Volume 12 – Issue 4 – November 2016

SPECIAL ISSUE Local Government Local Authority Turnout – what’s the story New Public Management’s Impact on Mike Reid 3 Capital Cities E-voting Eventually? Online voting in Richard Norman 47 (local) elections Auckland Council: is it too big to last? Christine Cheyne 10 Grant Duncan 54 Do We Underestimate the Political Strength Strategies for Managing Infrastructure Risk: of New Zealand’s Local Government? an update Jean Drage 17 Frances Sullivan 60 Local Councils and Public Consultation: Do Denser Urban Areas Save on Infrastructure? extending the reach of democracy Evidence from New Zealand territorial authorities Jenny Ombler, Marie Russell and Graciela Rivera-Muñoz 20 Matt Adams and Ralph Chapman 63 The Poll Provisions and Local Government Reform The Resource Legislation Amendment Bill, the in Western Australia Productivity Commission Report and the Future Chris Berry 28 of Planning for the Environment in New Zealand Community Governance Sir Geoffrey Palmer QC 71 Peter McKinlay 36 Local Government Funding: facing the issues The Need for Localist Reforms Claudia Scott 77 Jason Krupp 42 Editorial Note Local government in New Zealand exists within a “local government’s time has come”. fairly well-defined narrative. New Zealand is the Jenny Ombler, Marie Russell, and Graciela most centralised nation within the OECD. Central Rivera-Muñoz outline some fascinating New Zealand Volume 12 – Issue 4 – November 2016 government is by far the dominant partner in the cases of participation not only being encouraged, but Policy Quarterly (PQ) is targeted at readers central-local relationship and recent innovations succeeding in producing a number of benefits both in the public sector, including politicians and in local government have tended towards further intended and unforeseen, while Chris Berry looks at their staff, public servants and a wide variety centralisation, such as the amalgamation into the impact of referenda on our colleagues in Western of professions, together with others interested Auckland’s Super-City. Australia. in public issues. Its length and style are While there is, without doubt, some truth to A number of papers examine the issue of sub- intended to make the journal accessible to busy readers. this narrative, it is only part of the story and there national governance starting with Peter McKinlay’s Submissions: The journal welcomes is more that needs to be discussed in terms of local introduction to the concept of community governance contributions of about 4,000 words, written government and its role. and discussion on some of the innovations in on any topic relating to governance, public This includes recognising the genuinely innovative engagement that exist below the local level. This is policy and management. Articles submitted approaches that can be found in just about every followed by a paper from Jason Krupp which offers will be peer reviewed. Please submit articles us a broader view and looks at constitutional and to the Editor: [email protected]. local authority in the country, often at the community Although issues will not usually have single level and frequently undertaken without any great contractual resolutions to central-local relations, themes, special issues may be published from public acclaim. More thought needs to be given to looking to see in what ways each approach could time to time on specific or general themes, the legal and constitutional foundations of local benefit the power and autonomy of local councils. perhaps to mark significant events. In such government, along with the normative debate as to On the question of how cities are governed and cases, and on other occasions, contributions what the ideal balance between central and local perform, Richard Norman addresses the evolution may be invited from particular people. Subscriptions: The journal is available in PDF should be. And more attention needs to be paid to of Wellington over the last three decades, both in format on the Institute for Governance and the way in which engagement and participation is terms of its growth into digital and cultural markets Policy Studies (IGPS) website: http://igps. fostered in local areas so that any lessons learned but also the way in which it has been driven by New victoria.ac.nz/publications/publications/list/10. can be applied nationally. Public Management sensibilities. Grant Duncan then Readers who wish to receive it by email Consequently we are delighted to publish this looks at Auckland and asks whether it is too big to should register as PQ subscribers igps@vuw. Special Issue of Policy Quarterly which addresses fail; he asks whether or not it represents an apex ac.nz. This service is free. For all subscription and membership these issues and many more. in centralising forces, or whether there is still some enquiries please e-mail [email protected] or IGPS has long had an interest in local government. further distance to go. post to Institute for Government and Policy In 2015 it launched its ‘National Dialogue’ on local We also offer a number of papers on urbanisation Studies, P.O. Box 600, Wellington. and community governance, which not only collected and infrastructure. Frances Sullivan looks at Electronic Access: The IGPS directs the thoughts of many of the leading commentators the risks associated with infrastructure in New interested individuals to its website: www.igps.victoria.ac.nz where details of the in the field, but also collated the latest research Zealand and offers some thoughts on strategic risk Institute’s publications and upcoming events from around the world. We were also delighted to management that could be used to mitigate against can be found. welcome international experts such as Tina Nabatchi them. Matt Adams and Ralph Chapman investigate Permission: In the interest of promoting and Liz Richardson to Wellington and Auckland. the links between infrastructure costs and urban debate and wider dissemination, the Promoting research and stimulating informed debate density, concluding that denser, more compact IGPS encourages use of all or part of the about local government is also a priority for Local areas show in cost-efficiencies in roads and water papers appearing in PQ, where there is no element of commercial gain. Appropriate Government New Zealand (LGNZ). Although local supply. Sir Geoffrey Palmer looks at the Resource acknowledgement of both author and source government has been providing essential public Management Act. Interestingly he lays blame for its should be made in all cases. The IGPS services in New Zealand for the last 175 years it is perceived failures at the doors of both central and retains copyright. Please direct requests still poorly understood. This issue is a step towards local governments and finishes with an important for permission to reprint articles from this filling this gap and LGNZ is pleased to acknowledge contribution on the subject of local government’s publication to [email protected]. Editor: Jonathan Boston the IGPS for taking the initiative. (lack of) constitutional status. Finally, the question Guest Editors: Michael Macaulay and This issue of Policy Quarterly, therefore, reflects of how infrastructure and local government as a Mike Reid a long standing commitment to promoting debate and whole should be funded is addressed in Claudia Editorial Board: Guy Beatson, Roger Blakeley, research into New Zealand local government, and we Scott’s paper on local government funding, which David Bromell, Jo Cribb, Valentina Dinica, believe that the breadth and depth of the articles highlights the importance of providing councils with Gerald Minnee, Anneliese Parkin, Mike Reid here offer a vital window into debates old and new. additional revenue options to incentivise growth. and Andrea Schollmann ISSN: 2324-1098 (Print) Mike Reid’s paper on turnout which incorporates Taken together we hope that these articles provide ISSN: 2324-1101 (Online) data from the recent 2016 local authority elections, a stimulating set of discussions that cut to the heart Volume 12, Issue 4 – November 2016 is the first of a suite of papers concerned with the of many debates happening right now in the local Copy Editor: Rachel Barrowman nature and quality of our local democracy and government sector. We also hope, more importantly, Design & Layout: Aleck Yee opportunities for participation. Following this theme that they will provide a firm foundation upon which Cover photography: Aleck Yee Production: Alltex Design Christine Cheyne addresses the possible use of we can build. In a time of great uncertainty for the Proof Reader: Vic Lipski e-voting; charting the discussions so far, the risks future of global democracy, we believe that many involved and what the future might hold for this form great ideas can be found at the local level. of electoral participation. Further, Jean Drage offers us a compelling argument on the Local Government Michael Macaulay and Act 2002 Amendment Bill (No 2) and argues that the Mike Reid huge number of responses to it demonstrates that Mike Reid

Local Authority Turnout what’s the was headed with an item titled ‘What’s wrong with local government and can it be fixed?’ The article suggested that the public are disengaged, that trust and confidence in local politicians was low story? and that there was a growing democratic deficit (Edwards, 2016a). A week later, in an opinion piece in the New Zealand While the recent local authority elections attracted their Herald, Edwards provided his own ideas for solving this problem and observed fair share of media headlines, the dominant narrative, as in that ‘local government appears headed previous elections, was one of declining turnout and whether towards an existential crisis’ (Edwards, 2016b). or not local government has a future. Little was heard about Public concerns about the future of local democracy, let alone proclamations the nature of the role councils play in their towns, cities and about its impending doom, aren’t new. regions, or about the future challenges facing communities As long ago as 2001 the then minister of local government, Sandra Lee, was and how candidates were planning to deal with them. Typical so concerned she suggested that ‘when it comes to local government New of the headlines were the following: Zealanders as voters are pretty switched 1 • Local democracy is broken, but • Fixing dysfunctional local off’ and mused on the possibility of whose fault is it? government. introducing mandatory voting. (If • New Plymouth’s voter turnout for These headlines come from NZ only the current turnout was similar to local body elections heading toward Politics Daily, a blog compiled by Bryce the 2001 level which so concerned the worst ever. Edwards which was essential reading minister!) A factor in the lower turnout • Initial voter turnout plummets in for anyone wishing to follow this year’s levels in 2001 was the decision to increase this year’s local body elections. local elections. This particular issue the complexity of the voting process by incorporating elections for the new

Mike Reid is a Principal Policy Advisor with Local Government New Zealand and has published on a district health boards. The issue did not range of local government issues. go away and, following the 2004 elections,

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 3 Local Authority Turnout – what’s the story?

Figure 1: Turnout in local authority elections and parliamentary elections4 disenchantment with local government, or is it symptomatic of wider changes in Comparative turnout 100 New Zealand society? This article asks whether or not the extensive expression 90 of concern is justified and, if so, where 80 we might look for possible solutions. It

70 is structured around two questions: why turnout in local government elections is 60 consistently lower than in parliamentary 50 elections, and why turnout is declining.

40 Turnout 30 The 2016 local authority elections took

20 Average LG Total LG Parliament place on 8 October this year and, despite fears to the contrary, turnout increased 10 slightly on the 2013 results, largely due to 0 increases in Auckland and Wellington.3 87/89 90/92 93/95 96/98 99/01 02/04 05/07 08/10 11/13 14/16 Figure 1 shows a decline in both Source: Department of Internal Affairs, and Local Government New Zealand for 2016 election night counts average and total turnout since 1989, Figure 2: Highest turnout although the decline has been far from uniform – dropping significantly 80 between 1998 and 2004, and then again 70 in 2013. (The significance of those years 60 is discussed below.) Noteworthy for this 50 analysis, parliamentary turnout shows a % 40 similar downward trend. Within the local

30 government figure there is considerable variation, a fact that is not surprising 20 given that there are 67 elections. Figure 10 2 identifies the ten councils with the 0 o i highest turnout and Figure 3 looks at the Gore South ikoura Central Wairoa correlation between size and turnout. ChathamIslands McKenzie Westland Ka Whanganu Invercargill Central Otag Wairarapa Looking at the councils which have the Hawke’s Bay highest turnout figures for 2016, we find a Source: Provisional results provided by Local Government New Zealand concentration of largely smaller councils Figure 3: Relationship between population and turnout with populations of under 10,000, as well Turnout by Size of Council as councils based in the South Island. The 80.0 relationship between council population 5 70.0 and turnout is highlighted in Figure 3. As Figure 3 shows, smaller councils tend 60.0 to have higher turnout levels than larger

50.0 councils. Possible explanations for this % correlation are discussed below. 40.0 The theory 30.0 A range of theories have been advanced 20.0 to explain why people choose to vote or

10.0 not, the dominant, at least in economics, being the rational voter model; but other 0.0 factors, such as the level of social capital 0 50000 100000 150000 200000 Council population and political efficacy, also affect turnout (Gludovatz, 2014). The rational choice the Justice and Electoral Committee 2004 and a 2016 inquiry has already been perspective generally assumes voters initiated an inquiry into the way in which signalled.2 have selfish preferences: that is, people the elections were run. Inquiries have So what is the story behind turnout unconsciously apply a cost–benefit test now occurred after every election since in local elections? Does it reflect a when deciding to vote or not and take

Page 4 – Policy Quarterly – Volume 12, Issue 4 – November 2016 into account the degree to which their Table 1: Central and local government turnout (recent elections) utility is maximised (Edlin, Gelman and Country National/federal Local (average) Difference Kaplan, 2005). Voting has an opportunity New Zealand 74% 47% 27% cost, such as the cost of the time involved Italy 75% 67% 8% identifying candidates and assessing the Switzerland7 45% 49% –4% efficacy of their various promises. Recent research into voting behaviour Norway 78% 63% 15% shows that the rational voter is not Canada 61% 41% 20% concerned simply with personal utility Ireland 71% 46% 25% but also with ‘social utility’, which is the United Kingdom 66% 33% 33% degree to which the benefits from voting Source: Federal and central government figures sourced from the International Institute for Democracy and Electoral Assistance are likely to accrue to the community as a whole (ibid.).6 Voters’ willingness to a community with a younger age countries have a stronger incentive to consider social utility may be seen to be profile; invest in the time and cost of voting. positively correlated with levels of social • diversity, as turnout is influenced The situation is similar with regard capital, and/or the presence of shared civic negatively by the degree of to personal taxation. On average New values (Webster, 2016), an assumption heterogeneity in a community, such Zealand local government taxes are that aligns well with post-election as the proportion of residents who approximately 2.5% of household survey results which show that nearly a are recent migrants (ibid.). income, whereas central government third of respondents voted because they Both sets of factors help throw light taxes – that is, income tax, GST and believed it was their democratic duty on two frequently asked questions: why levies – consume between 30% and 40% and because of their belief in democracy turnout is consistently below that of of household income. If approached from (Local Government New Zealand, 2004; parliamentary elections and why turnout a rational voting perspective the incentive Auckland Council, 2013). has been declining. to vote for central government is much When applying a rational calculus greater than for its local counterpart. (whether for personal or social utility Explaining turnout Another factor that can influence the reasons), potential voters consciously Figure 1 showed that since 1989 local propensity to vote is the presence or not or unconsciously assess the benefits of government turnout has been consistently of formal political parties, which play voting against the costs. The relevant about 30% below the turnout at a minor role in local elections in New factors are likely to be: parliamentary elections, a difference often Zealand. While ‘party politics’ in local • the amount of time taken to search interpreted as indicating a democratic government can be problematic (such for information on candidates; deficit. The difference, however, is not as substituting national priorities for • the complexity of the voting process: uncommon: see Table 1. local ones), it should reduce the cost of • the direct ‘cost’ of the sphere of Other than Switzerland, where the information search. For example: government: that is, the amount decentralised model places most public • the party ‘brands’ signal distinct and spent in tax; responsibilities at the sub-national well-recognised policy styles; • the degree to which there is level, it appears the norm that turnout • there is more likelihood of confidence in the integrity of the in national and federal elections candidates’ policies being voting system; will be higher than for sub-national implemented should their party • the salience of the sphere of governments. Employing the perspective become a majority; government subject to the election. of the rational voter, three explanations • candidates will have been through a (Department of Internal Affairs, stand out: the level of salience; the level ‘filtering’ process to get on the ticket, 2010; Local Government New of elected member discretion; and the so the risk of electing eccentric or Zealand, 2013) related issue of taxation levels. unpredictable candidates is less. In addition, there are also contextual Given that central government in While theoretically appealing, the and institutional factors with the capacity New Zealand spends 89.4% of all public evidence that the lack of political to influence turnout; for example: expenditure (the highest proportion in parties in local elections has diminished • media interest, often created by local the OECD along with the Republic of turnout does not appear to be strong, issues and a competitive mayoral Ireland and Greece), it has significantly or is undermined by other factors, such race; more salience than local government, as salience. The United Kingdom, where • the level of social capital, as localities which is responsible for the remaining formal political parties play a major role with higher social capital vote more 10.6%. In comparison, local governments in local elections, has turnout rates of (Webster, 2016); in Norway and Italy spend considerably between 30 and 40% (but also has local • demographic characteristics, as larger shares of public expenditure, salience). voting varies by age: an older and, not surprisingly, citizens in those While local government turnout is community should vote more than generally less than turnout at the national

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 5 Local Authority Turnout – what’s the story?

Figure: 4 International turnout rates than in systems found in northern and southern Europe, where councils play Turnout by local government system 80 a major role in the delivery of social services, such as education, health and 70 police, and possess the authority to levy 60 income and consumption taxes. Another difference between New 50 Zealand and other countries is the lack % 40 of constitutional status and the resulting ease with which central government can 30 amend local government’s status and

20 powers. Why, for example, would citizens spend time and effort assessing candidates 10 when there is a relatively unconstrained

0 ability for higher-level governments to intervene to protect ‘national interests’ Latvia stralia Iceland Norway Estonia England Scotland Denmark or overturn local decisions? Recent S. Au W. Australia Br. Columbia New Zealand examples, such as the removal of the Source: Local Government New Zealand, 2013 elected councillors at Environment Table 2: International turnout trends Canterbury, the marginalisation of Country Turnout 1980–90 Turnout 2010–13 Change Christchurch City Council in the post- Israel 80% 67% –13% earthquake rebuild and the government’s intervention in Auckland, act to reinforce Norway 84% 78% –6% the subaltern status of local politicians in United Kingdom 75% 66% –9% this country. Canada 75% 61% –14%

Denmark 88% 88% 0% Why is turnout declining? Finland 75% 67% –8% Voter turnout has demand and supply Netherlands 85% 71% –14% characteristics. From the demand New Zealand 89% 74% –15% perspective, the decision to vote is influenced by individual and community Figure 5: Number of elected members values and traditions, as well as 2500 expectations that the act of voting will improve personal or community utility. Any change in community values, the 2000 introduction of new ways of political participation, or a change in salience

1500 (such as a reduction in services or autonomy) may consequently reduce the attractiveness of voting. From the supply 1000 perspective voter turnout is susceptible to increases in the cost of voting: for example, if the voting process becomes 500 more complex the consequential ‘cost’ of voting will increase and we can expect

0 that the number of people who choose to 1989 1992 1995 1998 2001 20042007201020132016 vote will diminish. In relation to recent Source: www.dia.govt.nz turnout both factors appear to be at work. level, it also varies according to the autonomy and their constitutional status. Turnout decline is not simply a nature of the local government system. The Zealand system is part of the Anglo- New Zealand local government issue. In Figure 4 shows this variation. Figure 4 Saxon tradition, along with those of his report on how to increase turnout highlights an important theme found in Canada, Australia and the Republic of Gludovatz states that local government studies, that turnout Ireland. Such local government systems rates are strongly correlated to the range have a narrow task profile and take a ‘voter turnout in elections in Canada of services councils provide, the way they small share of national GDP. As Figure 4 has decreased at the federal and are funded, the degree of elected member shows, turnout in these systems is lower provincial levels to under 60% ... but

Page 6 – Policy Quarterly – Volume 12, Issue 4 – November 2016 in municipal elections the number of per elected position) tend to have a higher voting (Ladner, 2009). While the New people voting has dropped even more turnout than those where the ratio is high Zealand local framework lacks the direct dramatically’ (Gludovatz, 2014, p.2). (Drage, 2008). The New Zealand ratio is democracy mechanisms found in the one of the highest in the OECD, and it has majority of Swiss cantons and communes, Table 2 shows turnout trends increased over the last two decades due it does provide a range of formalised in a number of central and federal to a reduction in the number of elected opportunities for citizens to take part in governments. members and an increase in population: decision making, namely the right to be In his 1999 Reith lectures Anthony see Figure 5.9 consulted on significant decisions and on Giddens referred to the ‘paradox of councils’ annual and long-term planning, democracy’, by which he meant the Salience budget setting and work programmes. phenomenon of turnout declining in the As discussed above, a government’s level of While anecdotally some citizens may ‘advanced’ democracies at the same time salience represents its ability to effectively claim to be over-consulted, we have that democracy was spreading and the meet citizens’ needs and preferences. no research that would substantiate number of democratic states expanding (Giddens, 1999). Why, he asked, were people in states that had a long ... [voter] turnout was relatively stable tradition of democracy losing interest? His explanation highlighted changing in the 1990s, until 2001 when it fell values and the rise of consumerism: that by 4%, to be followed by a fall of 7% is, the re-conceptualisation of people as consumers rather than citizens, in 2004 ... [as] changes to voting whereby voting is set against Netflix in a competition for ‘out time’. processes ... increased voter ‘costs’. The one country that stands out as having dodged the trend is Denmark. Robert Peden, chief executive of the Electoral Commission, has looked at Evidence suggests that the salience of the the view that citizens see consultative the Danish experience and notes that in New Zealand local government system, and engagement opportunities as response to signs of a decline in turnout while relatively low due to a narrow task an alternative to voting. Given that the government adopted a proactive profile, has declined further over recent recent legislation has greatly reduced strategy of civics education.8 The strategy years. Likely factors are: requirements on councils to consult with was built on a programme targeted at • legislation giving various ministers citizens, this is unlikely to feature as a schools and younger people and designed the ability to override council factor in turnout in the near future either. to ‘induce local discussions and initiatives decisions: for example, in relation on how to better cultivate democratic to aquaculture and urban land use Role of elected representatives virtues and national belonging among boundaries; Related to the issue of salience is the degree pupils. The main argument and concern • legislation limiting financial to which politicians have the discretion was that citizenship education is more discretion, as with the recent (statutory authority or institutional important in a globalizing world’ financial prudence measures; and mechanisms) to implement the promises (Kriegbaum and Mouritsen, 2015, p.1). • legislation enabling ministerial on which they stood, or respond effectively While changing values and intervention in councils’ affairs, such to community needs and preferences. perceptions are likely to apply to all as the enhanced ability of the minster Should politicians lack this discretion, spheres of government at the local level, of local government to intervene voting may cease to be rational.10 The there are a range of additional contextual when he or she identifies ‘a problem’. introduction of New Public Management factors which, should they change, may Such measures, while undermining and corporate-style service delivery have an impact on turnout. These are the constitutional separation of local and models in 1989, and the increased use of discussed below. central government, also disincentivise council-controlled organisations since potential voters when they realise that (as occurred in the Auckland model), has Increasing representation ratios elected members are less able to respond distanced elected members from decision The ratio between citizens and to their concerns and expectations. making on a number of services, many of councillors (the representation ratio) which are important to citizens. has, if increased, the potential to reduce Alternative mechanisms for influencing local Chris Trotter describes this trend as turnout by diminishing engagement with governments a growing democratic deficit created not elected members and increasing the cost As the Swiss example in Table 1 shows, by a shift in community values, but by of search. Local governments with a low citizens may prefer alternative ways of government efforts to marginalise local ratio (that is, a small number of residents influencing their local governments to politicians by shifting decision making

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 7 Local Authority Turnout – what’s the story?

Figure 6: Impact of policy and institution and change is consistently below the level achieved in 70 parliamentary elections, and why turnout in both elections has been declining. 60 The first question is straightforward. Voters act rationally and trade off the 50 benefit (in personal and social utility

40 terms) to be gained from participating in an election against the associated costs. % 30 The importance – that is, the demand side – is directly proportional to the 20 Postal voting salience of the governing system and STV & DHB elections Removalof DHB the degree to which politicians possess 10 constituencies the discretion and autonomy to put into effect policies and programmes to 0 1980 1983 1989 1992 1995 1998 200120042007201020132016 meet the needs and preferences of the relevant jurisdiction. As the discussion Note: Figures for 1989 and 1983 reflect mayoral turnout results (an accurate proxy). shows, New Zealand local government about local public goods into what he that voters had to assess and thus the has relatively low salience: it has a narrow refers to as corporate entities. As Trotter time it took to vote (and, reflecting task profile, spends a small share of argues: the lack of political party platforms, public expenditure and consumes an even information on candidates was not smaller share of GDP.11 And compared to even before the Government sacked easy to come by). central government, council taxes are a environment Canterbury in 2010, • The removal of the DHB small share of a citizen’s annual income.12 it was clear to voters that the constituencies in 2004 significantly In addition, the last decade has seen an ability of their elected members increased the number of candidates erosion of local politicians’ autonomy to translate election promises into that voters were required to assess; and discretion, both of which are vote- practical policies has been seriously • The introduction of single diminishing over time. compromised ... what possible transferable voting (STV), also in The reasons for turnout decline motivation could voters have for 2004, meant that almost all voters in local government, a phenomenon treating local government elections as were confronted with two voting not limited to New Zealand, are more anything other than an increasingly systems, which required additional complex. This is because citizens are not pointless political ritual. (Trotter, time to ensure that local government only affected by whatever democratic 2016) candidates received ticks and DHB malaise is sweeping the advanced candidates numbers (this writer democracies, but are equally susceptible Complexity admits to having failed on more than to government actions that affect Given that potential voters will consider one occasion). the context and institutional settings the ‘cost’ of voting in relation to the • An off-setting factor to the increased which apply to local governments, degree to which personal and social utility cost of search was the introduction particularly in this case since there are are enhanced, any changes that increase of 150-word profiles (in a booklet) in 67 separate elections. In addition to the the cost should see a resulting decline in 2004. The profiles (for good or bad) demand-type factors, such as salience turnout. Figure 6 attempts to identify this appear to have become increasingly and elected member autonomy, the effect. It uses average turnout data (and relied on by many people to assess context and institutional factors, such as the data starts prior to 1989 which was an the efficacy of candidates. population size, demographics, diversity, unusual peak year due to reorganisation Despite the fall in turnout in both representation ratios and complexity, all and universal postal voting). national and local elections, Figure 6 play a role in affecting the propensity of Removing the one-off factors, it suggests that changes in voting processes citizens to vote. would appear that turnout was relatively can have an effect on the willingness of Many of these factors are likely stable in the 1990s, until 2001 when it people to vote. Increased complexity and to be affected, in a vote-diminishing fell by 4%, to be followed by a fall of search time arising from the changes way, by recent and planned local 7% in 2004. Both of those elections made in 2001 and 2004 appear to have government reforms. These include were associated with changes to voting had a discouraging effect on potential efforts to create large local authorities processes which potentially increased voters. based on the Auckland model (a bill to voter ‘costs’. amend this process is before a select • The introduction of the district Conclusion committee); proposals to shift services health board elections in 2001 The two questions this article set out to into council-controlled organisations increased the number of candidates answer were why turnout in local elections and thus remove them from the direct

Page 8 – Policy Quarterly – Volume 12, Issue 4 – November 2016 control of citizens and local politicians provide greater certainty about its 5 For presentation purposes Auckland Council (turnout 38%) and Christchurch City Council (38%) are excluded from this (contained in the same bill); proposals role and powers; graph. Their exclusion does not affect the correlation. 6 Paradoxically the theory would suggest that people are more to set national performance measures • reduce the cost of voting by likely to vote in smaller than in larger elections, as their votes which, if implemented, could diminish exploring alternative voting will have more chance to affect outcomes. 7 While people will tend to vote more if they believe their vote local discretion; and plans to increase the processes, including the use of new is likely to count, they may vote less if there are other ways of influencing their governments, such as in Switzerland, opportunities for ministers to intervene technologies; and which provides extensive opportunities for direct democracy in local government affairs. The reforms • invest in programmes to increase the approaches, such as referenda. 8 Presentation given to the New Zealand School of Local are designed to improve the efficiency awareness of all citizens about the Government Managers’ Electoral Working Party Conference, of local services and ensure that the nature of our democracy and raise Wellington, December 2015. 9 Includes community and local board members. ‘national interest’ is not compromised by their civic awareness. 10 In a survey undertaken by the Local Government Chronicle (a UK publication), the major reason citizens gave for not local decision making. voting was their belief that councillors had no authority to Should, on the other hand, the 1 Morning Report, RNZ, 15 October 2001. adopt policies and implement programmes to address local 2 The terms of reference for inquires tend to vary according to issues. Despite UK local government’s role as a provider reform objectives be concerned with issues that might have arisen leading up to and including the of social services, at that stage services were delivered election itself. The big issue for 2004 was the failure of the according to performance standards set by Whitehall. strengthening local democracy, then a STV election process in a number of areas. 11 Local government taxes represent approximately 2% of GDP, different menu of changes is required. 3 Figures for 2016 are still provisional. Final figures will be the same proportion as found in 1950 and similar to the released by the government in early 2017; they are expected share that existed 50 years earlier in 1900, when it was These should be designed to: to show a small increase. 1.8%. 4 This analysis uses ‘average’ turnout of councils (the average • increase local government 12 This is not the case for many older people who own of the 67 territorial authorities) rather than the total turnout properties and live on fixed incomes. Not surprisingly this salience through a programme of figure (the number of enrolled voters who voted), for two group votes in extremely high numbers. reasons: in the first case, because average turnout is less decentralisation and (in Giddens’ sensitive to turnout figures in our two largest cities, which contribute virtually 50% of all turnout; secondly, because view) deepening democracy; international turnout data is expressed as averages. As it • recognise local government’s turns out, the 2016 average and total figures are almost exactly the same. Total turnout figures are included for constitutional status in order to information.

References Auckland Council (2013) Elections Research 2013: pre, during and Kriegbaum, J. and P. Mouritsen (2015) ‘The politics of citizenship post campaign results, accessed at http://www.aucklandcouncil.govt. education in Denmark’ (draft), accessed 1 November at https:// nz/EN/ABOUTCOUNCIL/HOWCOUNCILWORKS/ELECTIONS/Pages/ ecpr.eu/Filestore/PaperProposal/52bce13b-09f6-4b7b-930e- candidateresearchandresources.aspx f31d3d7878f1.pdf Department of Internal Affairs (2010) Local Election Statistics, available Ladner, A. (2009) ‘What explains electoral turnout in Swiss from www.dia.govt.nz municipalities?’, accessed 1 November at https://serval.unil.ch/ Drage, J. (2008) A Balancing Act: decision-making and representation resource/serval:BIB_3ACEFE6604FB.P001/REF in New Zealand’s local government, Wellington: Institute of Policy Local Government Commission (2008) Review of the Local Government Studies Act 2002 and the Local Electoral Act 2001, Wellington: Local Edlin, A., A. Gelman and N. Kaplan (2005) ‘Voting as a rational choice: Government Commission why and how people vote to improve the well-being of others’, Local Government New Zealand (2004) The Local Government New accessed 15 October at http://www.stat.columbia.edu/~gelman/ Zealand 2004 Post-election Survey, Wellington: Local Government research/unpublished/rational_final5.pdf New Zealand Edwards, B. (2016a) ‘What’s wrong with local government and can it Local Government New Zealand (2013) The 2013 Elections: what are be fixed?’, NZ Politics Daily, 27 September, https://www.nbr.co.nz/ the lessons?, Local Government New Zealand submission to the opinion/nz-politics-daily-what’s-wrong-local-elections Justice and Electoral Select Committee Edwards, B. (2016b) ‘Who’s to blame for a record low voter Trotter, C. (2016) ‘Democracy’s disappearing hand’, Press, 10 turnout?’, New Zealand Herald, 4 October, http://m. October, accessed 26 October at http://www.stuff.co.nz/the-press/ nzherald.co.nz/bryce-edwards-on-politics/news/article.cfm?c_ opinion/85144199/chris-trotter-democracys-disappearing-hand id=1503211&objectid=11722358 Webster, K. (2015) ‘Social capital and voter turnout: the case of Giddens, A. (1999) ‘The Reith Lectures: democracy’, http://www.bbc. the Auckland Supercity’, accessed 15 October at http://www. co.uk/programmes/ aucklandcouncil.govt.nz/EN/AboutCouncil/HowCouncilWorks/Elections/ Gludovatz, N. (2014) Getting the Majority to Vote: practical solutions Documents/2016SocialcapitalandvoterturnoutWebsterJun2014aut.pdf. to re-engage citizens in local elections, Vancouver: Centre for Civic Zvulun, J. (2010) ‘Postal voting and voter turnout in local elections: Governance, Columbia Institute, accessed 1 October at http://www. lessons from New Zealand and Australia’, Lex Localis: journal of local columbiainstitute.ca/news-events/getting-majority-vote-practical- self-government, 8 (2), pp.115-31 solutions-re-engage-citizens-local-elections

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 9 Christine Cheyne

E-voting Eventually? Online voting in (local) elections

Introduction The cancellation of the online voting 1 trial came as a disappointment to many In April 2016 New Zealand’s long-awaited online voting in the local government sector, especially trial for local elections was again cancelled, or postponed the councils that were keen to participate. The minister appeared very equivocal indefinitely. Despite its advocacy of e-government, central about the future of online voting, stating government in New Zealand has continued to stall over in her media release: trialling online voting. The trial of online voting was online voting could be trialled at future elections but there is still strongly supported by local government and has long been much to learn about online voting, recommended by a Parliamentary select committee. However, and issues with online voting overseas have stressed the importance three months before nominations opened for the October of getting it right and maintaining 2016 elections, the associate local government minister, Louise public confidence. The Government is open to looking at proposals for Upston, called off the online voting trial proposed for the future trials of online voting in local elections but any plans for trials elections, citing concerns about security and vote integrity. should be developed as part of a programme of gradual steps towards Christine Cheyne is an Associate Professor in the School of People, Environment and Planning at online voting in local elections. Massey University. (Upston, 2016)

Page 10 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Since that statement there has been rates in the period, but is rapidly become recommendations that this method no further public announcement of anachronistic as email and, in particular, of voting be considered for local body further steps towards online voting. online communications displace paper elections. Following the 2007 and 2010 Yet the option of e-voting is a mail. While the voting method is not elections, the Justice and Electoral key subset, and logical extension, the key determinant of turnout, the Committee inquiry into local elections of e-participation, which is being opportunity to harness technology to recommended a trial of online voting. proactively used in New Zealand. Indeed, assist voters cannot be ignored. The extent Already, as will be discussed below, New Zealand ranked fifth equal with the to which the antiquated postal voting online voting was being successfully Netherlands in the United Nations 2016 method deters voters needs to be carefully implemented in a number of jurisdictions index of e-participation, just behind examined. internationally. the United Kingdom, Japan, Australia The rapid expansion of e-government, A 2011 New Zealand Society of Local and South Korea (United Nations, which has been promoted by both central Government Managers (the peak body for 2016, p.56). What is perhaps more and local government, has heightened senior local government managers, which noteworthy than the high ranking is the expectation of many citizens of includes staff administering elections) the rapid acceleration in ranking, from being able to vote electronically. The electoral working party developed a 19th in the 2014 index. This high level move to e-government is a worldwide strategic framework for e-voting in local of e-participation reflects not only the phenomenon, found not just in developed elections which drew heavily on the draft pace of development of e-participation countries but also in developing strategy for voting technology published but also the rapid expansion of internet countries (Björklund, 2016). While by the Chief Electoral Office referred to connectivity, especially since 2014, online voting is ‘one of the last frontiers above. The working party noted: stimulated by faster broadband speeds, with exponential growth in fibre- based internet connections since the The move to e-government is a introduction of fibre in 2011 (doubling between 2014 and 2015) and more worldwide phenomenon, found not attractive pricing plans. For example, as at 30 June 2015 a third of all broadband just in developed countries but also in internet connections were uncapped, developing countries ... compared with 8% in 2014 (Statistics New Zealand, 2015). In this article, after reviewing the background to online voting in local elections in New Zealand, with reference for Internet use’ (Crothers, 2015, p.125), The local government sector has to relevant overseas experience, I consider many related aspects of elections utilise, had extensive experience in recent the way forward to implementing online and are increasingly dependent on, the decades with remote/unsupervised voting, with a view to e-voting being internet. These include voter registration, postal voting elections which are an optional method of voting in local information about elections, information extensively run on proven technology elections. about candidates, and other voter advice. systems. Election Services [one Nearly a decade ago in New Zealand the of two companies that provide Online voting: the growing momentum Chief Electoral Office in the Ministry assistance with vote processing and Postal voting, a form of remote voting, has of Justice published a draft strategy for other aspects of elections] have had been a long-established method of voting voting technology which identified a extensive experience in running and was made mandatory by the fourth very wide range of benefits to voters e-voting election in New Zealand Labour government for local elections and the community, to government and in tandem with postal voting for in 1989, in an effort to boost turnout. to democracy from the introduction non-public elections. This also means Following a change of government in of e-voting technologies. It noted the that there is a significant number 1990, postal voting was made optional natural progress towards e-voting, given of electors who have experienced from 1992, but with turnout plummeting that ‘ICT solutions are already in place e-voting. (New Zealand Society of at the one council (Hutt City), which for voter registration, the roll, “download Local Government Managers, 2011, used ballot box voting, the norm has and fax” voting, the administration of p.4) been for postal voting to be used (Bush, the election, media and public access to 1995; Zvulun, 2010). However, average election results, public access to election In September 2013 the minister of turnout has declined slowly, as it has in agency information, etc.’ (Chief Electoral local government announced that online parliamentary elections, since then (Local Office, 2007, p.36). voting would be trialled at the 2016 Government New Zealand, 2013). Postal Expectations of online voting were local elections (Tremain, 2013a). Online voting may have sustained voter turnout further elevated with the recurring

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 11 E-voting Eventually? Online voting in (local) elections voting was specifically linked to digital Zealand, had expressed support. Several the Chief Electoral Office in October 2010 government services: councils had volunteered to participate and is responsible for administration in a trial, with interest coming from a of parliamentary elections) argued that Online transactions are the way of diverse range of councils. there needed to be a national discussion the future and the Government is Just over two months later the minister about the implications of declining voter committed to rolling out digital announced the terms of reference and participation, and it sought to promote services for New Zealanders. ... The membership of the working party. The such a discussion with its strategy for Government RealMe service will clear intention was to have a trial prior to participation in parliamentary elections. be used to enable online voting. the October 2016 local elections and then In that strategy it noted that enrolment New Zealanders who have a RealMe full implementation at the elections: and voting processes themselves do logon can now update their electoral not significantly affect turnout in New enrolment details online. The The online voting working party Zealand, as it is easy to enrol and vote. Electoral Amendment Bill recently (the working party) is appointed to Research on non-voting indicates that introduced will enable electors with consider and recommend: key factors are that non-voters ‘are too a RealMe verified identity to enrol a) the feasibility of having online busy, have no interest in politics, have online. (Tremain, 2013a) voting in local government little faith in politicians, cannot make up elections by 2016; their mind, or do not think their vote will make a difference’ (Electoral Commission, 2013, p.3). Clearly, e-voting cannot While [security] risks [with e-voting] address many of these factors, but it can assist by providing a more convenient are ever-present, and have resulted in mechanism and would eliminate some of considerable caution, they have not the vulnerabilities of postal voting, such as postal voting papers being undelivered, prevented many countries successfully stolen or, once received, misplaced. Security risks with e-voting are implementing online voting ... undoubtedly essential to address, but can be overstated. While such risks are ever- present, and have resulted in considerable In addition to the extension of b) any other opportunities to caution, they have not prevented many e-government to elections, the minister provide for local electoral countries successfully implementing also made a connection between online processes through the internet; online voting at various levels of voting and voter turnout, especially and government. E-voting was first introduced among younger voters and people with c) practical options for achieving in local elections in Estonia (which has a disabilities: online voting in the 2016 local population of approximately 1.3 million) authority elections, subject to in 2005, and repeated in subsequent Voter turnout in local body elections a successful trial having been local elections in 2009 and 2013, and is traditionally low and we need conducted before 2016. (Tremain, also used in parliamentary elections to look at other ways to encourage 2013b; Department of Internal (2007, 2011, 2015) and in the Estonian people to become involved in the Affairs, 2013) European Parliament election (2009, democratic process. Online voting 2014) (Alvarez, Hall and Trechsel, 2009; will be more convenient and appeal It was envisaged that online voting Björklund, 2016; Gibson et al., 2016). to young voters. It will also make it would be available not just for council but There have been various other initiatives easier for people with disabilities to also for district health board elections, in Europe, such as in Switzerland, where vote (Tremain, 2013a).2 and, if used in local authority elections, e-voting was introduced in the early 2000s would potentially drive demand for to allow expatriate voters to participate in A working party was established by online voting in parliamentary elections elections (Mendez and Serdült, 2014). the Department of Internal Affairs to and school board elections. As noted In Canada, two provinces, Ontario consider the options, costs and security above, the Ministry of Justice had a decade and Nova Scotia, implemented e-voting aspects of online voting. As noted above, ago identified an extensive set of benefits in municipal elections in the early 2000s, the decision by the minister to progress of e-voting. It recognised that new and increasing numbers of councils have the implementation of the long-awaited technologies opened up new methods of provided the option of e-voting since online voting trial had been preceded by voting. As well, there has been growing then. In the October 2014 elections in strong support from the local government concern about the decline in voting in Ontario approximately a quarter (98 out sector. Both individual councils and parliamentary elections. In 2013 the of 414) offered e-voting in the elections, the peak body, Local Government New Electoral Commission (which replaced and in Nova Scotia approximately one

