Local Government (System Improvements) Amendment Bill

Local Government (System Improvements) Amendment Bill The Parliament of New Zealand enacts as follows: 1 Title This Act is the Local Government (System Improvements) Amendment Act 2025 . 2 Commencement This Act comes into force on the day after Royal assent. However, section 26(2), (3), and (5) comes into force on a single date set by Order in Council. If section 26(2), (3), and (5) has not come into force by 30 June 2030, it comes into force then. An Order in Council made under this section is secondary legislation ( see Part 3 of the Legislation Act 2019 for publication requirements). 3 Principal Act This Act amends the Local Government Act 2002. 4 Section 3 amended (Purpose) Replace section 3(d) with: d provides for local authorities to play a broad role in meeting the current and future needs of their communities for good-quality , cost-effective, and local — infrastructure, local public services, and performance of regulatory functions. i infrastructure; and ii public services; and iii performance of regulatory functions. 5 Section 5 amended (Interpretation) In section 5(1), replace the definition of community outcomes with: community outcomes means the outcomes that a local authority aims to achieve in meeting the current and future needs of communities for good-quality , cost-effective, and local— local infrastructure, local public services, and performance of regulatory functions a infrastructure; and b public services; and c performance of regulatory functions In section 5(1), insert in its appropriate alphabetical order: cost-effective , in relation to the delivery of infrastructure and public services, and the performance of regulatory functions, means ensuring that the public receives value for money by— a using resources effectively, economically, and without waste; and b taking into account the total costs and benefits of any decision or action In section 5(1), repeal the definition of public notice . In section 5(1), definition of significance , replace paragraph (a) with: a the district or region: In section 5(1), insert in its appropriate alphabetical order: waste management means solid waste collection and disposal 6 Section 10 replaced (Purpose of local government) Replace section 10 with: 10 Purpose of local government The purpose of local government is— a to enable democratic local decision-making and action by, and on behalf of, communities; and b to meet the current and future needs of communities for good-quality , cost-effective, and local— local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses; and i infrastructure; and ii public services; and iii performance of regulatory functions; and c to support local economic growth and development by fulfilling the purpose set out in paragraph (b) . 7 New section 11A inserted (Core services to be considered in performing role) After section 11, insert: 11A Core services to be considered in performing role 1 In performing its role, a local authority must have particular regard to the contribution that the following core services make to its communities: The following services are the core services of a local authority: a network infrastructure: b public transport services: c waste management and minimisation : d civil defence emergency management: e libraries, museums, reserves, and other community and recreational facilities. 2 In performing its role, a local authority must have particular regard to the contribution that the core services make to its communities. 3 In subsection (1)(d) , civil defence emergency management has the meaning given to it in section 4 of the Civil Defence Emergency Management Act 2002. 3 In subsection (1) ,— civil defence emergency management has the meaning given to it in section 4 of the Civil Defence Emergency Management Act 2002 public transport service has the meaning given to it in section 5(1) of the Land Transport Management Act 2003 reserve has the meaning given to it in section 2(1) of the Reserves Act 1977 waste management and minimisation has the meaning given to it in section 5(1) of the Waste Minimisation Act 2008. 8 Section 14 amended (Principles relating to local authorities) Replace section 14(1)(c)(iii) with: iii the likely impact of any decision on the interests referred to in subparagraphs (i) and (ii): Replace section 14(1)(h)(i) with: i the social, economic, and cultural interests of people and communities; and Replace section 14(2) with: 2 If any of these principles are in conflict in any particular case, the local authority must resolve the conflict in accordance with the principle in subsection (1)(a)(i). 9 Section 17A amended (Delivery of services) Replace the heading to section 17A with Delivery of services by different entity . Repeal section 17A(1) to (4). In section 17A(5), replace infrastructure, services , or regulatory functions with local infrastructure , and local public services , or the performance of regulatory functions . 10 Section 39 amended (Governance principles) After section 39 (1) (e), insert: f a local authority should foster the free exchange of information between, and expression of opinions by expressions of opinion by, elected members; and g a local authority should foster the responsibility of its elected members to work collaboratively to set the local authority’s agenda, determine its policy, and make decisions on behalf of its communities to set and deliver the local authority’s policy agenda, determine its policies and budgets, and make decisions on behalf of its communities . 11 Section 40 amended (Local governance statements) In section 40(1)(e), after requirements and , insert standard . After section 40(1)(f), insert: fa how the local authority is acting in accordance with the governance principles set out in section 39(f) and (g) ; and In section 40(1)(g), after Local Government Official Information and Meetings Act 1987 and , insert standard . 