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2025 Taksforce Members Appointed

Posted on 18 Aug 2009

Minister for Regulatory Reform Rodney Hide today announced the appointment of four members of the 2025 Taskforce, charged with recommending ways to improve productivity and close the income gap with Australia.

Chaired by Dr Don Brash, the 2025 Taskforce will investigate the reasons for the decline in New Zealand’s productivity performance over recent years.

Joining Dr Brash on the 2025 Taskforce are:

- Hon David Caygill: former Minister of Finance, current chair of the Electricity Commission, chair of the forthcoming ACC Review, and member of the Regulatory Responsibility Taskforce

- Jeremy Moon: founder and chief executive of Icebreaker and chair of Better by Design, a unit within New Zealand Trade and Enterprise

- Judith Sloan: Commissioner (part-time) at the Australian Productivity Commission and Commissioner at the Australian Fair Pay Commission

- Dr Bryce Wilkinson: Director of Capital Economics, with 12 years experience in public policy analysis at the Treasury and 12 years with an investment bank

"I am very pleased to have secured such high calibre people for the 2025 Taskforce," Mr Hide said. "From their wide experience they will provide valuable insights into the work of this important body.

"The establishment of the taskforce was a key component in the ACT-National confidence and supply agreement, reflecting the importance we place on working to close the income gap with Australia. That income gap is one of the reasons we lose so many talented, hard-working New Zealanders every year."

The Taskforce will provide an initial report in November 2009. Mr Hide said that report will identify the policy settings and changes that will deliver the productivity growth necessary for a stronger, more prosperous economy. Further progress reports will then be provided in 2010 and 2011.

Cutting Red Tape To Create A Better, Smarter Economy

Posted on 17 Aug 2009

Better and less regulation is essential to boost New Zealand’s productivity growth, international competitiveness and living standards, the Hon Rodney Hide, Minister for Regulatory Reform, and the Hon Bill English, Minister of Finance, said today.

The Ministers released the first Government Statement on Regulation, which contains two key commitments: to introduce new regulation only when the government is satisfied that is required, reasonable and robust; and to review existing regulation to identify and remove requirements that are unnecessary, ineffective and excessively costly.

Mr English said the two commitments responded to the Job Summit’s recommendation that the government delay introducing any new regulation that imposed extra substantive costs on business during the current difficult economic conditions.

"We have a clear plan to make New Zealand a more productive and higher income country and we believe that better and less regulation is essential to achieve that goal," Mr English said. "In our current financial situation the quality of the regulatory environment is even more important."

Mr Hide said businesses were struggling to keep up with the new rules and requirements they were being forced to comply with and all New Zealanders paid a price for that.

"We are committed to addressing the high compliance costs hampering the efforts of businesses to create jobs and support our economic growth," Mr Hide said.

"We have begun to roll back a number of regulatory measures put in place by the previous government. The taskforce set up to recommend changes to the Regulatory Responsibility Bill, which demands that regulators show restraint and respect for private rights and interests, will be reporting back to the Government by 30 September."

Measures supporting the delivery of the Government Statement on Regulation are:
- Departments required to provide annual regulatory plans of all known and anticipated proposals to introduce, repeal or review legislation or regulation
- Departments required to certify Regulatory Impact Statements and provide assurance that all policy options have been analysed and major risks and uncertainties identified
- Departments required to put in place systems for continually and systematically scanning existing regulation to identify possible areas for reform or further review
- Ministers required to certify that new regulation is consistent with the Government Statement on Regulation

Released by Hon Bill English and Hon Rodney Hide on 17 August 2009

Every day New Zealanders are affected by regulation in a myriad of ways. We look to regulation to help ensure we live safer lives, get treated fairly, protect and manage our environment, have a competitive and efficient economy, and much more.

But regulation also has costs and can have unintended effects. Outdated, poorly conceived and poorly implemented regulation can significantly hinder individual freedom, innovation, and productivity. Reducing the burden imposed by such regulation will help unshackle our economy and give New Zealanders more ability to shape and improve their own lives.

New Zealand needs to offer a better policy environment than can be found elsewhere if we are to overcome the economic disadvantages of our small size and geographical isolation, and attract and retain increasingly mobile talent, skills, capital, technology and entrepreneurship.

This is why improving the quality of regulation is a priority for this government. We believe that better regulation, and less regulation, is essential to assist New Zealand to become more internationally competitive and a more attractive place to live and do business.

Our Commitments

- We will introduce new regulation only when we are satisfied that it is required, reasonable, and robust.

- We will review existing regulation in order to identify and remove requirements that are unnecessary, ineffective or excessively costly.

How we will deliver on these commitments

We have already:

- Begun a programme of reviews of the effectiveness of important regulatory regimes, particularly those that have a significant impact on productivity;

- Committed to introduce an annual Regulatory Reform Bill to make it quicker and easier to remove or simplify unnecessary, ineffective or excessively costly requirements in primary legislation;

- Established an independent expert Regulatory Taskforce to investigate the case for, and form of, a Regulatory Responsibility Bill.

