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Frontpage News - December 2019

Greetings from LGNZ

Throughout the year we have aimed to play a straight bat in our commentary and advocacy.  Across the biggest issues, including housing, tourism, three waters, climate change, transport and localism, we've handed out both bouquets and brickbats.

Whether it has been highlighting the need for regional policy making, lifting understanding of local government's roles and responsibilities, or calling out poor policy, LGNZ recognise that there are trade-offs, and that local government has to balance not just one, but all four well-beings.

The highlights of 2019 have been numerous. October's local elections heightened local government's mainstream media coverage, while the LGNZ Conference illuminated the possibilities of a better political system, by giving power back to the people.

LGNZ will continue to highlight the benefits of democratic well-being.  After all, local democracy drives community and national success, so we thank you for supporting us over the past year, and look forward to 2020.

Meri Kirihimete,

The LGNZ Team

LGNZ's biggest moments of the year

There's been no shortage of big reports, policy developments and sector leadership from LGNZ, so before we see off 2019, lets cast back over the top 10 moments of 2019.

10. Jack Hodder QC finds government inaction putting councils on legal hook
As central government continues to prioritise climate chnage mitigation rather than adaptation, judges are increasingly setting precedents through lititgation.  Leading QC Jack Hodder provided guidance to councils on this issue, asking, 'Who's afraid of creative judges?'

9. Localism Symposium: NZ's political system broken
The Waterfront Room at the Harbourside Convention Centre was packed out in March, as attendees from iwi, parliament, local government, business and central government heard how New Zealand's highly centralised political system is failing New Zealand - and that we need to devolve decision making and power to improve community well-being.

8. Queenstown residents back visitor levy referendum at 83%
Queenstown's ratio of 34 international visitors per resident is among the highest in the world, so it's not surprising that residents backed a plan to make tourists contribute to the infrastructure they use.

7. Drinking water regulator established
Having long called for the establishment of an independent drinking regulator, LGNZ were pleased to see the the Water Services Regulator Bill, seeking to establish a new regulator in Taumata Arowai–the Water Services Regulator.

6. Reinstated well-beings endorse council's community focus
In May, the Community Well-Being Amendment Bill passed it's final reading, reinstating the four aspects of community well-being; social, economic, environmental and cultural, into the Local Government Act.  It was a significant show of support from the Coalition Government for the on-going work of councils to lift the well-being of their communities. 

5. Record number of remits voted on at LGNZ AGM
A record 21 remits were made official LGNZ policy at the AGM in July, covering everything from fireworks, to grass berms, Airbnb, campgrounds, alcohol, road safety and much more.

4. Sea level rise report reframes climate change conversation
In January, LGNZ released Vulnerable: The Quantum of local government infrastructure exposed to sea level rise, a report which revealed that as much as $14 billion of local government infrastructure is at risk from sea level rise. 

3. Localism Discussion Paper launched at LGNZ conference
Over 600 local and central government delegates, including the Right Honourable Jacinda Ardern, Prime Minister of New Zealand, were on hand to hear LGNZ president Dave Cull launch a roadmap to greater localism – ‘Reinvigorating Democracy: The case for localising power and decision making to councils and communities,’ at July's LGNZ Conference.

2. LGNZ EXCELLENCE Awards showcase outstanding council leadership
The sixth year of the annual LGNZ EXCELLENCE Awards celebrated the best in local government, across the four well-beings, as well as finding a supreme winner, and two individual awards for outstanding contributions to local government.

1. Local election voters elect record number of new mayors, youth and women
Long before 'Ok boomer' became mainstream parlance, millennials took to the polls in the October local elections and installed a record number of young elected members.

Honourable mentions:
LGNZ bring tools to climate emergency fight
New drinking water regulator established
Government backs LGNZ waste and recycling remits

Prod Comm hamstrung by playing it too safe

Local Government New Zealand (LGNZ) is lamenting the lack of courage shown in the Productivity Commission’s Local Government Funding Report, saying that while it makes many worthy recommendations, its play-it-safe-approach relegates the report to a mere repeat of the nine rates reviews that have preceded it since 1945.

“The report underscores the well-understood point that property rates are an efficient mechanism for charging and collecting local government taxes. We don’t disagree, especially where councils are operating in a stable environment,” said LGNZ President Dave Cull.

“But we’re not in a stable environment. In 2004, Stats NZ predicted our population would hit five million people by 2050, but we’re on track to hit that number in 2020. That’s 30 years ahead of schedule and our critical local infrastructure hasn’t kept up with this growth.”

Mr Cull noted a major reason for this is because rates confronted local communities with the costs of paying for growth infrastructure upfront, whereas the short-term tax benefits of population growth wash up exclusively in central government’s coffers in the form of GST, salary and profit taxes.

