Fighting local lunacy, Colin Knox

Local Government and Politics in New Zealand 
Graham Bush
Auckland University Press, $39.95
ISBN 9 781869 401269

In the beginning there was Governor Hobson. In 1840 he was instructed by the Colonial Secretary of Queen Victoria’s Imperial Government to divide the land into administrative subdivisions and promote the establishment of local bodies which would oversee drainage, byroads, police and the erecting of prisons and courthouses. Sensing local resistance to a system of local government based on the parishes of “olde Englande” with their gentry and common herd, rather than the poor and scattered population of the new colony, Hobson was not keen to move on the notion.

Hobson was overruled and in 1842 the colonial Legislative Council enacted laws to regulate the emerging European nation, proclaiming that any centre of population of 2000 was to be constituted as a borough. Only Wellington qualified and the whole idea of local boroughs came to nothing. Then, as now, people were suspicious of the benefits of local government and reluctant to pay for public goods. With 13,000 European settlers attempts to create effective local authorities with powers to raise taxes for public works fizzed and sputtered for another 20 years. It was only when 99,000 new European immigrants arrived in 1861 and another 172,000 arrived in 1864 with a further 80,000 by 1867 that settled and orderly management of thriving towns became necessary. As Professor Bush says: “In the annals of local government the decade of the 1860s was pre-eminently that of the establishment of town government”.

In the second edition of a book which was first published in 1980, Professor Bush provides a comprehensive description of local government in New Zealand — from its origins to its possible future. It ranges over the full gamut of local authority structures, functions and habits from 1840 to 1995, explaining what has happened, when and why. Names are named, credit and blame are given where Professor Bush believes they are due. The book is a valuable resource for anyone wanting to understand why local government in New Zealand is the way it is and the factors which might lead it to become something different in the future.

A list of section headings demonstrates the scope of the book. Starting with “History and Development until 1974”, the list includes “Towards the Present”, “The Structural Basis”, “The Array and Performance of Functions”, “Constellation and Interaction”, “Personnel, Policy and Management”, “Finance”, “Participation and Politics” and finally “Principles and the Future”.

The beginning of the colony is a fascinating story of scattered groups of new settlers experimenting with different forms of providing for the public needs of a European lifestyle. The British Parliament saw no reason why a system of towns with power to raise taxes to meet all local needs shouldn’t work, just as it did at home. However, with populations of only a few hundred it was a struggle for the new towns to raise the funds for public works or the administration required to manage them.

Larger units of local government, six provinces, were introduced in 1852 with the power to “make all laws for the peace, order and good government of their districts”. By the mid 1870s four urban centres — Dunedin, Christchurch, Wellington and Auckland — were established with populations of over 10,000. Their councils concerned themselves with roads, water supply, drainage and street lighting. The relationship between the provinces and the emerging towns was not clearly defined, resulting in uncertainty and disagreement regarding public needs and priorities which continued until the disestablishment of the provinces in 1875.

Outside the main centres the provision of basic public amenities was uncertain. The book describes the emergence of special purpose boards to fill the gap created by inadequate territorial local government. As early as 1870 there were harbour boards, river boards and education boards, drainage boards, fire boards and rabbit boards. Together with a growing number of counties which were responsible for wharves, roads and rivers, they had an immense task, requiring vision and commitment.

The cost and confusion of so many ad hoc special purpose boards was recognised very early. Professor Bush traces the attempts by reformers who as early as 1889 were identifying a wild proliferation of local bodies, some of which were barely able to survive financially. However, they proved to be remarkably resistant to amalgamation. No one knew better than the people affected by an issue of public concern how it should be managed. Suggestions of amalgamation with another authority on the grounds of efficiency were obvious signs of lunacy on the part of reforming central government politicians.

In 1890 a parliamentary committee of investigation recommended fewer and larger local bodies. However, Richard John Seddon in 1895 and Sir Joseph Ward in 1912 both failed to control the fragmentation and proliferation of counties.

