Reversal Needed of 1989 Local Government Reforms [1]

[This topic has relevance to other content produced at TSBNZ, most notably a forthcoming series of posts about how to improve public transport in Greater Christchurch, and indirectly in the case of regional transport management in regions such as Gisborne District, referred to directly in this post]

In 1989, the Labour government enacted a sweeping reform of local governance arrangements. This was only partially justifiable in terms of improved “local democracy” arrangements, and a large part of the rationale was driven by that government’s agenda of rationalisation and privatisation. A brief summary of the outcomes is as follows:

  • Territorial councils and other local bodies were amalgamated into a smaller number of larger councils. These councils also took over separate special purpose local authorities like drainage boards in some areas.
  • A new tier of local governance was created in the form of regional councils. These were felt necessary to have extra powers delegated from Wellington (largely in environmental matters) as well as taking over existing local authority regional functions such as catchment boards and public transport.

Neither outcome particularly made sense to local politicians in the existing territorial authorities and the amalgamation of these was bitterly resisted by the existing councillors. However there were those in the Labour Party who saw their opportunity at a local level and the means to take over special purpose bodies such as drainage boards and transport boards which had been lobbied for over many decades in most cases. For example in Christchurch there was Vicki Buck the first mayor of the newly amalgamated City Council who was instrumental in getting the Drainage Board taken over by CCC, but was unsuccessful in advocating for CCC’s long held goal of taking over the Transport Board, which was absorbed by the new Canterbury Regional Council.

The establishment of the regional councils recognised that there were existing regional groupings formed by territorial councils, for example the Canterbury United Council, that could be absorbed into a formal tier of local governance with its own elected members. However as is so typical of local government, the creation of this extra tier at the next level up from territorial councils has been incessantly criticised by many of their elected members, who seem to want to escape the oversight that regional councils often have over certain territorial functions. In a few regions, territorial authorities were able to persuade the government that they should be established as unitary authorities performing both territorial and regional functions. This was the case in Gisborne from the outset (Gisborne District Council) due to its isolation from other population centres on the central East Coast of the North Island, and later on in the 1990s it became the arrangement for the Nelson-Marlborough regions when the Nelson City Council, Tasman District Council and Marlborough District Council succeeded in a campaign to unitarise their respective territories, each taking over a part of the Nelson-Marlborough Regional Council’s functions, after which the latter ceased to exist.

In the establishment of regional councils there was seen to be a clear agenda from central government of the time to opt out of much of its existing responsibilities for environmental management and flood control, handing these over to the newly elected bodies. This situation helped along by the Resource Management Act which furthered the devolution agenda has had far reaching impacts on the management of freshwater resources and waterways which has undoubtedly made a major contribution to major environmental concerns now being felt in the areas of over-allocation of ground and surface water to irrigators and pollution of lakes and rivers. At the same time, regional councils have insufficient resources to be able to manage issues like erosion and flooding and still have to go cap in hand to the government for assistance when necessary. Formerly a lot of work that was handled by the Soil and Water Conservation division of MOWD was implicitly transferred to become a regional council responsibility without the capacity within local government plus political pressure from commercial ratepayers such as the farming and forestry community to tone down this aspect. For example in Gisborne District where soil erosion has always been a particular concern, a lot of conservation forest was sold for commercial production in the 1980s and 1990s on purely economic grounds, the result being the erosion problems have returned and are continuing to the present day.

The situation in Auckland was considerably more complex due to that city’s early pioneering of various forms of regional governance and the reorganisation of this in the 2010s in quite a substantially different form from that seen elsewhere. The Auckland Regional Authority established in 1963 was a forerunner of the regional councils established nationwide in 1989, but without the same level of transfer from central government that is mentioned above. There was a lot of political meddling from Wellington in Auckland affairs from the 1990s onwards, the first being in that decade an attempt to privatise the water networks and other assets by the National government of the day, which backfired when the Auckland Regional Services Trust that became the owner of these assets, was able to resist the government’s agenda. Subsequently the 3 Waters part of ARST was moved into Watercare where it remains today. In 2004, the Clark Labour government established ARTA, the Auckland Regional Transport Authority, to take over transport functions, including public transport, from the Auckland Regional Council. This in turn became the forerunner of Auckland Transport as it exists today (with ownership and management of roads added to the former ARTA functions). The setup of ARTA without direct political control from territorial councils influenced a similar governance arrangement at Auckland Transport that continues to the present despite incessant lobbying from elected members for direct control over AT. This is one of the many highlights of the reform of local governance in Auckland by the National/Act government in the 2008-2011 term of office.

In Auckland as it is today therefore we can clearly see the merits of maintaining separate agencies without direct political control from local politicians as being essential and it sets a model for this type of governance to prevail around New Zealand in the main centres. The current debacle over 3 Waters and the bitter campaign being waged by territorial councils over the loss of their assets should be seen in a proper context. That context can only rightfully be viewed as the Government wanting to right the mistakes made in 1989 when it allowed drainage boards in the larger metropolitan areas to be swallowed up into territorial councils. The net result has led to what is now being recognised as widespread rundown of the underground assets by many councils who have been eager to leverage balance sheet ownership benefits in favour of other unrelated projects. This in turn has led to the present moves by central government to take over the provision of 3 Waters infrastructure in what can be seen as a supercession of the Watercare service model currently established in Auckland.

The present Labour government has not stopped at 3 Waters but is now proposing to bring about greater reform of local governance but that has been left more in question as the major issue of the present is the replacement of the Resource Management Act. Here the potential also exists for Labour to properly address as far as is feasible the major problems of economic rationalism of the 1980s and 1990s in local government reform. National has unsurprisingly pushed back both on 3 Waters and the RMA proposals for purely political reasons which is suggested either politicking on the issue or lack of understanding of the core problems from their leader. Local governance gets to be very political. There have been times when central parties have shown some degree of brilliance in the formation of appropriate local authority structures and other times when naked self interest has taken over. National showed a particular aptitude for urban local governance when it reformed the Auckland region into Auckland Council and the model is serving well in the area today. But there were other times that National intervened in local governance in the rural sector that had much more messy consequences because these sectors are dominated by commercial and farming interests which naturally demand a lot of political kudos from their party. Nick Smith was one of the worst local governance interventionists in the National governments of recent years and frankly it’s an embarrassment that he has popped up in Nelson as the new mayor since their 2021 local elections. Smith had the Canterbury Regional Council sacked for trying to oppose a mass grab of irrigation water by farmers in the region and then later on, brought in national forestry standards that ignored the specific issues faced in places like Gisborne with their vulnerable erodible soils. Labour on the other hand is better at rural local governance than urban, where they are commonly engaged in shoring up power structures and opportunities for inculcating the next generation of party movers and shakers. When a former MP or cabinet minister steps down from the Labour party and pops up as a new urban mayor, the party fetes and idolises them without regard to the voters who may feel that a failed government leader is hardly going to make the best city mayor. It’s a truism that Labour at the local level does not stand for anything beyond getting elected, and ratepayers may well ask what they are getting from Labour because their main focus seems to be on governance itself rather than on specific achievements.

One of the key background themes for this post is the proposed reform of public transport provision that Labour want to bring in at the present time. From what has been seen to date, Labour does not want to offend their local wings in various centres and therefore so far there has not been any real suggestion of changing local structures, this question being more put out into the local government review. The appropriate type of local structure to best enhance and develop public transport services will be the focus of a series of three upcoming posts looking at how to fix the public transport systems in Canterbury. Stay tuned for that.