Rodney Hide’s latest plan for gutting local democracy

local government target

Rodney Hide’s agenda for local government involves – as Scoop reported six months ago – the importation of an American model that has resulted in drastic cutbacks in the public services provided by local government, and the privatization of some current services as a result. Colorado and California are two fairly chilling examples of what Hide has in mind. This agenda is outlined in a Cabinet paper whose contents are being wheeled into place in New Zealand under the cover of sweet-sounding terms like ‘greater transparency’ and ‘more accountability’.

In its purest form – first put in place in Colorado in 1992 – the process involves a spending cap for local government, and a requirement that elected councils must hold a referendum if any spending above inflation is contemplated. Over time, that spending cap becomes a sliding scale downwards, since the same mechanisms also require that any rates revenues collected above the previous year’s limit must be returned to ratepayers as a rebate.

Thus, the extent of local government spending at the trough of a recession quickly becomes the maximum allowed. It becomes a radical strait jacket for local government. Here, similar procedures are being enacted to serve an extreme anti-government agenda that – beyond the crackpot libertarian fringe – has never had a mandate in New Zealand.

The full account of Hide’s enthusiasm for the Colorado model – he mentioned the Colorado precedent explicitly in his 2006 private members Bill on local government reform – can be accessed here. The most extensive researched critique of the Colorado spending cap and referendum measures can be found here.
As with the Super City proposal for Auckland, Hide wants to have his reform structure enacted in legislation in time for the local body elections in 2010. In other words, the Key government will have radically reformed the structures of local government in Auckland and in every other council in New Zealand during its first term in office, by means of extremist solutions that it never put before the public at the 2008 election.

The Cabinet Paper proposal at the moment is (deliberately?) vague about just what core services our local councils will be forcibly reduced to providing. What Hide needs to come clean about is whether his proposal will entail local government being forced to live within a spending cap based in any way on its prior spending; whether any rates revenue collected above that cap will be required to be returned as a rates rebate; and in what ways, his proposal differs from the so called TABOR model of local government funding in Colorado, for which he previously felt such enthusiasm.

Hide has no mandate for this revolution. Election after election, his party achieves minimal support from the New Zealand public, and won fewer votes than Winston Peters’ party did in 2008. If Hide’s proposal does indeed turn out to comprise a restriction on local government (via spending caps and rates rebates) to core service provision, he will need to explain how local councils could then forward plan, and set money aside for emerging community needs.

In Wellington for instance under his proposals – would any council have been able to forward plan and allocate funds for sewage treatment? Would any future council be able to budget for long term community needs in say, affordable housing – or would it be forced to surrender such provision to the tender mercies of the private sector?

Councils are elected to govern, and they must regularly seek a fresh mandate from voters every three years. To require them, mid term, to hold a costly and wasteful referendum every time a decision has to be made to allocate money beyond an arbitrary limit set by Rodney Hide and his minions… well, that only makes a mockery of democracy. This reform is not about ‘transparency’ and ‘accountability’. It is about imposing a right wing strait jacket on communities and their elected councils, in order to further commercialise the provision of quite basic needs.


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