Scoop Election 08: edited by Gordon Campbell

Rodney Hide’s latest plan for gutting local democracy

June 9th, 2009

local government target

Rodney Hide’s agenda for local government involves – as Scoop reported six months ago – the importation of an American model that has resulted in drastic cutbacks in the public services provided by local government, and the privatization of some current services as a result. Colorado and California are two fairly chilling examples of what Hide has in mind. This agenda is outlined in a Cabinet paper whose contents are being wheeled into place in New Zealand under the cover of sweet-sounding terms like ‘greater transparency’ and ‘more accountability’.

In its purest form – first put in place in Colorado in 1992 – the process involves a spending cap for local government, and a requirement that elected councils must hold a referendum if any spending above inflation is contemplated. Over time, that spending cap becomes a sliding scale downwards, since the same mechanisms also require that any rates revenues collected above the previous year’s limit must be returned to ratepayers as a rebate.

Thus, the extent of local government spending at the trough of a recession quickly becomes the maximum allowed. It becomes a radical strait jacket for local government. Here, similar procedures are being enacted to serve an extreme anti-government agenda that – beyond the crackpot libertarian fringe – has never had a mandate in New Zealand.

The full account of Hide’s enthusiasm for the Colorado model – he mentioned the Colorado precedent explicitly in his 2006 private members Bill on local government reform – can be accessed here. The most extensive researched critique of the Colorado spending cap and referendum measures can be found here.
As with the Super City proposal for Auckland, Hide wants to have his reform structure enacted in legislation in time for the local body elections in 2010. In other words, the Key government will have radically reformed the structures of local government in Auckland and in every other council in New Zealand during its first term in office, by means of extremist solutions that it never put before the public at the 2008 election.

The Cabinet Paper proposal at the moment is (deliberately?) vague about just what core services our local councils will be forcibly reduced to providing. What Hide needs to come clean about is whether his proposal will entail local government being forced to live within a spending cap based in any way on its prior spending; whether any rates revenue collected above that cap will be required to be returned as a rates rebate; and in what ways, his proposal differs from the so called TABOR model of local government funding in Colorado, for which he previously felt such enthusiasm.

Hide has no mandate for this revolution. Election after election, his party achieves minimal support from the New Zealand public, and won fewer votes than Winston Peters’ party did in 2008. If Hide’s proposal does indeed turn out to comprise a restriction on local government (via spending caps and rates rebates) to core service provision, he will need to explain how local councils could then forward plan, and set money aside for emerging community needs.

In Wellington for instance under his proposals – would any council have been able to forward plan and allocate funds for sewage treatment? Would any future council be able to budget for long term community needs in say, affordable housing – or would it be forced to surrender such provision to the tender mercies of the private sector?

Councils are elected to govern, and they must regularly seek a fresh mandate from voters every three years. To require them, mid term, to hold a costly and wasteful referendum every time a decision has to be made to allocate money beyond an arbitrary limit set by Rodney Hide and his minions… well, that only makes a mockery of democracy. This reform is not about ‘transparency’ and ‘accountability’. It is about imposing a right wing strait jacket on communities and their elected councils, in order to further commercialise the provision of quite basic needs.


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    1. 24 Responses to “Rodney Hide’s latest plan for gutting local democracy”

    2. By brian marshall on Jun 9, 2009 | Reply

      “Councils are elected to govern, and they must regularly seek a fresh mandate from voters every three years. To require them, mid term, to hold a costly and wasteful referendum every time a decision has to be made to allocate money beyond an arbitrary limit set by Rodney Hide and his minions… well, that only makes a mockery of democracy. This reform is not about ‘transparency’ and ‘accountability’. It is about imposing a right wing strait jacket on communities and their elected councils, in order to further commercialise the provision of quite basic needs.”

      Actually referendums are democracey at it’s best, but only if they are binding. Their’s nothing to stop a left wing council being voted in and putting through their agenda Gordon. Well maybe that the rate payers might object to debt being run up like crazy. That might stop them.

    3. By angus on Jun 9, 2009 | Reply

      “Hide has no mandate for this revolution.”

      Welcome to MMP

    4. By CJ on Jun 9, 2009 | Reply

      The mandate he’s working under is that of National, if National didn’t support this it wouldn’t happen, i don’t understand why this is seen as Hide’s thing he’s just the front man.

    5. By Mark Sweet on Jun 9, 2009 | Reply

      Referenda are a deeply flawed expression of the will of the people because most issues are complex and require a great deal of research and discussion. That’s why we elect representatives to do the in depth work for us. Citizens can’t be expected to be so well informed, and will vote from self interest and emotion. Hide’s proposed changes to the LGA are anti-democratic and centralist. He has no mandate to do this stuff.