Parliament did take action on several occasions to set the rules by which local authorities operated. The Main Highways Act 1922 “nationalised” arterial roads outside the boundaries of larger boroughs, creating state highways. A Town Planning Act 1926 attempted to govern all future building, with the idea of conserving natural resources and coordinating public amenities.

By the mid-1930s there was widespread acceptance that reform of local government was needed, but not a single local authority was willing to volunteer to be reformed. After World War II Parliament gave the Local Government Commission power to investigate changes to local body boundaries. But pressure from local body members close to a national election resulted in its hearings being adjourned without a decision being reached. The resilience of the various boards, boroughs, counties, towns and cities and their remarkable resistance to amalgamation and reform reflect their political influence at national level.

Local government has long been a training ground for aspiring national politicians and the influence of key local figures within the electorate ensures more than a small degree of sympathy and an available line of communication when threatening bills emerged in the House of Representatives. Differences of emphasis between Labour and National parties have traditionally prevented major reform, with Labour inclined to favour the rights and welfare of residents while National preferred to restrict territorial local authorities to property-related functions.

Both parties could agree on measures to control the influence of local authorities on levels of public debt and the Local Authorities Loans Board became a powerful influence on growth and indebtedness of local territories. In effect the Treasury had control of the progress of major projects which required loan funding.

The functions undertaken by local authorities on behalf of their communities include mandatory functions which must be done and discretionary functions which may be done. Among the rather sparse list of statutory functions are environmental management, civil defence, public health inspections and dog control. The Local Government Act 1974, the Sale of Liquor Act 1989 and the Building Act 1989 are examples of the legislation confining the activities of local government. While constraining local government activity to those things which are permitted in law, territorial local authorities are enabled to undertake certain core functions. Included are: preserving and promoting local identity; advocacy; planning; development and promotion of the locality; regulation; recreational, physical and social services; coordination to utilise scarce resources.

Government influence has not been only negative. From time to time Government has encouraged territorial local authorities to deliver services which are primarily a redistribution of wealth — a closely guarded central government prerogative. For example, cheap loans from the Housing Corporation for pensioner flats and housing for the workforce resulted in some local authorities developing a significant housing stock, which some are now divesting as an inappropriate use of local government resources.

The book devotes a paragraph or two to the role of local government in “mopping up” unemployment in the late 1970s and early 1980s. I was assistant town clerk of Wellington when unemployment hit 6% in 1978. It was a national scandal, and local authorities were urged to take on Government subsidised labour to work on projects which were not included in their current works programmes. Some councils responded enthusiastically and soon found themselves with an unmanageable problem as supervisory resources were stretched to cover the existing as well as the new workforce. Others used the opportunity very creatively.

Wellington was able to tackle the problem of increasing gang violence in the city and successfully negotiated a “jobs for peace” agreement which had immediate effect. At one time Wellington had over 300 subsidised employees working for the city, 60 gang members among them, and Wellington remains largely untroubled by gang violence even today.

Attempting to cover the whole history of New Zealand local government from its antecedents in England to its future in New Zealand, describing functions, habits and reforms all in 320 pages means that the work is highly selective in what it covers and the examples it chooses. There are hints of power plays and intrigues, suggestions of great achievements and colossal follies. Professor Bush writes from his personal insight and knowledge as a former councillor of Waimate in west Auckland, informed by a wealth of research including the annual plans and other documents available from territorial local authorities.

His book can only tell part of the story. It must leave out the fascinating personal triumphs, collective catastrophes and heroic commitments to a cause. So much that happens in local government is dependent on the personalities of the elected representatives that to leave them out is like a meal without seasoning.

Dunedin had a history from its founding of strong personalities exercising leadership in the development of the city. In 1907 it became the first municipality to generate hydro-electricity. When I arrived in Dunedin as a student in 1965 the city had recently opened the first full Olympic-scale indoor swimming pool in the country, and had just completed a magnificent municipal library at a cost of £12 million. Dunedin was possibly the last city to retain a tradition of prominent business people being elected to run the city. Its tradition of commercial shrewdness allowed it to move quickly and without fuss to take advantage of local government reforms which allowed the establishment of locally owned trading enterprises.