We will also be looking for significant changes in the approach both Ministers and government agencies take to regulation. To this end we will:

Resist the temptation or pressure to take a regulatory decision until we have considered the evidence, advice and consultation feedback, and fully satisfied ourselves that:
- the problem cannot be adequately addressed through private arrangements and a regulatory solution is required in the public interest;
- all practical options for addressing the problem have been considered;
- the benefits of the preferred option not only exceed the costs (taking account of all relevant considerations) but will deliver the highest level of net benefit of the practical regulatory options available;
- the proposed obligations or entitlements are clear, easily understood and conform as far as possible to established legislative principles and best practice formulations; and
- implementation issues, costs and risks have been fully assessed and addressed;

Require there to be a particularly strong case made for any regulatory proposals that are likely to:
- impose additional costs on business during the current economic recession;
- impair private property rights, market competition, or the incentives on businesses to innovate and invest; or
- override fundamental common law principles (as referenced in Chapter 3 of the Legislation Advisory Committee guidelines)

Ensure that Cabinet’s requirements for assuring regulatory quality are treated as an integral part of policy development, and built into the policy process from the beginning

Ensure that all government agencies are fully aware of the commitments set out in this statement and understand the importance that the government attaches to them

Expect a culture from government agencies that:
- recognises the importance of productivity in enhancing New Zealand’s economic performance;
- respects the value of individual autonomy and responsibility;
- does not see regulation as the first resort for problem solving;
- provides fearless advice on whether a regulatory proposal is consistent with this policy statement and meets appropriate standards of impact analysis and consultation; and
- continually looks for opportunities to make existing regulation more effective, easier to access and understand, and easier and less costly to comply with;

Require greater accountability from government agencies for the quality of the regulatory analysis they undertake, and for the consequences of poor implementation; and

Encourage New Zealanders to hold us to account where they believe we have regulated in a way that is inconsistent with the commitments in this statement.

Speech To Local Government New Zealand Annual Conference

Posted on 28 Jul 2009

Speech To Local Government New Zealand Annual Conference - Hon Rodney Hide - Minister Of Local Government

President Lawrence Yule, Vice President Kerry Prendergast, Carl Wright, Secretary-General of the Commonwealth Local Government Forum and distinguished guests. Thank you for the opportunity to talk today at your Annual Local Government New Zealand Conference. It’s great to be here.

This is, of course, my first opportunity as Minister of Local Government to address LGNZ as a national body. I have enjoyed meeting with you at sector meetings and in your regions and districts. This is an exciting time to be working in local government. A commentator recently wrote Local Government is now sexy!

I can’t take the credit for that, but I am using my position to emphasise local government’s importance in people’s lives and to the future of New Zealand.
Local Government’s critical importance is why I took on the role of Minister.

Your theme "Our Place in the World" is big, bold and inspiring. I love it.

To achieve "Our Place in the World" we must dramatically improve New Zealand’s prosperity and super-charge our standard of living. We can’t achieve "Our Place" if we continue as a nation to drift ever further below the rest of the world.

That’s why ACT and National’s Confidence and Supply Agreement sets the goal of catching and matching Australia by 2025. That’s a big goal. It’s a stretch. It requires we dramatically lift our performance. But we can do it.

Setting the goal is important. It focuses our minds on what is important and what is not.

But we need to do much more than just set a goal to succeed. We need a plan to achieve our goal, we need to action that plan, and we need constant measurement of our performance against our goal.

That’s why I was so pleased last week to announce Dr Don Brash as Chair of the 2025 Taskforce. The Taskforce’s job is to measure New Zealand’s economic performance each year against achieving the goal. Then they will offer up the policies and institutional changes needed to put us on track to catch and match Australia.

I am now working with Don and Bill English to put together the rest of the Taskforce.

When I am assessing policy I ask a simple question: will it make the boat go faster? That is, will it boost our economic performance? That simple question focuses me on what we have to do to provide for ourselves and our children the prosperity and standard of living we so desperately yearn for. Far too many of our young and talented have to leave our place for other places to realise the standard of living they desire. As a country we can’t afford to lose their talent, enthusiasm and drive. We have to do better.

Making the boat go faster has been top of mind as I have visited councils in my new role as Minister.

There has been much that has impressed me.

Lawrence Yule and the Hastings District Council have been to the forefront with a proactive and client focussed efficient resource consent processing system. The council provides a key account manager for large or frequent consent applications.

A pre-lodgement service is also provided where a council staff member sits down with the applicant and works through the application to check that it is all complete and in order.

The system that Lawrence and his council have introduced saves time and cost for applicants, reduces frustration and error rates and importantly builds a relationship between council and customers. It makes our boat go faster.

And the results speak for themselves. Hastings District Council has a near 100 per cent compliance with on-time processing.

Hutt City has set a clear fiscal strategy based on what their ratepayers can afford. They have budgeted to that strategy thereby increasing the disposable income of their community and the profitability of their businesses. That makes the boat go faster. Hutt City has one of the lowest rate increases in the country while addressing council debt.

