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Making Auckland Greater - Speech To Rotary Club Of Pakuranga

Posted on 15 Jun 2009

Good evening, and thank you for your invitation to come along and talk about our exciting plans for making Auckland greater.

I can’t tell you how much I’m enjoying being Minister of Local Government - it’s a great challenge and it’s also great fun!

While it would have been great to be Minister of Finance, ACT didn’t get quite enough votes for that.

My first goal in negotiating with the Prime Minister was to get as many of the policies that we campaigned on into the confidence and supply agreement so we could deliver on what we promised.

My other objective was to be selected for the role of Minister of Local Government because I think that local government has been out of control for many years, and it’s an area where I knew I could make a real difference for all New Zealanders.

It’s my job to ensure that we all get better value for our money and that we get our rates under control. This is what I’m trying to achieve.

Firstly let me talk about Auckland, because I know we’ve all got an interest in that. We had the Royal Commission report and the Government made a number of decisions as a consequence of that, which we have been very busily working on.

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.

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 that’s what the Government is recommending.
Auckland’s future depends on critical decisions being taken at a regional level. Our view is that region-wide decision-making must have region-wide governance arrangements to overcome the competing interests, parochialism and factionalism that has held the region back for too long.

These issues are also important in the way councillors are to be elected.

The Government supported the Royal Commission’s recommendation for some councillors to be elected from wards and some to be elected ‘at large’, but we chose to shift the balance in favour of local communities through having 12 from wards and 8 ‘at large’.

We’re interested in people’s views on this, via the select committee process now underway.

We have also enhanced the Royal Commission’s recommendations in respect of community representation.

Just as region-wide issues need region-wide solutions, the functions that are best performed at the local level should have local advocacy and decision-making. To ensure strong community representation we have proposed 20-30 local boards, to develop local policies and advocate to the council for community needs.

Work is underway to determine what statutory roles and functions these local boards will have, and this is something else I’m looking forward to receiving submissions on. We want the local boards to have some real power and some real say, and to reflect the different communities that make up our region.

So where are we up to with all this? The Local Government (Tamaki Makaurau Reorganisation) Act, which came into force on 25th May, established the Auckland Transition Agency and its governing body. This enables the current form of local government to transition to the proposed Auckland Council by 1 November 2010 - after the local body elections.

The second piece of legislation, the Local Government (Auckland Council) Bill, covers the establishment of the council and 20-30 local boards, empowers the Local Government Commission to determine ward boundaries for the Auckland Council and local boards, and provides for the integration of Auckland’s water infrastructure.

It has been referred to a special select committee - the Auckland Governance Legislation Committee. Submissions have been called, with a closing date of 26 June, and I would urge anyone who is interested to have their say.

A third bill will be introduced later this year to provide for the ongoing governance structure, functions, roles and powers of the council and local boards, and detailed legislative framework for governance arrangements.

I am very pleased with the calibre of the board of the Auckland Transition Agency, headed by Mark Ford, from Watercare. They have a huge challenge ahead of them, but also a very exciting one.

If Auckland’s economy thrives, New Zealand thrives. That’s why the Government is determined to set up governance arrangements that enhance the productivity and competitiveness of Auckland’s businesses and ensure the region’s facilities are operated to maximise economic development, tourism and events.

Along with the Prime Minister, Associate Minister of Local Government John Carter, and other members of the government, I am attending lots of public meetings and taking the opportunity to hear from people like yourselves.

While the opponents of reform might hog the headlines, I am finding our proposals are being generally well received across Auckland. People understand the need for change, and they understand the common sense of simplicity. And they appreciate the opportunity to have real input into designing the final shape of things.

Despite what our political opponents may claim, we want people to get involved in determining the future of our region. We do understand that politicians aren’t the font of all wisdom - really!

I’m finding it very exciting to see the great engagement we’re getting with local government through the Auckland reforms. I very much hope that continues into next year’s election so we get the best possible candidates and a high level of interest in who is going to run our great region.

In tandem with the reform of Auckland governance, I have work underway to reform the Local Government Act so that it works a lot better for ratepayers.

