Kim Bowden
17 July 2025, 5:30 PM
The government has signalled a shift in priorities for local councils, introducing legislation this week aimed at tightening focus on core services and restoring ratepayer confidence.
The Local Government (System Improvements) Amendment Bill was introduced to Parliament on Tuesday (July 15), and proposes removing the four ‘well-beings’ - social, economic, environmental, and cultural - from council mandates.
In a statement, Local Government Minister Simon Watts said the bill aimed to restore discipline, transparency and performance across the sector, for the benefit of ratepayers.
“Kiwis are frustrated with rising rates, expanding bureaucracy, and poor value for money,” he said.
“This bill puts councils back to work on the basics - their core services - so ratepayers see real results for what they pay.”
The minister said councils had “drifted” from essential responsibilities like roading, water, rubbish, and infrastructure, and that the government was drawing a line.
“This refocusing of our councils will help to deliver better value for money, and ultimately help with addressing the number one issue people are dealing with right now, which is cost of living.”
The minister also ruled out supporting new taxes or revenue tools for local authorities, saying there was still room for greater efficiency.
A model for a potential rates cap was in the works, and he planned to provide an update later in the year.
On Tuesday, Central Otago District mayor Tamah Alley told The Central App more than 80 percent of last year’s average 18.3 percent rate rise for the district was attributable to “core services”, with water services soaking up a chunk of community funds.
She was cautious about the growing calls to cap rates, warning there would be "devils hidden in the details” of any government policy.
She pointed to the example of a Sydney council subject to a cap, which applied for an exemption to raise its rates by 87 percent.
“This indicates the scale of just how far behind councils are getting with providing the services communities expect,” she said.
Meanwhile, coalition partners appeared unconvinced a cap was a silver bullet.
On Thursday, New Zealand First leader Winston Peters told media his party preferred not to interfere with local government.
"It's a case of doctor, heal thyself" he told RNZ reporter Lillian Hanly.
"We can't be preaching to them when we haven't got our own spending under control ourselves."
For ACT leader David Seymour, the priority was to “cut non-essential spending” and not “worry about the ‘four wellbeings’”.
In a social media post, he also stressed the need for cooperation between central and local government.
“Finger-pointing has not worked to ease pressure on ratepayers. So, let’s work together,” he said.
Read more: Mayor defends rate hikes amid national scrutiny
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