I visited Rotorua District Council recently and took note of Mayor Kevin Winters’ and CEO Peter Guerin’s commitment to good governance through a strong relationship between the elected councillors and their management team and a clear understanding of their respective roles. Good governance means good government, and good government is what we need to achieve our place in the world. These initiatives all serve to make the boat go faster.

But two weeks ago I saw a programme that rocked my socks. I had the great fortune to visit the City of Manukau Education Trust. COMET brings business CEOs into schools, takes school principals into businesses, and brings parents and grandparents into the classroom to learn to read and to write. It’s a phenomenal programme.

Local businesses better understand and know the schools in their area. The schools better know the businesses.

There are parents and grandparents who have learnt to read and to write and to go on to get degrees and to teach. Now that’s making the boat go faster. That is amazing.

The children’s performance at school has dramatically improved as their family and home environment has become pro-learning and other children are now wanting their mums, dads and grandparents to take part in the programme.

COMET taught me the crucial role Local Government can play in better directing and facilitating centrally funded programmes such as education.

It has been something Social Development Minister Paula Bennett has been at me about for some time. I am enthusiastically working with her to see how we can, through local government, achieve much more in social delivery.

All thanks to COMET and the innovative work of Manukau City Council.

As I have travelled the country I have listened, to you, to ratepayers and to farmers and other businesses.

I have heard loud and clear the concern over rate increases, red tape, unacceptable delays and bureaucratic bungling. We need to do better, much better.

I have also heard loud and clear of the large and unacceptable costs central government has imposed on local government and thereby ratepayers.

Tim Shadbolt wrote to me explaining how his council could easily have held costs to the rate of inflation except for the costs central government had imposed over the past nine years. For this year alone, Invercargill City Council will spend an extra $1.59 million, or nearly eight per cent, of their budget on complying with these additional requirements.

It is clear to me that successive governments have imposed large costs on local government without care or adequate thought. At Local Government New Zealand’s request we have put a moratorium on the introduction of drinking water standards.

LGNZ have also expressed concern at the impacts of the new air quality standards. That’s why a review is underway to examine these issues.

As Minister for Regulatory Reform I want to ensure that central government policy making takes proper account of any costs to be imposed on local government.

With Bill English I am working to tighten cabinet procedures to take better account of local government.

A huge amount of regulation has been passed on by central government to local government to administer.

Two prime examples of over-regulation are the Resource Management Act and Building Act.

The complexities and bureaucratic processes of this legislation have heaped costs on councils, which have then been passed onto users and ratepayers.

The reform of these two Acts now underway will go a considerable way to lessening councils’ planning and regulatory costs and make it simpler to administer the legislation.

You have also made clear to me that the processes and procedures set out in the Local Government Act are imposing unnecessary cost, making your jobs harder, and slowing down our boat.

Accordingly I am looking at that Act. My review is guided by principle.

The first thing is that I believe in local government. That is to say, wherever possible, I believe that decisions are best left with individuals. Where government is involved, it’s best to have a government as local and as close to the people affected as possible. That’s why I support and believe in local government.

My job is not to tell councils what to do. My job is to provide the best environment for you to get on and do your job reflecting the wish and desire of your communities and their willingness to pay.

The principles driving my review are transparency, accountability and fiscal management.

I want communities to really feel that they are a part of the local community and its governance, and able to have their say.

They need to be able to see what’s going on and to be in a position to hold their councils to account for spending their rates money.

I also want Councils to be able to go about their business in a less risk averse, more empowered way, with the full backing of your communities.

My work programme recognises that:
o local government should operate within a defined fiscal envelope;
o councils should focus on core activities, and;
o council decision-making should be clear, transparent and accountable.

My officials are looking into:

Simplifying long-term council community plans. I think councils are required to do far too much consultation, and the consultation is not meaningful to the average person in your communities. I plan to streamline consultation requirements but ensure that councils must consult on the issues that matter to communities - rating levels; spending decisions and service levels for councils’ core business. As many of you know I am also looking into the potential for using polls or referenda for particular decisions. More about that shortly.

I am also looking into the effectiveness of the current community outcomes process and I intend to improve it; I am also examining the extent of audit requirements that you have to meet.

I would like to strip away some of the heavy processes that weigh you down and waste ratepayers’ money.

I have asked my officials to develop a process for "plain English" financial disclosures so that ratepayers can understand what councils plan to spend their money on. I would like to see councils having a Pre-election financial update (prefu) statement published before every election, (similar to central government) so that ratepayers and voters are clear about the state of the books, and can have an informed view on what the council should be focussing on in the next three years.

This links to my view that councils should identify and focus on their core roles and functions. In my opinion the basic infrastructure needs of this country, and of ratepayers should be at the top of the list of council spending, with the "nice to have" coming much further down the list, if at all.

Councils need a clear fiscal strategy identifying the rating level and exactly what ratepayers will get for that spend. Ratepayers should be the decision makers on this fiscal strategy so there needs to be consultation. I’m looking into councils doing this through a poll or referendum at election time. Over and above this there should be a consultation process, so that the community is very clear what they have agreed to, and can hold the council accountable to those decisions.

