Jennifer M Shipley

Speech to The Local Government New Zealand Conference - July 12, 1999

Jennifer M Shipley
July 12, 1999— Auckland, New Zealand
The Local Government New Zealand Conference
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Kerry Marshall, Carol Stigley, other Mayors and distinguished guests who are part of this Local Government Association Conference, thank you for the invitation to have an opportunity to come and speak with you this afternoon. I apologise I wasn't able to be here this morning as your original request implied, but as you are aware Cabinet does meet from time to time and that's where we were.

Can I firstly acknowledge the theme that you have chosen for this conference this year 'Democracy in Local Government'. It's an important concept, not only for you but also for us, in terms of our relationship between central government and local government as well. I think the term democracy in local government has real implications for you and I as colleagues in the business of government in general. There is no question in my mind that whether it's taxpayers or ratepayers, they are looking to both of us, we in central government, you in local government, to see that the business of government allows New Zealanders to do the best that they can in business with the least possible cost imposed on them. And so both of us meet, you here, and we in central government, seeking to make conditions as conducive as is possible for the people who drive the economies in our respective areas and in New Zealand as a whole.

I'm sure I don't have to remind you that New Zealand's been through a fairly demanding period over the last twelve or fifteen months. Many of your regions have seen the very sharp end of the downturn that was driven off the Asian economic crisis, and thankfully now most of your regions are seeing that not only has New Zealand succeeded in coming through, but in fact some of you are experiencing quite significant growth again. That recovery didn't just happen as a matter of course. There were hard decisions that had to be taken during that last twelve month period just as you have had to take demanding decisions in your districts and we in central government have as well from time to time.

I raise both of these issues, the issue of the situation, and both of our challenges in terms of government because I think we share a common challenge as special interest groups who look to both of us and have high expectations of what we might do for them in response to their requests. Obviously the Government has had significant experience in this and I just want to mention a few of the areas which, though highly contentious issues that drew significant sector comment, have all the same been very important to New Zealand's success overall. They are of course things like workplace insurance, the issue that has recently been moved through in New Zealand. The second is of course reducing tariffs and that is under much discussion in New Zealand at this present time. There are others like bulk funding in schools. All of them are going to be very important in terms of the success they can bring, although I can think of respective groups in each of their cases who were predicting catastrophes if we were going to make progress on them.

Put bluntly, in each of the three areas - workplace insurance, tariff reductions and bulk funding in schools - far from bringing catastrophe they have brought new opportunity for people albeit that there was change on the way. I think that the tangible benefits that many of your regions are seeing from each of those three things are important to us in terms of central government and are certainly important to your ratepayers in terms of the economic freedom and the choice that they offer.

I guess most close to home the issue of electricity has also had an impact on you. I know some of you approve and some disapprove of the issues to do with electricity reform. Our goal is to see that electricity prices come down in New Zealand, whether it's down for local authorities in terms of all the applications you have for the use of electricity, or whether it's for industry large or small, and in particular whether it's for agriculture of manufacturing or domestic use.

There is still contention around this issue, but I want to simply remind you that an international consultancy firm last week produced evidence that shows that New Zealand was third overall worldwide in terms of the electricity price competitiveness that we are experiencing in relation to developed countries. I think that the issue of whether prices are fair is the first one. This report also made predictions that prices would fall further in New Zealand due to the changes that have been introduced. It of course relies on competition being available in every area, and as many of you will be able to attest some regions have competition in terms of suppliers, others do but we are very confident that over time that will emerge. Our single goal is to see that the businesses in your districts can be internationally competitive. Most of you, whether you are city or rural or provincial representatives, represent people who export to the world and both of us share a duty of trying to see that their inputs, whether it's taxation, rates, things like energy, ACC, all the conditions that prevail in relation to tariff reductions, our challenge is to see that it is as conducive as is possible so that businesses in your regions not only succeed but they can create employment and growth for the people of your region, and for our country as a whole.

Which really brings me to some of the issues that I think you and I share in common and I hope can see as things that we would want to pursue in our own respective ways in the future. I acknowledge from time to time, and some of you have made this very clear to me, that you think that central government does interfere far too much in local government business.

What I would want to say to you is while it will be from time to time demanding as we interact together, our common goal must be that we try and see that the people of our region prosper for the mutual benefit of all New Zealanders. Both sections of government must face the challenge of seeing how we can deliver that.

