking about local government.  Too often we do.  They are our heart and soul and local government at its very best.

I did get to fix Auckland. It was a big job. 

I sat down at the start with the Mayors and Chief Executives.  I said we were doing this for Auckland.  I explained I would listen to all complaints and to all suggestions.  But there would be just one criterion of consideration: what’s best for Auckland? 

I wasn’t interested in what was good for the old council structures, interest groups, or particular careers, or the past.  I wanted what was best for Auckland’s future.

I also issued a challenge: let’s show the rest of New Zealand Auckland at its best.

And we did.

Everyone got on board.  We completed the largest restructuring public or private ever attempted in Australasia.  We did so at speed, on time under budget with a minimum of fuss.  Council officers worked hard for long hours for Auckland’s future even though for many of them there was no job at the end.  They worked themselves out of a job.  They did it for Auckland.  The professionalism shown was outstanding and local government should be very proud of their work. I know I am.

Looking ahead, I do not see great mileage in further amalgamation.  For me Auckland was unique.

We needed a Mayor and a council with the mandate and the power to provide the political leadership and vision that Auckland lacked.  That was never possible under the old fragmented structure.  We now have it.

The reform was never about savings.  It was about good governance for Auckland.  We achieved significant savings but they were hard work and I don’t believe amalgamation guarantees lower costs.  We were lucky with Mark Ford and his team at the Auckland Transition Authority who kept a very clear vision and a determined focus.

Amalgamation is risky.  It’s too easy to end up with councils even more remote and more bureaucratic – losing the local in local decision making.

So looking ahead I see benefits in shared services and councils working together on both projects and plans for the wider regions of which their communities are a part.  I believe in that way we can enjoy the benefits of amalgamation while keeping the local in local government and avoiding the risks of amalgamation.

It may well be that other cities will copy Auckland in becoming a unitary authority.  There is logic to that.  For example, Christchurch may be best served with a unitary authority with the Regional Council ECan concentrating on the rest of the region.  I believe we might improve both the governance of our cities and our natural resources with such a structure.

But let’s see how Auckland goes.  We have an opportunity now to learn something about what governance structures may or may not best serve our own communities.

Looking forward we must in the future align better local and central government decision making.  That’s the key to unlocking our true potential.  It seems wrong to me that central government requires local government to make 10 and 30 year plans but then itself does not come to the party.  Yet the dominant player in those plans is central government itself.

We have a unique process now for Auckland as it prepares the first spatial plan in New Zealand.  The Government has provided the new Council with background papers on its views on Auckland’s development, officials have been authorised to work closely with council officers on the plan, and we have a dedicated Cabinet Committee to ensure close collaboration between Ministers, central government agencies and the Auckland Council.

The project is proceeding better than I could ever have hoped thanks to the Mayor, his council and council officers.  Central government agencies are taking full advantage of the opportunity of at long last being able to work closely with the political leadership of Auckland in their own areas of responsibility.

We now have a unified Auckland leadership but also we have an Auckland working closely with officials and Ministers on its future development.  That’s a huge improvement over where we were.

I believe the process may offer benefits for other regions in New Zealand.  I can foresee councils of a region working together in developing their own joint plans. And likewise having the opportunity to align central and local government decision making for their region.  I believe such alignment is critical if we are to unlock our full potential.

As Minister, I have always been keen to get costs down for ratepayers and to provide democratically elected councils greater autonomy from Wellington.  We are not rich enough to be able to waste precious resources on unnecessary process and needless bureaucracy.  The result was the changes to the Local Government Act.  These were positive.  But to me they still don’t go far enough.

I still consider the Act too prescriptive.  Mayors and councillors are elected by their communities to make decisions for their community.  The Local Government Act needs to enable them to do that.  Its purpose should be to ensure that decision making is transparent for communities to hold Mayors and councillors to account.  But it shouldn’t disempower them by setting them on railway tracks of process where it’s the process that rules, not the people themselves.  That’s wrong.  We don’t do that for central government.  We shouldn’t do that for local government.

But the challenge of the Local Government Act being too prescriptive pales in comparison to the tidal wave of legislation passed by government and the multitude of policies pursued which further burdens local government operations.  Time and time again principles of good governance are sacrificed for the particular policy objectives being pursued by Ministers and central government agencies

Let me give you a controversial example.

