Public Finance Planning in New Zealand Local Government

Manu Caddie www.manu.org.nz

1. Introductions 2. PB in NZ 3. Local Government Structure 4. Legislative Environment 5. Planning & Reporting Cycles 6. Trends in Public Participation 7. Opportunities for Improvement

Public Finance Planning in New Zealand Local

Government  

1. Introductions

1. Introductions

2. PB in NZ “New Zealand tops the Open Budget Index with a score of 93 out of 100. New Zealand’s score indicates that the government provides the public with extensive information on the national government’s budget and financial activities during the course of the budget year. This makes it possible for citizens to hold the government accountable for its management of the public’s money.”

2. PB in NZ “Research and advocacy experience of civil society has demonstrated that transparency by itself is insufficient for improving governance. Transparency along with opportunities for public participation in budgeting can maximize the positive outcomes associated with open budgeting… The International Budget Partnership recommends that New Zealand expand public engagement in budgeting after considering the Open Budget Survey indicators on which the country performs poorly…”

2. PB in NZ

Historical -  1980s & 90s: Christchurch City Council public services reform:

‘participation for modernisation‘ -  1993 won ‘best run city’ Carl Bertelsmann prize for citizen-friendly

modernisation (including privatisation and participatory budgeting) -  subsequently influenced Germany’s adoption of PB -  focus on neighbourhood level funds and local boards and at city/

district level more on community outcomes and major projects with proposed budget and opportunities for public input via submissions and hearings before Council makes final decisions

-  contributed to Local Government Act 2002

2. PB in NZ

Recent -  Giovanni Allegretti Tour (Nov 2012):

-  Green Party leadership & public meeting -  Wellington City Council, Wellington Regional Council &

Auckland Council (2 million) -  National Radio

-  participatory budgeting & decision-making software development

NZ Central Government Main functions: law & order, defence, foreign affairs, health, education, social

security, public housing, national economic development, state highways, conservation estate, etc.

3. Local Government Structure

11 Regional Councils Main functions: environmental management (air, water, soil), land transport planning, public transport, air/ports, regional policy/planning

13 City, 54 District Councils Main functions: utilities, local roads, parks & reserves, recreation & cultural facilities, local economic & community development, community strategic planning and land use planning.

+ local community boards 5 Unitary Councils Combined responsibilities of Regional & District

3. Local Government Structure

0%   20%   40%   60%   80%   100%  

Denmark  

Norway  

Finland  

Australia  

New  Zealand  

Local  Government  

Central  Government  

International Comparison of Public Expenditure

3. Local Government Structure

3%  

27%  

9%  

5%  7%  5%  

9%  

18%  

17%  

Average  Council  Spend  

Property  &  Commerical  Assets  

Roading  &  Transport  

Wastewater  

Environmental  ProtecNon  

Drinking  Water  

Solid  Waste  

RegulaNon  &  Planning  

Culture  &  RecreaNon  

Governance  

4. Legislative Environment

“Balancing the budget is like going to heaven. Everyone wants to do it, but nobody wants to do what you have to do to get there.” - Phil Gramm, US Senator

-  Local Electoral Act 2001 -  Local Government Ammendment Act 2012 -  Local Government (Rating) Act 2002 -  Resource Management Act 1991 -  Local Government Official Information Act 1987

5. Planning & Reporting Cycle

5. Planning & Reporting Cycle (contd.)

OCTOBER:

Pre-Consultation + Expense & Income

Estimates

MARCH:

Draft AP/LTP Approved & Published

APRIL:

Submission Period & Public Meetings

JUNE:

Plan Revised & Approved

AUG-JUN:

Quarterly Variance Reporting

6. Trends in Public Participation

-  philosophy of governance: representative vs. participatory

-  traditionally older, whiter, wealthier citizens

-  limited staff resources committed to effective engagement

-  slow shift to online engagement

-  slow shift away from formal public meetings to informal neighbourhood public place events

7. Opportunities for Improvement

1.  Councils should: •  formalise commitment to

citizen empowerment through goal setting and reporting requirements on public participation (Māori only at present)

•  establish a matching fund and/or allocate a proportion of the total budget to particular geographic/interest groups

2.  Central government support for PB in local government

3.  NGO support for PB in LG