Page 12 – Policy Quarterly – Volume 12, Issue 4 – November 2016 third of communities used e-voting in September 2016, just over a week before undertook its work against this backdrop 2012 (Goodman and Pammett, 2014). polling ended nearly 700 voting papers of considerable interest in, support for Based on detailed analysis of online were found among up to 3,000 mail and international experience with online voting in the city of Markham in Ontario, items that had not been delivered by a voting. In early August 2014 the working Goodman concluded that ‘although New Zealand Post worker in Wellington party’s report, Online Voting in New online ballots are not a broad-based (Stewart, Shadwell and Nicoll, 2016). Zealand: feasibility and options for local solution for turnout decline, electoral The Justice and Electoral Committee elections, was released. The report found participation can experience modest inquiry into the 2011 general election that online voting for local elections increases when they are made available’, had also made recommendations was feasible. In October 2015 Local which seemed to result from the enhanced supportive of online voting. It had Government New Zealand announced accessibility and convenience offered by received submissions from the Electoral that eight councils had expressed interest remote e-voting (Goodman, 2014, p.22). Commission recommending that in participating in a trial of online voting Much closer to New Zealand, some e-voting be initially trialled with small- in the 2016 local elections.3 The trial states in Australia (where voting is scale pilots at coming elections, targeting would take place alongside postal voting. compulsory, so e-voting is not seen as an engagement mechanism) have introduced remote electronic voting in state general While the cancellation of the 2016 elections for voters who live at a distance from the nearest polling booth, or have online voting trial in local elections was a disability that means they require assistance with voting, or who are absent disappointing to many councils and from the state during the hours of polling voters, it is clear that from the beginning (Holmes, 2012; Zada, Falzon and Kwan, 2016). In New South Wales, legislation there was a lack of interest and support in 2010 made e-voting available in state elections for visually-impaired voters on the part of central government. and others with disabilities. In Victoria, electronically assisted voting for the visually impaired had been trialled in overseas voters and others disadvantaged The president of Local Government New state elections in 2006 and was expanded by paper-based ballots. The committee Zealand, Lawrence Yule, noted that to all advance voting centres in the state in noted that the Electoral Commission had 2010. This was prompted by recognition sought guidance from the government the eight councils together meet that the United Nations Convention on on the feasibility of running such a pilot the Cabinet’s requirement that the Rights of Persons with Disabilities, of internet and telephone voting for the trial is of sufficient scale and to which Australia is a party, protects the 2014 election. The commission had representativeness to produce the right of persons with disabilities to estimated the cost at $5–7 million, but the evidence of the practicality and value vote by secret ballot (Holmes, 2012). In government indicated that resourcing the of online voting in local elections the 2015 New South Wales state general pilots was not a fiscal priority. E-voting by across New Zealand. The councils election approximately 200,000 voters overseas voters had dropped significantly, will only be able to offer online were able to use the remote electronic and the select committee endorsed voting if they meet the regulatory voting system iVote, which allowed them recommendations from the Electoral requirements set by Cabinet and if to vote using the telephone or internet Commission for online voting to replace Cabinet agrees to a trial going ahead. (Zada, Falzon and Kwan, 2016). outdated technology (fax machines) (quoted in Local Government New Independent, up-to-date research which was being used at that time Zealand, 2015) is needed into what voters think about (Justice and Electoral Committee, 2013). postal voting. Surveys by the Electoral In the 2014 general election, overseas Councils seeking to participate in the trial Commission are primarily focused voters were able to download their voting had to give an assurance that they were able on how it can improve its services, as papers from the commission’s website to meet regulatory requirements imposed opposed to rigorously assessing current (in addition to the existing options for by the Department of Internal Affairs, and and potential voting methods. An voting) and could scan and upload them their participation would be subject to an Australian survey found that respondents directly to the commission’s website audit by the government’s chief information were more in favour of the use of – a first tentative step towards remote officer. Councils also had to meet the costs mobile internet e-voting than against electronic voting (Justice and Electoral of the trial, despite the trial being for what it. They were attracted by its mobility, Committee, 2016). was intended to be a nationwide policy verifiability and speed. As well, security The online voting working party initiative. The eight councils worked with issues continue to affect postal voting. In which met in the first half of 2014 national organisations for six months to

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 13 E-voting Eventually? Online voting in (local) elections prepare for the October 2016 online voting Australia in August 2016).4 Yet occasional needed simultaneously. In 2016 Local trial, until the government’s decision to failures should not be cause for rejection Government New Zealand launched a cancel the trial. of the use of digital technology. While campaign to promote voter awareness of a number of countries have stepped local government, but the effectiveness Beyond 2016 back from e-voting, there are generally of this is questionable. It needs to be While the cancellation of the 2016 factors specific to each country that have complemented by many other initiatives. online voting trial in local elections was prompted the retreat, as in the case of the A single initiative such as e-voting, disappointing to many councils and German federal court’s decision in 2009 or even enhancements more generally voters, it is clear that from the beginning that e-voting using a particular type of to elections, cannot address the complex there was a lack of interest and support machine was unconstitutional; this did set of factors affecting turnout. However, on the part of central government. not, however, mean that e-voting was it is essential to increase access to and Recommendations for online voting unconstitutional (BVerfG, 2009). convenience of voting. E-voting offers a from select committee inquiries into local Moving forward, a detailed mode of voting which will be preferred by elections had been addressed somewhat implementation plan for e-voting trials many voters who are familiar with digital belatedly and half-heartedly. Central should be developed, co-ordinated technologies or not able to use postal or government insisted that ratepayers in centrally by a joint local–central ballot box voting. Goodman, based on each local authority should foot the bill for government working group, and her research on e-voting in municipal the trials, which clearly penalised councils resourced centrally (by the Department elections in Ontario, concluded: that offered to be part of the trial and acted of Internal Affairs or the Electoral as a disincentive to participation. The lack Commission). It might be argued that ‘Though voting by Internet is by no means a systemic fix for apathy or other social and political causes E-voting is a key aspect of of nonvoting, and the numbers are small, there does seem to be some e-government, which is increasingly potential for engagement among less committed voters, particularly young being implemented internationally as people’ (Goodman, 2014, p.22). technological and sociological challenges While accessibility for those who are are resolved. not able to vote via conventional methods was improved for New Zealand voters with disabilities with the introduction of dictation voting by telephone in the of central government commitment was use of e-voting should be a matter of 2014 general election, many voters in particularly noticeable given that the trial choice for local communities or local local elections still require assistance with was nationally significant: it was intended councils. However, in a country the size paper ballots from friends and family to provide information which will benefit of New Zealand consistency is needed to members.5 all councils, and indeed other elections, assist voter understanding of elections, Several technical challenges are such as parliamentary elections. rather than different practices from associated with e-voting, as indeed with The cancellation of the online voting one council to another. Trials should be postal voting. These include verifiability, trial was disappointing also because of conducted at council by-elections. As dependability, security, anonymity and the length of time available for resolving well, a trial of e-voting by overseas voters trust (Gibson et al., 2016). However, as the technical challenges, and experience should be conducted in association with with postal voting and other methods internationally. In fact, technical the 2017 parliamentary election. Groups in the past, technology and testing has feasibility is not regarded as a key representing voters with disabilities need enabled these challenges to be minimised. impediment; rather, the issue is public to be fully involved in planning for online While postal voting has enjoyed a degree acceptance and political will. In New voting trials. of confidence in the past, it cannot be Zealand, public acceptance is evident It has been suggested that, rather assumed that this confidence continues, in the support from many sectors for a than implementing e-voting, central and especially in the wake of the non- trial of online voting as a complementary local government should first focus on delivery of voting papers in Wellington method to postal voting. Some e-voting encouraging people to vote by improving in September 2016. Up-to-date research systems that have been used in other voter knowledge of the importance of on confidence in this method, especially jurisdictions have not been trustworthy local government. The two initiatives, given recent reductions in postal services or trusted; however, that has also been the encouragement (or, as some prefer, and the related decline in use of ‘snail case with other forms of e-government, engagement) and access, should not mail’, is needed. such as online censuses (for example, in be seen as mutually exclusive. Both are

Page 14 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Conclusion turnout in parliamentary elections can elections continues in 2017. While it E-voting is a key aspect of e-government, also be addressed. Political leadership is important to distinguish between which is increasingly being implemented from central government is needed to engagement and access, access can be internationally as technological and ensure that the technology is robust and significantly enhanced with the use of sociological challenges are resolved. voters have comprehensive information digital technologies. E-voting has been utilised successfully about the option of e-voting. 1 The term ‘online voting’ is used interchangeably with the in many developed and developing Digital platforms are increasingly term ‘e-voting’ throughout this article. The former is the countries for municipal and higher- being used to provide information about term used by the minister and government officials in New Zealand primarily to refer to remote vote casting by digital level elections. No voting method is free candidates in an attempt to address one means. The term ‘e-voting’ (along with ‘internet voting’) is from risk; however, risks perceived with used more extensively in the international literature. Some of the causes of non-voting: namely, authors use these terms to encompass other aspects of e-voting can be and have been mitigated. lack of knowledge about the candidates. elections that use electronic means, such as vote counting, or local e-voting using an electronic device in an officially E-voting is not intended to replace other With a paper-based system only limited designated polling place. However, the focus in this voting methods, but will provide a much information can be made available, as discussion is on vote casting at a distance from the hub that captures, records and counts the vote. needed level of convenience and a more has been done through candidate profile 2 While the minister refers to low turnout in local elections, it is important to note that there are reasons for the gap in accessible form of voting. Increasingly, statements. These are clearly inadequate, turnout between central and local government elections. the choice to use digital means to and digital information will become More relevant to note is the common trend in both local and general elections of declining turnout. The Electoral cast a vote will be important for voter increasingly important for most voters. Commission in its report on the 2014 general election noted: participation in elections in a country ‘Turnout has been in decline in most developed democracies Efforts to provide information to voters over the last 30 years, but New Zealand’s decline has like New Zealand, which ranks so highly about candidates can be more effectively been particularly steep and persistent. At the 2011 election, turnout as a percentage of those eligible to enrol internationally in indices of e-government targeted through digital platforms than dropped to 69.57%, the lowest recorded at a New Zealand and e-participation. can paper-based information, and digital Parliamentary election since the adoption of universal suffrage in 1893. The 2014 result, 72.14%, is the second It is widely accepted that e-voting platforms are already used to remind lowest. This small increase, while welcome, is no cause for comfort. New Zealand has a serious problem with declining is not a silver bullet that will fix low voters about registering and voting. voter participation’ (Electoral Commission, 2015, p.i). voter turnout. However, that does not Officially sanctioned, digital information 3 The eight councils were Masterton District Council, Matamata-Piako District Council, Palmerston North City provide grounds for postponing the sources about elections and candidates Council, Porirua City Council, Rotorua Lakes Council, Selwyn introduction of online voting. As the District Council, Wellington City Council and Whanganui can potentially be linked to official District Council. They encompassed a mix of metropolitan, Australian case demonstrates, even where election information sources available provincial and rural councils, socio-economic status and voting systems, including single transferable vote (STV) and voting is compulsory and turnout is online. combined STV and FPP (first past the post) elections. They not an issue, e-voting is an important With online voting now postponed, included councils with community boards and licensing trusts. According to Local Government New Zealand (2015), mechanism for allowing participation there is sufficient time for a trial of the population within the jurisdiction of these councils comprised about 10% of New Zealand’s total population. by voters overseas, those away from their online voting in a council by-election and 4 In August 2016 the Australian Bureau of Statistics attempted electorate on polling day and people with for any refinements needed to be made in to administer the census online but a technological failure resulted in the census website shutting down. The disabilities. It forms part of a very diverse time for a full roll-out of online voting in Australian Parliament subsequently tasked the Senate set of initiatives needed to address voting, Standing Committees on Economics with inquiring into the the 2019 local elections. The abandoned preparation, administration and management of the census which include wider societal responses 2016 pilot would have provided valuable (Parliament of Australia, 2016). 5 In 2016 Auckland Council, working with the Blind to social exclusion as well as measures insights to assist deliberation about Foundation, offered ‘assisted voting’ for blind and low- related to elections (including not just online voting in general elections. Online vision voters, who could register for a service which used technology and in-house visits (Auckland Council, 2016). the method of voting but also timing voting in elections is likely to become a The Blind Foundation also supports online voting. and the voting system). A co-ordinated focus of public and media debate if the response is needed so that the decline in trend of declining turnout in general

References Alvarez, R.M., T.E. Hall and A.H. Trechsel (2009) ‘Internet voting Bush, G. (1995) Local Government and Politics in New Zealand (2nd in comparative perspective: the case of Estonia’, PS: Political edn), Auckland: Auckland University Press Science and Politics, 42 (03), pp.497-505, doi:doi:10.1017/ Chief Electoral Office (2007) ‘Draft long term strategy for voting S1049096509090787 technology’, retrieved from https://www.fyi.org.nz/request/2066/ Auckland Council (2016) ‘Register now for assisted voting’, retrieved from response/7126/attach/4/draft%20strategy%20for%20voting%20 http://ourauckland.aucklandcouncil.govt.nz/articles/news/2016/09/ technology.pdf register-now-for-assisted-voting/ Crothers, C. (2015) ‘Using the internet in New Zealand elections BVerfG (2009) Judgment of the Second Senate of 03 March 2009: and support for e-voting’, Political Science, 67 (2), pp.125-42, 2 BvC 3/07, paras 1-166, retrieved from http://www.bverfg.de/e/ doi:10.1177/0032318715610165 cs20090303_2bvc000307en.html Department of Internal Affairs (2013) ‘Terms of reference for the Björklund, F. (2016) ‘E-government and moral citizenship: the case of online voting working party’, available at https://www.dia.govt.nz/ Estonia’, Citizenship Studies, 20 (6–7), pp.914-31, doi:10.1080/13 vwluResources/Online-Voting-Working-Party-Terms-of-Reference/$file/ 621025.2016.1213222 Online-Voting-Working-Party-Terms-of-Reference.pdf

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 15 E-voting Eventually? Online voting in (local) elections

Electoral Commission (2013) ‘Voter participation strategy’, retrieved from reviewed’, in D. Zissis (ed.), Design, Development, and Use of Secure http://www.elections.org.nz/sites/default/files/plain-page/attachments/ Electronic Voting Systems, Hershey, PA: IGI Global electoral_commission_2014_participation_strategy.pdf New Zealand Society of Local Government Managers (2011) The Way Electoral Commission (2015) Electoral Commission Report on the 2014 Forward for E-voting in Local Government Elections and Polls: a General Election, retrieved from http://www.elections.org.nz/sites/ strategic framework prepared by the SOLGM electoral working party, default/files/bulk-upload/documents/report_of_the_ec_on_the_2014_ draft 1, September, retrieved from http://www.solgm.org.nz/images/ general_election.pdf Website%20Documents/Local%20Elections/E-voting%20Strategy%20 Gibson, J.P., R. Krimmer, V. Teague and J. Pomares (2016) ‘A review of -%2028-09-2011.pdf e-voting: the past, present and future’, Annals of Telecommunications, Online Voting Working Party (2014) Online Voting in New Zealand: 71 (7), pp.279-86, doi:10.1007/s12243-016-0525-8 feasibility and options for local elections Goodman, N. (2014) ‘Internet voting in a local election in Canada’, in Parliament of Australia (2016) ‘Inquiry into the 2016 census’, retrieved B. Grofman, A.H. Trechsel and M. Franklin (eds), The Internet and from http://www.aph.gov.au/Parliamentary_Business/Committees/ Democracy in Global Perspective, Switzerland: Springer International Senate/Economics/2016Census Publishing Statistics New Zealand (2015) ‘Internet Service Provider survey 2015’, Goodman, N. and J. Pammett (2014) ‘The patchwork of internet voting retrieved from http://www.stats.govt.nz/browse_for_stats/industry_ in Canada’, paper presented at the International Conference on sectors/information_technology_and_communications/ISPSurvey_ Electronic Voting EVOTE2014 HOTP2015/Commentary.aspx Holmes, B. (2012) E-voting: the promise and the practice, Canberra: Stewart, M., T. Shadwell and J. Nicoll (2016) ‘Wellington postie dumps Department of Library Services, Parliament of Australia, retrieved – or hoards – up to 3000 items of mail and 667 voting ballots’, from http://www.aph.gov.au/About_Parliament/Parliamentary_ Dominion Post, 26 September, retrieved from http://www.stuff.co.nz/ Departments/Parliamentary_Library/pubs/BN/2012-2013/EVoting business/84781212/wellington-postie-dumps-up-to-3000-items-of- Justice and Electoral Committee (2013) ‘Inquiry into the 2011 general mail-and-300-voting-ballots election: report of the Justice and Electoral Committee’, retrieved Tremain, C. (2013a) ‘Online voting to be trialled at 2016 elections’, from https://www.parliament.nz/resource/en-NZ/50DBSCH_SCR5837_ media release, 4 September, retrieved from https://www.beehive.govt. 1/095840b4b75b7b58a13ef77629e118aec6036439 nz/release/online-voting-be-trialled-2016-elections Justice and Electoral Committee (2016) ‘Inquiry into the 2014 general Tremain, C. (2013b) ‘Working party for online voting announced’, media election: report of the Justice and Electoral Committee’, retrieved release, 12 December, retrieved from https://www.beehive.govt.nz/ from https://www.parliament.nz/resource/en-nz/51DBSCH_SCR68922 release/working-party-online-voting-announced _1/878b9b3603f17a6986fa56f6b0414924993c24e7 United Nations (2016) United Nations E-Government Survey 2016: Local Government New Zealand (2013) The 2013 Elections: what are the e-government in support of sustainable development, retrieved from lessons?, Local Government New Zealand submission to the Justice http://workspace.unpan.org/sites/Internet/Documents/UNPAN96407. and Electoral Select Committee. Wellington: Local Government pdf New Zealand, retrieved from http://www.lgnz.co.nz/home/our-work/ Upston, L. (2016) ‘Further work before online voting proceeds’, media submissions/the-2013-elections-what-are-the-lessons/ release, 19 April, retrieved from https://www.beehive.govt.nz/release/ Local Government New Zealand (2015) ‘Eight councils put forward to be further-work-online-voting-proceeds among first to trial online voting in local authority elections’, media Zada, P., G. Falzon and P. Kwan (2016) ‘Perceptions of the Australian release, 14 October, retrieved from http://www.lgnz.co.nz/home/news- public towards mobile internet e-voting: risks, choice and trust’, and-media/2015-media-releases/eight-councils-put-forward-to-be- Electronic Journal of e-Government, 14 (1), pp.117-34 among-first-to-trial-online-voting-in-local-authority-elections/ Zvulun, J. (2010) ‘Postal voting and voter turnout in local elections: Mendez, F. and U. Serdült (2014) ‘From initial idea to piecemeal lessons from New Zealand and Australia’, Lex Localis: Journal of implementation: Switzerland’s first decade of internet voting Local Self-Government, 8 (2), pp.115-31

Festive greetings from the School of Government The School of Government would We wish you all a happy and like to extend our sincere thanks restful festive season and look and good wishes to all those forward to working with you all who had contact with the School again in 2017. during 2016, with particular School of acknowledgement of our 2016 Government graduands and prize-winners.

Page 16 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Jean Drage

Do We Underestimate the Political Strength of New Zealand’s Instead, the debate tends to focus on issues related to the political relationship Local Government? between local and central government, especially around the autonomy of local government in the face of central The decision to put the Local Government Act 2002 government’s fixation on continually forcing through legislative change, Amendment Bill (No 2) on hold in September 2016 ongoing funding inequities faced by many demonstrates clearly the strength that local government local councils despite new funding tools having been developed (although not has as a unified political voice within our democracy. Early implemented) (see Cheyne, 2016, pp.176- 89), and central government’s continued parliamentary support for deliberation on this proposed reluctance to work in partnership with amendment has now been withdrawn in the face local government on solutions to current Festive greetings from the School of Government policy concerns. of a strong and determined response from local In fact, the Local Government Act 2002 Amendment Bill (No 2) is a clear councils and those who represent them. And while demonstration of the very low ebb in the an impending general election year may have tempered the tidal relationship between central and local government in New Zealand at this National-led government’s resolve here, one can only wonder time, a low not witnessed since 1989 when what local government could achieve if it worked together as central government beefed up the role of the Local Government Commission1 in a united political force more often. order to substantially restructure (and reduce the number of) local councils Jean Drage is currently an Adjunct Senior Lecturer at Lincoln University and has recently co-edited in the face of considerable opposition. Local Government in New Zealand: challenges and choices. In a similar vein, the 2016 amendment

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 17 Do We Underestimate the Political Strength of New Zealand’s Local Government? promotes the Local Government would have a damaging impact on have on the democratic nature of local Commission as the protagonist for the quality of our local democracy government. further changes to local government, by diminishing the scope of elected But let’s be real. This central/ this time to reorganise local government members’ decision-making, reducing local government relationship has services (such as water, transport and the ability of councils to take a rarely been an easy one. Despite local economic development) across local holistic approach to the development government’s best efforts to work with authority boundaries into joint council- of their communities and eroding central government, history records a controlled organisations. This proposal the important constitutional political environment in which central would, in essence, force councils to work distinction between our two spheres government has ‘largely shunned local together through regulation rather than of government. government as the poor relation or the choice when in reality they already do incompetent younger sibling’ which it this. Further, councils attending the Local cannot always control and ‘so ridicules, Major concerns about the purpose of Government New Zealand conference reforms and dismisses’ (Drage, 2011, this bill were initially raised in Parliament, in July 2016 supported a remit that p.11). The command-and-control with opposition parties suggesting vigorously opposed bureaucratic model practised in the post- that it was a clear representation of the earthquakes environment in Canterbury (see Hayward, 2012) has always been the ‘go to’ position of our centre- Despite local government’s best efforts right governments, a position recently reinforced through the sacking of the to work with central government, history Environment Canterbury councillors records a political environment in which in 2010 (and the failure to restore full democracy to this regional council despite central government has ‘largely shunned earlier promises), and the reigning in of local government through legislative local government ... amendments that changed its purpose and introduced more central government oversight of local councils. National Party’s negative attitude to any measure in the Bill that The irony is that the current focus local government. Labour’s Phil Twyford directly or indirectly removes on promoting collaborative relationships claimed that it was yet another example the requirement for community within and across communities (a key of ‘the very vexed history of policy that consultation, demonstrable focus of this bill) is not practised by those this government has had in regard to local community support and direct promoting it, despite evidence that it can government’; the Green Party MP Eugenie local authority involvement in work. The first decade of the 21st century Sage pointed out that the bill showed a reorganisation investigations and was a time of significant collaboration lack of trust in local government as it local decision-making of councils or between these two levels of government. continued ‘the centralisation of executive their assets. (Local Government New The empowerment focus of the new power at the expense of local democracy Zealand, 2016) Local Government Act enacted in 2002 and at the expense of the public having was a first step here, particularly with a a say in decisions that affect them’; This strong opposition has resulted in limited power of general competence and New Zealand First MP Ron Mark the bill now being deferred for what local which enabled local councils to do what suggested it was ‘just another underhand, government minister Peseta Sam Lotu- they wanted within a legal framework dirty way of trying to force through the liga refers to as ‘more rigorous analysis and signalled a degree of power sharing. corporatisation of local government’.2 of submissions and more constructive Another step at the time was the Central/ But this parliamentary response paled dialogue with the local government Local Government Forum, chaired by in significance in the face of the strength sector’ (Lotu-liga, 2016). Aside from the prime minister, which met twice a of opposition that came from local the fact that he must be the seventh or year to work on common issues and councils, who suggested it cut to the eighth local government minister in the develop a relationship that acknowledged heart of local democracy and the role National-led administration in the past local government’s contribution and of local government in New Zealand. In eight years (a job that appears to be passed the increasing dependence that central its submission to the Local Government along at a speed that has little regard for government has on local government and Environment Committee, Local the government’s relationship with local to achieve policy outcomes. And across Government New Zealand3 summed up government), it can only be hoped that local authorities there is a wealth of the majority of the 244 submissions on this process applies a more critical lens examples of councils that have worked this amendment, suggesting that the bill to the impact that this amendment will collaboratively over many years on joint in its current form planning, strategy and service provision.

Page 18 – Policy Quarterly – Volume 12, Issue 4 – November 2016 So, while acknowledging the growing representative democracy needs a viable A great deal of energy is generally tendency of our current government system of local government to ensure that invested in getting central government to dismiss ‘free and frank’ advice, power is spread within this democracy on side, when in fact local councils (when nevertheless the following is a little and this occurs through the process of they work together) have shown that they guidance for the policy analysts working devolving policy making and planning have the political strength to demand in this area. for a range of services to an autonomous a more collaborative relationship with Let’s start with the language used and directly elected local government. As central government, perhaps even a here, particularly the reference by the Colin Copus reminds us, clearly defined contract that requires minister to the ‘local government sector’. both parties to work together regularly It must be said that local government elected local government is not a on common solutions to today’s major is not a sector group. It is a legitimate, quaint hangover from the past; it issues.5 I would encourage all those representative and accountable level of is a vital element of a functioning advising the current government government in this country. To continue democracy in which central power to read the 244 submissions to the to bundle it into a sector group (like is balanced with local autonomy and Local Government and Environment the farming or manufacturing sectors) independence, and in which citizens Committee on the proposed local completely undervalues the role that can participate and control those government amendment to get a very this level of government has within our aspects of local political life closest to clear picture of the great innovation democracy. their interests and concerns. (Copus, and enterprise that is happening already Next, a clear understanding of the role 2013, pp.404-5) within this country’s communities. of local government within a democracy The strength of opposition to the is greatly needed. We are all well aware My third point, however, is the latest proposed amendment to local of the local infrastructure provided by most important. A well-informed and government legislation has shown us our elected councils, the local leadership, critical analysis of just what our local clearly that local government’s time economic and community development4 councils do across this country coupled has come. Let’s work towards ensuring and the comprehensive strategic and with comprehensive knowledge of the central government gets this message. financial planning and decision making collaborative arrangements already in 1 The Local Government Commission is a central government done in consultation with communities. place is essential for all those in policy quango appointed by the minister of local government to make But local government is much more than jobs. In reminding the Local Government decisions on the structure of local government and electoral arrangements for local councils. a set of services. It is a legitimate form of and Environment Committee that local 2 See Local Government Act 2002 Amendment Bill (No 2) first local democracy within our communities government is not an administrative reading, https://www.parliament.nz/en/pb/hansard-debates/rhr/ combined/HansDeb_20160615_20160615_28. where accountability for local decisions arm of central government, Local 3 Local Government New Zealand is the national organisation of local authorities in New Zealand. is provided through triennial elections Government New Zealand was spot on 4 While the four well-beings were removed from the Local and through opportunities for public in saying that to ‘have to state this shows Government Act 2002 in 2014, councils continue to spend substantial levels of funding on economic and community participation in planning and decision a deep misunderstanding of the role of development. 5 See Reid (2010) for a comprehensive discussion on inter- making. Further, local government local government in the minds of the government agreements. provides an important counterweight to Government and its advisors’ (Local central government. A responsible and Government New Zealand, 2016, p.9).

References Cheyne, C. (2016) ‘Funding local government’, in J. Drage and C. Local Government New Zealand (2016) ‘Local Government New Cheyne (eds), Local Government in New Zealand; challenges and Zealand’s submission to the Local Government and Environment choices, Auckland: Dunmore Publishing Ltd Select Committee’, http://www.lgnz.co.nz/assets/Uploads/LGNZ- Copus, C. (2013) ‘Repoliticising and redemocratising local democracy Submission-LGA-Amendment-Bill.pdf and the public realm: why we need councillors and councils’, Policy Lotu-liga, P.S. (2016) ‘Local government reforms extension’, media and Politics, 43 (3), pp.389-408 release, 23 September, https://www.beehive.govt.nz/release/local- Drage, J. (2011) ‘A changing landscape’, in J. Drage, J. McNeil and government-reforms-extension C. Cheyne (eds), Along a Fault-Line: New Zealand’s changing local Reid, M. (2010) ‘Managing central–local government relationships: the government landscape, Auckland: Dunmore Publishing case of New Zealand’, Commonwealth Journal of Local Governance, Hayward, B. (2012) ‘Canterbury’s political quake’, Press, 30 March, 11, pp.3-32 http://www.stuff.co.nz/thepress/opinion/perspective/6664104/ Canterburys-political-quake

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 19 Jenny Ombler, Marie Russell and Graciela Rivera-Muñoz

Local Councils and Public Consultation extending the reach of unsatisfactory (Asquith, 2012; Barrett, 2011; Barrett democracy and Scott, 2008; Bond, 2007; Introduction Cheyne, 2015; Woodward, This article considers public consultation in the context of 2016). New Zealand’s New Zealand local government. Although by international consultation environment is standards New Zealand possesses a rich culture of citizen particular too, in that local engagement and public consultation (OECD, 2015), the government engagement quality of consultation presents itself as a problem to local with Mäori, including with government, as their efforts have often been perceived as iwi organisations such as rünanga, with mätäwaka Jenny Ombler is a researcher with the Resilient Urban Futures programme, funded by the Ministry of Business, Innovation and Employment, and the Health Research Council-funded He Kainga Oranga/ Housing and Health Research Programme, at the University of Otago, Wellington. Marie Russell is a (Mäori living outside the researcher and Graciela Rivera-Muñoz a PhD candidate with the Resilient Urban Futures programme. rohe of their iwi affiliations)

Page 20 – Policy Quarterly – Volume 12, Issue 4 – November 2016 and via central government, is integral less likely to be listened to or taken into a ‘five-point spectrum’ of public to decision-making processes (Ryks, account in policy making. Further, any participation: inform; consult; involve; Pearson and Waa, 2016). We begin by gains in power must be wrested by the collaborate; and empower (International sketching some theoretical underpinnings populace, as, in her view, the powerful Association for Public Participation, of consultation, and the legislative will not willingly relinquish power. 2014). ‘Inform’ corresponds only to the requirements for consultation in New More recent international literature provision of ‘balanced’ and ‘objective’ Zealand. We then consider two examples on the nature of ‘public engagement’ information, whereas ‘empower’ places – Loomio in Wellington and Share an Idea distinguishes between forms of the process into public hands, the primary in Christchurch – before signalling some participation. For example, Nabatchi and role of the governing body being reduced areas in which public consultation could Amsler distinguish between approaches to implementation (of both the process be improved and local government can to public consultation depending on and the decision). In summary, whereas increase its democratic efficacy. ‘who’ is engaged and ‘how’ the process is Nabatchi and Amsler differentiate by done (Nabatchi and Amsler, 2014). The target and process, IAP2’s distinctions Participation, democracy and consultation ‘who’ may refer to the ‘public’, ‘citizens’, align more with Arnstein’s in that they Public consultation is premised on ‘residents’, ‘communities’ or ‘stakeholders’, both convey a shift in power relations. the democratic integrity of a political each of these pertaining to a particular Provisions relating to consultation system and on varied assumptions and yet difficult-to-define grouping. This may with Mäori could be seen to support ideologies about democratic governance. refer to the target of consultation, and/or the aim of increased equity, within Representative liberal theory proposes to the organiser (for example, a gathering the context of Te Tiriti o Waitangi. that most decisions should be made by accountable elected representatives with expertise (Ferree et al., 2002). More Provisions relating to consultation with ‘participatory’ approaches hold that an - enriched democratic form of government Maori could be seen to support the aim facilitates an active and engaged of increased equity, within the context of citizenship, and are suspicious of claims to expertise over and above the knowledge of Te Tiriti o Waitangi. those affected (Ferree et al., 2002). More ‘emancipatory’ approaches propose that the accumulation of power and expertise within a governing elite promotes the of ideas might be initiated by a political Yet there are still many issues around continued disempowerment of certain interest or professional group: see engagement with Mäori (Controller and social groups. Improving participation is Howden-Chapman et al., 2011). The ‘how’ Auditor General, 2012, pp.49-55; Drage, part of an effort to empower those who denotes differing levels of engagement, McNeill and Cheyne, 2011; Meredith, are not otherwise enabled. (Arnstein, with ‘consultation’ and ‘involvement’ 2000; Sharp, 2003), and engagement 1969; Ferree et al., 2002; Palacios, 2015). being at the lesser end of the spectrum is too often limited to cultural aspects, A key reference in this debate and ‘collaboration’ and ‘participation’ as when Mäori have significant economic is Arnstein’s ‘A ladder of citizen degrees of co-production that range from and other interests (Early et al, 2015). participation’ (Arnstein, 1969), still the submission of ideas to decentralised, There is also little formal attention paid widely discussed by more contemporary population-wide direct decision-making to engagement with other sections of theorists (Cheyne, 2015; Connor, 1988; processes. A decentralised process society: for example, those living in Flinders and Dommett, 2013; Renn, relinquishes control over policy entirely greater social deprivation (who are often Webler and Wiedemann, 1995). This to a public process. A participatory more resource- and time-poor) and ‘ladder’ consists of eight steps, ranging budgeting process, for example, as used population groups like the young and old, from ‘manipulation’ to ‘citizen control’. in parts of Tuscany and Latin America, women and the gender-diverse, as well Arnstein was adamant that many is a process where citizens decide directly as landed immigrants and refugees (see forms of practised ‘participation’ are on parts of public expenditure (Bassoli, Bloomberg, 2012; ChangeMakers Refugee tokenistic at best, and oppressive at 2012; Lewanski, 2013; McNulty, 2013). Forum, 2008). A closer consideration of worst. Her typology describes the ‘levels For others (e.g. Flinders and Dommett, the idea of ‘partnership’ (Arnstein, 1969) of discrimination’ particular citizens 2013), ‘participatory’ refers to processes would seek to ensure that people within are subject to throughout consultative that increase voice, while ‘deliberative’ these communities are not only invited processes and measures, and the roles that processes refer to more decentralised to participate, but are also adequately power, racism and sexism play. According decision making. resourced in order to do so meaningfully. to this framework, people of lower socio- Another model is offered by the At the same time, greater distribution economic status are more likely to be International Association for Public of decision-making power must not subject to ‘sham’ consultation, and are Participation (IAP2), who have proposed undermine processes of engagement

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 21 Local Councils and Public Consultation: extending the reach of democracy with Mäori. New Zealand’s democratic the principles of consultation in section Government Commission review found expression is different from the 82: that while 30% of submitters felt that the assumptions of the models discussed • people affected by a local authority public consultation process was either here, which assume a power dynamic decision should be given ‘reasonable ‘excellent’ or ‘very good’, 38% found it ‘fair’ between the citizenry on the one hand and access to relevant information’ or ‘poor’, but these views were ‘coloured by decision makers on the other. Arnstein’s (s82(1)(a)) and be ‘encouraged to the outcome of the process’ of the matters typology and IAP2’s model both derive present their views’ (s82(1)(b)); being consulted on (Local Government from this assumption, and attempt to • such people should be clearly Commission, 2008, pp.69-71). The review shift the power balance towards those informed about the ‘purpose of the presented six key findings: consultation who would otherwise be powerless. When consultation and the scope of the requirements were ‘often not properly considered in light of the findings of the decisions’ to be made (s82(1)(c)) and understood’ by councils; councils needed Waitangi Tribunal’s Te Paparahi o te Raki have a ‘reasonable opportunity’ to processes to identify how far ‘community Inquiry, principally that Mäori did not present their views (s82(1)(d)); views’ were already known; there was cede sovereignty to the British Crown • the local authority should receive a risk of ‘over-consultation’ and ‘low in 1840 (Waitangi Tribunal, 2014), a such views with ‘an open mind’ and response rates’; good practice guidelines were needed on ‘effective consultation and engagement mechanisms’; while among Ultimately, under this legal framework items requiring special attention were the level of influence that consultative the effectiveness of councils’ practices and engagement with Mäori (Local processes have depends on how Government Commission, 2008, pp.69- 71, 4). elected representatives listen, structure Ultimately, under this legal governance ... and form policy. framework the level of influence that consultative processes have depends on how elected representatives listen, structure governance (Asquith, 2012) and simple shift (i.e. from local government give them ‘due consideration’ (s82(1) form policy. Elected representatives must to residents) does not adequately (e)); reconcile diverse submissions, expert meet expectations for engagement. In • people who express their views advice, special interests and budget particular, a blanket shift of decision- ‘should have access to a clear record’ considerations. This part of the process making power that treats Mäori as and explanatory material about is often less transparent and accountable, simply another interest group rather relevant decisions (s82(1)(f)). and may result in a policy that does not than holders of sovereign käwanatanga Observance of these principles is reflect the initial public process. As Local (governance), tino rangatiratanga at the discretion of the local authority, Government New Zealand has pointed (control and self-determination) and subject to various conditions, and open out, consultation is part of a process of ōritetanga (equity) will not fulfil the to challenge in the courts (Knight, 2010), best judgement, by which representatives principles of partnership, participation but the underlying requirement is that ‘a must make the best decision in light of all and active protection (Health Promotion local authority must, in the course of its available information and with cognisance Forum of New Zealand – Runanga decision-making process in relation to a of the effect on future generations (Local Whakapiki Ake i te Hauora o Aotearoa, matter, give consideration to the views Government New Zealand, 2012). As 2002). International models of greater and preferences of persons likely to be the majority opinion of submissions participation, if adopted, will need affected by, or to have an interest in, the may not be reflected in final decisions, adaptation to better fit New Zealand’s matter’ (s78). Nevertheless, according respondents in a consultative process specific bicultural context. to Cheyne, changes in the legislative may feel disheartened and ‘unheard’. This, requirements and local government in turn, feeds a culture of apathy and Consultation requirements and practice over recent decades imply more concern diminishes popular ‘buy-in’ of outcomes. In New Zealand, public consultation for councils’ flexibility than for citizen For elected representatives, the demand by local authorities – regional, city and engagement (Cheyne, 2015). to satisfy often diverse public opinion, district councils and the unitary authority Written submissions to councils come combined with other less visible factors, of Auckland – is prescribed in the Local from ‘a relatively narrow section of the leads to a conundrum of balancing best Government Act 2002. In addition to a community (generally well-educated, practice, interests and accountability. requirement to provide ‘opportunities New Zealand European, and over the age for Mäori to contribute to the decision- of 45)’ (Local Government Commission, Case studies making processes’ (s81) and the ‘special 2008, pp.69-71) and predominantly New approaches using digital engagement consultative procedure’ (s83), the act lists male (Bloomberg, 2012). A 2008 Local or innovative online platforms have been

Page 22 – Policy Quarterly – Volume 12, Issue 4 – November 2016 used by local government along with together, which could be quite often overwhelmed at public meetings by ‘visioning’ tools in an effort to reach more challenging in an in-person setting. vociferous ‘frequent flyers’. people and facilitate more constructive Online, everyone can speak at the discussions. These platforms support a same time but it’s still easy for every Share an Idea dynamic and user-friendly process for voice to be heard. (Loomio, 2013) Following the February 2011 earthquake, both the participating public and officials Christchurch City Council introduced organising the information for council However, after the council released its Share an Idea, a community engagement use. While these platforms are promising, final strategy, criticism emerged that the programme utilising online tools their use does not guarantee an outcome consultation process had been merely for (alongside other, more traditional that reflects the public’s input. Below we show rather than substance, that areas methods) developed by a New Zealand present two examples: Wellington City of clear consensus were ignored and company, NV Interactive. Share an Idea Council’s alcohol management strategy that the outcomes were predetermined gathered some 106,000 community- and Christchurch City Council’s Share an (Strathmore Park, 2013). This perception driven ideas, and around 21% of Idea. may be the ‘sour grapes’ of those whose Christchurch residents participated ideas were excluded from the strategy, (Carlton, 2013; Christchurch City Loomio and Wellington City Council’s alcohol but it also suggests that the transparency Council, 2011). The ideas were compiled management strategy online discussion inherent in the Loomio online by the council, and formed the basis for When Wellington City Council consulted engagement process was not maintained the initial draft central city plan (2011). on its proposed alcohol management strategy in 2013 it used traditional consultation practices (written and oral The ideas gleaned from Share an Idea submissions), and, as an innovation, engaged Loomio, a Wellington-based then entered a decision-making process initiative, to run a Wellington online that lacked the transparency of the collaboration. Loomio is an online tool which facilitates bringing ‘people together initial process, particularly due to the to talk things through, share ideas, address any concerns and determine a clear overarching powers of the Christchurch course of action that works for everyone’ Earthquake Recovery Act 2011 ... (Siegfried, 2014). It emerged from a group of social activists involved in the Occupy movement in Wellington in 2011–12 and uses some of Occupy’s discussion and through to the final decision making by Overall, the Share an Idea process was seen decision-making approaches (Rushkoff, councillors. as a great success, not only in terms of the 2014; Siegfried, 2014). The retrospective comments of one participation rate, but also as a visionary The council proposed a broad of the facilitators, Loomio co-founder way for the residents of Christchurch to strategy and invited residents to attend Ben Knight, are of interest. Knight was feel hopeful in the immediate aftermath community workshops, to join an struck by the behaviour of participants in of one of the country’s most devastating online discussion forum or to write a the council Loomio group compared to natural disasters: submission. Over 250 submissions were people at public meetings. In the Loomio received, and 150 people participated discussion there was no competition That particular engagement in the Loomio online discussion. The for limited ‘air time’ for participants campaign, was one of the few process itself was well received, with a to convey their views because Loomio examples in the last few years in diverse range of participants working ‘opens up space where all views can Christchurch where we’ve actually collaboratively to discuss issues and offer be considered and everyone can still reached out to our community and ideas and solutions. Council staff were be heard’. The public meetings were actually asked for their views ahead ‘delighted with the depth of many of the difficult because of the polarised views of doing planning. … It was framed discussions’, said council officer Jaime of anti-alcohol campaigners on one in a very enabling way so that people Dyhrberg (Loomio, n.d.). A participant side, and liquor-store owners on the could engage directly with that commented: other: ‘everyone else just got squeezed conversation and other conversations out’ and attendances were low. Knight [that] were happening. It was actually The value of Loomio has been noticed that extreme views became all played out on the internet, so the in providing a neutral space for more moderate and ‘reasonable’ during use of IT communications was very, productive dialogue, without needing the online discussion (Knight, 2015), very important. Having Facebook, to go to a public meeting. You’ve making the approach more attractive to having posts, blogs … People’s got really diverse viewpoints coming residents, councillors and staff, who are comments were blogged and posted.