The Government naturally and rightly wants to settle historical Treaty grievances.  In these cash-strapped times it’s getting harder. And the claims are getting tougher.

So now local governance is up for grabs as part of the settlement process.  Treaty negotiators have been discussing co-governance and seats at the council table in lieu of cash and property. Their purpose is not good local government but treaty settlements.

Of course, if the objective is a Treaty Settlement, then it’s unlikely good local governance will be the result.  These are two different objectives.  The drive for a Treaty settlement is quite different to a drive for sound local governance.

The same mixing of objectives occurs in every portfolio and every policy objective of central government.  The same problem arises for Aquaculture, Building Regulation, Transport policy, and so on.

Lawrence, Eugene and I found ourselves always on the wrong side of the Treaty Settlement process, not because we were against the settlements as such but because we were for good local governance.

And, of course, in the past local government and local communities weren’t involved in the process until the deal was done because rightly Treaty Settlements are the responsibility of central government, not local government.

We found it impossible to debate every proposed settlement on the basis of the principles of good governance. So we engaged cabinet in a generic debate about what principles for local government should guide the Treaty Settlement process.  That was a whole lot easier.  Having established the principles at Cabinet, we now have a good basis for a proper discussion of Treaty Settlements as they affect local government.

To me the big challenge for local government now and for the future is establishing its proper place in the constitution of New Zealand.  To me it’s very clear.  Local government is our second tier of government, properly constituted and democratically elected.  But successive central governments have not treated it as such.

It’s now become a mish-mash between central and local government of confused roles, overlapping decision-making, blurred accountability, and too often dual funding.

We need to establish some clear principles to guide local government and central government decision making.

That’s why the ‘Smarter Government, Stronger Communities’ project is so important.  It picks up on the many concerns and issues you have raised with me as I have visited and met with you.  And it provides a mechanism and a process for your issues and challenges to be properly considered, debated, evaluated and acted upon.

It’s a big project for local government and for the country.  I intend getting enough momentum behind it in my remaining months to propel it through the next three years to a conclusion.

I don’t have any preconceptions about what the project will conclude.  But I do have one thought to share.

It’s hard in our parliamentary structure to provide proper constitutional protection for local government.  Parliament is after all sovereign.

But I do believe that the Government should sign up to a statement of principle to govern its relationship with local government after each and every election.  And it should be required to adhere to these principles unless it has good reason not to.  Because otherwise, to be frank, councils will continue getting pushed around every which way.  The sort of principles I would like to see recognised are:

1. That there will be a clear assessment of what level of government is most competent to make a particular decision.

2. When central government makes decisions that constrain local decision-making, it will only do so in the national interest.

3. The cost of any central government intervention in local government should be fully costed.

4. If an intervention is considered in the national interest, it should be recognised when developing funding options.

I believe that central government should keep these principles in mind at all times before it makes any decisions relating to local government.

Once we get the principles established decision making becomes a whole lot easier.  What we have achieved for the Treaty Settlement process by way of good principle we should likewise do for all policy.

Once again thank you for inviting me to speak.

Thank you for your great support and hospitality you have shown me.  It has been a tremendous privilege to be Minister of Local Government in this great country of ours.

And let me assure you I am continuing to make every day count. There's much to be done before November, and I am working to achieve a good momentum to ensure the work we have underway continues and is completed in the years ahead.

Thank you.

Speech by ACT Leader Don Brash to the Federated Farmers Annual Conference
30 June, 2011 

Mr President, ladies and gentlemen,

This afternoon you're enduring a procession of politicians.

I'm sure we'll all be telling you what a great contribution farming makes to the New Zealand economy.

We'll probably all make the point that exports from the land generated some $23 billion in exports last year, nearly 60% of all exports of goods from New Zealand.

Some of us will acknowledge that, in the decade after agriculture was so abruptly stripped of all subsidies by the Labour Government of the eighties, farming achieved the highest rate of productivity growth of any major New Zealand industry, while over the whole 30 year period to 2008 labour productivity in agriculture has been right up there with the very best in the economy.

And achieved that without subsidies, and with the lowest rate of taxpayer support of any farming industry anywhere in the world.