Cabinet has authorised a review of the Local Government Act 2002 to improve the transparency, accountability and fiscal management of local government.

I am proposing that the Act be reviewed to ensure ratepayers and citizens have better tools for controlling council costs, rates and activities. And I will be looking at ways of ensuring local government operates within a defined fiscal envelope and focuses on core activities.

We are living in tough economic times and councils need to think about the cost and affordability of services in their areas. We need hard thinking about the costs imposed on ratepayers.

There will have to be trade-offs between the services wanted by communities and the services councils can afford to provide in the future. Councils and communities are going to have to work together to provide services that give value for money.

In going around the country meeting with councillors, I have been astonished at the extent to which they say their cost increases have been a consequence of central government decision making.

First of all, I’m looking at with things like mandatory water and air quality standards, mandatory consultation and planning procedures, and excessive water requirements. I’m going through with a big sharp pencil crossing out as many of those things as I can, because at the end of the day someone has to pay for all that - and its people like you. I believe that’s wrong.

I get a lot of push back from mayors and councillors, who simply think that if you don’t like them increasing rates you can vote them out. But we all know that if you vote them out, the next lot can come in and put the rates up again.

I’m particularly interested in any mechanism we can find to both control rates and target council costs, because my fear is that if we control the rates over here, they will end up putting charges up over there, and increasing their expenditure in other ways.

I think that any one who stands for public office should have to make the case for any increase in expenditure, and indeed the expenditure they have got now. They need to justify it to you, because it’s your money, not theirs.

As I travel around the country a lot of people are asking me if the new Auckland governance structure is going to be a model for the rest of the country. It could be. It depends on how well it goes for Auckland, and how well we go in implementing it.

If it works well, then other areas may want to build something for themselves on the basis of what we’re creating for Auckland.

I have worked hard at developing proposals for Auckland that could be replicated around the country. What the Royal Commission originally proposed for Auckland was unique - it could only be applied to Auckland. I didn’t think that was a particularly good model.

And that’s probably about enough from me. I’d now like to hear your comments and answer any questions you have. Thank you.

Speech To Lockwood Group Ltd Annual Conference

Posted on 15 Jun 2009

Good morning and thank you for the invitation to join you today.

I’ve been a Minister for six months now and I’ve got to say that I’m enjoying every minute of it. It’s great to be in a position to be able to get things done, and to be able to help people run their businesses by addressing the over regulation that hampers so many aspects of living in New Zealand, and especially in doing business here.

Regulation in the residential construction industry crosses both my Regulatory Reform and Local Government portfolios. Most of the regulation is made by central government, and its simply thrown at local government to implement.

A great example is the Resource Management Act (RMA). This Act is a very pervasive piece of regulation, as you will all be very aware. As it plays such an important part in the allocation of natural resources, I have no doubt that it impacts on Lockwood franchises on a daily basis.

You will have heard about the first phase of RMA reforms, being led by Hon Dr Nick Smith, aimed at addressing the excessive bureaucracy, costs and delays of the RMA.

Significant changes are being made to:

- remove frivolous, vexatious and anti-competitive objections
- streamline processes for projects of national significance
- improve plan development and plan change processes
- improve resource consent processes
- streamline decision making by councils and the Environment Court, and
- improve the flexibility and usefulness of national environmental standards and national policy statements.

This is a good start, but there is a lot more that needs to be done. This is why Dr Smith recently announced the second phase of RMA reforms. This second stage covers:
- barriers to sustainable and cost-effective aquaculture development
- alignment of RMA consenting processes with those in the Building Act, Conservation Act, Forests Act, Historic Places Act
- developing further the scope, functions and structure of the proposed Environmental Protection Agency
- improving infrastructure provisions, including the application of the Public Works Act 1981
- exploring better approaches to urban planning, and
- establishing a fairer and more efficient water management system.

I am excited about the potential of these proposed changes to unshackle businesses to do what they do best - create opportunities, wealth, and jobs.

Another piece of regulation that you will be well acquainted with is the Building Act 2004.
Like the RMA, this piece of regulation also needs streamlining and simplification.

