August 24, 2024 • 10 mins
The Local Government New Zealand conference wrapped up this week, with local government minister Simeon Brown hinting at more streams of funding for councils.
But some councillors are unhappy with recent comments from the Prime Minister.
Hamilton Mayor Paula Southgate joins Tim Beveridge on The Weekend Collective to discuss the feeling among councils after the conference.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks EDB.
Speaker 2 (00:10):
Now with Paula Southgate. So the Local Government New Zealand
conference that's finished up, we'll have seen the headlines. So
there's some nice moments of polarization, could you say, differences
of opinion? Of course, you get these things all the
time in politics. The Prime Minister told councils to cut
nice to have spending and start being more intentional. I
guess with their income. Wellington Mayor Tori Farino accused the
(00:33):
PM of punching down a local government minister at the conference.
Simony and Brown hinted at some new streams of fundings
to councils and to discuss that. The Hamilton Mayor, Paula
Southgate joins me now of Paula, good afternoon.
Speaker 3 (00:47):
Good afternoon.
Speaker 4 (00:48):
How did you feel the conference went?
Speaker 3 (00:50):
Well? You know, when you saw a cat amongst the prigeons,
it creates a bit of a chaotic environment. But off
the back of that, I believe the conference was really
rich in the necessary debates that we needed to have.
The Prime Minister was forthright, absolutely forthright about how he
felt counsels should approach the financial hard times that were
(01:12):
all facing together in terms of looking at our budgets
line by line and so forth. He got a lot
of reaction to that because many counsels, ours would be
one of them, feel that we have in fact gone
line by line through our budgets and cut out a
lot of discretional what he would describe as nice to
have aspects or delayed them, and we are very much
(01:35):
focused on the core infrastructure. So but you know, look
at the end of the day, people started talking about
that very important issue. We do need to be very
careful each and everyone ol of our dollars.
Speaker 2 (01:47):
Do you think it quite helped that he do you
think was quite useful? Actually that he was a bit
more blunt than diplomatic.
Speaker 3 (01:52):
Well, sometimes to get really good debate, you provoke, and
he certainly provoked. He got a good reaction. But I've
attended local government conference probably for twenty plus years, and
I've never seen in the depth of discussion that ensued
from Prime Minister's speech before. So it was really disturbing
(02:12):
and disrupting and provocative. But to be fair, he's absolutely
right that we do have to look very closely at
what we spend the public are telling us that they're
groaning under the strain of increased rates and they're expecting
us not to do the fluffy projects, but do the
core projects and do them well. Where I would differ
(02:34):
from the Prime Minister, and I've had these conversations with
Minister Brown and Minister Bishop as well, is that the
cost of infrastructure that we are facing is eye watering
and at the moment completely unaffordable for counsels. Minister Brown,
as you have noted, suggested that there would be some
tools to help us with that. I know some of
(02:56):
those tools relate to the capacity to borrow more to
get water services in and things like that. Anyway, debt
is debt. You've got to pay it back at some time,
So it's not a new source of revenue as such.
It is actually just a new source of debt that
we could dip into the.
Speaker 2 (03:15):
Short Just before we get into that that, in terms
of just the rhetoric, is is it sort of just
a bit of a nuisance because every council is you're
a diverse collection of individuals and councilors all on differently.
Do you feel that his message was aimed more at
some councils than others because there might be some who
are going on and I'm doing pretty well with my
budget and the basics.
Speaker 3 (03:37):
Ah well, it was a fairly broad swipe that he made,
so if that was his intention, it was unclear.
Speaker 2 (03:44):
I just believe they didn't look across the room and say, oh,
he's talking.
Speaker 4 (03:47):
About that lot.
Speaker 3 (03:48):
He didn't look me in the I know, but.
Speaker 2 (03:52):
Well, you guys, I was having a look at your
at the Hamilton Council thing. We're not going to have
a crack at you guys too much, but you've you've
got a big rate tite coming up, haven't you close
to twenty percent?