I want to point out that a requirement for a financial strategy is not the same as rate-capping, or rate-setting by central government. I am not proposing these measures.

A good financial strategy will help councils; ratepayers and voters make better decisions about trade-offs. It will provide a basis to measure a council’s financial management record and help to identify future financial management issues.

In developing this work I am keen to build on the successes across the sector where LTCCP consultation has produced clear and useful summary information to ratepayers and voters.

I am also responding to ratepayer concerns about rates and expenses. It’s clear that fiscally successful councils set fiscal strategies with limits on rate increases, expenditure and debt and then set priorities within those limits set by the strategy. That seems to me proper fiscal planning.

I believe we need sound fiscal policies in local government and we need ratepayers able to have a say on that strategy. After all, it’s their money.

Before and since last year’s Election I have received thousands of letters and comments from ratepayers unhappy with a particular decision of their council. As part of my legacy I am determined to see a better relationship between local authorities and their electors.

I have consulted with Local Government New Zealand; the Society of Local Government Managers and other key stakeholders on the first stages of my work programme. I thank everyone for their cooperation and assistance to date.

I am particularly interested in your views about the core roles of local government. I appreciate that what might be a necessity for a large metropolitan council could be an absolute extravagance for a small rural council. At the heart of the issue is that if ratepayers are going to have some control over fiscal strategies then I want to ensure the basics are properly funded and maintained.

I hope to have legislation in Parliament for this work by the end of the year.

Driving all of this is the simple desire of how best we can make the boat go faster and achieve our place in the world.

I also believe it’s crucial, especially so in these times, that councils ensure that core activities are properly identified and funded before spending occurs on more discretionary activities.

As I have already mentioned it’s not about me telling local authorities what they can and cannot do. Rather it is about encouraging greater local democracy where councils consult more widely and effectively and seek a mandate for "non core spending."

I cannot leave you today without talking about Auckland.

At this stage of the process, it’s too early to say what the implications of the work on Auckland may be for other local authorities.

There are at present no proposals to take similar steps in other regions, as we acknowledge Auckland has a unique set of circumstances that have needed to be addressed for many years.

Further down the track, we can consider the implications of the review of Auckland’s governance for local government generally and structures outside Auckland.

Auckland’s local governance model is not working and hasn’t for some time. But defining the problem has always been the easy part. The hard part is fixing what is not working.

So that’s what we are addressing.

Allow me to share a little bit of history with you.

Ninety years ago in 1919 Michael Joseph Savage campaigned for Labour supporting a single Auckland Council. And fifty years ago Sir Roger Douglas’s grandfather, Bill Anderton, Minister of Internal Affairs, called on Aucklanders to unite with a single council.

So the idea is not new.

What’s new is that we have had the Royal Commission report and a government prepared to do something about it.

Auckland is a great city and region; our one truly "big" city and a critical gateway to the rest of the world. We can make it even greater. That’s what this reform is all about.

And getting Auckland right is important not only for Auckland but, it’s important too for the rest of the country.

If we want the boat to go faster, if we want to achieve our place in the world, then getting Auckland right is crucial.

I approach the policy work on Auckland again with the simple question: What’s best for Auckland?

And not just best for the here and now, but best for as far as we can see into the future.

It’s not about making the decisions for Auckland. It’s about providing the best governance structure to take Auckland forward in the decades ahead.

The Government wants Auckland to be able to speak with one voice on the critical regional issues that are so important to get right at that level. We want a mayor and a council able to speak for and represent all of Auckland. We want candidates able to campaign on their vision for the city and region; to fire our imagination and be elected and do the job.

But we want more than that. We want the many and varied voices and communities which make up Auckland to have a clear and significant role in its future. The diversity of this great city is what makes it strong and exciting.

We want the proposed local boards to have a meaningful role and make local decisions. We don’t want the Mayor and council diverted from the regional issues to be tangled up in local issues that could best be handled locally.

The only constraint should be that local board decision- making should not undermine regional decision-making.

The Government’s proposed model is for a unitary authority with two levels of decision-making but one administration supporting both.

As you know the select committee has been hearing submissions on this model and I await their report with interest.

The response from Aucklanders has been fantastic and we are working with Auckland and officials to get the very best result for Auckland and for our country.

It’s fabulous work to be involved in.

It’s an exciting time to be in local government. I feel very privileged to be Minister.

It has been great to talk with you today. I am looking forward to working with you.

The one thing I am sure about is that not all the wisdom resides in Wellington. There is never a monopoly on good ideas.

I have learnt such a lot from mayors and councils. I especially have appreciated the help I have received from President Lawrence Yule and your Chief Executive Eugene Bowen. Both have helped me as new Minister to understand local government better.

I have also been impressed with the work of the Department of Internal Affairs. They have been tremendous with their enthusiasm, commitment, intelligence and effort. I couldn’t ask for better.

Thank you for the opportunity to outline my thoughts and priorities. We are now moving to a discussion session so I am hoping we can pick up and canvass some of the ideas we have been talking about.

Together, we certainly can "Achieve Our Place in the World."

