Politics : An open paddock with few horses yet

Back in the 1980s political theorists talked up ‘subsidiarity’ – clumsy French word depicting future of government decision-making and action moved from central governments closer to where people lived and worked.
A Canadian coined an even worse word: glocalisation. The world was becoming more globally connected and interdependent but at the same time also more local: Kelloggs side by side with farmers’ markets tells the story.
These theories fitted business theories about trends away from mass production to personalised work and customised consumption, made possible by computerisation.
Apply these modish theories to politics and logically you get lift in the importance and relevance of local government – and, in due course, more interest in the triennial local elections (due next month). Local politicians would grow in stature.
Not so fast.
A Labour party keen to capitalise on the National party’s strange estrangement, while in government, from its conservative mates on local councils, got passed new Local Government Act in 2002 which made local councils responsible for their communities’ “social, economic, environmental, and cultural wellbeing”.
It turned the previous law on its head by permitting councils to do whatever they were not expressly prohibited from doing. Until then, reflecting the centralist nature of our politics after 1877, councils could do only what the law explicitly said they could.
Since the law was complicated, convoluted and voluminous, expansive councils resorted to some ingenious interpretation. The “people’s republic of Christchurch”, bane of the Business Roundtable, was born.
After the 2002 act was passed one mayor talked excitedly of at last being able to “gallop round the paddock”. Conservatives had visions of wild horses.
Not so fast.
Labour ministers, for all their sweet talk of collaboration and earnest six-monthly forums, kept councils on short financial leash. The new permissive powers in theory did not come with new sources of revenue in practice.
Councils were left with rates, revenue from council owned businesses, some specific grants and cost-recovery for some services – and, recently, the prospect of two regional petrol taxes. Even though Finance Minister Michael Cullen expressed personal view that rates were outmoded and inadequate and even though fair number of his fellow ministers (not least present No 3 Steve Maharey) cut their teeth in local government, Labour-led governments since 1999 have not contemplated widening the revenue floodgates.
Alternative sources of revenue were not in the terms of reference for the rates inquiry which reported in August.
And rates are perennially contentious. People resent paying for things that are mostly out of sight and mind and especially resent paying more each year, even though, at two percent of GDP, the 85 local and regional councils’ total rate revenue is lower in GDP terms than three decades ago and fraction of central government’s 34 percent. Many council candidates this year will promise to cap rate rises.
That mentality ruled in the 1990s. Rate caps compounded the withdrawal of subsidies in the 1980s. The cheapskate way out of the revenue squeeze was to cut capital spending. An infrastructure deficit developed which councils have had to repair. The bill for the past 10 years has been $10 billion and $30 billion is projected for the next 10 years.
And rate cutters will find their room for manoeuvre is limited. The 2002 law requires councils to produce 10-year plans which have been required to reflect constituents’ preferences and which the Auditor-General has audited during development and will audit during implementation.
One way out is already coming back into favour: pay for some capital development by borrowing. The Government is making that easier by simplifying compliance requirements.
Auckland, having paid down its debt under John Banks, who sold off the council’s subsidised housing when mayor from 2001-04, is getting back into debt funding under successor Dick Hubbard. But Banks, backed by revitalised conservative team, is mounting strong challenge to get his old job back – helped by near-farcical infighting in the left-leaning City Vision team in June-July.
That is entertaining – but hardly the stuff of large voter turnouts. In any case, Auckland city is only one part of balkanised region which exasperates those, like business and the central government, who try to get things done there.
Elsewhere, two percent is two percent. Horses are not yet seen galloping round the paddock in droves. The urge, or need, to vote is low even though postal voting keeps it simple. Subsidiarity, it seems, has long way to go.

Colin James is Management’s regular political writer. [email protected]

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