Central government is not unique in having special lobby groups. I know in my own area as do you, or Ashburton and Selwyn Districts do, with their long term planning and their annual planning, that there are many many special interest groups that have high expectations.

I guess the real challenge for both groups, whether it's us working with you, or each of us working with special interest groups, is to try and be sure that we're doing the right thing. Only elected representatives ever have the privilege of making that judgement and then trying to see that, having sought to do the right thing, we've taken into account as many as possible of the special interest groups' needs, while still focusing on delivering the goal that was originally set albeit that it may be modified on the way.

In conclusion on this point, we do need to constantly think about whether we are achieving any contribution to the goal I mentioned first, that is the economic prosperity of our districts; also ensuring that we are managing public assets and making appropriate financial provision to meet all of the expectations that exist. I look forward to our Government Ministers continuing to work with the Association and also with respective councils in the areas that are of importance to you. We will only make progress if we focus on the overall goal and then work respectively with each other trying to make progress.

I don't want any of the comments I've made, whether you view it as criticism or constructive advice, or input, to take away from the fact that we still have a challenging agenda ahead of us, and this afternoon I want to touch on about four key areas.

The first one that comes to mind is obviously the area where you already have a huge vested interest, that is the implementation and administration of the RMA. I want to acknowledge that in my opinion, all of you in both regional and local government, have done very well in interpreting an Act that asks you to address the issue of effects. It is challenging legislation in principle. It's been challenging in its implementation, and while there've been a few rocks on the road so to speak, in general I think local government has done extremely well interpreting the legislation and applying it to each of your respective regions. Many of you have been involved in the consultation process that the Minister has been through in looking as to how we should amend the RMA to further refine the original intentions.

As I know you are aware, the Minister has identified a series of key areas that he believes will allow our developers in each of our regions to get timely decisions with reasonable cost, and that's important, and to also make as much progress while still maintaining the environmental balance that the legislation was originally set up to secure. I'm pleased to tell you that we expect the Amendment Bill to be placed in the Parliament this week, and I do hope that good progress can be made.

The Select Committee will have every opportunity to listen further to local government, and other interests in New Zealand, as to how we can best progress this important area that so many New Zealanders and particularly New Zealand investors and developers rely on.

The second area I want to basically acknowledge and it is an area of thanks, is the issue of Strengthening Families. This is one of the huge hidden successes in New Zealand today. I want to thank the Mayors in the audience in particular who have worked firstly with Peter Gresham and then with Roger Sowry and the other Ministers to try and co-ordinate effectively the human and financial resources in each of your regions=2E There are wonderful new examples of collaboration going on in many many districts throughout New Zealand and it is making a huge difference for a lot of New Zealand families. I simply acknowledge and thank local government for the partnership that has been entered into with the major agencies that are now working in response to the Minister's requests.

The third area which again is an important area of thanks is the area of Safer Community Councils. This has grown so far and so fast in a decade. At the beginning of this decade there were four Safer Community Councils in New Zealand. There are now over sixty, and every one of you who has worked in this field can take a bow in having contributed to the crime starting to track down. The crime rate over the last three years has fallen by six percent overall, and while there are still some key areas of growth particularly in violent crime by a very few people, overall the pattern of crime is falling.

It's my opinion that the preventative measures that the Police are now taking, some of the community initiatives like Safer Community Councils, and the increased number of police on the streets in New Zealand are all contributing to this downward trend. I thank local government for that contribution in terms of the part that you have played=2E

Can I move on to other areas that I think do need addressing and that I know you have some concerns about. The first is that of amalgamations=2E A number of you have asked as I've passed through your areas what the Government's view is on amalgamation. My answer back to you today is I know you often say why should Wellington direct local government, and I want to say to you, take my comments seriously here, because while many people have an expectation that amalgamations are possible, there are two reasons why one should do it. The first is to try and contribute to the principle I began my speech with, the overall improvement of the performance of your regions and the businesses who provide jobs and wealth and growth in them. If through amalgamating either services or local government entities, we can contribute to that, then I think that discussion should occur.

The second part of course is the service issue. You know there is nothing that prevents local governments collaborating far more than they currently do in the delivery of services. While there are electoral boundaries that define each of your areas, to my knowledge there is very little in the law that prevents you from working closely together in order to reduce the costs to the people you represent and I think if you want to take the pressure off the question of arbitrary amalgamation, one of the quickest ways to do that is to be able to demonstrate through innovative relationships how you can deliver change for your district in terms of efficient delivery of service, without necessarily having to abolish entities that in my opinion are quite important to local areas.

