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Heather Roy's Diary

Posted on 03 Jul 2009

Friends And Allies
As a Minister my days consist of appointments following briefings, following meetings and more. The engagements I've had this week include attending a special reception to celebrate the United States' 233rd anniversary of independence, and tomorrow night I am giving a speech to the opening of the New Zealand Model United Nations 2009 - a youth forum where each delegate represents a nation state and debates topical issues.

New Zealand has enjoyed a long friendship with the US, which first established consular representation in New Zealand in 1839 - 170 years ago - to represent and protect American shipping and whaling interests.

Possibly the strongest link that New Zealand has with the US, however, is in the area of defence. Kiwi and US soldiers have fought together in two world wars, and our two nations have worked together in theatres of war throughout the 20th Century.

For instance: 400,000 US soldiers were billeted in New Zealand - mainly in Auckland and Wellington - during WWII before being sent to fight in Tarawa, Iwo Jima, Leyte Gulf and Guadalcanal.

It is also interesting to note that, following WWII, the US and New Zealand were closely related when working almost exclusively for the formation of the United Nations in 1945.

Just six years later, those links were strengthened with the signing of the Australia New Zealand United States (ANZUS) security treaty - a military alliance binding Australia and New Zealand, and Australia and the US to cooperate on defence matters in the Pacific.

The years since have seen New Zealand co-operate with the US in Korea, Vietnam and the Gulf War.

Today, despite differences in nuclear policy, our relationship with the US remains an important one for New Zealand. The New Zealand Defence Force (NZDF) continues to work alongside US forces in a number of operations in pursuit of shared interests.

One of the key components of this is the international campaign against terrorism, with New Zealand providing troops - including special forces units - and naval ships in support of Operation Enduring Freedom, the US' official name for the war in Afghanistan.

New Zealand has played no small part in co-operation with the US; the Provincial Reconstruction Team in Afghanistan's Bamian province, three deployments of a frigate to the Gulf of Oman, and in 2003-04 engineering teams to assist in the reconstruction of Iraq.

New Zealand also actively contributes to, and participates in, the US-led Proliferation Security Initiative.

These commitments and efforts are appreciated by the US, which has stated that it views New Zealand as both a friend and an ally - continuing the relationship that our two nations built so many years ago and have nurtured ever since.

Friends In The East
Another engagement I attended this week was a celebration of Singapore Armed Forces Day - Singapore is another nation with which New Zealand has a history of military co-operation.

New Zealand's military ties with Singapore date back to 1955 - when the Royal New Zealand Air Force No 14 (Fighter) Squadron was sent to Singapore to form part of the Commonwealth Strategic Reserve and carry out operations against terrorists in the Malayan jungle - and form a significant part of the New Zealand-Singapore relationship.

Sixteen years later, in 1971, the New Zealand and Singapore Governments formalised arrangements for training assistance and other co-operation. This agreement was in parallel with the establishment of the Five Power Defence Arrangements (FPDA) - a joint defence arrangement providing a basis for continuing defence co-operation between Malaysia, Singapore, Australia, New Zealand and the UK.

Today, New Zealand's defence relationship with Singapore - the second most active after that with Australia - is increasingly strong and balanced. New Zealand undertakes an extensive range of naval, air and army exercises with Singapore - conducted both bilaterally and multilaterally - and Singapore, in overall activity terms, is New Zealand's second largest defence partner in the Asia-Pacific after Australia.

In fact, the maturity of New Zealand's defence relationship with Singapore - and our history of military co-operation - yield significant benefits for both countries.

This could be seen in Singapore deciding to send combat troops overseas as part of the New Zealand battalion group in Timor-Leste in 2001. This smooth integration of its troops into the New Zealand Area of Operations was Singapore's first experience in contributing ground troops to a peacekeeping operation. Since then, Singaporean forces have also operated with the New Zealand Provincial Reconstruction Team in Afghanistan.

Lest We Forget - 2nd (Canterbury Nelson Marlborough West Coast)
Last weekend I attended a charter parade in Christchurch's Cathedral Square and a formal dinner to celebrate the start of the 2Cants (NMWC) Battalion Group 150th year anniversary.

