The warning isn’t coming from an anti-reform voice
When a fiscally transparent former Green MP who refused to promise rate cuts on the campaign trail warns that a reform will cost ratepayers, it is worth listening. Whakatane mayor Nandor Tanczos has gone public with a pointed critique of the Government’s local government shake-up, and his objection is not to the principle. It is to the process, the timeline and, above all, the money.
“Everyone is really concerned about the timeframes involved because it just doesn’t allow the community a chance to really engage and understand what the issues are,” Tanczos told Stuff. His sharper line: “There is only one objective that is clear and that is that they want to get rid of regional councils across the country. What happens after that is a bit of an afterthought.”
All 78 city, district, regional and unitary councils were given three months in May 2026 to submit merger proposals under the Hard Start Pathway, with a deadline of August 9, 2026. Endorsed proposals get detailed in 2027 and implemented in 2028 ahead of local elections. Local Government Minister Chris Bishop’s framing was blunt when he announced it: “lead your own reform, or we will do it for you.”
The unfunded mandate nobody is costing
The problem Tanczos identifies is simple. The Government asked for the work but did not pay for it. The reform process has dramatically increased workload for elected members and staff with no funding to help pay for it. Councils are absorbing consultation roadshows, legal analysis and structural modelling out of budgets already stretched by infrastructure backlogs.
Whakatane has already pushed through an 11.7% rates increase for 2025/26. The reform work sits on top of that. Transition costs do not vanish because the slogan is about efficiency. They land somewhere, and for a council the only place they land is the rates bill, including the commercial rates businesses pay.
The core services gap that undermines the whole pitch
The most striking evidence comes from Whakatane’s own 2025 submission on the Local Government (System Improvements) Amendment Bill, which defines a list of “core services” councils should focus on. The council found that 99.96% of its $63 million capital expenditure was already spent on those core services. Capital spending is not the problem.
Operating spending tells a different story. Of the council’s $76 million operating expenditure, only 51.35% counted as core services, while 48.65% went on other legally required functions that the bill mandates but does not classify as core. That excluded list includes building consenting, resource consenting and enforcement, food premises monitoring, liquor licensing and by-laws review.
Then-councillor Tanczos called the list “bizarre,” noting it “doesn’t include a whole bunch of functions that the Government itself requires that we do”. For business owners this is not abstract. Building and resource consenting are the gateway to development and expansion. Reorganise the councils without fixing the definitional gap and the efficiency savings never reach the costs businesses actually bear.
The debt consolidation risk buried in the maps
The Bay of Plenty situation shows how amalgamation can quietly redistribute liability. Whakatane’s community feedback has been overwhelmingly opposed to merging with Tauranga. By contrast Western Bay was warmer, with 45% supporting a merger and only 27% opposed.
Western Bay mayor James Denyer set the condition that matters commercially, insisting on “ensuring our communities are not taking on debt from other areas”. Amalgamation can consolidate debt across councils with very different financial positions. A business in a fiscally prudent district could end up cross-subsidising the infrastructure liabilities of a neighbour it just merged with.
This is bipartisan, which is exactly why business should watch it
In November 2025 the Eastern Bay mayors jointly called the shake-up “unnecessarily rushed”. Tanczos himself noted in June 2025 that the reforms would broadly remain in place even after a change of government. This is not a partisan fight to wait out.
The stated goal, fewer councils and simpler consenting, is what business owners have long wanted. The execution is the risk. Whether the reform delivers cheaper consents, lower commercial rates and faster approvals by 2028, or just a bigger bureaucracy funded by ratepayers who absorbed the transition and inherited someone else’s debt, is the question to be asking now, not in 2029.
Sources
- Rush to reform will cost ratepayers says Whakatane Mayor, Nandor Tanczos (2026-07-09)
- Govt’s list of council core services ‘bizarre’ says Nandor Tanczos (2025-08-22)
- Eastern Bay mayors say reform happening too fast (2025-11-30)
- Public feedback sought on Whakatane’s possible Eastern Bay council merger (2025-06-05)
- Whakatane District Council 2025/26 Budget and Rates Information (2025)