I am working with Hon Maurice Williamson and Hon John Carter to explore if legal responsibility, and liability, can be taken away from councils and placed back where it should be - on the industry and individual contractors or suppliers. Contractors and suppliers have the expertise and incentives to manage it properly.

The reason councils are so incredibly demanding is that they are now paranoid about the possibility of being considered negligent, or found negligent, some time in the future over decisions they make on both minor and major building projects.

It is appropriate that they are stringent and demanding in many areas involving safety and reliability of structures. Preventing leaky buildings is a good example. But it’s gone too far and it’s got to stop. We can’t have councils extending ridiculous controls into micro areas of a project.

Costs, charges, and fees keep being raised way beyond what is reasonable or justifiable.
Three thousand dollars for a consent to build a ten thousand dollar Skyline garage is absurd. The paperwork’s gone crazy too. Up to fifty pages of paperwork is needed for councils to approve a garage - whereas two or three pages used to be enough.

Reform of the building regulations will, I am sure, make a big difference to your sector. And hopefully help you to ride through these turbulent times and survive as flourishing businesses.

In addition to the RMA and the Building Act, we are now reviewing 9 other major regulations including:
- electricity institutional arrangements
- Employment Relations Act
- Foreshore and Seabed Act
- Holidays Act
- Overseas Investment Act
- Telecommunications Act
- Weathertight Homes Resolution Services Act
- Climate Change Response Act, and
- Dairy Restructuring (Raw Milk) Regulations.

Given the importance of this legislation, the Minister of Finance and I have an oversight of these reviews to ensure that they deliver the outcomes we are after.

As well as these reviews of major legislation we have what I call the "low-hanging fruit".
These are the infuriating laws that people have been writing to me about in droves - like pool fencing laws, and shop trading hours regulation.

The fixes to these laws are usually quite straightforward - it is just a case of getting a commitment to make regular changes. Although many of these types of changes may seem small compared to the major reviews, I think that together they will make a real difference.

I want them to impose an important discipline on regulators and drive continual regulatory improvement.

The Local Government Act is also long overdue for review, and in my role as Minister of Local Government I’m enjoying getting stuck into that.

The Local Government Act is responsible for a lot of the foolishness and waste by councils.
Far too many new obligations, with associated costs, have been passed on to local government - which in turn passes them on to ratepayers, or anyone applying for a building or resource consent.

While it is clear that these pieces of legislation are responsible for many of the absurdities, councils themselves must bear part of the blame. Councils have become very risk-averse and over zealous. They have also moved into areas that I believe should be the preserve of business - such as running lotto shops and hotels. And they have moved into areas that should be the preserve of central government, such as social services and housing.

Don’t get me wrong - I accept councils do a lot of good work. But they have become a block on growth in this country.

We are in a very tough situation economically and we must do everything we can to help businesses flourish and grow. This is not going to occur until we get both local council rates and red tape under control.

Perhaps the greatest gain that can be made is to change the culture of government. The culture that says politicians and bureaucrats have a better idea of individual self-interest than individuals do. The culture that overlooks the regulatory burden born by households and firms. I want to impose an important discipline on regulators and drive continual regulatory improvement.

It is for these reasons that I have established a Regulatory Responsibility Task Force to recommend changes to the Regulatory Responsibility Bill that aimed at increasing accountability and transparency around law making.

This bill can make a real difference in the same way that the Fiscal Responsibility Bill has improved the transparency and accountability around fiscal decisions.

I believe that we produce some of the best business people in the world and I consider it my responsibility to help deliver a regulatory environment that encourages business rather than hinders it.

But you too have an important role to play in improving the regulatory environment.
I need to know what problems business face with regulations and regulators, and how we can make things easier for business to operate.

In the Regulatory Reform Bill, there will be an annual opportunity to make positive changes to regulation - there will be no excuses for any of us if this opportunity is missed.

Reform is needed, and I promise you change is going to come.

That’s enough from me - I’m happy to take your questions and hear your thoughts on what I’ve been talking about. Thank you.

Speech To ACT Party Upper South Regional Conference

Posted on 15 Jun 2009

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 myself became Ministers.