LGNZ has long argued that local government’s revenue tools need to be broadened and linked to the economic cycle, either through a share of GST, local capital grants, resource rents, or tourist taxes.

“We’re not calling for rates to be scrapped, but for this mainstay of local government funding to be augmented with revenue tools that give communities a clear reason to vote for pro-growth initiatives. Until we tackle the political incentives at the ballot box created by the rates system, New Zealand’s infrastructure will continue to fall behind.”

“That’s what makes the Productivity Commission’s endorsement of the status quo so disappointing. If the Government entity charged with coming up with bold new ideas for New Zealand can’t think courageously, then who can?”

“They’ve played it extremely safe, and haven’t left an inch to try something different at the margin - the irony being that only by trying something different can we find new and innovative ways to be more productive as a country.”

The local government peak body welcomed many of the suggestions put forward about how councils can lift their performance, noting that much of it was already in train through LGNZ’s work programme.

What was less certain was the Government’s willingness to accept the recommendations in the report as they relate to central government, particularly on the need for central government to tally up the invisible costs it imposes on ratepayers through the legislative process.

“We’ve been highly critical of central government’s unfunded mandates for years, and economists and governance experts up and down the country all agree that government should at a minimum disclose the costs they impose on ratepayers when making laws,” said Mr Cull.

“But as vocal as we’ve been on this issue, we’ve seen successive governments simply refuse to be transparent this. The challenge on Ministers Robertson and Mahuta – as sponsors of this report – is to have the courage to finally grasp this nettle.”

Cull: Environment Commissioner right to be concerned about tourism impacts

LGNZ President Dave Cull says that Parliamentary Commissioner for the Environment Simon Upton is on the money with his new report warning that domestic and international tourists are putting too much pressure on our environment.

The report, Pristine, popular… imperilled? The environmental consequences of projected tourism growth, examines the role successive governments have played in supporting and regulating the tourism industry, and looks at how the industry, and the environmental pressures it generates, could evolve in the future.

“Central government has done a great job of marketing New Zealand’s prime tourism destinations, particularly to international visitors, but have literally passed the buck when it comes to funding the infrastructure and managing the very real impacts that local communities see on the ground,” says LGNZ President Dave Cull.

“More people than ever want to visit New Zealand, which is fantastic for our regions and economy.  We can see the benefits, but we can also see the challenges to our environment and heritage.”

“Councils are guided by the four well-beings, so are critically aware that we need to strike a balance in any endeavour.”

“Tourism brings great economic opportunities to towns and cities across New Zealand, but we have to get the balance right and ensure that it’s not to our environmental, social or cultural detriment.”

“The Commissioner is right to ask whether we’re in danger of killing the goose that laid the golden egg.”

While the direct tax benefits from tourist activity, such as GST, PAYE and profit taxes flow into central government's coffers, ratepayers, which in many regions of New Zealand are outnumbered by international visitors, provide the local roads, footpaths, drinking water, waste water, toilets, parks and other facilities.  This can lead to poor environmental outcomes.

“Like the Government’s Tourism Strategy, the Commissioner’s report highlights the pressures of high volume tourism and the need for New Zealand to instead focus on high value tourism.”

“But right now we need to start putting real, sustained investment into infrastructure to support the industry and protect the environment, not just grants and contestable funding.  That’s why LGNZ is right behind introducing a local tourism tax in Queenstown, similar to what is found in many of the world’s most popular tourism destinations.”

“Our regions welcome the opportunities that tourism brings, but we need to find a balance to maintain tourisms environmental and social licence with our communities. Visitor arrivals are forecast to reach 5.1 million by 2024, so more flexibility to have those tourists pay their own way is needed,” concluded Cull.

Floods highlight need for river management investment

Local Government New Zealand (LGNZ) extends it condolences to those adversely affected by the recent heavy rains and flooding, saying it highlights the urgent need for councils and central government to ramp up investment in New Zealand’s river management and flood protection schemes.

Research commissioned by LGNZ’s Regional Sector showed successive investments in river management and flood control assets, such as stop banks and weirs, had unlocked billions of dollars in economic value over several decades.

However, that investment stalled after the 1989 local government reforms, when central government withdrew capital funding for river management and flood protection projects.

Communities, largely through regional councils, have continued to invest $200 million a year in these schemes, but without central government support this critical infrastructure has will not keep pace with growing flood risks.

“Flooding is New Zealand’s most common natural hazard, one that is exacerbated by climate change induced storm events that are hitting us more frequently and with more ferocity,” said LGNZ President Dave Cull.

