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Brief Description of the Country and its
National/State Government Structure
Demography
In terms of land area New Zealand is similar in size to Japan
and the United Kingdom of Great Britain. Its physical geography
is variable, much of it being mountainous and uninhabitable.
New Zealand lies in the southwest Pacific, about 1600 kilometres
southeast of Australia. It is made up of two main islands
(North and South Island), Stewart Island and several outlying
islands. The landscape is a mixture of flat country, rolling
hill country and mountains. Over three quarters of the country
is more than 200 metres above sea level. The South Island
in particular has numerous peaks, fiords and glaciers, lakes
and fast flowing rivers. New Zealand has a mild climate with
few extremes due to it being located in an ocean environment.
This climate means that New Zealand is well suited to agriculture
and horticulture that are still vitally important to the economy.
Mean annual temperatures range from 15 degrees Celsius in
the top of the North Island to 10 degrees Celsius in the bottom
of the South Island.
In 1996, the total population was 3,660,364*. Nearly three-quarters
of New Zealand's population live in urban areas with populations
over 20,000. A significant percentage of the population (55
per cent) is concentrated in five main urban areas - Auckland,
Wellington, Christchurch, Dunedin and Hamilton. Around 80
per cent of the New Zealand population are of European origin:
mostly of British descent but also including people originating
from the Netherlands, Yugoslavia and other European nations.
Approximately 15 per cent of the population are of Maori descent.
Besides, Pacific Island and Asian (Chinese, Indian and Korean)
peoples are significantly represented in the New Zealand population.
Maori are recognized as the original settlers in New Zealand
having been thought to have arrived approximately 700-800
years ago from Polynesia. The first wave of British settlers
reached New Zealand in the 1840s. By the end of the century
the population had expanded rapidly following the introduction
of government assisted immigration. The Maori population is
expected to grow from 425,000 (1991 census figures) to 672,000
by the year 2031, which represents a growth rate that is twice
as fast as the non-Maori population. The government has a
special Ministry to look after issues that are particularly
of concern to Maori. Te Puni Kokiri (The Ministry
of Maori Development) provides the government with advice
on how key policies affect Maori and it works alongside other
government agencies on issues such as education, health, employment
and income.
Traditionally a predominantly rural economy, New Zealand's
economic base has diversified significantly across all sectors
(manufacturing, services and tourism) over the last 30 years.
This has been reflected in progressive urbanization. Since
1984, New Zealand has undergone considerable economic restructuring.
These changes have involved dismantling the extensive tariffs
and protection that sheltered New Zealand's productive sector
from overseas competition and made locally produced goods
and services less competitive than those produced overseas.
This restructuring also involved considerable public sector
reform, privatization and deregulation. These changes initially
led to economic stagnation as the economy went through a process
of readjustment. Since 1991, economic performance has recovered
with positive economic growth (especially export growth) accompanied
by low inflation. Over this period a number of industries
expanded rapidly, many of these in non-traditional areas.
These included electronics, engineering, computer software,
tourism, wine, forestry, boats and marine products and building
construction products. In 1997 New Zealand had a per capita
Gross Domestic Product (GDP) of US$18,250.
Figure 1. Contribution of the Sectors to GDP
(1995)
Compared to other developed nations, the Agriculture sector
still makes a relatively high contribution to total economy
activity. Future trends indicate a further diversification
away from agricultural products towards higher value goods
and services. New Zealand is party to several international
trade arrangements, including the International Trade Association
and APEC. The Australia-New Zealand Closer Economic Relations
Trade Agreement (CER) provides for a free exchange of all
goods and most services between the two countries. This complements
the free movement of people and mutual recognition of qualifications
and standards that exist between Australia and New Zealand.
Although New Zealand is best known as an agricultural nation,
the country is highly urbanized with 85 per cent of the country's
population living in centres with more than 1000 inhabitants.
New Zealand is a well-housed nation with 73 per cent of the
population owning their own home. Single detached housing
with private gardens predominates, although many people are
choosing more high density living particularly in inner city
areas of the main metropolitan centres. Material living standards
and quality of life indicators remain high by international
comparisons. Culture and cultural activities are important
to the New Zealand way of life and this is reflected in the
strong support of museums, libraries, art galleries and concerts.