Thank you.

Speech To Federated Farmers Plenary Day, Auckland

Posted on 01 Jul 2009

Speech To Federated Farmers Plenary Day, Auckland

Good morning. I’m very pleased to have the opportunity to join you here today.

Your business - agriculture - is one of the few areas where New Zealand leads the world. We are the 12th largest agricultural exporter by value. The success of New Zealand agriculture is reflected in its value to our economy, making up around 12 per cent of GDP and over 12 per cent of employment.

A badly performing economy impacts on us all, regardless of whether we are employers, employees, superannuitants, or self-employed. That’s why growing the economy is one of the Government’s three priority areas.

To grow the economy we need to create the right environment, which means reducing bureaucracy, and reducing regulatory and compliance demands.

The work I have underway, both as Minister of Regulatory Reform and Minister of Local Government, aims to make an important contribution to creating the right environment to foster growth.

I’ve had a lot of valuable input from farmers, both in meetings I’ve attended and correspondence I’ve received. The messages have been very clear - farmers are paying too much in rates and this is impacting on the economic viability of your farms.
Many of you also feel that council expenditure has got out of hand. And you’re certainly not alone in thinking that.

I’m very clear about what needs to be done. Firstly, we need to focus on reducing local government costs. Containing councils’ costs will benefit all ratepayers, including the rural sector, through reduced rates demands. Just as central government has had to cut its spending in the current economic climate, local government needs to consider how it can contain costs and limit rates increases.

Councils should be looking at each and every item of expenditure. They need to be assessing if every service they provide and every project they plan is necessary, and listening carefully to what their ratepayers think. Councils need to do better in some areas. They should be streamlining procedures and processes to ensure their services are as efficient as possible.

Some councils’ procedures for processing resource consents are good examples of how not to run a service. Consent applicants are paying a high price for these bad processes, through significant delays and costs. The delays don’t just affect applicants; they can also impact on regions’ economies by delaying or discouraging economic growth.

As farmers, and significant contributors to the national economy, you will understand that we cannot afford these sorts of unwarranted and avoidable hindrances to improving our economic performance. This is particularly so in the current economic climate, which is unlikely to significantly improve for some time yet.

The Government wants ratepayers to have greater confidence in, and control over, their councils. This means that councils’ decision-making must be clear, transparent and accountable to ratepayers in a meaningful way.

We are taking a number of actions to try to achieve a more streamlined, efficient, and responsive local government sector. One of the most important areas of work in my local government portfolio is enhancing local accountability, and reducing the process burden that central government imposes on local government. The work aims to ensure that ratepayers and citizens have more control over council costs, rates and activities.

Some commentators have portrayed the proposals as a threat to local democracy, but that is not correct. The review is not about stopping councils from doing things. It’s about giving ratepayers and citizens more tools to have a greater say in what is done on their behalf and with their money. It is about simplifying processes, and ensuring that ratepayers and citizens have the right information to make informed decisions about what they want for their communities.

The review is guided by the following principles:

- local government should operate within a defined fiscal envelope
- councils should focus on core activities, and
- council decision-making should be clear, transparent and accountable.

It has three related workstreams:

- long-term planning and financial management
- management of service performance, and
- accountability and decision-making.

The first workstream aims to reduce the complexity and cost of long-term planning processes.
It will also consider how councils’ financial reporting could be improved to provide better and more easily understood information.

Planning documents such as long-term council community plans play an important role in councils’ accountability to their communities. But the size and complexity of these plans often make them difficult to understand and can deter citizens from participating in decision-making processes. Much of the financial information provided by councils is incomprehensible to the layperson.

Having access to useful information that can be readily understood is crucial if communities are to hold their councils accountable. Information needs to be in ‘plain English’ and ratepayers need to know what activities their money is being spent on.

Officials will examine the merits of councils preparing financial strategies to set limits on rates, debt and expenditure, and to prioritise expenditure. Under this approach councils then set priorities within those limits, rather than collating a wish list and taxing ratepayers to pay for it.

They will also consider pre-election financial updates, which would ensure that councils give a proper account of activities over the previous three years, and identify proposed items of expenditure over the next three years.

This would give electors a chance to put hard questions to candidates about past and proposed expenditure, and encourage debate about spending priorities.

The second workstream will look at whether changes are needed to the current requirements around identifying and monitoring community outcomes. It is debatable whether this is a good use of council resources. Officials will be examining options for a more focused and less costly service performance reporting system.

The third workstream is about enhancing councils’ accountability to their ratepayers and citizens. There are two issues. The first is the total cost of councils. The second is council priorities.

The councils that control the budgets set a clear fiscal strategy. That stands to reason.
A fiscal strategy clearly has to be set. The question is ‘who sets it?’ It seems to me that it should be ratepayers. After all, it’s their money being spent.

Accordingly, officials are examining options for allowing voters at election time to tick a box and thereby control council spending to, say, the rate of inflation.

Total cost is an issue. So is prioritising.

Many ratepayers have written to me concerned about rate rises. Many too have written because they are worried and angry at having to pay for facilities they don’t want - like the Otago Stadium, the Timaru aquatic complex, and the Nelson Performing Arts Centre.