Speaker 4 (04:01):
Isn't that right?
Speaker 3 (04:02):
Is sixteen point three?
Speaker 4 (04:04):
Okay?
Speaker 3 (04:04):
Sorry, yeah, well that's fine. I mean it has in
fact moved around. There was a time it was mooted
by some councilors, not myself, to be closer to twenty
five and since then we've done a lot more cutting.
But look, we cut forty percent from our transport budget,
and we cut ten million dollars a year from KPEX
and a further amount of money, plus we reduce stuff severely.
(04:27):
We've lost hundreds of stuff and that's not even finished.
So as I say, we did look at what do
we absolutely have to do. At the conference, one of
the interesting things was the comeback on what is core infrastructure.
I think we all agree that roads, waste water and
those kind of things core infrastructure. But outside of that,
(04:48):
how important is it for communities have, for example, playgrounds, libraries,
some tourism assets to get people coming to visit those
kind of things. Some of them would fit into the
nice to have category now, I think, And yet you know,
fundament a city like Hamilton has to have something to offer.
If we didn't have the Hamilton Gardens, we wouldn't have
(05:11):
the millions of visitors coming through spending money here each year.
So you know, it's not black and white's there's some
shades of grain in it.
Speaker 2 (05:18):
I think, Yeah, what are the basics then, and if
you would think about because I think that's the word
that luxon News, wasn't it. He talked about the basics?
What are the basics for you guys that really that
you've focused on as a result of well not wanting
to ping your right past too much.
Speaker 3 (05:34):
Well, we've certainly not cut a lot of services, not
closing libraries, closing pools, or running assets into the ground.
So we're trying to look after everything we already have.
In addition, we have pulled back on roading and we
have pulled back on some of the kepex. Part of
the reason and some of that's water infrastructure. Part of
(05:54):
the reason is we are hoping for some new funding
tools to enable us to put in the new water
services that we need. But we're the fastest growing city
in the country. I'm not having bragging rights about that.
That's just the fact we're situated in the high growth
area between Totonga and Auckland. We're short of housing already,
(06:15):
We've got more people coming, We've got a younger population
that is choosing to stay here and we must do
something about that.
Speaker 2 (06:23):
So what's your council's biggest challenge right now?
Speaker 3 (06:28):
Future infrastructure? The waters water done well when the Three
Waters approach changed, and I don't have an issue with
that because Hamilton was always favorable to a CEO council
controlled organization approach, and that's what we're still leaning into.
But we have been waiting for their final details of
what's available to councils in setting up these new ways
(06:51):
of delivering water services. We need a Southern wastewater plant
to cater for the fast growing South area of Hamilton.
We've just upgraded our water treatment plant. We haven't got
a lot of resilience in our water system should something
happen to the Whitecuttle River, and you know we need
to have reservoirs full of clean water to keep people going.
(07:14):
All of those things are pretty critical. Roads into new subdivisions,
roads into industrial and commercial areas. All of that is
a lot more expensive than it was six years ago.
And an example I use is that if you built
a bridge six years ago and you built it now,
it would be thirty percent more expensive to do. So
that's your labor, that's your material, you know, steel, concrete, etc.
Speaker 2 (07:38):
Where would you ideally get your money from to avoid
having to raise rates?
Speaker 3 (07:45):
Well, I think we need to form a funding partnerships.
I think debt is part of the issue. If we
can borrow more and then spread it over multiple generations,
that seems reasonable. But also we need some funding partners,
whether they come from offshore or their businesses in New
Zealand who want to partner in infrastructure funding. We have
(08:07):
got the Local Authority Finance Organization, we have Crown Infrastructive
partners all talking with us excuse me about what they
could offer in terms of deals and loans, But we
need to develop. We need to partner with developers. We
need to just partner with big businesses to help us
(08:27):
put infrastructure in nice and early, and then over time
the people can start to pay that back.
Speaker 4 (08:34):
Just a couple of last questions.
