Local Government Reform

From shortly after its inauguration in 1876 the structure of local government in New Zealand has been the cause of much dissatisfaction, primarily because of the proliferation of local authorities of all types. In the 70 years to 1946 it was investigated by select committees of the House of Representatives on five occasions (1889, 1890, 1938 (2), and 1944–45), and once by an administrative committee (1932). Each inquiry confirmed the need for consolidation. In the same period five Bills designed to effect a major reorganisation of local government were introduced into Parliament in 1895, 1912 (2), 1932, and 1937. There was a parliamentary motion to the same purpose in 1927, while various Governments have over the years promised to effect reform. The 1944–45 inquiry was the only one of these moves which led to any definite action. The failure to adopt earlier recommendations showed very clearly that the prospect of reform by direct parliamentary action was remote. The idea of empowering an extra-parliamentary commission to act in this field, although first put forward in 1895, took 50 years to achieve actuality.

The Local Government Commission

The Local Government Commission Act of 1946 implemented many of the recommendations of the Select Committee which investigated local government in 1944–45. The Act established a permanent Local Government Commission of four members, two of whom were nominees of local authority associations. The Commission was charged with the continual review of the functions and districts of all types of local authorities. Although not recommended by the Select Committee, schemes for the union, merger, or abolition of local authority districts were made subject to confirmation by a poll of electors. This Commission achieved some minor successes, but its efforts in 1949 to reorganise local government in the Christchurch and Auckland urban areas — the two areas where reorganisation was considered essential by the Select Committee — failed, largely because of political considerations. These two failures seriously affected its status, so much so that in 1951 a Bill was introduced providing that it be abolished and that future reorganisation be conducted voluntarily. The counties and municipalities who, while dissatisfied with the Commission, could not agree on alternative procedures, opposed the Bill, which accordingly was not proceeded with.

In 1953 a new Local Government Commission Act adopted another approach. It reconstituted the Commission as a three-man body with different personnel and curtailed its powers. Rabbit boards had already been removed from the jurisdiction of the previous Commission. The 1953 Act provided similarly in respect of electric power boards also. Hospital boards were removed from the Commission's jurisdiction in 1957. Unlike its predecessor, the second Commission was not empowered to initiate reorganisation schemes of its own accord, while petitions for polls on its schemes could now be made by 5 per cent of the electors instead of 20 per cent as previously required. This latter provision was offset to some extent by the fact that the majority required to upset a decision of the Commission was changed from a bare majority to 60 per cent of the electors who cast valid votes. An appeal authority was constituted to hear appeals against the Commission's decisions. The 1953 Commission, not unnaturally in view of these considerations, achieved very little in the way of consolidation of the local government structure.

Continued dissatisfaction with the cumbersome local government structure and the resulting overlapping and diffusion of responsibilities, both within local government and between local and Central Government, led to a further intensive inquiry by a parliamentary Select Committee in 1960. This Committee firmly recommended that the Local Government Commission be completely reconstituted, that many of the powers possessed by its 1946 counterpart be restored to it, and that it be given additional powers. The Local Government Commission Act of 1961, which came into force on 1 January 1962, gave effect to many of these recommendations. The new Commission has three members, none of whom is nominated by local authority organisations. It may initiate inquiries of its own motion or on request and is authorised to carry out investigations and to report to Government in respect of the establishment of any new form of local government in any area. Its schemes for reorganisation of territorial authorities within the existing structure are still subject to polls of electors, but only in certain cases, and the minimum number of electors who may request a poll in these instances has been increased to 15 per cent. Polls may nullify the Commission's schemes only if, when more than two-thirds of the electors vote, there is a bare majority of valid votes against a proposal and, when two-thirds or fewer vote, there are 60 per cent of the valid votes against it. The new Commission is also empowered to adjudicate where local authorities cannot agree on financial adjustments arising from an adjustment of their boundaries. Provisions for appeal against the Commission's decisions have been retained. The 1962 Act, however, did not implement the 1960 Committee's recommendation that electric power boards, rabbit boards, and hospital boards should be brought within the jurisdiction of the Commission.

Possible Future Trends in Local Government

The two basic weaknesses of the local government structure are the number and variety of special-purpose authorities and the excessive number of territorial authorities. The special-purpose authorities in general are subject to a considerable degree of direction by the Central Government. Moreover, they exercise functions which in some instances at least might otherwise be exercised by territorial authorities, especially if the territorial structure was strengthened by amalgamation of smaller and weaker units. The excessive number of territorial authorities means that some of them are too small and consequently have inadequate resources, a fact which limits their ability to perform satisfactorily the functions demanded by a rapidly growing community and expanding economy, at least without substantial financial assistance by the Central Government. This assistance once again tends to increase the extent of direction by Central Government.

The fragmented and heterogeneous character of the local government system as a whole raises difficult problems in the planning, coordination, and execution of regional works and services involving several local authorities. These problems are rapidly becoming increasingly crucial, especially in the large centres of rapidly expanding urban population. Although regional planning authorities are now in being it remains difficult to secure effective joint planning and to put plans into effect.

Modern communications and transport and the steady urbanisation of county areas adjacent to municipalities are rapidly breaking down the earlier distinction between urban and rural interests, but this development is not being accompanied by appropriate readjustment of the territorial local government structure.

It was considerations of this kind which moved the Government in 1962, acting on the recommendation of the 1960 Select Committee, to empower the Local Government Commission to bring down proposals for new forms of local government in appropriate areas. The Local Government Commission is already engaged in preliminarily discussing with local authorities the question of progressively establishing regional-type local authorities in certain areas. Moreover, in 1962 a committee of local authority representatives established under a special Act in 1960 for the purpose of studying and bringing down legislative proposals for a regional local authority in the Auckland urban area introduced a local Bill into Parliament. This Bill proposed the establishment of a regional authority which would carry out regional works and services over the districts of 32 municipalities and counties and which would, in the process, assume the functions of most special-purpose authorities in the region. It proposed that the regional authority be also the regional planning authority for the region. The Bill was held over by Parliament in its 1962 session. A substantially modified measure was eventually passed in 1963.

It is possible that in the years to come reform of the local government structure will be approached by progressively reducing the number of local authorities by way of merger and amalgamations effected by the Local Government Commission, accompanied by the establishment of regional authorities in particular areas in which regional problems are most acute.

The regional authority established in Auckland is what is known as a two-tier type, the essence of which is that the regional authority exercises powers and functions of a regional nature, including the functions performed by special-purpose authorities, while the territorial authorities remain in existence to perform purely local functions. This is perhaps the type of regional authority most likely to be acceptable in New Zealand. It involves less radical change than other types, such as the multipurpose authority, can be adapted to the existing structure fairly readily, and retains an avenue whereby citizens may perform a public service by taking part in territorial local government.

by Bryan David Crompton, M.A., Executive Officer, Advisory and Research Branch, Department of Internal Affairs, Wellington and Herbert Williamson, Research Officer, Local Government Branch, Department of Internal Affairs, Wellington.

• Appendices to the Journals of the House of Representatives, 1959, B. 4, “Report of the Royal Commission on Local Body Finance”
• 1945, I. 15, and 1960, I. 18, “Reports of Local Bills Committee on the Structure of Local Government in New Zealand”;Local Government in New Zealand, Polaschek, R. J., ed. (1956).