Government report cards for council may miss key information

Tuesday, 17 December 2024

Prime Minister Christopher Luxon and Local Government Minister Simeon Brown discuss the government’s plans to rein in local council rate hikes with a package of reforms focused on essential services and fiscal responsibility.

The Government’s plan to “benchmark” council performance would make it easier for residents to track spending, but that was not the same as tracking success, a Canterbury mayor says.

Local Government Minister Simeon Brown and prime minister Christopher Luxon announced on Monday policy intentions for the local government sector after a Cabinet meeting, reiterating their condemnation of high rates increases and so-called “white elephant” projects.

Luxon said councils had “lost focus” on outcomes.

Based on new benchmarks for council performance - like rates increases, debt, expenditure and road conditions - the Government has tasked the Department of Internal Affairs with creating report cards.

Local Government Minister Simeon Brown says “it is clear the rates are out of control”.

Council’s financial records were already publicly available, but would be collated and published mid-2025, ahead of the next local body elections. Around the same time, Brown said Cabinet may introduce rates “pegging” - or capping - and review audit requirements.

Selwyn district mayor Sam Broughton, also chair of Local Government NZ, accepted rates had risen “like we haven’t seen before in this country” and it was unsustainable.

But in order to lower rates rises, councils needed new funding options, he said.

LGNZ had asked the Government for more ways to generate income - such as mineral extraction royalties, tourism levies and the return of GST on new builds, which central government currently collect - but, without new revenue streams, councils were reliant on rates.

Local Government NZ president, Selwyn mayor Sam Broughton, says tracking council spending was not the same as tracking success.

He said evidence of rates capping overseas showed communities “getting less” and essential infrastructure being “worn down even further”. Many councils were still playing catch-up with decades of under-investment in essential infrastructure, he said.

Broughton welcomed the Government’s report cards as a way to make it easier for the public to understand council spending, saying it was something Local Government NZ had been asking for.

However, he said if the impact of council spending was not measured - such as by considering how closely spending was tied to ratepayers’ requests - it could give the public a false impression of success.

“Communities want things that make a place better, beyond just good roads and clean drinking water, which should be the standard and delivered everywhere, no question.

“[A good neighbourhood is] often about your local reserve, your pool or your community centre, or the way the gardens are done. There’s lots of things that council contribute in that space and the report card isn’t going to go into that level of detail.

“Communities expect that local government are accountable to them. We are directly elected by the people within our communities, not elected or appointed by the Government.”

No council had the same geography, density of ratepayers or length of road or pipe network - the tool should acknowledge that, he said.

Waimakariri mayor Dan Gordon said his council took pride in being transparent and accountable, with budgets, annual reports and infrastructure strategies thoroughly considered and made public for scrutiny.

Some 86% of residents were satisfied with the council’s overall performance, based on the most recent customer survey, he said. That had been consistent for almost a decade.

Mayor Phil Mauger was approached for comment, but is attending a council information session scheduled for most of Tuesday.