Established as the Nelson Militia in 1854 and raised under the Militia Act, the current 2Cants unit was formed 1964 as an amalgamation of the 1 Canterbury and 1 Nelson Marlborough West Coast Battalions.

With such notable New Zealanders as Jack Hinton VC, Sgt Eric Bachelor DCM and Bar, and Sir Charles Upham VC and Bar having served in its ranks it is only fitting that 2CANT's motto is: 'Ake, ake, ake, kia kaha - forever and ever be strong.'


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

Reflections On The One Big City Proposal

Posted on 30 Jun 2009

Speech by Michael Bassett to ACT Supporters, Mecca Cafe, Newmarket, Auckland
Friday, June 26 2009


1. Local government reform was talked about for a century after the abolition of the provinces in 1876. Territorial Local authorities and special purpose boards grew in an ad hoc manner. There were counties, boroughs, cities, town boards, county towns. Prime Minister Seddon expressed his unease and promised to legislate. Arthur Myers, Auckland's mayor 1905-1909, and possibly our greatest, had a bill drawn up when he was in Parliament. But nothing came of it. In his experience, too many local authorities became an impediment to extra-territorial improvement schemes, especially within cities.

2. There were special purpose boards too: harbour boards; hospital boards; at one stage as many as 320 roads districts; urban drainage districts; as many as 52 rural drainage districts; main highways boards; river districts; water supply districts; tramway districts and transport boards; gas lighting boards; electric power districts; fire districts. Each perceived need resulted over time in a new category of authority. No thought was given about whether an existing group of elected people could undertake the new function.

In rural areas, there were Nassella tussock boards, rabbit boards, and local railways districts. You name it; we had a local authority to cover it. All up in the 1920s there were about 1100 different local authorities for a country with a population of less than one and a half million. One authority to every 1,300 people! Seddon was only slightly exaggerating when he said in 1895 that every fifth man in the country seemed to be a member of an elected authority.

3. Vanity was the main obstruction to amalgamation. A character in Shakespeare's Measure for Measure wails: "Man, proud man, dressed in a little brief authority, most ignorant of what he's most assured…" A fellow Auckland City Councillor, Mel Tronson, once warned me that melting the mayoral chain would always be a difficult challenge. Well, I managed to do it. There were nearly 800 local authorities left by the 1980s, with a variety of revenue-raising powers. With the help of Brian Elwood of the Local Government Commission, we melted those chains of office to 12 regional councils; 74 territorial authorities; and 155 community boards that are - as they stand - creatures of their territorial authorities. In all, only 86 authorities across the country now have a capacity to rate.


I won't go into the failed attempts to rationalize local government starting with Dick Seddon. It's a sorry tale of lack of vision and constant self-promotion by second-rate people, with governments too timid to do what the public realized needed doing.

Early in 1989, just as the ink was drying on the Local Government Commission's new schemes I received an invitation from Mayor Cath Tizard to lunch with the then editor of the Herald. If I was prepared to go with one big city in Auckland the Herald would be prepared to get in behind the campaign. The offer was tempting. In those days the Herald was a quality paper and it didn't employ Bernard Orsman. Possibly the current problems could have been avoided? But it was too late. As I say, the ink was dry on the new schemes, and we'd run out of time.

However, instead of 43 territorial and special purpose boards in the Auckland region in 1989, we narrowed them to eight, including the region. But I didn't get time to alter the powers of local government - although I was able to achieve better rules for the control of trading organizations and more clearly defined relations between councils and bureaucrats.

But today there are still overlapping jurisdictional problems. For example, take the ARC and its authority over the waterfront. First the ARC is a body relatively starved of cash compared with the Auckland City Council, thanks to Warren Cooper in 1992 taking away some functions and its main cash cow. Not surprisingly, the more affluent ACC has designs on the waterfront, the port etc. So it should. The waterfront is the city's gateway. But as things stand, the ACC has the planning powers to stop, or to mangle initiatives from the ARC and Auckland Regional Holdings, the legal owners of the Ports' land. The City Council has been quite open about miss-using its powers. It can be judge and jury in its own cause.

