Can the government intervene to take control of Wellington City Council? : what you need to know

Photo: Supplied / Wellington City Council

Explanation – The issue of central government intervention in Wellington City Council governance or council decisions has been raised this week, but what is allowed under New Zealand law and where are we ?

Dr Dean Knight, a law professor at Victoria University, told RNZ there was no indication the government could justify intervention in the governance of Wellington City Council, and any attempt to do so could create a dangerous precedent for democracy.

He described the council as operating under normal circumstances and blamed the calls on political grandstanding.

What has happened so far?

Local Government Minister Simeon Brown said on Tuesday that possible interventions were being considered, including looking at the thresholds at which intervention was permitted.

Prime Minister Christopher Luxon said the government was closely monitoring the advice and that Brown would make more announcements soon, while Finance Minister Nicola Willis earlier said the advice was a “disaster”.

(archive photo)
Photo: LDR / Max Fréthey

Brown’s announcement comes after the council voted against continuing with plans to sell its shares in Wellington Airport to fund a more diversified investment fund created to act as “self-insurance” for infrastructure.

But Knight told RNZ that under the laws governing such interventions, the council had not reached the point where an intervention could be made.

If the government intervened now, it would set a new precedent, and local authorities across the country should be concerned about similar intervention, he said.

Last month, Wellington City Councilor Diane Calvert called for intervention within council, but such calls for intervention were a normal political maneuver, Knight said.

“These calls for intervention are part of local politics – it’s convenient for some of these councilors to lament about what’s happening and say it’s all gone to hell in a handbasket. But the reality is that what happened is not out of character, and not to the degree… that warrants ministerial intervention.

“I think people who are calling for intervention in Wellington need to take a deep breath, nothing that’s happening there, in my opinion, rises to a level of dysfunction or failure of government or anything of this kind which justifies significant ministerial intervention.

“And that’s because it’s not a major issue when someone simply has a different view on an ideological policy issue, whether to retain a particular asset or (release) assets for different types of investments… it’s the daily life of local people.”

What interventions are possible and in what circumstances?

The Local Government Act gives the minister a range of intervention powers, Knight said.

These powers could be invoked: “if a local authority is faced with a problem – and even more so with a significant problem – in their governance.

There is a hierarchy of various tools that can be used, he said, ranging from:

• Request information
• Sending a review team
• Appoint a corona observer (which is more like a corona facilitator).

Until finally:

• Appoint commissioners – effectively fire elected members
• Call another local election.

“The fact is that each of them has a different threshold for ministerial action,” Knight said.

The types of issues that might warrant intervention in the operation of an elected local council might be a situation “impacting their ability to do their job”, a failing council, or even a situation where they “fail to recognize the problems they have.

“It’s a high threshold – it’s a high threshold for intervention, and the thresholds are higher for higher degrees of intervention,” Knight said.

The minister is required to determine what level of intervention corresponds to the circumstances. But they are not obliged to progress in the list from less important interventions: they can adapt the level of intervention to the situation.

In August, some Wellington city councilors walked out of a meeting and refused to vote on a controversial roadworks project.
Photo: Supplied / Wellington City Council

Has this already happened?

Yes. But there has been very little use of the law to intervene in local government governance, and there appear to have been important reasons that were considered before action was taken.

Three councils were previously placed under the direction of a commissioner:

• Commissioners have been appointed to take over the governance of Tauranga City Council, in 2021, after a review revealed significant problems and a public breakdown in relations between councilors (a new council was elected in July of This year).

• The Kaipara District Council was sacked in 2012 after illegal borrowing led to a massive budget blowout.
• Environment Canterbury councilors were replaced by commissioners in 2010 after a long period of poor performance.

Has Wellington City Council reached a level where intervention could be considered?

“I don’t think we have any significant level of problems,” Knight said.

Any issues or disagreements the council faces would have to rise to a much higher level “before central government steps in and undermines local democracy through ministerial intervention”.

This would have serious implications for the established democratic system, he said.

“Because making a ministerial intervention will go against the usual processes of local democracy which see local elected officials held accountable to their taxpayers and the citizens of their district in triennial elections.

“There are many cases where local authorities across the country change their minds on difficult ideological issues in their long-term plan, and also situations where debates, discussions and deliberations on issues important to their district become a little exciting.

“It’s part of the game… as we see in central government.

“If the minister intervened in this type of scenario, then I think there would be local authorities across the country who would be or should be very concerned about similar intervention.”