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 23 Local Councils and Public Consultation: extending the reach of democracy

Having moving clips of people saying that’s sort of like what I suggested’. Nesta, who insist that ‘impact’ of the things [and] all that stuff, putting it (Sutton, 2014, p.55) consultative process must be broader, out there. ‘This is what you’re seeing and include more difficult measures, and this is what you’re telling us.’ Others too supported the process and than the rate of participation (Simon It engaged the community in the the outcome document. Architect David and Bass, 2016). conversation. We haven’t done that Sheppard wrote: ‘Since its publication Moreover, while most appear to since. (Rivera-Muñoz, 2016) in July 2012, there has been a lot of believe that Share an Idea was successful, support for the Blueprint and the ideas there has been little independent analysis The ideas gleaned from Share an contained in it. This support has come of how the community has perceived the Idea then entered a decision-making from many in the business community outcomes and ongoing process, and to process that lacked the transparency of as well as from the residents of what extent the initial process was able the initial process, particularly due to the Christchurch’ (Sheppard, 2014, p.62). Yet to shape the eventual Blueprint. It may overarching powers of the Christchurch there was a discord between this notion be that the outcomes will not be able to Earthquake Recovery Act 2011 (without and a thread of discontent that ‘the ideas be properly understood for some years, which many of the ideas would have been generated by community participation alhough interim analysis is important. very difficult to implement, according in Share an Idea had been sidelined in A 2013 analysis of a participatory to some: see Sheppard, 2014). The the progression away from community democracy process in Sheffield, England, outcome document, the Christchurch ownership towards national government found that rhetoric surrounding the City Blueprint (2012), compiled by ownership’ (Carlton, 2013, p.10; Press, consultative process consistently over- the Christchurch Earthquake Recovery 2012). Some argued that the process by promised on how much citizens could influence policy and that exuberance about the potential for new systems To enable effective evaluation, a and processes, promoted by local government officials and politicians, consensus must first be reached as to raised public expectations above what was realistic in the policy and decision- the nature, scope ... and purpose of making context (Flinders and Dommett, consultation. 2013). While the rhetoric of hopefulness that surrounded Share an Idea was important in terms of kick-starting the recovery that was beginning to take Authority’s Christchurch Central which Share an Idea was turned into the shape, particularly psychologically, Development Unit, was perceived by Blueprint was a ‘step-by-step process of it may be that the enthusiasm of the some Share an Idea participants to removing control and ownership from process set up expectations beyond what reflect a top-down approach from central Christchurch’s communities’ (Carlton, was possible in this particular legislative government, rather than a faithful 2013, p.10). Similarly, Sheppard noted context. expression of the participatory and that a criticism could be levelled at those highly democratic process itself (Carlton, implementing the plan that ongoing Evaluation and measurement 2013; Hayward, 2016). consultation was not as good as it should Evaluation has often been absent in The then chief executive of the or could be (Sheppard, 2014, p.66). online consultations. Finding common Christchurch Earthquake Recovery Across this range of viewpoints is a standards for evaluation of digital Authority, Roger Sutton, described the degree of consensus that the initial Share democracy initiatives, such as defining Blueprint as directly reflecting the Share an Idea process was extremely successful, what the ‘impact’ is, can be challenging, an Idea consultation process: and an international exemplar of ‘co- and in most cases the number of creation’ (Christchurch City Council, participants and contributions is used as The creation of the new inner city, its 2011; Mathewson, 2013). However, the the only measure or indicator (Simon and smaller, greener and more accessible measure of success appears to be largely Bass, 2016). But even around ‘metrics’, an space, can be directly linked to the based on the volume of input, and the ‘honest discussion’ may prove difficult: ideas and concepts put forward by initial buy-in from the community, the community. This may not have with the number of ideas (106,000) [Practitioners] want to encourage been a consultation process in itself, being cited as proof of success. Yet, as the piloting and adoption of these but the 106,000 individual ideas Arnstein would insist, the success of a types of projects within an already were on tap and available. I believe programme depends not only on levels resistant political or legal system; there will be many a resident across of participation in the process but therefore, frank discussion around the city who can now look at the also on outcomes. This sentiment is failures seems less enticing. However, Blueprint for the city and say ‘hey, echoed by the UK innovation network learning about what doesn’t work

Page 24 – Policy Quarterly – Volume 12, Issue 4 – November 2016 and why can promote successes and exercise is difficult to determine’ (Rowe organisations, is something that New best practices going forward, so the and Frewer, 2000), leading to reliance Zealand is still grappling with, and must conversation is a critical one to have. on process evaluation. Further advice pay close attention to in the context of (govlab, 2014) is that planning the evaluation or, less improving public consultation generally. formally, the review of a consultation in The examples of Loomio and Share The type of qualitative reflection by advance is important, and should include an Idea show that there is significant Knight on the tone of the debate that at least a ‘basic description of what took potential for improving public emerged in the Wellington City Council place’ (Involve, 2005, p.48). Generally, consultation in New Zealand through the Loomio collaboration is important to ‘formal evaluation is emerging as an use of innovative methods and means record, along with counts of people integral part of good public participation of engagement. However, to meet the engaged and numbers of interactions. management’ (ibid.). One advantage expectations that increased engagement But beyond metrics and participant of undertaking an evaluation is that ‘a might engender, more thorough attention perceptions, robust review process can be an effective must be paid to the process throughout, form of risk management’ for local including management of expectations, Other, more difficult questions need councils (ibid., p.49). increasing transparency, and multiple to be asked, such as: did the process points of engagement at every step, improve the quality or legitimacy Conclusion from conceptualisation to the final of decision-making? Did it help to Despite efforts to improve public outcome. Further, more robust and far- improve the quality of debate and consultation in New Zealand, and reaching evaluation must be supported inform citizens about important promising examples of increased and implemented, at all stages of the political issues? Did it succeed in engagement, there is more that can be consultative process, in order to better improving public trust? (Simon and done to improve the quality and the understand the processes, impacts and Bass, 2016) outcomes of consultative processes. To outcomes of consultation, and to better enable effective evaluation, a consensus construct and refine the ultimate aim of Advice on systematic evaluation of must first be reached as to the nature, a consultative process – to enhance the online consultations is emerging: for scope (Cheyne, 2015) and purpose of democratic character of our political example, in Evaluating Digital Citizen consultation. Many participatory and system. Engagement (International Bank for deliberative democracy theorists would Reconstruction and Development/World urge greater decentralisation of decision Acknowledgements Bank, 2016). Equally, though, the more making, leading to greater empowerment, The authors would like to acknowledge traditional consultation approaches have in a manner that particularly seeks Professor Philippa Howden-Chapman, been little evaluated, at least in ways that to include those whose voices would Andrew Waa and Professor Simon are publicly visible. This is partly because otherwise remain unheard. Importantly, Kingham. evaluating outcomes is hard, as ‘the engagement with diverse Mäori quality of the output of any participation groups, including but not limited to iwi

References Arnstein, S.R. (1969) ‘A ladder of citizen participation’, Journal of the of submitters to the 2009 New Zealand local government LTCCP American Institute of Planners, 35 (4), pp.216-24 consultations’, Masters in Management thesis, Massey University Asquith, A. (2012) ‘The role, scope and scale of local government in Bond, S. (2007) ‘Participation, urbanism, and power’, PhD thesis, New Zealand: its prospective future’, Australian Journal of Public University of Otago Administration, 71 (1), pp.76-84 Carlton, S. (2013) ‘Share an idea, spare a thought: community Barrett, J. (2011) ‘The challenges of polyphony: a perspective on consultation in Christchurch’s time-bound post-earthquake rebuild’, New Zealand local government’, Journal of Contemporary Issues in Journal of Human Rights in the Commonwealth, 1 (2), p.4-13 Business and Government, 17 (2), pp.33-43 ChangeMakers Refugee Forum (2008) Standards for Engagement: Barrett, J. and C. Scott (2008) ‘Costs and funding of New Zealand local guidelines for central and local government, and NGOs working with authorities: the role of democratic discourse’, International Journal of refugee background communities, retrieved from http://crf.org.nz/ Public Sector Management, 21 (3), pp.295-304 Standards_for_Engagement Bassoli, M. (2012) ‘Participatory budgeting in Italy: an analysis of Cheyne, C. (2015) ‘Changing urban governance in New Zealand: public (almost democratic) participatory governance arrangements’, participation and democratic legitimacy in local authority planning International Journal of Urban and Regional Research, 36 (6), and decision-making 1989–2014’, Urban Policy and Research, 33 pp.1183-203 (4), pp.416-32 Bloomberg, P.J. (2012) ‘Opportunities for dialogue or compliance with Christchurch City Council (2011) ‘Share an Idea’, retrieved from https:// legislation? An investigation into representation and satisfaction levels www.ccc.govt.nz/the-rebuild/strategic-plans/share-an-idea/

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 25 Local Councils and Public Consultation: extending the reach of democracy

Connor, D.M. (1988) ‘A new ladder of citizen participation’, National Lewanski, R. (2013) ‘Institutionalizing deliberative democracy: the Civic Review, 77 (3), pp.249-57 “Tuscany laboratory”’, Journal of Public Deliberation, 9 (1) Controller and Auditor General (2012) Auckland Council: transition and Local Government Commission (2008) Review of the Local Government emerging challenges, retrieved from http://www.oag.govt.nz/2012/ Act 2002 and Local Electoral Act 2001, retrieved from http://www. auckland-council/docs/auckland-council.pdf lgc.govt.nz/assets/Uploads/LegReviewLGactLEactMainReport.pdf Controller and Auditor General (2015) Consulting the community about Local Government New Zealand (2012) Mythbusters: examining common local authorities’ 10-year plans, retrieved from http://www.oag.govt. assumptions about local government in New Zealand, retrieved nz/2015/ltp-consultation-documents/docs/ltp-consultation-documents. from http://www.lgnz.co.nz/assets/Uploads/Our-work/Mythbusters- pdf Examining-common-perceptions-about-local-government-in-New- Drage, J., J. McNeill and C. Cheyne (eds) (2011) Along a Fault-line: Zealand.pdf New Zealand’s changing local government landscape, Wellington: Loomio (n.d.) ‘Case study: Wellington City Council’, Loomio Blog, Dunmore retrieved from http://blog.loomio.org/case-study-wellington-city-council/ Early, L., P. Howden-Chapman and M. Russell (2015) Drivers of Urban Loomio (2013) ‘Drinking discussion online: anyone can participate’, Change, Wellington: Steele Roberts media release, 21 March, retrieved from http://wellington.scoop. Ferree, M.M., W.A. Gamson, J. Gerhards and D. Rucht (2002) ‘Four co.nz/?p=53834 models of the public sphere in modern democracies’, Theory and McNulty, S. (2013) ‘Participatory democracy? Exploring Peru’s efforts to Society, 31 (3), pp.289-24 engage civil society in local governance’, Latin American Politics and Flinders, M. and K. Dommett (2013) ‘Gap analysis: participatory Society, 55 (3), pp.69-92 democracy, public expectations and community assemblies in Mathewson, N. (2013) ‘International award for Share an Idea’, Press, 5 Sheffield’, Local Government Studies, 39 (4), pp.488-513 July, http://www.stuff.co.nz/the-press/news/city-centre/8882340/ govlab (2014) ‘Toward more inclusive lawmaking: what we know and International-award-for-Share-An-Idea still most need to know about crowdlaw’, retrieved from http:// Meredith, P. (2000) ‘Urban Mäori as “new citizens”: the quest for thegovlab.org/toward-more-inclusive-lawmaking-what-we-know-still- recognition and resources’, paper presented at the Revisioning most-need-to-know-about-crowdlaw/ Citizenship in New Zealand conference, University of Waikato, http:// Hayward, B. (2016) ‘Sustaining democracy in disaster: the seeds of lianz.waikato.ac.nz/PAPERS/paul/URBAN%20MAORI.pdf recovery’, retrieved from https://makingchristchurch.com/sustaining- Nabatchi, T. and L.B. Amsler (2014) ‘Direct public engagement in local democracy-in-disaster-the-seeds-of-recovery-390675eb26a9#. government’, American Review of Public Administration, 44 (4), izm4y2fkn 0275074013519702 Health Promotion Forum of New Zealand – Runanga Whakapiki ake i OECD (2015) OECD Regulatory Policy Outlook 2015: country profile: New te Hauora o Aotearoa (2002) TUHA–NZ: a treaty understanding of Zealand, retrieved from https://www.oecd.org/gov/regulatory-policy/ Hauora in Aotearoa–New Zealand, retrieved from http://www.hauora. New%20Zealand-web.pdf co.nz/resources/Tuhanzpdf.pdf Palacios, J.M. (2015) ‘The sex of participatory democracy: an analysis Howden-Chapman, P., R. Chapman, W. Abrahamse, S. Awatere, G. of the theoretical approaches and experiences of participatory Fougere, B. Frame, M. Krausse, B. Hayward, C. Mortimer, A. democracy from a feminist viewpoint’, Democratization, 23 (5), Stevenson and J. Logie (2011) Christchurch’s Regeneration: research pp.940-59 and science-based insights, New Zealand Centre for Sustainable Press (2012) ‘Public consultation “a farce”, say MPs’, Press, 4 December, Cities and Landcare Resarch retrieved from http://www.stuff.co.nz/the-press/news/8031904/Public- International Association for Public Participation (2014) ‘IAP2: spectrum consultation-a-farce-say-MPs of public participation’ Renn, O., T. Webler and P. Wiedemann (eds) (1995) Fairness and International Bank for Reconstruction and Development/World Bank Competence in Citizen Participation: Evaluating models for (2016) Evaluating Digital Citizen Engagement, Washington, environmental discourse, Springer retrieved from https://openknowledge.worldbank.org/bitstream/ Rivera-Muñoz, G. (2016) ‘Community resilience and post-disaster handle/10986/23752/deef-book.pdf housing recovery: a case study of the Canterbury Earthquales of Involve (2005) People and Participation: how to put citizens at the heart 2010 and 2011’, PhD thesis, University of Otago, Wellington of decision-making, retrieved from http://www.involve.org.uk/wp- Rowe, G. and L.J. Frewer (2000) ‘Public participation methods: a content/uploads/2011/03/People-and-Participation.pdf framework for evaluation’, Science, Technology, and Human Values, Knight, B. (2015) ‘How Loomio improves public behaviours’, 25 (1), pp.3-29 retrieved from https://medium.com/@taptiklis/humans-of-loomio- Rushkoff, D. (2014) ‘Loomio: the Occupy inspired app for consensus 40c411fe723a#.fmzwnuufe decision making’, retrieved from http://www.shareable.net/blog/ Knight, D.R. (2010) Local Authority Decision-making and the loomio-the-occupy-inspired-app-for-consensus-decision-making Consideration of Community Views: obligation and observance, Ryks, J., A.L. Pearson and A. Waa (2016) ‘Mapping urban Mäori: working paper VUW-NZCPL003, Wellington: New Zealand Centre for a population‐based study of Mäori heterogeneity’, New Zealand Public Law, retrieved from http://www.victoria.ac.nz/law/centres/nzcpl/ Geographer, 72 (1), pp.28-40 publications/working-papers/publications/VUW-NZCPL-003.pdf

Page 26 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Sharp, A. (2003) ‘Traditional authority and the legitimation crisis of urban Strathmore Park (2013) ‘Wellington City Council alcohol reform tribes: the Waipareira case’, Ethnologies comparées, 6 (Printemps: consultation a sham?’, blog post Océanie, début de siècle) Sutton, R. (2014) ‘A blank canvas for new beginnings’, in B. Bennett, J. Sheppard, D. (2014) ‘To plan or not to plan’, in B. Bennett, J. Dann, E. Dann, E. Johnson and R. Reynolds (eds), Once in a Lifetime: city- Johnson and R. Reynolds (eds), Once in a Lifetime: city-building after building after disaster in Christchurch, Christchurch: Freerange Press disaster in Christchurch, Christchurch: Freerange Press Waitangi Tribunal (2014) Te Paparahi o te Raki Inquiry, retrieved from Siegfried, A. (2014) ‘From Occupy to online democracy: the Loomio http://waitangitribunal.govt.nz/inquiries/district-inquiries/te-paparahi-o- story’, retrieved from https://www.opendemocracy.net/participation- te-raki-northland/ now/alina-siegfried/from-occupy-to-online-democracy-loomio-story Woodward, A. (2016) ‘The Island Bay cycleway: terribly important Simon, J. and T. Bass (2016) ‘Digital democracy: where to next?’, and nothing new’, retrieved from https://blogs.otago.ac.nz/ retrieved from http://www.nesta.org.uk/blog/digital-democracy-where- pubhealthexpert/2016/03/07/the-island-bay-cycleway-terribly- next important-and-nothing-new/ Building Auckland’s policy and management capability 2017 School of Government Victoria University courses in Auckland

GOVT 522 Policy Analysis and Advising: GOVT 531 Local Government: GOVT 523 Policy Methods and Practice: 14-15 March and 9-10 May 4-5 April and 23-24 May 27-28 July and 31 August-1 September Courses are held at Victoria University’s Auckland Campus on Level 4, The Chancery, 50 Kitchener Street, Auckland. Each course requires attendance at two modules – each module is 1.5 days: Day 1 9.30am to 5.00pm, Day 2 9.30am to 1.00pm, Day 3 9.30am to 5.00pm and Day 4 9.30am to 1.00pm.

Professor Claudia Scott is Professor of Public Policy at VUW GOVT 522: Policy Analysis and Advising and has taught at Auckland University, the Australia and This course extends your knowledge, skills, competencies and New Zealand School of Government and Victoria University. behaviours that are required to craft quality policy analysis and advice She has teaching and research interests in policy analysis for organisations, government and other sectors. Topics include problem and advising, strategic management, local government definition, policy option design, evaluative criteria, policy implementation policy and planning and regulatory policy. She has delivered and strategies and practice to enhance quality, capability and performance. policy courses for academic credit and professional development in New Zealand and Australia The course is taught by Professor Claudia Scott in two 1.5 day modules: 9.30-5.00pm on 14 March and 9.30-1.00pm on 15 March, with similar Dr Mike Reid, Principal Policy Adviser at Local Government timings for 9-10 May. New Zealand, will contribute to the course as will other experienced practitioners drawn from the public and private GOVT 531 Local Government sectors. Mike holds an MPP and a PhD from Victoria The course is designed for individuals working in local and central University, contributes to seminars, workshops and government and others who wish to learn more about current policy, conferences and has published research on various management and governance challenges in the sector. Emphasis is given to governance and policy issues. both New Zealand and international experiences surrounding the functions, structures and financing arrangements, strategic planning practices, Email: [email protected] the challenges associated with growth and decline and the roles and Dr Amanda Wolf is a Senior Lecturer in public policy. Amanda relationships between local and central government, Māori, and the private leads in public policy and research design and methodology at and community sectors. Victoria and ANZSOG. She researches and publishes on the This course is taught by Dr Mike Reid and Professor Claudia Scott in two ways that innovative uses of social science inform the selection 1.5 day modules: 9.30-5.00pm on 4 April and 9.30-1.00pm on 5 April, with and application of policy methods and the role of information similar timings for 23-24 May. and evidence in enhancing policy knowledge and practices. Email: [email protected] GOVT 523 Policy Methods and Practice You will learn the quantitative and qualitative techniques for collecting, analysing, interpreting and applying information and evidence to advance You can take one or more courses to build your skills in Public policy objectives, particularly under conditions of complexity and Policy or Public Management. The courses provide stepping stones uncertainty and in light of given task requirements. to a Post-Graduate Certificate (4 courses), a Diploma (8 courses) and Master’s (12 courses) in Public Policy or Public Management. This course is taught by Dr Amanda Wolf in two 1.5 day modules: 9.30-5.00pm on 27 July and 9.30-1.00pm on 28 July, with similar Enrolment enquiries: [email protected] timings for 31 August-1 September. Academic enquiries: [email protected]

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 27 Chris Berry

The Poll Provisions and Local Government Reform in Western Australia Preface One of the most hotly contested Local government reform is on the agenda of many countries, issues is the role of local referenda. For much of the last 150 years a fundamental particularly those with local government systems based on tenet of local government law in New the Anglo-Saxon approach. In many of these jurisdictions, Zealand has been the right of residents to decide the future of their locality from Wales to the Republic of Ireland, to most of the through a binding referendum. Indeed, for the second half of the 20th century Australian states and New Zealand, the dominant reform this was a defining difference between narrative is structural change, and the challenge faced in Labour and National governments, with Labour governments looking to weaken most of these jurisdictions is how to marry the apparent the referenda requirements in order to national interest in creating bigger councils with the desire promote consolidation and National governments focused on retaining them. of citizens to have a say about how their towns and districts Today the roles are reversed, but the issue is as topical as ever, with the local are governed; it is a debate that inevitably finds governments’ government sector recently asking for technical experts at odds with local citizens. The resulting binding referenda to be reinstated. Given the issue’s currency, this article challenge has led to a range of new approaches to structural from Chris Berry provides an insight into how the right to hold referenda reform, optimistically designed to meet the needs of both. has had an impact on local government reform in Western Australia – lessons that should be helpful given the content Since completing a Doctor of Philosophy on local government boundaries, Chris Berry has spent nearly 30 years working in the Western Australian local government sector, and now consults to local of the Local Government Act 2002 governments in Western Australia. Amendment Bill which is currently with

Page 28 – Policy Quarterly – Volume 12, Issue 4 – November 2016 the Local Government and Environment 1995 can be triggered by a petition signed who vote thereat is not less than one- Committee. by at least 250 individual electors or 10% third of the number entitled to vote Mike Reid and Michael Macaulay, of total electors (whichever is the lesser) thereat and a majority of the valid Guest Editors of a district affected by an amalgamation votes recorded at the poll are against proposal.1 The results are binding, and the proposal, the Minister shall not Introduction the proposed amalgamation is defeated present the petition containing it to The local government system in Western if a poll is held and at least 50% of the the Governor. Australia has two unique characteristics. electors of one of the districts vote in the It is the only state in Australia where poll and a majority of those voting oppose The timing – 1975 – of this there has not been significant reform the amalgamation. amendment to the Local Government of the sector. In addition, it is the only The 1995 act provisions replaced Act 1960 is significant, as it followed on state where legislation contains binding and amended provisions that were from several major boundary inquiries, provisions for a poll of electors on local first introduced through the Local including a royal commission on government amalgamations. It would Government Act Amendment Act (No. metropolitan boundaries which reported be reasonable to conclude that these two 4) 1975. Under the 1975 amendments, in 1975. These reports recommended characteristics are linked. provision was made for the presentation that the number of metropolitan local Referenda – the holding of a direct vote on a specific issue – are in common use around the world at every level of The current poll provisions of the government, with the June 2016 Brexit poll being a well-known example. A Western Australia Local Government distinction might be made between Act 1995 can be triggered by a petition mandatory referenda, such as those provided for under certain circumstances signed by at least 250 individual electors in Western Australia’s Local Government Act 1995, with conditions to be met for or 10% of total electors (whichever is a binding result, and optional referenda, the lesser) of a district affected by an initiated by local government, which are non-binding and indicative, possibly amalgamation proposal. assisting local government decision making. Further, reference might be made to the ‘popular referendum’, where the means is provided for a petition of a petition where the adjustment of governments be reduced from 28 (in signed by a certain minimum number of municipal boundaries, the abolition of 1968) to 17, 18 or 22 respectively. The registered voters to force a public vote, a municipal district or the union of two proposed implementation of the royal a form of direct democracy (Wikipedia, or more adjoining municipalities was commission recommendations by the 2016; ACE, 2016). proposed. Unless councils had jointly then government was a direct threat to the Although Western Australia is the signed the petition, it was mandatory future of the smaller local governments in only state in Australia with legislation for ratepayers of each affected district the metropolitan area, including the inner provisions governing a binding elector’s to be given the opportunity to demand urban City of Subiaco (1976 population: poll on local government amalgamations, a referendum on the proposals, and 16,100). While the city would continue there are poll provisions in place in New only one third of the electorate were as a local government entity under the Zealand (Local Government Act 2002, required to turn out to vote to create a royal commission recommendations, schedule 3) and in some parts of Canada binding outcome (Department of Local a significant portion (known locally as (such as in British Columbia: Local Government, 1976, p.21). Specifically, the Crawley Corridor) was proposed to Government Act 1996, s8). This article section 30A of Local Government Act be ceded to the neighbouring City of looks at the history and effect of the 1960–1975 provided that: Nedlands. poll provisions in Western Australia, and A subsequent amendment to the considers the question as to whether the 4) at least fifty per centum of the 1960 act (section 30A) became known poll provisions have impeded structural number of electors of a municipality as the ‘Dadour amendment’.2 The MP for reform of the local government sector in which will be directly affected … Subiaco, Tom Dadour, who was also a the state. or fifty of them, whichever is the sitting Subiaco councillor, had previously lesser number, can demand that the called for an amendment to the Local Background proposal be put to a poll. … Government Act in a speech to Parliament The current poll provisions of the (6) (e) if at the poll in any in 1973, arguing that boundary changes Western Australia Local Government Act municipality the number of electors should only be made after a poll of

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 29 The Poll Provisions and Local Government Reform in Western Australia

residents. Dadour continued to lobby Town and Shire of Albany had been provisions were altered, the spirit of the vigorously on this proposal, including mooted for some time. A community Dadour provisions was retained, but to the new premier after the 1974 state group known as the Albany One the key numbers were changed (50% of election, his efforts culminating in what Movement submitted a petition for their voters for a binding result rather than became known as the Dadour Bill being amalgamation to the Local Government one third) to make the process ‘more presented to Parliament in early 1975. It Boundaries Commission in 1989. The democratic’. Another important change provided for 50 or more ratepayers to commission subsequently recommended saw the poll provision removed for demand a poll on a boundary change, the creation of a local government boundary changes and retained only for and required one third of eligible based on the urban areas of the town amalgamations. This change would have voters to vote, with a simple majority and shire. A poll involving both town major ramifications when metropolitan voting ‘no’ to defeat the proposal and shire electors defeated the proposal boundary changes were being progressed (Spillman, 1985, p.332). The proposed (Department of Local Government, in 2015. amendment was opposed by the Labor 1987).3 If, on completing an inquiry, the opposition of the time. The provisions The only amalgamation to occur after Local Government Advisory Board were seen as diminishing ministerial the Dadour amendment (and prior to recommends to the minister that an responsibility, ‘tak[ing] away from the the 1995 version of the legislation) was amalgamation proposal should proceed, Minister the right that all Ministers for the creation of the City of Kalgoorlie– the poll provisions come into play. Before Local Government have had up to the Boulder in 1989. As both the Town of the minister can consider any such present. It seeks to take away that power Kalgoorlie and Shire of Boulder agreed recommendation, the board must inform for no good reason, and it does appear to the merger by council resolution on affected electors of their right to hold to take some of the control from the the same date (14 November 1988) and a poll on the proposal. A valid request Government in exercising responsibilities a jointly signed petition was forwarded for a poll must be signed by at least 250 individual electors or 10% of total electors (whichever is the lesser) of a The evidence shows that most district. If a poll is held and at least 50% of the electors of one of the districts vote electors, or at least those electors in the poll and a majority of those voting oppose the amalgamation, the minister who care enough to turn out to vote must reject the board’s recommendation on such occasions, do not support of amalgamation. Under clause 9 of schedule 2.1 of the act, the board is to amalgamations. determine the question to be answered by electors and to prepare a summary case for each way of answering the question. The government amended the of government’ (Legislative Assembly of to the governor (Department of Local legislation in 1998 ‘to make it clear that Western Australia, 1975, p.1249). Government, 1992, p.3), no poll was where a poll is requested in relation to When the City of Nedlands followed required. a proposed amalgamation of two or up the royal commission recommendation more local governments the poll applies with a petition for boundary change A new Local Government Act only to the local government which in October 1975, hundreds of Subiaco After a comprehensive review and has received the request’ (Legislative ratepayers supported the demand for a consultation process, the new Local Assembly of Western Australia, 1998, poll via counter petition. Following an Government Act 1995 came into effect p.2456), effectively changing the extensive city campaign leading up to on 1 July 1996 (Department of Local application of the poll from ‘the districts’ the March 1976 referendum, nearly 60% Government, 1996, p.8). A new process to ‘that district’, even though only one of of Subiaco electors turned out to vote, for local government boundary change the districts would have to return a ‘no’ with 94.4% voting ‘no’ to the proposed was established, with a Local Government vote to stop the proposal. boundary change. The poll provisions Advisory Board replacing the former Local These polls, like many elections, had had their first success in blocking a Government Boundaries Commission. often turn into battles of vested interests, local government boundary change. Any proposal for boundary change or with claims and counter claims often After the Subiaco referendum the amalgamation, which could come from based on emotive arguments rather poll provisions were used in a number the minister, the community or from a than hard facts. In most circumstances of other areas, and each time the local government, must be referred to the a referendum must have a 50% ‘yes’ vote proposed boundary change was stopped. board for review. Schedule 2.1 of the act to carry the proposition, but in the case For example, the amalgamation of the sets out the inquiry process and relevant of these local government amalgamation ‘doughnut’ local governments of the criteria. While the specifics of the poll polls the obverse is true and a 50%

Page 30 – Policy Quarterly – Volume 12, Issue 4 – November 2016 turnout and a 50% ‘no’ vote is required Table 1. Amalgamation Poll results, Western Australia 1995-2015 to stop a proposal. The default position Phase No. of polls No. valid polls No. where the No. where the is that the amalgamation will proceed. amalgamations amalgamations The parties that oppose a particular defeated proceeded amalgamation therefore have to work 1. Pre 2009 Reform 7 4 4 3 across the community to ensure they initiative muster enough support to generate the 2. State-wide Reform sufficient numbers to defeat the proposal. 5 3 3 2 Perversely, where such polls attract a large period 2009 -2013 number (but not necessarily a majority) 3. Metropolitan Reform 5 3 3 0* of ‘yes’ voters, such voters increase the period 2013 -2015 likelihood of a binding poll result by their TOTAL 17 10 10 5 participation. Some of the stakeholders *While two polls were not valid, the amalgamation was defeated by valid polls in the other amalgamating local government. who better understood the provisions have realised that it is better for those in Phase 1: Pre the 2009 reform initiative With this conclusive poll outcome, favour of a proposal to not vote to reduce The first test for the 1995 act poll the City of Geraldton and Shire of the possibility of a binding poll result. provisions was in the Shire of Albany in Greenough continued as separate entities 1998 (1997 population 13,165), where through 1999. The chief executive officer Polls under the Local Government Act 1995 the poll on the proposed amalgamation of the City of Geraldton observed that The poll provisions of the Local with the Town of Albany failed to attract ‘the current situation is so unsustainable Government Act 1995 have been well the necessary 50% voter turnout and the unification will occur at some time in tested, with 17 polls conducted between amalgamation into the City of Albany the future through boundary changes 1998 and 2015 (Tables 1–4). These polls proceeded. or an amalgamation agreement between have been categorised into three reform The amalgamation of the urban the shire and the city’. But he would not eras: the period prior to the 2009 state- centre of Geraldton and the ‘doughnut’ be around to see it, as his contract was wide reform process commencing, the Shire of Greenough in the Mid West terminated in April 2000 after just 16 period of state-wide reform (2009–13) region of Western Australia was much months’ tenure.5 The mayor did not run and the period of metropolitan reform more controversial. The Greenough at the next council election in October (2013–15). poll, a postal ballot overseen by the 2001. The evidence shows that most Western Australia Electoral Commission, It is perhaps not surprising that electors, or at least those electors who was characterised by an extensive amalgamation eventually occurred in care enough to turn out to vote on such media campaign conducted by the 2006. Once again there was a petition occasions, do not support amalgamations. City of Geraldton which included local for a poll of Greenough residents, but Most amalgamation referenda have been television advertising and newspaper without the acrimonious campaign of defeated, although seven proposals did advertisements. The extraordinary part 1999 fewer than 50% of the Greenough not attract sufficient turnout to yield a of the campaign was the unprecedented electors voted, so the poll result was not binding result (although the majority negative message promoted by the city, binding. of those participating voted ‘no’). The based around discouraging Greenough In retrospect, the amalgamation likelihood of a binding ‘no’ vote is greater electors from voting to ensure a non- of the City of Geraldton and Shire of in the less populous councils. This binding poll result. It included full-page Greenough to form the City of Geraldton– particularly characterised the polls held local press advertisements with banner Greenough could be judged to be a prior to the metropolitan reform phase: headlines such as: ‘Plea for unity – significant success. Community benefits where the boundary changes were defeated don’t vote’; ‘Let’s Grow Together, Let’s and outcomes included new leadership (seven councils), the average electors roll Grow Today. Greenough ballot, throw it with a new organisational structure which was 1,768; where the boundary changes away’; and ‘Stronger if we unite. Support created capacity to expand the provision proceeded (five councils) the average unification and put the ballot in the bin’.4 of services and improve delivery and electors roll was 8,517. Paradoxically, it This campaign was extensively criticised standards of existing ones. The new might be argued that it is in the smaller by the local press, and by local electors on structure incorporated key functions local governments, where amalgamation both sides of the boundary. As has been that were lacking in the old entities and is most required, that amalgamation is noted, an amalgamation poll referendum applied additional resources to areas that more likely to be defeated by a poll, given must have a 50% turnout and a 50% ‘no’ had previously been under-resourced, the lower numbers required to enforce vote to stop a proposal. The outcome of including tourism and marketing, a binding outcome. The more recent the Greenough poll was convincing on economic development, environmental metropolitan amalgamation polls of 2015 both counts, with nearly 5,000 of the sustainability and engagement with (Table 4) were undertaken in a different 7,763 ballots returned (74%), and 90% of community groups (Department of Local reform context. those cast against the merger. Government, 2010). The new entity has