New Zealand has a strong publishing and film industry with
films by New Zealand directors such as "The Piano" and "Once
Were Warriors" achieving box office success around the world.
Besides, New Zealand has a great sporting tradition and New
Zealanders are active participants in a range of sporting
activities. The most popular sports in 1995 were rugby, golf,
netball and athletics.
The historical dispersion and distribution of New Zealand's
population settlement and the need to maintain communications
to sustain economic development have resulted in a well-developed
road infrastructure throughout both islands. The evolution
of local government structure in New Zealand and the development
of the road system have occurred interdependently. In New
Zealand's early history, local authorities were formed significantly
in response to the need to provide for effective communications.
The funding and provision of local roads have become the most
significant single functional responsibility for the sector.
National governmental and political structure
Government structure
There are two branches of government: central and local.
New Zealand's parliamentary system of government was originally
based on the Westminster model but has progressively departed
from this in recent years. The parliamentary system is unicameral.
The electoral system, previously a first-past-the-post system
was replaced (in 1996) by a form of proportional representation
known as the mixed-member-proportional (MMP) system. Under
this system, electors have a Party Vote and an Electorate
Vote, which, in total, are used to select a total of 120 members
to Parliament. The first election held under this system was
in 1996. After lengthy negotiations between the political
parties it resulted in the formation of a centre-right coalition
government.
Public sector reform in the national context
Local government reform in New Zealand closely followed that
applied to central government. From 1984, the Labour Government
set about comprehensively reviewing the role of the state.
This had significant implications for the public service and
the way it was managed. The Treasury in its 1984 and 1987
briefing papers articulated the government's objectives, policies
and proposals. These focussed on economic and government management.
State sector reform was a product of changes in thinking arising
from new institutional economic and management theories. In
particular the government sought to achieve significant efficiencies
in New Zealand's economic performance through:
- Achieving optimum efficiency in the allocation of economic
resources;
- Achieving higher levels of transparency and accountability,
especially by ensuring that public sector organizations'
objectives would be clearly defined, by providing freedom
for managers to manage accountably in accordance with those
objectives and by ensuring better information flows; and
- Achieving better performance all round by emphasizing
the importance of attaining desired outcomes and outputs,
especially in public management, instead of by emphasizing
inputs as had been symptomatic of the pre-reform era.
Public sector reform resulted in new management practices
and organization structures. In effect, the state was to deliver
policy and goods and services only where market failure demonstrably
existed. Initially, central government separated the trading
arms of many of its departments from their essential policy
functions. Later stages of reform saw a considerable reduction
in the size of most departments and the creation of much smaller
policy ministries. The underlying concept of founder/provider
(or policy/service delivery) split became well recognized.
Many traditional functions and activities of central government
were privatized, e.g. telecommunications, railways, the postal
service and both state-owned trading banks. Another significant
means of delivering some services was through the corporatisation
of some agencies by establishing SOEs (State Owned Enterprises)
- wholly government-owned corporations, operating along the
lines of private companies. These were managed by appointed
boards of directors, outside of the direct control of the
political arm of government. The state sector reforms owed
a lot to the agency theory principle where governments (local
or central), as the principals, set broad public objectives
and policies that the agents carry out. This principle applies
to the relationships of the governing bodies with their chief
executives, their trading arms (State Owned Enterprises and
Local Authority Trading Enterprises) and with private contractors.
Essentially, this model of reform for central government became
the basis for local government reform.
Evolution of Local Government, its Legal
and Political Background
History of local government
The pattern and structure of local government were shaped
by the growth and distribution of population and by the needs
of the economy and people for improved communications, especially
roads. The provincial governments, abolished in 1875, progressively
gave way to a fragmented system of territorial and single-purpose
local authorities (including road districts). Many county
councils were created from old road boards. The need to reform
local government had long been recognized and was reflected,
in particular, in the establishment of the first Local Government
Commission in 1946 and others succeeding it up to the present.