Speaker 2 (08:36):
So when it comes to council elections and things, you
know a lot of people don't really know who they're electing.
How close do you feel, how much communication do you
actually have with rate payers? Are you able to have
and input as opposed to just people complaining about their
rates bills?
Speaker 3 (08:52):
You are able to have an input. It's really hard
to get the rate payers to understand the complexity and
size of the issue that we're facing. That is why
you will get people talking about pothole in their street
because it's local. You can look at it and you
can see it, and you can complain when the council
doesn't ef exit in time if your rubbish bin is
(09:13):
left behind. Likewise, but how do you understand the importance
of a waste water interceptor? You know, it's not like
infrastructure is something everybody's dealing with every day, and those
are the kinds of things that I'm always trying to
break through to the public state. Not to do with
the smaller things, it's to do with the really big
(09:34):
infrastructural items that we need to be a modern, thriving
New Zealand.
Speaker 4 (09:39):
Yeah, excellent.
Speaker 2 (09:41):
Well, will you be inviting the Prime Minister to the
Hamilton Hamilton Festival next year?
Speaker 3 (09:47):
Absolutely? In fact, we're opening the new visitation center in
a month, which I very much doubt we'd have been
able to fund and stay's current regime. But yes, we're
even going to charging external visitors, but Hamiltonians will still
be free twenty dollars because we have to look at
user pays ways of maintaining what we've got.
Speaker 4 (10:09):
Right, Yep, indeed, no, you're right.
Speaker 2 (10:12):
I mean that Hamilton Gardens is a good example of
it is an example of the blurry lines, isn't it,
between making you you know, doing the basics and having
a city that's actually got a bit of vibrancy to it.
So yeah, rather human than me on those decisions. Hey,
thanks for your time, Paula really appreciate.
Speaker 3 (10:26):
It at all. Thank you very much.
Speaker 4 (10:28):
There we go.
Speaker 2 (10:28):
That's Hamilton Mayor Paula Southgate
Speaker 1 (10:31):
For more from the Weekend Collective, listen live to news
talks It'd be weekends from three pm, or follow the
podcast on iHeartRadio
You're listening to the Weekend Collective podcast from News Talks EDB.
Speaker 2 (00:10):
Now with Paula Southgate. So the Local Government New Zealand
conference that's finished up, we'll have seen the headlines. So
there's some nice moments of polarization, could you say, differences
of opinion? Of course, you get these things all the
time in politics. The Prime Minister told councils to cut
nice to have spending and start being more intentional. I
guess with their income. Wellington Mayor Tori Farino accused the
(00:33):
PM of punching down a local government minister at the conference.
Simony and Brown hinted at some new streams of fundings
to councils and to discuss that. The Hamilton Mayor, Paula
Southgate joins me now of Paula, good afternoon.
Speaker 3 (00:47):
Good afternoon.
Speaker 4 (00:48):
How did you feel the conference went?
Speaker 3 (00:50):
Well? You know, when you saw a cat amongst the prigeons,
it creates a bit of a chaotic environment. But off
the back of that, I believe the conference was really
rich in the necessary debates that we needed to have.
The Prime Minister was forthright, absolutely forthright about how he
felt counsels should approach the financial hard times that were
(01:12):
all facing together in terms of looking at our budgets
line by line and so forth. He got a lot
of reaction to that because many counsels, ours would be
one of them, feel that we have in fact gone
line by line through our budgets and cut out a
lot of discretional what he would describe as nice to
have aspects or delayed them, and we are very much
(01:35):
focused on the core infrastructure. So but you know, look
at the end of the day, people started talking about
that very important issue. We do need to be very
careful each and everyone ol of our dollars.
Speaker 2 (01:47):
Do you think it quite helped that he do you
think was quite useful? Actually that he was a bit
more blunt than diplomatic.
