Prime Minister Christopher Luxon told attendees at the Local Government New Zealand conference in Wellington today that local councils need to "rein in the fantasies" on spending.
"Ratepayers expect local government to do the basics and to do the basics brilliantly," he told the conference.
"Pick up the rubbish. Fix the pipes. Fill in potholes. And more generally, maintain local assets quickly, carefully, and cost effectively."
Luxon specifically mentioned the venue where he was speaking the recently completed Tākina convention centre which has seen concerns raised about its costs.
"The building we're in today is a classic example," he said, to some audible grumbling from the audience.
Citing continuing water woes in Wellington including today's flooding, Luxon criticised how "Wellington City Council decided to spend $180m on a convention center that according to public reporting is now losing money."
"It looks very nice, and it's very nice that politicians like us have another expensive room to deliver speeches in, but can anyone seriously say it was the right financial decision or the highest priority for Wellington given all of its challenges?
"Ratepayers are sick of the white elephants and non-delivery. So, my challenge to all of you is to rein in the fantasies and to get back to delivering the basics brilliantly."
Luxon said local government officials often tell Wellington they need more money.
"I have to be honest with you - the previous government might have taken that approach, but the party is over.
"There is no magic money tree in Wellington, thanks to the previous government's economic mismanagement and vandalism."
While saying he wanted to work closely with councils and provide new revenue tools, Luxon declared "the days of handouts are over".
Luxon said Cabinet has agreed to streamline the Local Government Act and abolish the four wellbeing provisions in legislation.
Cabinet has also agreed to investigate performance benchmarks for local councils.
"Sunlight is the best disinfectant - and ratepayers deserve to know exactly what they're getting for their rates," he said.
The government will also investigate options to limit council spending on what Luxon called 'nice-to-haves".
"Yes, councils need adequate revenue to fund core responsibilities like roads, rubbish and water, but the value-for-money proposition is more questionable in a range of other areas."
Cabinet also will review the transparency and accountability rules that apply to councils.
"We want a productive and constructive relationship with local government - one that enables your growth and development and gives you the tools you need to pay for it," Luxon said. "But we expect you to spend ratepayers' money responsibly."
Earlier this year, Local Government New Zealand commissioned a report from Infometrics which found homeowners faced on average rates rises of 15 percent.
After the speech, Luxon told media, "Many councils are actually doing a very good job balancing their balance sheets".
Still, "there comes responsibility not to do dumb stuff," Luxon said.
"It's a war on council waste, absolutely."
Luxon said New Zealanders are having to tighten their belts due to inflation and other costs and local government should expect the same.
"We expect a return on that investment and we expect the basics to be done brilliantly, and to be honest we've seen councils get distracted."
Around 100 people were also seen protesting the removal of Māori Wards outside the Tākina convention center in Wellington.
"We're very comfortable with councils having Māori wards," Luxon said, but said it is something local communities should decide, not central government.
