Should councils stay out of business?
Should the government take more control over the things that really impact society and the economy?
Wednesday, September 21 2011 || Comment || BY Julian Smith
After the government stepped in the trains did indeed run on time – something of a victory for Rugby World Cup minister Murray McCully, even if, as was reported, he had to travel in a near-empty carriage to the game.
The interestingly titled Rugby World Cup 2011Empowering Act, enacted in 2010, gave the government fairly sweeping powers to assume control of crucial aspects of the competition, which perhaps indicates it had some doubts about the ability of local authorities to deliver the required results for the international rugby showcase.
Although the organisation of Party Central hardly rates on the same scale, it's clear this government is willing to take over whenever significant national interests are involved – whether it's managing the perception of the Rugby World Cup or Christchurch’s post-earthquake recovery.
And it's possible we’ll see more of this approach in areas where national interest can be shown to outweigh the capability or reach of local government.
That reach is now pretty wide. Local councils, in our bigger cities in particular, have become increasingly involved in a wide range of activities – many of which are perhaps the more traditional preserve of central government. Community housing, transport and infrastructure assets, major events and social support have all become part of the business of local government in recent years.
Much of this activity has stemmed from the decisions of individual councils or strategic investments made or absorbed by local bodies, rather than any single, guided mission for local government across the country.
But for a country of this size – with a population base roughly equivalent to a mid-sized international city – is it right for regional and local authorities to have such an extensive remit, or is the government’s 'winding back' of council’s responsibilities something that should be pursued on a less ad-hoc basis?
Certainly local councils are not nearly as popular with Kiwi business as the current government - according to MYOB Business Monitor research, many local councils struggle to earn more than 10% approval from their business community – just over half that of the National-led government.
At issue for many businesses is the failure of councils to address – or even appreciate – the realities of business. Long delays in resource consents and petty bureaucratic battles over regulation drive business owners mad – and often out of business altogether.
So is it possible that we would be better off with the councils sticking to rubbish, roads and rate collection, and paying more attention to fast-tracking resource consents, while the government assumes more control over the things with a greater influence on society and the economy. In effect, should our councils stay out of business?
Julian Smith (@JulianTSmith) is the general manager for MYOB in New Zealand. A frequent keynote speaker and business commentator, he blogs on key issues and trends, providing advice on how to make business life easier.
