New Zealand, already one of the most centralised countries in the world, is still seeing numerous activities being undertaken to bring even more of local government responsibility into central government, such as the proposed mandatory creation of amalgamated three waters companies. Another example of centralisation is that of six countries, being Australia, France, Switzerland, Spain, Germany and New Zealand. We are the only country where local government has no input into education, healthcare and social welfare. There is lots of opportunity in this advocacy.
One of the other topics on the day included the big issue of climate change adaptation. The feeling is that New Zealand’s risk and resilience framework for managing natural hazards has a long way to go, with the principal issue around how to incentivise resilience investment. The key here will be to have the debate (and decision re: responsibility) prior to the impacts, rather than after.
There was also an update on the Provincial Growth Fund. It confirmed that $934 million has been allocated across New Zealand, as formally announced by 20 March 2019, with Northland receiving $103.7 million, 55 per cent of which has come to the Far North. And updating the rural broadband roll-out and addressing mobile black spots in Northland – lots of positive things are happening in this area.
We discussed what is described as the New Zealand housing catastrophe. No quick wins here, sadly. It was interesting to note that Queensland, with a similar population size as New Zealand, pays around a third less to build a home. No clear reasoning yet as to why. Some interesting work is being done around social and community housing. Currently, councils cannot access subsidies for tenants and so some interesting work is being undertaken to look at mitigating this issue, such as setting up community trusts.
Finally, we had a quick chat around why rates are not in line with inflation – which is often a real source of confusion and frustration. In a nutshell, the Consumer Price Index (CPI - which includes rates) is used to calculate inflation, or what Google describes as ‘the overall general upward price movement of goods and services in an economy’. Local government has a Local Government Cost Index (LGCI), which confirms that cost structures faced by local governments differ significantly from those captured within the CPI basket. LGCI has been rising at a faster rate than household costs i.e. between 1999 and 2010 the LGCI increased by 43.9 per cent, compared with a 30.6 per cent increase in the CPI.
It’s fair to say there is never a dull moment in local government!