Minister of Local Government Nanaia Mahuta.
Local Government New Zealand is pleased the Government is starting a discussion to reinvigorate local decision making, but says a bold localist approach is needed to drive meaningful change.
The Local Governance for Community Wellbeing Cabinet paper looks to re-introduce social, environmental, economic and cultural wellbeings back into the Local Government Act 2002, which was removed by the previous Government in favour of a more infrastructure-focussed purpose statement.
"Local government has a huge role to play in the intergenerational wellbeing of New Zealanders," says LGNZ President Dave Cull.
"It's the form of government closest to the people, and is arguably in the best position to lead a grassroots drive to strengthen our democracy, protect and enhance the environment, sustain regional growth and instill greater trust and confidence in local governance."
"However it requires a bold, localist approach to achieve better outcomes in these areas."
"It's internationally recognised that having decisions made by the level of government closest to those that they affect has huge economic and social benefits."
Evidence shows fiscal decentralisation leads to higher standards of living and greater democratic participation. However, New Zealand, with 88 per cent of public expenditure made by central government, is significantly more centralised than the United States (54 per cent), Denmark (31 per cent), and Germany (19 per cent). Central government's share of public expenditure is also much higher than the OECD average (46 per cent).
Shifting more decision-making to the local level means that local citizens, iwi/Māori organisations, businesses and community groups will have greater ability to influence the design of local services to address the matter most.
"We're pleased the Minister of Local Government Nanaia Mahuta has initiated this dialogue on governance responsibilities and where they should sit. It's important that the hard questions are asked around performance, not just from both local but also from central government. Improving outcomes for our communities means both spheres of government must focus on what they are best at doing."
The wellbeing paper, which seeks Cabinet support for a prospective work programme to be undertaken by DIA into the roles and responsibilities of local government, sits apart from the Productivity Commission's Inquiry into Local Government Funding.
"It raises some concerns that the funding review of local government sits in isolation to the wellbeing paper, which is considering roles and responsibilities. It will be difficult to come to definitive solutions in one area without considering the other, and we expect there to be more conversation on how this will be resolved."