Government to force councils back to basics - with a scorecard

The Government has agreed to reforms that refocus local councils on delivering essential services and core infrastructure, spending responsibly, and operating under greater scrutiny, Local Government Minister Simeon Brown says.

“Homeowners face the fastest rates rise in more than twenty years. Rates are out of control and the Government is taking action for councils do the basics brilliantly, rather than pursuing expensive extras that burden ratepayers,” Mr Brown says.

“Earlier this year, the Prime Minister and I set clear expectations: focus on what must be done, not on nice-to-haves. Today’s announcement delivers on that plan.”

The local government reform programme will:

Remove references to the ‘four well-beings’ from the Local Government Act 2002, restoring a purpose focused on fixing pipes, filling potholes, and delivering core local services.
Refocus local government on basics, guiding council decision-making and avoiding duplication of roles with central Government.
Benchmark council performance. The Department of Internal Affairs (DIA) will publish a yearly report on key financial and delivery outcomes, helping ratepayers hold councils accountable.
Modernise outdated rules, including removing requirements for newspaper notices, to drive efficiency and cost savings.

“The first benchmarking report on local councils will be released in the middle of 2025 and is expected to include a number of key council performance metrics:

Rates – so that ratepayers know the amount of rates levied per unit, the change in rates since the previous year, and the forecast change in rates over the next 10 years.
Council debt – including debt per rating unit, percentage change in council debt since the previous year, and forecast change over the next 10 years.
Capital expenditure – including a breakdown by activity class such as roading and water services.
Balanced budget – to show whether a council is balancing its budget or borrowing to support expenditure
Road condition – so that ratepayers can compare the state of their local roads with councils across the country.

“This report will be released ahead of the next local council election to give ratepayers and residents clear information about their council’s performance prior to going to the polls in October 2025. Legislation will be amended to allow future benchmarking reports to include comparison of contractors and consultant expenditure alongside other key metrics.

“Evidence shows that including the four well-beings in the Act led to about two per cent higher rates growth each year. Removing them sends a clear message that councils must focus on roads, rubbish, and reliable infrastructure.

“There is no room for wasteful spending. Communities deserve value for money, not grand projects that fail to meet expectations.

“Local Water Done Well already provides a foundation for councils to invest affordably in water services. By encouraging greater investment and efficiency, communities can enjoy reliable water services without unsustainable rate hikes.”

Cabinet will consider additional measures next year, which will be included in legislation introduced mid-2025 and passed by the end of 2025. These will consider investigating rates pegging similar to NSW, reform of codes of, reviewing audit requirements, and the establishment of a written question system to give councillors more access to information.

“Putting local government on a more efficient, affordable path is a priority. Councils must also scrutinise every dollar they spend as they prepare their next annual plan.

“These decisions give councils a clear signal of Government’s direction. I look forward to introducing these reforms to Parliament next year.”

The Government will amend section 10(b) of the Local Government Act 2002 so that the new purpose of local government is: “to meet the current and future needs of communities for good-quality local infrastructure, public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses, therefore supporting local economic growth and development.”