More modern personalities became well known nationally. The whole country was aware of Sir Dove-Meyer Robinson and his command of Auckland city (though below the Bombay hill he appeared to control the whole region). Robbie’s ability to establish one of the world’s largest waste water treatment plants at Mangere, despite opposition from the Local Government Loans Board, should rank with the “Tales of Hercules”.

Sir Ross Jansen, former Mayor of Hamilton, chairman of the Electrical Supply Authority and chairman of Waikato Regional Council, lifted the territorial/regional debate above the scrabble for ownership of public assets, which preoccupied neighbouring Auckland. As chairman of the Local Government Association at the time, his was a calm and authoritative voice of reason in the highly politicised debate.

Sir Michael Fowler is a good example of a mayor who had a unique influence on the city he led. Wellington’s new entertainment and conference centre (now the Michael Fowler Centre) was built in the early 1980s, mainly on the single-minded commitment and energy of the mayor. But he was concerned with more than bricks and mortar. I was present at a meeting of police officers in 1980 where Sir Michael Fowler condemned the introduction of riot shields and long batons and said in the plainest possible language that their use would be unwelcome in Wellington. The police were not at all happy that the mayor should attempt to guide their behaviour in his city.

This was just months before the anti-Springbok tour demonstrations which ended in violent confrontation between demonstrators and police teams kitted out in their new riot gear. The incident rates with the great waterfront strike and the wartime riots in Courtenay place as one of the key events in the history of the city.

In 1876 women first became legally eligible to stand for election and in 1898, the year when women were first enfranchised to vote for the Parliament, Elizabeth Yates was elected as mayor of the borough of Onehunga — the first woman mayor in the British empire. Even so, who could have imagined a woman mayor for Christchurch — until Vicki Buck? Even the arch Canterbury conservatives who conduct a daily analysis of local politics at the bar of the Commercial Travellers’ Club are solid supporters of a woman who stood for council on the (ye Gods!) Labour ticket.

It was a Labour government which in 1998 started the Local Government Commission set about a major rationalisation of functions and reduction in numbers of local authorities. Chaired by the experienced former mayor of Palmerston North, Sir Brian Elwood, the commission forced towns and cities together, dis-established many ad hoc boards and redefined functions. Howls of anguish greeted the draft decisions of the commission. Protesting authorities were afforded every courtesy but made little progress in changing the draft report.

The anguish of those who were deposed by the reforms in understandable. Some people who had devoted weeks or even years of their time to the service of their community had real concerns that a larger authority would let things run down, or somehow alter the character of their haven. Eastbourne near Wellington and Devonport near Auckland, both seaside resorts, feared for their identity. Some elected representatives of the people, such as the Auckland Harbour Board, went to extreme lengths to protect the public from the horrors of a change in ownership. Most, however, gave up their jobs with dignity and some stood in the coming local body elections in a new authority in 1989. A few years on the odd whimper can still be heard, but since a National Party government elected in 1990 supported the reforms embodied in the Local Government Amendment Act 1989 there would appear to be no going back.

The key reforms marked such a departure from the proprietorial local authority regime of the previous 150 years that they are worth listing. Firstly there were the objectives of local government, specified by Parliament for the first time: recognition of the existence of different communities; recognition of their identities and values; definition and enforcement of appropriate rights within communities; enabling communities to choose between different kinds of facilities and services; operating of competitively neutral trading undertakings; delivering facilities and services on behalf of central government; recognition of communities of interest; enabling local bodies to efficiently and effectively play their role; enabling effective citizen participation.

Public involvement is formalised in a number of ways, but principally, at least in theory, through publication of the local authority’s annual plan. Apart from containing its aspirations and the budget for the coming year, the plan also contains a report on performance for the main activities of the authority for the year past, and measurable indications of successful performance for the coming year. The management skills required to consolidate such a plan are considerable and require a more professional management team than in the past.