12 Section 42 amended (Chief executive) After section 42(2)(h), insert: i ensuring that members of the local authority have access to documents that— i the local authority holds; and ii are reasonably necessary to enable each member to effectively perform their duties as a member of the local authority. 13 Section 48O amended (Local board agreements) In section 48O(5)(a)(i), delete for each activity described in clause 2(2) of Schedule 10 . 14 Section 48Q amended (Application of Schedule 7 to local boards and their members) In section 48Q(2), delete 15 and . 15 Section 54 amended (Application of other provisions to community boards) In section 54(2), delete 15 and . 16 Section 57 amended (Appointment of directors) Repeal section 57(3). 17 Section 99 amended (Audit of information in annual report and summary) In section 99(1)(d), after Schedule 10 , insert (excluding clause 32B ) . 18 Section 101 amended (Financial management) Before section 101(1), insert: 1AAA A local authority must, when determining its approach to financial management, have particular regard to— a the purpose of local government stated in section 10 ; and b the core services of a local authority stated in section 11A . Replace section 101(3)(b) with: b the overall impact of any allocation of liability for revenue needs on the community current and future communities . 19 Section 118 amended (Certificate of compliance) In section 118, insert as subsection (2): 2 If a local authority holds out a person as having the authority to exercise the power of a chief executive under subsection (1) , then any certificate signed by that person under subsection (1) is conclusive proof for all purposes that the person has that authority. 20 Section 200 amended (Limitations applying to requirement for development contribution) Replace section 200(1)(c) with: c a third party has provided, or undertaken to provide, the same reserve, network infrastructure, or community infrastructure; or d a third party has provided, or undertaken to provide, funding for the same reserve, network infrastructure, or community infrastructure. After section 200(4), insert: 4A For the purposes of subsection (1)(d) , if the third party— a has stated that the funding provided by it , or any specific part of the funding, is to be used to pay for the project cost attributable to capital expenditure necessary to service growth over the long term , the whole or the specific part of the funding must be deducted from the portion of project costs being funded by development contributions; or b has not made a statement under paragraph (a) or (c) ,— i the funding must be divided pro rata between— A the project cost attributable to growth; and B the project cost attributable to other purposes; and ii any funding that is attributable to growth costs must be deducted from the portion of costs being funded by development contributions; or c has stated that none of the funding provided by it , or any specific part of the funding, is to be used to pay for the project cost attributable to purposes other than growth, the whole or the specific part of the funding capital expenditure necessary to service growth over the long term, none of the funding is to must be deducted from the portion of project costs being funded other than by development contributions . ; or d has not made a statement under paragraph (a) or (b) ,— i the funding must be divided on a pro rata basis between— A the project cost attributable to growth; and B the project cost attributable to purposes other than growth; and ii any funding that is attributable to growth costs must be deducted from the portion of project costs being funded by development contributions. In section 200(6), (8), and (10), replace (1)(c) with (1)(d) . 21 Section 259 amended (Regulations) Replace section 259(1)(dc) with: dc prescribing parameters or benchmarks for assessing whether a local authority is— i prudently managing its revenues, expenses, assets, liabilities, investments, and general financial dealings; or ii performing specified activities or groups of activities in accordance with best practice: After section 259(1)(dd), insert: de prescribing the groups of activities that a local authority must include in its long-term plan, annual plan, and annual report: After section 259(1)(f), insert: fa prescribing processes, time frames, and other matters relating to a request for access to documents under clause 26A(2) of Schedule 7: After section 259(4), insert: 4A Regulations made under subsection (1)(de) may— a differentiate between particular local authorities or types or classes of local authority (for example, regional councils and territorial authorities); and b prescribe— i which activities must be included in a group of activities: ii which activities may be included in a group of activities: iii which activities must not be included in a group of activities. 4AB Regulations made under subsection (1)(de) must not include in a group of activities any activities relating to water services under the Local Government (Water Services) Act 2025. 4B The Minister must, before recommending the making of regulations under subsection (1)(de) ,— aaa consult all relevant local authorities; and a consult any of the following persons that the Minister considers appropriate: i any local authority: ii any individual or organisation that the Minister considers representative of the local government sector as a whole: iii any other person; and b have particular regard to— i the purpose of local government stated in section 10 ; and ii the core services of a local authority stated in section 11A . 