      Great to hear Lawrence Yule, Mayor of Hastings, and Chairman of Local Government challenging this move on Morning Report.

    6. By Brian Marshall on Jun 9, 2009 | Reply

      Mark. A referendum is the will of the people expressed, regardless of any self interest. Those who challange this, are challanging democracy at it’s most basic level.
      The best thing anybody could do is make any referendums binding on the councils (or central government for that matter).
      I would imagine that to be consistant, those that oppose Rodneys suggestions above, would also oppose any suggestions that the people of Auckland should have a direct say about the proposals for local government.

    7. By stuart munro on Jun 9, 2009 | Reply

      @ Mark Sweet – “That’s why we elect representatives to do the in depth work for us. ”
      No. I elect representatives to do what they promised to do. In fresh circumstances I expect them to ask, and to do what I tell them.
      They are not experts, and they are not an intellectual elite, the only qualification they require is good character.
      Currently, most of ’em don’t even have that.

    8. By VCD on Jun 10, 2009 | Reply

      A big problem is that Rodney Hide is a deeply flawed expression of the will of the people.

    9. By Philip Palij on Jun 10, 2009 | Reply

      Referenda are Democratic, the arguments are laid out before the public and a vote is taken.

      The problem with visionary councillors is they say things like ‘we must be courageous’ but the bit they left out is ‘with other peoples money’.

      So we get projects costing millions upon millions that small populations cannot afford and do not want. They finance these projects with ratepayer debt for generations to come and in Ashburton we have seen double digit rate rises.

      Our council is putting forward ill thought out badly estimated plans which end up exceeding original estimates by 100% or more and they continually get away with it.

      Something has to change and referenda for large budget items put forward by profligate visonaries will make them think very hard about local issues rather than expanding their reputation and ego’s

    10. By Jane on Jun 11, 2009 | Reply

      As a 25 year resident of California, I can attest that there are many reasons why referendums are not in the interests of the people and do not, in fact, promote democracy. For one thing, the signatures required for an issue to be included on the ballot can be bought and usually are. Voters tire of the barrage of propositions, don’t bother to vote or fail to read the details, and most propositions are euphemistically named so that those who fail to read the fine print end up voting for the opposite of what they think they’re voting for. It is an expensive and wasteful process that a small country like New Zealand cannot afford. The results are usually challenged in court and often overturned. Check out Prop 187 (you can google it), the anti- immigrant proposition also named the “Save our State” proposition. It was voted in and later overturned by the courts, like many others, because it was undemocratic and unworkable.
      A general election (in NZ 3- yearly) is the time to elect those who will govern.

    11. By Dominic on Jun 11, 2009 | Reply

      Jane’s points are dead on. I understand frustrations with the way councils (or indeed any elected official) acts but the referenda system is deeply flawed, not to mention expensive.

    12. By Martin on Jun 11, 2009 | Reply

      “A referendum is the will of the people expressed, regardless of any self interest.”

      That depends on how you word the question[s]

    13. By brian marshall on Jun 12, 2009 | Reply

      Jane, you are entitled to your opinion, but we do not have any control over our elected politicians once they are elected here in New Zealand.
      I completely disagree with any suggestion that we should have to wait every three years to exercise democracy. Democracy goes back to ancient greek city states and free citizens were able to vote on every on any issue. You also don’t seem to realise quite what Rodney was proposing. Maybe you should google that.

      Dominic, how can you say that it expensive, when we have no proposed system to cost. I get regular newsletters from my well run local council, but for an example, Wellington City council needs about $40 million to re-pile the wharfs, and wants to spend $45 million to build a indoor sports arena.
      The citizens of that city do not get any say about what they want the money spent on, or any rates increases to cover the councilers wish list. They may end up having to fund both and having no influence on their rates bills.

    14. By Paul Robeson on Jun 12, 2009 | Reply

      Talk about arguing on the head of a pin.

      It was just a couple of months ago those wasteful government initiatives of being ready for pandemics were being panned by right wingers in the States.

      Isn’t it nice to see a supporter of Rodney Hide arguing for a referendum?

    15. By Jane on Jun 12, 2009 | Reply

      Brian, I live in New Zealand (I’m a Kiwi). Thank you for allowing me a right to an opinion:) Californians also do not have any rights over an their politicians once they are elected. That’s the idea of elections. They do things you don’t like, you vote them out next time. I understand full well what Rodney Hide proposes without googling it (a snide remark btw. I was simply suggesting that readers here take the opportunity to actually read about the reality of referendums… I gather you didn’t like that?). I spent many years seeing a referendum system fail. It will eventually be scrapped in both Colorado and California because as it is widely considered unworkable for all the reasons I cited above.
      The one aspect of direct consultation with the voters that works in California is the bond system. If local bodies want to raise money for special projects with a bond issue, it gets voted on, but in the next general election, not in a special referendum.

