Photo: Wellington City Council
With voting for local body elections opening in less than a month, just how well are councils tracking with their long term planning?
On Wednesday, the Governance and Administration committee was joined by Henry Broughton and Laura Cannon, officials from the Office of the Auditor-General (one of Parliament's independent watchdogs), to discuss their recent audit of local councils' Long Term Plans.
Councils are legislatively required to produce Long Term Plans (LTPs) every three years, outlining their strategy and investment intentions over a 10-year period.
Cannon told MPs that the LTPs had become unnecessarily long and were not particularly accessible to their communities.
Councils should be asking communities "what's useful to you as part of that planning process," Cannon said. "The better the strategic long term planning, actually, the better the short term decisions are made."
Wednesday's hearing comes at a critical time, with local election voting opening in under a month. Perhaps the most universal issue across local government is rate increases, with an average of 8.7 percent for 2025/26. That's not the only figure going up - so is council debt.
National's Tim Costley was keen to hear from the officials about how this "perfect storm" of more debt and higher rates came about.
"Although the debt is larger because of that historical underinvestment, we are seeing that peak now [as we are] trying to catch up, and you would hope, as that catch up is achieved, then things will level off and it will become more level because it's not sustainable," Cannon explained.
Costley rebutted that the projections didn't match earlier data, "if you look at that curve, it's not starting to come down now for at least another five years, it was meant to be decreasing or even".
Cannon emphasised the consequences of "30-40 years of underinvestment", worsened by high inflation.
"I think councils would say that local government CPI rates are higher, so it contributes to their own expenses [being] higher than the general level of inflation. So generally, the debt we talk about is your long term investment into assets and so on, but your rates are your operational costs, and that's where they've seen really, really strong increases in their expenses, so the rate rises have been needed to cover those."
It's easy to forget that local and central government don't operate in silos. Councils and territorial authorities have the autonomy to make everyday decisions relevant to their community, but government (specifically Parliament), sets out the overarching responsibilities, standards, and priorities for local governments to follow.
Local v central governments - a wobbly relationship
In the 54th Parliament, there has been a palpable hostility between local and central government. Some councillors have said they felt patronised or bullied by the government, while some ministers feel councils have been irresponsible when left to their own devices. Earlier this year, Local Government Minister Simon Watts compared councils to children given too much freedom to misbehave.
With the backdrop of burst pipes, accusations of "vanity projects", and the appointment of a Crown observer, Wellington may be where this tension has been most obvious.
Coincidentally, two of the six MPs at Wednesday's select committee meeting are former Wellington mayors: New Zealand First's Andy Foster and the Green's Celia Wade-Brown. Despite being on opposite sides of the aisle, both MPs-perhaps due to their shared experience-were unified in defence of local government.
Wade-Brown, who left the mayoral office nearly 10 years ago, seemed keen to clear her own and Foster's names from the idea of councillors guilty of conscious under-investment.
"You say, the councils historically have not ever underinvested. Where was the audit advice that they were underinvesting? I don't remember, and I don't know whether my colleague remembers, ever being told that we weren't really spending enough on our underwater pipes and so on. ...I just think it's quite frustrating to be always told, particularly by certain candidates that, oh, we should have been focused on this more - when there wasn't a report that said that."
Celia Wade-Brown questions a submitter in select committee. Photo: VNP / Phil Smith
Broughton seemed surprised: "It is an issue we've raised in these reports for some years, but I think what you're saying is that they weren't raised to you at Wellington City Council."
"You should have been screaming it, not whispering it," said Foster.
"Well, we will take that back and go and reflect on that", Broughton replied diplomatically. "But certainly in ... these reports we provide to Parliament, we have raised that issue for several years now, because it is a sector-wide challenge."
Recently, Watts said he'd be submitting a paper to Cabinet that proposes caps on rates. Neither of National's coalition partners are keen on this idea, nor is Local Government New Zealand. Whichever path Cabinet takes, the strained central-local government relationship remains crucial.
To listen to the audio version of this story, click the link near the top of the page.
RNZ's The House, with insights into Parliament, its legislation and issues, is made with funding from Parliament's Office of the Clerk.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