22 Section 261B amended (Secretary must make rules specifying performance measures) Replace the heading to section 261B with Secretary may make rules specifying performance measures . Replace section 261B(1) to (3) with: 1 The Secretary may make rules specifying performance measures in relation to activities or groups of activities provided by, or on behalf of, a local authority. 2 Before making a rule under subsection (1) , the Secretary must— a consider whether an existing performance measure, including a performance measure set by another relevant regulator, is suitable for the purpose; and b have regard to whether a proposed performance measure— i measures the level of service for a major aspect of the activity or group of activities; and ii addresses an aspect of the activity or group of activities that is of widespread interest in the communities to which a service in relation to the activity or group of activities is provided; and iii contributes to the effective and efficient management of the activity or group of activities. 3 Before making a rule, if the Minister advises the Secretary that the Minister considers it appropriate to consult any of the following persons, the Secretary must consult : — a any local authority: b any individual or organisation that the Minister considers representative of the local government sector as a whole: c any other person. a all relevant local authorities; and b any other persons or groups that the Secretary considers appropriate. 3A The Secretary may make minor and technical amendments to a rule without complying with the requirements set out in subsections (2) and (3) . 23 Sections repealed Repeal the sections specified in Schedule 1 . 24 Schedule 1AA amended In Schedule 1AA,— a insert the Part set out in Schedule 2 of this Act as the last Part; and b make all necessary consequential amendments. 25 Schedule 7 amended Replace the heading to clause 15 with Standard code of conduct . In Schedule 7, replace clause 15(1) with: 1 The Secretary may approve and issue a standard code of conduct for members of local authorities. 1A The Secretary may approve and issue an amended or a replacement standard code of conduct, but may not revoke it without replacement. 1B Before approving and issuing an amended or a replacement standard code of conduct, the Secretary must consult all local authorities. 1C Subclause (1B) applies only to any amended or replacement standard code of conduct that is approved and issued on or after 1 January 2027. In Schedule 7, clause 15(2): a replace The code of conduct with The standard code of conduct ; and b delete adopted by the local authority ; and c replace his or her with their . In Schedule 7, repeal clause 15(3), (5), and (6). In Schedule 7, replace clause 15(4) , delete “of that local authority”. with: 4 The following persons must comply with the standard code of conduct: a a member of a local authority: b a person appointed to a committee or subcommittee of a local authority who is not a member of that local authority. In Schedule 7, clause 15(7), after a breach of the , insert standard . In Schedule 7, after clause 15, insert: 15A Chief executive must provide explanation of amended or replacement standard code of conduct The chief executive must, as soon as practicable after any amended or replacement standard code of conduct is issued under clause 15(1A) , provide an explanation of the amended or replacement standard code of conduct to members in a meeting of the local authority that is open to the public. Replace the heading to clause 16 with Members to abide by standard standing orders . In Schedule 7, clause 16(1), replace standing orders adopted with standard standing orders approved and issued . In Schedule 7, clause 16(2), after ruling made under the , insert standard . In Schedule 7, clause 19(3)(c), replace of the local authority with approved and issued under clause 27 . In Schedule 7, replace clause 19(3)(c) with: c the standard standing orders approved and issued under clause 27. In Schedule 7, after clause 21(5)(c) (i) (ii) , insert: ia iii the standard code of conduct approved and issued under clause 15; and In Schedule 7, clause 24(4)(b), replace standing orders of the local authority with standard standing orders approved and issued under clause 27 . In Schedule 7, clause 25A(1)(a) and (2)(a), replace standing orders of the local authority with standard standing orders approved and issued under clause 27 . In Schedule 7, clause 25A(1)(b) and (2)(b), replace standing orders with standard standing orders . In Schedule 7, after clause 26, insert: Documents held by local authority 26A Member entitled to documents held by local authority 1 A member of a local authority is entitled to have access to documents held by the local authority that are reasonably necessary to enable the member to effectively perform their functions and duties , and to effectively exercise their powers, as a member of the local authority. 2 A member of a local authority may request access to the documents specified in subclause (1) from the chief executive of the local authority. 3 If the chief executive declines the request, the member may request access to the documents from the local authority’s governing body. 4 If the member requests access to the documents under subclause (3) , the governing body must make a final decision on the request. In Schedule 7, replace clause 27(1) and (2) with: 1 The Secretary may approve and issue a set of standard standing orders for the conduct of a local authority’s meetings and those of its meetings of local authorities and meetings of their committees. 2 The Secretary may approve and issue an amended or a replacement set of standard standing orders, but may not revoke them without replacement. 2A Before approving and issuing an amended or a replacement set of standard standing orders, the Secretary must consult all local authorities. 