Source: New Zealand Government
Introduction – Grounding in shared reality
Thank you to LGNZ for the opportunity to speak today, and thank you to the mayors, chairs, and councillors in the room for putting your names forward to serve your communities.
Right now, the cost of living is top of mind for every Kiwi: food, fuel, power, and, yes, rates. Households are stretched, and rate rises are a flashpoint for that understandable frustration.
It is easy to point the finger in tense times, but I came here to point out a common cause. The Government and councils all want the same thing. Affordable, effective Local Government services for local communities.
We recognise that depreciation has accumulated, and funding mechanisms are finite. Behind those rate rises are decades of pressure building: water systems that should have been renewed a generation ago, roads worn out faster than they’re maintained, and new housing demands without the means to service them.
Central government blames councils. Councils blame government. The problem is blaming isn’t productive. New Zealanders don’t care whose fault it is – they want affordable and effective local government, too.
The question is, how can we sharpen focus and raise productivity to do just that?
Everyone’s under pressure, central government, local government and, most importantly, New Zealand taxpayers and ratepayers. The pressure households currently face mean that we cannot justify passing the bill to families who are already stretched. Inflation’s legacy is still biting. Families are tightening their belts. Government must do the same.
From Wellington, we’ve worked hard to rein in spending, eliminating low-value activities. Households have done their part too, paying eye-watering mortgage rates and making sacrifices in their own budgets to make ends meet.
These efforts have paid off. Households now see an overall consumer price inflation rate of 2.5%, down from a peak of 7.3% in 2022.
We could be doing even better, but Stats NZ helpfully releases breakdowns of the drivers of inflation. And one figure practically screams out from the spreadsheet. Local authority rates and payments rose by 12.2% in the year to March. 12.2%, versus an overall rate of 2.5%.
Clearly, local government is a key driver of cost pressure on households and, don’t forget, businesses that people rely on for goods, services, and jobs.
In Wellington, we’re focusing on delivering services that only Government can deliver effectively and affordably. I believe local government should have the same focus, beginning with a clear conception of local government’s role.
That is, what things must local government provide because private markets cannot?
To put it the way someone once said it to me: Roads, rats, rubbish and rates should be the focus. Horizontal infrastructure of new jobs and housing is a priority, too. Councils shouldn’t be pontificating on people’s four well beings. Your job is not to recreate Plato’s Republic here in the South Pacific. It’s to effectively provide a discrete bundle of goods at an affordable price.
But we also recognise a hard truth: many of the costs facing councils aren’t of your own making.
They’ve been baked into the system through decades of regulatory complexity. Layer upon layer of vague mandates, unclear responsibilities, and well-meaning rules that create more confusion than solutions.
You’re stuck trying to deliver core services under rules that second-guess every decision and inflate every budget line.
On overregulation: we hear you. We are pushing government back to basics but we’re also delivering a plan to make it easier for councils to reflect the needs of their communities.
We’ve seen the so-called four well beings, introduced with good intentions, but resulted in asking councils to act as second-tier social ministries, expected to deliver on every issue, regardless of mandate, expertise, or funding.
In 2017 I called the introduction of this legislation the Puppy Dogs and Ice Cream Bill. That’s because rather than requiring councils to deliver core services in a cost-effective way for households and businesses, the Government believed councils should be able to do whatever they felt like. That was always going to be a recipe for higher rates.
And we’ve seen the proliferation of the RMA’s numerous processes and requirements turning councils into consultation machines.
Add to that endless duplication across agencies, overlapping consents, decades of poor investment and management (and a Minister asking you to focus on attendance). We all need things to change.
Councils are not only granters of resource consents, they are the biggest applicants, with much of council’s essential infrastructure hamstrung or cost inflated by the RMA.
The Government’s resource management reforms tackle this head on.
Benchmarking will show ratepayers how the performance of their own council compares with others, in terms of rates, debt, and spending. Some healthy competition between councils is long overdue.
We’re demanding discipline from councils, but we’re also committed to clearing away the red tape that constrains you. We’re scrapping the laws that confuse roles, inflate budgets, and justify the kind of spending Kiwis can’t afford.
We’re rebuilding the system so councils can focus on the things only councils can do: represent their local communities, fix pipes, roads, rubbish, and infrastructure that unlocks growth and lowers costs.
Back to basics isn’t a slogan. It’s a plan. And we’re going to deliver on it.
A plan for councils and communities
To cut costs, clear roadblocks, and put power back with communities there’s a clear blueprint:
1. RMA reform – real change
We are replacing the Resource Management Act aiming for a fundamental shift in how it works, because there’s no piece of legislation more detrimental to the cost of living than the RMA.
I’ve seen the details of resource consents for solar farms, which include requirements such as:
- Inviting mana whenua to perform karakia before removing any native trees or plants from the site.
- Providing written reports every six months until two years after construction is finished, outlining compliance with a 66-page Cultural Impact Assessment, with ongoing reporting beyond that.