I was reminded of just how extraordinary that productivity growth in agriculture has been when I visited the Wairarapa last week. I was told by one farmer that in 1946, shortly after the Second World War, it took seven men to produce 300 bales of hay in a day. In other words, one man could produce about 43 bales of hay in a day. Now, one man can produce 2000 bales in a single day - a near 50-fold increase in labour productivity!

If the whole economy had performed as well as farming has over the last 25 years, New Zealand would have living standards on a par with Australia, not well below Australia.

Despite this extraordinary achievement, of which all farmers should feel immensely proud, successive governments have tended to see farming as a sunset industry, important in our past but increasingly irrelevant to our future.

Politicians have talked about riding a Knowledge Wave, about the importance of the creative industries, of movies, and of fashion. They've talked about high tech start-ups, and the opportunity to build a back office for the world's financial industry.

And yep, all of those things are good and to be welcomed. Some New Zealand high tech companies are doing some extraordinarily innovative things.

But the foreign exchange earned from exporting movies and fashion garments is tiny compared with the exports from the farming industry.

And yet farming is pilloried by people who should know better.

All farmers get blamed for the environmental sins of the minority.

All farmers are assumed to be incredibly rich and to pay no tax.

All farmers are assumed to treat their animals with total indifference to their well-being.

After the next election, ACT will not be using its influence to re-introduce subsidies for the farming sector. I know you wouldn't believe me even if I said that we would be doing that!

But to the extent we can influence the policy of the next government - and that depends entirely on how many party votes we get in the election - we will be aiming to achieve three objectives of direct relevance to the farming sector.

First, we will be pushing to get government spending under control.

In the first four or five years of the Labour Government's nine years in office, you'd have to say that they were reasonably responsible, as left-of-centre governments go. Government spending grew slightly more slowly than the economy as a whole.

But in their last three or four years, they started throwing money around in all directions. In the four years to June 2009, national income grew by 20% but government spending grew by an astonishing 43%, and largely as a consequence the government's budget moved from surplus to deficit.

Much of this increase in spending was of very poor quality. Earlier this month, the Minister of Education mentioned that government spending on early childhood education had roughly trebled over the past five years, from about $500 million a year to about $1.4 billion a year - and yet all that extra money has increased the level of participation at preschool centres by just 1%.

The National Government didn't create this mess. Labour did. But tragically National has failed to fix the mess.

Why does it matter? Well, most obviously the huge increase in government spending, coming on top of the slow growth in revenue as a consequence of the recession and, now, the cost of the Christchurch earthquakes, is pushing up government debt at the rate of knots.

The Government has been borrowing over $300 million a week, week after week. At that rate, before long you're talking serious money! That's equivalent to $300 for every household in the country, every week.

But from the point of view of you in the export sector the most serious consequence of all this borrowing is its effect on the exchange rate. When the Treasury sells $300 million of bonds every week, most of those bonds are not sold to Mum and Dad investors in New Zealand, or even to New Zealand-based institutions. They're sold to foreign investors, and of course those foreign investors have to buy New Zealand dollars to buy New Zealand dollar bonds.

And that adds to the upward pressure on the exchange rate.

Yes, export prices in foreign currency have been pretty good lately, and this has shielded the farming sector from the worst effects of the very high New Zealand dollar.

But New Zealand needs the export sector to be doing not just well but extremely well at present! Over decades, New Zealand has accumulated massive amounts of overseas debt - indeed, our net indebtedness as a country puts us in the same league as Greece and Portugal. Why? Because year after year (indeed, every year since 1973!) we've run balance of payments deficits, and last month's Budget predicts that we'll be running deficits for as far ahead as the eye can see.

So we need you in the export sector to be doing extremely well, strongly motivated to produce more milk, produce more meat, and produce more wool.

And the high level of government spending, and the resultant high level of government borrowing, is blunting those incentives by putting upward pressure on the exchange rate.

Actually, the high level of government spending - and government spending today is higher, relative to the size of the economy, than in any year under Labour - has another damaging effect on the exchange rate.

The Reserve Bank is charged with keeping inflation low and stable. But when the government is spending a lot more than it's taking in in revenue, the Reserve Bank has to keep interest rates at a higher level than would otherwise be necessary. Today, the Reserve Bank's OCR is lower than at any other time in our history, but it's still relatively high compared with other countries (with the single exception of Australia). That makes New Zealand an attractive place for foreign savers to invest their money, with resultant upward pressure on the exchange rate.