The problem with current mechanisms, such as complaints to the Ombudsmen or voting out councils, is that they are retrospective. By the time elections come round, the council may have started the project, so it’s too late to pull out.

We’re looking at putting the horse before the cart, by giving ratepayers greater control over council decisions to invest in large and controversial projects, and especially projects beyond what we think of as core local government functions.

Officials have now scoped the review and are consulting with stakeholders, including the Local Government Forum. As a member of the Forum, Federated Farmers will have input into the process.

I believe that the measures being considered in the review would go a considerable way towards achieving my objective of an efficient, cost-effective and responsive local government sector.

I am aware that Federated Farmers is advocating for wider reform of local government funding, such as a move away from property-based rates to a greater focus on matching costs to benefits. At this stage my priorities are to get Auckland’s governance issues sorted out, and then to get local government expenditure under control. Once I’ve dealt with these matters, I will welcome discussion on future priorities for local government reform.

There has been quite a lot of attention lately on what constitutes the ‘core’ business of local government. Officials are considering this, as it is linked to their work on transparency, accountability, and financial management.

There is currently no formal definition of local authority core services. We need one. But I’m not suggesting that the Government stop councils from undertaking activities.

What I’m proposing is that councils focus on core services and seek a citizen mandate (probably through a referendum mechanism) for activities that are clearly not core services.

I am also concerned about mandatory functions and associated costs being imposed on local government by central government. In the past, too many obligations and costs have been passed on to local government by central government.

The Government is committed to reducing the costs that central government has imposed on the sector. I intend to examine whether central government has processes for making policy decisions that take full account of the costs and benefits.

My local government reform programme ties in with my work as Minister for Regulatory Reform.
The Minister of Finance and I have oversight of review of 11 major areas of regulation. These include review of the Building Act and Resource Management Act. Significant progress has been made on both reviews.

At the moment the Resource Management Act is causing unnecessary delays and high compliance costs that slow down our economic growth and infrastructure development. We currently have a Bill before the House which seeks to streamline and simplify RMA processes. This Bill makes a lot of small improvements to the Act, including removing frivolous, vexatious and anti-competitive objections, improving plan development and plan change processes, and reducing the compliance cost of consents.

We think this will make a big difference for farmers and other businesses.

The current Bill is only the first step in improving the RMA. We are starting to look at a host of more complex issues. For farmers, perhaps the most important will be water. Getting water right is critical to the long term future of the primary sector, tourism and Brand New Zealand. It will require input from all water users, and a concerted effort from both local and national government. And it won’t happen overnight. But we’re confident that in conjunction with work already underway on managing water quality, abstraction and allocation, we can continue to improve the way water is managed and ensure we get the most value from it.

In my role as Minister for Regulatory Reform I see one of my jobs as changing the culture of government. I want regulators to give more thought to how regulation impacts on local government, businesses, and private citizens. Regulators should be thinking 'how much is this going to cost the taxpayer or ratepayer' and 'is regulation really the right approach or are there more savvy ways of achieving the same result?' The quality of new regulation is important.

Officials are working on a set of quality assurance measures that can be established within government. This includes a Government Policy Statement on regulation.

We also need to have a systematic approach to continually reviewing existing regulations, to make sure that they are still relevant and implemented in the most efficient way. Again, officials are working on proposals for us to consider.

Additionally, we are establishing a 2025 Productivity Taskforce to investigate a number of important matters, including:
- the reasons for the recent decline in New Zealand's productivity performance
- identifying superior institutions and policies in Australia and other more successful countries, and
- making credible recommendations on the steps needed to close the income gap with Australia by 2025.

We will also explore the concept of a New Zealand Productivity Commission associated with Australia's Productivity Commission, in order to support the goals of higher productivity growth and improvements in the quality of regulation.

So you can see that much work is underway to help get our economy growing. New Zealand is not going down the path some other countries are currently following in pursuing heavy regulation and even heavier subsidies. That leads to a farming sector which is over-regulated, inefficient, and drifts further and further behind what is internationally competitive.

We want New Zealand farmers to continue to be innovative, sustainable and profitable, and the role of Government is to focus on getting the regulatory settings right to enable you to do so.

Thank you again for the opportunity to speak to you today. I’m very happy to take your questions or hear your comments.

Speech To The ACT Party 2009 Wellington Regional Conference

Posted on 30 Jun 2009

Speech To The ACT Party 2009 Wellington Regional Conference

This conference is a celebration for us.

The last election gave us three more MPs. Our Confidence and Supply Agreement with the National Party helped form a government. Heather Roy and I became Ministers.

We have more resources, more people, and the opportunity to get better policies for New Zealand. We are making a difference.

The National Party’s pre-election policies were in large part business-as-usual policies. They were pretty timid. They were not what I would call ambitious for New Zealand.

In the context of the global recession and financial crisis, business-as-usual policies are not good enough. The world has changed, and we are not in good shape to face this crisis.

