Local councils must ‘curb fantasies’ on spending – PM

Premier Christopher Luxon told the Local Government New Zealand conference in Wellington today that local councils must “cut corners” on spending.

“Taxpayers expect local governments to perform basic tasks and to perform them excellently,” he said at the conference.

“Pick up trash. Fix pipes. Patch potholes. And generally maintain local assets quickly, carefully, and economically.”

Luxon specifically mentioned the venue he was to speak at – the recently completed Tākina Convention Centre, which had raised concerns about the cost.

“The building we are in today is a classic example,” he said, to murmurs from the audience.

Citing Wellington’s ongoing water problems, including today’s floods, Luxon criticised how “Wellington City Council has decided to spend $180 million on a convention centre which, according to public reports, is now operating at a loss.”

“It looks all very well and good that politicians like us have another expensive venue to give speeches in, but can anyone seriously say that this was the right financial decision or a top priority for Wellington given all the challenges it faces?

“Taxpayers are fed up with white elephants and under-delivery. So my challenge to all of you is to stop the fantasy and get back to delivering the basics in a brilliant way.”

Luxon said local officials often tell Wellington they need more money.

“I have to be honest with you – the previous government could have taken this approach, but the fun is over.

“There is no magic money tree in Wellington due to economic mismanagement and vandalism by the previous government.”

Saying it wants to work closely with councils and provide new revenue-generating tools, Luxon said the “days of handouts are over”.

Luxon said the government had agreed to streamline the Local Government Act and abolish four provisions relating to social welfare.

The government also agreed to examine the performance indicators of local councils.

“Sunlight is the best disinfectant and taxpayers should know exactly what they are getting for their rates,” he said.

The Government will also consider options to reduce council spending on what Luxon described as “nice-to-haves”.

“Yes, councils need adequate revenue to fund essential duties such as roads, waste and water, but the value for money proposition is more questionable in many other areas.”

The Council of Ministers will also review the transparency and accountability rules that apply to councils.

“We want a productive and constructive relationship with local government — one that allows you to grow and develop and gives you the tools you need to pay for it,” Luxon said. “But we expect you to spend taxpayer dollars responsibly.”

Earlier this year, New Zealand’s local government commissioned a report from Infometrics that found that homeowners faced an average 15 per cent increase in their property tax rates.

Following the speech, Luxon told the media that “a lot of boards are doing really well in balancing their balance sheets.”

“Still, there is a responsibility not to do stupid things,” Luxon said.

“This is a war on municipal waste, definitely.”

Luxon said New Zealanders were having to tighten their belts due to inflation and other costs and that local governments should expect the same.

“We expect a return on that investment and we expect the fundamentals to be done brilliantly, and quite frankly we’ve seen councils get sidetracked.”

About 100 people also protested against the removal of Māori precincts outside the Takina Convention Centre in Wellington.

“We are very happy for councils to have Māori electoral areas,” Luxon said, but added that this should be decided by local communities rather than central government.