NZ Government Wants Mayors to Tighten Belts, Rein in ‘Fantasies’

(Bloomberg) -- New Zealand’s government announced a proposal to encourage local councils to invest more in necessary infrastructure and at the same time sent a message to mayors to stop frivolous spending.

Local Government Minister Simeon Brown outlined a new Regional Deals framework Thursday in Wellington, saying it is a tool already used in the UK and Australia to build stronger relationships between central and local government. The framework will help coordinate capital investment and will also enable regions to utilize new and existing funding tools to finance infrastructure projects, he said.

“The Government will invite up to five regions to provide straightforward basic proposals for a Regional Deal,” he said. “I’ve made my expectations clear to councils that we are not interested in seeing ratepayers’ money spent on extravagant proposal documents.”

His comments echoed Prime Minister Christopher Luxon, who in a speech Wednesday challenged local and regional councils to look at how they spend the rates they collect from their citizens. At a time of slowing inflation many councils have announced double-digit increases in their annual levies, often because they have incurred rising costs for non-essential projects like convention centers.

“Ratepayers are sick of the white elephants and non-delivery,” Luxon said. “So, my challenge to all of you is to rein in the fantasies and to get back to delivering the basics brilliantly.”

Luxon said councils need to focus on their own costs and spending because the days of central government handouts are over.

Councils need to “go line by line, stop the wasteful spending, remove the bureaucracy, focus on better customer service, and end the projects that aren’t delivering value for money.” he said.

The government plans to investigate performance benchmarks for local councils, similar to the approach some Australian states apply to their local authorities, which will focus on financial performance and customer service indicators, Luxon said. 

The cabinet has also agreed to consider options to limit council expenditure on “nice-to-haves,” he said.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.