Call for four-year terms to help ailing councils

Tuesday, 19 December 2023

Repairing New Zealand’s failing water infrastructure is estimated to cost at least $100 billion, a bill which falls largely on the purse of ratepayers.

Council terms should be extended to four years from the current three to increase productivity, provide stability and certainty and prevent “churn”, the head of New Zealand’s local government body says.

Sam Broughton, the mayor of Selwyn and president of Local Government New Zealand (LGNZ), said councils - and the country - needed as much certainty as possible amid changes announced by the new government.

Adopting four year terms would “double the amount of productive years for local government” and build more certainty into the system, he said on Monday.

Christchurch mayor Phil Mauger has backed a call to shift to four year terms, saying it offers more stability and certainty to elected members and staff.

Broughton also said he hoped to see extended terms introduced before the next round of local body elections in 2025.

The call was echoed by Christchurch mayor Phil Mauger, who said the first year as an elected representative is about getting used to the job, and first-timers can feel “like a possum in the headlights”.

“You get one year in the middle, where you go, ‘Oh, I’m quietly getting my act together here’, then you've got an election year.”

Hurunui mayor Marie Black agreed four-year terms “made very good sense”, saying they would boost productivity across the sector.

Selwyn mayor, Sam Broughton and Āpōpō president Gary Porteous warned of the crippling impact of unsustainable funding models and years of underinvestment in infrastructure.

“A three-year term is a very tight turnaround, and doesn’t give us the opportunity for blue-sky thinking.”

University of Technology Sydney local government expert Andy Asquith said four-year terms “should have happened a long time ago,” and that three years was a “really silly time frame”.

Broughton also issued a fresh call for new ways of funding cash-strapped councils, saying the pressure on them had reached “tipping point”, suggesting collecting rates from the government on Crown land, congestion charging and tourist levies as ways of raising money.

He was joined at Selwyn’s Pines Wastewater Plant by Gary Porteous, president of infrastructure asset management organisation Āpōpō, who warned many years of underinvestment had reached crisis point.

Selwyn’s Pines Waste Water Treatment Plant was an example of the costly and complex infrastructure councils are responsible for, Broughton said.

“We believe we're staring down the barrel of an infrastructure tragedy,” he said.

The cost of repairs to water infrastructure alone was estimated at over $100 billion, a figure that would spiral once costs such as transport, roading, port and airport strategies were added in, said Broughton.

The repeal of the Three Waters legislation had created “uncertainty,” Broughton said.

'We knew where we were going whether we liked it or not. The discussion now with the central government is how we come up with a model we can all get behind.'

He praised councils putting double-digit rates rises on the table as 'responsible' in confronting the level of investment required.

'I’m really proud of mayors and elected members who are having those hard conversations - 25% is hard on communities to be able to fund long-term.'

University of Technology Sydney local government expert Andy Asquith says four year terms should have happened “a long time ago.”

He said councils' share of tax revenue had remained at 2% of GDP for the last 50 years, despite 'ever-increasing responsibilities', and said relying on rates and debt was an “unsustainable”.

'New Zealand needs a 30-year infrastructure plan and a commitment to funding it.'

Asquith said local government funding had been the 'elephant in the room' for years, and that years of underinvestment had left the sector like an ill-maintained car, “that will run for so long before it falls apart”.

“It works because of the people in the system, not because of the system,” he said.

Many councils have projected a double-digit rates rise, including Selwyn, where ratepayers are facing a 20% increase.

But he described LGNZ as being “on a hiding to nothing” in seeking more funding from the coalition government, who were “philosophically opposed to spending any public money on public services.”

Meanwhile, a rough analysis by Christchurch City Council indicated collecting rates on Crown-owned land could generate at least $7 million annually.

Currently, Crown-owned land like hospitals, schools and conservation land are unrateable by law, though they do pay for water and sewerage services.

Russell Holden, the council’s acting chief financial officer, said the figure could be considerably higher if properties were treated as businesses.

However, he said the council doesn't have a complete list of what land is owned by the Crown or a Crown entity.

Many councils have warned recently of high rates rises as part of their long-term plans, with Hamilton City Council forecasting 25.5% for next year and Buller District Council’s mooting a 31.8% increase.

Christchurch City Council has proposed a 30% rates increase over three years - 13.3% for the 2024/25 financial year, while in Selwyn, ratepayers could face increases of 20% or more.

Environment Canterbury has warned of a potential regional rates rise of at least 15% or “substantially more.”