If your local council was able to list on the sharemarket, would anyone invest?
Well, in a manner of speaking, we already do invest in a council (or two ) and by compulsion. We also reasonably expect a good return by way of service for our ‘‘investment’’ of rates.
Regretfully, the important administrative role of council appears to be progressively unworkable.
Councils in New Zealand had a recorded total revenue of $13.6 billion in 2019-20. Add on the last few years of dramatic rate increases to the $13.6b and we are looking at $16b in revenue. This huge sum is being administered by council staff, with governance oversight by elected members of the public (councillors ) who may not possess any specific training or knowledge beyond that of the household budget.
Massive rates increases when all around them are hurting, along with the very high rate of dysfunctional behaviour within councils all over the country, illustrate a clear perception and reality that the local government system is broken.
Public companies are run by boards, chosen for their levels of competency and which can be sacked by shareholders if their performance does not meet expectation. Councils do not face a similar or higher level of scrutiny over expenditure as the private sector.
Financial competency and performance within local government is not just important but essential, given the huge amount of fiscal influence councils exert. No business would be able to increase prices to the level our councils have struck, while retaining their customer base.
While the Audit Office does review council expenditure, it is only a forensic examination of local government expenditure that would offer confidence to the ratepayer.
It should also be noted that councils tend not to avoid involvement in all the moral paradigms that present themselves as a matter of public concern but for which they have no greater or lesser knowledge than the public.
Surveys of the voting public are rarely undertaken to determine the level of public support for, or prioritisation of, such issues as climate change vs housing the homeless. Councils tend not to ask the public their opinion until after a council has settled on a course of action, so the point of consultation is what?
The possible sale of Aurora, the Dunedin City Council lines company, is the exception to the rule. Each DCC councillor should be required to present their personal, detailed examination of the Aurora sale issue so the public can better determine their understanding of all the issues. The Otago Regional Council needs to do the same with the sale of Port Otago.
So how do councils determine and prioritise those expenditures that are deemed to be the most important to a ratepayer? True representation is reflective of public and not personal opinion, yet public opinion is too often given the epithet tag of populist by councillors.
There is a legitimate expectation that openness and transparency are hallmarks of all councils. Not so, as official information requests can be met with a demand for a fee before councils release information. No such attitude within central government would be tolerated.
Councils need to show an unwavering level of expertise and concern , along with significant abilities to listen and learn from those who do possess significant financial expertise. The Central Otago District Council (by way of example) spent $70 million on consultants and contractors out of a total income of $86m, so it is clear the oversight of expenditure is essential.
In the private sector, fund managers’ experience is crucial when dealing with other people’s money — whether buying, selling or investing.
We local government investors have for years offered opinions and options to the local authorities, yet rarely if ever are we listened to. Most of the ever decreasing circle of misguided souls who actually bother to write submissions (based on their personal experience and see it as a civic duty) are gradually realising that it is about as useful a pastime as kite-flying under water.
Most of us can’t recall one — just one — occasion when a council paused and rethought a proposal based on feedback.
After nine years on the ORC, I certainly can’t recall one occasion in which a ratepayer had cause to celebrate their submission being adopted. This is due in large measure to councils adopting reports before they are sent out for consultation (as indicated earlier), rather than asking for and actively seeking ratepayer opinion at the get-go.
A comment in the ODT by Dunedin city councillor Cherry Lucas (12.7.24) offers some hope for change to this broken system.
Another unfortunate reality is that local government is still far too entrenched in the ceremonial niceties of a bygone era. A mayor was originally a person of popular choice by the locals which was a privilege derived from King John at the start of the 13th century. Exactly why the honorific prefix of mayor is still in use today is a mystery.
In the 1300s, when the title mayor meant leader or person in charge, very few people were functionally literate. Your worship was a given title to address a magistrate or clergyman. Just why we need to keep such a title of subservience in this day and age is unclear.
New Zealand simply cannot afford to stockpile public representatives on councils and central government, without the necessary skills, due to the misguided desire for diversity in all its forms.
It would also help minimise representational damage of councils if transparency occurred daily instead of every three years.
• Gerrard Eckhoff is a retired Central Otago farmer and former Otago regional councillor and Act New Zealand MP.
