Building Empires ( district and city councils )
So let’s go back to basics and look at what councils are supposed to do for their ratepayers.
A quick look at the Local Government Act 2002 shows the expectations of councils, briefly–
The purpose of local government is –
- To enable democratic local decision-making and action by, and on behalf of, communities
- To promote the social, economic, environmental, and cultural well-being of communities in the present and for the future. (Local Government Act 2002, section 10 (1)).
The role of local authorities is to lead and represent their communities. They must engage with their communities and encourage community participation in decision-making, while considering the needs of people currently living in communities and those who will live there in the future.
The Local Government Act 2002, section 12(2), gives councils wide scope to do anything within the context of the purpose of local government.
The Act requires all councils to –
- Separate policy setting from operational functions as far as possible.
- Prepare long-term plans (LTPs), annual plans and budgets in consultation with their communities.
- Report annually on performance in relation to their plans.
- Prepare long-term financial strategies including funding, financial management and investment policies.
The Local Government Act 2002 also makes it clear that councils have a variety of other statutory responsibilities. These are mostly in other Acts such as the Resource Management Act 1991, the Building Act 2004, and the Biosecurity Act 1993.
Regional Councils responsibilities include –
- Sustainable regional well-being.
- Managing the effects of using freshwater, land, air and coastal waters, by developing regional policy statements and the issuing of consents.
- Managing rivers, mitigating soil erosion and flood control.
- Regional emergency management and civil defence preparedness.
- Regional land transport planning and contracting passenger services.
- Harbour navigation and safety, oil spills and other marine pollution.
Territorial Authorities (district and city councils) responsibilities include –
- Sustainable district well-being.
- The provision of local infrastructure, including water, sewerage, stormwater, roads.
- Environmental safety and health, district emergency management and civil defence preparedness, building control, public health inspections and other environmental health matters.
- Controlling the effects of land use (including hazardous substances, natural hazards and indigenous biodiversity), noise, and the effects of activities on the surface of lakes and rivers.
The powers and responsibilities of city and district councils are all the same - both are territorial authorities. The only difference is that city councils serve a population of more than 50,000 in a predominantly urban area.
Six of the territorial authorities in New Zealand also have the powers of a regional council, making them unitary authorities. These are Auckland Council, Nelson City Council, Gisborne, Marlborough, Tasman District and the Chatham Islands Council.
Nowhere does it state that councils are supposed to act as promoters for private businesses within the region – city - district boundaries, even though many seem to have accepted this as a role they are prepared to play.
My first question is: WHY?
What do I as a ratepayer gain from my representative body (City Council) acting as a promoter for private businesses in the City’s region/district. I don’t see how the council acting as a promoter for business in the city – region – district can be construed as complying with the purpose of Local Government as stipulated above.
Yes it may be looking to help economic wellbeing but this is limited to the wellbeing of the business that is being promoted and can in no way be seen as promoting the economic wellbeing of the community in general, in my opinion.
For this exercise I have used the example of my local Auckland City Council and their economic and cultural agency (Auckland Unlimited) which is represented as being committed to making the region a desirable place to live, work, visit, invest and do business.
Auckland Unlimited states inn their promotional documents; that building on the 10-year legacy of their founding organisations – Regional Facilities Auckland Ltd, and Auckland Tourism, Events & Economic Development Ltd – they will continue to make Auckland a vibrant destination and support the development of the region’s economy. They will lead the development of the region’s growth industries, support innovation, and help to attract transformative investment and multi-national companies.
So again in light of this statement I ask the question, as a ratepayer of Auckland City what benefit does this provide for me and mine?
Auckland Unlimited states that they work with partners to grow Auckland’s innovation culture, support growing businesses and key industries; and attract foreign direct investment, international events and visitors from around the world.
Some of the highlights from the 2022/23 financial year achieved by Auckland Unlimited included: an attributable $325 million in investment attracted to the region; 2.08 million ticketed attendees to TAU venues and events – including Auckland Zoo, New Zealand Maritime Museum, Auckland Art Gallery Toi o Tāmaki, and those operated by Auckland Live and Auckland Stadiums; launching the Destination Partnership Programme and Discover Auckland digital platform; $74 million GDP contribution from major and business events the organisation supported; and the delivery of the hugely popular Auckland Diwali Festival and Pasifika Festival on behalf of Auckland Council.
I am sure that Auckland Unlimited staff are doing a great job and that they are committed to their roles as evidenced by the highlighted results above, but what do these results actually mean to me as a ratepayer of Auckland City.
Firstly I must state that the same as all other ratepayers in the City I am obliged to pay my rates as set by the council and these are supposed to be set at a level that covers all of the council’s costs.
So in light of that I take exception to the major role that Auckland Unlimited plays in attracting investment into the region ($325 million in the last year alone) as this is a role that should be carried out and funded by the business community not the ratepayers.
No matter that the increased level of investment looks as if they are doing a great job this does not actually benefit the ratepayers as this investment does not go into the pockets of the Council; in fact it actually results in an increase in costs for the ratepayers from the need for increased levels of infrastructure spending and increased levels of regulatory oversight required.
It may also be a good thing that there has been 2.08 million ticketed attendees to TAU venues and events and $74 million GDP contribution from major and business events the organisation supported, but how much of this directly goes to the City and indirectly therefore supports the ratepayers? ZERO!
The more attendees to Auckland events the greater the requirements for provision of infrastructure such as sewage treatment, garbage collection & disposal, traffic management, etc. In relation to the increase in GDP this will result in at best a zero increase in costs (given that the rates paid by any new business will cover the increased costs for provision of infrastructure) or at worst an increase in costs (given that the rates paid by any new business will not cover the increased costs for provision of infrastructure).
Given that the total expenses for Auckland Unlimited were $100.6 million for the 2022/2023 year and that 54% of that funding was provided by the Auckland City Council; in the current economic climate where ratepayers are struggling with rising costs of living and increasing rates of inflation I don’t believe that councils in general should be taking on the role of providing promotional support for private businesses in any shape or form.