Victor Luca

Since I first entered local government in 2019, both Labour- and National-led Governments have shown an obsession with reforms of local government.

Failure of local government and declining voter turnout were often cited as reasons for the need to reform.

The current lot call their reform, “Simplifying Local Government”. It is interesting that they have used the word “simplifying” as opposed to “amalgamation”. Politics at work I suppose.

I am neither for nor against the proposed Government reforms of local government until such time as definitive proof can be provided that changing the status quo and opting for the unknown, the untested, gets “better” results for rate payers.

But what do we mean by better and how do we measure it?

Better could mean improved economic efficiency, cost savings relative to the status quo, improved service delivery and democratic outcomes.

If Government could put solid evidence on the table that bigger really is better, then I would feel compelled to yield to that view. If that proof exists, then in my six years in local government, I was never shown it.

The mayor of Tauranga City has been right behind the amalgamation agenda, and indeed was actively advocating for it after only having been in the job for less than a year.

He clearly couldn’t care less about evidence.

If Government’s real intention is to reduce the number of local government entities (district and regional councils) to satiate some kind of ideological urge or dogma then that is not good governance. Decisions need to be evidence-based.

Local government is not like building cars where scale certainly does matter.

Local government is not dealing with the manufacture of things, it is dealing with people and is responsible for delivering an extremely diverse array of services (eg, water, transport and solid waste) and especially the associate basic infrastructure.

In 2022, the Infrastructure Commission released a report, Does size matter? The impact of local government structure on cost efficiency, Te Waihanga Research Insights series, July 2022.

In this excellent report no strong arguments were presented for reducing the number of local government entities, quite the opposite.

Government needs to take the message in this report on-board not sweep it aside or ignore it because it is inconvenient. I urge readers to peruse this very readable report that is available on the internet.

Nick Clark, a senior fellow at the conservative Think Tank, The New Zealand Initiative, and with whom I have interacted on many occasions, states “Centralisation has been New Zealand’s answer to local government’s problems for decades. It has not worked”.

Clark is a pretty sensible guy.

Just as there are economies of scale, so too can there be dis-economies of scale. That is, as things get bigger, efficiency diminishes.

There seems to be no argument for amalgamations except perhaps in exceptional cases.

On May 16 of 2025, as the mayor, I authored an opinion piece in the Beacon, Crisis – what crisis?.

In it I included a table of the number of New Zealand local government entities over time and showed that the infrastructure deficit started blowing out in the years that the number of local government entities was dramatically reduced from 454 to 86.

That is, between 1980 and 1990, the time of the neoliberal economic reforms.

In the mid- to late 1980s New Zealand embraced neoliberal economics, which has become mainstream, and which we in New Zealand have stuck to doggedly, despite the fact that it is patently obvious that this form of economic thinking has failed abysmally. That is according to many top-notch economists.

Infrastructure is a key responsibility for local government and the fact that the infrastructure deficit widened dramatically when the number of local government entities was cut doesn’t argue in favour of amalgamations, it argues the opposite.

One can compare the number of local government entities per million of population for developed nations that might be considered models for New Zealand which has 15.3 local government entities per million of population.

For comparison Switzerland has 231, Finland has 54.5, Sweden has 29.3, Australia has 19.7 and Denmark has 16.3.

New Zealand has the lowest number local government entities per million of population than any of those countries and substantially fewer than most of them.

In 2025, I scoured the international academic literature on the subject of whether larger local government entities are better than small ones and can’t find a single study that convincingly proves that bigger is better.

My literature study has tended to point in the opposite direction. At best one study suggested a sweet spot at a population of between 20,000 and 50,000 people per local government entity.

A major danger of large government entities, such as for example a BOP unitary council, is the manner in which the large population centres, like Tauranga, dominate smaller less prosperous areas like Whakatāne, Ōpōtiki and Kawerau.

I have seen at first hand this sort of domination play out such as during the development of the Regional Land Transport Plan.

The big guys get everything and the rest of us get screwed. Anyone wanting a local voice should not be in favour of amalgamations.

If bigger is better, then logically it might follow that a single local government entity for all of New Zealand would be the ultimate.

Of course, this is a Reductio ad absurdum argument, although central government might like the idea.

The reason we divide things up into smaller units is to improve manageability and give more local expression.

If Government has proof that bigger is better, then it should put that proof on the table.

So far, the minister of local government has done no such thing. What my research suggests is that government thinking is flawed.

The minister of local government should focus on finding more money to help shrink the infrastructure deficit, and force current local government entities to be less wasteful and more efficient.

He is clearly not interested in evidence.

Readers interested in the academic studies I have found are welcome to get in touch, or consult my website. https://www.votevictorluca.com/blog