2B Subclause (2A) applies only to any amended or replacement set of standard standing orders that is approved and issued on or after 1 January 2027. In Schedule 7, repeal clause 27(3) and (5). In Schedule 7, clause 27(4), after suspend insert standard . In Schedule 7, clause 30A(6)(c)(iv), replace standing orders of any local authority or with standard standing orders approved and issued under clause 27 or the standing orders of any . In Schedule 7, clause 32B(4), replace the officer with an officer acting under subclause (1) . In Schedule 7, clause 34(4), replace 2 with 5 . In Schedule 7, replace clause 36B with: 36B Code Standard code of conduct Each member of each local board must comply with the standard code of conduct approved and issued under clause 15. In Schedule 7, after clause 39, insert: 40 Code Standard code of conduct Each member of each community board must comply with the standard code of conduct approved and issued under clause 15. 26 Schedule 10 amended In Schedule 10, replace clause 2(1)(c) with: c outline any significant negative effects that any activity within the group of activities may have on the local community: In Schedule 10, replace clause 2(2) and (3) with: 2 In addition to groups of activities prescribed in regulations made under section 259(1)(de) , a local authority may treat any other activities (except activities relating to providing water services under the Local Government (Water Services) Act 2025) as a group 1 or more groups of activities for the purposes of this schedule. In Schedule 10, clause 4(a), replace described in clause 2(2) with prescribed in regulations made under section 259(1)(de) . In Schedule 10, clause 4(d), after reasons for the changes , insert (unless regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the preceding year that makes it impossible or impractical to include the statement, in which case the local authority must note why it is impossible or impractical to do so) . In Schedule 10, clause 4, insert as subclause (2): 2 If regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the preceding year that makes it impossible or impractical to specify the information referred to in subclause (1)(d) , the local authority does not need to specify the information but must note why it is impossible or impractical to do so. In Schedule 10, clause 17A(b), replace specified in clause 2(2) with prescribed in regulations made under section 259(1)(de) . In Schedule 10, clause 23(c), after achievement of those outcomes , insert (unless regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the year to which the annual report relates that makes it impossible or impractical to provide the report, in which case the local authority must note why it is impossible or impractical to do so) . In Schedule 10, replace clause 23(d) with: d describe any identified effects that any activity within the group of activities has had on the community (unless regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the year to which the annual report relates that makes it impossible or impractical to provide the description, in which case the local authority must note why it is impossible or impractical to do so) . In Schedule 10, clause 23, insert as subclause (2): 2 If regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the year to which the annual report relates that makes it impossible or impractical to provide— a the report referred to in subclause (1)(c) , the local authority does not need to provide the report but must note why it is impossible or impractical to do so: b the description referred to in subclause (1)(d) , the local authority does not need to provide the description but must note why it is impossible or impractical to do so. In Schedule 10, clause 24(1), after the amount spent , insert (unless regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the year to which the annual report relates that makes it impossible or impractical to include the statement, in which case the local authority must note why it is impossible or impractical to do so) . In Schedule 10, after clause 24(1), insert: 1A If regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the year to which the annual report relates that makes it impossible or impractical to provide the statement referred to in subclause (1) , the local authority does not need to provide the statement but must note why it is impossible or impractical to do so. In Schedule 10, clause 25, insert as subclause (2): 2 However, a local authority does not need to comply with subclause (1) if If regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the year to which the annual report relates that makes it impossible or impractical to include the statement , referred to in subclause (1) , the local authority does not need to provide the statement but must instead note why it is impossible or impractical to do so. In Schedule 10, clause 26(2)(b), after in accordance with clause 5(2) , insert (unless regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the year to which the annual report relates that makes it impossible or impractical to provide the comparison, in which case the local authority must note why it is impossible or impractical to do so) . In Schedule 10, after clause 26(2), insert: 3 If regulations made under section 259(1)(de) have made a change to the groups of activities provided for in this Act in the year to which the annual report relates that makes it impossible or impractical to provide the comparison referred to in subclause (2)(b) , the local authority does not need to provide the comparison but must note why it is impossible or impractical to do so. In Schedule 10, after clause 32A, insert: 32B Expenditure on consultants and contractors An annual report must include a report on all operating and capital expenditure by the local authority on consultants and contractors— a in the financial year to which the report relates; and b in the immediately preceding financial year. 26A Principal Act Sections 26B and 26C amend the Local Government (Auckland Council) Act 2009. 