In a big backdown, the Government is to rewrite its controversial local government amendment legislation.

The Bill would have allowed the Local Government Commission to impose so-called Council Controlled Organisations (CCOs) on local bodies.

The CCOs would be able to span several local bodies and cover things such as water or transport.

They would, in effect,  be mergers.

Local body after local body has told the Select  Committee considering the Bill that they opposed it.

At one point a whole delegation of Mayors attended a Select Committee meeting and sat silently in the room in testament to their opposition.

But the legislation has had support from some powerful Government allies such as Federated Farmers, the Chambers of Commerce and companies like Foodstuffs and Fulton Hogan.

However, there has been a more measured response from one of the most influential lobby groups, the New Zealand Council for Infrastructure Development who, like many of the local body opponents, oppose the Local Government Commission being able to impose CCOs on Councils.

“While such an approach would address a key barrier to the use of CCOs in particular, we consider this measure to be inconsistent with democratic local decision making and an infringement upon the authority and integrity of local government.<” they say in their submission.

“We do not support the empowerment of the Local Government Commission to overrule elected local authorities.


“We consider options for shared services, CCOs and wider council restructuring must remain decisions for elected governing bodies – either central or local.

“When considering proposals for shared services and CCOs, councils should, in our view, have the option of either a local referendum or a vote across the governing body.”

It is surprising that a Bill which has attracted such widespread opposition, much of it from traditional National Party allies, would get through Cabinet and into the legislative system.

In that regard, it resembles the  Health and Safty legislation last year which also underwent a rewrite while it was in the Select Committee after opposition from within the National Party.

The Minister in Charge of the Bill, Sam Lotu Iiga announcing on Friday  that the Bill would now not have to emerge from the Select Committee until March next year put a glossy spin on the decision by saying that it was needed because  within the 200 submissions received by the Committee “many contain details which need to be worked through with officials to ensure they will work.”

Whilst many do contain comment on details within the Bill, almost have at their heart their opposition to the CCO proposals.

The Minister appeared to acknowledge this.

“I acknowledge some of the concerns raised by local government.,” he said.

“Solutions need to be found that promote local democracy, while ensuring better quality services and better value for ratepayers,”

He says the delayed report back will allow for further policy consideration and drafting changes to the Bill.

“I am committed to legislation that enables high quality, resilient and affordable infrastructure.

“We need regulations and services that benefit residents and communities.”

“The reforms will enable councils to more easily share resources and expertise to address current and emerging challenges.”

“I will be working with my colleagues and the sector over coming months to address concerns while still achieving the objectives of the reforms.”