Local government prior to reform
Prior to reform there were, in total, about 830 local authorities.
Of these, about 730 were predecessors to the 86 new regional
and territorial authorities created by the 1989 legislative
reform. About 450 single purpose authorities and 22 former
united and regional councils were subsumed in the new system.
74 Territorial (city and district) authorities - replacing
217 former city, borough and county councils - were established.
In addition, 136 community councils were abolished, being
replaced by community boards under the new territorial authorities
umbrella. Community boards are set up by councils and are
composed half of elected councilors nominated by the city/district
council and half elected by the local electorate. They may
have responsibilities delegated to them by the council that
set them up, but are mostly used as a mechanism for consultation.
Table 1. Local Government Structure
|
| Number of local authorities |
1996 |
1988 |
|
| Regional councils |
12 |
3 |
| City councils |
15 |
28 |
| District councils |
58 |
177 |
| Chatham Islands council |
1 |
0 |
| Special purpose authority |
7 |
249 |
| Domain and recreation boards |
0 |
176 |
|
Table 2. Expenditures Territorial Authorities
(1995)
|
| Expenditure items |
Percentage in 1995
|
|
| Democracy |
4
|
| Regulatory |
10
|
| Utilities |
26
|
| Roads |
24
|
| Social/cultural/recreational |
23
|
| Commercial |
6
|
| Other |
7
|
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There are 12 regional councils and 4 unitary territorial
authorities that are responsible for the tasks of both a regional
and a district council. The unitary authorities are the Gisborne
District Council, Tasman District Council, Marlborough District
Council and the Nelson City Council. Before the reform, local
government administration was generally lacking a strong corporate
planning ethic. Decision-making and budgeting tended to be
incremental. Expenditure was typically constrained by financial
commitments made in previous years and by the level of available
funds rather than being driven by a zero-based or another
explicit planning approach.
Reform of local government
The main local government reform occurred in 1989. The changes
in reform were signalled in December 1987 in Government Policy
Statements, which proposed that:
- As the main principle, local government should be selected
to undertake responsibilities or functions only where the
net benefit would exceed that of other institutional arrangements;
and
- Subsidiary principles were to be applied, including functions
to be allocated based on: appropriate communities of interest,
operational efficiencies to be achieved, clear, non-conflicting
objectives; trade-off of objectives to be explicit and transparent;
clear and strong accountability mechanisms.
The Minister stressed that the review would aim to improve
the accountability and performance of local government. The
outcome of the application of these principles was the introduction
of two types of local government units: regional councils
and territorial authorities.
Local Government Categories and Hierarchies
In unitary and territorial authorities, the mayor is elected
at large. Regional councilors elect one of their members as
the chair. Virtually all councils have taken up the option
available to them to hold elections by postal ballot. Regional
councils and territorial local authorities have separated
but complementary functions, with neither being subordinate
to the other. One researcher has noted that there is an overlap
of responsibilities between regional councils and territorial
local authorities in the planning area in particular. Another
outcome of reform was that the sector became smaller. The
total number of sector jobs (i.e. trading and non-trading)
reduced from 44,200 in 1989 to 40,000 (in February 1996).
Finally, the reforms changed the ways in which councils had
to make and implement decisions so as to achieve the objectives
of reform - in particular, changes occurred in planning, accountability
and reporting.
Local Government Functions
Local government has responsibilities and delivers functions
under a raft of legislation. The influence of reform policy
objectives is reflected in an emphasis on outcomes and outputs
(results) instead of on inputs. Another important product
of reform has been the legal requirement on councils to achieve
the separation of policy and service delivery. The intention
behind this is to bring about greater public accountability
and transparency in their conduct and to reduce conflicts
of interest between their policy/regulatory and service delivery
functions and between trading and non-trading activities.
Essential functions of regional councils
- Resource management policy and plan provision as well
as consents administration relating to the use and development
of (and particularly the effects of these on) natural and
physical resources, land, air and water discharges and water
allocation;
- Pest destruction and policy aspects of biosecurity;
- Flood control;
- Regional emergency management and civil defence;
- Regional land transport planning and coordination;
- Regional hazardous waste disposal; and
- Harbour administration.