26B Section 21 amended (Local board agreements) In section 21(5)(a)(i), delete for each activity described in clause 2(2) of Schedule 10 of that Act . 26C Section 29 amended (Application of Schedule 7 of Local Government Act 2002 to local boards and their members) In section 29(2), delete 15 and . 26D Principal Act Section 26E amends the Local Government (Water Services) Act 2025. 26E Section 116 amended (Limits on power to require development contributions) Replace section 116(1)(c) with: c a third party has provided, or undertaken to provide, the same water services infrastructure; or d a third party has provided, or undertaken to provide, funding for the same water services infrastructure. After section 116(2), insert: 2A For the purposes of subsection (1)(d) , if the third party— a has stated that the funding, or any specific part of the funding, is to be used to pay for the project cost attributable to growth, the whole or the specific part of the funding must be deducted from the portion of project costs being funded by development contributions; or b has stated that the funding, or any specific part of the funding, is to be used to pay for the project cost attributable to purposes other than growth, the whole or the specific part of the funding must be deducted from the portion of project costs being funded other than by development contributions; or c has not made a statement under paragraph (a) or (b) ,— i the funding must be divided on a pro rata basis between— A the project cost attributable to growth; and B the project cost attributable to purposes other than growth; and ii any funding that is attributable to growth costs must be deducted from the portion of costs being funded by development contributions. 27 Principal Act Sections 28 to 30 amend the Local Government (Water Services Preliminary Arrangements) Act 2024. 28 Section 58 amended (Purposes of this Part) In section 58(b), replace sections 65 to 68 with sections 65 to 67 . 29 Section 68 repealed (Exemption from cost-effectiveness review) Repeal section 68. 30 Section 69 repealed (Repeal of section 68) Repeal section 69. 1 Sections repealed Section 32 Section 273 Section 274 Section 275 Section 276 Section 277 Section 278 Section 280 Section 283 Section 284 Section 285 Section 286 Section 287 Section 290 Section 291 Section 294 Section 295 Section 296 Section 297 Section 312 Section 314 2 New Part 10 inserted into Schedule 1AA 10 Provisions relating to Local Government (System Improvements) Amendment Act 2025 59 Interpretation In this Part,— amendment Act means the Local Government (System Improvements) Amendment Act 2025 code of conduct means a code of conduct adopted by a local authority under clause 15 of Schedule 7 (as it was in force before the commencement date) commencement date means the commencement date of the majority of the amendment Act under section 2(1) of that Act standing orders means a set of standing orders adopted by a local authority under clause 27 of Schedule 7 (as it was in force before the commencement date). 60 Local governance statements 1 This clause applies to the requirement in section 40(2) for a local authority to comply with section 40(1) within 6 months after each triennial general election of members of the local authority. 2 A local authority need does not need to comply with section 40(1) (as amended by the amendment Act) within 6 months after the 2025 general election of members of the local authority but must instead comply with that section within 6 months after the commencement date . 3 However, a local authority must comply with section 40(1) (as amended by the amendment Act) within 6 months after the commencement date. 61 Code of conduct 1 This clause applies to the code of conduct most recently adopted by a local authority under clause 15 of Schedule 7 before the commencement date. 2 The code of conduct continues to have effect on and after the commencement date as if the amendment Act had not been enacted until the Secretary approves and issues a standard code of conduct under clause 15(1) of Schedule 7 (as amended by the amendment Act). 62 Standing orders 1 This clause applies to the set of standing orders most recently adopted by a local authority under clause 27 of Schedule 7 before the commencement date. 2 The standing orders continue to have effect on and after the commencement date as if the amendment Act had not been enacted until the Secretary approves and issues a set of standard standing orders under clause 27(1) of Schedule 7 (as amended by the amendment Act). 62A Terms of employment of chief executive 1 This clause applies to a chief executive who was appointed for a second term under clause 34(4) of Schedule 7 (as in force before the commencement date) less than 15 months before the commencement date. 2 The local authority may appoint the chief executive for a third term if the combined duration of the chief executive’s second and third terms does not exceed 5 years. 3 Despite the provisions of any other enactment or rule of law, the chief executive has no right or expectation of renewed employment at the end of the chief executive’s second term. 4 Clause 35 of Schedule 7 applies, with any necessary modifications, to any appointment of a chief executive for a third term under subclause (2) . 5 This clause is repealed on the second anniversary of the commencement date. 63 Expenditure on consultants and contractors The first report under clause 32B of Schedule 10 prepared after the commencement date— a must include a report on the relevant expenditure in the financial year ending 30 June 2027; but b need not include a report on that expenditure in the immediately preceding financial year.