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FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 0022
INFO ASEAN REGIONAL FORUM COLLECTIVE
RUEHAP/AMEMBASSY APIA 0005
RUEHBY/AMEMBASSY CANBERRA 0009
RUEHDN/AMCONSUL SYDNEY 0011
RUEHNZ/AMCONSUL AUCKLAND 0008
RUEHWL/AMEMBASSY WELLINGTON

UNCLAS SECTION 01 OF 03 WELLINGTON 000181 
 
SIPDIS 
SENSITIVE 
STATE FOR EAP/ANP 
PACOM FOR J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM NZ
SUBJECT: FIXING THE BIG CITY 
 
WELLINGTON 00000181  001.2 OF 003 
 
 
¶1.  (SBU) The Auckland region, New Zealand's commercial center and 
home to a third of the country's population, is governed by a 
patchwork of institutions - four city councils and mayors, two 
district councils and an overarching regional council.  These 
overlapping and competing authorities slow decision-making and hobble 
the city's development at taxpayers' expense. 
 
¶2.  (SBU) In 2007, the previous Labour government tasked the city's 
leaders to come up with a new governance plan.  Their proposed 
changes were mostly cosmetic and designed to protect existing 
political fiefs.  Unimpressed with the product but not wanting to 
deal with the issue during an election campaign, the Labour 
government punted the job to a Royal Commission of three eminences 
grises, with a mandate to come up with a new plan after the November 
2008 national elections. 
 
¶3.  (SBU) After extensive consultations, the Royal Commission issued 
its report in March.  It called for the establishment of a single 
city council with a popularly elected mayor and some council seats 
set aside for Maori.  Existing city and district councils would be 
replaced by six local councils covering the same localities as the 
current city and district councils.  They would be subordinate to the 
new greater Auckland council but still authorized to raise and spend 
money independently. 
 
¶4.  (SBU) Within weeks, the National-led government in Wellington, 
via Local Government Minister Rodney Hide, leader of the small ACT 
Party, set aside much of the Royal Commission's plan and put forward 
a more radical proposal.  Hide proposed a single city council - 
without Maori seats - and a popularly elected mayor.  The six 
proposed local council were eliminated, to be replaced instead with 
20-30 community boards that would have very minor responsibilities 
(graffiti and pet control) and would otherwise be limited to an 
advisory role.  The new governance structure is to be in place by 
October 2010. 
 
OXEN GET GORED 
-------------- 
 
¶5.  (SBU) Initial reaction was predictable.  Current Auckland City 
Mayor John Banks, a minister in an earlier National government and 
frontrunner (to the extent there is one) for mayor of the new 
"supercity," praised the government's plan.  The mayors and council 
members from the other current city and district councils, who will 
be out of their jobs if the plan is implemented, spluttered in 
outrage.  The New Zealand Herald's op-ed pages have been filled with 
columns penned by various mayors, deputy mayors, and city councilors 
decrying Wellington's attack on local democracy.  The decision has 
also upset community activists concerned their neighborhood interests 
and pet projects will be overlooked by a top-heavy city government. 
 
¶6.  (SBU) The Maori community condemned the government's elimination 
of Maori seats, but Maori Party co-leader Pita Sharples' response was 
nuanced.  He objected to the elimination of the Maori seats, but took 
pains to add that the disagreement would not affect the Maori Party's 
confidence and supply agreement with National.  The protests from 
local Maori tribes were more pointed and a protest march (hikoi) was 
called for late May.  The 6,000-strong hikoi managed to close down a 
few blocks of downtown Auckland on May 25 but PM Key dismissed it. 
 
A STUMBLE, BUT A SMALL ONE 
-------------------------- 
 
¶7.  (SBU) The government seems taken aback by reaction to the 
supercity plan, but it is not clear how seriously the government has 
stumbled.  The government has dropped hints that, when the enabling 
legislation moves through parliament, there may be room for tweaking, 
including a way to guarantee Maori representation on the new council. 
 While the opposition Labour Party has been trying to make political 
hay out of the issue, strong opposition remains limited to Maori and 
community activists.  Media interest in the issue is fading.  One 
Auckland MP confirmed a view held by many: the average Aucklander 
cares little about the governance debate so long as the outcome 
delivers better traffic and lower taxes.  A recent public opinion 
poll showed Aucklanders were evenly split on the supercity concept, 
but feelings among the general public on the issue do not seem 
particularly strong.  Outside Auckland, the debate attracts barely 
any interest at all. 
 
¶8.  (SBU) One analyst suggested that the Maori Party's protest was 
muted because Sharples has bigger fish to fry.  This observer 
suggested that Sharples is hoarding his political capital to expend 
 
WELLINGTON 00000181  002.2 OF 003 
 
 
on social and welfare issues more important to the Maori community. 
By largely giving National a pass regarding Maori seats in Auckland, 
he has earned points with PM Key that he can spend later. 
 
