Luxon's local government speech misses the mark
An AI-generated image of Christopher Luxon being pelted with vegetables while trying to deliver a speech.
Prime Minister Christopher Luxon’s speech to Local Government New Zealand’s (LGNZ) annual SuperLocal conference appears to have missed the mark, with one attendee describing it as “paternalistic and visionless” and others were bemused at Luxon’s apparent lack of understanding of the local government sector, his lack of awareness of the impact his own government’s actions are having on local government’s finances, or central government’s own issues with white elephants and bungled delivery..
Initially covering familiar ground through reiterating previous announcements around changes to the Local Government Funding Authority, Local Water Done Well, city and regional deals, and road cones, Luxon then proceeded to spend the rest of his speech largely admonishing elected representatives through a mixture of cherry picking high profile failures, meaningless one liners, and relitigating debate points from last year’s election campaign.
The Prime Minister also seemed to make up fictional councillors that he had been speaking to about issues in the system. Luxon claimed that these councillors were telling him that they just needed more “cold, hard cash” from central government. As someone who was an elected representative and remains a close follower of the sector, what local government consistently asks for are additional revenue tools that it can choose to use so they don’t have to ask or hope that central government might set up some contestable (usually at the discretion of Cabinet) pot of money that inevitably wastes more time and money for all involved.
The Prime Minister then went on to criticise councils for not spending money on the basics, despite the reality that the vast bulk of councils’ expenditure does go on core services such as water, parks, roads, pools, community halls, social housing, and libraries.
Having ensured he’d successfully alienated most of his audience, Luxon did eventually outline some new changes central government was intending to make:
Removing the four wellbeings (economic, social, cultural, environmental) from the Local Government Act and legislating a focus on local services and infrastructure.
Investigating benchmarks for local councils based on similar measures in Australia
Investigating options to limit council expenditure of “nice-to-haves”, including revenue capping.
Reviewing the transparency and accountability rules that apply to councils.
However, even in doing this Luxon appears unware that much of what he’s proposing already exists. For example, councils already benchmark and report on their performance through their long-term and annual plans, while LGNZ also offers the CouncilMARK programme.
LIkewise, in Luxon’s exhortation for council’s to “go line by line” through their spending, the Prime Minister appears blissfully unaware that this happens every year through the long-term plan and annual planning process. Councils consult in far more detail, far more transparently, and need to be far more responsive to the immediate needs of their community than central government ever has to be in developing and delivering its annual budget.
No doubt many of Luxon’s criticisms around the perceived value of some of the expenditure choices of councils will age poorly as his own government’s questionable expenditure decisions come to light over time. This is of course the Prime Minister who initially tried to dig in over his entitlement to claim a $52,000 accommodation allowance to live in his own apartment.
Carrying on even after his speech, Luxon tweeted to criticise what he claimed was a “laundry-list of distractions and experiments that are plaguing council balance sheets”. If Luxon and his advisors had bothered to look beyond their noises, they would have found that most of those distractions and experiments were things initiated by central government, not councils.
Analysis by the New Zealand Institute for Economic Research found that the constantly shifting nature of reforms, unfunded mandates that have been pushed down on councils, and static fees and outdated cost recovery mechanisms set decades ago, have added tens of millions in costs on councils. Similarly, significant inflationary pressures well above the Consumer Price Index has impacted the costs of delivering, upgrading, maintaining, and insuring core infrastructure.
More importantly, if Luxon and Local Government Minister Simeon Brown had been hoping that councils would seek to engage with the Coalition Government in good faith over city and regional deals, the Prime Minister has most likely blown any chance of that out of the water with a speech and attitude that was equal parts tone deaf, ignorant, and petty.