So that is the first thing ACT would try to achieve of direct relevance to you in the farming industry, getting government spending under control to help ease the upward pressure on the exchange rate.

Secondly, we would seek a root and branch reform of the Resource Management Act and all the bits and pieces that hang off it - like the proposed National Policy Statement on Indigenous Biodiversity.

As some of you know, I've been the chairman of the 2025 Taskforce for the last couple of years, charged with providing advice to the Government about how to lift New Zealand living standards to the Australian level by 2025.

I'm sometimes asked: what's the single most important thing to be done if we're to achieve that goal? I reply that there's no single thing which will get us all the way there, but the most important single thing to be done in my opinion is to remove the extraordinary obstacles to progress created by the RMA.

I'm constantly regaled with horror stories of the little Hitlers who far too often seem to populate the lower levels of local and regional government, charging for this, complaining about that, throwing their weight around (sometimes in flagrant breach of the law), refusing to grant consents on the most flimsy excuse.

And I've already had anguished letters from farmers distressed about the implications of the National Policy Statement on Indigenous Biodiversity if adopted in its present form.

As I probably don't need to tell you, that directs that local governments ensure that there's "no net loss of biodiversity of areas of significant indigenous vegetation" (Policy 5); and requires that tangata whenua be fully involved in developing and implementing regional and district plans to protect indigenous biodiversity (Policy 7).

No mention at all of compensation for trespassing on the property rights of farmers. No suggestion that tangata whenua should have no more rights to be consulted than any other member of the community.

ACT believes that if a council wants to restrict your ability to manage your property as you see fit, then, provided that what you are doing on your own property is not directly and adversely affecting others, the council must demonstrate one hell of a good reason for doing so. And if the council does restrict you in a way that disadvantages you financially, it should compensate you.

ACT also believes that local and regional government should have an obligation to consult with all members of the community equally, and not give any kind of preference to one racial group over another.

So that's the second thing of direct relevance to the farming sector we want to do.

And thirdly, and finally, ACT will press for the abandonment of the Emissions Trading Scheme.

Why do we have an ETS? I have to admit I know of no good reason at all.

To be sure, it seems pretty clear that on average temperatures around the world have been increasing. But they've been increasing for at least the last 200 years, since the days when the Thames regularly froze over, and that warming began long before greenhouse gases caused by human activity could've had a significant influence on the climate.

And we know temperatures were very warm in the medieval period, and in Roman times, when grapes were routinely grown in what is now the United Kingdom. And greenhouse gases could hardly explain that, or the cooling which took place between those warm periods.

Even if a case can be made that human activity is behind the gradual increase in global temperature, it isn't obvious that an increased temperature is necessarily a bad thing for life on the planet. We know that plant life thrives on an atmosphere high in carbon dioxide - which is why many market gardeners deliberately pump carbon dioxide into their glass houses.

And we know that human societies thrive both in Singapore and in Finland, though average temperatures in the two places could hardly be more different.

Incurring the many trillions of dollars in cost which would be involved in any serious global attempt to slow the increase in average temperature would place an enormous burden on all societies, especially those already living on the margins of existence.

And even if it were accepted that human activity is causing the planet to warm, and that the enormous cost of trying to slow that warming is justified, it's entirely unclear why New Zealand should be at the forefront of that effort, at considerable cost to all New Zealanders, including New Zealand farmers.

It's estimated that the average dairy farmer is already incurring increased costs of nearly $4,000 annually (including both on-farm costs from the increased cost of diesel and electricity and the increased costs incurred by Fonterra), and that that will rise to over $10,000 annually by 2015.

So ACT favours the abolition of the ETS system, or at very least its suspension until comparable schemes are in place in all our major trading partners.

But Mr President, ACT's ability to achieve those goals - bringing government spending under control in order to take the pressure off the exchange rate, a fundamental reform of the RMA and all its off-shoots, and the abandonment of the ETS - depends entirely on one thing and one thing only: how many party votes we get in the election.

By all means vote for Bill English in Clutha-Southland, or Shane Ardern in Taranaki-King Country - but please give your party vote to ACT!