The task for this new government is to turn around the decline under nine years of Labour: the falling productivity growth rate that is widening the income gap with Australia, the regulation of everything that moves, and our failing social institutions.

Public spending was, and still is, out of control. That is why the deficit and public debt projections are appalling over a 10 or more year outlook. We face a fundamental, long-term problem, not just one due to the current recession.

Consider the state of our social policies.

Think of the disastrous educational outcomes for the bottom third of the school population. The truly astounding decline in health sector productivity in the past decade. The unwillingness to address the welfare trap, which is the source of inter-generational dependency in New Zealand. The incompetently designed family support scheme - Working For Families - which has middle income households facing marginal tax rates of 53% and 59%. Sometimes higher.

Our heavy taxation of low risk forms of saving puts a huge barrier in front of people trying to save, which forces people into over-investing in housing or investing in higher risk assets to try and get a decent return, after tax and inflation have taken their toll. It is one of the sources of the disaster in the finance company sector.

It is madness. We have destroyed the ability of households to get ahead from their own efforts. That is what a high marginal tax rate does.

And there was a sustained assault on business over the past decade. We are suffocating small businesses, enveloping them in regulation and red-tape.

We have seen all these things. These are what must be changed.

You can judge how well the government is doing by how many of these issues you can tick off as fixed, or seriously addressed, by the end of this 3-year term.

The ACT Party is playing a crucial role in prodding the government into action. We have a new ACT team in Parliament. And we have a comprehensive Agreement with the National Party.

Since the election we have been working our way through the items in that Agreement.

We have established a select committee to review climate change policies. The terms of reference we negotiated required a quantified cost-benefit analysis of policies to combat climate change. We fought hard to get this work done by independent economic consultants.

The ETS will cost jobs, and reduce household incomes. It could heavily and unfairly penalise agriculture. It is a huge issue.

We will be pushing hard to ensure that New Zealand, at a minimum, does not get ahead of countries like Australia, and that agriculture is treated fairly.

To improve the abysmal quality of regulation in this country we established a high-quality taskforce to complete the work ACT started on a Regulatory Responsibility Bill.

This is the missing link in the range of constraints on government. It could be as important as the Monetary Policy and Fiscal Responsibility Acts.

The RMA Advisory Group formed as a result of our Agreement has reported already, and a range of reforms are in the process of becoming law. There will be a second round of reforms in due course.

We are currently putting together a group (the 2025 Taskforce) to analyse the productivity decline in New Zealand, and recommend policies to reverse it.

In our Agreement with National, we have a joint goal of closing the income gap with Australia by 2025. That goal is meaningless without an annual audit of progress made to achieve it. That is what the 2025 Taskforce is for.

We are also exploring the option of establishing a Productivity Commission for New Zealand, like the very successful Australian one. I have met with Gary Banks, the Chair of the Australian Productivity Commission, to explore an association with them.

Our Agreement with National includes a number of taskforces to review government spending. The first of them, focused on health, is underway, and there will be more to follow.

Our 3-Strikes Bill has passed its first reading and is now before a select committee.

The Inter-Party Working Group on Education is established and will meet regularly. This group will focus on issues central to ACT education philosophy, which features greater choice for parents and pupils, and increased competition via parental choice and greater school autonomy.

Our highly centralised state-monopoly education system has failed our kids. We need to sort it out.

Next year we will move forward with work on the Taxpayer Bill of Rights.

In short, there is much to do. And there is a huge and important work programme that springs directly from our Agreement with National.

Our three new MPs have hit the deck running. They are confident and commanding in the House.

John Boscawen led the campaign against the EFA, and will front our efforts to get better, fairer electoral law. He is also focusing his attention on the rorts that have occurred in the finance sector, and standing up for the rights of savers in this country.

And he campaigned hard as our candidate in the recent Mt Albert by-election, getting great publicity for ACT.

David Garrett is working hard to get our 3-Strikes Bill passed into law. Maintaining law and order, keeping people safe, is the first and highest responsibility of government. We must fix our parole system, and ensure that the most violent recidivist offenders are off our streets. Our 3-Strikes Bill will do just that.

And Roger Douglas is back. Roger is proving to be a strong but fair critic of government policy - the conscience of economic rationalists.

In our Ministerial positions, we have Heather Roy as Minister of Consumer Affairs, where she is working to get simple principles driving consumer protection law - not just endless ad-hoc interventions.

She chairs the Inter-Party Working Group on Education. As Associate Education Minister, she has responsibility for special education and independent schools.

She has wide responsibilities in her Associate Defence portfolio, and is actively engaged in the current Defence Review.

In my role as Minister of Local Government, I am focussed on reform of the Local Government Act to get more responsive and better focused local government, and stop the endless upward ratchet of rate increases.

My biggest task this year has been responding to the Royal Commission Report on Auckland governance. The Government made a number of high-level decisions as a consequence of that report.

Since then we have been explaining them to the people of Auckland, working with officials drafting the legislation, getting that legislation passed, and setting up the Auckland Transition Agency to implement the decisions made.

