Success is a system where local government is a genuine partner in national development. Resourced, empowered and expected to lead, writes Nick Leggett, the Chief Executive of Infrastructure NZ.
We are often described as one of the most centralised countries in the world. That reflects a simple reality: councils exist at Parliament’s discretion and can be reshaped or removed by a simple majority. That makes the Government’s current direction on local government reform worth supporting.
Simplifying structures, enabling consolidation, and creating stronger regional decision-making is both sensible and urgent. We need more infrastructure and stronger growth, but with limited public finances, we also need smarter ways to deliver and invest. Done well, this reform could show us how to work smarter, not harder.
As someone who has been a mayor, I understand the frustration of fragmented regional decision-making and the sense that communities are not reaching their potential because councils are constrained by size, functions and revenue. That’s not fair. Small communities calling for autonomy should also consider what they lack under the status quo, not just what they might lose if things change.
Doesn’t a community know best how it wishes to grow, and what it’s prepared to pay? If we accept that, structural reform alone will not be enough. It has to involve a genuine rebalancing between central and local government. Otherwise, we risk rearranging the furniture while leaving the underlying imbalance untouched.
Our economic performance is increasingly shaped by place. In healthcare, this is often described as a postcode lottery, where access to services depends on where you live. In regional development it shows up as uneven growth, concentrated infrastructure gaps, and very different levels of local capacity to respond across the country.
Yet, decision-making power and, critically, funding remains heavily concentrated in Wellington. The result is slower delivery, weaker accountability, and one-size-fits-all solutions that do not reflect local realities.
If local communities often know better, does the current division of powers and taxes sit in the right place?
There is no argument for abandoning national standards or oversight. But there is a strong case for trusting local institutions with greater responsibility. International experience supports this. Countries like Australia, Canada, the United States, Sweden, Norway, Denmark and the United Kingdom all operate with stronger layers of regional or local government. Those systems provide clearer mandates, broader fiscal tools, and greater ability for regions and cities to shape their own economic futures.
We stand apart for how concentrated power remains at the centre, despite persistent challenges around productivity, infrastructure delivery and regional growth.
The Government’s proposed resource management reforms, particularly regional spatial plans, are an important step forward. They create more integrated long-term planning around land use, infrastructure and growth. But their success will depend on whether local government is genuinely empowered to act on those plans, rather than simply participate in producing them.
City and regional deals provide a practical pathway forward. They create opportunities for central and local government to partner on outcomes, test new funding approaches, and devolve decision-making in a controlled and accountable way. Done well, they can become a proving ground for a more mature system where responsibility and power are shared, not hoarded.
The issue is not weaker councils needing more support, but underpowered local government more generally. Properly-funded councils make better decisions and deliver better outcomes. If a city or region wants infrastructure, it should have both the authority and the means to help lead and deliver it.
Our country has examples of this approach in its own history. The Auckland Harbour Bridge was initially considered too expensive by central government, yet local initiative and financing helped drive the project forward. The result was transformative infrastructure that reshaped the city and demonstrated what local ambition can achieve when matched with the ability to act.
That spirit has faded over time. Local government today often feels constrained and cautious. The reforms to water infrastructure may have been necessary, but they also reinforced the sense that councils are losing responsibility without gaining new capability in other areas. Both central and local government need to lift their performance.
The challenge now is to recover that local can-do spirit within a modern framework. Supporting the Government’s reform agenda is the right starting point. But success should not simply be measured by fewer councils or tidier boundaries. Success is a system where local government is a genuine partner in national development. Resourced, empowered and expected to lead.
If we want more balanced growth, stronger regional economies, and better infrastructure outcomes, we need to trust the citizens closest to the problem.