I mean people love Mayors, and I say that to you with full respect, because while I represent fifty five thousand people, some of you in this room will represent an equal or larger number of people than that. A lot of areas that are widely disbursed do not want to just be lumped in with large population groups. They feel they have an identity, they feel they have differences they want to express in particular ways, and their Mayors and their local identity gives them some ability to do that. They then have to weigh that up as to whether they can afford the choice.

I guess my invitation to you today is to think about how either through the Local Government Commission or through business innovation and collaboration, you can overcome what is sometimes a quite theoretical call for the issue of amalgamation. I think of Canterbury for example where I look at each of the district plans that have emerged over the recent two or three years, and so much of them is in common, although some aspects are defining and different. I wonder if for example we could have avoided significant duplication of cost by working out those areas that were more than likely always going to be in common, while still being able to define those areas that would bring difference in terms of the flair and favour of our regions. By doing so you may well be able to significantly reduce the cost of producing the plans, while still serving the district's interest and desire for autonomy.

In conclusion the Government does not have a specific agenda to see arbitrary amalgamations. I congratulate those districts that are leading because you feel your district wishes you to lead and clearly the Hawkes Bay and some other areas are well down the track to taking their own initiatives. From my point of view there are two options, both of which are legitimate - the issue of formal amalgamation, and the issue of collaboration with the intention of getting the best that autonomy can give with the best that collaboration can achieve through the reduction of cost by efficient delivery of services or purchases of service. I leave you with that challenge.

In my opinion central government will not be badgered by local regions to amalgamate local authorities if ratepayers see that local authorities are addressing these issues themselves in ways that seem relevant to the ratepayers concerned. So from this government you are not going to get arbitrary leadership dictating how you should amalgamate but rather an encouragement and an invitation to work out what it is you might like to do, and if there are legislative impediments by all means come of us and we'll try and get them out of the road. I would have to respond of course if there was an overwhelming call from the public, but in my opinion they're looking for different solutions for different regions and I leave that challenge with you.

The second area that I know you have a huge interest in is the issue of roading. The Better Transport Better Roads project has been a long one. As an ex Minister of Transport I acknowledge that it's probably been one of the most complex reforms that government has undertaken in recent years.

I want to say to you today it is critical we find solutions here. Our economy has grown by twenty two percent in the last decade in real terms, and yet the way in which we manage and fund our roads is not keeping up with the pressure that economic growth is putting on some areas of our infrastructure. You and I share a responsibility to people whether they are in the Auckland region or in the provincial regions, to be able to honestly say to them that we are working through this issue in such a way as the economy grows and the system automatically responds, that growth and maintenance and development on our roading network is capable of carrying the load that the economy produces=2E

It is very important in my opinion that local government and central government continue to work on this issue. The Government does not intend to force this through without getting a large level of consensus on the issues concerned. I believe it will take us at least the rest of this year, if not in early part of next year to settle the last perhaps thirty five or forty percent of issues that appear to be outstanding, as a result of the recent round of consultations What is very clear as a result of the consultation, is that there are a large group of things upon which we agree, and in which a lot of other sector groups also agree. There is also a clear indication in the submissions that we all agree that progress must be made. What we must now do is try and work out how we're going to finally agree on the issues that are outstanding.

From the Government's point of view we believe this would have to be settled early in a next term in Government, and I say to you - those of you who might be tempted to a political persuasion of something different to my own, and that is of course your choice and I respect that - all of us will have let New Zealand down if we do not solve this issue.

The issues of Auckland are very obvious. I do not know how we can continue to excuse the fact that there is massive productivity loss going on in this city on a daily basis, and it is there because we have not yet resolved how we are going to plan for the future and also fund the funding arrangements that are required for that planning. It is very important that we do not underrate the significance of this issue, and all I say to you is we must find a way in which we can overcome the outstanding issues that are left between us, because these infrastructural demands are going to go on.

This economy will grow a further nine percent in real terms in the three year cycle in which we are currently in, it is just going to add more pressure. When they say three percent growth it is growth on growth remember. It is not growth within a static circle, and as that growth in the economy occurs it is putting pressure on all of the infrastructural issues for which we are both responsible.