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 31 The Poll Provisions and Local Government Reform in Western Australia won significant awards, and as further Phase 3: Metropolitan reform 2013–15 subsumed by a continuing entity though a testimony to that success the adjoining On 30 July 2013, following on from the boundary adjustment, thus not triggering Shire of Mullewa (population 1,000) recommendations of the Metropolitan the poll provisions. Some of the proposals amalgamated with the City of Geraldton– Local Government Review Panel, the received by the board used this approach, Greenough in 2011 to form the City of state government announced plans to and some of the recommendations of the Greater Geraldton (Office of the Minister reduce the number of metropolitan local board were also based on this approach, for Local Government, 2011). governments from 30 to 14, as well as to concerned as it was with recommending Held on the same day in 1999, a poll amend the act so that the poll provisions on the best boundaries rather than on of electors of the Shire of Northam had a could not be used in metropolitan Perth the mechanism of their achievement. very similar outcome, with nearly 1,700 (Department of Local Government This difference in implementation was of a potential 2,300 ballots cast (74%), and Communities, 2016). While the seen as an inequity, with the opposition with 95% against the merger. The poll local government sector was expecting spokesperson moving in Parliament: was conducted by the Shire of Northam, the government to announce plans for which at the same time was campaigning major metropolitan reform, the removal That this house – (a) condemns the against amalgamation. This caused of the long-standing poll provisions Premier and the Minister for Local concern, as people were uncomfortable was a surprise. The Local Government Government for allowing, through its forced amalgamation process, some communities in the metropolitan The poll provisions of the Western area an opportunity to have a poll Australia Local Government Act 1995 under the Dadour provisions in the Local Government Act 1995 about can and do stop amalgamations, and their local council’s future, while others have not been given that have done so as recently as 2015. democratic right; and (b) further, supports all affected communities having a right to a poll on their with the primary opponents having a Association president described the council’s future. (Legislative Assembly direct role in ensuring that the poll was poll provisions as the ‘safety net for the of Western Australia, 2014, p.8879) conducted in a fair and open manner. community’ and announced that their This situation led to further legislative arbitrary suspension would be opposed. Some councils had non-binding change relating to the running of polls An opposition MP moved a motion in polls prior to the board concluding on amalgamation: the Local Government Parliament to support the retention of the its recommendations, including in Act was amended in 2004 to provide Dadour local poll provision in the Local conjunction with their 2013 postal for the Western Australia Electoral Government Act in September 2013, elections. Commission to be responsible for the leading to a long debate in the chamber The minister subsequently accepted conduct of such polls (clause 9(2)). All about the origins, intentions and effects of all but two of the report’s key boundary amalgamation polls since 2004 have been the poll provisions (Legislative Assembly recommendations.6 On 24 December conducted by the Western Australian of Western Australia, 2013, pp.4365-94). 2014 governor’s orders to change the Electoral Commission. Despite the political debates, the local boundaries of nine local government government reform process continued. districts and abolish six local governments Phase 2: State-wide reform 2009–13 The Local Government Advisory Board were gazetted. Naturally this caused a In February 2009 a state government subsequently received 38 proposals for public outcry, particularly since many agenda for voluntary local government amalgamations and boundary changes communities would not have access to reform was initiated. Funding was offered to districts in metropolitan Perth in poll provisions to have their say. Three to local governments to form regional October 2013, with 12 proposals from the proposed amalgamations, involving six transition groups (RTGs), which were minister for local government, 25 from metropolitan councils, were subject to to undertake cost–benefit analyses of local governments and one from electors. the poll provisions of the act. Petitions the benefits to the community (Berry, After an extensive public consultation for polls were subsequently received for 2012). After the business planning process the board submitted its report five of the affected local governments, process was completed by a number to the minister in September 2014, with Cockburn, Kwinana, East Fremantle, of groups, amalgamation proposals recommendations for amalgamations and South Perth and Victoria Park. The Local were subsequently defeated in polls in boundary adjustments that would reduce Government Advisory Board had a role in Perenjori, Westonia and Cuballing (Table Perth’s 30 councils to 16. The key point preparing statements for the ‘yes’ and ‘no’ 3). Amalgamation of the Shire of Mullewa here is that as well as amalgamations, cases for the polls. There were significant and the City of Geraldton–Greenough there are also provisions in the legislation community campaigns for the ‘no’ case, took effect on 1 July 2011. which allow for local governments to be some of which were underpinned by

Page 32 – Policy Quarterly – Volume 12, Issue 4 – November 2016 significant council resources and some the state government put its local can and do stop amalgamations, and of which were supported by government government reform agenda on hold on have done so as recently as 2015. But the backbenchers. There was no comparable 17 February 2015 and governor’s orders outcome is never a certainty and depends campaign waged by any party in support for boundary adjustments not supported on the context. In the smaller local of the reforms. by the councils were revoked (Offices governments, amalgamation proposals On 7 February 2015 the proposed of the Premier and Minister for Local have often been defeated, and this is a amalgamations were defeated through Government). direct reflection of the relatively small valid polls in three of the local numbers required for a binding outcome. governments (Kwinana, East Fremantle Review and future directions In other cases, mainly in the larger local and South Perth) (Table 4). With the The poll provisions of the Western governments, amalgamations have on proposed reforms now in disarray, Australia Local Government Act 1995 occasion proceeded because of the much

Table 2: POLLS ON AMALGAMATION PROPOSALS – Pre 2009 reform initiative

Local Proposed Population Date Of Voting Data For Local Government Area Requesting Poll Outcome Government Amalgamation Of Proposed Poll Area Partner New Entity Requesting Number Total Number of Number of Percentage Number of Poll of Number No Votes Yes Votes of Electors No Votes as Electors Of Votes Voting a Percentage of the Total Number of Votes

Northam Northam 10,100 28 April 2,539 596 555 41 23% 93% Amalgamation Shire Town 2007 Invalid poll proceeded

Greenough Geraldton City 33,565 2 8,931 2,564 2,045 519 29% 80% Amalgamation Shire December Invalid poll proceeded 2006

Narrogin Narrogin Town 5,436 26 596 454 325 129 76% 72% Amalgamation Shire February Valid poll defeated 2004

Narrogin Narrogin Town 5,565 17 March 619 551 502 49 89% 91% Amalgamation Shire 1999 Valid poll defeated

Greenough Geraldton City 31,763 20 7,763 4,891 4,410 479 63% 90% Amalgamation Shire February Valid poll defeated 1999

Northam Northam 9,948 20 2,270 1,680 1,591 89 74% 95% Amalgamation Shire Town February Valid poll defeated 1999

Albany Albany Town 28,668 28 9,114 3,983 1,713 2,267 43.7% 57% Amalgamation Shire February Invalid poll proceeded 1998

Albany Annexation of No data 6 May No data No data No data No data Less than 75% Annexation Shire the southern currently 1989 currently currently currently currently 33% defeated portions of available available available available available Invalid poll the Shires of Jerramungup and Gnowangerup to the Shire of Albany

Albany 1987 56% 80% Shire

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 33 The Poll Provisions and Local Government Reform in Western Australia

Table 3: POLLS ON AMALGAMATION PROPOSALS State-wide Reform 2009 -2013

Local Proposed Population Date Of Voting Data For Local Government Area Requesting Poll Outcome Government Amalgamation Of Proposed Poll Area Partner New Entity Requesting Number of Total Number of Number of Percentage Number of No votes Poll electors number of No votes Yes votes of electors as a percentage of votes voting the total number of votes

Cuballing Narrogin Shire 6,138 13 April 559 449 353 96 80% 79% Amalgamation Narrogin Town 2013 Valid poll defeated

Westonia Yilgarn 2,015 14 April 200 154 126 28 77% - 82% Amalgamation 2012 Valid poll defeated

Geraldton- Mullewa 38,773 16 April 22,128 7,903 5721 2,158 36% 72% Amalgamation Greenough 2011 Invalid poll proceeded

Mullewa Geraldton- 38,773 16 April 471 167 139 28 35% 83% Amalgamation Greenough 2011 Invalid poll proceeded

Perenjori Mingenew 2,607 16 April 368 296 273 20 80% 92% Amalgamation Morawa 2011 Valid poll defeated Three Springs

Table 4: POLLS ON AMALGAMATION PROPOSALS Phase 3: Metropolitan reform 2013-2015

Local Proposed Population Date Of Voting Data For Local Government Area Requesting Poll Outcome Government Amalgamation Of Proposed Poll Area Partner New Entity Requesting Number Total Number Of Number Percentage Number Of Poll Of Number No Votes Of Yes Of Electors No Votes As Electors Of Votes Votes Voting A Percentage Of The Total Number Of Votes

East Fremantle 7 February 5,178 2825 2145 680 54.7% 76% Amalgamation Fremantle 2015 defeated

Cockburn Kwinana 7 February 61,888 22,398 18,654 3744 36.3% 83% Amalgamation 2015 defeated (by Kwinana result)

Kwinana Cockburn 7 February 18,209 9618 8462 1156 52.9% 88% Amalgamation 2015 defeated

South Victoria 7 26,789 13,598 10,572 3026 50.8% 78% Amalgamation Perth Park February defeated 2015

Victoria South Perth 7 20,136 7627 4697 2930 38.0% 62% Amalgamation Park February defeated (by 2015 South Perth result) larger number of voters required to turn albeit in their amended, 1995 form. In a the one and only boundary change that out. The metropolitan reform polls of final irony, the Crawley Corridor, that part the state government achieved after years 2015 showed, however, that it was possible of the City of Subiaco that Tom Dadour of promoting metropolitan reform. to get binding ‘no’ votes in more populous had sought to protect when introducing local governments. these poll provisions, was transferred to Postscript The Dadour poll provisions still exist the City of Perth from 1 July 2016 through Berry highlights the damage that can be within the state’s Local Government Act, the City of Perth Act 2016, thus becoming done as a result of poorly thought-through

Page 34 – Policy Quarterly – Volume 12, Issue 4 – November 2016 legislation. New Zealand councils are government’s desire to achieve economies Government Advisory Board (Local Government Act 1995, schedule 2.1). currently facing the fourth major change of scale by joining services together and 2 While many amendments to local government legislation can be attributed to particular individuals or councils, the Dadour to their core legislation in the last eight local governments’ desires to ensure such provisions are perhaps the most famous in Western Australia. years. The changes, which intend to restore decisions are made with the agreement of 3 Note that the Town and Shire of Albany amalgamated on 1 July 1998 to form the City of Albany. binding referenda for consolidation of citizens. 4 Geraldton Guardian, 3 Feb. 1999, p.11; 1 Feb., p.9; 27 Jan., p.12; 1 Feb., p.11. political or legal boundaries, exempt any Mike Reid and Michael Macaulay, 5 Ibid., 22 Feb. 1999, p.1; 10 April 2000, p.1. consolidation of council services, and Guest Editors 6 The City of Perth Act came into effect on 1 July 2016. 7 7 The proposal is for any polls to require a majority of residents are as a result highly contentious. At in all affected councils to support a reorganisation. The the time of writing efforts are underway 1 Amalgamations may be proposed by the minister, local traditional approach has been for separate polls to be held in governments or affected electors, and are subject to an each district and that a reorganisation will only occur where to find a middle ground between the inquiry and recommendation to the minister by the Local each district votes in support, not a majority of the total.

References ACE (2016) ‘Direct democracy: referendums’, Electoral Knowledge Legislative Assembly of Western Australia (1998) Hansard, 22 October, Network, http://aceproject.org/ace-en/focus/direct-democracy/ http://www.parliament.wa.gov.au/Hansard/HANS35.NSF/NFS/b2a6a3f referendums, accessed 6 July 2016. b8d49a102482566aa00125b4c?OpenDocument Berry (2012) ‘Regional transition groups and regional collaborative Legislative Assembly of Western Australia (2013) Hansard, 18 groups: a voluntary approach to structural reform in Western September, http://www.parliament.wa.gov.au/Hansard/hansard. Australia’, Commonwealth Journal of Local Governance, 10, December nsf/0/58041d5862eed80a48257bec002a3374/$FILE/ 2011–June 2012, pp.159-64 A39+S1+20130918+p4365b-4394a.pdf Department of Local Government (1976) Annual Report 1976, Legislative Assembly of Western Australia (2014) Hansard, 26 November, Government of Western Australia http://www.parliament.wa.gov.au/Hansard/hansard.nsf/0/b5e8e9b8a3 Department of Local Government (1987) Annual Report 1987, 3e1f8048257dc8000d93d9/$FILE/A39+S1+20141126+p8879b- Government of Western Australia 8894a.pdf Department of Local Government (1992) The Amalgamation of the Office of the Minister for Local Government (2011) ‘Birth of City Kalgoorlie and Boulder Councils: a history and guidance for the future, of Greater Geraldton’, media release, 1 July, https://www. July, Government of Western Australia mediastatements.wa.gov.au/Pages/Barnett/2011/07/Birth-of-City-of- Department of Local Government (1996) Annual Report 1996, Greater-Geraldton.aspx, accessed 6 July 2016 Government of Western Australia Offices of the Premier and Minister for Local Government (2015) ‘Future Department of Local Government (2010) Reform Case Studies: of LG reform now rests with councils’, media release, 17 February, amalgamation in Western Australia: City of Geraldton–Greenough https://www.mediastatements.wa.gov.au/Pages/Barnett/2015/02/ Shire of Northam, May, West Perth: Government of Western Australia Future-of-LG-reform-now-rests-with-councils--.aspx, accessed 18 July Department of Local Government and Communities (2016) ‘Local 2016 government reform’, https://www.dlgc.wa.gov.au/CommunityInitiatives/ Spillman, K. (1985) Identity Prized: a history of Subiaco, Nedlands, WA: Pages/Local-Government-Reform.aspx/Page.aspx, accessed 6 August, UWA Publishing 2013. Wikipedia (2016) ‘Popular referenda’, Wikipedia, https://en.wikipedia.org/ Legislative Assembly of Western Australia (1975) Hansard, 29 April, wiki/Popular_referendum, accessed 6 July 2016 http://www.parliament.wa.gov.au/Hansard/hansard1870to1995.nsf/ vwMainBackground/19750429_Assembly.pdf/$File/19750429_ Assembly.pdf MeGov courses stimulate collaboration with the University of Indonesia

The School of Government received a promoting in its government reforms. Highly week-long visit in November by Dr Roy successful meetings were held with a range Salomo and Zuliansyah Zulkarnain (Ichan) of staff, other VUW offices and external from the University of Indonesia to discuss stakeholders, increasing understanding and School of collaboration, specifically about establishing agreement around a possible curriculum. Government a double Master’s degree in e-Government VUW’s Master’s in e-Government started in between VUW and UI, Indonesia’s leading 2013 and is an innovative degree of which university. This visit followed an earlier there are only few in the world. NEWS visit from UI in 2015. E-government is one of several capabilities that Indonesia is

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 35 Peter McKinlay

Community Governance The theme of this article is current developments in There are three principal elements to a community governance approach, only community governance (see, for example, Rolfe, 2016), but one of which is picked up in virtually all it comes with a warning: this is an area where definitions current New Zealand consultation and engagement practice. The three elements are extremely difficult and it is easy to become distracted by are: • the council seeking feedback from its semantics, rather than focused on the substance. Discussion communities on council proposals; is further complicated by the variety of practice, the many • the community seeking dialogue with the council on initiatives different approaches which can come under the umbrella of which the community wishes to put in place (the opportunity to community governance, and the formal responsibilities of make submissions on a long-term local government in different jurisdictions: local government plan or annual plan falls short of a community governance approach for in England and Wales has significant social service delivery a number of reasons, including time responsibilities (albeit typically under fairly tight government constraints and lack of opportunity for genuine dialogue); requirements), but in both Australia and New Zealand local • dialogue within a council’s community or communities government’s actual involvement in social service delivery themselves in order to arrive at is relatively minimal, although Australian local government a representative view on what it is the community wishes to see does have a role in care both of older people and of children, take place – a contrast with the especially in the provision of childcare centres. current situation, in which input from a community level is typically from individuals or groups with Peter McKinlay has worked for many years nationally and internationally as a researcher and advisor no specific mandate to speak on on the role and function of local government. He is executive director of McKinlay Douglas Ltd and a fellow of the Royal Society of Arts. behalf of the community as a

Page 36 – Policy Quarterly – Volume 12, Issue 4 – November 2016 whole (especially when it affects a given to decision-making and action by it over to individual councils to work geographic community rather than a communities. Treated in isolation, this through with their communities what community of interest). purpose can be seen as virtually a charter their preferences are, and over time for A central point to consider is for participatory democracy. In practice, a shared understanding of good practice whether local government involvement the second leg of the purpose section, to develop through the sector. Guidance in community governance should with its focus on meeting ‘the current and can, however, be found in experience depend on the explicit statutory powers future needs of communities for good- elsewhere, including the following of local government and be confined quality local infrastructure, local public description of engagement taken from a to those services for which it has actual services, and performance of regulatory good practice guide to achieving a whole- responsibility, or whether instead it is a functions in a way that is most cost- of-organisation approach to best value function of being the only elected entity effective for households and businesses’, prepared for Victorian local government whose principal purpose is serving the has been much more prominent, in 2007: communities which provide its electoral especially in central government’s mandate. From an elected member relationship with the local government Engagement is an outcome which can perspective, the difference is between sector. arise out of consultation processes, being elected as part of the governing In formal terms New Zealand or other interactions occurring body of a specific entity with a limited local government’s interaction with its between a local government and its range of functions, and being elected as a community leader, one of whose roles is being a member of that governing There are differences between local body. In terms of accountability, it can be loosely seen as a choice between government in New Zealand and Victoria accountability to a statutory function which has remained little changed for ... but the basic statutory understanding decades (while the world around it has of the relationship between councils and changed dramatically), or accountability to the community for providing their communities is broadly similar ... leadership to deal with the complex issues communities face now and in the future. This is a relatively recent distinction, communities has largely been through community, such as participation the significance of which is still being statutorily specified requirements and the gathering and provision of worked through, with the majority of for consultation, which have often information. Engagement is achieved elected members and observers of local been less than satisfactory in terms of when the community is and feels government almost certainly yet to fully building trust and confidence between part of the overall governance of understand the difference between the councils and their communities (see that community. Local governments two roles and why the difference matters. the trenchant criticism in chapter 15 have an important role in building One reason is that the community of the report of the local government stronger communities, and engaging leadership role is emerging in a variety rates inquiry (Local Government Rates communities is a key means to doing of different ways and almost invariably Inquiry, 2007)). Practice is beginning so. (Victorian Corporate Planners outside the conventional statutory to change both on the part of councils Network, n.d., p.12, emphasis added) planning, reporting and accountability themselves and in legislation (despite requirements imposed on local the present government’s emphasis on There are differences between local government, in part because, at least in local infrastructure and services), with government in New Zealand and Victoria, the early stages, a community leadership an amendment to the Local Government most notably the fact that Australia is a role may make only a minimal demand Act in 2014 requiring councils to prepare federal system, but the basic statutory on council resources. a significance and engagement policy understanding of the relationship For New Zealand councils and their which is required to include ‘how the local between councils and their communities elected members, a useful starting point authority will respond to community is broadly similar in the two jurisdictions. is the first leg of the purpose of local preferences about engagement on This lends force to the suggestion that government as stated in section 10 of the decisions relating to specific issues, assets, the Victorian description of engagement Local Government Act 2002, which states or other matters, including the form of should be a good starting point in New that the purpose of local government is consultation that may be desirable; and Zealand, especially when councils are ‘to enable democratic local decision- how the local authority will engage with considering, and discussing with their making and action by, and on behalf of, communities on other matters’. communities, the development of their communities’. The wording is fascinating The legislation is silent on what is significance and engagement policies. in its implications. First priority is meant by engagement, seemingly leaving

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 37 Community Governance

Table 1: Change in approach by Bendigo Bank from conventional grant making to outcomes- renew sporting facilities or equipment, focused community development provide short-term funding for local From To non-governmental organisations, and similar reactive responses. As the amount Strengthening community Transforming community of money within the overall network Keeping capital in the community Growing capital in the community available for community reinvestment A local investment option for locals Investment in local enterprises and increased, the network as a whole came innovation to realise that the funds which branches Source of revenue for local projects Source of revenue, plus leadership and had available for distribution were more innovation than just a useful top-up for local activity.

Source: C. DeAraugo, personal communication, 2014 They were in fact a critical community resource, which, if deployed strategically, Some Australian experience means of understanding the relationship could play an important role in achieving Five years ago the present writer was the between various tiers of government important outcomes for the community lead author of a major report on what was and the communities they serve, but itself. This shift in emphasis has been happening with community governance in as encompassing processes which may described by a senior manager working Australian states. The report, Evolution in involve non-government actors, including with the community banking network as Community Governance: building on what private sector parties, as very significant shown in Table 1. works (McKinlay et al., 2011), looked at a participants. Although the Bendigo Bank number of different initiatives, not just on In the late 1990s Australian banks, community banking network is unique the part of councils, but uniquely also on in order to reduce operating costs, internationally, its role as a community the part of a significant private institution, embarked on a major programme of grant maker distributing what are the stock exchange listed Bendigo Bank rationalisation, eventually closing well discretionary funds (that is, funds which Ltd. The wide variety both of practice and over 1,000 branches. The Bendigo Bank, are held for purposes of community purpose made it clear that any attempt to then a small regional bank mainly serving benefit rather than any specific activity develop (or find) a single clear definition the state of Victoria, saw an opportunity or activities) within the community is of community governance which would to offer communities an alternative not. This makes the community banking have both precise boundaries and general approach to accessing banking services. network experience, in consciously acceptance was unlikely to be successful. It developed a very well-designed recognising its role in transforming Instead, after considering both the range community banking franchise. Under this community and providing leadership of practice which works for the report approach, local branches would be owned and innovation, an important insight reviewed, and a wide body of research, locally by companies with a widespread into the potential of a community the report proposed that ‘community shareholding, one shareholder one vote governance approach, and one which is governance’ be understood as: rather than one share one vote, a locally very relevant in New Zealand. Several appointed board of directors, and a different community-based trusts in a collaborative approach to commitment to returning a significant this country hold funds for purposes determining a community’s proportion of branch profits to the local of community benefit, and thus are preferred futures and developing and community. Bendigo Bank itself would essentially a discretionary resource for implementing the means of realising retain responsibility for quality control, application as trustees determine. They them. In practice it may or may not appointment of staff and provision of include the community trusts which involve one or more of the different banking services; borrowings were from resulted from the restructuring of tiers of government, institutions and deposits were with the bank itself, New Zealand’s trustee savings banks, a of civil society, and private sector not with local branches. number of the energy trusts which came interests. We have taken the view The model has proved extremely out of the restructuring of the electricity that the critical issue in defining successful and there are now more than industry, licensing trusts, and trusts ‘community governance’ is not 300 community-owned branches within within the recently emerging community whether clear and specific boundaries the Bendigo Bank community banking foundation network. can be set around it, but whether it network. Substantial profits have been has utility in the sense of improving returned to the community, with some Some New Zealand initiatives understanding of how decisions branches now returning in the order of An overview of practice in New Zealand which affect a community’s future several hundred thousand dollars a year. local government shows that a number of are best taken and implemented. In the early stages of profit distribution, councils have taken quite innovative steps community bank branches acted like any to go beyond the statutory requirements Inclusion of the Bendigo Bank within other small community funder – inviting for consultation to much more of an the study highlighted the potential of applications from within the community engagement approach, some well before community governance not just as a and typically funding proposals to the 2014 amendment. Examples include:

Page 38 – Policy Quarterly – Volume 12, Issue 4 – November 2016 • Porirua City Council’s long- largely taking place within conventional of the Local Government Information standing village planning initiative, assumptions about the respective roles of Unit, in an early response to the Brexit under which the council supports central and local government, with local referendum has stated: community-based groups within government primarily seen as a subsidiary its different villages (the council’s form of government, undertaking services There are many reasons why the term for its different geographic and activities authorised by statute and country voted to leave the EU but communities) to prepare village preferenced by central government as one factor was certainly a sense of plans which feed into the council’s appropriate for local government. As anger about decisions being made own long-term planning in terms a number of indicators demonstrate, far away by people not directly of initiatives to be taken within that including the percentage of GDP spent accountable. Devolution is a key part community (Porirua City Council, by local government,1 one consequence is of resolving that just as it is a key n.d.); that New Zealand local government plays part of growing local economies and • Palmerston City Council’s use a lesser role in respect of its communities improving public services. (Carr- of an online citizens’ panel of than local government in almost any West, 2016) approximately 1,100 individuals chosen at random to provide monthly feedback to the council on ... innovation in community governance issues which the council refers to ... is largely taking place within the panel (Palmerston North City Council, n.d.); conventional assumptions ... with • Waipa District Council’s engagement with its communities local government primarily seen as a over a period of nearly 12 months subsidiary form of government ... in the lead-up to the publication of its draft long-term plan for 2015–25 (Waipa District Council, 2014), to share information about other developed jurisdiction. A joint study by the Royal Society priorities for the district, including From a static analysis perspective, of Arts and the Staff College, Changing a 30-year vision, and the funding this sets a context which is relatively the Narrative, published after the Brexit implications, especially in relation to limited in terms of the range of activities referendum, argues the case that public infrastructure renewal. a community governance approach as administration is shifting from New These are examples from councils between a council and its communities Public Management to New Public which have been particularly innovative. might encompass. We are not, however, in Governance,2 with the implication that Anecdotal evidence suggests that some a static environment. There is increasing public services will be increasingly other New Zealand councils are seeking evidence from a number of jurisdictions place-based, collaborative and drawing to go well beyond what have been that addressing the so-called ‘wicked strongly on community support of both the standard statutory requirements problems’ which have bedevilled public a tangible and an intangible nature. The for consultation (as with the special policy for decades will depend at least in thrust of their argument can be seen in consultative procedure), seeking to part on strong collaborative arrangements the following extract: learn more about their communities’ at a local level, able to tap into local expectations and build community knowledge and networks and encourage Assumptions behind preventative understanding of what the council is co-production (see, for example, the and pre-service interventions, which proposing to do. Generally, however, Productivity Commission’s report More become increasingly attractive as practice is still within the understanding Effective Social Services (Productivity public services become ever more of the role of elected members as being Commission, 2015)). Associated with financially stretched, point often the elected governing body of the this is a concern that the conventional, (but not exclusively) towards the council, rather than elected leaders of relatively top-down approach to the type of soft interventions that the community with their council role as design, targeting and delivery of major draw on a variety of place assets. simply one way of expressing leadership social services has been one factor in the These assets include the formal and with their communities on substantive increasing sense of exclusion which is informal, statutory and voluntary, issues. seen as lying behind phenomena such as material assets such as buildings the Brexit referendum outcome. and institutions where people Putting the community into community In England this is leading to increasing associate with one another or governance calls for devolution, and to take decision- receive the support services they Currently, innovation in community making closer to the people affected. need, and much less tangible things governance on the part of councils is Jonathan Carr-West, chief executive like community networks, social

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 39 Community Governance

relationships, integrated and flexible to respond to the many challenges takes to the nature of government. As the services, or a civic pride in the local they now face? current local government amendment bill place. It is impossible to conceive of • What objectives do councils have demonstrates,5 central government sees it all of these things being activated for engagement and, potentially, as entirely proper that if it is dissatisfied centrally. Instead, a mixed ecology promoting a community governance with the way in which local government of these assets and actors needs the approach? Is it simply to inform their is managing its responsibilities, it opportunity to thrive – and this is communities about matters such as should intervene legislatively to ensure most likely to happen around the proposed council activities and the that local government activities are construct of a local place. (Buddery, associated funding implications? controlled and managed in ways which Parsfield and Shafique, 2016, p.48) Is it to build a more collaborative meet the government’s objectives. This relationship with their different is an approach which has deep-seated In New Zealand the case for a stronger communities, with the purpose, roots in practice over at least the past emphasis on place-based management for example, of encouraging co- 30 years (since the major restructuring at a local level, with individual councils production?3 Is it to partner with initiatives of the 1984–90 Labour-led playing a pivotal role, would currently be their communities in working with government), and has shaped not only seen as based much more on changing central government to ‘localise’ the the way central government approaches understandings of the requirements for design, targeting and delivery of local government but also, arguably, the effectiveness in the design, targeting major social services? way local government responds to central and delivery of major services than on • Is the objective to find better ways of government initiatives. Increasingly, this is a contrast with practice in other jurisdictions, where New Zealand local government operates central governments (state or federal) are to varying degrees coming to realise that within a public policy framework which much of what needs to be done to improve outcomes within the communities they is inherently top-down in the approach it serve cannot be done by higher tiers of takes to the nature of government. government alone, or for that matter by higher tiers of government working in partnership with local government. Instead, addressing the current challenges concerns that New Zealand communities tapping into community knowledge facing developed societies, including the face similar issues of exclusion as are now and networks in order to improve the potentially very negative impacts of the being recognised in jurisdictions such as efficiency and effectiveness of council sense of exclusion which many people England. That said, New Zealand local spending? There are a large number feel, will more and more require working government as a sector and individual of examples which suggest that at a community level in partnership with councils face some extremely complex councils which work collaboratively communities. choices when considering how to carry with their local communities, and New themes such as community forward a commitment to engagement respect their knowledge of the governance, new public governance, and to community governance as local area, can benefit significantly place-based management, co-production, described in this article, including exactly in terms of better decisions: co-design and much more will set the what their role should be in respect of for example, in spending on patterns for the future of public sector their communities taking into account infrastructure, whether maintenance, activity and determine the extent to which the very marked changes now under way. renewal or new investment. different communities are able to realise The following indicative questions are • Is it part of a broader strategy of their objectives for a reasonable quality among the choices this author identifies. building strong communities able of life and a sense of belonging to the • Are councils primarily a subsidiary to take significant responsibility for society of which they are part. Achieving form of government, delivering dealing with their own collective this in a New Zealand context will not be primarily those services, including issues as happen: for example, straightforward. For local government infrastructure and regulation, which in Portland, Oregon, through it will require a commitment to a central government has determined its neighbourhood involvement collaborative approach in working with should be handled by a subsidiary programme?4 its communities, almost notwithstanding entity, or are they primarily a some of the current signals from central community resource providing Conclusion government. For central government it leadership in working with their New Zealand local government operates will require an understanding of both the communities to determine how best within a public policy framework which nature of New Zealand local government is inherently top-down in the approach it itself as an expression of local democracy

Page 40 – Policy Quarterly – Volume 12, Issue 4 – November 2016 rather than simply an outreach of central definition, it will also increasingly be the (source: Local Government New Zealand). 2 Essentially, from a market-driven approach to governance, government objectives, and of how essence of how successful communities to a collaborative approach with a philosophy akin to that described above for community governance. international experience is demonstrating function. 3 For an excellent recent example of this approach see the the critical importance for governments Wigan Deal, an innovative approach under which the Wigan 1 A 2007 Council of Europe report, Local Authority Council is achieving significant savings by promoting a of working collaboratively with the Competences in Europe, notes that the majority of European range of partnership and co-production initiatives with its communities they serve. In this sense, local authorities spend between 6% and 13% of GDP, rising communities: https://www.wigan.gov.uk/Council/The-Deal/ to 20% plus in Nordic countries and falling as low as 5.3% The-Deal.aspx. although community governance will in Italy (this figure is artificially low because of a significant 4 See https://www.portlandoregon.gov/oni/. parallel funding source for local activity) and 5.9% for 5 Local Government Act (2002) Amendment Bill (No 2). remain one of the single most difficult Portugal and Spain (Council of Europe, 2007). In contrast, terms for which to find an agreed New Zealand local government spends 3.8% of GDP

References Buddery, P., M. Parsfield and A. Shafique (2016) Changing the Narrative: Porirua City Council (n.d.) ‘Village planning programme’, http://www. a new conversation between the citizen and the state, Nottingham: pcc.govt.nz/Community/Strategic-Priorities/Great-Village-and-City- Staff College, https://www.thersa.org/globalassets/pdfs/reports/ Experience/Village-Planning-Programme changing-the-narrative-report.pdf Palmerston North City Council (n.d.) ‘Citizens’ panel’, available at https:// Carr-West, J. (2016) ‘What councils want from a post Brexit future’, www.publicvoice.co.nz/portfolio/pncc-citizens-panel/ http://www.localgov.co.uk/What-councils-want-from-a-post-Brexit- Productivity Commission (2015) More Effective Social Services, future/41420 Wellington: New Zealand Productivity Commission, http://www. Council of Europe (2007) Local Authority Competences in Europe, https:// productivity.govt.nz/inquiry-content/2032?stage=4 wcd.coe.int/ViewDoc.jsp?p=&id=1377639&direct=true#P83_1883 Rolfe, S. (2016) ‘Divergence in community participation policy: analysing Local Government Rates Inquiry Panel (2007) Funding Local Government: localism and community empowerment using a theory of change report of the government rates inquiry, Wellington: Local Government approach’, Local Government Studies, 42 (1), pp.97-118 Rates Inquiry Victorian Corporate Planners Network (n.d.) A Guide to Achieving a McKinlay P., S. Pillora, S.F. Tan and A. Von Tunzelmann (2011) Evolution Whole-of-Organisation Approach to Best Value, http://docplayer. in Community Governance: building on what works, vol.1, Sydney: net/2141470-A-guide-to-achieving-a-whole-of-organisation-approach- Australian Centre of Excellence for Local Government, University to-best-value.html of Technology Sydney, available at http://www.acelg.org.au/system/ Waipa District Council (2014) ‘Let’s get engaged!’, http://www.waipadc. files/publication-documents/1335499377_Vol1_Community_ govt.nz/our-council/news/Pages/Lets-get-engaged!.aspx Governance_20_April_2012.pdf Fast-track your career in the public sector with a top-level professional qualification with a: Master of Public Policy or a Master of Public Management

• Try the graduate pathway professional programme for a Master’s in Public Policy or Public Management with the School of Government. • This is a one-year course after the completion of a Bachelor School of qualification. Government • Public policy and public management are examined at the postgraduate level.

for more details visit victoria.ac.nz/sog/study

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 41 Jason Krupp

The Need for Localist but they include scope for central government to share tax revenues with local authorities. Under their proposal, Reforms Parliament would retain the right to pass regulatory responsibility to local government, but it must consult on Sir Geoffrey Palmer and Andrew Butler recently released their any new local government mandate, and detail any extra financial and draft constitution for New Zealand, which joins a rich body administrative costs associated with these of work on the subject of constitutional reform. It is in the responsibilities (Palmer and Butler, 2016, p.73). area of local government that the document departs from The proposed settings bear a close resemblance to the constitutional much of the literature and the current government’s thinking structure of the Netherlands and on this important sector. Switzerland, two countries whose governance arrangements are structured In short, Palmer and Butler propose As such, where government is concerned, on a bottom-up rather than top-down that local government’s place in New local bodies would make local decisions, basis (Krupp, 2016, pp.17-31). Zealand’s decision-making structure be regional bodies would make regional reorganised along localist lines, as seen decisions, and central bodies would be Constitutional muddle in many European democracies. In these concerned with national-level decisions. To those less familiar with the current countries local authorities have their Under their draft constitution, local constitutional arrangements of local own distinct place in the constitution authorities would manage their affairs government in New Zealand it may seem as that is independent from that of central independently within the areas of control if Palmer and Butler’s solution is begging government. Palmer and Butler call for ceded to them by Parliament, and guided a question. However, a closer examination decision-making power to be based on the by democratic community preference. of the country’s governance arrangements principle of subsidiarity, where decisions Funding would predominantly come shows that many of the challenges facing are made at the lowest appropriate level. from the existing property rates system, New Zealand right now, such as declining housing affordability and pressure on Jason Krupp is a former business journalist and is currently a research fellow at The New Zealand local infrastructure, are caused or made Initiative. worse by our constitutional arrangements.

