Local bodies caught in an undemocratic spiral
Local bodies are caught in an austerity bind, and it’s likely to get worse before it gets better. In the absence of bold reforms that empower communities and overcome this financial crunch, councils will be forced to pursue yet more cost-cutting and corporatisation – as we’re seeing with water reforms.
As Local Government Minister Nanaia Mahuta put it in a recent Cabinet paper, ‘‘rates are forecast to continue to rise at a faster rate than inflation, with the greatest part of this increase forecast to occur in the next three years’’. As a result, ‘‘current funding and debt constraints are creating a barrier to local government delivering optimal services and achieving good outcomes’’. Translation: councils can’t afford to do their job.
Mahuta gets the diagnosis right – most, if not all, local bodies are on a fiscal knife-edge – but fails to propose any reform ambitious enough to treat the underlying malaise. Thirty years after the last major national reforms to local democracy, it’s time for a gut-check. Has the 1989 model, ushered in by Geoffrey Palmer, delivered better outcomes, or has it lingered past its use-by-date? The answers are clear to me: no and yes, in that order.
The Palmer reforms were perfectly attuned to the late 20th-century neoliberal moment, applying a hands-off model that vested operational authority (and stupendous salaries) in powerful chief executives. By design, managers took charge, and elected members became constrained in their ability to set and fund policy in any meaningful way.
Just last week, councillor Tracey O’Callaghan resigned from the Carterton District Council, citing ‘‘total frustration’’ at the inability of elected members to properly represent her community. ‘‘Throughout my term,’’ she told Stuff, ‘‘I’ve been asking for accountability on budgets. I’m constantly being told that it’s not my call, it’s an operational issue. I cannot keep taking ratepayers’ money when I feel unable to make a positive difference.’’ Household rates in Carterton have spiked by more than 40 per cent since 2012.
You can draw a straight line between O’Callaghan’s decision, the 1989 reforms, and this disturbing trend: even as postal voting has made it easier to participate, voter turnout in local body elections has declined by 15 per cent since the reforms (over the same period, participation in general elections has dropped by about 6 per cent). We face a clear, undeniable local democratic deficit that we shouldn’t ignore. Without rejuvenating community democracy, councils are bound to be elected by an ever-smaller segment of the electorate, ever less diverse and representative.
The Wellington region presents a compelling case for change. Take my hometown of Porirua, a fast-growing city that relies almost entirely on household rates. Thanks to a mix of public, iwi and privately backed residential developments, its population is projected to rise from 56,000 to over 80,000 in the next decade and a half. The growth won’t fund itself, so what’s a council to do?
As three-term councillor ’Ana Coffey told me, ‘‘Growth is costly in the short and medium term. Development is welcomed, but there are environmental costs and infrastructure, like the three waters, that come with any new development, as well as capacity issues on our existing networks.’’ Porirua is doing the region a service by enabling new developments, but is left with no choice but to slug its current ratepayers, who are already paying the third-highest in the country.
We face a clear, undeniable local democratic deficit that we shouldn’t ignore.
Meanwhile, the Hutt Valley will suffer from a lack of growth and economic activity over time, and the Ka¯ piti Coast from mounting debt from infrastructure. Wairarapa communities rejected amalgamation, but face increasingly hollow units of local government, able to do less and less. The Greater Wellington Regional Council, is groaning under the weight of its own incompetence. With the exception of Wellington City, which enjoys a critical mass of commercial and industrial ratepayers, it’s a starkly uneconomic picture. By not addressing it, we face an unholy choice between stifling growth and imposing untenable costs on already stretched households.
We need to rethink what we expect from local government, and to tackle both the economic and democratic shortcomings in the current model. The National Party’s reductive mantra of ‘‘stick to your knitting’’ won’t cut it – even the costs of basic compliance, along with modest investments in local services and infrastructure, are quickly becoming unaffordable for many councils.
Mahuta seems to grasp the problem, but we’re yet to see how she plans to revitalise the sector. Without change, voter apathy will deepen, council finances will get worse, and services and infrastructure will continue their slow, steady decline.