Finance key to reform of local government?

Press, 20 July 1979, Page 12

Finance key to reform of local government?

By

OLIVER RIDDELL

At the last count there were 669 local authorities in New Zealand. There were 244 territorial authorities at county, borough and city levels, and all the rest were ad hoc authorities — catchment boards, drainage boards, harbour boards, electric power and gas boards, fire boards, pest destruction boards, and a host of other. In fact, these numbers are far too modest. When considering all the special purpose committees and boards the true figures for ad hoc authorities are probably several thousand. In the year ending March 31, 1976. all these local authorities had an expenditure of 5615.7 M, which had to be found from the community as well as the $3,292M needed for central Government expenditure. Local authority expenditure was only 18.7 per cent of total Government expenditure, and this percentage seems to have stayed fairly constant over the years. If the costs of central Government are shattering, that is no reason why the considerable costs of local authorities should be ignored. Dr Claudia D. Scott, a senior lecturer in economics at the University of Auckland, has looked closely at local authorities and has published her conclusions in a book, “Local and Regional Government in New Zealand: Function and Finance.” Her basic premise is that local authorities face problems of reorganisation and finance, and have suffered because successive governments have tried to achieve reform in one without the other. The result is that almost nothing of moment has been achieved in reforming local authorities for years. In 1976, the Layfield Committee sat in judgment on local government finance in Britain, the New Zealand system is based on that of Britain. Dr Scott quotes the

Layfield Committee as being apposite for New Zealand, and uncomfortable reading it makes. It found: “ ... A picture of almost total confusion and a feeling of helplessness on the part of many citizens who feel caught between two sets of institutions which seem to be becoming less, rather than more responsive to individual needs.” The report of the task force on economic and social planning contrasted New Zealand’s highly organised central government system which, through regulation and administrative decree, has a natural tendency towards conformity, as against its highly fragmented system of local government which has insufficient resources to provide more than essential services. The creation of a regional tier of government between central and local government has many advocates, mainly to introduce regional co-or-dination. Moves towards regional government have been cautious and even with emasculated united councils, such as that which exists in North Canterbury, any benefits accruing may be more than outweighed by public distrust of a new and expensive authority. This caution/ not to say distrust, has been justified in Dr Scott’s opinion in the light of the failure of the central government to define clearly the responsiblities of the regional units (and their relationships with the central government), or to make adequate provision for a financial base to support an extension of local and regional activity. Dr Scott does not have any easy answers. She says clarification is needed of the extent to which the central government will confer on regions new or extended responsibilities for health, education, or welfare services, regional development, and environmental management. There is no point in discussing what regional

financial needs might be until regional activities are confirmed. She dwells at some length on financial options open to local and regional authorities. but is obliged to return to the unsatisfactory conclusion that firm definitions of the respective roles of local, regional and central government are needed first. This is “unsatisfactory” because even without such definitions, all three tiers of government are continuing and growing, and costing a great deal of money. What is needed, as Dr Scott recognises, is a thorough investigation of the procedures (if any) adopted by the centra:! government in determining priorities of public expenditure. As the central government controls the purse strings, only it can do this. Dr Scott does not sav how it might be persuaded or coerced into doing so. This is an interesting book on a subject which public apathy has allowed to remain generally in the hands of those with vested interests in it. Nothing occurs to shift this apathy, and so it continues — reports of tax revolts by exasperated citizens overseas notwithstanding. While the book is interesting, on its own it will not diminish the apathy one jot. It is a book by an academic for academics and its vocabulary and structure will defeat all but the most determined reader. For this reason it joins a growing list of interesting books about New Zealand problems — social, economic, political — which remain unread by the very people who would benefit most from exposure to the worth-while ideas contained within them, the ordinary citizens of New Zealand. “Local and Regional Government in New Zealand” is published by Allen and Unwin, 1979 (150 pp bibliography. $18.50' hardback, $6.95 paperback.).