By John McDonald (CityWatch NZ Editor and Hamilton East Ward Candidate)
Local Government New Zealand (LGNZ) is an organisation that represents many councils in New Zealand, describing itself as being a “voice” for the councils.
This local government election year, LGNZ has published a “Common myths about councils” webpage.
In response, I have prepared this article for CityWatch NZ to address the various claims made by LGNZ. It will be a two-part series of articles with this first article focused more on the financial issues with local government.
In these articles each section of LGNZ’s ‘mythbusting’ webpage will be quoted and followed by my commentary which will address LGNZ’s numerous false and misleading statements. All the large quotes in this article are directly from the “Common myths about councils” webpage.
“Councils get asked a lot of questions from “what day is my rubbish collected?” to “why are my rates going up?” Many of these are straightforward and come from people wanting to understand how things work.
But some questions come from misinformation or confusion – often sparked by things people see on social media. Other times, they’re completely made up.
That’s why it’s important we clear a few things up. Because once a myth spreads, it can cause real worry for people, and undermine trust in the work councils do every day to support our communities.
Let’s bust a few common ones.”
LGNZ is off to a bad start by using the term “misinformation”. It is a sign you are likely dealing with a propaganda piece when the terms “misinformation” or “disinformation” are used.
The writers of the LGNZ webpage express concern about “undermine trust in the work councils do”,without discussion around whether councils are deserving of trust.
Are councils trustworthy?
I have observed councils undermine their trustworthiness by hiding important details about projects in their public engagement activities.
Council brochures for road “safety improvement” projects can be promotional rather than informative.
In a damning example, the brochure for one of Hamilton City Council’s proposed road redesign projects was missing many important details. The brochure failed to inform the public of following details for the planned project: all the new crossings would be raised crossings, over ten raised crossings would be installed, the project would likely cost over $26 million, and that over 40 carparks would be removed to make space for the new cycle lanes. This raises questions about whether the Council was deliberately acting in bad faith by not including these important project details because they know that those details would make the project unpopular with your average resident of Hamilton.
“Myth: Councils don’t need to exist. Everything should be centralised.
Truth: Councils deliver the services you use every day, and local decision-making matters.
From rubbish collection to parks, libraries, street lighting, water pipes, footpaths and building consents – councils keep your town or city running. Local government exists because different places have different needs. A small rural district has different priorities to a big city and decisions are best made by the people who live there. Councils give you a say in what happens where you live.”
Some rural people do not use council services everyday. They may be completely off-grid for water and sewage, not relying on the local council for those necessities. They may not be using council-maintained roads, rubbish collection, or libraries on a daily basis either. So that “truth” from LGNZ is somewhere between an exaggeration and a falsehood.
Although I personally think that councils should exist, councils do not need to exist.
An alternative political structure could be possible where all councils are disbanded and central government instead provides an equivalent set of services and asset management functions.
Some of the recently proposed local government reforms look to be taking steps in that direction; taking various functions and responsibilities away from councils.
I doubt that the current Coalition government will disband all the councils, though they might demonstrate that many functions currently carried out by councils could be shifted to a centralised bureaucracy.
I am generally not a supporter of more centralised bureaucracy. However, I acknowledge that a major restructuring which disbands councils is a feasible political program rather than the impossibility that LGNZ implies.
Just because they disapprove of a policy direction does not inherently make that policy direction a “myth” or “misinformation”. LGNZ needs to understand that concept.
“Myth: Rates are a rip-off and councils waste the money.
Truth: Every dollar of rates goes back into your community and councils are accountable for how it’s spent.
Rates fund the public services and infrastructure we all rely on. The cost of materials, wages and maintaining aging infrastructure has gone up – just like it has for households. That’s part of why rates have risen across the country.
Rates go up because they have to, not because councils want them to. They have to consult the public, balance the books, and report on how they’re spending money. If they don’t, auditors and voters hold them to account.”
It is a demonstrable fact that every dollar of rates does not go back into the local community.
Some rates money goes towards paying interest on the debts that a council has taken on (wisely or unwisely). Those interest payments will go to financiers, fund managers, and investors who are mostly outside of the local community.