Essential functions of territorial authorities
- Community well-being and development;
- Environmental health and safety (including building control,
emergency management, civil defence and environmental health
matters);
- Infrastructure (roads, transport, sewerage, water and
storm water); and
- Provision for recreational and cultural activities.
Local government: founder, provider and regulator
Local authorities may provide goods and services in-house,
set up a Local Authority Trading Enterprise (LATE), or contract
or tender out services. Clearly these are similar to the options
also available to central government in its own sphere of
operations, especially in the parallel between a LATE and
a State Owned Enterprise (SOE). LATEs are companies in which
a local authority or any combination of local authorities
holds equity securities that carry 50 per cent or more of
the voting rights at any general meeting of the company. Local
government legislation provides a code of operation for LATEs
in addition to accountability provisions. LATEs are required
to pay tax and to be run as successful businesses. They also
employ their own staff. At least two members of the Board
must be individuals otherwise unconnected to the council.
Energy, ports and airport companies cannot be LATEs, although
there are LATEs that own these assets. LATEs may operate outside
of the district where they are based, both nationally and
internationally. They are involved in a wide range of activities
including but not limited to: engineering, car parks, cinemas,
shopping complexes, water, forestry, tourism, quarrying, public
transport and property management. LATEs are accountable to
their shareholders (who are either one or a combination of
local authorities) for their performance.
Corporatisation and contracting out
LATEs have been a popular service delivery option as evidenced
by the number of them set up since the reforms in 1989. Some
senior practitioners have noted that sometimes setting up
a LATE may not improve the financial position of a council
due to the high costs of the corporatisation process. There
are no universal figures available to justify the use of LATEs
in all cases. Contracting out also needs to be explored on
a case by case basis. However, a New Zealand business association
that is normally a strong critic of local government has noted
that one district council in a regional area has achieved
cost savings of 30-40 per cent through contracting out the
bulk of its works and services. Another council, in one of
the major metropolitan areas is achieving cost savings of
18 per cent and 36 per cent in parks management and road maintenance
respectively through competitive tendering. One local authority
in the greater Auckland area has claimed it has been able
to reduce rates by over 28 per cent through a combination
of contracting out services (including the franchising of
its water supply). At the same time it claims to have improved
customer service.
At the local government level, corporatisation has been a
far more common option than privatization, which has tended
to be restricted to ports, electricity companies and gas companies
(which may not be run as LATEs). The option of creating LATEs
has been seen as a way of making services more contestable
while retaining the public ownership of services. Some assets
such as airports, which have been Crown assets in the past,
have been bought by some authorities because they are regarded
as strategic assets designed to ensure that communities and
businesses in regional areas continue to have strong links
with the outside world. Given the autonomous nature of local
government and the rigorous consultation processes local authorities
are required to follow, each council is accountable to their
local electorate for any decisions to corporatise or contract
out services. Therefore, there is not one prescribed formula
for local authorities to follow outside of the planning and
consultative requirements set out in local government legislation.
Independence and accountability of local
government
Local government has become significantly independent of
central government. This independence arises in two main ways:
- One is that the Local Government Act places an obligation
on each local authority to be directly accountable through
the annual planning process to its own community for the
ways in which it will allocate resources. This has been
accompanied by a selective reduction in central government
oversight of essentially policy matters. There remains,
however, oversight of local government's stewardship roles
through an external audit of its management and environmental
activities; and
- Secondly, there has been a steady withdrawal, over a number
of years, of central government financial assistance and
subsidies to local government. Present local government
funding is about 90 per cent locally sourced. The balance
comprises mainly financial assistance from central government
for land transport.
Local authorities independently undertake extensive regulatory
activities under a range of statutes (e.g. Resource Management
Act, Building Act, Biosecurity Act and Sale of Liquor Act).
Under some of these Acts, they are operating as the main implementers
of legislation in their own right (e.g. the Resource Management
Act). In others, they are agents of central government (e.g.
liquor licensing).