    16. By Martin on Jun 12, 2009 | Reply

      Brian: Have you seen the blogs on You Tube

      I’M BACK is one angry American but he has tappede a deep vein of anger at the bottom of US society.

      It feels like we are getting shafted here too.

    17. By Martin on Jun 12, 2009 | Reply

      Democracy here is joke!
      we spend 5 minutes ever three years and let them do what they like in the meantime. Our turn outs at local body elctions is P*** Poor.

      If my fellow contry folk were as passionate about the quality of our society and country as they are abot their bloody rugby we wouldn’t be anywhere as deep in it as we are.

      NZ Civics F Grade [fail]

    18. By Brian Marshall on Jun 13, 2009 | Reply

      I try to avoid blogs on you tube Martin. It’s very rare you get anything insightfull or well explained. I agree with your comment about the 5 minutes spent every three years. That is why I like what Rodney is proposing.
      As a rate payer of Upper Hutt city where there has been two mayors in the last 20 odd years, and I consider a well run city, compared to the old Lower Hutt city which used to run wild with spending, I think I know what I would have liked when I lived in Lower Hutt.
      Now Wellington rate payers are having to live with a council that keeps on spending.

      Bring on referendum for local AND central government and more power to the people.

    19. By Martin on Jun 13, 2009 | Reply

      “That is why I like what Rodney is proposing.”

      As long as it [super cities] is not a Trojan Horse for oher thiongslike selling more public assets.

      The problem with ACT et al is their free market mantras come from the Chicago School of Economics and Milton Friedman. Naomi Klein had a lot to say about them in her book The Shock Doctrine. None of it was good.

    20. By Stephen on Jun 17, 2009 | Reply

      It is very obvious the current governance in Auckland is failing in a big way. Just look at Melbourne and their fantastic public transport system. Their great cycling pathways. Auckland currently does not have ‘local democracy’. Nearly anything would be better than what we currently have. What other city in the world has six or so bodies managing it?

    21. By Steve Baron - Better Democracy NZ on Jun 18, 2009 | Reply

      “What does democracy mean to you?”

      The trouble is most people don’t really give much thought to politics and democracy.
      Democracy can mean many things to many people. We have come to accept that whenever the word “democracy” is used, it must be a good thing. However, when democracy means many things to many people, it runs the risk of meaning nothing at all to anyone.

      People have a lack of in depth understanding when it comes to knowing what democracy
      is and how it can be improved. (Heywood, 2007). The British political theorist Sir Bernard Crick said, “Democracy is perhaps the most promiscuous word in the world of public
      affairs.” It comes from the ancient Greeks which means ‘rule by the people’. Is electing a
      government every three years and then having no say in between, all that is required to be
      ruled by the people? I hardly think so, however there are many forms of democracy. The
      system of Representative Democracy is used in New Zealand, but it is only one form of
      democracy and not necessarily the best. What we need are more checks and balances so
      we have a true exchange of communications between the elected and the electorate.

      Most New Zealanders, when asked, would say they live in a democracy. However while
      this might be true to a certain extent, many are now starting to query just how much of a
      democracy we really have and if our governments have too much power? Do we have real democracy or just one day of democracy and three years of an elected dictatorship?

      There have been many controversial issues over the last several years which have been
      passed, or stopped, by the government. Many of these issues appeared to be the opposite
      of what polls reflected and what the people wanted. These issues include prostitution,
      abortion, voluntary euthanasia, lowering the drinking age, civil unions, removing the right
      to appeal to the Privy Council, GE, and immigration. Even in Australia a new law has been passed which would appear to stop freedom of speech. It is no longer legal in Australia to give out information on voluntary euthanasia via phone, fax or email. How long before freedom of speech is curtailed in New Zealand?

      So is it enough to have a vote once every three years at a general election and then
      simply trust those we elect to use their better judgment on issues like those mentioned
      above? Many politicians I have spoken to believe that we elect them to do a job and make
      all the hard decisions on our behalf. They tell me they are far better informed than the
      general public on important issues. Well to a certain extent many of us might agree with
      that. In most cases we are happy to elect them to make the difficult decisions a government must make on a daily basis, but there does come a time when governments become out of
      touch with the will of the people. The trouble is we have no way of bringing about change
      until the next election. The only alternative then, is to remove the current government and
      replace it with another government who to all intensive purposes will not be any more
      attentive to the wishes of the people.

      The weakness of our current political system is that once a government is elected there
      are few checks and balances between elections. Voters must accept whatever the government or coalition of the day wants. This it often does without a popular mandate or majority support of New Zealanders and much of which is introduced by a List MP who is not responsible to an electorate. Neither can these List MPs be thrown out at the next election as some would have us believe. This is a good argument for having the Recall system as was used to elect Arnold Schwarzenegger in California.