Rates income can go to a range of consultants and contractors who are not always part of the local community. Some of a community’s rates money often goes to support national organisations such as LGNZ and Taituarā (SOLGM). Those organisations are predominantly ‘not locals’ and such groups may actively campaign for policies your local community largely disagrees with.
Many people are of the view that they are not getting value-for-money from their rates and that councils are wasting funds. Those are opinions and values judgements, not “myths”.
There are broadly two types of council waste:
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Projects that the community largely agree are needed, though council chooses to install an expensive, extravagant, or inefficient option. An example would be when the community agrees that more rubbish bins are needed, though would view spending around $2900 for each 60-litre rubbish bin as a waste of money (Costs taken from Hamilton City Council LGOMIA 422930, via Graeme Mead).
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Projects that the community largely agree are not needed, not wanted, or not the role of the council to fund. An example would be a raised crossing, costing around $500,000, for a community that mostly travels by car and will not appreciate another speed bump being installed on a major road.
The extremely high costs for various projects also makes people wonder about how much wasteful spending results from bad contract negotiation practices or outright corruption.
Using the ‘corruption’ word is a serious accusation. With the recent cases of a Watercare engineer being convicted of fraud and a criminal cartel prosecution for a contractor biding on Auckland transport projects, it is worth considering corruption as a possible explanation for the extreme costs of some council projects.
We have weak accountability systems for councils. We can potentially vote councillors out of council every three years, though council staff are not directly accountable through elections. The Auditor-General has not been effective at holding councillors or council staff accountable for dubious decisions. The Mangawhai sewerage treatment plant case provides an example where Parliament rushed through legislation to retrospectively validate unlawful activity so that local ratepayers would be burdened by their council’s incompetence and bad spending decisions.
“Myth: Councils can just stop rates increases if they want to.
Truth: Councils are legally required to balance the books – and costs keep rising.
It might feel like councils could just freeze or cut rates with a vote, but it’s not that simple. Councils have legal obligations to provide essential services, plan for future growth, and maintain critical infrastructure. They can’t spend more than they bring in, and they can’t borrow to balance the books. Councils can delay or reduce spending, and they often do, but that usually means cuts to services or pushing problems down the road.”
Firstly, some councils have not balanced their books in years. Some councils are borrowing to cover operating expenses, cutting services, and “pushing problems down the road” all while they are also inflicting large rates increases on local ratepayers. It is definitely not as simple as an either/or situation.
Secondly, councils do have scope to reduce or stop rates increases by avoiding unnecessary spending and increasing efficiency. Whanganui District Council has attracted recent positive attention by keeping rates rises very low while also spending more on core infrastructure.
“Myth: Councils choose fancy projects over fixing basics.
Truth: Basics take up most of the budget and “extras” often bring in outside funding.
There’s a common frustration that councils spend on nice to haves rather than the basics.
But the bulk of council budgets goes on core infrastructure – water, waste, roads, transport, and essential services. Those visible “extras” are often a small slice of the pie, and they can often be funded through special grants, developer levies, or central government funding that can’t be used for other things.
Plus, councils need to invest in liveability too. Parks, events, libraries and community spaces are what make towns and cities great places to live – and attract people, businesses and visitors.”
It is true that combined ‘waters’ and ‘transport’ infrastructure usually makes up most of a council’s spending. However, just because a project is classed as “transport” or “water” does not automatically make it all necessary spending on basic infrastructure. Councils (and their Council Controlled Organisations) are spending on extravagant “extras” within waters and transport infrastructure projects. Expensive raised crossings or Wellington’s councils looking to spend $2000 per household for smart water meters are not strictly necessary spending. Cities have functioned, and can function, without such expensive installation projects.
A Hamilton City Council’s 2024 Business Case has estimated $4 million in establishment costs plus $9 million per year in new operating costs to setup its new (and arguably unnecessary) water company. Although officially being spent on “water”, those extra costs will likely go towards fancy branding for the new company, ‘nice to have’ pay levels for the new CEO and board members (estimated at $2 million per year), and considerable spending on new “systems”.
According to StatsNZ (data from 2019, the graph has not been updated recently) “Recreation and sport” was the second largest category of rates-funded spending on activities across all councils analysed. The first largest spending category was “Roading”.