I leave with you a commitment from the Ministers to work with respective groups that have outstanding concerns. I know that the Minister has recently met with interests in Christchurch and Canterbury, and we are going to try and look at some of the suggestions that have emerged. I've recently agreed to meet the Auckland Mayors after a request from them to again try and see if we can progress some of the specific issues related to Auckland and we will try and do that. But I appeal to every one of you in this audience, those of you who are seeking to promote the business interests of your region.

The roading infrastructure upon which so much of the economic competition that's now available between coastal shipping, rail and roading, relies on you. I am prepared to exercise leadership in this area. While it is probably one of those twenty-five year reforms and it is difficult, it will be much more difficult to explain if we do not succeed in solving it, and so I leave that with you, a commitment to make progress, a commitment to work with you, but an urgency that resolution be found.

The third area is the area of business. The Minister responsible for Industry & Commerce, Max Bradford, has been running a series of programmes called 'The Five Steps Ahead'. Again I thank those of you in local government who have gone along to those organisations, where they have sat down and listened to local ideas, local businesses wanting to talk about local ideas in order to try and get a proper high growth path available for each of us in our respective regions.

New Zealand has performed well in the last decade in terms of growth, but if we are to improve the per capita income of every New Zealander, we need to aspire to five percent growth per annum, not three, and in order to do that we need to build on the productive base, both the manufacturing, agricultural, electronics and service sectors, but with the added set of issues that are flowing from a knowledge based society; in fact we need to add on to what we've got, so that growth occurs. There are major strategic issues that have been involved in getting us to where we need to go, and that issue of how we get that next set of growth is going to continue to be of interest to us all.

I want to give you our commitment that whether it's in local business ideas, innovations that need to occur in different regions, or good ideas that have emerged from some of the business leaders, we are going to try and see that we keep making progress in this area. It does require from time to time our daring to bring through reforms albeit that they may be contentious. As I mentioned earlier, issues like ACC have been contentious, but I wouldn't mind wagering a bet that the majority of you in this audience in terms of your local authorities are now experiencing a significant reduction in the cost of accident cover for your workforce. One local authority I visited last week told me that their premiums have reduced by over fifty percent. It's important insofar as it frees up resources that you can then spend elsewhere, or indeed you can give relief to your ratepayers by not requiring so much in the future.

It would be inappropriate for me not to remind you that some others in the political spectrum believe that they should reverse these savings and require you to act in a different way. I'll leave you to make a judgement as to whether that's in your best interest.

The last area that I wanted to touch on that I think is important for you in your sector are the issues of water and waste water management. I know that many of you are grappling with this difficult issue at this time. So has Government been grappling with how we should advance it in our mutual best interest. Some of you are aware that the Commerce Ministry has been putting some work together and some of your people in your association have been helping in that.

Late last month I had what has become a reasonably regular meeting with the Metro Mayors and your Association President and they came up with an interesting suggestion. They believe that local government is quite capable of making progress on water, waste water and stormwater service management if they are left to their own devices. They made the suggestion that we should give you between fifteen and eighteen months to demonstrate that the local government sector is capable of progressing this issue without being directed as to how to do so from central government.

There is nothing this Government would love more than to see Local Government New Zealand and the Metro Mayors and other Mayors in your respective districts take up this challenge and move through through your own experience, thus developing a framework for water and waste water management.

The Government has decided that we will accept the initiative, or the offer of an initiative, from the local government sector to come up with good solutions. I suggest that in agreeing to do so, we do two things. I intend to outline what I think are the things we would be looking for as clear signals that local government is keen to do this in a way that is credible in terms of their ratepayers' interest. I also think we should agree that perhaps fifteen to eighteen months from now that local government and central government should meet and review the progress that has been made in this area.

The areas in terms of a framework, if we were to be looking for progress, would probably have the following features -

  • that customers would have access to safe and secure water services at a reasonable price
  • that services are delivered in an efficient and environmentally sustainable way
  • that appropriate investment occurs in both the assets and in the water quality so that standards are met
  • that clear accountability is established for the management of the services so it's transparent and clear
  • strong incentives exist for innovation and service improvement, and * fairness to both public and private providers of water services is able to be achieved.