BAD POLITICS? 
------------- 
 
¶9.  (SBU) Some observers suggest that National has made bad decisions 
both for itself and for the people of Auckland.  One local government 
expert from one of Auckland's big law firms noted that National's 
rejection of the Royal Commission proposal meant that National had 
taken ownership of Auckland governance issue.  Given that few 
analysts expect any form of local government reform to have much 
impact on Aucklanders' tax bills and traffic woes, that may have been 
a mistake.  Had National simply implemented the Labour-appointed 
Royal Commission plan, it could have dealt with Aucklanders' 
inevitable disappointment by shifting the blame to Labour and the 
Commission.  At least one Auckland politician agreed, arguing that 
while there were no votes to be won in redesigning Auckland's 
government, there were at least a few votes to be lost. 
 
¶10.  (SBU) Auckland University Professor Ray Miller sounded a similar 
theme, warning that National was identifying itself with a policy 
drawn up by Hide.  Hide's party drew only 3.7% of the vote in last 
year's election and, argued Miller, Hide is not very popular with the 
New Zealand electorate and is not trusted by his National 
counterparts in cabinet.  Hide's pro-business attitudes open the 
government up to accusations that it is backing a plan meant to 
promote a business takeover of Auckland's government.  According to 
this argument, only the wealthiest candidates will be able to mount 
serious campaigns in a constituency of 1.4 million.  (By comparison, 
the population of Auckland City, the largest of the Auckland region's 
current municipalities, is about 450,000.) 
 
A BAD PLAN? 
----------- 
 
¶11.  (SBU) Some experts in local government see a fundamental flaw in 
both the Commission and government plans.  Both plans opt for what 
experts describe a "weak mayor" model.  The mayor will get to appoint 
his/her deputy and committee chairs and propose the budget, but the 
mayor's authority will not be nearly as strong as that of London's 
mayor, for example.  Experts point with concern to Toronto, which 
implemented municipal reform similar to that proposed for Auckland 
and has been left with a divided council with a mayor too weak to 
resolve disputes.  It is certainly hard to see how a council that 
included the four current mayors - different from each other in both 
temperament and philosophy - could succeed. 
 
ALTERING THE AUCKLAND-WELLINGTON DYNAMIC 
---------------------------------------- 
 
¶12.  (SBU) The impact of reform on the relationship between Auckland 
and national politics remains to be seen.  In New Zealand, local 
government generally is not a stepping stone to higher levels of 
government.  While there are exceptions, mayoralties in New Zealand 
are filled with politicians at the end, rather than the beginning, of 
their careers.  Likewise, members of city councils tend to limit 
their focus to local issues.  Last year's election to parliament of 
Auckland City Councilman Peseta Sam Lotu-Liga is the exception rather 
than the rule. 
 
¶13.  (SBU) A number of our interlocutors suggested that a supercity 
might change all that.  Traditionally, gaining a ministry required an 
ambitious young politician to toil for years in the party hierarchy 
and parliament's backbenches.  That has already started to change, as 
party leaders take advantage of the party list system to bring in 
fresh blood.  Some observers argue that a relatively junior 
politician could avoid paying his dues in Wellington and pursue a 
city-wide council seat or mayoralty in Auckland.  A politician who 
could succeed there, and demonstrate to party leaders that he can 
capture a plurality in what will be by far the single largest 
constituency in the country, could make a persuasive argument to 
enter national politics at the ministerial level. 
 
¶14.  (SBU) Even if a reformed Auckland government does not become a 
springboard to national office, many of our interlocutors hope it 
might lead to better candidates at the local level.  We heard many 
complaints about the dismal quality of local government officials, 
with the few noteworthy exceptions only drawing attention to the 
mediocrity of the rest.  A more authoritative government for the 
entire Auckland region might draw more effective policymakers who 
 
WELLINGTON 00000181  003.2 OF 003 
 
 
consider pursuit of local office under the current structure to be a 
waste of effort. 
 
¶15.  (SBU) Despite its weaknesses, reform may strengthen Auckland in 
its dealings with the rest of the country.  New Zealanders outside 
the city tend to be wary of Auckland, believing it already gets too 
much attention and too many resources compared to the rest of the 
country.  This is reflected in national politics, where some 
politicians, such as former Finance Minister Michael Cullen, gain 
reputations for being particularly "anti-Auckland."  This infuriates 
Auckland boosters, who point out the city contributes much more in 
economic growth and tax revenues than it gets back in, for example, 
funding for roads. 
 
¶16. (SBU) One expert argued that even an imperfect supercity will be 
better placed to battle for its interests in Wellington.  He used a 
recent example of a regional fuel tax.  The previous Labour 
government imposed a fuel tax for the Auckland region only, with the 
proceeds to go to Auckland infrastructure.  When gasoline prices 
spiked last year, the tax became politically unsupportable and the 
government withdrew it, without any indication of how it would 
replace the badly-needed funding.  Auckland's fragmented leadership 
made no effective response.  A mayor and city council from a single 
Auckland supercity would have been better positioned to protect the 
fuel tax or draw a commitment from the government that funds for the 
needed infrastructure would be found elsewhere. 
 
¶17.  (SBU) The final shape of the supercity won't be seen for months, 
after continued public debate and parliamentary hearings.  The 
hearings will keep the story in the newspaper, but it is unlikely to 
return to the front pages soon.  Prime Minister Key, a pragmatic 
politician, will likely use the hearing process to make adjustments 
to the new governance structure in order to appease key 
constituencies like the Maori.  Regardless of the final design, it 
will be years before we learn whether the restructuring has created 
the world class city everyone seems to agree New Zealand needs. 
KEEGAN