Governance and accountability
A raft of obligations and responsibilities, of which the
overriding one is to act intra vires, maintains accountability.
Councils are answerable for their acts (and omissions) both
in a court of law (civil and criminal breaches) and triennially
to the electorate. Within their respective spheres the Ombudsman
and the Auditor General may also exact accountability. The
1989 amendments to the 1974 Local Government Act require councils
to prepare annual plans in consultation with their communities
and to report on their performance in accordance with the
plan at the end of each year. These reforms introduced significant
new elements of local governance as opposed to just management/
administration. Councils were required to:
- Establish clear objectives for each activity and policy;
- Resolve conflicting objectives and conflicts of interest
clearly;
- Separate regulatory functions from other functions as
is practicable;
- Measure performance in terms of stated objectives;
- Reflect the separation of regulatory from other functions
as far as is practicable in their management structures;
and
- Outline for the year in question in particular terms and
for the following two financial years in general terms,
the relevant policies and objectives (for the local authority
and any subsidiary enterprise or company) and describe the
scope of significant activities to be undertaken together
with performance targets and other relevant measures.
Every local authority must publicly report annually on its
own activities and those of any companies or LATEs it is involved
with.
Resource Management Act
The passage of the Resource Management Act (RMA) into law
in 1991 followed several years of intensive broad-based consultation.
The RMA replaced over 50 former statutes. The focus of the
RMA is on promoting sustainable management of natural and
physical resources; it gives councils the means to provide
for the management of the effects of the use and development
of such resources, rather than to plan for and direct development.
It is mandatory for regional councils and unitary authorities
to produce maintain and review a regional policy statement
and a regional coastal plan for their regions. Territorial
local authorities are required to prepare, maintain and review
district plans. The purpose of district plans is to enable
local authorities to manage the natural and physical resources
of their districts primarily by controlling the effects of
land uses and development, together with land subdivision,
noise and the use of rivers and lakes.
This legislation is unique, as it is the only statute where
local government is required to explicitly take into account
the Treaty of Waitangi. Councils are required to:
- Recognize and provide for the relationship of Maori and
their culture and traditions with their ancestral lands,
water, sites and other Taonga;
- Take into account planning documents recognized by local
Maori;
- Consider whether to prepare a regional plan where there
are any significant concerns of Tangata Whenua; and
- Consult variously with Maori in policy and plan preparation
and in processing resource consent applications.
Local Government Finances
Rating and charging powers
Local authorities' income sources are varied and include
property rates, user charges, fees, some central government
financial assistance, fuel taxes and returns on investments.
The present rating and charging powers have been provided
for in law since 1988 and remain an important source of local
tax revenue for local government. These powers were reviewed
(although ultimately they remained essentially unchanged)
during the process leading to the 1989 reforms. Because 1996
changes to legislation radically reformed the regime by which
councils make financial management policies, a major review
of rating and charging powers is programmed to ensure that
adequate instruments are available to councils to apply the
new policy-making requirements.
Funding, financial management and reforms
The 1996 reforms to the local government legislation - notably
in the financial management provisions of the Local Government
Amendment (No. 3) Act 1996 - signalled changes and a new approach
for local government in the ways it undertakes its financial
planning and management responsibilities. These reforms amount
in effect to the second major wave of local government reform
in New Zealand. These changes require councils to establish
policies on how they will fund expenditure needs on investment,
on borrowing management and on security for loans, and reflect
the earlier application of fiscal responsibility measures
in central government by:
- Strengthening local accountability for the long-term financial
planning and borrowing activities of councils;
- Providing more explicit economic and financial guidelines
to councils in making funding decisions and allocating costs;
- Introducing explicit fiscal responsibility principles;
and
- Providing a basis for councils to manage their debt and
investments prudently.
