Simeon Brown: Local Government Minister outlines his expectations to Local Governments regarding spending

The Local Government Minister's outlining his expectation to councils ahead of day two of the local government conference. 

Local Government New Zealand is meeting in Wellington, and yesterday received a broadside from the Prime Minister instructing them to tighten their belts. 

Minister Simeon Brown is expected to make an announcement today on potential deals between central and local government. 

But Brown told Mike Hosking it won't be a silver bullet, and councils still need to be better with their spending. 

He says like central government, councils need to cut their budgets, to give residents rates relief. 

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Episode Transcript

Speaker 1 (00:00):
So the council's got the hard word from the government
yesterday about costs and spending and pet projects. Our councils
are looking on average at a fifteen percent rate rise
around the country. So the idea is we get back
to basics. Local Government Minister Simming and Browns with us
on this Siming morning to you.

Speaker 2 (00:14):
Good morning.

Speaker 1 (00:15):
All I heard post the speech was a lot more whining.
Did they miss the point?

Speaker 2 (00:19):
Well, I think some councils which got the point. There's
some other councils which didn't. And the reality is with
an average fifteen percent rate increase, our expectation is that
councils get on with the work, just like government has
had to do, go line by line, cut the waste,
focus on the basics and ensure that they can pass
those cost savings onto ratepayers at this cost of living
crisis time. So you know we're doing our part. We've

(00:41):
also put in place Local Water have done well which
gives councils far greater access to financing for water infrastructure.
That means they should be able to do that and
reduce the cost burn and ordinate payers.

Speaker 1 (00:51):
Are there too many councils.

Speaker 2 (00:53):
Well, there's a need for more shared services is what
I would absolutely say. The question of amalgamation is one
that often up. There's pros and cons to it, but
there definitely needs to be more shared services and that's
what we're pushing with water services.

Speaker 1 (01:05):
Okay, so that's the water example. What about these are
the I can't even remember what they're called, Central to
city or local to whatever. They get to run some
local projects. Is that being announced today or not?

Speaker 2 (01:15):
Well, where we're putting out this regional deals program, I'm
going to make some comments about that today. Ultimately that's
about actually having a longer term relationship between councils and
regions and government. But it's not just about money. It's
actually about what the outcomes we're after, how are we
going to achieve that, and also about having clear accountabilities

(01:37):
in place. And ultimately these are things which we won't
enter into councils. I'm playing their part.

Speaker 1 (01:42):
Right, Does that open up, potentially, from their point of view,
some funding streams that they would argue they need.

Speaker 2 (01:48):
All we said, look, there are a range of funding
and financing tools already available, such as Infrastructure Funding and
Financing Actor that helps support new developments, and there's other
tools such as tolling or congestion charging. There's other things
that there are available already or that we're putting in place.
But ultimately what we want is we want to have
good outcomes for communities. We will have cost effectiveness being

(02:10):
on being the core business of councils and so we're
not going to just go and put cash into councils.
We're very clear that we're about outcomes and there's no
magic money tree in Wellington.

Speaker 1 (02:20):
Would you, in all honesty, hand on heart cost cap
or council or are you just trying to jaw bones
so well.

Speaker 2 (02:27):
We were in Sydney last week. One of the ideas
we've been looking at is how they've got an independent
pricing regulatory body which actually regulates council expenditure. That's something
we've asked officials to do some work ondo set that
needs to be put in place in New Zealand. Ultimately,
what we've seen is rates increasing far faster than inflation,

(02:48):
and so we think there's actually a real need to
have an independent body to actually help regulate and keep
those costs under control. Otherwise, what you see is our
councils continue to say yes to every single idea that
gets put in front of them rather than actually being
accountable to their ratepayers, and sometimes they have to say no,
put your.

Speaker 1 (03:05):
Power hat on for a moment. Is there a deal
coming between the government and Methodics that's separate to the
Methodics deal with the two power companies.

Speaker 2 (03:13):
No, there's a deal which has been done in regarding
the supply of all of methanex gas to the electricity
companies to provide further electricity supply into the market.

Speaker 1 (03:25):
That's the deal that's already been announced.

Speaker 2 (03:27):
That's right. There is an all the government contract as
well which is being shattered in regards to schools and hospitals,
which is under negotiation, but that is separate from the
deal that was done.

Speaker 1 (03:39):
With me and that all of government deal. When will
that be announced and will it solve the problem?

Speaker 2 (03:43):
Well, it's currently in negotiation. Ultimately that's about ensuring that
our schools and hospitals have the the guests supply that
they need. And ultimately there's a conversation around what the
price will be. But we can ensure that that that
has been sorted out. But I would just say we
have an energy shortage problem. This the reason we're having
these We don't have energy, and that's why we're seriously

(04:04):
looking at the importation of l G looquified natural guests
to actually fill that gap. And we'll we're making the
decisions very soon.

Speaker 1 (04:12):
Okay, is the EA doing anything at all?

Speaker 2 (04:16):
Well? I started work around making sure that there's accurate,
regular updates been put in place in terms of the
whether there's price gouging or not happening, and started.

Speaker 1 (04:26):
Work what but apart from looking at the power industry,
what does the EA actually do well?

Speaker 2 (04:32):
The job is to is the regulator. We've had some
we've had some conversations around what they need to be doing.
The The reality is their job is to ensure that
they are regulating the market. But I will just make
this point, Mike, that end of the day is we
have a shortage of energy.

Speaker 1 (04:49):
I think we all get that. But but but I'm
focusing on the hero and now and the hero now
seems to be a bit chaotic, that's all. And all
the EA seem to be doing is a dumpty. Do
we might have a look at the market market's bucket
right now? Haven't they worked that out? Well?

Speaker 2 (05:01):
The market is the market has no energy. Energy we
needed I say and so yes, there is work being done.
That there's work being a transpower is consulting on bringing
forward contingent supply. There'll be an announcement very soon around
that there's work being done. The method next dealt wise
reducing supply reducing its demand. So the market is, the

(05:22):
market is responding, but a lot of these big players,
it's very chunky and that makes it very challenging in
terms of how those decisions are made and the impact
they have. But at the end of the day, all
of those things can happen. We don't have enough energy
and that's why we're very focused on how we can
actually get more supply into the market.

Speaker 1 (05:38):
And you should be appreciated. Geez, they got a lot
on their plate, haven't they. I'm a Siming and Brown
local government minister with us this morning.

Speaker 2 (05:44):
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