Last week’s announcement by Ministers Simon Watts and Chris Bishop continues this approach. Councils will have three months to submit proposals to merge themselves or risk a government-led process that could impose mergers on them. The choice is framed as ‘flexibility’ but it is really Hobson’s choice – accept amalgamation or be forced into it. Either pathway would produce fewer, larger councils.
The premise is that 78 councils are too many for a country of our size. International evidence does not clearly support this. Switzerland has 2,100 communes with a population of 8.7 million. Denmark, after its 2007 consolidation programme, retained 98 municipalities for a population of 5.7 million. New Zealand is the fourth-most consolidated country in the OECD, with one council per 74,000 residents, compared with Switzerland's one per 4,000.
The government's own Infrastructure Commission examined the efficiency case for amalgamation in 2022. Its report, Does Size Matter?, found no simple relationship between council size and cost efficiency. Instead, it suggested the right size depends on function, geography, and delivery model.
Auckland provides a cautionary tale. The Super City was formed in 2010 out of a regional council, four city councils, and three district councils. Post-amalgamation savings evaporated within a few years and Auckland’s operating expenditure per capita soon returned to around the national average. Its 2025 voter turnout was a dismal 29 percent, indicating widespread disengagement.
The New South Wales state government attempted a similar reform exercise in 2016-17, proposing to force 152 councils into 112. Strong local opposition led to political and judicial decisions reversing several of the forced mergers.
I am currently preparing a report for the Initiative outlining an alternative – that more local democracy works better than less, with more and smaller councils (or at least beefed-up local boards within merged councils). These should be aligned with communities of interest, making decisions and undertaking functions best placed at a local level. If regional councils are abolished, locals should be able to establish elected bodies dedicated to specific purposes, like we had prior to 1989.
A localist approach must come with stronger accountability, including real authority for elected members over their bureaucracies. This would help distinguish genuine local democracy from what years of consolidation and bureaucratic sprawl have produced.
New Zealand’s local government problems are real, but fewer, larger councils are not the answer.
Nick is a Senior Fellow at The New Zealand Initiative, focusing on local government, resource management, and economic policy. This article was first published HERE
The government's own Infrastructure Commission examined the efficiency case for amalgamation in 2022. Its report, Does Size Matter?, found no simple relationship between council size and cost efficiency. Instead, it suggested the right size depends on function, geography, and delivery model.
Auckland provides a cautionary tale. The Super City was formed in 2010 out of a regional council, four city councils, and three district councils. Post-amalgamation savings evaporated within a few years and Auckland’s operating expenditure per capita soon returned to around the national average. Its 2025 voter turnout was a dismal 29 percent, indicating widespread disengagement.
The New South Wales state government attempted a similar reform exercise in 2016-17, proposing to force 152 councils into 112. Strong local opposition led to political and judicial decisions reversing several of the forced mergers.
I am currently preparing a report for the Initiative outlining an alternative – that more local democracy works better than less, with more and smaller councils (or at least beefed-up local boards within merged councils). These should be aligned with communities of interest, making decisions and undertaking functions best placed at a local level. If regional councils are abolished, locals should be able to establish elected bodies dedicated to specific purposes, like we had prior to 1989.
A localist approach must come with stronger accountability, including real authority for elected members over their bureaucracies. This would help distinguish genuine local democracy from what years of consolidation and bureaucratic sprawl have produced.
New Zealand’s local government problems are real, but fewer, larger councils are not the answer.
Nick is a Senior Fellow at The New Zealand Initiative, focusing on local government, resource management, and economic policy. This article was first published HERE
6 comments:
There is something rather distasteful about our government demanding others stick to basics and get their spending under control. Perhaps they should check their own actions of broken promises and over spending first.
Actually Nick, fewer councils are exactly what you need if you want to eliminate the ‘local voice’. Much less trouble for the massive bureaucracies that will grow like toxic mushrooms. Oh, also, massive rates increases as a special bonus. Obesity isn’t just a personal issue these days. Institutions are exceptionally prone.
to Anon at 12.33:
If fewer councils means no unelected people installed on council committees and wielding a power of absolute veto with no accountability, then it sounds like a return to democracy. Maybe that's the government plan.
I agree Nick. There are plenty of local government models across the world which we would do well to study.
Also, as you noted the one major model of broad amalgamation Auckland, is surely reason to question the bigger is better model.
The one, perhaps valid issue, at least in past years, is that very small councils cannot reasonably afford the staffing expertise to properly plan major projects, nor to supervise major works let out to outside contractors.
But surely in these modern times of greatly expanded means of communication, it should be possible to construct some centers of excellence, perhaps regionally which even the smallest of councils could tap into?
Local govt. works best. Both Petone and Eastbourne had well established councils filling pot-holes, clearing drains and doing those dozens of local jobs needing quick and constant attention. Eastbourne had its own public transport contributing to rates and keeping them down. Amalgamation was forced upon us and we were swallowed up by the Hutt City in spite of a public referendum against it. Today we suffer long established pot-holes, drains often neglected and blocked and ever rising rates. Local govt.is democratic but amalgamation is inefficient with too much power in the hands of too few people.
To Anon, the last National government embedded unelected Maori influence (which quickly became control) into its imposed Super Auckland. It'd pay never to assume a government will do the right thing by the citizens.
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