There are many other examples of this across the region. And therefore an obvious need for streamlining. And there must be someone with a structure and vision that will not be constantly second-guessed by others disputing his/her mandate. Auckland is now a large city whose airport, port, and inter-city relations around the Pacific matter for ours, and their futures. In our globalised world Auckland needs to be promoted around the Pacific as a good place for investment, and in which to do business. The current structure cannot guarantee this.

There's another reason for change. It's called evolution. Technology has made aspects of my structure ready for the scrap heap. Since 1989 the internet has revolutionized how people relate to each other, to the media, and to their councils. We saw people using email to an extraordinary extent at the time of the stadium debate in 2006 to communicate their views to their representatives and to the media. The result of the new technology is that most community boards have become unattended gatherings with only a handful of squeaky wheels present, people like Penny Bright, Lisa Prager and an assortment of discombobulated loonies such as I witnessed at a recent meeting of Nikki Kaye's called to discuss the restructuring. Ordinary folk just want their elected representatives to get on with the process, and they'll let their representatives know by email if things seem to be going wrong.

I won't bore you by recounting the recent history that ended up with the Royal Commission. The RC was a good idea in the sense that three of the 'great and the good' got to hear somewhere in the vicinity of 3,700 submissions, travel about and talk to people, consult widely, test out their ideas, and then produce their recommendations. It was a substantial document, as you know, dealing with a huge number of issues. It was not something to be dismissed lightly. That report possessed considerable moral authority.

The Royal Commission was a gift to Rodney Hide and to the new Government. Their Labour opponents had carefully selected the personnel, and had drawn up the terms of reference. The major weakness was that the commissioners were constrained to take - as their base document - the Local Government Act 2002 which, as you'll all be aware, is deficient in many respects, most notably its power of general competence. Many less than competent councillors misuse that power of competence, using our funds.


My initial reaction to the Royal Commission was to welcome most of its report, and to argue that it should be put into a bill or bills, taking submissions from interested parties on them. I favoured earmarking several areas – the proposed waterfront development region, the Maori seats, the total number of councillors for the Auckland Council, and the at-large/ward elected numbers. These areas were the ones on which the government had reservations, and which would be the subject of careful cross-questioning when it came to those hearings. On matters like the Maori seats the draft Bill could have had a separate section that invited comments on words like this statement: Since the beginning of local government in Auckland there has been no representation based on race. Questions: Do you think it should be introduced in 2010. If so, why? Since there are more Pacific Islanders in Auckland than Maori, should they have separate representation? Asians too perhaps? Maybe Dutch? Or should Aucklanders acknowledge that we all have equal rights?

It's a safe bet that no one would have been unable to argue convincingly for race-based representation. Certainly the Treaty is of no assistance to Maori on this issue since democracy existed nowhere except, perhaps in the United States, in 1840.

I also favoured proceeding with the six entities specified in the Royal Commission report, firstly because that was the least disruptive of the status quo. Buildings exist, and it would be easier to work out which were surplus to requirements. With the local councils tied closely to the Auckland Council, it seemed to me that so long as they were without their own rating powers, the six could work. The most important reason for proceeding with the RC report, however, was because it possessed moral authority.

Sadly, the decision quickly to announce unilateral changes to the RC report, instead of holding on to them through the submission stages, freed everyone of any tie to the Royal Commission process. What was now going to happen became the government's responsibility. In reality, the loudest critics had all had a chance to make submissions to the RC. Labour was completely tarred with responsibility for it. The one person on the Commission with considerable local government experience was a Head Office member of the Labour Party. These facts could have been tightly hung around Labour's neck. Instead, those few unilateral changes made quickly by the Government let Labour off the hook.

What I am saying is that the opposition could have been corralled more easily had there been no more than signals that, depending on submissions, the Government could make changes to the RC formula in those defined areas relating to wards, the waterfront region, Maori representation etc.

