PM goes to war on council waste – and on councils

Analysis: In opposition, National won over many disgruntled local councils with its opposition to the Labour government’s one-size-fits-all Three Waters reforms, and an express commitment to devolution and localism. At last year’s Local Government NZ conference in Christchurch, Christopher Luxon promised that if elected Prime Minister, he would “reshape the relationship between central government and local government”.
Yesterday, he delivered on that promise – but not in the way councils had hoped. “You have to forgive me for speaking very plainly and very directly and frankly,” he began. “The tough times that New Zealand finds itself in actually demand that I do so.”
Gathered in Wellington this year for the annual conference, local government reps listened in somewhat stunned near-silence, as he told them the days of councils putting out the begging bowl to the Government were over. Rather than offering them the new funding and financing solutions they’d been hoping for, he’s instead promising revenue caps on non-core activities to control rates increases, spending controls, and performance benchmarks.
Speaking to media afterwards, he insists he remains committed to devolution and localism. But clearly, this ain’t it. I asked Prime Minister Christopher Luxon whether he was going to war on council waste – or going to war on councils? 
“It’s war on council waste,” he replies. “Absolutely, I think there’s a lot of council spending. I think there’s a lot of bureaucracy in the system that needs to be freed up to actually have a customer mindset, to actually serve the ratepayers that are actually paying the bills.”
When he talks about improving the customer mindset, he’s got good evidence to fall back on. As I wrote here yesterday, the Auditor-General has tabled a report on the state of local government. Auditors issued councils with 22 qualified opinions in the previous financial years, and 19 of those were about failings in councils’ underlying systems that support performance information, such as inaccuracies in how they calculated customer complaint information. “Many councils’ performance reporting systems need improvement,” the report said.
So, as Whangārei Mayor Vince Cocurullo tells me, there may be some hurt feelings among councillors after the Prime Minister’s broadside, but they need to take onboard some of the criticism. 
Some of the ‘nice-to-haves’ that councils do are co-funded by central government, so ministers are entitled to apply some heat to councils. And as one observer points out to me, they must also scrutinise their own departmental funding for non-essential projects, because if the Government offers taxpayer co-funding for a project, councils are likely to take it and combine it with ratepayer funding.
All that said, the way the Prime Minister delivered his message went beyond ‘direct’ and ‘blunt’. It was rude and it was patronising, and I don’t think he’d disagree with that assessment. He intended to shake councillors out of any comfort zone, and to a large extent he was also talking over their heads to the TV cameras and the ratepayers watching at home. 
Observing at the conference is Jordan Williams, executive director of the conservative Taxpayers’ Union. “Luxon is taking a risk here, but is reading – I think, accurately – that confidence in local government is at an all-time low,” he tells me. “This is the first time in my lifetime, where picking a fight with local government actually has a political upside, and that is demonstrative of the extent to which the sector risks losing its social mandate.”
Luxon arrived too late to hear Te Atiawa’s Nate Rowe, of Taranaki Whānui, welcome delegates to the Wellington’s new Tākina conference centre, and tell of the history of that whare. Of how manawhenua had conceived its role in bringing people together, and even written a song for it, long before builders broke ground.
That’s not to say the previous council’s $180m decision to build the centre was right, or wrong. When Wellington’s rates are rising 16.9 percent this year (accompanied by increases to charges for pools, parking, dog registration, and even burials) then some ratepayers may well agree that it’s a ‘white elephant’.
What is clear is that Luxon is ready for a fight. And having seen how the Government has also taken on the big Australian-owned banks this week, and before that supermarkets and public sector leaders and roadworks managers and many more, it seems apparent that part of his political strategy is to divert criticism of the Government by offering up new public enemies. Don’t look here, look over there!
Is local government up for that fight? Yes and no. Speaking to Wellington mayor Tory Whanau, she’s pulling no punches. “It’s incredibly rude to come into someone’s house, someone’s whare, from a tikanga perspective, and to talk down to people like that. We don’t do that. That is not how you build a community. It’s incredibly degrading.”
And the Government’s plan to regulate local government right down to what they can and can’t spend their money on? “I will absolutely challenge this,” she says. “We only have fees or rates at the moment. And we’re expected to invest heavily in water infrastructure, transport and community services. Those are the basics. He might not agree with that, but that all costs money.”
On the most part, though, councils will roll with the punches. As former Auckland deputy mayor Penny Hulse points out, there’s a huge power differential.
Hulse was on the Future for Local Government review team that highlighted the distrust between central and local government. Now, her conference name tag has ‘local government enthusiast’ scrawled on it. She’s not representing any organisation, so she feels free to speak – perhaps as frankly as Luxon.
She accuses him of “extraordinary over-reach” in proposing to cap rates and regulate where councils can spend their money. “I’m failing to understand how Wellington can decide what those communities need or what they don’t need. I think it’s completely out of order to control expenditure on what the community is asking its councils to do.
“It’s like a bad marriage,” she muses. “Some people say, why doesn’t the partner who’s being abused leave or do something more proactive? The reality is the other partner’s holding the car keys and the chequebook. Unfortunately, that’s the kind of relationship that it appears that we’ve got at the moment.”