Speaker 3 (01:52):
Well, sometimes to get really good debate, you provoke, and
he certainly provoked. He got a good reaction. But I've
attended local government conference probably for twenty plus years, and
I've never seen in the depth of discussion that ensued
from Prime Minister's speech before. So it was really disturbing
(02:12):
and disrupting and provocative. But to be fair, he's absolutely
right that we do have to look very closely at
what we spend the public are telling us that they're
groaning under the strain of increased rates and they're expecting
us not to do the fluffy projects, but do the
core projects and do them well. Where I would differ
(02:34):
from the Prime Minister, and I've had these conversations with
Minister Brown and Minister Bishop as well, is that the
cost of infrastructure that we are facing is eye watering
and at the moment completely unaffordable for counsels. Minister Brown,
as you have noted, suggested that there would be some
tools to help us with that. I know some of
(02:56):
those tools relate to the capacity to borrow more to
get water services in and things like that. Anyway, debt
is debt. You've got to pay it back at some time,
So it's not a new source of revenue as such.
It is actually just a new source of debt that
we could dip into the.
Speaker 2 (03:15):
Short Just before we get into that that, in terms
of just the rhetoric, is is it sort of just
a bit of a nuisance because every council is you're
a diverse collection of individuals and councilors all on differently.
Do you feel that his message was aimed more at
some councils than others because there might be some who
are going on and I'm doing pretty well with my
budget and the basics.
Speaker 3 (03:37):
Ah well, it was a fairly broad swipe that he made,
so if that was his intention, it was unclear.
Speaker 2 (03:44):
I just believe they didn't look across the room and say, oh,
he's talking.
Speaker 4 (03:47):
About that lot.
Speaker 3 (03:48):
He didn't look me in the I know, but.
Speaker 2 (03:52):
Well, you guys, I was having a look at your
at the Hamilton Council thing. We're not going to have
a crack at you guys too much, but you've you've
got a big rate tite coming up, haven't you close
to twenty percent?
Speaker 4 (04:01):
Isn't that right?
Speaker 3 (04:02):
Is sixteen point three?
Speaker 4 (04:04):
Okay?
Speaker 3 (04:04):
Sorry, yeah, well that's fine. I mean it has in
fact moved around. There was a time it was mooted
by some councilors, not myself, to be closer to twenty
five and since then we've done a lot more cutting.
But look, we cut forty percent from our transport budget,
and we cut ten million dollars a year from KPEX
and a further amount of money, plus we reduce stuff severely.
(04:27):
We've lost hundreds of stuff and that's not even finished.
So as I say, we did look at what do
we absolutely have to do. At the conference, one of
the interesting things was the comeback on what is core infrastructure.
I think we all agree that roads, waste water and
those kind of things core infrastructure. But outside of that,
(04:48):
how important is it for communities have, for example, playgrounds, libraries,
some tourism assets to get people coming to visit those
kind of things. Some of them would fit into the
nice to have category now, I think, And yet you know,
fundament a city like Hamilton has to have something to offer.
If we didn't have the Hamilton Gardens, we wouldn't have
(05:11):
the millions of visitors coming through spending money here each year.
So you know, it's not black and white's there's some
shades of grain in it.
Speaker 2 (05:18):
I think, Yeah, what are the basics then, and if
you would think about because I think that's the word
that luxon News, wasn't it. He talked about the basics?
What are the basics for you guys that really that
you've focused on as a result of well not wanting
to ping your right past too much.
Speaker 3 (05:34):
Well, we've certainly not cut a lot of services, not
closing libraries, closing pools, or running assets into the ground.
So we're trying to look after everything we already have.
In addition, we have pulled back on roading and we
have pulled back on some of the kepex. Part of
the reason and some of that's water infrastructure. Part of
(05:54):
the reason is we are hoping for some new funding
tools to enable us to put in the new water
services that we need. But we're the fastest growing city
in the country. I'm not having bragging rights about that.
That's just the fact we're situated in the high growth
area between Totonga and Auckland. We're short of housing already,
(06:15):
We've got more people coming, We've got a younger population
that is choosing to stay here and we must do
something about that.