This reform legislation requires a local authority to prepare
every three years a long-term financial strategy covering
at least the next ten years. This strategy must contain estimates
of operating expenditure for each year, the reasons for incurring
it and the proposed ways of funding it. Councils are also
required to prepare a borrowing and investment policy. Councils
are permitted to borrow the funds required to build capital
works such as water and drainage systems with residents paying
only the annual cost of that borrowing. This legislation abolishes
the Local Authority Loans Board and the previous borrowing
restrictions on local authorities. The reforms have:
- Given councils powers to make financial and infrastructure
provision for their communities' long-term needs (e.g. libraries,
swimming pools, parks and outdoor recreation facilities,
art galleries and cultural activities, job creation, housing);
and
- Provided greater legal autonomy (but subjected councils
to increased rigour in explaining their financial management
policies) and greater transparency.
Councils must respond to these disciplines in particular
by:
- Stating those principles, considerations and matters which
they propose to take into account in funding their expenditure
needs;
- Preparing long-term financial strategies, funding, investment
and borrowing management policies; and
- Reporting (in connection with the annual plan and report)
on the strategies and policies.
The main principles that councils are obliged to address
in making their funding policies and allocations are:
- The principle of recovering the costs of expenditure at
the time benefits accrues. This means arriving at a balance
between how much to charge current ratepayers and how much
to charge to future generations, i.e. through raising loans
(intergenerational equity);
- The principle that the costs of expenditure be borne by
those who benefit. This may mean recovery from the community
generally, or from identifiable categories of persons or
individuals, consistent with economic efficiency and the
nature and distribution of the benefits, commonly known
as the user pays principle; and
- The principle of recovering costs of any expenditure to
control negative effects from those who generate them (exacerbator
pays).
Long-term financial strategies have to be prepared in consultation
with communities, as part of the annual plan and require councils
to show:
- Estimated expenditure necessary to meet identified needs
of the local authority;
- Estimated cashflow projections and long-term borrowing
requirements;
- Significant forecasting assumptions and risks involved;
and
- Reasons why proposed activities are needed.
In adopting borrowing management policies councils must show
broadly:
- The amount of their proposed loan;
- From where it will be derived;
- How they propose to manage it; and
- What they intend to use for collateral.
Figure 2. Steps in the preparation of local
governments budgets.
Personnel systems in local government
The law stipulates that councils appoint the Chief Executive
Officer to head the council management. This is the only person
appointed by the political arm of the council. All other council
workers are employees of the Chief Executive Officer. Section
119D of the Local Government Act specifies the role of the
Chief Executive and the functions they are expected to perform.
These include:
- The implementation of the decisions of the local authority;
- Providing advice to members;
- Ensuring the exercise of delegated and statutory functions
by staff; and
- Ensuring effective and efficient management.
Section 119B(4) of the Act gives the Chief Executive Officers
(rather than the Council) responsibility for employing staff.
It has become accepted that elected members set the overall
policy of the local authority and the Chief Executive and
their staff implement that policy, in addition to managing
the local authority's resources. Commentators have noted that
the relationship between the Chief Executive and the Mayor/Chair
is a crucial one because they work closely together.
Central-Local Links
The principal formal interface between local and central
government is the Department of Internal Affairs, which provides
policy advice to the Minister of Local Government. The Minister
has an indirect power of inquiry by referring a matter to
the Local Government Commission; a quasi-judicial appeal authority
whose main function is to hear and determine appeals and proposals
relating to reorganization schemes and representation issues.
It may also consider proposals for new districts and regions
and carry out investigations of particular matters affecting
local government. Three other agencies enquire, monitor and
report directly to Parliament on local government issues.
The Parliamentary Commissioner for the Environment has the
power to investigate the effectiveness of environmental planning
and management. The Office of the Ombudsman generally investigates
appeals against declined requests for information, in accordance
with the Local Government Official Information and Meetings
Act and complaints against maladministration.
The jurisdiction extends only to complaints of unreasonable,
unjust, oppressive or discriminatory behaviour by an officer
or committee against which there is no other avenue of appeal.
The Office of the Controller and Auditor General has two distinct
functions. The first is the annual audit of every local authority,
covering the receipt, handling and expenditure of funds and
to assess to what extent objectives are matched by performance.
