progress new zealand

October 12, 2021

The Problem with Local Government

Josh Van Veen

Animal control, building consents and drainage. That is what comes to mind when a New Zealander thinks of ‘local government’. These issues are unlikely to arouse much passion. Those who do have strong opinions about local government are in a minority. The question is why; and what, if anything, should be done about it? 

Analysis by Oliver Hartwich of the New Zealand Initiative has found that we have one of the most centralised governments in the world. This can be measured by the amount spent on local government as a percentage of all public spending. In 2010, the OECD average was 30%, while New Zealand recorded just 11%. In other words, central politicians and bureaucrats control almost 90% of public spending. According to Hartwich, only Greece and Ireland surpass New Zealand in that regard.

Given the centralisation of power, it is understandable if most New Zealanders might feel a lack of efficacy when it comes to local government.  While many important decisions regarding the management of infrastructure and utilities are indeed made by councils, it is not clear that the voting public have enough say in these matters to justify the term ‘local democracy’.  Indeed, use of the term is rare. A recent Google search finds that 109,000 uses of the term ‘local democracy’ on New Zealand websites compared to almost two million mentions of ‘local government’. 

However, the democratic deficit that exists at the local level does not reflect nationwide political apathy. Since local government reform in 1989, turnout at local body elections has declined from 57% to 42% in 2019.  But most tellingly the gap between turnout at national and local elections has widened from 28 percentage points in 1989/90 to 40 percentage points in 2019/20. Most New Zealanders do care about public issues and want to have a say in how the country is run. They just don’t believe their local mayor and council have a significant role to play in that.

Where did this scepticism come from? During the Colonial Era, New Zealand experimented with a quasi-federal system of government. Six provinces were established under the New Zealand Constitution Act 1852, each governed by an elected council and superintendent. Although there was a national Parliament, this body proved less effective than the councils, which had wide legislative powers. In fact, New Zealand political culture in the mid-19th century was the inverse of what it is today, with voters more concerned about local politics than central government.

It was provincial governments that built much of our early infrastructure, from roads to railway and telegraph lines. The provinces were also responsible for establishing the first public schools in New Zealand. But during the 1860s-70s many became disillusioned with the fragmentation of government and the inefficiencies this caused. The failure to build a bridge over the deadly Waitaki River, situated on the border of Canterbury and Otago, came to symbolise the gridlock caused by inter-provincial rivalries. Widespread financial mismanagement and lack of development led to growing calls for power to be centralised in Wellington. 

Sir Julius Vogel is remembered as the man who broke that deadlock. In 1870, the then-Colonial Secretary, devised a radical plan for the central government to bypass the provinces. The ‘Grand Go-ahead’ involved borrowing millions of pounds from London to fund the development of national infrastructure and subsidised immigration. Vogel would see to it that the ‘iron horse’ ran from one end of the country to the other. To that end 16,000 kilometres of rail was built during the 1870s. Opposition to Vogel’s plan ultimately led to the abolition of provincial councils in 1876 and the consolidation of power by Wellington.

While it was by no means the end of parochialism, and local government would flourish in other forms, the Vogel era transformed New Zealand into a unitary state. One-hundred-and-forty-five years later, our politics have congealed around this belief in centralisation. Whether it is the amalgamation of councils in the Auckland region, the abolition of district health boards, or the ‘Three Waters Reform Proposal’, the New Zealand power elite has an inherent bias for centralised decision-making. Historically, this made sense when it came to developing national infrastructure and the public service. But in the 21st century it has led to the neglect of local democracy and civic culture.

With the Government’s Review into the Future for Local Government underway, now is a good time for New Zealanders to question the purpose and role of government in their local communities. Although officials in Wellington might refer to your local council as an ‘external partner’, the council is itself an organ of the state; an elected bureaucracy that functions more as a government department than a democratic body representing the interests of a particular locality or community. Therefore, it is not obvious that the solution is more devolution of power to local government, as Local Government New Zealand has argued. It could be that the solution lies in democratising council bureaucracy.

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