DON'T GET ME WRONG - there is, of course, inevitability about some opposition to any restructuring, no matter what strategy is used. Over the years such opposition has always been driven by staff and councilors who haven't yet worked out where they fit into the new scheme of things. There are a few nutters around the edge as well, like Penny Bright and Lisa Prager and the guy with the pork-pie hat and the camera that he trains on anyone who he disagrees with, but they really want to go back to some idealized version of the 1950s. Communism is surely the most reactionary philosophy on the globe.

In my view the Six Unit idea below the Auckland Council always made more sense than 20 to 30 local boards. Since they were announced on 7 April, the Government has continued to struggle to justify them. What will those local boards do? That is still so fuzzy as to cast doubt on their worth. Six units below the top council elected on a ward basis have a more substantial feel to them and could be of more use both to the council and to ratepayers.

If the six were resurrected, and had delegated authority and were devolved the funds to let contracts for, say, rubbish, roads and footpaths, possibly even caring for the regional parks in their areas, and the beaches and boat ramps, and the walkways and the cycle ways, then there could be reasonably robust competition amongst contractors. With 20-30 local boards it beggars belief that contractors won't be able to sew them up easily. Either that or they will relate solely to the top council. More important, there never have been enough really competent individuals willing to stand for local office over the wider Auckland area to head up 20-30 local boards.

But there is an over-riding fear that I have: the existence of 20-30 local boards will be a standing invitation to some political party at a later date to promise them rating powers. Then we'd be back to pre-1989, and Penny Bright's and Lisa Prager's iconic world. The 20-30 idea HAS NOT been well thought through.


Right now, there is a period of maximum uneasiness in the Auckland scene. There is a wide-spread feeling amongst those with a current electoral mandate that they don't know what they are allowed to do. This uncertainty stems from provisions covering the Auckland Transition Agency. Those powers, in my opinion, go too far. Initially it was planned to have every bit of spending above $5,000 go before the agency. That seems to have been altered to $20,000, but that still means that the ATA is involved in micromanaging, which in my experience, goes beyond what is needed to preserve the integrity of those new authorities in the process of being formed. There will be, indeed, there already are, efforts underway for 'legacy projects'. There were in 1989 too. Several seedy members of the old Auckland Harbour Board tried to squirrel away $8 million of funds belonging to the board into trusts, the revenue from which they would distribute to their mates. One borough town clerk tried to get away with some land, and had to be stopped. Those are the sorts of things that a transition agency is there to keep an eye on, as well as ensuring that senior officers of the new entities are selected properly. But remember, change goes best if it isn't micromanaged.

However, the other day I saw a letter from the CEO of the Transition Authority to one of the CEOs of an existing authority. It read something like this: Dear X, I notice there are aspects of your plans for this year that appear to require our oversight. Please make an appointment to come and see me. It was a bit like the headmaster calling in an errant schoolboy! The guy didn't even have the courtesy to sign that letter. It was one of those pp jobs. What I am saying is that already there is at least one swollen head at the Transition Authority 'dressed in a little brief authority', and he is bound to cause trouble unless spoken to sharply. Over the next 16 months many elected people with bruised egos will be ringing the newspapers with similar stories. What I am saying is that there is bound to be trouble unless a firm hand is exercised by the minister and the chair of the ATA over their staff, and a more conciliatory attitude adopted towards those who, after all, still enjoy an electoral mandate.

I should add that at least one of the existing councils also appears to be acting unwisely. Several senior Auckland City officers are confiding to people that they expect Auckland City to form the nucleus of the new entity, with themselves in positions of authority after the October 2010 election. One employee has been heard to say to another of an outlying council: 'send us your CV and I'll see if we can fit you in'. That, too, requires firm handling by the ATA. Its role at best is acting as a facilitator for the purpose of ensuring that the best and the brightest, from wherever they currently are employed, get to run the new city in the interests of the ratepayers, NOT the employees. I must stress that point. The new structures are for the ratepayers, NOT the employees. Nobody in this process should be let to feel they have an inside track. The Minister and the ATA chair ought to make that clear publicly to representatives of all existing authorities.


