Local Government Act 2002: free at last?

As published in New Zealand Environment, Issue 26, 14-27 February 2003

"Costly duplication", "public confusion" and "unnecessary bureaucracy": that was the November 2002 prediction of Auckland City Mayor John Banks on the Local Government Bill, just a few weeks before it was passed under pre-Christmas urgency on 19 December 2002.

"Not so", responded Local Government Minister Chris Carter: the legislation "imposes tougher requirements ... to plan, consult and provide understandable information to their communities on each and every decision they make".

Amidst the rhetoric and controversy surrounding the so-called new "power of general competence", Treaty clause and lengthy lists of principles, what will the Local Government Act 2002 really mean for local authorities? What will it mean for the communities they are intended to serve? And what impact might the Act have on environmental outcomes?

As explained in the introduction to the Select Committee Report on the draft legislation, the LG Bill was the first comprehensive review of general local government laws since 1974. Even the harshest critics of the new Act agreed that the previous LGA needed a major revamp. With over 100 amendments, it had become an unwieldy mish-mash of 1950s and 60s prescriptive planning, overlaid with 1990s accountability and financial provisions. And with a complicated numbering system including section references such as s37ZZZQ and s594ZPA, for many people it was just plain hard to navigate.

Much has been made of the change in emphasis from the old Act’s highly prescriptive provisions (s663 allowed the Council to install, light and maintain a town clock) to a more flexible description of activities that may be undertaken by district and regional councils. However, claims that with their new-found freedom, councils will rush headlong into non-core activities, putting established companies out of business, are likely to have been overstated. The reality is that although s12(2) confers "full capacity" on councils to undertake activities or business, the Act also contains a myriad of limitations on the exercise of that power, and onerous consultation requirements before embarking on significant new ventures. In fact, the more detailed obligations to consult and act in accordance with the long list of principles in s14, and the beefed-up accountability and transparency provisions, may make councils more, rather than less, cautious (at least at the early stages) about embarking on brave new ventures.

For residents and businesses looking for greater opportunities to be involved in local government decision-making, there are a range of opportunities to contribute and be heard. Section 78 explicitly requires councils, in the course of decision-making, to "give consideration to the views and preferences of persons likely to be affected by, or to have an interest in, the matter". Section 81 requires councils to set up and operate processes to provide opportunities for Māori to contribute to decision-making. Section 82 contains specific details on exactly how councils should consult prior to making decisions. And while the Act allows for some flexibility in how the consultation and decision-making obligations are met for some decisions, if a decision is a "significant" one, the council must follow the prescribed processes.

So far, so good. But what is a "significant decision"? The Act unhelpfully defines "significant" as a matter that "has a high degree of significance". Using the defined "special consultative procedure", councils are obliged to adopt a "policy of significance", which may give us a better idea of how this vague (but legally important) concept will be applied by councils around the country. Something to watch for in the future.

Finally, in terms of environmental outcomes, the LGA 2002 certainly includes more explicit requirements to take into account environmental issues than its predecessor. The purpose of local government under s10(b) includes the promotion of environmental well-being of communities, in the present and for the future. And in an interesting departure from the "sustainable management" purpose of the Resource Management Act, s14(1)(h) if the LGA 2002 requires local authorities to take a "sustainable development approach". Local authorities will continue to have to comply with the obligations of the RMA and other environmental legislation where that is necessary, however the stronger emphasis on environmental and sustainability issues in the purpose and principles provisions may give further impetus to environmental considerations at a strategic level of local government planning.

Whether or not the greater obligations and opportunities for community input into district and regional planning under the LGA will translate to better outcomes will be interesting to observe over coming years. The Government has signalled that it intends to review the Act in 2004 and 2007, and that will be a useful time to review whether the legislation has indeed promoted better local government process and outcomes, or whether Mr Banks’ fears of a bureaucratic nightmare have been confirmed.

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