- Submitting a detailed landscaping plan specifying:
- Every plant’s botanical and common name.
- Exact location, spacing, and planter bag size.
- Soil preparation methods and planting techniques.
- The type and quality of materials like soil, mulch, stakes, and ties.
- A requirement to replace any dead plant with the same or similar species at the same size.
- Constructing a ‘public viewing area’ with off-street parking, and informational and educational signage.
This is what’s driving up power bills. You and your ratepayers want renewable energy but the consenting process demands ceremonial chanting and spreadsheet-level detail about every shrub on site. These two aims don’t compute.
We see the same thing happening with supermarkets, IKEA, even hospitals. This madness raises prices at the checkout and on power bills.
IKEA’s consent required inviting representatives of seven different mana whenua groups “to undertake cultural monitoring, karakia and other such cultural ceremonies on the site” at the pre-start meeting, commencement of earthworks and immediately prior to completion of bulk earthworks across the site, with ten days’ notice before each of those events. Ten working days, that can be two weeks of waiting for a construction site that wants to get cracking, more if you chuck a public holiday in the middle. IKEA must think us Kiwis really love affordable Swedish furniture for it to be worth their while.
That’s the problem though, for every IKEA there’ll be another organisation that just can’t get past the consenting, can’t hack the months of delays and paperwork.
Currently, and under the reforms of the last government, the RMA slows down housing, gums up roads and strangles infrastructure. It delays pipes. It creates years of delay for projects that ratepayers are already paying for.
Under the new framework this government is working towards, councils will spend less time litigating, and more time building.
National rules will be clear and local voice will be stronger, with less duplication and endless second-guessing.
Infrastructure consents will be faster and more certain, especially for projects with regional importance.
In short: fewer lawyers, more shovels.
2. Regional Deals – Partnership, not payouts
Second, we’re advancing a new model of Regional Deals. These are not handouts. They are contracts between central government and regions to deliver real outcomes in return for real reform.
For years I championed the idea of genuine partnerships between central and local government to make sure important infrastructure actually gets built. The ACT/National Coalition Agreement committed to instituting long-term city and regional infrastructure deals, allowing PPPs, tolling and value capture rating to fund infrastructure.
Deals will include:
- New revenue tools for councils, but only where there’s discipline on costs and a plan to grow.
- Dedicated infrastructure funding, where councils demonstrate delivery readiness, not just need.
- Housing and economic growth acceleration, tied to streamlined consenting and local development strategies.
And crucially, each deal must include measurable, transparent outcomes. Because Kiwis are done with blank cheques.
It’s great to see negotiations underway on the first regional deals, and I hope to see the first deals announced by the end of the year.
3. Encouraging investment so we can have nice things
Many of you will be concerned about the cost of living for your ratepayers. I encourage you to save more, think about where you’re spending and prevent rates rises as much as possible. That’s what you can do. The Government is also looking to lower the cost of living by tackling one of the most stubborn costs out there. Groceries.
Increased competition in the grocery sector is a win-win for councils. Ratepayers see cheaper prices at the checkout and regions see development that brings jobs and money to the area.
Right now, outdated planning and consenting rules make it nearly impossible for new players to break into the market. I’ve suggested a possible way to fix that is through a fast-track grocery development process to clear the path for new entrants like Aldi, Walmart or local startups, to bring real competition to communities across New Zealand.
That means lower prices for ratepayers, but also new jobs, investment, and mixed-use developments that can revitalise town centres. It’s a win-win: Central Government gets out of the way, new businesses bring in the investment, and local councils and communities reap the rewards.
Mindset shift – From finger pointing to problem solving
None of this works if we go back to zero-sum thinking. That kind of mindset, the idea that central government only wins if local loses, or that councils are always to blame has failed New Zealand.
It failed us with housing. It failed us with crime. It’s failing us with infrastructure.
What works is recognising that our problems are shared and that the success of one level of government helps the other.
When councils deliver better infrastructure, housing becomes more affordable.
When central government cuts red tape, council costs come down.
When both work together, communities thrive.
This is the positive-sum mindset. And it’s what we need to get our country moving again.
Conclusion – Delivering for New Zealanders, together
So here’s the deal.
We are repealing the four wellbeings and other vague mandates, not because they’re bad ideas, but because they’ve become an excuse to do everything and nothing.
We are replacing them with a clear emphasis: focus on what only councils can do and do it brilliantly.
We are reforming the RMA so you can build the pipes, roads, and housing New Zealand needs.
We are putting Regional Deals on the table, tools that empower you, with accountability baked in.
And we are asking every council to go line-by-line on spending, to say no to what’s nice-to-have, and deliver the basics at a price ratepayers can afford.
That is how we rebuild trust.
That is how we earn the right to ask Kiwis for more.
And that is how, together, we can solve the problems of our communities, not by pointing fingers, but by rolling up our sleeves and getting to work.
Thank you.
MIL OSI New Zealand News –