One of the major improvements that came administratively both with central and local government reforms in the 1980s, was the introduction of contracts between CEOs and elected officials. They revolutionized the constant meddling that the elected engaged in. The changes in the 1980s required executives and the elected to crystallize their ideas. The elected had to define carefully what it was they wanted to achieve, and it then kept them clear from the day-to-day running of the enterprises. However, it is already clear to me that with the largest existing local authorities, political input is difficult. A large, billion dollar organization like the Auckland City Council has many layers of responsibility throughout it. A detailed contract between the councilors and the CEO is not enough to ensure that political goals are achieved. The bureaucracy often seems to carry on regardless. I like to taunt a friend who is on the council with the words: "When do you and your team intend to take office?" Things that were defining issues at the October 2007 election appear to trundle on regardless.

The new Auckland Council covering 1.4 million people with hugely varied responsibilities will need committee chairs of considerable ability. They will have wide responsibilities. I'm hoping that thought is being given to introducing some form of contract arrangement between each chair, and his/her section head, with, of course, overall responsibility resting in the hands of the Mayor, the CEO and the Auckland Council. This would be a bit like the contracts between each Minister and his/ her CEO. There will have to be almost day-to-day contact between the chairperson of an Auckland Council committee and his/her section head. It will be impossible to channel all authority up through the CEO of the whole organisation. Auckland City will be all at once a business, but with a vital elected/democratic component. Balancing those realities needs careful attention to detail.

Make no mistake about it, the new city is an enormous undertaking. The Auckland Council will require a new CEO from outside those currently holding CEO positions. That means higher remuneration too. The old adage holds: pay peanuts and you get monkeys. Aucklanders need to get their heads around modern day realities. There's a role there for the media to help explain this. If the new system is to work the time for shock/horror/probe has gone.

Above all, the new Auckland Council doesn't mean transferring 6,500 people, holus bolus, from the existing councils to automatic positions within the new structure. There has to be a mixture of retirements and sinking lids, and may be some redundancies. Otherwise there will be people holding non-jobs, and the expense to the ratepayers will make the whole exercise worthless. The changes must belong to the people, not the employees.

Any politician who says there won't be any redundancies is fooling the public and calling into question why we are engaged in this huge exercise.

Rodney, I wish you well. Stay firm. But stay flexible where it matters.

Fraud More Reason For Voluntary Student Association Membership

Posted on 29 Jun 2009

ACT New Zealand Deputy Leader Heather Roy today reiterated her call for student association membership to be made voluntary, following an article in the 'Press' newspaper that a woman has been jailed for 22 months after defrauding the Christchurch Polytechnic Students' Association (CPSA) of $175,000 - $125,000 of which was unrecoverable.

"With students forced to pay association fees, these organisations have pools of cash and little accountability when it comes to managing those funds - making it easy for individuals to use the money for their own means," Mrs Roy said.

"According to the 'Press' other incidents over the years include:

'December 1999 - Brendan McQuillan, president of Nelson Polytechnic Student Association, admitted stealing $8,004. November 2003 - Florence bailey, office manager of Massey Students Association, jailed for two years and three months after stealing $203,000. November 2005 - Victoria University Maori Student Association treasurer Wi Nepia jailed for stealing $161,000. 2005 - Otago University's Te Roopu Maori, the Maori students' association collapsed amid allegations of financial impropriety. Estimated fraud $21,000. April 2007 - Clelia Opie, officer of Victoria University Students' Association, spends $6,000 on phone calls.'

"Student associations are one of only a few organisations in New Zealand that can compel membership. This compulsion results in a guaranteed stream of income, with a seeming lack of accountability to properly manage the pool of money it creates.

"Misuse of funds in a voluntary organisation would result in a loss of confidence by members in the executive. But in student organisations, despite frequent fraud and theft, students are still forced to pay union fees whether they want to or not. Student associations are also often plagued by accusations of advocating only the views of their executives rather than those of their wider memberships.

"During the last Parliamentary session, I had a Private Members Bill in the ballot to amend this and make student association membership voluntary. Unfortunately it was not drawn from the ballot and students are paying the price.

"We allow students to choose what university or polytechnic they attend, and what papers to take - it's time we gave them the freedom to choose whether or not to join their local student association rather than forcing them to pay a union fee if they want to study," Mrs Roy said.


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