Page 42 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Before examining local government’s at both ends of the centralised– that central government is likely to place in New Zealand’s legislative and decentralised local government underweight the costs imposed on local constitutional structure, it is worthwhile spectrum at the same time. Notionally communities as part of the legislative describing how decision-making power is this arrangement should provide for process. For example, the Treasury’s typically divided in developed countries. double oversight, one where councils Regulatory Impact Assessment Team, At one end of the spectrum are highly are democratically accountable to their which assesses regulatory impact centralised countries, where the role communities, and also benefit from statements, requires policymakers to of local government is limited to a set central government oversight and consider the significant impacts or list of defined activities, principally standard setting at the same time. In risks associated with legislative changes. the provision of local public goods. At practice these governance arrangements In theory this requirement should the other end are more decentralised fall far short of this ideal state, and include the costs and risks posed to countries, where local government is could in some respects be described as local government, but in practice these regarded as an independent democratic dysfunctional. are often overlooked (Productivity entity in its own right. Pinpointing Commission, 2013, pp.102-3). New Zealand’s place on this spectrum Accountability gap Although the practice of passing is difficult because to some degree One of the problems with this arrangement unfunded or under-funded mandates local authorities are both agents and is that it creates an accountability gap is widespread, the true costs of the independent authorities at the same time. between those who set policy and those problem are unknown. One attempt to Under the Local Government Act who bear the effects and costs thereof. A tally the costs imposed on councils by 2002 the purpose of local authorities is to ‘enable democratic local decision- making and action by, and on behalf of, The Productivity Commission’s inquiry communities’ (s10). While conducting this duty, councils must also meet ‘the into local regulation shows that central current and future needs of communities for good-quality local infrastructure, government is likely to underweight the local public services, and performance costs imposed on local communities as of regulatory functions in a way that is most cost-effective for households part of the legislative process. and businesses’. This would imply to the casual reader of the act that local authorities in New Zealand reside on the devolved/independent side of the clear example of this was the introduction amendments to the Local Government Act spectrum, wholly answerable to their of minimum drinking water standards by 2002, the Public Transport Management communities. However, in the absence of the Ministry of Health in 2005 (Ministry Act 2008, the Health (Drinking Water) a formal constitution, local government’s of Health, 2008). The policy forced many Amendment Act 2007 and the Land existence relies entirely on statute. As councils to upgrade their plants to meet Transport Management Amendment such, Parliament can – and does – pass this standard. The costs of compliance Act 2008 estimated that it would take an on responsibilities to local authorities were estimated at between $309 million additional 720,000 hours of council staff as part of the lawmaking process, which and $527 million, yet central government time to meet them. Conservatively priced councils are obliged to accept. The set aside only $150 million for this activity at the average hourly wage at the time, Productivity Commission estimates that (CH2M Beca Ltd, 2010, p.82). The this represented $14 million in additional there are about 30 pieces of legislation shortfall had to be funded out of local salary costs, and excludes $25 million of that confer regulatory responsibilities on taxes, yet the communities were given one-off consulting costs (Statistics New local government, and more by-laws are little say in the setting of these standards. Zealand, 2009; PricewaterhouseCoopers, made under these statutes than under Some rural communities may have been 2009). The study did not explore how the Local Government Act (Productivity happy to settle for less stringent standards these costs are distributed between small Commission, 2013, p.17). The scope than those set by central government, or to and large local authorities. of these activities ranges from building have upgraded their facilities over a longer Central government acknowledged and construction standards to food and time period, in order to lighten the tax this problem in its official response to the hygiene regulations, health hazards, the burden on local ratepayers. These kinds Productivity Commission, noting that control of liquor and gambling activity, of trade-offs, based on local preference, ‘improvements will be made to central the storage of hazardous substances and are not feasible with a one-size-fits-all government documentation, such as the waste management, to name but a few. approach to policy making. Cabinet Office Manual, Cabinet Guide, These arrangements mean that New The Productivity Commission’s Regulatory Impact Analysis Handbook Zealand’s local authorities are positioned inquiry into local regulation shows and the Department of Internal Affairs

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 43 The Need for Localist Reforms

“Policy Development Guidelines resource use section amounts to little making greater use of debt to pay for for Regulatory Functions Involving more than a list of what might or might infrastructure investments (total term Local Government”’ (New Zealand not be costs and benefits (Käpiti Coast debt was equivalent to 6% of assets in Government, 2014). District Council, 2012). This listing 2014) (ibid., p.53). Fast-growing areas, process may be appropriate where the like Auckland, have higher term debt to Blame game expense of a professional cost–benefit asset ratios – in Auckland 14% in 2014, The current governance structure also analysis is not justified based on the near the statutory borrowing limit – but allows councils to shift the blame for scale of the activity, but councils can still the city also held investments equivalent poor local performance onto central commission a professional cost–benefit to 556.1% of infrastructure assets in 2014 government. Rapidly rising house prices assessment of the entire ten-year plan, as (ibid., p.46). Selling these assets to pay for in Auckland are often blamed on the Auckland Council did with the Unitary infrastructure investments or to service Resource Management Act (Bassett and Plan (Nixon et al., 2013). Unfortunately, debt has been labelled ‘a hot political issue’ Malpass, 2013, p.5). This legislation has Auckland is an exception. by the city’s former mayor, Len Brown, certainly made it more difficult to build This lack of transparency and suggesting that it will be unlikely or at in New Zealand’s biggest city by making accountability on both sides of the least very difficult for the city to divest subdivision of land more difficult, but central–local divide could to some itself of these assets to fund infrastructure the problem has been made significantly degree explain local voter disengagement. development or pay off long-term debt. worse by the city’s urban growth limit. Preliminary estimates suggest that only A concern is that the current situation may worsen. The lack of transparency and accountability at a local level may Under the separation of powers laid increase voter intransigence, which in turn is likely to frustrate central out by Palmer and Butler, each tier government’s efforts to encourage faster of government would be pre-eminent economic growth. Central government’s response may be to legislate around within the sphere of its constitutionally political roadblocks, further blurring the lines of accountability, transparency and mandated duties. local choice, forming a vicious policy circle. This is already playing out to some extent. The 2012 amendments to the This zoning rule, which delineates urban 41.8% of eligible voters cast a ballot in Local Government Act made it easier and rural land at the edge of the city, was the 2016 local government elections. for local parties to propose local council found by one study to increase the cost of This was marginally higher than the amalgamations in their area. Three residential land by between eight and 13 41.3% turnout in 2013, but well down such applications to merge councils times relative to that of equivalent rural on 57% turnout in 1989 (Department of in Northland, Greater Wellington and land parcels of a similar size just outside Internal Affairs, 2013; Local Government Hawke’s Bay regions were made under the boundary (Grimes and Liang, 2007, New Zealand, 2016). The public’s this legislation. The Northland and p.31). Nowhere in the RMA are councils dissatisfaction is not limited to the ballot Greater Wellington proposals failed required to put urban boundary limits in box either. Attitudinal surveys rate the to win sufficient popular support to place; it is a local policy preference. overall performance of the sector at 29% proceed to a poll, and the Hawke’s Bay The quality of local council decision (Local Government New Zealand, 2015). amalgamation proposal was voted down making is also highly questionable. by a ratio of 2:1 (Local Government Under section 32(2) of the RMA, local Political intransigence Commission, 2015; Hawke’s Bay Today, authorities are required to assess the This distrust of local government 2015). Central government’s response costs and benefits of any major spending appears to manifest itself as political was to table further amendments to the item proposed in the district plan. To an intransigence, where communities Local Government Act. Should these economist this would imply a systematic resist moves by councils to increase amendments become law, it will make measure of the expected net benefits rates, borrow more or sell assets to fund it easier for councils and the Local of a proposal for affected members of investments that should benefit residents Government Commission to propose a community. In practice many of the in the long term by growing the ratepayer amalgamations and consolidations section 32 analyses do not meet this base (Krupp and Wilkinson, 2015, p.29). of local council assets into regional standard. For example, in the Käpiti Community resistance to higher taxes or council-controlled organisations. Many Coast District Council’s ten-year plan, the great council borrowing is not surprising, in the local government sector see this cost–benefit analysis that accompanies but it is perplexing that fast-growing as an attempt to legislate around local the infrastructure, services and associated communities like Queenstown are not preferences.

Page 44 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Constitutional remedies confined to academia. Appetite among have a constitution, but the country has A constitutional separation of powers the public and policymakers is low. opted to devolve powers to city-regions on would go a long way to remedying these Research by Rachael Jones shows a contractual basis. The first and most well- problems. Under the separation of powers that various attempts have been made known of these is the Greater Manchester laid out by Palmer and Butler, each tier by government to begin this process ‘city deal’. Under this arrangement central of government would be pre-eminent over the past two decades, to little government has devolved a number of within the sphere of its constitutionally avail. These include the Building the powers and responsibilities to the city- mandated duties. Were the costs of a Constitution conference, which was region, a regional body made up of locally provided public service to suddenly hosted in Parliament in 2000, and ten constituent local councils (Greater rise, or quality deteriorate, the affected the Constitutional Arrangements Manchester Combined Authority, n.d.). community would immediately know Committee, which was established in The powers and responsibilities conferred which agency was responsible. Likewise, 2005 (Jones, 2013, pp.14-15). The former include control over health and social communities would be directly faced failed to achieve any ‘general consensus’ programmes, housing and planning, skills with the costs of their decisions (taxes) on constitutional reform. The latter and employment development, and the and the consequences of their decisions produced a report which recommended setting and collecting of business rates (approving poor policies). The transfer that government avoid a constitutional (Krupp, 2016, p.15). This deal provides of authority is low-risk, as the majority of debate for fear of stirring disagreement some of the outcomes that the Palmer– these tasks are largely already managed by and division in the community. Butler constitution would achieve. The local authorities, such as the provision of roading, water and other services. Where there are benefits from central Like New Zealand, the United Kingdom government passing regulatory tasks to local authorities, the draft constitution does not have a constitution, but the stipulates a mechanism by which the cost country has opted to devolve powers to this would impose on communities is made transparent. Where these costs are city-regions on a contractual basis. deemed to be greater than the benefits, local authorities, given the power to ‘manage their own affairs independently within subject-matters established in Acts More recently, the National-led Greater Manchester Combined Authority of Parliament’ (Palmer and Butler, 2016, government, which was elected into is contractually assured that it has full p.73), should be within their rights to power in 2008, agreed to set up a control over the policy areas devolved reject these policies. Even if councils are framework to review New Zealand’s to it, guided by democratic preference. not given the ability to opt out, greater constitutional arrangements as part of Officials in Whitehall can of course use transparency about the costs that central its confidence and supply agreements parliamentary power to amend the terms government imposed on communities with the ACT, United Future and Mäori of the deal, and again dictate standards at should provide greater oversight and parties. This led to the formation of the the local level, but it would not be without scrutiny of these mandates. Constitutional Advisory Panel in 2011. political cost. Conceptually, the constitutional The panel finished its recommendations In some respects the malleable nature reforms proposed by Palmer and Butler in November 2013; they included of these arrangements is preferable to a would go a long way to resolving the that New Zealand wrap up its various constitution. Once enacted, constitutions blurred lines of accountability and mixed constitutional protections (such as are robust legal documents, and require responsibilities that currently exist. It is those contained in the New Zealand a high measure of public support to notable that New Zealand is one of the Bill of Rights Act 1990) in one statute change. Should the local government few countries in the world that does (Constitutional Advisory Panel, 2013, arrangements proposed by Palmer and not have a written constitution (New p.22). The panel’s recommendations were Butler prove to be a poor structure for Zealand’s constitutional arrangements not binding, and at the time of writing deciding local matters, it would be a very are codified in numerous pieces of government has not issued an official difficult and slow process to reverse. A legislation). However, those looking response. contractual arrangement, on the other to improve on the local government hand, could be reversed, and quickly, by arrangements through a formal written Contractual workaround mutual agreement. constitution are unlikely to find much Developments in the United Kingdom, Furthermore, a constitutional success any time soon. Palmer and however, suggest there are other means of separation between central and local Butler’s work shows that there is interest achieving the same ends as the Palmer– government achieved by contract could in a written constitution, but it is largely Butler written constitution. Like New be changed as the capacity of councils Zealand, the United Kingdom does not change. It would also allow central

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 45 The Need for Localist Reforms government to tailor the handover of Conclusion One means of addressing this would powers according to different types of In concluding, it is worth restating be to formally stipulate the respective councils, as opposed to taking a one-size- the problem that the contractual or roles of local government in a written fits-all approach. constitutional reforms would both constitution, as proposed by Palmer and Precedent for this kind of contractual address. That is to fix the dysfunctional Butler. The lack of public and political devolution already exists in New Zealand. aspects of the relationship between appetite for a constitutional discussion, Under the Waikato-Tainui Raupatu central government and local authorities however, suggests that this process may Claims (Waikato River) Settlement Act that has been created by the way New not be achievable any time soon. This 2010, the Crown handed a group of iwi Zealand structures its governance affairs. need not derail much-needed local the power to set the strategic direction of This relationship is characterised by poor government reform, as the devolution management of the Waikato River. This lines of accountability and overlapping process in the United Kingdom, and power was previously held by Waikato regulatory responsibilities. This makes it specifically Greater Manchester, shows. Regional Council. Under the act, local difficult for the public to tell which tier of Unlike a constitutional discussion, there authorities have to ensure that regional, government is ultimately responsible for is great interest among the public and coastal and district plans align with the which service. The same arrangements policymakers in improving the efficiency vision and strategy set by iwi. Notably, mean central government gives too little and effectiveness of local government. iwi decisions supersede national and consideration to the costs its policies Making local councils more accountable coastal policy statements, two areas impose on local communities and, in to the communities they serve is a means under central control (Local Government turn, allow councils to blame their poor of getting there. New Zealand, 2011, pp.19-20). If this performance and decision making on kind of arrangement can be established central government. The effects are high 1 Local Government Act 2002 Amendment Bill (No 2) with iwi, the same framework can surely levels of frustration among communities be used to achieve a separation of powers who live under, and pay for, these between central and local government. governance arrangements.

References Bassett, M. and L. Malpass (2013) Priced Out: how New Zealand lost its Local Government New Zealand (2011) Local Authorities and Mäori: case housing affordability, Wellington: The New Zealand Initiative studies of local arrangements, Wellington: Local Government New CH2M Beca Ltd (2010) Drinking Water Standards New Zealand Cost Zealand Benefit Analysis: engineering input, Wellington: CH2M Beca Ltd for Local Government Commission (2015) ‘Amalgamation decisions: the Ministry of Health Wellington and Northland’, http://www.lgc.govt.nz/commission- Constitutional Advisory Panel (2013) New Zealand’s Constitution: a report news-and-contact-information/media-statements-and-speeches/ on a conversation, Wellington: New Zealand Government amalgamation-decisions-wellington-and-northland/ Department of Internal Affairs (2013) ‘Local authority election Local Government New Zealand (2015) Building a Stronger Local statistics 2013’, https://www.dia.govt.nz/diawebsite.nsf/wpg_URL/ Government for New Zealand: a survey of New Zealanders’ perceptions Services-Local-Elections-Local-Authority-Election-Statistics- of local government 2015, Wellington: Local Government New 2013?OpenDocument Zealand Greater Manchester Combined Authority (n.d.) Greater Manchester Local Government New Zealand (2016) ‘Preliminary voter turnout 2016’, City Deal, https://www.gov.uk/government/uploads/system/uploads/ http://www.lgnz.co.nz/vote2016/preliminary-voter-turnout-2016 attachment_data/file/221014/Greater-Manchester-City-Deal-final_0.pdf Ministry of Health (2008) Drinking-water Standards for New Zealand Grimes, A. and Y. Liang (2007) Spatial Determinants of Land Prices in 2005 (Revised 2008), Wellington: Ministry of Health Auckland: does the metropolitan urban limit have an effect?, working New Zealand Government (2014) ‘Government response to paper 07-09, Wellington: Motu Economic and Public Policy Research recommendations of the Productivity Commission’s report Towards Hawke’s Bay Today (2015) ‘Big NO in amalgamation referendum’, Better Local Regulation’, Wellington: New Zealand Government Hawke’s Bay Today, 15 September, http://www.nzherald.co.nz/hawkes- Nixon, C., P. Clough, R. Peterson and M. Douché (2013) Section 32 bay-today/news/article.cfm?c_id=1503462&objectid=11513412 RMA Report of the Auckland Unitary Plan, Wellington: New Zealand Jones, R. (2013) ‘The problem of constitutional law reform in New Institute of Economic Research Zealand: a comparative analysis’, LLB (Honours) dissertation, Palmer, G. and A. Butler (2016) A Constitution for Aotearoa New Zealand, University of Otago Wellington: Victoria University Press Käpiti Coast District Council (2012) Käpiti Coast District Plan Review PricewaterhouseCoopers (2009) Costs of Regulation on Local Government, Section 32 Analysis: summary report: infrastructure, services and Wellington: PricewaterhouseCoopers for Local Government New associated resource use (part 1: infrastructure and network utilities), Zealand Wellington: Kāpiti Coast District Council Productivity Commission (2013) Towards Better Local Regulation, Krupp, J. (2016) The Local Benchmark: when smaller is better, Wellington: New Zealand Productivity Commission Wellington: The New Zealand Initiative Statistics New Zealand (2009) ‘New Zealand income survey: June 2009 Krupp, J. and B. Wilkinson (2015) The Local Formula: myths, facts and quarter’, http://www.stats.govt.nz/browse_for_stats/income-and-work/ challenges, Wellington: The New Zealand Initiative Income/NZIncomeSurvey_HOTPJun09qtr/Commentary.aspx

Page 46 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Richard Norman

New Public Management’s Impact on Capital Cities new economic and employment challenges for Wellington

The philosophy of New Public Management, which relies In fact, Wellington is a relatively prosperous city at the heart of a region more on market solutions and less on government officials with a largely urban population of as initiators, has had particular impact for capital cities such 480,000 which has New Zealand’s highest average incomes, with nearly as Wellington that are not also their country’s dominant 50% of work in higher-skilled knowledge roles, contrasting with 33% nationally 1 commercial centre. Wellington has been challenged to (Wellington Regional Council, 2012, diversify away from government-related employment during p.3). The anxiety in Wellington, which has prompted a rethinking of strategies the past 30 years. While it has had considerable success for economic development, reflects growing international debate about the fostering tourism and software and film production, since likely impact of technological change on 2008 growth in employment has been almost non-existent, work and responses needed from public organisations. The 20th anniversary contrasting with strong growth in Auckland, New Zealand’s conference of the International Public largest city and commercial centre. In 2013, John Key, prime Management Network is a timely prompt to reflect on the leadership which might minister in the country’s centre-right government, triggered be expected from public administrators and managers during the early stages of debate and local action with an offhand comment: ‘even a ‘fourth industrial revolution’ (Schwab, Wellington’s dying ... all you have there is government, 2016). Technologies seen as leading Victoria University and Weta Workshop’. this revolution include mobile supercomputing, intelligent robots, self- Richard Norman is head of the human resources and industrial relations specialisation at Victoria driving cars, neuro-technological brain University’s School of Management. Over the past three years, with support from 13 local enhancements and genetic editing. Klaus government and the Ministry of Business, Innovation and Employment, he has been engaged with students and summer scholars in researching the changing nature of knowledge sector work in Schwab, founder of the World Economic Wellington.2

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 47 New Public Management’s Impact on Capital Cities: new economic and employment challenges for Wellington

Table 1: Changes in the distribution of population in New Zealand since the freeing of the ‘management by objectives’, created a new markets in the 1980s era of rationalising, restructuring and Year New Zealand Auckland Wellington Auckland as percentage of Wellington as a managerialism by the numbers. population the national population percentage of the With a single debating chamber and a population first-past-the-post electoral system, New 1984 3,264,000 863,000 342,000 26.4 10.48 Zealand politicians were able to introduce rapid and comprehensive change in the 2015 4,479,000 1,500,000 478,000 33.5 10.67 1980s and early 1990s. New Zealand was the first nation to adopt private Forum, fears the pace of change might be These margins put in context sector accounting methods throughout so great that organisations will be unable international, winner-takes-all economic government. It adopted a comprehensive to adapt and governments will fail to pressures. But while digital technologies system for the delivery of public sector employ and regulate new technologies to are global, people live and work locally ‘outputs’ and gained an international capture their benefits. Among results will and their local governments can expect reputation as either an exemplar of be new security risks, and increasingly to be at the front line of debate about or cautionary tale about public sector unequal and fragmented societies (ibid.). how to respond. As a city with an already change (Norman, 2003). The scale of potential change in work high proportion of knowledge-based The neo-liberal theorising which influenced these system changes was summarised in April 2016 by the Wellington’s challenges are similar Guardian’s George Monbiot. to those of many cities in an era of Neoliberalism sees competition as the defining characteristic of globalised markets, challenges which human relations. It redefines citizens as consumers, whose democratic have led to ‘winner takes all’ successes ... choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It was highlighted by a 2013 survey which work, and its capital city role, Wellington maintains that ‘the market’ delivers concluded that nearly half of 700 United can expect to be at the forefront of this benefits that could never be achieved States employment classifications are emerging public management challenge by planning. at risk of being significantly altered by during the next decade. Attempts to limit competition computerisation (Frey and Osborne, are treated as inimical to liberty. Tax 2013). Millions of people with education Relearning public leadership at a local level? and regulation should be minimised, and training which they thought would In 1996, when the International Public public services should be privatised. be work for a lifetime are likely to be Management Network was founded, The organisation of labour and ‘not only unemployed but also obsolete’ the internet was an emerging and collective bargaining by trade unions (Galbraith, 2014). unreliable technical wonder, not the are portrayed as market distortions Letting nature take its course commercial force it now is. Markets that impede the formation of as occurred during the Industrial were favoured solutions for public a natural hierarchy of winners Revolution of the late 18th and early services in the aftermath of the recent and losers. Inequality is recast as 19th centuries would be a ‘dangerous collapse of communism. New Zealand virtuous: a reward for utility and a gamble’. Those changes occurred over was an enthusiastic adopter of New generator of wealth, which trickles 50 years, with ‘untold human suffering Public Management ideas for reducing down to enrich everyone. Efforts during an extended period of economic the size of government, contracting out to create a more equal society are transformation’ (Kaplan, 2015, p.15). services and using competition to reshape both counterproductive and morally The possible pace of change with the public services. These ‘neo-liberal’ views corrosive. The market ensures that ‘fourth industrial revolution’ is illustrated were theorised by economists during everyone gets what they deserve. by Kaplan, who contrasts revenue per an era dominated by large public and (Monbiot, 2016) employee of $US855,000 for Amazon, the private organisations that were strongly largest online retailer, with $213,000 for hierarchical and drew from the Second The emphasis on ‘the market’ has Walmart, the largest bricks-and-mortar World War military experience of many brought major changes for the role of retailer; for each $1 million in sales, of their leaders. New Public Management capital cities. Prior to 1984, New Zealand Walmart employs about five people while was assisted by one of the first ‘miracles’ had a tradition of strongly activist Amazon employs slightly more than one of the era of personal computers, the central government, starting with the person (ibid., p.139). spreadsheet, which, when linked with opening up of new land during the 19th

Page 48 – Policy Quarterly – Volume 12, Issue 4 – November 2016 century, and redistributing wealth and Table 2: Employment by sector, Wellington Region providing social security in response to Employment Number FTEs %pa Change the depression of the 1930s. One result 2005 to of the ‘more market’ policies since 1984 Sector 2005 2013 2014 2015 2014 2015 2015 has been very limited economic growth Primary 4,320 4,178 4,315 3,963 3.3 -8.2 -0.9 in Wellington in contrast to Auckland. Manufacturing 17,336 12,958 13,059 13,214 0.8 1.2 -2.7 In that period Auckland has grown from having about one quarter of New Construction 14,833 16,600 15,841 17,154 -4.6 8.3 1.5 Zealand’s population to one third, Wholesale and Distribution 17,118 16,308 16,622 15,939 1.9 -4.1 -0.7 while Wellington has remained at about Retail Trade and Service 40,132 39,191 40,373 39,483 3.0 -2.2 -0.2 11% (Table 1). ‘More market’ strategies Business Services 53,508 58,540 60,032 59,536 2.5 -0.8 1.1 adopted by central government, advised Arts and Recreation Services 3,596 4,888 4,841 4,754 -1.0 -1.8 2.8 mostly by Wellington-based public Social Services 57,507 73,962 74,451 76,194 0.7 2.3 2.9 servants, have created a new challenge for Wellington Regional Council 208,351 226,626 229,533 230,237 1.3 0.3 1.0 local and regional public organisations New Zealand 1,741,850 1,883,050 1,932,950 1,976,617 2.6 2.3 1.3 to consider how they might counter the Source: BERL Regional Datab ase, 2015 pressures of ‘winner takes all’ market forces. (2000) as part of the development of it take a broader approach to economic With the added pressure of technology the waterfront alongside the central development to seek a way ahead from change, leaders of local authorities have business district. Wellington-based film a period of relative decline. With the gained a new role, whether ready or entrepreneurs have helped rebrand the aim of encouraging economic growth, not. While the market is international, city by gaining Hollywood backing for the council opted for a higher rates rise ‘place has replaced the industrial local production of films based on J.R.R. and borrowing and selling some assets in corporation as the key economic and Tolkein’s books The Lord of the Rings and order to fund these initiatives: social organising unit of our time’ The Hobbit. A capital city which New • establish a tech hub in collaboration (Florida, 2012, p.188). Place is critical for Zealanders tended to see as ‘bureaucratic with the private sector with ICT economic development because jobs are grey’ in earlier times was in 2011 start-ups; increasingly dependent on entrepreneurs recommended by the Lonely Planet travel • investigate an extension to the who can choose where to live and seek guide as ‘the coolest little capital’ and one Wellington International Airport locations which provide ‘high-quality of the top ten cities in the world to visit. runway to allow for direct amenities and experiences, an openness Wellington was also helped by a buoyant connections to Asia and to bring to diversity ... and the opportunity to economy and an expansionist left-of- extra visitors, students and economic validate their identities as creative people’ centre Labour government between 1999 benefits; (ibid., p.186). When each new high-tech and 2008, a period of central government • establish an international film job in a city can create five additional activism which a centre-right National museum to showcase talent and local jobs (Moretti, 2012, p.57), it is no Party government has since 2008 sought attract visitors and encourage them longer sufficient for local authorities to to restrain. to stay longer; focus overwhelmingly on the traditional Since 2008 Wellington has had almost • build a large-scale performance arena roles of ‘roads, rats and rates’. The ability no net employment growth (Table 2). The to fill a gap in the current offering to support infrastructure such as water largest single local authority of the region, and draw in larger concerts and more and waste disposal, planning and parks Wellington City Council, with 200,000 visitors; is significantly affected by the economic residents under its jurisdiction and a • establish an urban development health of the region. Wellington has central business district which means it agency to support the creation adopted a ‘creative capital’ strategy to has about 60% of the rating base of the of vibrant, mixed-use inner city define its distinctiveness; but in doing region, has again opted for an activist neighbourhoods. so it is competing with at least 60 cities, economic agenda. In June 2015 it opted Concurrent with Wellington City 20 in Britain alone, which have sought to leverage the city’s real estate assets and Council efforts to take an activist to brand themselves as creative (Hollis, borrowing capacity to make available an approach to the local economy, the city’s 2013, p.96). additional $80 million per year to invest in largest university, Victoria University Wellington bounced back from growth-oriented projects, with eight big of Wellington, adopted a strategic public sector cutbacks of the 1980s and development ideas as the strategic centre plan in August 2014 which proposes 1990s with a period of activist public for action. Tourism, events management a doubling of student numbers, from management which included major and economic development roles have 15,000 to 30,000 over 20 years. This infrastructure projects such as the been combined into a single agency, plan also proposes that the university building of a new national museum, Te the Wellington Regional Economic become more strongly a civic university, Papa (1998), and the Wellington Stadium Development Agency, with the goal that and tackle cross-disciplinary research

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 49 New Public Management’s Impact on Capital Cities: new economic and employment challenges for Wellington themes of distinctive relevance to the Cities are like natural ecosystems, ‘not more like the manufacturing sector, with region: advancing better government, static entities but continually evolving large independent firms wary of sharing cultivating creative capital, digital futures, creative commons that expand or shrink information with other firms for fear design-led high-value manufacturing, depending on the ingenuity of their of losing ideas. In Silicon Valley there and promoting sustainability. Two of residents’ (Moretti, 2012, p.247). Human was a more cooperative, interdependent Wellington’s largest public organisations creative talent is now the most important environment in which many smaller firms are therefore seeking ways to influence part of a city’s ecosystem, argues Richard worked through decentralised networks market forces that have shown the pulling Florida (2012). A city which seeks to which prompted more innovation power of larger cities in providing more attract and retain the people who are and different use of information and diverse employment opportunities and critical for its economy needs to consider: resources. Strong networks of larger local markets. • what’s there: the combination of the Wellington’s challenges are similar built environment and the natural ‘weak ties’ enable people to find work more easily and for cities with creative workers to be ‘ideal Economic development increasingly laboratories of innovation: there are based on knowledge and distinctive more people here, so the likelihood is that more ideas will bubble to the human capabilities involves very surface. It is not just the size of the population, however, but the density different economics from that based on of the connections that matter’ large physical investments ... (Hollis, 2013, p.100).

Changing work as a challenge for public to those of many cities in an era of environment – a proper setting for sector leaders globalised markets, challenges which have pursuit of creative lives; Work has become so established as led to ‘winner takes all’ successes such as • who’s there: the diverse kinds of the dominant organising structure for Silicon Valley and Seattle, contrasted with people, interacting and providing developed societies that it is easy to the collapse of cities based on previous cues that anyone can make a life in overlook the extent to which it is a creation technologies, such as Detroit and the that community; and of city-based economies. Cities were first motor industry and Rochester, New York • what’s going on: the vibrancy of built around trade and manufacturing; and Kodak film. street life, cafe culture, arts, music now, knowledge-based work assisted by and people engaging in outdoor technology change is increasingly the Cities as sources of innovation and new activities – altogether a lot of active, force for economic development. economic activity exciting, creative endeavors. Such work is increasingly likely In 1800, 3% of the world’s population The contribution of cities towards to involve cognitive and social skills. lived in cities. Productivity gains made economic activity and innovation has Cognitive skill is ‘the ability to acquire possible by coal, oil and electricity have been explained by the ‘weak ties’ they can knowledge, process information, and seen the depopulation of rural areas provide, in contrast to smaller centres solve problems’, while social skill is the during the 20th century. Cities now hold where everyone is likely to know everyone ‘capacities used to work with people to 54% of the world’s population, and 100 else (Granovetter, 1983). In New York’s achieve goals’. These are ‘more than just cities account for a third of the world’s art world, for instance, ‘your ability to get people skills’, and ‘include the capacity economy (Ross, 2016, p.196). a new job is more likely dependent on a to bring the right people together on a As technology change and wide network of acquaintances who are project, persuasion, social perceptiveness, international trade during the past plugged into a wider network of other the ability to help develop other people, 30 years have spread the gains of the acquaintances, further increasing your and a developed sense of empathy. These digital era unevenly, city-based political chance that someone knows someone are the leadership skills that are needed leaders have tended to be pragmatic who is willing to give you a job’ (Currid, to innovate, mobilize resources, build interventionists. While neo-liberal ideas 2007). The importance of networks for effective organizations, and launch new have dominated national debates in creating new businesses was highlighted firms’ (Florida, 2012, p.224). English-speaking countries, political in a study by a political scientist and urban Economic development increasingly leaders of cities have been prompted to planner which contrasted the success of based on knowledge and distinctive seek pragmatic responses to changing high technology enterprises in Northern human capabilities involves very different economics which are locally visible California’s Silicon Valley with the relative economics from that based on large through empty shops and social unrest. failure of Boston’s Route 128 (Saxenian, physical investments such as electricity 2006). In Boston, new companies worked supply or aluminium smelting, two

Page 50 – Policy Quarterly – Volume 12, Issue 4 – November 2016 major areas of New Zealand investment region increased by 1.3%, compared with funds allocated are less than 1000th the between the 1950s and 1980s. People- national growth of 3.2%. Employment size of the regional GDP of $26 billion. focused skills that are least automatable in the Wellington region grew by only The Wellington Regional Economic are ‘sensing the thoughts and feelings of 0.3% compared with 2.3% nationally. Development Agency, in common with others, working productively in groups The agency described the strengths of the similar agencies, has as a priority the … and expressing ourselves with greater region as: establishing of ways of leveraging its power than logic can ever achieve’ • a highly skilled and educated funds with a variety of partners. (Colvin, 2015, p.3). workforce; The challenge for allocating local • a strong knowledge-based services government support for economic Challenges facing the new Wellington sector; development is highlighted by the Regional Economic Development Agency • world-renowned ICT, film, science comparative statistics on tourism and In 2014 the Wellington city and regional and creative sectors; digital sector work in Wellington. The councils opted to merge tourism, events • a mix of large multinationals and tourism sector contributes 2.9% of and economic development agencies, small and medium enterprises; GDP to the region, compared with creating a larger agency with a total budget • the location for central government, tourism throughout New Zealand which of about $28 million, with $8 million from trading and public funds contributed 80% by Wellington City and 20% through the regional council. Expectations for the The knowledge-based sector of new agency were set high in July 2015, Wellington has moved beyond a stage of with the board of the agency announcing the new mission that ‘by 2025, Wellington seeming almost ‘accidental’ as a series will be the most prosperous, liveable and of support functions for long-established vibrant region in Australasia’. New agency chairman Peter Biggs said the bar was public sector and finance and insurance high but it could be done and there was no route to ‘wimp out’. Wellington would organisations. not compete head to head with large Australian cities; comparisons were made with Tel Aviv in Israel and Manchester in the public service and the diplomatic makes up 3.8% of GDP. Wellington’s England instead. corps; more dominant knowledge-based Among challenges the agency • a reputation as a leader in arts, sectors are ‘information, media and identified for the region were flat retail culture and cuisine; telecommunications’, which contribute spending since 2011, a lack of confidence • a high-performing education sector, 6% of the local economy (compared in the local economy, and a slowing of including three universities; with a New Zealand average of 3.2%), overall job growth despite employment • a quality food and beverage offering, and ‘professional scientific and technical growth in the public service resuming. including innovative and export-led services’ at 10.7% of the Wellington There were skill shortages in key sectors, primary industries; economy (compared with 7.3% particularly information technology, • the national centre for the expression nationally). Yet these sectors receive less and the region was not reaching its and discovery of New Zealand’s funding than tourism, which can point potential in terms of international nationhood. to trackable numbers of visitor arrivals visitors, particularly those from outside The newly reorganised agency faces and spending patterns. The digital sector its traditional markets of Australia, the the challenge of all public agencies that has had a multi-year run of unfilled job United States and Britain. The region while politicians campaign in poetry, vacancies, at pay levels double those was not getting its share of migrants and they ‘govern in prose’.3 of tourism. The digital sector has been international students, and its distinctive The extent of the gap between poetry dispersed in its focus and growth has been arts and events positioning was being and prose is evident in the dollars so rapid that much of its focus has been challenged, particularly by a united and involved: a newly constructed agency with on building individual businesses with increasingly confident Auckland. a rates-based budget of approximately local and international clients, leaving The extent of this ‘falling behind $20 million has a mandate to find ways of limited time for industry collaboration other parts of New Zealand’ was leveraging a regional economy of $25.6 or local promotions. highlighted in a report released in early billion annual turnover and a workforce 2016 for the Wellington Regional Council of 230,000. To tackle this task, the agency Leadership is needed for building a about economic trends. (Tables 2 and 3 will have a staff of about 160, with 75% knowledge city have some of this data.) In the year to of budget directed towards support for As work becomes increasingly based March 2015, GDP in the Wellington tourist promotions and events. The public on human innovation and relationship

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 51 New Public Management’s Impact on Capital Cities: new economic and employment challenges for Wellington

Table 3: Location Quotient 2015 skills, as captured in the title of the book Industry Wellington Region New Zealand Humans are Underrated (Colvin, 2015), Location Quotient Share of total GDP Share of total GDP the core challenge of a city seeking to Central Gov Admin, Defence & Safety 3.0 11.4% 3.8% be activist about its economic future is Petroleum & Coal Product Manufacturing 2.8 1.4% 0.5% to attract, retain and build distinctive Telecomms, Internet & Library Services 1.9 4.4% 2.3% skills. These are what Ulrich (2015) Finance 1.7 6.6% 3.8% calls leadership skills that are required Printing 1.7 0.5% 0.3% to navigate the industry conditions. Information Media Services 1.6 1.4% 0.9% Drawing on experiences of specialist Arts & Recreation Services 1.5 2.2% 1.4% investors, Ulrich summarises the industry Professional, Scientific & Tech Services 1.5 11.2% 7.7% and performance challenges facing any Auxiliary Finance & Insurance Services 1.3 1.2% 0.9% business. Industry favourableness includes Other Services 1.3 2.2% 1.8% such characteristics as growth potential, Insurance & Superannuation Funds 1.3 1.4% 1.1% barriers to entry, competitiveness, Electricity & Gas Supply 1.2 2.9% 2.5% social trends, customer opportunity Local Government Administration 1.1 0.6% 0.5% and regulatory opportunities. The Administrative & Support Services 1.0 2.1% 2.1% performance of a company will include Health Care & Social Assistance 1.0 5.9% 6.1% financial results coupled with intangibles Polymer Product & Rubber Product Manu 0.9 0.5% 0.6% related to strategy, technological Rail, Water, Air & Other Transport 0.9 0.8% 0.8% Water, Sewerage & Waste Services 0.9 0.4% 0.5% advantage, and capabilities such as speed Furniture & Other Manufacturing 0.9 0.3% 0.3% to market, innovation and customer Education & Training 0.9 3.8% 4.3% service. But the distinctive qualities for Accommodation & FoodServices 0.9 1.8% 2.1% knowledge-based business development Textile, Leather, Clothing, Footwear Manu 0.8 0.2% 0.3% are likely to be the ‘ability to set and Fruit, Cereal & Other Food Product Manu 0.8 0.7% 0.9% execute strategy, to manage current Supermarket & Specialised Food Retailing 0.8 1.0% 1.3% and future talent, and to develop future Property Operators & Real Estate Services 0.8 4.6% 6.0% leaders’. Other Store & Non Store Retailing 0.7 1.9% 2.6% The knowledge-based sector of Pulp & Paper Product Manufacturing 0.7 0.2% 0.3% Wellington has moved beyond a stage of Construction Services 0.7 2.2% 3.0% seeming almost ‘accidental’ as a series of Fabricated Metal Product Manufacturing 0.7 0.6% 0.9% support functions for long-established Postal, Courier & WarehousingServices 0.7 1.2% 1.8% public sector and finance and insurance Road Transport 0.7 0.9% 1.4% organisations. The low-profile, privately Wholesale Trade 0.6 3.4% 5.3% owned Datacom, now New Zealand’s Building Construction 0.6 0.8% 1.2% largest information technology company, MotorVehicle, Parts & Fuel Retailing 0.6 0.4% 0.7% has grown significantly through gaining Beverage & Tobacco Product Manu 0.6 0.5% 0.9% contracts in Australia. TradeMe, New Wood Product Manufacturing 0.6 0.4% 0.6% Zealand’s equivalent of the US trading Rental & Hiring Services 0.6 0.7% 1.1% site EBay, was a disruptive technology Basic Chemical & Chemical Product Manu 0.6 0.3% 0.6% developed by a young entrepreneur Machinery & Other Equipment Manu 0.6 0.7% 1.3% at the expense of newspaper classified Non-Metallic Mineral Product Manu 0.6 0.3% 0.5% advertising. Xero, developer of cloud- Meat & Meat Product Manufacturing 0.5 0.4% 0.8% based accounting software which puts Transport Equipment Manufacturing 0.5 0.2% 0.5% a large part of the role of bookkeepers Heavy & Civil Engineering Construction 0.5 0.9% 1.8% and accountants in the hands of end Fishing & Aquaculture 0.5 0.1% 0.1% users, has yet to make a profit while Forestry & Logging 0.4 0.3% 0.7% Primary Metal & Metal Product Manu 0.4 0.1% 0.3% it builds international business. These Poultry, Deer & Other Livestock Farming 0.4 0.1% 0.1% and hundreds of small start-ups in Mining 0.3 0.5% 1.7% the digital sector have brought about Sheep, Beef Cattle & Grain Farming 0.2 0.3% 1.3% a change in the shape of Wellington’s Dairy Product Manufacturing 0.2 0.1% 0.6% economy as manufacturing has reduced. Horticulture & FruitGrowing 0.2 0.1% 0.5% Many founders have emerged from Agric Support Services & Hunting 0.2 0.1% 0.7% large corporations and government Seafood Processing 0.1 0.0% 0.2% agencies and are using their skills and Dairy Cattle Farming 0.1 0.3% 2.6% entrepreneurship to create software Source: Infometrics, 2015, p.11

Page 52 – Policy Quarterly – Volume 12, Issue 4 – November 2016 products or services with internet-based, tourism and the creation of high- what forms of planning and activism can international markets. tech work?4 provide the most effective leverage for This is the industry context which city leadership which refuses to accept a the new economic development agency Conclusion ‘dying city’ verdict? is tackling. Questions which seem to Local governments can expect to face If cities are to be generators of digital- this researcher to be most productive to increasing expectations to provide era innovation, more activist ‘ecosystems’ pursue in more depth include: leadership in tackling economic of capability building and connectedness • How can a city and a region development, particularly in cities and are needed. Wellington is a capital which with more than 500 digital sector smaller centres that are not buoyed by has been significantly changed by New vacancies best create such skills spending on construction that comes with Zealand’s adoption of ‘more market’ without relying too strongly on population growth. Calls for public sector strategies at a national level. Wellington’s migration? action on employment can be expected current challenge is an example of an • How can tertiary education to increase as technology change affects international pressure for local public organisations best create ‘employable’ increasing numbers of knowledge- and sector leaders to explore new ways of graduates during a period of rapid service-based jobs which can be converted leveraging limited public funds to create technology change without becoming into computer-controlled routines. distinctive competitive advantage for the ‘trades’ schools? During the past 30 years the neo- increasing pace of change of a ‘fourth • How can public funds best be used to liberal approach to government has industrial revolution’. gain collaboration from the private emphasised reducing the scale of 1 Ottawa and Canberra are other examples. sector to create new, high-value work, government and its role in planning. The 2 This article is an edited version of a presentation given at given perceptions that companies ideas of neo-liberalism were a disruptive the 20th conference of the International Public Management Network, 1–3 June 2016, at St Gallen, Switzerland. ‘free-ride’ on such money? ‘technology’ for the centralised and 3 Attributed to Democratic governor of New York State, Mario Cuomo: https://en.wikiquote.org/wiki/Mario_Cuomo. • How can the new Wellington planning-intensive model of government 4 These are questions that are driving a next phase of research Regional Economic Development of the early 1980s. Now that those ideas and the author would welcome input from others interested in these dilemmas for a period of digital disruption. Agency balance its role in supporting have become the ‘new establishment’,

References Monbiot, G. (2016) ‘Neoliberalism – the ideology at the root of all BERL (2016) The Wellington Region: situation analysis 2015:a our problems’, Guardian, 15 April , https://www.theguardian.com/ snapshot, Business and Economic Research Ltd books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot Colvin, G. (2015) Humans are Underrated, New York: Penguin Random Moretti, E. (2012) The New Geography of Jobs, New York: Mariner House Books, Houghton Mifflin Harcourt Currid, E. (2007) The Warhol Economy: how fashion, art and music Norman, R. (2003) Obedient Servants: management freedoms and drive New York City, Princeton: Princeton University Press accountabilities in the New Zealand public sector, Wellington: Florida, R. (2012) The Rise of the Creative Class Revisited, New York: Victoria University Press Basic Books Ross, A. (2016) The Industries of the Future, New York: Simon and Frey, C.B. and M.A. Osborne (2013) The Future of Employment: how Schuster susceptible are jobs to Computerisation?, Oxford: Oxford Martin Saxenian, A. (2006) The New Argonauts: regional advantage in a global School, University of Oxford, http://www.oxfordmartin.ox.ac.uk/ economy, Boston: Harvard University Press downloads/academic/The_Future_of_Employment.pdf Schwab, K. (2016) The Fourth Industrial Revolution, Geneva: World Galbraith, J. (2014) The End of Normal: the great crisis and the future Economic Forum of growth, New York: Simon and Schuster Schwartz, B. (2015) Why We Work, New York: TED Books, Simon & Granovetter, M. (1983) ‘The strength of weak ties: a network theory Shuster revisited’, Sociological Theory, 1, pp.201-33 Ulrich, D. (2015) The Leadership Capital Index: realizing the market Hollis, L. (2013) Cities Are Good For You, London: Bloomsbury value of leadership, San Francisco: Berrett-Koehler Infometrics (2015) Wellington Annual Economic Profile, http://ecoprofile. Wellington Regional Council (2012) Wellington Regional Strategy 2012: infometrics.co.nz/Wellington%20Region/PDFProfile growing a sustainable economy, Wellington: Wellington Regional Kaplan, J. (2015) Humans Need Not Apply, New Haven and London: Council Yale University Press Katz, B. and J. Bradley (2013) The Metropolitan Revolution, Washington, DC: Brookings Institution Press

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 53 Grant Duncan

Auckland Council is it too big to last?