Speaker 2 (06:23):
So what's your council's biggest challenge right now?
Speaker 3 (06:28):
Future infrastructure? The waters water done well when the Three
Waters approach changed, and I don't have an issue with
that because Hamilton was always favorable to a CEO council
controlled organization approach, and that's what we're still leaning into.
But we have been waiting for their final details of
what's available to councils in setting up these new ways
(06:51):
of delivering water services. We need a Southern wastewater plant
to cater for the fast growing South area of Hamilton.
We've just upgraded our water treatment plant. We haven't got
a lot of resilience in our water system should something
happen to the Whitecuttle River, and you know we need
to have reservoirs full of clean water to keep people going.
(07:14):
All of those things are pretty critical. Roads into new subdivisions,
roads into industrial and commercial areas. All of that is
a lot more expensive than it was six years ago.
And an example I use is that if you built
a bridge six years ago and you built it now,
it would be thirty percent more expensive to do. So
that's your labor, that's your material, you know, steel, concrete, etc.
Speaker 2 (07:38):
Where would you ideally get your money from to avoid
having to raise rates?
Speaker 3 (07:45):
Well, I think we need to form a funding partnerships.
I think debt is part of the issue. If we
can borrow more and then spread it over multiple generations,
that seems reasonable. But also we need some funding partners,
whether they come from offshore or their businesses in New
Zealand who want to partner in infrastructure funding. We have
(08:07):
got the Local Authority Finance Organization, we have Crown Infrastructive
partners all talking with us excuse me about what they
could offer in terms of deals and loans, But we
need to develop. We need to partner with developers. We
need to just partner with big businesses to help us
(08:27):
put infrastructure in nice and early, and then over time
the people can start to pay that back.
Speaker 4 (08:34):
Just a couple of last questions.
Speaker 2 (08:36):
So when it comes to council elections and things, you
know a lot of people don't really know who they're electing.
How close do you feel, how much communication do you
actually have with rate payers? Are you able to have
and input as opposed to just people complaining about their
rates bills?
Speaker 3 (08:52):
You are able to have an input. It's really hard
to get the rate payers to understand the complexity and
size of the issue that we're facing. That is why
you will get people talking about pothole in their street
because it's local. You can look at it and you
can see it, and you can complain when the council
doesn't ef exit in time if your rubbish bin is
(09:13):
left behind. Likewise, but how do you understand the importance
of a waste water interceptor? You know, it's not like
infrastructure is something everybody's dealing with every day, and those
are the kinds of things that I'm always trying to
break through to the public state. Not to do with
the smaller things, it's to do with the really big
(09:34):
infrastructural items that we need to be a modern, thriving
New Zealand.
Speaker 4 (09:39):
Yeah, excellent.
Speaker 2 (09:41):
Well, will you be inviting the Prime Minister to the
Hamilton Hamilton Festival next year?
Speaker 3 (09:47):
Absolutely? In fact, we're opening the new visitation center in
a month, which I very much doubt we'd have been
able to fund and stay's current regime. But yes, we're
even going to charging external visitors, but Hamiltonians will still
be free twenty dollars because we have to look at
user pays ways of maintaining what we've got.
Speaker 4 (10:09):
Right, Yep, indeed, no, you're right.
Speaker 2 (10:12):
I mean that Hamilton Gardens is a good example of
it is an example of the blurry lines, isn't it,
between making you you know, doing the basics and having
a city that's actually got a bit of vibrancy to it.
So yeah, rather human than me on those decisions. Hey,
thanks for your time, Paula really appreciate.
Speaker 3 (10:26):
It at all. Thank you very much.
Speaker 4 (10:28):
There we go.
Speaker 2 (10:28):
That's Hamilton Mayor Paula Southgate
Speaker 1 (10:31):
For more from the Weekend Collective, listen live to news
talks It'd be weekends from three pm, or follow the
podcast on iHeartRadio
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