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The New Zealand government is set to remove four wellbeing provisions from the Local Government Act in an effort to curb rising rates and streamline local government operations. Minister Simeon Brown announced the proposed changes on Monday, with legislation expected to be introduced by mid-2025.
Local councils have expanded their focus beyond traditional governance with provisions targeting the social, economic, environmental, and cultural wellbeing of communities.
However, some critics, like Brown, argue that this broader mandate has allowed councils to fund projects like convention centres and hotels, which they describe as “nice-to-haves,” driving unsustainable rate hikes.
Rates, Wellbeing, and Core Services
Brown has expressed growing concern over rising rates, calling the increases “unacceptable to ratepayers, and unacceptable to the government.” He pointed to data from the Department of Internal Affairs, which suggests the wellbeing provisions have contributed to a two per cent annual rise in rates.
In his view, councils should refocus on “pipes, potholes, and core services.” “The party is over,” he said, accusing local councils of using the wellbeing provisions as a justification for spending decisions that stretch beyond their core responsibilities.
Fabrication Allegations and Misdirection
Chris Hipkins, leader of the Labour Party, strongly countered Brown’s assertions, accusing him of fabricating a connection between the wellbeing provisions and rising rates. “There is no clear data that shows that there is a cause-and-effect factor here,” Hipkins argued.
“One of the biggest things driving up rates up and down the country at the moment is the need to upgrade water infrastructure,” Hipkins said. He argued that the government’s decision to scrap the previous administration’s water reform plans placed a greater burden on local councils and ratepayers.
Additionally, Hipkins rejected Brown’s call for new transparency measures, pointing out that councils already report extensively on their plans and capital investments.
Transparency and Benchmarking
The government’s plan to scrap the wellbeing provisions is paired with the introduction of annual benchmarking reports to assess council performance. The reports will cover key indicators such as rates, debt, capital expenditure, balanced budgets, and road conditions.
Brown argued that these reports will allow voters to compare the performance of their local council with others nationwide ahead of next year’s elections.
“Voters can actually directly compare their council’s performance with another council and be able to make up their mind as to whether or not the councillors or the mayor are actually performing adequately,” Brown said.
Mixed Reactions to Policy Changes
ACT Party local government spokesperson Cameron Luxton praised the government’s commitment to accountability and transparency, saying it would encourage council candidates to focus on “respecting ratepayers and getting the basics right.”
He also expressed support for the benchmarking reports, calling them a way to promote healthy competition between councils. On the other hand, the Green Party strongly opposed the move.
Local government spokesperson Celia Wade-Brown argued that wellbeing projects, such as libraries, community centres, and sports fields, are essential services, not “nice-to-haves.”
She criticised the government’s approach as undermining local democracy. “Today’s announcement makes it clear that ‘Luxon localism’ has nothing to do with supporting local democracy but everything to do with dictating from the top down what communities should think is important,” Wade-Brown said.
Rates Capping Under Consideration
The government is exploring the possibility of introducing rates capping, which would limit the percentage by which councils can raise rates each year. A Cabinet decision on the matter is expected by February 2025, with further legislation likely to follow later in the year.
The proposed changes have reignited discussions about the power dynamics between central and local government. While the government insists that removing wellbeing provisions and introducing new transparency measures will address ratepayer concerns, critics argue these steps could weaken councils’ ability to meet local needs.