What is a 'core activity’? Government tells councils to focus on ‘must-haves’

Thursday, 22 August 2024

Central and local governments at odds over spending

What is “a non-core activity”? As the prime minister urges local and central government to cut out “non-core” functions, Glenn McConnell looks into what those activities would be.

After telling councils to cut out the “nice to haves” and get “back to basics”, the Government announced it would co-fund a $1.5 million dance competition.

Economic Development Minister Melissa Lee confirmed $750,000 of taxpayer funding, which would go alongside another $750,000 from Auckland Council.

Lee said funding for the World Dance Crew Championship could bring up to $4 million of economic benefit to the country.

Her announcement came the day after Prime Minister Christopher Luxon ruffled feathers at the Local Government New Zealand (LGNZ) conference, saying: “The days of handouts are over.”

And, “The central government focuses on must-haves, not nice-to-haves, and we expect local government to do the same.”

On Wednesday, Luxon said the Government would abolish “well being” provisions in the Local Government Act, to scale back what councils were expected to fund. He said the Government would also impose statutory limits on what councils could spend money on, limiting the ability for rates to be increased on things deemed frivolous or “white elephants”.

Prime Minister Christopher Luxon has chastised councils for “wasteful” spending.

The majority of the mayors, councillors and local government officials did not appreciate Luxon’s speech. There were groans across the conference centre.

But Taxpayers Union boss Jordan Williams loved it.

And then he slammed the Government on Thursday, saying it was failing to follow its own advice as it announced dance competition funding.

“I mean, this is the very sort of local government waste the Government is supposed to be stopping, instead they’re co-funding it,” he said.

All the things councils spend money on

The Local Government Act states councils may work on anything impacting “the current and future social, economic, environmental, or cultural well-being of the district or region”.

Wellington City Council is the core funder of Cuba Dupa.

As well as infrastructure such as roading and water, which councils must invest in, that gives them breadth to look into events, social services, and anything that could feasibly benefit their community.

As well as those infrastructure services, local government is directly responsible for the management of domestic animals, environmental hazards, and local civil defence. They must also manage some other regulations, such as alcohol licenses and food safety.

But region by region, councils do many other things.

On the Chatham Islands, for instance, the council is the sole importer and provider of 91 octane fuel - to service the economic and social needs of the isolated community.

In a number of regions, including Auckland and Nelson, there are council-run early childhood education centres.

In Wellington, the council helps put on events such as Cuba Dupa.

In Dunedin, the council runs a museum.

Most regions have libraries. (Councils are not required to run these, but if they do run libraries the councils are prohibited from charging a membership fee.)

Selwyn District Mayor Sam Broughton says communities should decide what “core funding” is.

Most regions also have council-run parks, playgrounds and recreational spaces.

Auckland Council and Auckland Transport hire a significant number of security guards.

Are those core services?

Stuff asked LGNZ president Sam Broughton, who is also mayor of Selwyn, to define a “non-core services”.

Local Government Minister Simeon Brown says core services are roads, public transport, housing facilities and things focused on economic growth.

After pausing, he said, “It’s up to the community to decide.”

He went on to say that he thought a library would be a core service.

“It’s a core service for communities. They’re places where people gather. Communities need to be more than just roads and water supplies. People want to live in places where they can connect, where their children can run around outside. They want places where it feels good to be,” he said.

The Government vision for local government

Local Government Minister Simeon Brown said “core” services were “roading, public transport, unlocking land for housing, and economy growth”.

Labour local government spokesperson Kieran McAnulty says the Government is trying to throw councils under the bus.

He announced plans for “regional deals” on Thursday, after Luxon said on Wednesday that the Government would look to limit the ability for councils to increase “non-core” spending.

Those regional deals would open up new revenue and legislative opportunities for councils, if they met the Government’s priorities in negotiations.

Stuff asked Brown if he was trying to “strong arm” local government.

“We’re strong arming NZTA, too. We’re requiring benchmarking for them,” he said.

Opposition responds

Labour local government spokesperson Kieran McAnulty said ministers’ criticism of the Government was political point scoring.

“A spineless and cynical political move. The equivalent to tying someone legs together then criticising them for not being able to walk,” he said.

“The solution is to empower and fund councils to do more, not remove their influence in their communities,” he said.

While mayors and councillors were deeply critical of Luxon’s speech, in conversations at the LGNZ conference, the mood had improved by Thursday afternoon.

Talk of new revenue tools and the ability to negotiate with central Government as widely welcomed from local representatives across the country.