Total rates expenditure on activities, Stats NZ’s Where do your rates go? webpage, 2020
The “wastewater” and “water supply” categories could be added together into a general ‘waters’ category which would get 1st place. However, we could also add “Culture”, “Community development”, and “Recreation and sport” together into a broader ‘cultural spend’ category which would instead get top place. 2024 data also demonstrates that such a broader ‘cultural spend’ category can be larger than ‘transport’ or ‘waters’ categories when looking at total rates spending for councils in the database.
I am not arguing that councils should stop funding all cultural activities, just that such activities do make up a significant amount of a council’s rates-funded spending. Like many people, I do have serious concerns with councils funding expensive corporate events and facilities (the commercially-focused stadium or convention centre are the typical examples of concern in a number of cities).
“Myth: Elected members are overpaid and do nothing.
Truth: Councillors and mayors work long hours under public scrutiny often for modest pay.
Being a councillor isn’t an easy role. Many elected members spend hours every week reading reports, attending meetings, engaging with the public, and making tough decisions that affect thousands of people.
The pay varies depending on the size of the council and the role. And unlike most jobs, they’re constantly in the public eye and open to criticism, often with little support.
Most do it because they want to serve their community, not for the pay check.”
We would hope that city councillors are spending dozens of hours every week reading reports and actually doing their job.
It is true that there is a large difference in pay for elected members around the country. Some elected members representing small populations are likely overworked for the level of pay they receive. Other elected members in larger cities are possibly just ‘coasting along’ on a salary far above the average income of the people they should be representing.
In many other jobs workers are subjected to criticism from customers and the wider public. This is true for many trade, retail, education, and customer service roles. Mayors and councillor are not special, or sympathetic victims, just because they need to “spend hours every week” on their work and sometimes face public criticism.
“Myth: Council staff are just bureaucrats sitting in offices.
Truth: Councils employ everyone from engineers and town planners to dog control officers, lifeguards and librarians.
Councils are some of the biggest local employers in the country. They include people working in building inspections, environmental protection, waste collection, emergency management, consent processing and more.
Councils are frontline organisations and their staff do everything from fixing potholes to teaching kids to swim.”
Not all council employees are frontline staff. Most councils employ large numbers of back-office staff or what are often called bureaucrats. This often includes many managers and communications staff in larger councils. For example, a role such as “consent processing” sounds very bureaucratic.
In recent decades, councils have often been contracting out many infrastructure building, maintenance, and operations tasks. The pothole fixing might now be done by an external contractor, while your council has likely become more of a bureaucratic organisation through hiring more managers and communications staff.
Many people have legitimate concerns with their council growing into an inefficient organisation with large numbers of unproductive and overpaid bureaucrats. People who criticise bureaucracy are usually less critical of frontline council staff who are actually doing important and visible work.
LGNZ appears to be deliberately confusing these issues and is misrepresenting legitimate criticism of growing council bureaucracies as some kind of attack on frontline staff.
Conclusions
Most of what LGNZ has declared as being “myths” have more than a grain of truth.
LGNZ’s ‘mythbusting’ activity is at best a distorted oversimplification and often descends into outright falsehood.
LGNZ should stop putting ratepayers’ money towards portraying reasonable and evidence-based concerns of residents and ratepayers as “misinformation”.
If LGNZ is going to make bold truth claims then they really need to make sure they can back it up with evidence and logic.
Next month, Part 2 of this analysis will address the rest of the claims on LGNZ’s ‘mythbusting’ webpage.
[The content of any Opinion pieces represents the views of the author and the accuracy of any content in a post labelled Opinion is the responsibility of the author. Posting of this Opinion content on the CityWatch NZ website does not necessarily constitute endorsement of those views by CityWatch NZ or its editors. CityWatch NZ functions to provide information and a range of different perspectives on New Zealand’s cities and local councils. If you disagree with or dispute the content, CityWatch NZ can pass that feedback on to the author. Send an email to feedback@citywatchnz.org and clearly identify the content and the issue.]
Further reading on this issue:
LGNZ holds annual conference and engages in propaganda war with Taxpayers’ Union
Hamilton City Council votes to fund work towards creating new multi-council finance company