      Better Democracy NZ believes the people should be able to make more decisions other than just once every three years at a general election. The mechanism for doing this is called Binding Citizens Initiated Referendums (BCIR) which has operated extremely well for over 130 years in Switzerland, several European countries and many US States. Binding Referendums are not a replacement for the current system of representative democracy, they are simply an adjunct to it, the next step forward from MMP toward real democracy.

      It is a very simple process where on perhaps one day a year, or combined with a general
      election, New Zealanders would get to vote on an issue by issue basis. They would be
      able to make decisions that directly effect them so long as the required number of
      signatures have been collected to trigger a referendum on that subject. At present this
      amount is 10% of those registered on the Electoral Roll which is approximately 300,000
      signatures, a figure that would seem extremely high given the Swiss only have to collect
      50,000 signatures with a population almost twice that of New Zealand. It only takes 5% of
      the vote at election time to put a party in to parliament so surely this would suffice to
      trigger a referendum.

      Some also say that referendums are expensive and on the surface approximately $10 million per referendum may sound like a lot of money. However, in the overall scheme of things that is a drop in the ocean given the economy of our country. Surely this is a small price to pay for real democracy given we spent $30 million for our yachties to attend the Americas Cup. It is also a lot cheaper for New Zealanders to hold referendums than in
      Switzerland because the Swiss must produce their official referendum pamphlet in several
      official languages. This pamphlet gives the pros and cons from each side of the argument
      and is posted to every voter prior to an election. Over the last 130 years the Swiss have averaged only 3-4 citizens initiated referendums per year and they are the most recidivist users of referendums in the world.

      It would seem logical, in a modern well informed society like New Zealand that we would
      want, and have a democratic right to make decisions on issues that directly affect us
      through Binding Referendums. People are no longer prepared to accept that those in
      positions of authority always know what is best for them. It is time for change but firstly, New Zealanders must demand it of their politicians.

    22. By VCD on Jun 19, 2009 | Reply

      Are you promoting referendums to be used as solution for the current corporate control of our Govt?

      For a start, please refer to Jane’s comment ( with 25 yrs real experience of the abuse of referendums to perpetuate the democracy myth at a huge cost). They are imported debt creating bureaucracy.
      * I mentioned years ago that online voting on (referendum) issues would have been a cheaper option.
      I am not impressed with the idea you are promoting- in which we are made to pay more for the illusion of democracy.( The french had a more viable and effective solution).

      If the Govt were accountable, transparent and listened to what the people wanted we would not need the cost of referendums.

    23. By Linus on Jun 20, 2009 | Reply

      I heartily agree with Martin (13 June)– Everyone should read The Shock Doctrine by Naomi Kline. An extremely enlightening book. ACT is continuing the free market philosophy that led to so much privatisation of our state owned assets in the 80s and 90s. Why allow Hide et al. to sell off public assets — private businesses would profit, but the resulting services would very likely be worse and the infrastructure would be allowed to deteriorate more quickly than otherwise. The free market pushers say that services and efficiency improve when assets are transferred to private ownership, but that has not generally been the experience in hundreds of instances throughout the world in the last 50 years.

    24. By Mr King on Jul 2, 2010 | Reply

      This might sort out the “Rodney Hides of life” forever…

      Do we need a Referendum For A New Democracy?

      Are you concerned about the future of democracy? Do you feel democracy is under attack by extreme greed in countries around the world? Are you sick and tired of: living in fear, corporate greed, growing police state, government for the rich, working more but having less?

      Can we use both elections and random selection (in the way we select government officials) to rid democracy of undue influence by extreme wealth and wealth-dominated mass media campaigns?

      The world’s first democracy (Athenian democracy, 600 B.C.) used both elections and random selection. Even Aristotle (the cofounder of Western thought) promoted the use random selection as the best way to protect democracy. The idea of randomly selecting (after screening) juries remains from Athenian democracy, but not randomly selecting (after screening) government officials. Why is it used only for individual justice and not also for social justice? Who wins from that? …the extremely wealthy?

      What is the best way to combine elections and random selection to protect democracy in today’s world? Can we use elections as the way to screen candidates, and random selection as the way to do the final selection? Who wins from that? …the people?

    25. By KJT on Mar 20, 2012 | Reply

      Democracy works fine for the Swiss.

      Why should a few self selected incompetents in Parliament be allowed to make decisions which affect all of us.

      “We do not have democracy. We have a dictatorship where they graciously allow us to change the dictators every three years.”

      “Where are only option if we do not like the decisions of the politicians currently in power is to vote back the lot we did not like last time.” Acknowledgement to “No Right Turn”.

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