The other is its ability of its own volition, to investigate
and report on any aspect of financial management that it deems
necessary. New Zealand local authorities have considerable
autonomy. Central government involvement in the affairs of
local government is limited to the powers that have already
been described. Governments do not have the power to dismiss
a council, or to exercise the direct running of a council.
Overall, it is intended that local authorities are accountable,
above all, to their electors, with local government legislation
prescribing the information required to be made publicly available
and the processes necessary to ensure the effective participation
of electors in the running of their local district.
Local government commission
The Local Government Commission is a quasi-judicial appeal
authority appointed by the Minister of Local Government. It
is made up of a Chairperson and two additional members. Its
main functions are:
- Hear appeals against decisions on objectives to draft
reorganization schemes;
- Hear and determine proposals for the constitution of new
communities; and
- Hear and determine proposals for the reorganization, or
abolition of communities where there is disagreement between
a community board and its parent authority.
In 1994, the Commission assumed further powers to consider
and process reorganization proposals for new districts with
a population of more than 10,000 people and new regions with
a population of more than 50,000 people. The Commission carries
out special investigations of matters relating to local government,
as requested by the Minister of Local Government. An example
of this was in the late 1980s when the Commission was tasked
with the role of reorganizing and reforming New Zealand's
system of local government.
Extent of Public Participation
Any person who is entitled to vote in parliamentary elections
is entitled to be a candidate for membership of a regional
council, a territorial authority, or a community board. Councilors
are elected for a period of three years, with the mayors of
territorial authorities elected independently. Chairs of regional
councils are appointed from within the council. New Zealand
currently has 1132 elected members (of whom 27 per cent are
women). Community boards have advisory and other roles delegated
to them by the territorial authority in their area. They are
part of the democratic process, with members being elected
to the board, while others are appointed. Community boards
have two roles: provide smaller communities with a more approachable
channel through which residents can influence local government
and provide an oversight of the territorial authority's performance
as perceived by the community. They can be set up anywhere
if there is sufficient demand for them and if the territorial
authority agrees. The powers of community boards vary largely
and are delegated to them by the parent council. Community
boards cannot borrow money or levy a rate. Territorial authorities
and regional councils have been given the right to make by-laws
by a number of enabling Acts of Parliament which prescribe
in a very specific manner what laws a local authority can
make. The main areas include resource management, public health,
litter and noise control, fire safety, public libraries, public
swimming pools, removal of refuse and nuisances. The by-laws
and their enforcement are limited to the authority's own district
or region. Once made, the enforcement of by-laws is a regulatory
function of the local authority.
Further issues for local government
There have been significant gains since the 1989 reforms
with the local government sector having become more customers
focussed, efficient and accountable, with a higher level of
governance and leadership. The greatest challenge will be
the successful implementation of the new financial management
legislation. This requires councils to take a ten-year outlook
on what they wish their communities to be, what local government
will provide, how it will fund it and how it will allocate
the costs of provision across communities. This reform is
probably a greater challenge than the 1989 reforms, which
were about form and function and a year-to-year accountability
to the community. The 1996 reform goes to the heart of community
choices and how those can be reconciled, funded and delivered.
A second major challenge now is to create a vision for local
government as a whole and to establish the future for local
government as a sector, while allowing for the diversity and
difference that are at its core. Local government in New Zealand
has joined with central government (the Department of Internal
Affairs) and SOLGM (the Society of Local Government Managers)
in an exercise (called Strategy 2010) aimed at creating this
future vision. Strategy 2010 is aimed at establishing a vision
of where the local government sector should be by the year
2010 and strategies to achieve this.
The expected benefits of such a vision should be to:
- Provide a framework for achieving better local government
over the next decade and beyond;
- Establish clarity between the roles and relationships
of central and local government;
- Develop alignment between long-term strategies for central
and local government;
- Provide a direction and timetable to achieve a policy
and legislative framework that will enable local government
to succeed consistently together with central government
in the governance of New Zealand communities;
- Provide a framework within which regional councils and
territorial authorities can do their own strategic planning;
and
- Provide greater certainty for the community and its various
components, for example, citizens, electors, the business
sector, Maori tribes and the rural sector.
