This document discusses public finance planning in New Zealand local government. It provides an overview of the local government structure, the legislative environment governing public finance, and the planning and reporting cycles used. It also examines trends in public participation, noting it has traditionally involved older, wealthier residents. The document argues opportunities exist to improve public participation, such as by formalizing local government commitments to empowering citizens and establishing funds to allocate portions of budgets to specific community groups.

1. Public Finance Planning in
New Zealand Local
Government
Manu Caddie
www.manu.org.nz

2. 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

3. 1. Introductions

4. 1. Introductions

5. 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.”

6. 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…”

7. 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

8. 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

9. 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 boards5 Unitary Councils
Combined responsibilities of Regional &
District

10. 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

11. 3. Local Government Structure
3%
27%
9%
5%
7%5%
9%
18%
17%
Average Council Spend
Property & Commerical Assets
Roading & Transport
Wastewater
Environmental Protection
Drinking Water
Solid Waste
Regulation & Planning
Culture & Recreation
Governance

12. 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

13. 5. Planning & Reporting Cycle

14. 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

15. 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

16. 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