Never mind the view from Wellington, bigger may not mean better for local government

Saturday, 9 May 2026

Local Government Minister Simon Watt and RMA Reform Minister Chris Bishop have put councils on notice that they must come up with amalgamation plans within three months. (FIle photo)

Rhys Hurley is the Taxpayers’ Union investigations coordinator.

OPINION: When it comes to local government, ratepayers may wish for bigger, cheaper centralised authorities. Off the back of the 34% average rates hike across the country last term, something needed to change.

The Government this week took that wish on board when it opened the “Head Start” pathway, giving councillors and officials just three months to design how they would amalgamate.

Minister Chris Bishop left those who don't submit with a clear message: centralise, or “we’ll do it for you”.

Ratepayers will apparently be consulted with eventually, but not until plans are already well underway, with Cabinet considering these plans in September.

This is not the localism that National campaigned on.

Central government is inviting councils to redraw local democracy at speed, under the same sales pitch wheeled out in opinion pieces every few years: fewer councils would, in theory, mean fewer duplicated functions under one regional voice, with cleaner planning and better infrastructure.

National was elected on a promise of protecting localism but is still following Labour’s Three Waters amalgamation trend of snatching local decision making into Wellington’s bureaucracy. This can only be seen as a slap in the face of voters who voted this mindset out at the last election.

A demonstration of community activism in action at Porirua City Council in 2024. Porirua has the largest average rates bill in the country, according to the Taxpayers’ Union, but its size means that it’s still possible to talk to the actual staff member handling a particular problem, writes Rhys Hurley.

If ministers and mayors believe amalgamation is in ratepayers’ interests, then why not put that to the test? How about asking them directly through a proper referendum of affected voters before communities are merged?

If locals don’t want it, then it should not proceed. The buck stops with the people paying the bills. It really should be that simple.

And on top of this, the facts already show that bigger doesn't always mean better.

The Infrastructure Commission (in 2022) examined whether larger councils deliver key services more cheaply. Looking to road maintenance, building consent processing, and governance and support overheads, it found council size means nothing when it comes to cost efficiency. Performance was basically the same on average.

TDB Advisory’s reports make these same points. Wellington super-city analysis found a case for sharing some costly services, like roading and water. For the other local government functions, sitting at around two-thirds of expenditure, there was little or no evidence of economies of scale.

Their overall conclusion was blunt: “bigger is not necessarily better”.

Further undercutting claims New Zealand simply has too many councils, our councils already average about 67,000 people each, larger than almost all other Western countries. Yes, there may be some efficiency gains for very small councils serving under 50,000 people, but that is still not an argument for super-city centralisation by force.

Auckland is the cautionary tale proving this, not the template.

The super-city was sold as a way to do more with less, but instead the efficiency promises never lasted. Household rates have climbed over 85% since amalgamation, while staff numbers rose from 9430 across the individual councils to the current 11,943.

At $5591, Porirua City Council, with the largest average rates bill in the country, is also a useful comparison. Do ratepayers really think coming under Wellington City Council’s inept control would really stop further hikes?

Additionally, those who have the misfortune of having to deal with councils know scale has a cost.

In a smaller council like Porirua, you can ring the LGOIMA (official information) officer, planner, or staff member handling a problem and reach the person responsible. Try getting the same responsiveness out of Auckland. Bigger organisations bring more layers of bureaucracy and more ways for accountability to disappear.

Some small councils do lack the technical depth and buying power that you can get from the power at regional scale. However, the answer to these issues needs to be councils working together and leading change, not Wellington-enforced top-down centralisation dressed up as local leadership.

These distinctions matter. Sharing services, such as deciding to combine water entities or setting up a regional buying agency, is not the same as abandoning localism.

In some areas amalgamations may work, but that does not mean every local function and every community should be swallowed into a super-council. It also does not mean residents in these areas should not be properly consulted either.

So where could real reform start? For example, removing the power of general competency that allowed councils to lose focus on core services is one idea. Bringing forward a rates cap system to force sensible spending is another.

Ministers need to get back to the basics they have preached to councils. A bigger council may look easier to deal with from Wellington, but for those already struggling to afford their rates bill, bigger doesn’t always mean better.