“Our river management and flood protection schemes have largely performed well over the last three decades, but as the recent storms and the 2017 Edgecumbe floods have shown we need to ramp up investment if we are to protect our communities and our economy now and in the future.”

As it stands, around 1.5 million hectares of New Zealand’s most productive and intensely used land is protected by 364-river management and flood protection schemes, as are over 100 towns and cities.

In total, these schemes currently provide an estimated annual benefit of over $11 billion each year, more than five times the capital replacement value ($2.3 billion).

Mr Cull acknowledged the policy work already underway in this area, principally through the Community Resilience work programme, but urged both central and local government to translate this into real action on the ground as soon as possible.

“This is one of those unique problems where we have good data, a strong economic and environmental case, and a clear course of action,” said Mr Cull.

“What we need now is a political commitment from both tiers of government to put more funding on the table. It cannot wait until the next flood hits us, especially when we know that it is significantly more costly to do nothing for another 30 years.”

The Regional Sector’s 2019 report, which makes the case for greater co-investment in river management and flood protection schemes, can be downloaded here.

Landfill levy transparency needed to get public on board

LGNZ is welcoming the Government’s plan to increase funding for onshore recycling and to reduce the amount of landfilled waste, saying it is a vital part of the wider system change needed to improve New Zealand’s waste management.

“The increasing amount of waste going to landfill and the lack of onshore recycling facilities is a major concern for communities across New Zealand,” says LGNZ President Dave Cull.

“The consultation announced recently will provide a chance to shape system changes that can bring us closer to a circular economy.  We’re hopeful that the Government will act on council advice to ensure the changes are cost-effective and efficient.”

The proposed changes include raising the landfill levy that funds waste minimisation projects, which is currently one of the lowest in the OECD, as well as having that levy apply to more types of landfill, as it currently only covers 11% of landfills, or 40% of the total waste sent to landfill.

“The China Sword ban on hard to recycle plastic has heightened the awareness that so much plastic isn’t designed to be easily recycled, and that per capita New Zealand has above average waste generation.”

“If we widen the landfill levy, it’s important that the public can be sure that the money collected is being invested where it has the greatest impact possible, in reducing waste and increasing recycling.”

“We want to see funds raised go directly into transforming the waste industry, and that means the any money collected by central government should be ring-fenced and allocated to strategic national investments in waste minimisation, rather than being spent on piecemeal schemes, as we’ve seen in the past.”

“In particular we would like to see onshore recycling centres, a national waste minimisation strategy, expanding our glass recycling capability and controls on hard to recycle grade 3-7 plastics entering the country.”

At the 2018 LGNZ AGM, councils passed remits asking LGNZ to advocate for the implementation of the Local Government Waste Manifesto and the widening and lifting of the Waste Disposal Levy.

“Councils spend a lot of money on collection and processing of waste, as well as dealing with illegal dumping. In our experience, any levy is going to increase incentives for dumpers to get around it.”

“That’s why the levy changes need to be phased in over time, and work in tandem with other changes, for example giving the Litter Act more teeth, to ensure that councils have the appropriate tools to stop fly tipping.”

Road to Zero strategy must be locally accountable for success

LGNZ broadly supports the Road to Zero Safety Strategy, saying that its success will depend on government and NZTA improving their relationships with local communities, who directly fund this core infrastructure through fuel taxes and rates.

Local councils are responsible for 88 per cent of New Zealand’s roading network, representing 83,000km of roads.  In the year ending 30 June 2018, local government spent over $2.9 billion in operating expenditure on roading infrastructure.

Safety improvements in many councils’ regional land transport plans have been delayed for the last 12 months, so we’re hopeful that the strategy launch is a signal that the Government is coming to the party to co-invest in these improvements

“It’s important that our central government agencies listen to the safety concerns of local people.  Where speed limits need adjusting, that’s fine, but we also need to look at improving the quality of roads as a solution,” says LGNZ President Dave Cull.

“Roading is a complex system that is vital to every New Zealander, and territorial authorities, unitary councils and regional councils all play an important role in the planning, funding and delivery of the transport system.”

“New Zealand really needs this strategy to be a success.  There is far too much suffering on our roads and if you talk to any local they’ll tell you where the problem areas are – let’s use that knowledge to improve our roads,” concluded Cull.

What's coming up for LGNZ in 2020

  • Localism Discussion Paper submissions close - 31 January
  • LGNZ Housing Symposium - 25 February
  • Climate Change case studies - February & March
  • Te Maruata Hui - 11 March
  • LGNZ Stakeholder Function - 5 March
  • UCLG-ASPAC - executive meeting, 22-24 April
  • China Mayoral Forum - 18 May
  • LGNZ Conference & AGM, Marlborough - 16-18 July

Visit the LGNZ events page for more information.

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