I’m not someone who believes that bigger is necessarily better, but I believe simple is certainly best. I never understood why it took so many politicians to run Auckland, and why it needed seven mayors and a chairman. With this structure, if the Mayors can’t agree on some regional issue, then nobody is accountable for the regional failings.

This reform is all about getting good governance in Auckland - about transparency and accountability.

It seemed to me that as Auckland is one region, the simple solution is to have one council, one Mayor, and one plan. That’s what the Royal Commission recommended, and what the Government is implementing.

But I was determined to also ensure strong local representation, because it seemed to me that a risk of having one big council was that it could get distanced from the people. So we pushed for local boards to have some real influence and decision-making ability in their communities.

We knew we needed to hear more from the public on this, so we have left the final decisions on Local Boards until after we consider the submissions that have come in to the select committee.

These moves alone won’t ensure that rates are under control or that we get better value for money. It will help, but reform of the Local Body Act is the most important issue longer term.

The objective is to get more accountability and transparency in local government. And to give more power back to the ratepayers - the people who pay the bills.

My other Ministerial hat is as Minister of Regulatory Reform, a portfolio that overlaps with most others.

Regulations are pervasive and powerful, both for good and ill. Regulatory reform involves issues across a number of dimensions of economic activity.

Regulations such as competition law, tax legislation, and contract law impact on entrepreneurship, and on incentives to innovate.

Regulations such as the Securities Act and Overseas Investment Act impact on the level of business investment.

Legislation such as the Immigration Act and occupational regulations affect the access of businesses to skilled labour.

And regulations such as the Resource Management Act have a powerful influence on the allocation of natural resources.

There is a huge amount of work to be done in all these areas.

The government is now reviewing 11 major regulations:

- the Building Act,

- electricity institutional arrangements,

- Employment Relations Act,

- Foreshore and Seabed Act,

- Holidays Act,

- Overseas Investment Act,

- Resource Management Act,

- Telecommunications Act,

- Weathertight Homes Resolution Services Act,

- Climate Change Response Act, and

- Dairy Restructuring (Raw Milk) Regulations.

It is one thing to have a review, it is another to make the tough decisions needed. But at least it is a start.

As well as these reviews of major legislation we have what I call the "low-hanging fruit". These are issues such as pool fencing laws and shop trading hours regulation. The fixes to these laws are usually reasonably straightforward - it is just a case of getting a commitment to make regular changes to the more obviously foolish regulations.

The quality of new regulation is important and I have officials working on a set of quality assurance measures that can be established within government, including a Government Policy Statement on Regulation.

We also need a systematic approach to reviewing the existing stock of regulation which is vast to make sure that it is still relevant, and is implemented efficiently. Officials are working on proposals for us to consider.

So that’s a summary of what your ACT team in Parliament have been working on.

We are having an influence beyond our numbers, and making a difference. You can definitely say that, with ACT, you get more bang for your voter buck.

I want to conclude, as Leader, by coming back to the ACT vision for a more prosperous and socially cohesive nation.

Here is what we need to do in this country.

We face huge challenges, but we have enormous resources. The greatest resource we have is the energy and enthusiasm, the talent and the drive of ordinary people.

What we have to do is unleash it.

We have crazy planning processes, huge delays in getting consents to do things. We block initiative all over the place.

Remove the blockages, and you will see what can happen.

Imagine the innovation that could occur in education if we freed up the initiative, imagination and entrepreneurial abilities of our best teachers?

And remember this.

You can cut out wasteful government spending, you can improve our infrastructure, and you can certainly improve our social institutions. And we must do all these things.

But, it is entrepreneurial activity that really gets an economy growing. It’s ideas, innovation, imagination and initiative that matters.

It’s entrepreneurs who start new businesses and new industries, who create not just new jobs, but new sorts of jobs.

Think about it. Much of today’s economic activity didn’t exist 10, 20 or 30 years ago.

It might be somebody who bought into a franchise and made it grow.

Another bunch of people might have contributed to building a new industry - the Central Otago wine industry, the olive oil industry, or small innovative companies in the telecommunications or biotech industries.

Others are inventing new products, like the Blo-kart I had great fun riding recently during a visit to Tauranga.

You can see it in the software and film industries. And in hundreds of small businesses in the tourism industry. Or those many new companies focused on fashion and design.

A theatre company, or an artist or writer, or a rock band - all are engaged in entrepreneurial activities.

These people are putting everything on the line, taking risks, backing themselves.

Government doesn’t drive these things. It tags along for the ride.

This is what happens in the private sector: it is the world of work and risk-taking, of innovation, of turning ideas into businesses that employ people.

This is where new jobs come from.

There is plenty of excitement and vitality here, and we need to ensure that our young people know it, and can feel that they can be a part of it, and do well here in this country.

Otherwise that initiative, imagination, energy and flair will be exercised in a country other than New Zealand.

In the ACT Party we embrace free markets, competition, and entrepreneurship.

We want people to have a go.

We want people to succeed.

And we will celebrate their success.

Fixing the problems that this government inherited, and unleashing kiwi initiative and our entrepreneurial spirit - that is what I call being ambitious for this country.

Thank you

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