Auckland is a city-region under intense political pressure. simply Auckland Council, a middle term is conspicuous by its absence. ‘City’, ‘District’ Migration and development are transforming streetscapes and ‘Regional’ could not be used, as they and communities. Local government has to plan and budget were the kinds of entities being abolished. Auckland Provincial Council would have for significant investments in infrastructure as the city grows, resurrected an entity abolished in the 19th century; ‘Shire’ sounds too Australian; and there is no strategy that pleases all sectors of residents State of Auckland would have raised the at once. Property owners love their rising asset wealth, but spectre of federalism. Auckland’s basic problem is one that central government is under pressure to address homelessness many other regions would love to have: growth. But then, how do you manage it? and home affordability. The Reserve Bank and the Treasury, Its population was 1,415,550 in the 2013 moreover, watch Auckland’s over-heated housing market census, and is predicted conservatively to reach 2 million by 2033. ‘Three- nervously, as it poses risk to the whole economy (Makhlouf, fifths of New Zealand’s population 2016). growth between 2013 and 2043 will be in Auckland’ (Statistics New Zealand, In the midst of this, a major restructuring (encompassing 4,894 sq km of land and 2015). Providing for this growth is costly of Auckland’s local governance and 3,702 km of coastline and embracing 30% for ratepayers (new infrastructure and administration has been undertaken. of New Zealand’s population). This new amenities) and for central government The formation of the Auckland Council entity was popularly dubbed the Super (new schools, state highways, etc), and in 2010 unified four metropolitan city City, somewhat misleadingly given that, in there is no end of argument over how to councils, two and a half district councils terms of area, the new authority is mainly plan for it. A struggle arose over whether and one regional council, comprising rural, although its population is mainly the urban space should intensify (grow a large urban, rural and marine area urban-dwelling. Being formally named up) or sprawl (grow out), and a political compromise was reached when the Grant Duncan is an associate professor in the politics programme at Massey University. He teaches council passed the unitary plan in August political theory and public policy at the Albany campus, Auckland. In 2016 he participated in an 1 independent evaluation of the unified governance model in Auckland. 2016.

Page 54 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Blakely (2015) summarised the arguing that Auckland Council does ward on the council’s governing body planning issues in a previous issue of not represent or address the needs of (which has 20 councillors and the this journal; the present article considers their communities. So, how well have mayor), and select a team (of between the new governance structure of the the Auckland reforms worked out five and nine members) to make up Auckland Council itself, but not the in practice? Is the new model fit for their local board. The 21 local boards council’s administrative organisation. purpose? As a decision-making entity (or play an important role in local policy Central government considered that group of entities), is it achieving what it decisions and place-shaping, but they a unified governance structure was was supposed to achieve? And, even if it are not mini-councils, as they have no needed in order to provide the policy is working well, what further problems powers to raise rates or to pass by-laws. and planning effectiveness necessary to or needs for modifications have become They do have non-regulatory functions, manage the city’s growth. In the view apparent? and they have input into region-wide of the Royal Commission on Auckland The unification aimed for cohesive policy through their local strategic Governance,2 the aim was to achieve Auckland-wide planning within a single plans. It is the governing body that strategically cohesive and effective policy framework, and the new model approves the budget, makes the critical planning and decision making across the has settled in surprisingly well, given the policy and planning decisions and region, and to improve local participation sheer size and scope of the restructuring passes by-laws. The mayor has a ‘first and engagement. Efficiency and cost and the lengthy and contentious process mover’ role, initiating budget proposals reduction were not the primary concerns. towards a unified plan. My qualified and strategic plans, but has only one Businesses and central government were frustrated with having to deal with seven local authorities; it was considered Dissatisfaction with rates rises and desirable that Auckland should ‘speak with one voice’ (Chen, 2014). The reforms planning processes has emerged, but were set down in the Local Government it is not sufficient simply to ‘blame the (Auckland Council) Act 2009, without the endorsement of a local referendum. Super City’ for this ... This significant reform of governance was more than just an amalgamation. It introduced a two-tier structural model with an office of the mayor that endorsement of the unified governance vote on the governing body. This was new to local government in New model should not be taken as an briefly summarises the main elements Zealand at the time. Proposals for similar evaluation of the particular actions and of Auckland’s governance. Aspects of unifications in other regions (Northland, decisions of the Auckland Council. The this new model of local government Wellington and Hawke’s Bay) were unitary governance model and the actual have become politically controversial, roundly rejected after consultation and, performance of the council itself are however; this article sets out some of in the case of Hawke’s Bay, a referendum. obviously closely related, but they need those contentious issues and seeks to And most Aucklanders’ attitudes are to be assessed separately. Dissatisfaction put them into context. negative or indifferent towards the with rates rises and planning processes new local authority. The council’s own has emerged, but it is not sufficient The governing body performance-monitoring survey found simply to ‘blame the Super City’ for this, The mayor of Auckland appoints the that few residents express trust in the as one cannot prove that people would deputy mayor, chairs the governing body, council or satisfaction with its services. have been better off under the former establishes its committees and appoints Only 15% expressed satisfaction with the seven councils. Although the Auckland their chairpersons. The inaugural council’s overall performance; 17% trust model has some flaws, the challenge for mayor, Len Brown, distributed the roles the council to make the right decisions; the time being is to make it work as well of committee chairs evenly among and 20% were confident that the council as possible. The present article identifies councillors across the political spectrum. is heading in the right direction. Critics aspects of the governance model that This helped to avoid partisanship of a of the council are especially prevalent in may require refinement. Looking long- kind that, at worst, could mean a stand-off the Rodney and Hibiscus and Bays areas term, it also asks whether Auckland in which a majority opposes the mayor. (Auckland Council, 2016). Those in rural Council, in its present form, is simply So, while there was a noticeable left–right areas feel that the new administration too big to last. political spectrum, no cohesive factions has an urban bias (Rose, 2015). Local The 2016 election, then, was the third (and certainly no whipped caucuses) advocacy groups in North Rodney and time that Aucklanders have participated emerged under Brown’s mayoralty. Waiheke Island formally proposed the in this governance structure as electors. Nonetheless, the mayor is given significant formation of separate unitary authorities They vote at large for one mayor, vote powers. Councillor Christine Fletcher to the Local Government Commission, for a councillor to represent their local observed that the inaugural mayor, the

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 55 Auckland Council: is it too big to last? deputy mayor and the chair of the finance The office of the mayor Zealand, but the boards have no regulatory committee had ‘much of the control and The legislation gives the mayor the leading powers. They cannot pass by-laws or levy authority for day-to-day organisation and (but not decisive) role in planning and rates; their budgets are granted by the gatekeeping between the chief executive budgeting, and authorises him or her to governing body. The legislation states that and senior management, and access to be the voice of Auckland as a whole. To the local boards and the governing body information’ (Fletcher, 2015). support this higher executive function, it ‘share’ decision making, but the governing The ward system for the election provides for an office of the mayor with body can override a local board if a local of councillors means that they are a guaranteed operational budget. The matter is deemed to have region-wide based geographically across the whole mayor can staff this office as he or she sees policy implications or impact. A formal of Auckland. This creates a tension, fit, but all the employment agreements submission seeking to split North Rodney however, between representing their local come under the human resources controls off from Auckland Council stated that ‘we voters, on one hand, and the need to vote of the council’s chief executive. The office do not regard the present local boards in the interests of the region as a whole of mayor and its executive powers have as any more than advocates, as they have on the other. nonetheless been attacked for giving the very limited areas of empowerment’ mayor too much power, independently (Northern Action Group, 2013, p.15). Some governing body councillors of the governing body and removed This may underestimate the consultation, think regionally … but a few are still from public scrutiny. Christine Fletcher planning and place-shaping roles of very parochial and not all work well commented in 2015 that democracy is local boards, but nonetheless it reflects a with their local boards, creating a ‘lacking’, that ‘Councillors are not driving certain perception of the two-tier model. If one includes all of the elected officials on local boards and the governing body, Urban Ma-ori leaders complain that the the representation ratio in Auckland is still a relatively high 1:8,820 and growing. views of their community groups are This indicates that a significant weakness in the Auckland model may be at this still not being taken into account, and local level, in terms of representation they say that mataawaka representatives and engagement. Local board members are part-time in their roles, and not all should be appointed by urban Ma-ori ... meetings are open to the public. The claim that they lack the resources and powers to be meaningfully working with, and making decisions for, their communities situation whereby the governing body policy’, and that the public did not get will continue to be heard. councillor and local board members enough information about decisions cut across each other’s work. In affecting them (Fletcher, 2015). To Ma-ori representation theory, given their regional mandate, mitigate such concerns, the mayor’s role The government rejected the royal governing body councillors should be as first mover in policy development is commission’s recommendation to visiting and meeting with residents subject to the support of the governing have Mäori represented directly on the and local boards outside their own body, and budgeting and planning governing body through two wards, wards to get a more-regional view processes are open to the public once based on the Mäori electoral roll, plus of issues, and this does happen with they reach the governing body. Having one appointed by a Mana Whenua some councillors. (Shirley et al., the mayor elected at large is appropriate Forum. Instead, the legislation created an 2016, p.23) to the purposes of the unitary governance independent board tasked with assisting model, as it means there is a single the council in ‘promoting cultural, Moreover, this body of 21 figurehead for the whole region. Given the economic, environmental, and social representatives makes the key regulatory, scope and responsibilities of this new civic issues of significance’ for both mana budgetary and rating decisions for a leadership role, it also appropriate that a whenua and mataawaka (urban Mäori), population of 1.5 million and growing: a distinct office be resourced to support it. and ensuring that the council complies representation ratio of roughly 1:71,500. with statutory provisions that refer to Given the scope of the unitary planning Representation and participation the Treaty of Waitangi.3 The Independent process, it is simply impossible for Auckland Council has 21 local boards with Mäori Statutory Board consists of seven councillors to be ‘across the details’ in between five and nine elected members mana whenua and two mataawaka their own wards, let alone the region, each, or 149 members altogether. The representatives. They are appointed by and hence unelected officials are likely to population covered by any single local a selection body which includes one exercise greater influence. board is larger than many of the local representative from each mana whenua territorial authorities elsewhere in New group. The board then appoints up to

Page 56 – Policy Quarterly – Volume 12, Issue 4 – November 2016 two of its members to sit on each sub- of a cheaper and more efficient council’ democratic accountability over them. committee of the governing body. (Hill, 2015). No such promise was The Ports of Auckland Ltd (a company Some have criticised this arrangement made, however. The royal commission wholly owned by a CCO) has been subject on the grounds that it places unelected and others (McKinlay Douglas Limited, to public controversy, for example, due members onto committees that are 2006; Reid, 2009) were aware that, while to its management of the workforce and otherwise composed of elected councillors some efficiencies may be gained through a proposed wharf extension. The CCOs (Rudman, 2015). On the other hand, by combining services and resources, the have their own governing boards and are representing each of seven mana whenua overall costs may not be reduced due to required to act as commercial entities. This groups, this arrangement provides a past underinvestment in infrastructure opens up the risk of role conflict and poor more inclusive, yet independent, avenue and population growth. Empirical co-ordination between the business goals for local Mäori participation in decision research from Australia suggests, of a CCO, the wishes of a local community making than would have occurred under moreover, that, beyond a certain scale, and the region-wide policies and planning the royal commission’s proposal for only amalgamation of local authorities may priorities of the unitary plan. The two wards. The boundaries of such wards even lead to diseconomies (see below). Auckland model could thus be accused would cut across and/or incorporate An independent analysis of Auckland of replacing geographical fragmentation distinct rohe. But with no Mäori Council’s finances concluded that rates with functional fragmentation. wards, there is no guaranteed Mäori increases, on average, ‘are well above the In the recent past, under the ‘new representation on the governing body itself, only on its subordinate committees. Moreover, the selection body’s Experts largely agree that the unification appointments of mataawaka representa- was a good idea ... but very few tives have been controversial. One unsuccessful applicant disputed the residents hold positive opinions about selection process, and the Court of Appeal (in Te Rangi v Jackson) agreed that the the council ... process had been hasty and failed to take into account the views of mataawaka. rate of inflation, but allowance needs public management’ of the 1990s But the controversy has not ended there. to be made for Auckland’s growth and publicly-owned trading organisations Although the selection body consists the pressures this creates, as well as for such as state-owned enterprises and only of mana whenua representatives, it addressing the infrastructure deficit’, and CCOs were required to act like business appoints the mataawaka representatives. that ‘debt appears to be within prudent enterprises, although some social Urban Mäori leaders complain that the limits, although compared to other responsibilities may be mandated as views of their community groups are councils it is high and growing’ (Shirley well. Commercially-oriented business still not being taken into account, and et al., 2016, pp.40, 69). In June 2016 decisions were at arm’s length from the they say that mataawaka representatives the council group’s total tax-supported political process, and hence subject to should be appointed by urban Mäori debt was reported to be at 246.5% of its less ‘interference’. A minister or a council (Radio New Zealand, 2016). That would adjusted operating revenue, and it aims might instead purchase services from require amending the statute. to keep this under 270%. Auckland has them. For Auckland’s CCOs, however, the Direct representation by indigenous large capital expenditure requirements pendulum is now swinging back towards people in governance over their to upgrade existing infrastructure, due centralised control and democratic traditional territories is consistent with to increased population densities and the oversight. The Governance Manual the Treaty of Waitangi and necessary need to modernise, and also has to provide for Substantive CCOs (issued by the for heritage and development purposes; new infrastructure as urban development Auckland Council’s CCO governance and hence some form of guaranteed expands. Hence some difficult decisions monitoring committee in August 2015) representation for Mäori – and not have to be made about financing this in requires them to act in the best interests only through ‘mainstream’ systems – is future, through debt, rates, user charges, of ‘the council group’ and to make warranted. Mäori wards could still be public–private partnerships and/or asset decisions that align with the council’s implemented in Auckland, but they are sales. plans and policies. Agency theory and politically contentious (Edwards, 2016). the autonomy to act as a commercial The current independent board is a Council-controlled organisations (CCOs) entity have given way to ‘partnership’ and compromise that has caused controversy The CCO model has also been a closer co-ordination of activities between among Mäori and non-Mäori. controversial aspect of Auckland council entities. governance. Given the sheer size of the Financial situation assets and costs, especially in Auckland Too big to last? Some observers assume that the unitary Transport and Watercare, there have been Experts largely agree that the unification model was set up with ‘alluring promises claims that there should be more direct was a good idea (Chen, 2014; Shirley et al.,

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 57 Auckland Council: is it too big to last?

2016), but very few residents hold positive number of councils from 157 to 73 and Victorian councils between 161000 and opinions about the council (Auckland the number of elected representatives 174000 residents’ (Drew, Dollery and Council, 2016). Even some councillors from 1,250 to 526. But a before-and- Kortt, 2016, p.74). are sceptical. Mike Lee (Waitematä and after analysis ‘cast doubt on whether Given that Auckland’s average rates Gulf ward) expressed qualified support the Queensland forced amalgamation increases have been well above inflation for a ‘greater level of self-government’ program has improved the operational and that there is significant public for North Rodney on the grounds that efficiency of local councils’ (Drew, Kortt dissatisfaction with the council, the results the unitary Auckland Council ‘cannot be and Dollery, 2016, p.12). As a result of of this Australian research reinforce the defended as optimal in terms of efficiency the amalgamations, this study found, contention that the Auckland model is and cost-effectiveness’ (Lee, 2016, p.26). a greater proportion of Queensland well beyond the optimum size from the The council has work to do to build the residents were represented by local viewpoint of both efficiency and public satisfaction. Auckland is now the largest local authority in Australasia in terms Auckland is now the largest local of population, and the comparative evidence cited above does not support authority in Australasia ... and the the notion that its size will lead to greater efficiency and economy of scale, or to comparative evidence ... does not greater public satisfaction. support the notion that its size will lead Conclusion to greater efficiency and economy of Is Auckland Council now simply too big to be efficient, democratic and sustainable? scale ... Will it be branded ‘a failed experiment’? Once the unitary spatial plan has been approved and put in place, will the next step be to devolve powers to, say, ten or 12 reputation of the unitary model among authorities that exhibited diseconomies smaller councils? its own elected members and Aucklanders of scale. The optimal population size Empirical evidence and public at large. Even if disaffected communities was found to be just under 100,000. In sentiment weigh against Auckland’s in North Rodney and Waiheke Island do addition, Sinnewe, Kortt and Dollery unified governance model. Aucklanders not win their case to break away from (2016) conducted a comparison of the disapprove of it; the rest of New Zealand Auckland Council, the fact that they have very large Brisbane City Council with refuses to emulate it. This particular put formal proposals forward to do so Sydney City Council, an average of six pendulum may have further to swing shows that many residents see the council south-east Queensland councils and an towards centralisation (meaning central as too big and too remote for effective average of ten metropolitan New South government takes over some powers to local democracy. If this trend were taken Wales councils on measures of financial shape Auckland), or it may have reached to its logical conclusion, however, more performance. If the notion that ‘bigger its extreme position and be on the cusp powers would be devolved to all local is better’ holds true, then Brisbane (with of swinging back towards a devolved boards, and eventually Auckland would 380,800 households) should out-perform model (multiple boroughs under a have 21 boroughs and a regional council, those comparators. But, on measures regional council). In the meantime, the and be back at square one. of financial flexibility, liquidity and council has to earn a better reputation On the other hand, an argument in debt-servicing ability, the Brisbane City with the people of Auckland, improve favour of the unitary council is based Council performed comparatively poorly. local engagement and participation, on its sheer size. It may create greater On non-financial performance indicators implement the new unitary plan and buying power with suppliers, reduce too the evidence does not look good for ensure financial sustainability. Its long- duplication, allow for efficient sharing of larger municipalities. Using data from term fate rests in the balance. services, and provide scope for trialling community satisfaction surveys of local 1 At the time of writing, legal appeals threaten to delay the full innovative service models. Empirical councils in the state of Victoria, Drew, application of the unitary plan’s zoning maps. evidence from Australia, if comparable, Dollery and Kort found, for metropolitan 2 The Report of the Royal Commission on Auckland Governance (2009) and related papers have been archived suggests that Auckland Council could be councils, an inverted U-shaped by the National Library at http://ndhadeliver.natlib.govt.nz/ ArcAggregator/arcView/frameView/IE1055203/http://www. well above the optimal size, however. The relationship between population size and royalcommission.govt.nz/. forced amalgamations of local bodies community satisfaction. These results 3 Local Government (Auckland Council) Act 2009, s81. in Queensland in 2007 reduced the suggest ‘an optimal population size for

Page 58 – Policy Quarterly – Volume 12, Issue 4 – November 2016 References Auckland Council (2016) Measuring Auckland Council’s Trust McKinlay Douglas Limited (2006) Local Government Structure and and Reputation: baseline results summary – June 2016, Efficiency, Wellington: Local Government New Zealand http://www.aucklandcouncil.govt.nz/EN/AboutCouncil/ Northern Action Group (2013) A Proposal to Form a North Rodney HowCouncilWorks/PerformanceAndTransparency/Documents/ Unitary Council, Auckland: Northern Action Group citizeninsightsmonitorbaselinesummaryjune2016.pdf Radio New Zealand (2016) ‘Auckland iwi block urban leaders’ bid for Blakely, R. (2015) ‘The planning framework for Auckland “Super City”: city council role’, Morning Report, 1 September, retrieved from an insider’s view’, Policy Quarterly, 11 (4), pp.3-14 http://www.radionz.co.nz/national/programmes/morningreport/ Chen, M. (2014) Transforming Auckland: the creation of Auckland audio/201814426/auckland-iwi-block-urban-leaders’-bid-for-city- Council, Wellington: LexisNexis NZ council-role Drew, J., B. Dollery and M.A. Kortt (2016) ‘Can’t get no satisfaction? Reid, M. (2009) ‘The Auckland debate: is big city governance always this The association between community satisfaction and population size difficult?’, Policy Quarterly, 9 (2), pp.39-44 for Victoria’, Australian Journal of Public Administration, 75 (1), Rose, C. (2015) ‘Living on the edge: rural views of the supercity’, pp.65-77 Briefing Papers, http://briefingpapers.co.nz/2015/11/living-on-the- Drew, J., M.A. Kortt and B. Dollery (2016) ‘Did the big stick work? An edge-rural-views-of-the-supercity/ empirical assessment of scale economies and the Queensland forced Rudman, B. (2015) ‘Maori board hops over the law’, New Zealand amalgamation program’, Local Government Studies, 42 (1), pp.1-14 Herald, 6 November, retrieved from http://www.nzherald.co.nz/local- Edwards, B. (2016) ‘Political roundup: bringing ethnic minorities to the government/news/article.cfm?c_id=250andobjectid=11540747 table’, 9 September, retrieved from http://www.nzherald.co.nz/politics/ Shirley, I., J. Molineaux, D. Shand, N. Jackson, G. Duncan and N. news/article.cfm?c_id=280andobjectid=11706780 Lewis (2016) The Governance of Auckland: 5 years on: a report Fletcher, C. (2015). ‘Phil, can you save our lovely city?’, New Zealand commissioned by the Committee for Auckland, Auckland: Policy Herald, 15 October 15, p.A25, retrieved from http://m.nzherald. Observatory, Auckland University of Technology co.nz/opinion/news/article.cfm?c_id=466andobjectid=11529204 Sinnewe, E., M.A. Kortt and B. Dollery (2016) ‘Is biggest best? A Hill, M. (2015) ‘Poll: what Auckland wants, what NZ needs’, 14 comparative analysis of the financial viability of the Brisbane City November, retrieved 14 June 2016 from http://www.stuff.co.nz/ Council’, Australian Journal of Public Administration, 75 (1), pp.39- auckland/74018816/Poll-What-Auckland-wants-what-NZ-needs 52 Lee, M. (2016) ‘Rodney escape bid could help rest of Auckland’, Statistics New Zealand (2015) ‘Subnational population projections: Ponsonby News, 1 July, p.26 2013(base)–2043’, 19 February, retrieved 8 December 2015 from Makhlouf, G. (2016) ‘The importance of being Auckland: strengths, http://www.stats.govt.nz/browse_for_stats/population/estimates_and_ challenges, and the impact on New Zealand’, speech delivered projections/SubnationalPopulationProjections_HOTP2013base.aspx at the Committee for Auckland Advisory Group summit, 21 June, Wellington: Treasury Improving Intergenerational Governance Forthcoming Event in March 2017

As part of the University’s Speakers will include: focus on the theme Peter Hughes; State Services Commissioner; of Advancing Better Sir Geoffrey Palmer QC, Professor Jonathan Boston, Government, the Institute Dr Andrew Colman. More information will for Governance and Policy Professor Girol Karacaoglu, be made available soon Studies is organising a Professor Wendy Larner, through one-day symposium at Associate Professor Michael Macaulay and www.igps.victoria.ac.nz Parliament in March 2017 on Associate Professor Maryan Van Den Belt. Improving Intergenerational Governance.

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 59 Frances Sullivan This paper was submitted prior to the November 14, 2016 Kaikoura earthquake.

Strategies for Managing Infrastructure Risk as one of five key factors for policymakers to consider to achieve the vision of higher living standards for New Zealanders (see figure). As our wealth and standard of an update living has grown, so has our risk. Risk management enables policymakers to be Dynamic is perhaps the most understated and least understood better informed about the risks associated with action or inaction, to analyse critical of all the terms used to describe New Zealand. Straddling an information for prioritisation and resource active plate boundary and surrounded by ocean, New Zealand allocation processes, and to target desired levels of resilience. Good risk management has a spectacular and dynamic landscape formed by geological is the difference between evidence and knowledge, and intuition and luck. and meteorological events, but the management of the risk to Risk is defined by ISO 31000 as the people, property and infrastructure from natural hazard events ‘effect of uncertainty on objectives’, and while science continues to improve our associated with this environment is a challenging area of public understanding of the likelihood of natural sector management. Events of recent years, both here and hazard events, the consequences are not so well understood. The immediate overseas, present a timely reminder that risk does not stand still. impacts of these events are readily identifiable, if not quantifiable – lives lost Our knowledge of hazards and our climate change impacts are now being or damage done to property – but much vulnerability to events are both on the rise, embedded in the policy environment. more difficult to assess is the impact on and local government has recognised the Central government agencies are the economy, community health and need to stand back and take stock of whether responding: the National Infrastructure well-being. we are doing the best we can to manage risk Unit infrastructure plan, the Ministry of The uncertainty of when an event rationally and sustainably (Willis, 2014). Civil Defence and Emergency Management will occur, whether it be coastal erosion The Canterbury earthquakes of 2010 and resilience strategy, the classification of or an earthquake, and the impacts 2011 created a heightened awareness of earthquake-prone buildings and the of these events does not measure up the impacts of earthquakes, including parliamentary commissioner for the well against the perception of the access to insurance (Stobo, 2015), and environment’s report on sea level rise. immediate impact on property rights. global agreements to commit to mitigating Treasury has embedded risk management This is often the greatest barrier to action. Local government has seen this time Frances Sullivan is a Principal Policy Advisor with Local Government New Zealand. and again in the dialogue on actions to

Page 60 – Policy Quarterly – Volume 12, Issue 4 – November 2016 address the threat of these natural hazards Climate change will amplify existing risks and create new risks for natural and hu- on our lives. Downward pressure on rates, man systems. Risks are unevenly distributed and are generally greater for disadvan- coupled with increasing expectations taged people and communities in countries at all levels of development. Increasing of service delivery, have the potential to magnitudes of warming increase the likelihood of severe, pervasive and irreversible delay decision making and create gaps in impacts for people, species and ecosystems. Continued high emissions would lead to investment that cannot be avoided in the mostly negative impacts for biodiversity, ecosystem services and economic develop- long term, although it is not clear who ment and amplify risks for livelihoods and for food and human security. will pay and when. These are issues that — IPCC fifth assessment report are being grappled with internationally. Local Government New Zealand has developed a business case for a local core ideas that dominate natural hazard 2. Real progress requires public government risk agency for government risk management: participation: societal goals are bigger consideration. The initial focus of the • the need for issue- and place-specific than government in the sense that proposed risk agency will be to close responses; and their achievement requires effort and the information and capability gap in • the need for integration and action on the part of all. Climate relation to local government assets (and collaboration in order to develop and change mitigation and health are associated services) and natural hazard deliver effective responses across the both good examples. It takes more risks. Local authorities want to take a many players with a role to play. than good public transport and cycle more integrated and informed approach Integration and collaboration are paths to reduce reliance on private to risk-based decision making because easier to require than they are to deliver, transport; it requires an informed and these assets (three waters infrastructure however. Don Lenihan describes the policy engaged public who are ready, willing (water supply, waste water and storm process as ‘designed for a simpler world, and able to change their behaviours. water) in particular) tend to be expensive where governments were busy building 3. Societal goals require long-term (and ageing) and difficult to maintain, roads and bridges, regulating basic trade planning: societal goals like wellness and are of critical importance to the and commerce, and establishing law or climate change adaptation are local economy and community welfare. and order’, and proposes five principles long-term goals that require ongoing This would include the use of risk-based for rethinking the policy process, with a dialogue, action and adjustment. No approaches for asset management and strong underlying theme of collaboration single piece of legislation or strategy developing a better understanding of and integration: will achieve them; nor will they be the risk/return trade-offs. The benefits 1. Good policy is comprehensive: good achieved in the usual three-year expected from the proposed changes are: planning and policy development mandate of a government. • greater community resilience and should be comprehensive, in the sense 4. Every community is different: issues welfare as a result of better risk that it should take important links to that look similar at first glance are management and governance; and other policy fields into account. often very different just below the • improved national and local visibility (greater sharing and understanding) and cost certainty of risk exposure. Assess the impact of policy across key living standards dimensions Benefits will also accrue to ECONOMIC • the Crown by way of its reduced GROWTH contingent liability; • communities by way of improved resilience and welfare; and • local government by way of insurance SUSTAINBILITY premiums that are better value for MANAGING Higher Living FOR THE money. RISKS Standards FUTURE This work follows the Local • Ecomonic Capital Government New Zealand think piece • Natural Capital on managing natural hazard risk (Willis, • Social Capital • Human Capital 2014) and insurance market review (Stobo, 2015). The think piece made three recommendations: for a national information portal; a policy platform: and a natural hazards and community SOCIAL INCREASING resilience strategy. It also identified two COHESION EQUITY

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 61 Strategies for Managing Infrastructure Risk: an update

Coastal defenses reduce the risk of floods today, but they also attract population to multiply from $US6 billion per year in and assets in protected areas and thus put them at risk in case the defense fails, or 2005 to $US52 billion in 2050 through if an event overwhelms it. increasing population and property value alone (Hallegatte et al., 2013). The risks —Stephane Hallegate, senior economist, World Bank from sea level rise and sinking land mean that large coastal cities could face losses surface, as, therefore, are the causes of caused by climate change are, by contrast, costing $US1 trillion a year if these cities and solutions to the problem. While the long-term priority for Otago. The do not take steps to adapt, and while this does not mean there is nothing parliamentary commissioner for the New Zealand cities do not feature in the useful to say at a regional or national environment has described sea level rise list of those at risk, local authorities well level, it does mean that good policy impacts on South Dunedin as ‘a slow remember the influence the Canterbury making must allow for real flexibility unfolding red zone’. The Otago Regional earthquakes had on the cost of insurance in solutions and implementation at a Council has recently released three videos, for infrastructure assets. variety of levels. on the history of the landscape, the A risk management approach will 5. The public have new expectations: relationship between groundwater and enable local authorities to address public expectations around land levels, and sea level rise and other priority issues with their communities. transparency and accountability have risks, as the starting point for discussions Infrastructure that provides core services changed. (Lenihan, 2012, pp.39-41) about the future of South Dunedin and to communities could be the first to be Underpinning integration and how the community responds and adapts affected by rising sea levels and storm collaboration, the application of these to climate change. surges, rainfall events of greater frequency principles within local government is Following the ACTA (avoid, control, and intensity, and other natural hazard growing. The provision of natural hazard transfer and accept) approach, most events. Despite this, there remains the information to the public is taking on local authorities have some planning potential for risk management to be new dimensions, with Otago and Hawke’s provisions that reflect climate-related risk viewed as part of the merry-go-round of Bay recently setting up websites. The based on current predictions (Lawrence favoured policy themes that come and go East Coast LAB (Life at the Boundary) et al., 2013). In a study of 99 local depending on the political leanings of the is a collaboration between GNS Science, authority plans, Wendy Saunders of GNS time. Yet, in light of increasing demands on EQC, Massey University, NIWA, the Science found that a set of general risk budgets, and increasing demands on and Ministry of Civil Defence and Emergency management and/or ‘all hazard’ objectives expectations of services for both central Management, regional councils and the and policies, alongside hazard-specific and local government, risk management civil defence and emergency management methods and rules, is a common approach at its simplest supports prudent financial groups from Hawke’s Bay, Manawatu– in district plans, and that managing risk is management and decision making in a Whanganui, Wellington and Napier. becoming more explicit in regional policy constrained fiscal environment. Given this region’s proximity to the statements and district plans (Saunders Hikurangi trench, the aim is to ensure and Grace, 2015). that people living on the east coast of the North Island are aware of the hazards that Conclusion affect them and know how to prepare and Consideration is needed about the choices respond to natural hazard events. that exist for addressing future risk and Reinforcing the principle that every who will bear the costs. A World Bank community is different, natural hazards report forecasts average global flood losses

References Hallegatte, S., C. Green, R.J. Nicholls and J. Corfee-Morlot (2013) Saunders, W. and E. Grace (2015) ‘A case study of best practice natural ‘Future flood losses in major coastal cities’, Nature Climate Change, hazard planning provisions in New Zealand’, paper presented at the 3, pp.802-6 Roger Davis Research Symposium, Auckland Lawrence, J. F. Sullivan, A. Lash, G. Ide, C. Cameron and L. McGlinchey Stobo, C. (2015) Local Government Insurance Market Review, (2013) ‘Adapting to changing climate risk by local government Wellington: Local Government New Zealand in New Zealand: institutional practice barriers and enablers’, Willis, G. (2014) Managing Natural Hazard Risk in New Zealand: International Journal of Justice and Sustainability, 20 (3), pp.298- towards more resilient communities, Wellington: Local Government 320 New Zealand Lenihan, D. (2012) Rescuing Policy: the case for public engagement, Ottawa: Public Policy Forum

Page 62 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Matt Adams and Ralph Chapman Do Denser Urban Areas Save on Infrastructure?

Compact (dense) urban form presents Evidence from an alternative to the sprawling city development that characterises many younger cities around the world. Sprawl is low-density, car-oriented, dispersed New Zealand or leapfrog development, typically with segregated land uses (Litman, 2015). Compactness is argued to be an territorial important component of sustainable urban form, other elements of which include destination accessibility, design of street networks, diversity (mix) authorities of land use, density of intersections (connectivity), and distance to destinations by walking and cycling How urban planners shape urban form and long- (Ewing and Cervero, 2010). Benefits of lived infrastructure in these coming few years will sustainable urban form and design, it is claimed, can extend to energy saving, largely determine whether the world gets locked into a emission reduction, more available green traditional model … or moves onto a better path, with space and even improved community interaction (Jabareen, 2006; Joffe and more compact, connected and liveable cities, greater Smith, 2016; Litman, 2012; Talen, 1999). For example, the Global Commission on productivity and reduced climate risk. the Economy and Climate (2014) argues — Global Commission on the Economy that: ‘more compact, more connected city forms allow significantly greater energy and Climate, 2014, p.41 efficiency and lower emissions per unit of economic activity’ (p.41). Other literature Ralph Chapman is the director of the graduate programme in Environmental Studies at Victoria reinforces the significance of the potential University of Wellington, with particular interests in climate change mitigation, cities, transport, economic, environmental and social gains energy and housing. Matt Adams was a postgraduate student in the Environment Studies programme at Victoria University of Wellington, and is now a policy analyst at the New Zealand (Creutzig et al., 2015; Ewing et al., 2011; Customs Service.1 Holman et al., 2015; OECD, 2012).

