Wellington amalgamation is dead, long live Wellington amalgamation

An AI-generated image looking out a shattered glass window at a harbour city.

One unspoken casualty of the appointment of a Crown Observer to Wellington City Council will be that of local government reorganisation in the Wellington region, at least any attempt at pushing for reorganisation that is led locally. The politics are reorganisation are extraordinarily difficult to navigate in the best of times. They become impossible when the largest council in the region is up to its neck in difficulties.

This is a sad column for me to write. I’ve long been a vocal advocate for reorganising local government in the Wellington region and as a result I’ve covered recent developments around it extensively on Local Aotearoa. This is because I firmly believe that the interconnected and interdependent nature of much of the region requires a local government structure and governance arrangement that reflects that to ensure regulatory consistency across communities and prevents decisions being taken in isolation. This has been informed by having both grown up and worked in the region, but also from my triennium on Kāpiti Coast District Council.

I’m very aware that in doing so this involves losing the more granular level of governance we have currently. I also know that amalgamations, whether they’re of councils or other government entities, deliver a mixed bag when it comes to achieving economies of scale.

But I also know that there are huge opportunities for our communities to be unlocked from having better planning and coordination of issues like economic development, transport, housing, and environmental management at a regional level, and the status quo of disconnected councils and multiple layers of increasingly confusing and disjointed regional committees and forums haven’t been able to realise these.

There are always going to be trade offs whatever way we cut it, and Auckland’s merger of seven local and one regional council into a single unitary authority is a useful example to weigh up what trade offs are worth making and, more importantly, how we could better mitigate the downsides and accentuate the positives.

However, it’s notable that for a reorganisation of that scale it required central government to force the issue, and even then central government only took action when they decided that the status quo was completely untenable for our largest city. Oddly enough, the straw that broke the camel’s back was central government being rebuffed over a new waterfront stadium for the Rugby World Cup, something which is still being debated 14 years on from the merger.

The Wellington region tried to follow suit following the process available via the Local Government Commission. Unsurprisingly, whatever the merits of the proposal were, it wasn’t able to overcome the parochial politics at play.

That’s the nature of these things. People are well within their rights to look at the trade offs involved and feel that having smaller, possibly less efficient councils is a cost worth incurring for local democracy that’s closer to their community. It’s also an incredibly easy political argument to make too, which is why when these proposals get to referenda they’re so hard to get over the line.

A good example of this played out over Labour’s Three Waters, where there was understandable concern around other communities ending up being put in a mega entity that also included Wellington Water. It’s still a live concern now even under Local Water Done Well with my stomping ground Kāpiti Coast District Council wrestling with how to manage a requirement in their Standing Orders to hold a non-binding referendum if there are any changes to the management, ownership, or delivery of water services as would happen if a new regional water service entity was created and Kāpiti wanted to take part in it.

Even if it made perfect financial sense for Kāpiti to join the new regional water entity and would save us money in the long run, the perception that we’ve done a better job managing water to date and would just end up subsidising fixing Wellington Water’s mess would likely be impossible to overcome in the referendum.

In terms of the amalgamation discussion however, water was the one issue that was going to resolve itself out of the equation either through Labour’s Three Waters, or now the Coalition’s Local Water Done Well.

A similar issue plays out more broadly with councils. People in Kāpiti have a perception that if they’re amalgamated with Porirua, Lower and Upper Hutt, and Wellington City, they’ll just end up subsidising things in those cities. Even if The Taxpayers’ Union’s Ratepayers’ Report indicates that Kāpiti ratepayers have some of the highest levels of debt per ratepayer in the region, meaning amalgamation would see Kāpiti’s debt per ratepayer decline, arguably resulting in taking some of the pressure off rates increases, the idea that we’d end up subsidising larger centres is hugely difficult to overcome.

It doesn’t matter if the reverse is likely true - that larger centres would end up subsidising capital and operational expenditure here and that we could finally directly influence planning decisions in other centres that have been directly impacting our communities for decades, there’s a host of challenging political dynamics to navigate that may well be insurmountable.

Certainly this was the case for both the Hawke’s Bay and Wairarapa reorganisation referendums.

It’s ultimately why, even though I’d been toying with the idea of establishing a grassroots campaign to try to push for regional reorganisation, I decided better of it. Aside from the financial outlay required to get the wheels moving on such an initiative which I don’t currently have, I’m very much away of the old adage that “in politics timing is everything”. It goes without saying that the timing is not favourable at the moment.

And so, with the next round of local government elections less than a year away, Wellington City about to receive a Crown Observer, and other councils in the region facing similar fiscal challenges to Wellington, it’s hard to see how any local push for amalgamation - whether led by councils or a grassroots movement - would be able to overcome the politics of it all to even get to the starting line of a referendum, let alone winning one.

Amusingly though, despite the Government’s stated preference for any such reorganisation proposals to be locally-led, it seems more than likely that the Coalition’s Local Water Done Well reform once implemented will force the issue anyway. With councils both within Wellington and around the country likely to struggle to remain financially viable if water infrastructure and services go into new council-controlled organisations, the Coalition is going to have to figure out what to do next, with its Regional Deals framework unlikely to provide any practical funding relief.

While the current work of Wellington’s mayors towards amalgamation is now likely dead in the water, the issue is more than likely going to land back in Simeon Brown’s court once Local Water Done Well starts to be implemented by councils. Long live amalgmation!