Chris Hipkins Photo: RNZ / REECE BAKER
Labour has told the local government sector it will not ask them to do anything without providing some form of funding first, should it return to government.
Unfunded mandates, in which central government gives policy direction to local government without bearing any of the costs, have long been identified as key difficulty facing local government's revenue streams, including prominently in the Future for Local Government Review.
Labour leader Chris Hipkins told the Local Government New Zealand conference in Wellington the practice should cease.
"I will commit us right now to no unfunded mandates in local government. If central government wants something done then we must back you to do it. But if you want something from us, you must bring a solution along with the problem," Hipkins said.
Hipkins' speech came two days after the Prime Minister challenged councils to "rein in the fantasies" and focus on the basics.
While he acknowledged that successive governments had failed to address the funding challenges faced by the local government sector, he said Christopher Luxon was being "patronising, condescending, and offensive," and apportioning the blame onto councils rather than working with them constructively.
"After decades of being told by central government to keep rates low, local governments are now facing the reality of a burgeoning infrastructure investment backlog and that's flowing through in higher rates bills. Rather than look for solutions to that challenge, the current government is instead focused on apportioning blame," Hipkins told the audience.
Hipkins said it was an "inconvenient truth" that central government had set the rules that had led to local assets running down, but also had a poor record of its own on schools, hospitals, and electricity infrastructure.
He said governments should not be afraid to borrow to fund investment and infrastructure and assets for the future.
"We should boldly get behind projects we don't see ourselves cutting the ribbon on. We should invest properly, instead of deferring or delaying and never beginning."
The Prime Minister was unperturbed by Hipkins' criticisms, saying if Hipkins got out of Wellington and spoke to ratepayers he would find they agreed with his speech.
"Actually, people are very grateful that that's what they do what their councils to do. Yep, waste will look different in each council based off its financial situation, but all I'm saying, and the general gist, was to make sure you prioritise your projects properly," Christopher Luxon said.
In a Q&A session afterwards, Labour's local government spokesperson Kieran McAnulty criticised the tone the prime minister had taken in his speech.
"He came in and told these people off and then buggered off," he said.
"Engagement is a two way street, it can't expect to understand what the sector needs without going and actually talking to them, rather than expecting you to come to them."
Speaking to media afterwards, Hipkins said Labour would engage with the sector to see what the change to funding streams would look like.
"If we are asking councils to do more, then we need to talk to councils about how that is funded. That's a bit that I think all governments, Labour or National, have not done in recent decades, and I think it's one of the reasons that councils do have quite a lot of their work that they're struggling to fund," he said.
Local Government New Zealand has suggested options like a bed tax, returning the GST on rates back to councils, or charging the Crown rates on the council land it occupies.
Hipkins would not commit to any options, choosing to instead leave them all on the table.
"I think for local government, we shouldn't underestimate how critical the situation is. They're being asked to do things that they simply don't have the financial means to do," he said.
He used the waste minimisation levy as an example where councils use the revenue to implement environmental sustainability policy directives set by central government.
Hipkins and McAnulty were also amenable to the regional deals framework announced by the government, which would see 10-year agreements between central government and five regions to work together on critical infrastructure projects.
While the government is not putting cash on the table, it will speak with councils about unlocking new funding and financing tools such as value capture, targeted rates, tolling, and congestion charging.
Local Government New Zealand welcomed the announcement, but said cross-party support would be critical to ensure the deals would not change with a change of government.
Hipkins indicated Labour would honour the deals should it return to government.
"I'm not simply going to dial the clock back on everything that they have done just because it was them that did it," he said.
However, they said if the financial burden for regional deals fell back onto ratepayers, then they would be doomed to fail.
Hipkins also took umbrage with the prime minister's criticism of the Tākina convention centre, where the conference was being held, and said the government was "a bunch of hypocrites" for celebrating the convention centres in Auckland and Christchurch but disparaging Wellington's.
"It's being used. It's actually supporting local businesses at a time when the Wellington economy is facing a more significant downturn because of the decisions of this government. This is one of the few bright spots in the Wellington area. I don't think they should be criticising it," he said.