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 63 Do Denser Urban Areas Save on Infrastructure? Evidence from New Zealand territorial authorities

Arguments for compactness include but an analysis is beyond the scope of this expenditures (Litman, 2016, p.43). In the agglomeration benefits arising from article. short, the evidence base is improving higher employment density and the (Litman, 2012; Global Commission easier exchange of ideas, information Compactness and infrastructure on the Economy and Climate, 2014), and services, driving a more productive In principle, mid- to high-density and grey literature, based on business urban economy (Grimes, 2010). Other development means more people can be consultancy studies, provides additional arguments include the support of public served by a given investment in networked if less robust evidence (e.g. Centre for and active transport modes, meaning infrastructure such as roads and water International Economics, 2015). fewer cars on the road, shorter commutes, supply. Cities of higher density are argued The present study examines economic fewer vehicle kilometres travelled, to have lower infrastructure costs per efficiency in relation to the provision reduced energy consumption and capita, making them more economically of infrastructure by New Zealand’s carbon emissions, and healthier lifestyles efficient than lower-density development. territorial authorities (TAs), considering (Cameron, 2011; Chapman, 2008), as well Higher density can in principle leave local four key assets: roading, water supply, as more space at the urban periphery for councils more resources to allocate to waste water and storm water. To examine agriculture, biodiversity protection and other services. As cities develop, making economic costs we use depreciation, an outdoor recreation. On the other hand, good use of the excess capacity of existing accounting measure that spreads the intensification brings greater change for infrastructure is preferable to building cost of an asset over its life, as a proxy for the (annual) economic cost of each asset. There is conceptual support for Other research examined the using depreciation as an indicator of the economic cost of replacing infrastructure consistency of any relationship between assets at current service levels (Office of infrastructure costs and density: they the Auditor-General, 2014, paragraph 2.64). found that the cost curve might be The rest of this article is structured as follows. First, the methodological U-shaped, first falling and then rising as approach taken by studies on density increased ... compactness and infrastructure is briefly examined. Second, the methods used in the present study are detailed. Empirical results are accompanied by a discussion existing communities (Mead and Ritchie, new infrastructure in areas further from of limitations and implications. 2011). There is a need for research to employment. Such new and distant provide planners and local authorities infrastructure may be poorly utilised, Approach taken by the literature on with an evidence base for shaping especially if growth slows. infrastructure costs development to be economically efficient The empirical evidence on Early US work (Burchell and Mukherji, as well as socially and environmentally infrastructure savings from compactness 2003) used a simulation approach to sustainable. In New Zealand, local rests largely on some key studies mainly costs of ‘public services’ (including authorities spend collectively about from the United States (e.g. Carruthers infrastructure) for conventional $8 billion annually on infrastructure and Úlfarsson, 2008, 2003). Recent (sprawling) development patterns, assets (Department of Internal Affairs, Spanish research on costs for water comparing them with those of a managed 2013) and their configuration matters supply, sewerage and other services growth (higher density) scenario over economically. (Prieto, Zofío and Álvarez, 2015) found 25 years. Burchell and Mukherji took Significant questions relating to that infrastructure costs per capita fall into account lower public service costs compact development include whether, as population increases (economies of associated with sprawl arising from a even if it is more economical in some scale), reinforced by increased density ‘reduced need for a deep public service sense, such development is also attractive (economies of density), and concluded base’ (p.1534), and the higher costs of to people choosing where to live (Arbury, that most cities studied were below the administering managed growth. 2005; Carruthers and Úlfarsson, 2008, optimum density for these infrastructure Other research examined the p.1816). How do people trade off services. Litman’s review (2015) indicates consistency of any relationship between neighbourhood type against housing that sprawl typically increases the costs of infrastructure costs and density: they attributes, and transport factors, for providing a given level of infrastructure found that the cost curve might be example? There is emerging evidence on by 10–40% (p.28). Litman also refutes U-shaped, first falling and then rising this (Dodge and Chapman, 2015; Dodge the findings of Cox and Utt (2004), as density increased (Ladd, 1992, 1994). et al., 2014; Yeoman and Akehurst, 2015), who found little effect of density of Carruthers and Úlfarsson (2008, 2003) US municipalities on public service considered how the form of urban

Page 64 – Policy Quarterly – Volume 12, Issue 4 – November 2016 development (including density) was to give the city’s overall population- Table 1: Top five densest New Zealand related to a range of public expenditures weighted density. This accords greater territorial authorities (people per (including roadway and sewerage costs) salience to those areas of high population. hectare) across 283 metropolitan US counties (over An advantage of this measure is that it Territorial Authority Population- 1982–92). They used regression analysis, indicates better how density varies across weighted density controlling for property values and a city (Mead, 2014) and considers where people per ha other confounders, finding that the cost people actually live. If population growth Wellington City 57.40 per capita of most public services fell as occurs at lower densities (for example, in Auckland 46.33 density rose. While roading costs declined greenfields), the lower-density area will Dunedin City 34.09 with density, sewerage costs (waste gain a higher weighting, thus bringing Christchurch City 30.00 water and storm water combined) rose down the population-weighted density of Hamilton City 29.91 with density, although not significantly. a city. Also, population-weighted density The authors concluded that this latter better indicates the density residents relationship arises because low-density experience, and thus more typical information on depreciation is available areas tend to use private rather than economic and liveability impacts. But from the authors.) public facilities. Carruthers and Úlfarsson it is more difficult to compute (Litman, Depreciation was chosen over other also noted that regression-based analyses 2015) and, in New Zealand, accurate potential measures of infrastructure can produce conflicting evidence, partly calculations are limited to census years. costs, such as operating and capital because of methodological differences but also because of differences in the way the character of urban development is measured (2003, p.507). They noted that The fast-growing TAs of higher density density is only one factor characterising maintain roading costs lower than those urban areas and that other aspects should be considered; and that the use of counties of more dispersed TAs. (analogous to TAs in New Zealand) can be problematic where their large size obscures urban density. We minimise this latter difficulty in the present study Method expenditure, for several reasons. Firstly, by using a population-weighted density Density in a recent report on the management of measure for TAs. We calculated population-weighted road and three waters (water supply, waste Urban densities (whether dwelling or densities using 2013 census data for every water and storm water) infrastructure, population densities) are measured in the territorial authority, with meshblock depreciation is identified as an literature in various ways, including gross, zones for weight calculations. Meshblock appropriate estimate of the expenditure net and population-weighted density. land areas were obtained from Statistics required to maintain infrastructure asset Gross density is simply the number of New Zealand,2 as were population data service capacity (Office of the Auditor- people or dwellings in a geographic zone (Statistics New Zealand, 2013). Densities General, 2014).6 Second, both capital (e.g. a region, a district, a census area were calculated at TA level to match the and operating expenditure fluctuate as unit or a meshblock) divided by the financial information on infrastructure asset replacement and new development zone’s land area. It includes land areas of costs (in required audited public reports) become necessary and as maintenance all uses, whether urban, suburban, rural only publicly available at TA level. schedules come due (not to mention or wilderness. Accordingly, the existence Thus we could compare TA density to emergency expenditure from natural of parks, natural environments and infrastructure costs.3 disasters). Depreciation smooths such undeveloped land within a set zone can effects. Third, maintenance costs are skew results (Nunns, 2014). Net density Financial data not consistently reported separately in includes only zones of a particular land use We used depreciation for infrastructure the financial statements of all councils, (Zhao, Chapman and Howden-Chapman, assets presented in TA financial statements whereas infrastructure depreciation must 2011): exclusion of open space or parks as a proxy for annual infrastructure costs. be disclosed. Lastly, items of capital and within a city’s boundary arguably gives Depreciation spreads an asset’s capital costs operating expenditure from the activity a more accurate portrayal of the density over its useful life. The result is an annual funding impact statements are not experienced by a city’s population. expense which reduces an asset’s carrying subject to the same accounting and audit Population-weighted density assigns a value (asset cost or value less depreciation rigour as the main financial statements. weight to each zone of a city’s land area accumulated since the asset was On the other hand, a weakness is that based on that zone’s population. This recognised) in the financial statements.4 depreciation omits certain aspects, such weight is applied to the average density Typically, this depreciation is calculated as land (relevant to the true economic of the zone, and zones are then summed on a straight-line basis.5 (Supplementary cost of such assets).7

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 65 Do Denser Urban Areas Save on Infrastructure? Evidence from New Zealand territorial authorities

Growing territorial authorities is densest, with a population-weighted Wellington City, and rise as density falls As this research addresses the way New density of 57.4 people/ha, almost double to the least dense district (Mackenzie Zealand cities are growing, and the that of Hamilton City which rounds out District). Figure 1 uses costs per km of economic costs of doing so, we also the top five.9 The mean weighted density lane length per capita rather than simple examined the relationship between rapid of all TAs is 18.3 people/ha. road length, as higher-density roading is population growth and infrastructure more likely to be multi-laned and would costs. Ladd notes that ‘rapid population Roading therefore be under-represented if simple growth is associated with large increases Figures 1–5 allow visual comparison road length was used. Figure 2 illustrates in per capita spending’ (Ladd, 1992, between TA density and infrastructure more simply the inverse relationship p.274). Examination of growth over the costs, with infrastructure costs per capita between TA roading costs per capita and intercensal 2006–13 period showed a on the vertical axis and the TAs arranged on TA density. cluster of TAs growing at 9% or above. the horizontal axis in descending order of Narrowing the comparison to just We investigated whether this cluster had density. Fitted lines indicate how costs vary the fast-growing TAs, the roading cost higher (or lower) depreciation. as density falls. Positive slope lines (as for gradient with density is more pronounced roading) indicate that infrastructure costs (data not shown). The fast-growing TAs Results per capita rise as density falls, while negative of higher density maintain roading costs Density slopes show costs falling with density falling. lower than those of more dispersed TAs. Table 1 shows densities for the five most Figure 1 shows that roading costs per Most TAs fit the pattern well. Ashburton densely populated TAs.8 Wellington City km of lane length per capita are lowest in and Waikato are the only districts well

Figure 1: Road costs per km lane length per capita (excluding significant outliers of Kawerau and Kaikoura District Councils)

Roading Costs Per Km Per Capita 0.40 y = 0.0019x + 0.071 0.35

0.30

capita ($/km/cap) 0.25

0.20

0.15

0.10

0.05

Depreciation per lane km - y y y y y y t t t t t t ct c ct c ct ct ct ic ict i ict i i rict r rict ri rict trict trict trict trict trict t City s s s strict istrict istrict th City District Distr Di Dist Distr i Di i District h District y d Distric to District r th Dis e pa District es ko District ey D Napier Cit ton District ton Distr i a o ller Distri ton Districttha Di Porirua Nelson City tak iroa District and Dist ia k i omo Distri Gore Di tf Gr u itik Dunedin Cit aupo District i rarua enzie Distric ellington City Tauranga City it imate Distr Auckland Cit Hamilton City T ranaki District a Bu ter apehu District Wa Opitiki D r Cl thl urunui Wa irarapa Distr Selwyn Distric Wa estland District Ta l Otago Dis e’s Bay Dist ck W Lower Hutt Cit Upper Hutt City Rotorua District Invercargill Cit Tasman District anganui District n-Lak ar Hauraki Distri Kaipara Dis ta-P Wa ar Nor ang H Hastings District Gisborne District St Wa Wa Ru Christchurch Cit W C w F tra R Ashbur W Master Sou Whangarei District Manawatu District Ma Whakatane District Otorohanga Waimakariri District ay of Plent Coromandel District Kapiti Coast District sto Marlborough Dist Horowhenua District - B n Cen Plamerston Nor New Plymout South Waikato District South Ta ee Matama mes tral Hawk South Wa n Qu

Tha Ce Western

Note: those coloured grey have populations which have grown by more than 9% since the 2006 census. Figure 2: TA road depreciation costs per capita, against TA density

Roading Costs Per Capita against Population-Weighted Density 700

600

500

400

300 Road Costs per Capita ($) 200

100

- - 40.00 50.00 60.00 70.00 10.00 20.00 30.00 Population-Weighted Density

Page 66 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Figure 3: Combined three water costs per capita

Three Waters Costs Per Capita 350 y = 0.3368x + 134.82 300

250

200

150

100 Depreciation per capita ($) 50

0 y y y y y y t t t t t ct ct c ct ct ct ct c ct ct ct i ic i i i i i rict rict ri rict rict ri trict trict trict t t t t trict s s s strict

th City District Distri Distr Distr District Dis Distr Dis Distr Dis l Di rirua City y District o a Di a pa District es ko District g Napier Cit ton District ton Distr i ller Distric Po Nelson City iroa a raki Distri Bay Distri ia kato Distr itaki District Gore Di Grey our unui Di Dunedin Cit aupo District i u enzie District ellington City itomo imate District ande s Auckland Cit Hamilton City Tauranga City T atford DistrictBu stland terton ’ gitikei ik Wa ranaki District ararua District Clutha Dis aipara apehu Districtur asman District Wa irarap Selwyn Distric Wa Opotiki District T l Ot n a ck W Lower Hutt Cit Upper Hutt City Rotorua District Invercargill Cit T anganui District n-Lak ar Ha K ta-P Wa ar North District ke H Hastings District Gisborne District Kawerau District Str Wa Wa om K Ru Christchurch Cit We r C w F Ra Ashbur W Master Southland Dist Whangarei District Manawatu District Ma Whakatane District ntra ay of Plent Otorohanga Distr Waimakariri District Kapiti Coast District Co h Wa Marlborough Dist Horowhenua District sto B n Ce Haw Plamerston Nor South Waikato District New Plymouth Dis South Ta es- n out ee Matama m S

Qu ster

Tha Central We Note: those coloured grey have populations which have grown by more than 9% since the 2006 census Figure 4: Storm water costs per capita

Storm water Costs Per Capita 60 y = 0.2215x + 30.76 7 50

40

30

20 $ Depreciation per capita 10

0 y y y y y y t t t t t t t ct c ct ct ct ct c ct ct ct ic ic ic i i i i i rict r rict rict rict ri rict ri rict t t trict trict s s

th City Dist Distr Distr District Dis Distr Dist Distr Dis irua City l Dist i h District s y District o a Distric a e pa District ko District Napier Cit ton District ton Distr i ke ller District Por Nelson City iroa raki Distri Bay Distri ik ia kato Distr itaki District tag Gore Di land Distri Grey our unui Dist Dunedin Cit aupo District i u enzie District ellington City Tauranga City La itomo imate District ande s arap Auckland Cit Hamilton City T ranaki District Bu st O terton ’ git ik Wa ratford District ararua District Clutha Dist aipara ur Wa Selwyn Distric Wa Opotiki District T l n a ck W Lower Hutt Cit Upper Hutt City Rotorua District Invercargill Cit Tasman District anganui District n- ar Ha K Wa ar North Di ke H Hastings District Gisborne District Kawerau District St Wa Wa om K Ruapehu District Christchurch Cit We r C F Ra Ashbur W Master Southland Dist Whangarei District Manawatu District ow Ma Whakatane District ntra ay of Plent Otorohanga Distr Waimakariri District Kapiti Coast District Co h Wair Marlborough Dist Horowhenua District st B n Ce Haw Plamerston Nor South Waikato District New Plymout South Ta es- n out ee Matamata-P m S

Qu ster

Tha Central We

Note: those coloured grey have populations which have grown by more than 9% since the 2006 census

below the fitted line and Mackenzie and roading costs, increase as density declines. medium- (between 1 and 4.99%) and Queenstown districts are well above. This gradient is strong enough that the low-growth (less than 1%) ones (data not combined three waters cost gradient in shown but available from the authors). Three waters Figure 3 remains marginally positive. Across all growth categories, roading The combined three waters costs (Figure The grey coloured bars in the figures, costs per capita consistently rise as density 3) show that the less dense TAs face representing faster-growing TAs, illustrate declines. Freshwater supply costs also marginally higher costs per capita for that such areas do not differ markedly increase, although the trend is much their three water services combined. in three waters cost terms from other flatter for medium-growth TAs. Storm However, this gradient is not as steep as TAs not experiencing equivalent growth. water costs decline as density declines. with roading. Figures 4 and 5 show storm Queenstown Lakes is an exception: it is a This relationship is steepest for storm water and water supply costs separately. clear outlier in terms of storm water costs water in high- and medium-growth TAs. Storm water costs (Figure 4) actually (Figure 4). Waste water costs in low-growth areas fall as density falls. Waste water costs increase marginally as density decreases, are flat (not shown). The storm water Grouping TAs by growth whereas they decrease in the medium- relationship runs counter to that observed We also compared high-growth TAs and high-growth areas. with roading. Water supply costs, like (greater than 5% growth pa) with

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 67 Do Denser Urban Areas Save on Infrastructure? Evidence from New Zealand territorial authorities

Figure 5: Water supply costs per capita Water Supply Costs Per Capita 140 y = 0.6816x + 38.865 120

100

80

60

40 Depreciation per capita ($)

20

0 y y y y y y t t t t t ct c ct ct ct ct c ct ct ct ic ict ic ict ic i i i i i rict r r ri rict r ri trict trict trict trict trict s s strict

th City Distr Distr District Dist Dis Distr Dist Distr Dis irua City l Di h District s y District o a District a Dist a th Dis pa District ko District ler Distr g Napier Cit ton District ton Distr i ke ord Districtl Por Nelson City iroa a raki Distri Bay Distri ng ia kato Distr itaki District Gore Di land Distri Grey our unui Di Dunedin Cit aupo District i u enzie District ellington City La itomo imate District ande s Auckland Cit Hamilton City Tauranga City T Bu st terton ’ gitikei ik Wa ranaki District ararua District Clutha Dist aipara apehu Districtur asman District Wa irarap Selwyn Dist Wa Opotiki District T l Ot n a ck W Lower Hutt Cit Upper Hutt City Rotorua District Invercargill Cit T anganui District n- ar Ha K ta-P Wa ar Nor ke H Hastings District Gisborne District Kawerau District Stratf Wa Wa om K Ru Christchurch Cit w We F r C W Master Ra Southland Dist Ashbur Manawatu District Wa Ma Whangarei District ntra Whakatane District Otoroha Waimakariri District Kapiti Coast District ay of Plent Co Marlborough Dist Horowhenua District sto B n Ce Haw Plamerston Nor New Plymout South Waikato District South Ta n outh ee Matama S

Qu ster

Thames- Central We

Note: those coloured grey have populations which have grown by more than 9% since the 2006 census

Discussion growth appears to have little effect on TAs’ the major ones) have been measured. Density and infrastructure costs per capita spending on infrastructure. Public infrastructure costs were proxied The gradients observed show that the costs Examination of TA infrastructure by depreciation only. Private and social of infrastructure do vary with TA density. costs against density highlights numerous costs (as well as benefits) are excluded; TAs of higher density have generally lower outliers. Clearly, other factors influence the calculation of these would be infrastructure provision costs per capita, a the cost of supplying infrastructure, and complex and is beyond the scope of this pattern consistent with the literature and not all can be easily controlled. Prieto research. Further, for the reasons given, sustainable urban growth principles. The and colleagues (2015) identify soil operating costs were not measured (e.g. waste water cost gradient is insignificant, hardness and topography as two such the electricity required to operate pump but storm water costs do rise noticeably factors affecting the cost of infrastructure stations and the wages of pump station with density. For the US, Carruthers and installation. Other factors, such as local workers). Such costs could be related to Úlfarsson (2003) found that waste water climate, local industries and proximity factors such as density, population (use) plus storm water system costs rose with to raw material suppliers, could also and topography. density, as noted earlier. The relationship affect infrastructure asset life and In addition, the quality of service in New Zealand may be partly explained installation costs. Network variables, received by each TA from its infrastructure by the use of above-ground storm water such as the number of pump stations or was not gauged. The quality of systems in areas of lesser density. Further treatment plants, will directly influence infrastructure systems across TAs varies research is required to confirm this. But infrastructure costs and are likely linked as each strives to meet objectives laid taking the three waters costs together, to urban compactness. As an example, down in their individual long-term plans, water supply costs dominate and costs Westland is an outlier in regard to three and other standards, for example those decline marginally as densities rise. waters costs. This TA is the longest in set by the Ministry of Health. Some TAs Growing TAs follow a similar New Zealand and its high costs may may be performing well and some may be pattern to other TAs. Those with relate to the need for nine separate water performing poorly; this is not measured denser development tend to have lower treatment plants and nine storm water by cost estimates. On the other hand, the infrastructure costs. This appears to networks (Westland District Council, Office of the Auditor-General recently contradict the finding of Ladd (1992) 2014) to service the small urban areas found that there was ‘little relationship and suggests that rapidly growing TAs along the West Coast. In contrast, between asset expenditure and service- (above a threshold for ‘rapid growth’) do Wellington City, with almost 23 times the level performance in public information’ not experience infrastructure costs that population of Westland, is served by only (Office of the Auditor-General, 2014, differ from other TAs’ costs. Moreover, four treatment plants. p.5). grouping TAs by the level of growth Not all roading costs have been experienced over 2006–13 shows that the Limitations measured. Understandably, private roads cost patterns do not change significantly Setting aside the matter of other variables are ignored, but state highways, owned with growth.10 The rate of population influencing TA infrastructure costs, only and managed by the New Zealand four types of infrastructure cost (albeit Transport Agency, are also excluded.11

Page 68 – Policy Quarterly – Volume 12, Issue 4 – November 2016 These state highways serve TAs to varying current and future populations. The to show that the ‘default’ relationship extents, and have varying traffic flow and present study is not conclusive, as not between more dispersed development expenditure. However, the motivations all factors affecting infrastructure costs and higher costs does not apply. for state highway building differ have been considered, but it does raise The findings have backing within significantly from those for local roads, important questions about the practice the international literature, and have and their costs may vary in a different of many local governments subsidising relevance to local government in New way with TA density. sprawl in New Zealand. Zealand. They provide significant evidence to local government planners Implications Conclusion that compact urban form is likely to This research investigated the link The purpose of this research was to be more economically efficient than between urban density and the costs of examine the link between density and dispersed development. providing major infrastructure. Although the costs of providing infrastructure 1 This article draws on work Matt Adams undertook as part of a number of variables affect the cost of in New Zealand. Clearly a link exists. postgraduate study at Victoria University of Wellington, with infrastructure provision, this research That is, higher-density TAs incur lower Associate Professor Ralph Chapman (supervisor), Director of Environmental Studies at Victoria. Thanks to the Ministry suggests that roading and water supply infrastructure costs for roading and water of Business, Innovation and Employment for supporting the research through funding of the Resilient Urban Futures costs fall with increasing density. While supply than TAs of lower density. The programme. Input from Nadine Dodge (VUW PhD candidate) storm water and waste water costs may or relationship is stronger for these forms of and support of Professor Philippa Howden-Chapman are acknowledged. may not increase with density, they matter infrastructure than it is for storm water, 2 J. Alexander, personal communication with N. Preval, 14 less in terms of costs. the costs of which increase comparatively October 2014. 3 Using TAs is a minor departure from the approach of Nunns Such relationships are consistent slowly as density increases (waste water (2014), who split New Zealand into 15 main urban areas; accordingly, population-weighted densities calculated here with a literature that largely accepts that costs appear unrelated to density). differ slightly from Nunns’. In line with Nunns, meshblocks public services can be delivered more Considerable ‘noise’ is evident in the with fewer than three people/ha (unurbanised areas) were excluded from the analysis. efficiently (economically, socially and outliers of the illustrated patterns. This 4 When an asset is depreciated, its value is decreased in the statement of financial position. The depreciation amount environmentally) at higher density, up to is understandable: density is important is recognised each year as an expense in the statement of a point. The overall picture of costs falling but not the only variable describing financial performance. 5 The annual amount expensed equals asset cost minus with density provides support to those urban areas, and does not solely drive residual value, divided by useful life. councils espousing and following ‘smart infrastructure costs. However, the analysis 6 Note that the report identifies that asset renewal expenditure is currently below asset depreciation in local governments, growth’ plans that seek to utilise the establishes that density does influence suggesting underinvestment in infrastructure. 7 Litman includes it in his analysis of the costs of sprawl in the excess capacity in existing infrastructure the cost of infrastructure provision. United States: see Litman (2015). Valuing road land is not as opposed to continuing dispersed Further research, taking a bottom-up trivial, as values would be much lower without road access. 8 A complete list of TA densities is available from the authors. development. It may also help underpin or longitudinal approach, may help to 9 As indicated in note 3, the method of calculation is close to that used by Nunns (2014), who identified Auckland the setting of higher development confirm these findings and strengthen as densest (43.1 people/ha). The notable difference is in contributions for areas sprawling away the evidence base. area selection. Nunns identified 15 main urban areas; this research analyses all 67 TAs. The Wellington main urban from established infrastructure. In interpreting these results, it is area used by Nunns includes Wellington City, Hutt Valley and Councils encouraging lower- worth remembering that the relationship Porirua, treated separately in the present study as they form separate TAs. density development could be seen as between density and infrastructure 10 A possible exception is that the per capita water supply cost gradient in the medium-growth grouping is flatter than for the falling short in terms of section 10 of costs seen at the ‘wider’ territorial other groups (data not shown). the Local Government Act 2002. That authority level may be different at 11 The annual depreciation for state highways on NZTA’s books for 2013/14 was $465 million. This is equivalent to around section identifies the purpose of local the neighbourhood level, where the 70% of the annual depreciation expense of all TAs put government and requires delivery of principles of compact development are together ($677 million). ‘good-quality’ infrastructure that is often considered. The onus is now on effective, efficient, and appropriate for those working at the neighbourhood level

References Arbury, J. (2005) From Urban Sprawl to Compact City: an analysis of Centre for International Economics (2015) Cost of Residential Servicing: urban growth management in Auckland, Auckland: Department of final report, prepared for Auckland Council, Canberra and Sydney: Geography and Environmental Science, University of Auckland Centre for International Economics Burchell, R. and S. Mukherji (2003) ‘Conventional development versus Chapman, R. (2008) ‘Transitioning to low-carbon urban form and managed growth: the costs of spraw’, American Journal of Public transport in New Zealand’, Political Science, 60, pp.89-98 Health, 93, pp.1534-40 Cox, W. and J. Utt (2004) The Costs of Sprawl Reconsidered: what Cameron, M. (2011) Technical Report: policy options for delivering a the data actually show, paper 1770, Washington, DC: Heritage quality compact city, Auckland: Auckland Council Foundation Carruthers, J.I. and G.F. Úlfarsson (2003) ‘Urban sprawl and the cost of Creutzig, F., G. Baiocchi, R. Bierkandt, P.-P. Pichler and K.C. Seto public services’, Environment and Planning B, 30 (4), pp.503-22 (2015) ‘Global typology of urban energy use and potentials for an Carruthers, J. and G.F. Úlfarsson (2008) ‘Does “smart growth” matter to urbanization mitigation wedge’, Proceedings of the National Academy public finance?’, Urban Studies, 45, pp.1791-823 of Sciences, 201315545

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 69 Do Denser Urban Areas Save on Infrastructure? Evidence from New Zealand territorial authorities

Department of Internal Affairs (2013) Regulatory Impact Statement: are misrepresented by critics, Victoria, BC: Victoria Transport Policy better local government: improving development contributions, Institute Wellington: Department of Internal Affairs Litman, T. (2015) Analysis of Public Policies That Unintentionally Dodge, N. and R. Chapman (2015) ‘Submission to the Wellington City Encourage and Subsidize Urban Sprawl, Victoria, BC: Victoria Council on the medium-density housing and town centre plans’, Transport Policy Institute for LSE Cities on behalf of the Global Wellington: New Zealand Centre for Sustainable Cities Commission on the Economy and Climate Dodge, N., K. Stuart, P. Blaschke, N. Preval, P. Howden-Chapman and Litman, T. (2016) Evaluating Criticism of Smart Growth, Victoria, BC: R. Chapman (2014) ‘Submission to Wellington City Council on the Victoria Transport Policy Institute Wellington urban growth plan 2014–43’, Wellington: New Zealand Mead, D. (2014) Auckland’s Density Part Two, Auckland: Hill Young Centre for Sustainable Cities Cooper Ltd Ewing, R. and R. Cervero (2010) ‘Travel and the built environment: a Mead, D. and R. Ritchie (2011) Technical Report: towards a preferred meta-analysis’, Journal of the American Planning Association, 76 (3), urban form, Auckland: Auckland Council pp.265-94 Nunns, P. (2014) Population-weighted Densities in New Zealand Ewing, R., A.C. Nelson, K. Bartholomew, P. Emmi and B. Appleyard and Australian Cities: a new comparative dataset, working paper, (2011) ‘Response to special report 298: Driving and the Built Auckland: MRCagney Environment: the effects of compact development on motorized travel, OECD (2012) Compact City Policies: a comparative assessment, OECD energy use, and CO2 emissions’, Journal of Urbanism, 4, pp.1-5 green growth studies, Paris: OECD Global Commission on the Economy and Climate (2014) Better Growth Office of the Auditor-General (2014) Water and Roads: funding and Better Climate, New Climate Economy report, Washington, DC: World management challenges, Wellington: Office of the Auditor-General Resources Institute Prieto, Á.M., J.L. Zofío and I. Álvarez (2015) ‘Cost economies, urban Grimes, A. (2010) ‘Infrastructure: new findings for New Zealand’, Policy patterns and population density: the case of public infrastructure for Quarterly, 6 (4), pp.3-8 basic utilities’, Papers in Regional Science, 94 (4), pp.795-816 Holman, N., A. Mace, A. Paccoud and J. Sundaresan (2015) Statistics New Zealand (2013) ‘2013 Census meshblock dataset’, ‘Coordinating density: working through conviction, suspicion and Wellington: Statistics New Zealand pragmatism’, Progress in Planning, 101, pp.1-38 Talen, E. (1999) ‘Sense of community and neighbourhood form: an Jabareen, Y.R. (2006) ‘Sustainable urban forms their typologies, models, assessment of the social doctrine of new urbanism’, Urban Studies, and concepts’, Journal of Planning Education and Research, 26 (1), 36 (8), pp.1361-79 pp.38-52 Westland District Council (2014) Annual Report 2013/2014, Hokitika: Joffe, H. and N. Smith (2016) ‘City dweller aspirations for cities of the Westland District Council future: how do environmental and personal wellbeing feature?’, Cities, Yeoman, R. and G. Akehurst (2015) The Housing We’d Choose: a study 59, pp.102-12 of housing preferences, choices and trade-offs in Auckland, Auckland: Ladd, H.F. (1992) ‘Population growth, density and the costs of providing Market Economics Limited for Auckland Council public services’, Urban Studies, 29 (2), pp.273-95 Zhao, P., R. Chapman and P. Howden-Chapman (2011) ‘New Zealand Ladd, H.F. (1994) ‘Fiscal impacts of local population growth: a urban intensification: a spatial analysis’, in K. Witten, W. Abrahamse conceptual and empirical analysis’, Regional Science and Urban and K. Stuart (eds), Growth Misconduct? Avoiding sprawl and Economics, 24 (6), pp.661-86 improving urban intensification in New Zealand, Wellington: Steele Litman, T. (2012) Understanding Smart Growth Savings: what we know Roberts about public infrastructure and service cost savings, and how they

Victoria Professional and Executive Development High quality professional and executive development courses specifically designed for the public sector:

MACHINERY OF GOVERNMENT ECONOMIC PRINCIPLES AND APPLICATIONS IN ENGAGING EFFECTIVELY WITH YOUR -> Thu 2 March, 9am–4.30pm PUBLIC POLICY STAKEHOLDERS STRATEGIC THINKING FOR GOVERNMENT -> Thu 16 & Wed 17 March, 9am–5pm -> Wed 1 March, 9am-4.30pm -> Wed 15 March, 9am–4.30pm ENGAGING THE PUBLIC EFFECTIVELY USING -> Wed, 31 May 9am-4.30pm GROUP FACILITATION SKILLS SOCIAL MEDIA DELIVERING DATA DRIVEN INSIGHTS FOR -> Wed 8 & Thu 9 March, 9am–4.30pm -> Wed 30 & Thu 31 August, 9am–4.30pm COMMUNICATION AND DECISION-MAKING -> Mon 14 & Tue 15 August, 9am–4.30pm USING DATA: DISCOVERY, ANALYSIS, PUBLIC SECTOR FINANCE FUNDAMENTALS VISUALISATION AND DECISION-MAKING -> Fri 19 May, 9am–4.30pm EVIDENCE-BASED POLICY MAKING -> Wed 23 & Tue 24 November, 9am-5pm RE-USING OPEN DATA FOR MORE EFFECTIVE -> Mon 22 & Tue 23 May, 9am–4pm -> Mon 20 & Tue 21 March, 9am-5pm OUTCOMES -> Mon 8 & Tue 9 May, 9am–4.30pm

We can also deliver in-house courses, customise existing courses or design new programmes to suit your requirements We now also run courses at our Auckland training rooms. For more course dates, further information and to enrol visit www.victoria.ac.nz/profdev or call us on 04-463 6556.

