Have we Been Breaking Local Government by Trying to Fix it?

The Post

Local government is hard to defend. Rates are rising at more than three times inflation. Debt has doubled in less than a decade. Consents drag on while housing remains unaffordable.

Each generation of politicians has reached for the same fix for local government’s problems: bigger councils, fewer of them, and more decisions made in Wellington. The 1989 reorganisation cut local bodies from around 850 to 86. The 2010 Auckland reform put nearly 1.5 million people under a single council and twenty councillors.

Last week, the Government announced the next round. Councils have three months to come up with proposals to merge themselves out of existence. Those that do not will have mergers chosen for them. The Ministers for Resource Management Reform and Local Government, Chris Bishop and Simon Watts, present this as flexibility and efficiency.

But what if we have got this all wrong?

Auckland has the largest local authority in Oceania. Its council now governs nearly two million people through one mayor and twenty councillors. Zurich governs a similar number through more than 160 separate municipalities. Many remain small enough that residents can still vote on the budget at an annual town meeting.

The Swiss outperform us on almost every measure of civic, economic and infrastructural performance. They do not do this despite their fragmented local government. They do it because of it.

The Swiss understand something we have largely forgotten: local government is not a delivery mechanism for central government policy. It is the level of government closest to the decisions people live with, closer to the knowledge needed to make those decisions well, closer to the consequences, and closer to the people who must consent to them.

In a liberal democracy, that proximity – of power to knowledge, and of decisions to the people who live with them – is part of how freedom and self-government should work.

Some will object that our councils are irretrievably broken. But central government is hardly a model of competence either, and there are few signs that its successive interventions in local government have worked. Fifteen years after the formation of the so-called “Super city,” Auckland’s per capita spending remain at the national average. The promised efficiencies did not arrive.

A decade of research from the New Zealand Initiative has shown that local government has been set up by central government to fail. Councils are given responsibilities without the funding to deliver on them. Their elected members have authority on paper but, once elected, quickly discover that operational power rests with unelected officials.

The fix is not to abolish councils. It is to give them the funding, authority, incentives and democratic discipline that would let them do the job properly.

But there is another, deeper reason we should care about local government. When decisions move from local communities to regions and then to Wellington, voters lose the connection between civic participation and outcomes. An inevitable result is a weakening of faith in the democratic process.

The bill for that disconnection is now coming due. Fewer than three in ten Aucklanders bothered voting in the local elections last October. National turnout, at 40 per cent, was the lowest on record. This is what happens when the layer of government people most directly experience stops feeling like their own. The same disconnection appears at national scale: New Zealand ranks 25th of 28 countries on the Acumen Edelman Trust Barometer, level with Colombia.

Three Waters is a recent reminder of how local democracy can work. A coalition of thirty-two mayors, representing more than 1.5 million New Zealanders, organised against the previous government’s plan to take water out of local hands – and won. Last week’s announcement would weaken precisely what made that resistance possible: independent local mandates, and standing to disagree with the centre.

Forced amalgamation moves us further from the kind of local democracy worth defending. The fact that all of this sits inside an otherwise welcome RMA reform programme makes it harder to see, but no less serious.

Genuine localism would push power and revenue down to authorities small enough that residents recognise them and follow what they do. It would condition further centralisation on demonstrated need rather than on Wellington convenience. And it would treat local democracy as a thing worth strengthening for its own sake.

But the funding mechanics matter less than what they are for. Council chambers and the institutions that sit alongside them are not just service providers. They are where local communities learn to govern themselves, and where liberal democracy quietly renews itself.

The reform itself is not yet legislated. Cabinet will decide later this year which proposals to progress, and a Bill will be introduced in 2027. Between now and then, councils, voters, and Parliament still have the chance to ask the harder question: not how to consolidate, but whether to.

This column was first published in The Post on 15 May 2026.