Can I say, as I look through these issues that I would perhaps describe as a loose framework, I'm aware that a number of you succeed on all counts already. I simply leave it with you that I think it's a very good test of both of our sectors of governments' commitment to each other, but also to quality delivery of services to our respective constituencies, to allow this process to unfold in this way. We have some expertise in central government that if it proves valuable to Local Government New Zealand we would be very happy to make available. But we have no desire to impose it on you if, as the Mayors and your leader from Local Government New Zealand indicated he believed, this sector was very willing to take up this challenge and lead from your own perspective and see how far you could get without being dictated to within a confined framework.

It may be as a result of your work that you will want legislative change of some sort. That is a matter that we are happy to leave to you to come to the Government on, to say how you think that can be achieved or indeed whether there are any impediments in the current legislative framework that prevent you from acting in a way that you think is desirable.

This is a challenge for both of us. This is a challenge that I think both taxpayers and ratepayers will welcome in terms of the genuine leadership that I know many of both of those groups are looking to us for.

Can I conclude my comments this afternoon by acknowledging that there are other issues that I know you are hoping can be progressed. The issue of the rates review; on the whole issue of how we deal with rating, there have been discussions between central and local government. I know that many of you are looking to see that central government puts the issue of rating of public lands on the agenda.

While I acknowledge that initially we felt that that was not a possible way to begin, the Ministers of Finance and the Treasurer now believe that at least it should be a matter that can be discussed as we try and make progress on how our mutual interests can be advanced in this area. I know that many of you are well down the track in defining what sort of issues you want to see progressed and I look forward to further measures being brought through that might be able to bring us to some common ground that will be useful.

Can I also ask for your support at this time in trying to give enterprising New Zealanders every opportunity to lower their costs through better regulation. As I travel round New Zealand, if there is a single thing that is breaking the spirit of business, it is both the timeliness and the cost of doing business. I say to you that you and I as central and local government players, if we are seriously interested in the growth and prosperity of our regions, we need to think about how we can address that issue.

I have to acknowledge that as a legislator and a regulator we often think we've done our best job in defining a policy issue, bringing through a remedy and asking officials to go through and implement that=2E From time to time I have business leaders who tell me that in the implementation the intention of the original provision appears to be completely lost.

It is an issue I believe we share in common, and I suggest that both of us have a joint interest in seeing that we do not frustrate business in New Zealand from being able to progress, because it is business that creates wealth and jobs for our respective regions. If we are to serve our respective constituencies well, we must not be defensive about this issue. We rather should be open minded and recommit ourselves to trying to make progress in lowering the frustrations that I believe exist. I can tell you that Government does intend to bring some major initiatives through as a result of the Five Steps Ahead consultation. Well over two thousand people have attended those groups, and we intend to make sure we do what we can. In my experience it appears to be more a problem at that implementation end rather than at the macro policy end, and I suggest that it's something we may wish to work together on further to try and reduce that timeliness and cost in as thoughtful and effective ways as we can.

The third area I've already mentioned. I think that the issues of congestion in Auckland cannot be left to wait, and I hope that we will be able to make progress. I acknowledge that the Auckland Regional Transport Plan is still in the development stage, but I bring to you a commitment of both Transfund and Tranz Rail to try and advance these issues as soon as we can find solutions, that will help crack this problem. It's not just an Auckland problem by the way. Much of the traffic that runs through the Auckland city to the port are transport issues that run off many of the productive regions in the central and upper North Island areas. It is in everybody's interest that this major region tries to find some breakthrough in terms of how we resolve these problems.

Finally that issue of managing waste water is an issue that I am confident that we can progress albeit that I've thrown the challenge back into your court. If you think we've done the thing incorrectly please talk to the Metro Mayors and to Kerry Marshall. It was their suggestion that we try this faciliatory approach rather than a regulatory approach with Wellington directing. I think it is a good challenge for both of us and I offer you my Ministers and our officials to either your association or to the respective local authorities if that is any help to you, but I do hope that we can make progress.

In conclusion Mr Chairman, can I thank you for the work that local government does for the people of New Zealand as well as the work you do with Government Ministers and Government officials as we try to advance issues in common.

Governance is not easy, but the privilege of being in government whether it's in central government or in local government carries with it a special privilege, that is to try and advance the health and wellbeing and economic success of the people each of us represent. I bring to you my commitment to do that in a realistic, pragmatic, but determined way.

Our Government is not one that will stand and tell you what we're against. It is a Government that's sought to bring real solutions that will actually improve the prosperity of people in your regions and as a country as a whole. I intend to continue to do that and I look forward to working with you.

Thank you very much.

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