Page 70 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Sir Geoffrey Palmer QC

The Resource Legislation Amendment Bill, the Productivity Commission Report and the Future of Planning for the In my judgement the overall conclusion to be reached is that New Zealand does regulatory statutes rather badly. They are Environment in insufficiently researched. They are not rigorously tested before being enacted. Nor are sufficient efforts made to find out how they worked in the real world. And New Zealand large statutes are amended far too readily, leading to incoherence and uncertainty in the market. No doubt these are not Let us begin with the proposition that there is much in the positive conclusions. But I have been around a very long time and seen these Resource Management Act 1991 (RMA) that needs to be issues come back again and again. fixed.1 How that cure is to be effected is not widely agreed. My overall conclusion is not restricted to the resource management Indeed, the policy surrounding the Resource Management legislation. New Zealand’s methods of law making are deficient both within the Act at present seems confused. We need to stop and ask, what executive government, which conducts are we trying to do in this space? I shall in this address try its affairs in secret on legislation, and in Parliament, which concentrates on to unravel the issues. Being a planner in this febrile policy politics rather than scrutiny of the legislation itself. Sooner or later we may context must have its challenges. wake up to the fact that these ingredients are impeding better governance in this Sir Geoffrey Palmer is a former Prime Minister of New Zealand and a Distinguished Fellow in the Law Faculty at Victoria University of Wellington. country. How the law is designed, how

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 71 The Resource Legislation Amendment Bill, the Productivity Commission Report and the Future of Planning for the Environment in New Zealand it is consulted about, how it is drafted different acts. The bill implicitly accepts need to be considered. The bill was not and how parliamentary scrutiny proceeds that the amendments proposed in 2013 supported by Peter Dunne, who voted are all vital issues in securing quality to alter the environmental bottom lines against it; so did ACT MP David Seymour legislative outcomes. of the statute in part 2 will not proceed. (who thought the amendments were too The failures of the RMA can be But the changes are extensive and quite a weak), and the Green Party also voted laid at the doors of central government number may not survive select committee against it. New Zealand First abstained and local government. Failure to make scrutiny. The most important changes are: and Labour voted for it. policy statements and set environmental • joint development of national The Mäori Party cast their votes standards that the act provides for environmental standards in national for the first reading only, having handicapped the legislation. It left local policy statements; successfully secured concessions that authorities wandering in the wilderness. • new regulation making powers involved removing two objectionable Too often local government did not designed to permit specified provisions before the bill was introduced, appreciate the nature of its duties under land uses to avoid unreasonable and winning enhanced iwi and Mäori the act and there was too much political restrictions on land, and to prohibit consultation provisions in return. The interference. and remove council planning Mäori Party prevented the introduction It is important to rectify those provisions; of privatised consenting: alternative weaknesses, and there are signs that • new provisions in the Exclusive consent authorities, where public powers that is occurring. But the brutal truth Economic Zone and Continental would be exercised by organisations approved by the government but not by people who are publicly accountable Collaborative planning is likely to pave officials, had been drafted but dropped before the bill’s introduction. The Mäori the way for non-transparent dirty deals Party also stopped changes in the bill that would have imposed new limitations at the expense of freshwater quality. on restrictions on the use of land. They may secure further changes at the select committee stage. But I sound a word of caution. needs to be faced. Political reactions Shelf (Environmental Effects) Act Given the complicated political situation that have led to numerous amending 2012; evidenced by the voting upon the bill’s acts for the RMA over the years have • lengthy new provisions to enable the introduction, it is not easy to predict made the legislation worse, not better. development of a national planning how the bill will fare at the hands of Constant fiddling debilitates both the act template which gives the minister the select committee. The parliamentary and administration. And the pattern is for the environment power to direct debates warrant close study. Predicting continuing. the required structure and format of the outcome would be speculative. There are currently two major policy statements and plans and to policy reviews occurring in the same specify matters (objectives, policies, Issues with the bill policy space: the Resource Legislation methods and rules) that either must Let me now turn to the weaknesses that I Amendment Bill and the Productivity be included in any policy statements think this bill exhibits. There are at least Commission’s Better Urban Planning or plans or may be included at the three significant and dangerous trends review.2 In addition, Local Government discretion of councils; running through the bill. These are: New Zealand published a blue sky • amendments to ensure councils • greater ministerial control and discussion about New Zealand’s resource provide sufficient land for residential centralised decision making that management system earlier this year. and business developments to meet overrides local planning decisions; At the very least stakeholders will have long-term demand; • reduced opportunities for public suffered from submission fatigue. • lengthy provisions allowing for participation in decisions that will collaborative planning processes to affect local communities; The Resource Legislation Amendment Bill substitute for normal processes (that • emphasis on speed, rather than On 3 December 2015 the Resource was designed particularly for the quality, of decision making. Legislation Amendment Bill received its Land and Water Forum work); It is my view that the process for first reading and it was a referred to the • substantial powers designed to collaborative planning particularly for Local Government and Environment centralise control, introduce many freshwater management will prove to Committee for public submissions. The detailed procedural changes and be unworkable and is likely to deliver bill is 170 pages in length. It is technical provide a new fast track. outcomes that will be detrimental to the and difficult to follow. The minister, Nick The politics in the House of quality of New Zealand’s rivers, lakes Smith, said the bill makes 40 changes to six Representatives surrounding this bill and streams. The whole collaborative

Page 72 – Policy Quarterly – Volume 12, Issue 4 – November 2016 enterprise was based upon the principle lead to quick and suspect decisions based Environment and Development, which that it would be accepted as a whole on political expediency. This is supposed set out principles for environmental system. It would not be served up to the to be an effects-based statute. protection and sustainable development. government in bits and cherry-picked by There are also significant changes The commission’s report, issued in 1987, the government on the basis that it would to the regulation-making power in is known as the Brundtland Report advance the pieces that it liked. the legislation. The effect of these after its chairperson, the Norwegian There is a more serious objection here. amendments will be to significantly prime minister. The Brundtland Report Collaborative planning is likely to pave increase the scope of the regulation- defines sustainable development as the way for non-transparent dirty deals making power, thereby increasing the ‘development that meets the needs of at the expense of freshwater quality. This power of the minister to direct the the present without compromising the is not the sort of situation that is likely outcome of planning and consent ability of future generations to meet their to elevate the standards of our public decisions under the act. own needs’.4 It contained two concepts: decision making. Power imbalances will The legislative solutions on offer do the concept of needs and the idea of threaten the integrity of environmental not seem to me likely to achieve much. limitations. outcomes. The way it appears in the They will make the act more complex, Rather than viewing ‘development’ bill, collaborative planning seems to be cumbersome and bureaucratic. There will and ‘environment’ as competing values, designed to favour development interests be so many alternative routes to getting one to be sacrificed to the other, the over the environment. It is wrong to to yes, resulting in increased transaction Brundtland Report approaches the assume that it is possible to find an costs and legal costs. The people who two as inseparable: needs can only accommodation of all the relevant interests through mutual compromise. Environmental bottom lines will not [The National Development Act survive a process like that. I think the adoption of a national 1979] was a statute of considerable planning template is a positive constitutional dubiety and led to a wave development, but there are very grave weaknesses in the manner in which this of political opposition based essentially policy has been translated into law. A national planning template can set out on environmental and constitutional ‘requirements or other provisions relating factors. to any aspect of the structure, format, or content of regional policy statements and plans’ (emphasis added). Furthermore, the extent of the proposed content may design the processes do not have to make be met within the limitations of the be prescribed through the national them work. environment. The Brundtland Report planning template under new section puts sustainable development in the 58C. I read this proposal as allowing the The Productivity Commission’s Better Urban international mainstream. It is a concept minister to use the national planning Planning issues paper that appears not to be as popular in template to give directions to district and Bill English as minister of finance New Zealand governmental circles as regional councils on substantive matters launched a new inquiry by the it was when it was new, but that report of policy. It could be used also to tell Productivity Commission on 1 November formed the foundation of the Earth councils what they substantively can and 2015, asking the commission ‘to review Summit held in Rio de Janeiro in 1992 cannot do. It goes very far beyond the urban planning rules and processes and and received expression in principle 4 of national planning template described identify the most appropriate system for the Rio Declaration: ‘In order to achieve in the public consultation documents land use allocation’.3 This followed the sustainable development, environmental circulated by the government before the concerns expressed by the commission in protection shall constitute an integral bill was introduced. its earlier report, Using Land for Housing, part of the development process and There have been many efforts to released in October 2015, which made the cannot be considered in isolation from it.’ streamline the processes of the RMA case for integrating across the Resource It is for this reason that the RMA over the years. They never seem to work Management Act, Local Government Act is driven by part 2, the purpose and very well. This bill contains another 2002 and Land Transport Management principles. The purpose of the act is to streamlined planning process and it is far Act 2003. promote ‘the sustainable management from clear that there is any evidence to What current analysts seem to forget of natural and physical resources’ support the need for such a process as the about the Resource Management Act (s5).5 All this grew out of the National one that is proposed. The real risk is that is that the inspiration for it came from government’s policies in the late 1970s it will politicise the planning process and the report of the World Commission on of Think Big. The National Development

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 73 The Resource Legislation Amendment Bill, the Productivity Commission Report and the Future of Planning for the Environment in New Zealand

Act 1979, now happily repealed, provided made was consciously avoided by both The government’s 2013 proposed a fast track for big development sides on the environmental divide, so changes to sections 6 and 7 take on a new projects. It was a statute of considerable their interests were not weakened by the significance in light of this interpretation. constitutional dubiety and led to a wave decisions taken. To cut a long story short, Collapsing sections 6 and 7 into a single of political opposition based essentially the Supreme Court of New Zealand has list, after the court has clearly identified the on environmental and constitutional now provided clarity in the case of the relationship between the two provisions factors. The RMA replaced as many as Environmental Defence Society v New and explained the basis for it, would 50 different statutes that dealt with these Zealand King Salmon.6 In a careful and make a significant difference. Further, an matters and created a one-stop shop. elegant judgment of the court given by overall broad judgment approach is not Justice Terence Arnold, matters were appropriate, the court tells us. The established jurisprudence made as clear as possible. It is to be The unfortunate feature of the A notable feature of the original RMA was hoped that decision makers do not return struggle over part 2 is that it has caused that the environmental safeguards in it to their old habits of ad hoc balancing. years of delay in making the processes of were defined and limited in part 2 of the Without going into detail, it is the act less cumbersome, less bureaucratic act. This applies to all decision makers important to note that the Supreme Court and more user-friendly. What the and decisions made under the authority in the most important judicial decision Supreme Court decision demonstrates, of the act. It has taken a very long time to since the inception of the act made a in a remorseless analytical manner, is reach judicial understanding of how these number of significant pronouncements that the environmental protections in the act are real, and any reduction of them would be a retrograde step. People who New Zealand has a bad habit of passing want to change the approach have to recognise that the sustainability paradigm large legislative schemes and never constitutes the key anchoring principle analysing whether they were effective or and the key policy for the whole act. efficient in achieving their goals. Where is the evidenced-based policy? It needs to be observed that over the years we have seen very little empirical research that convinces about how the RMA is provisions should be interpreted. But now, of great precedential value: working. No doubt empirical research is many years after 1991, one consequence • It repeatedly emphasised that expensive, but before changes are made of starting again would be to lose the environmental protection is an it really is necessary to find out what is granulated and now clear jurisprudence essential part of the RMA’s purpose actually happening. Only in that way that applies. That would be a retrograde of sustainable management. can meaningful improvements be made. step. • It stressed that sections 6 and 7 are Far too many of the changes to the RMA Leading cases have been slow to an elaboration of the statement of have been driven by anecdote, prejudice reach the senior courts in New Zealand principle contained in section 5. and interest, rather than evidence. Such a to provide definitive guidance on how • It drew a distinction between matters position certainly allows political pressure the RMA is to be interpreted. The old addressed in section 6 and those to be exerted for change. Whether the planning philosophy was overturned by addressed in section 7, noting that direction in which that change should the new act. Disputes were dealt with the matters in section 6 ‘fall naturally proceed is based on evidence is entirely at the beginning by Planning Tribunal within the concept of sustainable another matter. judges, who were not sympathetic to the management in a New Zealand New Zealand has a bad habit of new legislation and quite critical of it. context’, and section 6 therefore passing large legislative schemes and never By the beginning of 1995 there had not contains a stronger direction to analysing whether they were effective or really been any leading cases on it. There decision makers than section 7. efficient in achieving their goals. There are was, however, a good deal of academic • It explained that the elements of many reasons for this phenomenon, but commentary on the uncertainties protection and preservation in none of them convinces. Some exciting presented by the act, an issue that occurs section 6 ‘are intended to make it new developments on this issue have with all new legislation and one reason clear to those implementing the been tried in some European countries. why big, quick changes of direction are RMA that they must take steps to New mechanisms should be developed to to be avoided. But after the Planning implement that protective element of look rigorously at the effects of legislation Tribunal was abolished and recreated as sustainable management’. that is being passed, and to ensure that the Environment Court, new approaches • It rejected the ‘overall judgment’ it has achieved the objectives upon began to emerge. It seems almost as approach adopted by the board of which it was based and that there are no if the stuff of which leading cases are inquiry. unforeseen consequences of a deleterious

Page 74 – Policy Quarterly – Volume 12, Issue 4 – November 2016 kind. It seems sound to do this before reconsidered, made simpler, clearer and inefficient and potentially dangerous rushing in with amendments, as occurs much less convoluted. “free-market” outcomes’.7 This is the so often in New Zealand. Such analysis is reason the environmental bottom lines in also necessary before embarking on new Integration across the RMA, Local the RMA are so important and tinkering proposals to replace existing law. Government Act and Land Transport with them is so unwise. Humankind’s Management Act destruction and defilement of the natural Changes to the RMA The New Zealand statute book has to be environment is seriously endangering The cures to the problems ailing the RMA viewed as a whole, and that is the place the continuation of life on this planet. do not require throwing out the act; nor to start. Concentrating reform efforts on The failure is one of rational ecological should they involve changes to the purpose one subject, such as land for housing, is governance. and principles of the act as set out in bound to have unexpected consequences When it comes to environmental sections 5, 6 and 7. Our recent experience elsewhere. issues, the market fails to capture with stakeholders is that there is support The issue of climate change does not many of the values and contributing for the original intention of the RMA as seem to figure in these debates and it factors at play. The externalisation of articulated by the responsible ministers should. Planning for climate change in environmental and social costs seems to at the time, myself and Simon Upton. the future is going to be an enormous be inevitable in an atmosphere where The core idea was that a development issue, and central government so far governments seek endless economic must take place within the capacity of the environment and ecosystems that support it. That is why the RMA is driven by part Too often [local government] is regarded 2, the purpose and principles. But some major change is needed. In particular: as the agent of central government, to be • regional spatial planning at the kicked around and told what to do and strategic level; • integration across the RMA, Local not properly consulted. Government Act and Land Transport Management Act; • better provision for urban planning and development within the RMA; in New Zealand has not taken that on growth. Elementary economics suggest • mitigation of and adaptation to board. One has only to read the report that the polluters should pay so that the climate change; of the Parliamentary Commissioner for costs of development are not externalised • more central guidance through the Environment of November 2015 – to the public, but how often does that national policy statements and Preparing New Zealand for Rising Seas: happen? national environmental standards; certainty and uncertainty – to understand • better district planning and rule that this can be ignored no longer. Post Local government making; the Paris Agreement there is going to Let me conclude with a word about local • better institutional design and have to be a sea change in New Zealand’s government. The policy problems I have decision making; climate change policies. outlined all depend upon the reform of • rigorous monitoring and evaluation What is needed are simple principles the structures of local government. This of effective legislation. and processes that will work in the is going to be necessary to achieve the These changes would not be disruptive real world. The fixes lie in better plans outcomes that the government wants. to the established jurisprudence, but and better processes, not in altering Government policies so far in this area they would require radical changes in environmental bottom lines or in the have lacked bite and determination. behaviour and actions by parties that absence of rules. Those in the business Local government needs more have responsibilities for implementation community who resent the RMA and constitutional autonomy in New Zealand under the act. And I would add one praise markets fail to acknowledge than it enjoys. Too often it is regarded thing. One of the greatest problems that the defects of markets when it comes as the agent of central government, to the RMA faces lies in the prescriptive to dealing with environmental issues. be kicked around and told what to do nature of the processes and procedures Price signals are often distorted for and not properly consulted. There is it prescribes. There are so many environmental issues and externalities little doubt that the local government different processes now and so many produced by pollution are not reflected legislation in New Zealand is defective. different avenues that applicants can in prices. The polluters do not pay and Whenever a new government comes in go down that the matter has become those harmed by pollution are not it changes the legislation and often in far too complicated, bureaucratic and compensated. As the Yale economist ways that are incomplete and unclear. difficult. The processes need to be totally William Nordhaus puts it, ‘markets Significant constitutional change can distort incentives and produce is required in New Zealand if local

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 75 The Resource Legislation Amendment Bill, the Productivity Commission Report and the Future of Planning for the Environment in New Zealand government is to flourish. Let me suggest decide and control local policies. Constant meddling with the the following – a set of constitutional Administrative supervision of local government legislation is as principles along these lines: local government will be limited counterproductive as the constant 1. The state shall have a strong, to ensuring compliance with the meddling with the resource management transparent and accountable system law and the execution of delegated legislation. When you put both together of local government based on the responsibilities. it is a rather lethal combination. principle of subsidiarity. That is to 6. Local government representatives 1 This article is an edited version of Sir Geoffrey Palmer’s say, decisions should be made as shall be democratically elected keynote address to the annual conference of the New close as possible to the people whom by secret ballot under an act of Zealand Planning Institute, Dunedin, 2016. 2 The Local Government and Environment Committee they affect. Parliament. expects to report back to Parliament late in November. It is understood that there were 750 submissions. The 2. The provision of services and the 7. Local government shall be open and Productivity Commission is scheduled to deliver its final solution of problems should take transparent in its decision making report to the government on 30 November. 3 Beehive.govt.nz; see terms of reference at http://www. place as close to the citizens as and accountable to its citizens. productivity.govt.nz/inquiry-content/2682?stage=3. practicable and ‘in accordance with 8. The financing of local government 4 World Commission on Environment and Development, Our Common Future, Oxford: Oxford University Press, 1987, allocative efficiency’ as the nature of by the imposition of rates on ch.2, p.1. 5 See Geoffrey Palmer, ‘The making of the Resource the relevant process allows. land and property provided for Management Act’, in Environment: the international 3. The right of units of local by act of Parliament needs to be challenge, Wellington: Victoria University Press, 1995; Palmer, ‘The Resource Management Act: how we got it government to manage their own accompanied by a revenue-sharing and what changes are being made to it’, in Trevor Daya- Winterbottom (ed.), Resource Management Act: theory and affairs independently in accordance programme with central government practice, Auckland: Resource Management Law Association, with laws and regulations under the negotiated between central and local 2014, p.22. There are a number of legal texts on the act that are useful to practitioners, which do not discuss the supervision of the state shall be laid government. policy but rather describe the law: see Derek Nolan (ed.), down in acts of Parliament. 9. When new responsibilities are Environmental and Resource Management Law (5th edn), Wellington: LexisNexis, 2015. For more on the policy see 4. All local government builds on the placed on local government Klaus Bosselman, David Grinlinton and Prue Taylor (eds), Environmental Law for a Sustainable Society (2nd edn), concept of community. by central government, they Auckland: New Zealand Centre for Environmental Law, 5. Central and local government must be preceded by adequate University of Auckland, 2011. 6 Environmental Defence Society v New Zealand King Salmon policies must be coherent, but consultation and estimate of what Co Ltd [2014] NZSC 38(SC). 7 ‘The Pope & the market’, New York Review of Books, 8 within a broad general framework the new responsibilities will cost to December 2015. local authorities must have self- administer. government, with freedom to

Study at one of the ADVANCE BETTER GOVERNMENT world’s leading Gain a qualifi cation in e-government, public management or public policy from business schools. Victoria—New Zealand’s leading education and development provider in public services. Victoria Business School holds the triple Master of Public Management: Upgrade your personal skills and competencies as crown of international a manager and improve your public management practices and your impact. accreditations. Master of Public Policy: Develop your skills and knowledge in policy analysis, development and evaluation in public and non-government sectors. Master of e-Government: Learn how to successfully manage complex technology- based initiatives in the public sector. Flexible learning options—study full time or continue to work while you study. APPLY Courses off ered in Wellington and Auckland. NOW FOR 2017 victoria.ac.nz/sog | [email protected] STUDY CALL   TODAY

Page 76 – Policy Quarterly – Volume 12, Issue 4 – November 2016 Claudia Scott

Local Government Funding facing the

in most reviews of local issues government funding. The larger question is whether

Introduction the nature, level and mix Designing funding policies to serve all the local and regional of current funding sources councils in New Zealand is challenging. This article looks meets the needs of all the at some of the issues that arise, and some principles for councils, given the diversity addressing funding arrangements and for considering of their roles, funding whether current local government funding arrangements are requirements, opportunities suited to the requirements of local governments throughout and constraints. Similar issues are raised by councils New Zealand. The need for new sources of revenue for themselves and the private and local governments in New Zealand is a topic which is raised community sectors. Funding is often a matter of concern to ratepayers, particularly commercial and industrial Claudia Scott is Professor of Public Policy at Victoria University of Wellington, and has long-standing teaching and research interests in local government policy, strategic planning and funding. She ratepayers who feel that their rates headed a five-year research project, Local Futures, which explored strategic planning practices in 19 are too high in relation to the benefits councils under 2002 legislation. She was a member of the 2015 Local Government New Zealand they receive from the services provided Working Group which examined local government funding. by local and regional councils. Some

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 77 Local Government Funding: facing the issues councils are stretched to provide and has now obtained an ‘in principle’ resources can expand the revenue base maintain essential physical and social agreement to the council charging while also reducing the contribution infrastructure. Councils with low motorists driving on the city’s most required from existing funding streams. population or economic growth and congested streets. The recently published The predominant source of funding a declining or ageing population are interim report of the Auckland Transport for councils is rates, which make up being challenged, as are those with small Alignment Project (ATAP) has found that about 50% of the revenues raised by local populations in places that attract visitors charges of between 3 cents and 40 cents governments in New Zealand. A lack of who require services and amenities but do a kilometre would be likely to have a clear linkages between the functions, not directly contribute to funding them. dramatic positive impact on congestion jurisdictional boundaries and funding of Visitors generate costs for small councils and the use of public transport. local governments has prevented fruitful and communities. They can generate Funding pressures are leading discussions of funding approaches and demand for places to park and to camp, some councils to be less responsive to their suitability for each particular and high levels of service delivery: for pressures for development, because council and context. Ministers have example, in respect of water quality. their ability to secure adequate funding shown a preference for creating unitary Local governments must also incur to meet requirements and expectations authorities, which combine regional with costs arising from central government’s is constrained under current funding territorial councils. This has been done expectations and policy decisions. A arrangements. Fast-growing urban in Auckland, Gisborne, Nelson, Tasman, recent example is a central government communities in New Zealand, especially Marlborough and the Chatham Islands. Auckland Council was formed from eight authorities. A similar proposal developed If the function of local government, its for the Wellington region by the Local jurisdictional structure and its funding Government Commission was not supported by a popular vote. Arguments arrangements are artificially separated, as to whether ‘bigger is better’ or ‘small is beautiful’ are perennial and unresolved. then it is difficult to say anything of They are likely to remain so as long as consequence about any of them. policy for local government is framed with a heavy emphasis on efficiency gains from reorganisation and limited attention to funding arrangements for decision to alter the way regional councils Auckland, expend considerable energy local governments. will be reimbursed for the transport and resources to deliver planning subsidies to superannuitants. It will and infrastructure services, address The Local Government New Zealand funding result in councils receiving less revenue congestion and housing affordability review for delivering transport services, which issues, and endeavour to placate strong Most previous funding reviews have been was not anticipated and therefore not objection to proposed intensification. instigated by the government or done budgeted for in their long-term plans. While councils have the power to set internally by the public service, whereas the Councils are also expected to meet the tax rates for existing sources of revenue, 2014–15 review was initiated by the local costs of implementing regulations made they do not have power to create new government sector. Local Government by central government, but there is no revenue sources. Any such changes New Zealand (LGNZ) created a working provision made for cost-sharing. will require legislation by Parliament, group of invited participants, who The 2015 OECD economic survey and therefore support from central contributed to a discussion paper on local of New Zealand said that the most government. These matters will often government funding issues. The review problematic factor cited for doing also involve community consultation. It developed some case studies that widened business in New Zealand remains is easy for central government to signal the discussion of funding and made inadequate infrastructure. The survey that they are not interested in supporting comparisons which brought together recommended that New Zealand proposals for additional revenue sources. issues of function, structure and funding. facilitate the provision of better urban Ratepayers often oppose proposals for Members were independent and drawn infrastructure by diversifying the revenue new sources of finance because they from many different sectors, recognising streams available to local governments. believe this will necessarily encourage the diversity of local governments and It also suggested better management councils to spend more overall. But new their issues, opportunities and challenges. of the demand for and use of urban sources can in fact spread the costs of The funding discussion paper was infrastructure, including congestion local government more widely without followed by a more specific ten-point plan charging to reduce urban traffic. After increasing them, and target particular issued by the LGNZ national council. some years of seeking support from population groups and sectors that The working group provided central government, Auckland Council benefit from services. New funding perspectives on a wide range of issues

Page 78 – Policy Quarterly – Volume 12, Issue 4 – November 2016 regarding current funding arrangements, Table 1: Local government functions and suggested options for reform. Territorial council functions Members brought extensive knowledge of the issues and challenges facing various Rural fire protection Museums Drainage councils. Some councils felt financial Civil defence Libraries Cemeteries pressures arising from rapid growth Crime prevention Economic development Cultural facilities and high demand for infrastructure and After-school care Tourism promotion Drinking water development. Others councils had ageing Crèches Airport ownership Waste water populations and shrinking economies, Voluntary sector grants Events Storm water and some communities that attract Public health protection Sports facilities Citizens’ advisory services tourists were challenged to meet visitors’ expectations. Housing Parks and open spaces Citizenship ceremonies If the function of local government, Community centres Public health regulation Town planning its jurisdictional structure and its funding Refuse collection and Local roads Environmental management arrangements are artificially separated, disposal Local regulations then it is difficult to say anything of consequence about any of them. This Regional council functions separation has become newly important Public transport Biodiversity Regional environmental as a result of the Local Government Act Port ownership Bulk water supply planning (air and water) 2002 Amendment Bill, currently before Marine regulations Pest management Environmental protection a parliamentary select committee, which sets out a new framework for local government organisation without taking Source: Reid, 2016 financial considerations into account. regulations established by central affect perceptions of their territories as Structure, functions and funding of local government. Many services are taken attractive places to live and to visit. governments for granted by those who use or benefit As already observed, rates are the The history of the organisation of local from them, and the general public is predominant revenue source, delivering government in New Zealand has been one often unsure as to the roles of councils almost 50% of revenues on average. of consolidation. In 1974 there were 991 and other organisations in financing and Taxes on property were recognised in territorial and ad hoc authorities; there delivering services; communities differ in the funding review as the cornerstone of are now 78 local authorities, comprising the level and mix of particular services funding for local government services, 11 regional councils and 67 territorial provided by their local councils beyond though new revenue sources, such as authorities (unitary authorities, city the core services that are required by an accommodation tax and the sharing councils and district councils). legislation. of sales taxes, were also considered. Local authorities vary considerably Relative to councils in other OECD The imposition of mandatory rating in size. At the last census of population countries, however, all local governments exemptions was also raised. One option and dwellings (March 2013), the largest in New Zealand have a narrow mandate, proposed was that mandatory rating regional council was Environment and their range of services excludes the exemptions be removed, and exemptions Canterbury (population 539,433); delivery of education, health and social made in response to specific local needs, the smallest was West Coast Regional services, which are local government following consultation by councils with Council (population 32,148). Territorial responsibilities in other jurisdictions. their communities. Core Crown land and unitary authorities’ populations Council planning and regulatory is exempt from rates, though in many ranged from 1,415,550 (Auckland) to 600 functions influence the location of overseas jurisdictions it is common for (Chatham Islands). various activities and set standards for councils to pay grants in lieu of rates. Table 1 sets out the functions of the built environment. Councils also There are also subsidies from central territorial and regional councils. play an important role in emergency government, including cost-sharing Local and regional councils create management, and have a role in building arrangements with the New Zealand and maintain infrastructure and provide strong communities and resilience in Transport Authority (NZTA), which services for districts, cities and regions. their communities. These activities collects petrol tax and shares a proportion They play an important role relating to influence the quality of life and the of this revenue with local government to planning, and build and maintain local economic, social, environmental and fund local roads. roads. Many councils deliver various cultural outcomes in local communities. In 2013 the proportions of local community services, such as libraries, Councils also vary in the range of government funding sources were as swimming pools, parks and recreational services and amenities that they provide follows: rates 49%, user fees and charges facilities. Councils must also implement to residents and visitors, and this will 15%, current and capital grants (from

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 79 Local Government Funding: facing the issues

Table 2: Average council activity funding sources for services (by percentage), 2013 Good practice principles for funding Rates Regulatory User Fees interest & Grants arrangements Income & Charges Dividends Local government funding design should be guided by acknowledged good practice Roading 61 4.5 4.5 30 principles for taxation and revenue systems. Transportation 16 10 28 46 Some criteria for well-designed funding policies and arrangements are allocative Water supply 64 36 and technical efficiency, horizontal and Waste water 85 15 vertical equity, administrative simplicity and transparency. The efficiency criterion Solid waste/refuse 45 1 51 3 is concerned with ensuring that the Environmental protection 74 4 19 3 tax system does not distort economic behaviour and incentives, and maintains Emergency management 63 17 20 relative prices to avoid economic Planning and regulation 38 47 13 2 inefficiency. Equity is about fairness. Horizontal equity means treating people Culture 65 1 16 18 who are equal in terms of their income Recreation & sport 66 32 2 or economic status the same way; vertical equity seeks to compensate for differences Community development 78 13 9 in ability to pay, by varying taxes for Economic development 56 16 28 different income groups. Governments pursuing growth and efficiency have Property 21 1 77 1 become interested in administrative Governance 94 6 simplicity, to keep the administrative and compliance costs of taxation relatively low Support services 76 3 4 17 as a proportion of the revenue collected. Other 28 14 58 In New Zealand, discussion of funding for local government tends to place an Source: Local Government New Zealand, 2015a, p.15 extraordinary emphasis on the burden of rates on ratepayers, and on perceived NZTA contributions) 19%, vested assets Expenditures also vary considerably inequities and inefficiencies. Many 7%, regulatory income and petrol tax across authorities. In 2013 the six largest candidates in local government elections 5%, interest and dividends 4%, and operating expenditure categories on have campaigned on the platform of development and financial contributions average by activity were, from high to keeping rates down, unsurprisingly given 2%. The percentage of income derived low, transport and roading (at 29.1%), the reliance on rates as a principal source from taxes can vary substantially council support services (14.9%), water, of funding. Some councils make use of between councils, as it depends upon the storm water and waste water (14%), differential rating, which allows councils availability of other forms of revenues recreation and sport (8.5%), culture to impose different rates on property from investments and user fees and (6.5%) and planning and regulation values for residential, commercial and charges. Councils vary in the degree to (5.3%). Other categories included industrial property, and differentials can which they rely on particular revenue property, environmental protection, solid also be used to impose different rating sources to fund their activities. waste/refuse, economic development, levels on properties in different value The Local Government Act 2002 community development, governance classes. Differentials are sometimes used replaced legislation that mandated and emergency management. with a view to considering differences specific services. It included a new Revisions to the legislation in 2010 in the benefits received and/or ability purpose clause, giving councils a power and 2012 focused on improving the to pay of different classes and value of general competence and local choice performance of local governments and classes of property. Councils can also regarding the services to be delivered improving transparency, accountability impose a uniform annual general charge to their communities. The act required and financial management. Somewhich is imposed at the same rate for all councils to specify their intended levels modifications allowed more flexibility to ratepayers. of services and to work with their make use of targeted rates, with a view Making decisions on how to fund communities to prepare a ten-year to assigning rates more precisely to the various council services requires long-term plan. Councils are now also benefits received. No provision has been consideration of the purpose of required to each provide a 30-year plan made, however, for introducing new delivering the services and the precise for infrastructure. sources of revenue. benefits received from them. Public services can confer private benefits to the

Page 80 – Policy Quarterly – Volume 12, Issue 4 – November 2016 users of the service; benefits to those in within a specific category of property available to councils, or subsidies linked the community who support councils’ by value class or other attributes. to income or consumption taxes collected delivery of services irrespective of whether Differential rating for commercial by central government. they personally benefit from them; and property is widely used by large urban These issues raise questions as benefits to others, including visitors, councils. Research commissioned in 2016 to whether the revenue base in New who do not contribute to the funding by the Property Council of New Zealand Zealand should be diversified, and if of services. Funding arrangements such reported commercial differentials, which central government should share some as the metering of water are designed to are multiples of the general rate applied of the proceeds from GST with local produce efficiencies, as user charges will to residential property by the same governments, or find ways to reward make individuals more aware of costs and council. The commercial rates differential communities which are growing and provide incentives to reduce the amount applied by Wellington councils in 2015 thus generating revenues to local used. Water saving confers benefits to were: Wellington City 2.8; Porirua 3.5; governments. In some countries sub- other users, and financial benefits to the Lower Hutt 3.14; and Upper Hutt 2.7. national governments, particularly in council and thus indirectly to all those The proportion of general rates collected large urban areas, have access to a local who help finance council services. from commercial property ranged from tax based on income, payroll or sales, The nature of benefits from a service 22% in Upper Hutt to 45% in Wellington which can generate some local revenue – such as swimming pools, for example City. Only Porirua had a uniform annual from local and international visitors and – will vary between communities, and charge. others who place significant demands on funding policies must have regard to the public and private benefits they confer. The proportion of public and The use of differentials makes the rating private benefits from swimming pools will differ within and between councils system less transparent, in that valuation depending on who uses the pools, and the degree to which entry is subsidised becomes less important in determining for particular user groups. In Auckland the quantum of rates paid by different a decision to provide free swimming for people under 16 years of age was initially sectors. made by a local board, then extended to all parts of the city by the governing body. Public funding of pools and other recreational facilities is often delivered to The use of differentials makes the council services but do not contribute to ensure access for the community which rating system less transparent, in that local taxes. Such a subsidy, for example, is would otherwise be unaffordable to some valuation becomes less important in the sharing by the federal government in individuals and groups. determining the quantum of rates paid Australia of the proceeds of the goods and Services provided by central or local by different sectors. These arrangements services tax with the state governments. government may provide private benefits have the effect of increasing the share The funding review examined several to users and benefits to those who do not of rates paid by commercial ratepayers. potential new sources of funding for use the services themselves. If the services Differential rates can make it more councils. It focused particularly on issues provided by councils were producing difficult for people to predict their of rapid growth and housing affordability only private benefits to individuals, then, liability for rating increases in the future in fast-growing urban areas, but also in theory, one could consider mandating than if a single uniform rate was imposed looked at the financial challenges facing that households purchase specificon all classes of property. small districts with declining populations services, such as rubbish collection. The Debate about new sources of revenue and rating bases, which still need to renew services provided by governments are is more common in rapidly growing cities infrastructure and maintain services, often those that benefit the community such as Auckland, but the issues involved and the service delivery requirements of even though they confer private as well as also affect small rural communities and places that are under pressure from non- public benefits. Public parks and reserves areas with small local populations that resident populations. are an example of amenities from which are popular with tourists and visitors. A key theme of the funding review’s both public and private benefits are There is ongoing discussion about the recommendations was the need to re- enjoyed. costs associated with visitors and tourists examine existing funding arrangements As observed, councils in New Zealand and the revenue contribution they make to provide stronger incentives for continue to rely principally on rates for to local governments. One option to councils to support economic growth revenue. They can impose differential consider is imposing taxes on visitors and and to strengthen local communities. rates on property zoned for different tourists, which should be paid locally. Oliver Hartwich, executive director of the purposes, and can also differentiate There is no payroll, income or sales tax New Zealand Initiative and a member of

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 81 Local Government Funding: facing the issues the LGNZ working group, describes the economic development. Environment expanded and strengthened Local current approach to growth as follows: Canterbury, for example, has developed Government Commission has a focus a comprehensive strategy with support on reorganisation and the potential In New Zealand, unfortunately, from mayors of all the local councils in the benefits of further consolidation of local we have separated out the benefits region. The local government sector has governments. But legislation currently and costs of development. Taxes on been through a long period of constant before a select committee proposes to economic activity – income profit reform and legislative change, and could reintroduce mandatory community and sales taxes – typically end up in benefit from more certainty about polls on any proposed amalgamation of central government’s coffers. Yet costs its functions, structures and funding councils. The bill proposes allowing the associated with increasing economic policies. If councils are to be encouraged commission to amalgamate particular activity – infrastructure spending but to support growth more proactively and councils’ services, as distinct from their also losses of amenity – are borne are to provide infrastructure efficiently identities, where it believes this will lead locally. and effectively, there is a case for looking to efficiencies. The New Zealand Council for Infrastructure Development considers this approach to improving local Designing funding policies should government to be too narrow. Its report on local government and planning reform involve consideration of the potential role proposes ‘a fully integrated planning, governance, funding, regulation, delivery, of new sources of revenue, and of the and resource management system that principles that should guide the design will drive regional social and economic development, improve environmental of a robust and suitable funding system. outcomes and strengthen local democracy and community engagement’ (New Zealand Council for Infrastructure Development, 2015). As a result of this disconnect, at ways to broaden their permissible The issues facing Auckland regarding central government is a pro- revenue base. growth, transport, urban planning and development force while local This should in turn serve to make housing affordability are challenging government is an obstacle to councils more receptive to accommodating and substantial. They are not unique growth by definition. This affects all growth and development. Social, environ- to Auckland. Tourism is growing, and sorts of development, whether of mental and cultural outcomes will need to regional development strategies are residential housing, new businesses, be considered, and mechanisms devised being developed by local governments in or more controversially, oil and to help governments make informed various regions. gas exploration and mining. (Local judgements about individuals’ and Government New Zealand, 2015b, communities’ well-being, and on the Conclusions p.8) benefits and costs of alternative courses of Assessing the suitability of funding action. arrangements requires balanced There remain many options to consideration of the roles and functions to consider. The jurisdictional structure of The local government reform agenda be undertaken; the jurisdictional structure local government might be subject to In many countries arrangements of local government; and the adequacy of change, with implications for the roles for funding local governments are the the level and mix of revenue sources. These local governments undertake, as well as subject of lively debate because the range three elements must be able to work well for funding. The tendency has been to of funding sources is wide. Governments for a diverse range of local and regional seek amalgamations, reducing the number with multiple levels of sub-national councils in New Zealand. The diversity of of councils and gaining efficiencies in government often have arrangements issues, opportunities and challenges for service delivery, without changes in for revenue sharing, with the aim of New Zealand councils necessitates policy councils’ roles. Regional councils were transferring revenues from higher- to settings that recognise and cater for the formed in response to environmental lower-level government units. These whole range of communities and regions concerns, but may yet take on a wider transfers are made for various purposes. in New Zealand. Designing funding role regarding growth and economic Efforts to secure alignment between policies should involve consideration development: this function is sometimes functions, jurisdictional arrangements of the potential role of new sources of carried out by specific councils, or and financing arrangements can be revenue, and of the principles that should by separate economic development undermined by selective focus on any guide the design of a robust and suitable agencies, but some regions are beginning one of these three dimensions at the funding system. to work with local councils on regional expense of the other two. The recently

Page 82 – Policy Quarterly – Volume 12, Issue 4 – November 2016 References Bailey, S. (2004) Strategic Public Finance, London: Palgrave Macmillan OECD (2015) Economic Survey of New Zealand, Paris: OECD Gemmell, N. and D. Gill (2016) ‘The myth of the shrinking state: what Property Council of New Zealand (2016) ‘Myth busting Wellington City does the data show about the size of the state in New Zealand, Council rates’, media release, 11 August, http://www.propertynz. 1900–2015?’, Policy Quarterly, 12 (3), pp.3-10 co.nz/media/wysiwyg/pdf/Myth_Busting__Wellington__Commercial_ Hartwich, O. (2015) A Global Perspective on Localism, Wellington: Local Rates.pdf Government New Zealand and the New Zealand Initiative Reid, M. (2016) ‘Contemporary local government reform in New Local Government New Zealand (2015a) Funding Review: a discussion Zealand: efficiency or democracy’, in U. Sadioglu and K. Dede (eds), paper, Wellington: Local Government New Zealand Theoretical Foundations and Discussions on the Reformation Process Local Government New Zealand (2015b) Local Government Funding in Local Governments, Hershey: IGI Global Press Review: 10 point plan, Wellington: Local Government New Zealand Scott, C. (1979) Local and Regional Government: function and finance, New Zealand Productivity Commission (2016) Better Urban Planning: Sydney: Allen & Unwin draft report, Wellington: New Zealand Productivity Commission Scott, C., J. McNeill and M. Reid (2011) Local Government Strategic New Zealand Council for Infrastructure Development (2015) Integrated Planning: in theory and practice, Wellington: Institute of Policy Governance, Planning and Delivery: a proposal for local government Studies and planning law reform in New Zealand, Auckland Nicholls, P. and D. Gill (2014) Is Local Government Fiscally Responsible?, Wellington: NZIER

New Publication from Emerald Governing for the Future Designing Democratic Institutions for a Better Tomorrow by Jonathan Boston, Victoria University of Wellington This book is about governing well for the future. It investigates the nature of, and the conditions for, prudent long-term democratic governance in a dynamic, complex, and uncertain world, the reasons why such governance is politically challenging, and how such challenges can best be tackled. In particular, There is nothing else like this book. Boston it addresses the problem of ‘short-termism’ – or a addresses one of the most urgent questions of our times: whether democracies are capable ‘presentist bias’ – in policy-making; that is, the risk of managing long-run problems like climate of governments placing undue weight on near-term change. He provides a comprehensive and considerations at the expense of a society’s overall long- thoughtful survey of techniques for avoiding myopic decision-making. It is the indispensable term welfare. While acknowledging that this problem is guide for policymakers and academics.

‘wicked’, complex and enduring, the book argues that Professor Alasdair Roberts, University of Missouri, strategies are available to enhance the influence of long- co-editor of the journal, Governance

term interests in democratic decision-making, thereby This book can be ordered online from better protecting the wellbeing of future generations. http://books.emeraldinsight.com

Policy Quarterly – Volume 12, Issue 4 – November 2016 – Page 83 TEACHING IN AUCKLAND FROM 2016 Study at one of the world’s leading BUILD PUBLIC business schools Victoria Business School is among just 72 business schools SECTOR CAPABILITY worldwide that hold the triple crown of international accreditations: EQUIS (European IN AUCKLAND Quality Improved System); AACSB (the Association to Advance In 2016, Victoria University’s School of Government is offering Schools of Business) and AMBA Public Policy and Public Management Master’s level courses (Association of MBAs). for working professionals in Auckland. Courses will be taught in block modular mode out of our Auckland premises in Kitchener Street, and include: • Policy Analysis and Advising • Managing for Results • Local Government • Policy Methods and Practice • Leading Change in Public and Community Organisations. Find out more at www.victoria.ac.nz/sog APPLY NOW TO ACCELERATE YOUR BUSINESS FUTURE

FC0301 victoria.ac.nz/business | [email protected]