Local government financial estimates for the coming year are foreshadowed in December and approved in April for the year commencing on 1 July. Whereas in the private sector budgets are often approved after the commencement of the financial year, local government administrators must estimate their results 17 months ahead, with very great accuracy. Surpluses of more than a few per cent are evidence that the local authority is squirreling away funds it does not need for purposes it has not specified. Deficits are intolerable.

Other aspects of the local authority managers’ job changed profoundly with the 1989 act. The duties of the chief executive officer were to: implement all decision of the governing body; furnish advice to both councillors and community board members; ensure that all statutory and delegated responsibilities were properly performed; ensure that all activities and planning were managed efficiently, economically and effectively.

Parliament also prescribed that the chief executive was the only person employed by the council, with all other staff employed by the chief executive. This is often the most difficult aspect of the relationship between the chief executive and the elected representatives to manage, because elected representatives, like most people, are prepared to believe the best of the people they have most to do with and the worst of people they seldom see. Often elected representatives had become unofficial managers or supervisors and gave up their role with the greatest reluctance.

The National Party got behind the reforms with enthusiasm. Prize for the most compelling and influential personality in recent times must go to National’s Minister of Local Government, Warren Cooper. Absolutely convinced that his experience as Mayor of Queenstown more than adequately equipped him to understand and instruct local government in the rest of the country, Warren Cooper developed a few incisive slogans and rammed them down everyone’s throat.

In the name of the ratepayers he insisted on competition for local authority services and proper accountability. Making great use of the telephone as well as personal appearances, he would hand out a “telling off” to councils, politicians or officers who looked as if they were breaking the rules. In his zeal to prevent councils from building monuments to their grand egos he would publicly criticise decisions he thought could not be justified as value to ratepayers. He would say that it was not the millions of dollars his reforms would save the ratepayer that he was after — it was the tens of millions in stupid decisions that would not be made!

The National government’s contribution to the reform of local government was to encourage local authorities to contract out every service that was in a contestable market and to do away with most of the regional councils established by the Local Government Commission in 1988. Only regulatory functions, mostly under the new Resource Management Act, were to remain with the regional authorities, while any service delivery functions reverted to territorial local bodies.

An exception was made in Auckland, where a regional infrastructure including public transport, water supply and waste water treatment, refuse disposal and the operation of the Ports of Auckland were placed under the jurisdiction of a new elected body, the Auckland Regional Services Trust. This organisation was created by a statute which also prescribed its demise. However, like its predecessors throughout the history of local government in New Zealand, the new authority is proving most unwilling to privatise its assets and give up its life.

The more recent local government reforms, ushered in from 1988, include a most interesting possibility in the local authority trading enterprise (LATE) structure. This allows a local authority to transfer assets to an entity in which it may have complete or partial ownership. No officers or elected representatives may serve on the board of directors of a LATE, which operates under many of the same rules as a private company. The LATE must publish an annual statement of intent which can be either approved by the owning authority or sent back for revision, but not amended.

The Auckland Regional Council was one of the first authorities to make use of the new structures and against a cacophony of internal dissension established four very successful businesses. Each has been able to return a dividend to its owner while avoiding public criticism of its service delivery. It may be too early in their life cycle to judge the performance of the LATEs. However, the early signs are promising. They may become the way of the future for the provision of services which are commercial in the sense of having competitors. They may also provide an opportunity for divestment of services which could just as well be provided by private or publicly owned companies.

In many respects the history of the European nation of New Zealand is reflected in the history of local government, as structures, functions and relationships follow the needs of local population centres. Professor Bush skilfully weaves the various strands of analysis into a manageable and coherent description of the purpose and state of local government. He concludes his book: “By a mysterious political alchemy, local government manages either to mirror or to avoid grossly distorting community preferences and priorities … it must be empowered and should endure.”

Colin Knox was chief executive of the Auckland Regional Authority from 1988-92 and has had a variety of private sector and local government senior management roles. He is a regular contributor to university studies and conferences on a range of strategic management topics.

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