To achieve this, a number of issues will need to be tabled.
These include:
- Clarification of the constitutional position and roles
of local government;
- Articulation of the governance issues of local government
generally and specifically in relation to the management
arm;
- Definition of the source of authority and legitimacy that
supports local governance;
- Development of an enabling legislative framework for local
government;
- Matching funding/rating mechanisms to the legislative
principles, considerations and matters that relate to the
funding of local authority expenditure needs;
- Continuing to develop good practice, especially in the
coordination of annual and long-term financial planning
and in asset management and maintenance; and
- Clarification of the role of local government in relation
to the Treaty of Waitangi.
The Way Ahead
A strong feature of local government in New Zealand is its
independence and autonomy from central government. Whilst
local authorities have certain roles and responsibilities
under the Local Government Act, they are primarily responsible
to their electors. Local government has gone through considerable
changes over the last eight years. These changes have come
in two waves. The first wave occurred in the late 1980's and
sought to make local government more accountable and more
accessible to electors. Part of this process involved a large
number of local authorities being subsumed into larger more
effective units. These changes also resulted in the creation
of two complementary levels of local government to promote
more effective planning. The second wave came in 1996 with
the aim of ensuring that councils undertake rigorous long-term
financial planning. Legislative changes also sought to provide
more explicit economic and financial guidelines to councils
in making funding decisions and allocating costs to residents.
The greatest challenge for local government in New Zealand
is to successfully implement the new financial management
legislation. A further challenge will be to create a future
vision for local government as a whole, to achieve better
local government, to create a stronger partnership between
central government and local government and to provide greater
certainty for local communities.
Further Reading
Hon Dr Michael Bassett, Minister of Local Government, Statement
on Reform of Local and Regional Government, Wellington,
August 1988
Bush, Graham, Local Government and Politics in New Zealand,
Auckland University Press, Auckland 1995
Elwood, Sir Brian, Local Government Reform, Local
Government New Zealand Research Monograph Paper No. 4, September
1995
Dr Bob Chilton, A Place of Your Own; Dr Ngatata Love,
Local Government/Tangata Whenua Relationship; Rt Hon
Sir Geoffrey Palmer, Reflections Upon the Role of Local
Government in New Zealand, Local Government New Zealand,
Keynote Speeches 1996 Annual Conference, Local Government
New Zealand Research Monograph, Paper No. 5, April 1997
McDermott, Philip; Forgie, Vickie; Howell and Robert (eds.),
An Agenda for Local Government, Massey University,
Local Government Studies Occasional Paper Series 2, Proceedings
from the New Local Government Conference, Auckland, November
1995
Howell, Robert; McDermott, Philip, Forgie and Vickie, The
Unfinished Reform in Local Government: The Legacy and the
Prospect, Massey University Local Government Studies Occasional
Paper No. 3, 1996
Annex I
Statement on Local Government New Zealand
Local Government New Zealand is a voluntary organization
of all 86 local government bodies in New Zealand. It exists
to promote the national interests of local government. It
is founded in the belief that local governments speak powerfully
when they speak together. It undertakes three core businesses:
- Promoting collective interests;
- Information sharing; and
- Development for members.
Its philosophy and work are based on six core principles,
being:
- Independent local government complements and balances
central government in a healthy democracy;
- Difference and diversity in local government are a value
and a strength;
- Independence of funding is key to local government autonomy
and community choice;
- Caring for and developing communities is a core value
of local government;
- Local government commits to being fully representative
of its communities in order to best lead, govern and manage;
and
- Local government asserts the right to influence its own
destiny and in return accepts accountability for effective
and efficient governance.
Local government in New Zealand:
- Contributes 3.5 per cent of gross domestic product;
- Has an annual operating expenditure of $3 billion and
an annual capital expenditure of $800 million;
- Contributes 40,000 jobs;
- Has term assets of $32.5 billion;
- Has $31.2 billion in ratepayer equity (1:11 ratio debt
to equity); and
- Has 1132 elected members (of whom 27 per cent are women).
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