We have more resources, more people, and the opportunity to get better policies for NZ.
National was elected with policies devised before the worst of the global crisis had emerged.

Well, the world has changed. And New Zealand was not in good shape to face this crisis.

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 NZ.

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,
- 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. It’s 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 - the source of intergenerational dependency in NZ. The incompetently designed family support scheme - Working For Families - which has middle income households facing marginal tax rates of 53% and 59%. Sometimes higher. The heavy taxation of low risk forms of saving, which drives people into over-investing in housing or into higher risk assets. 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 strangling 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 NZ, 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 NZ, and recommend policies to reverse it. In our Agreement with National, we have a joint goal with National 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 is underway, focused on Health, 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.

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

In short, there is a huge and important work programme that springs directly from our Agreement with National. And our three new MPs have hit the deck running. They are confident and commanding in the House.

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.

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 over the past month he has been campaigning hard as our candidate in the Mt Albert by-election, and getting great publicity for ACT.

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 that portfolio.

In my role as Minister of Local Government, my focus is 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. 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 to draft the legislation, getting that legislation passed under urgency, 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 have left the final decisions on Local Boards until after we hear submissions to the select committee.

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

That is 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 reasonably 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. So 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 put up blockages to initiative all over the place. Take those away and you will see what can happen.

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 makes an economy grow.

It’s the realm of 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, or the new olive oil industry, or small companies innovating in the telecommunications or biotech industries.

Others are inventing new products, like the Blo-kart I had great fun riding last week at a visit to their business in 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 them to succeed; and we will celebrate that 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

Guiding NZ Out Of Recession And Building An Economy For The Future

Posted on 09 Jun 2009

Good morning and thank you for the invitation to join you today.

The world is experiencing the deepest recession since the 1930s, and as an open, trading country New Zealand is being significantly affected by global events.

The recession has also highlighted problems already evident in the New Zealand economy that have been limiting our future growth prospects.

Two key problems are excessive government spending and excessive, poor quality regulation. My particular concern as Minister of Regulatory Reform is excessive and poor quality regulation.

According to international surveys, the quality of New Zealand’s regulation has been getting worse, while the quantity of our regulation has been increasing.

My aim is to reverse that trend.

Improving the regulatory environment will deliver overall benefits to our economy and will help businesses recover from the recession.

At present New Zealand does not have a systematic approach to reviewing regulation, and there are weaknesses in how we assess new regulatory proposals. As Minister for Regulatory Reform, I am committed to ensuring that the government improves our regulatory performance.

We’re well underway already.

We are now reviewing 11 major regulations - including:
- the Building Act
- electricity institutional arrangements
- the Employment Relations Act
- the Foreshore and Seabed Act
- the Holidays Act
- the Overseas Investment Act
- the Resource Management Act
- the Telecommunications Act
- the Weathertight Homes Resolution Services Act
- the Climate Change Response Act, and
- the Dairy Restructuring (Raw Milk) Regulations.

Given the importance of these pieces of legislation, the Minister of Finance and I have an oversight of the reviews to ensure that they deliver the outcomes we are after.

As well as these reviews of major legislation, we have what I call the "low-hanging fruit" - the infuriating laws that people have been writing to me about in droves, such as pool fencing laws and shop trading hours regulation.

The fixes to these laws are usually quite straightforward - it is just a case of getting a commitment to make regular changes.

It is my intention to pass an annual Regulatory Reform Bill to tidy up these "low-hanging fruit".

While many of these types of changes may seem small compared to the major reviews, I think that together they will make a real difference. I want them to impose an important discipline on regulators and drive continual regulatory improvement.

I have also established a Regulatory Responsibility Task Force to recommend changes to the Regulatory Responsibility Bill that aimed to increase accountability and transparency around law making.

This bill can make a real difference in the same way that the Fiscal Responsibility Bill made a real difference to the transparency and accountability around fiscal decisions.

While this is a good start, my ambitions do not end here.

This is what I would like to see done over the next couple of years:

- The Government needs to be clear about what we expect from the regulatory environment.

- The quality of new regulation is important, and 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, as part of the ACT-National confidence and supply agreement, we are working on the establishment of a 2025 Commission 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 fulfil National's and ACT's aspirations of closing 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.

