Public Finance Planning in New Zealand Local Government

Manu Caddiewww.manu.org.nz

1. Introductions2. PB in NZ3. Local Government Structure 4. Legislative Environment 5. Planning & Reporting Cycles6. Trends in Public Participation7. 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 of100. New Zealand’s score indicates that the governmentprovides the public with extensive information on the nationalgovernment’s budget and financial activities during the course of thebudget year. This makes it possible for citizens to hold the governmentaccountable 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 GovernmentMain 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 CouncilsMain functions: environmental management (air, water, soil), land transport planning, public transport, air/ports, regional policy/planning

13 City, 54 District CouncilsMain 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 CouncilsCombined responsibilities of Regional & District

3. Local Government Structure

Denmark

Norway

Finland

Australia

New Zealand

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Local GovernmentCentral Government

International Comparison of Public Expenditure

3. Local Government Structure

3%

27%

9%

5%7%5%

9%

18%

17%

Average Council Spend

Property & Commerical AssetsRoading & TransportWastewaterEnvironmental ProtectionDrinking WaterSolid WasteRegulation & PlanningCulture & RecreationGovernance

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

MAY

:

Staff

Ana

lysis

& P

ublic

Hea

ring

sJUNE:

Plan Revised &

Approved

AUG-JUN:

Quarterly Variance Reporting

JULY:Annual

Report

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