I met recently with Gary Banks, the chairman of the Australian Productivity Commission. He is very willing to assist in any way possible to develop links between our two countries.

I believe that New Zealand produces some of the best business people in the world, and I consider it my responsibility to help deliver a regulatory environment that encourages business rather than hinders it.

But you too have an important role to play in improving the regulatory environment.

I need to know what problems businesses face with regulations and regulators, and how we can make things easier for business to operate.

In the Regulatory Reform Bill, there will be an annual opportunity to make positive changes to regulation.

There will be no excuses for any of us if this opportunity is not taken.

In my role as Minister of Local Government, the reform of local government is one of my priorities.

Cabinet has authorised a review of the Local Government Act 2002 to improve the transparency, accountability and fiscal management of local government.
I am proposing that the Act be reviewed to ensure ratepayers and citizens have better tools for controlling council costs, rates and activities, and I will be looking at ways of ensuring local government operates within a defined fiscal envelope and focuses on core activities.

The reforms underway for the Auckland region aren’t just important for Auckland - it’s important for all New Zealanders because the whole country will benefit from a well-functioning Auckland.

Submissions are now being received by the select committee set up to consider the legislation that will enact the Auckland governance changes.

We are keen to hear Aucklanders’ views on the composition of the Auckland Council, and on the role of the 20 - 30 Local Boards. I invite you all to share your thinking with the Select Committee.

I am very pleased with the calibre of the board of the Auckland Transition Agency, headed by Mark Ford.

They have a huge challenge ahead of them, but also a very exciting one.

I too have a lot on at present, but I am very well supported by the outstanding officials I work with at the Department of Internal Affairs. The Department’s people impress me at every turn. It’s marvellous to have the support of the best brains and the hardest workers I could hope to find in either the public or private sectors.

As I travel around the country a lot of people are asking me if the new Auckland governance structure is going to be a model for the rest of New Zealand.

It could be. It depends on how well it goes in Auckland, and how well we go in implementing it.

If it works well, then other areas may want to build something for themselves on the basis of what we’re creating in Auckland.

I have worked hard at developing proposals for Auckland that could be replicated around the country.

What the Royal Commission originally proposed for Auckland was unique, and could only be applied to Auckland. I didn’t think that was a particularly good model.

In setting up the structure we have proposed, we have tried to break the parochialism that has dogged good governance in Auckland.

We’re in a time of real change that is going to deliver positive results for everyone.

I’m thoroughly enjoying my role in driving that change, and enjoying the wide engagement I’m having in the process.

But enough from me. I’d appreciate hearing your comments, and I’m happy to answer any questions you have.

Thank you.

Local Government Faces Serious Spending Issues

Posted on 08 Jun 2009

An analysis of draft 2009 - 2019 long-term council community plans (LTCCPs) shows that local authorities are planning significant rates increases over the next 10 years to fund their extra spending, the Minister of Local Government Rodney Hide said today.

The Department of Internal Affairs report shows councils are planning a 41% increase in total operating expenditure over the next 10 years, despite attempts to cut costs. Planned capital expenditure will total almost $31 billion over the same period. If councils confirm this expenditure in their final LTCCPs, it will mean an overall increase in income from rates of 48% by 2019.

"These are hard economic times and councils need to think about the cost and affordability of services in their areas," Mr Hide said. "They need to think about the broader impact of the decisions they are making over the next decade, not just the impact over the next two to three years.

"We need hard thinking about the costs imposed on ratepayers. There will have to be trade-offs between the services wanted by communities and the services councils can afford to provide in the future. Councils and communities are going to have to work together to provide services that give value for money.

"Cabinet has authorised a review of the Local Government Act 2002 to improve the transparency, accountability and fiscal management of local government. I want the Act reviewed to ensure ratepayers and citizens have better tools for controlling council costs, rates and activities. I will be looking at ways of ensuring local government operates within a defined budget and focuses on core activities."

Mr Hide said that the report shows councils should think hard about the sustainability of funding and be vigilant about cost increases. The review of the Act will ensure their decision making is transparent and accountable.

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