The convention that the advice of Ministers responsible to Parliament be accepted was established by the demands and protests of successive Ministries. An indication that the convention had achieved some strength by 1867 was an amendment to the Instructions of the Governor requiring him to use his “own deliberative judgment” in the exercise of the prerogative of pardon. This instruction, evidently, had not previously been considered necessary. By 1892 the convention was yet more firmly established and such gubernatorial discretion was unacceptable to New Zealand governments. The Instructions were, therefore, further amended to bring the prerogative of pardon under Ministerial control, except when Imperial interests were affected. Since 1892 no instance of the rejection of Ministerial advice has become public.

In practice, there remained two relatively important survivals of dependent status in the relations between Governor and Parliament. First, the Governor, designated Governor-General after 1917, was in the position, anomalous under a British parliamentary system, of having from time to time to tender advice to his New Zealand Ministers at the request of another government, the Imperial Government. Secondly, he was appointed by the Imperial Government. Both of these matters were dealt with by Imperial Conference. At the Conference of 1926 it was decided to appoint representatives of the Imperial Government in the Dominions. New Zealand did not take advantage of this till 1939, but its effect, once adopted, was to leave the Governor-General as representative of the Crown alone. Then, at the Imperial Conference of 1930, it was decided that a Governor-General should be appointed on the advice of the Dominion government concerned. Today the conventions governing the relations between the Governor-General and Parliament in New Zealand are, in all important respects, the conventions which obtain in Great Britain between Monarch and Parliament.

The first effective legislation to provide New Zealand with representative institutions is “An Act to Grant a Representative Constitution to the Colony of New Zealand” passed by the Imperial Parliament in 1852. Apart from dividing the country into six provinces with their own elected councils the Act also established a General Assembly of which the present General Assembly is a direct descendant. It consisted of the Governor, a Legislative Council, and a House of Representatives. Legislative Councillors were appointed for life by the Governor. Members of the House of Representatives were elected for five years or until the Assembly was dissolved.

The Constitution Act did not grant responsible government. In the first Parliament, which met in 1854 in Auckland, the House of Representatives therefore passed a motion praying for the “establishment of ministerial responsibility in the conduct of Legislative and Executive proceedings by the Government”. The prayer was granted in 1856 after a general election, the civil servants on the Executive Council giving way to Ministers supported by the majority in the House of Representatives. The Governor, however, still did not act only on Ministerial advice. In some matters his Instructions permitted him to make decisions without obtaining the approval of the Executive Council, either at his own discretion, or along lines laid down by the Imperial Government. There remained important limitations on the legal powers of Parliament until 1947. The successive removal of these limitations and the general decline of the Legislative Council are the two main aspects of parliamentary development since 1852.

The two basic weaknesses of the local government structure are the number and variety of special-purpose authorities and the excessive number of territorial authorities. The special-purpose authorities in general are subject to a considerable degree of direction by the Central Government. Moreover, they exercise functions which in some instances at least might otherwise be exercised by territorial authorities, especially if the territorial structure was strengthened by amalgamation of smaller and weaker units. The excessive number of territorial authorities means that some of them are too small and consequently have inadequate resources, a fact which limits their ability to perform satisfactorily the functions demanded by a rapidly growing community and expanding economy, at least without substantial financial assistance by the Central Government. This assistance once again tends to increase the extent of direction by Central Government.

The fragmented and heterogeneous character of the local government system as a whole raises difficult problems in the planning, coordination, and execution of regional works and services involving several local authorities. These problems are rapidly becoming increasingly crucial, especially in the large centres of rapidly expanding urban population. Although regional planning authorities are now in being it remains difficult to secure effective joint planning and to put plans into effect.

Modern communications and transport and the steady urbanisation of county areas adjacent to municipalities are rapidly breaking down the earlier distinction between urban and rural interests, but this development is not being accompanied by appropriate readjustment of the territorial local government structure.

It was considerations of this kind which moved the Government in 1962, acting on the recommendation of the 1960 Select Committee, to empower the Local Government Commission to bring down proposals for new forms of local government in appropriate areas. The Local Government Commission is already engaged in preliminarily discussing with local authorities the question of progressively establishing regional-type local authorities in certain areas. Moreover, in 1962 a committee of local authority representatives established under a special Act in 1960 for the purpose of studying and bringing down legislative proposals for a regional local authority in the Auckland urban area introduced a local Bill into Parliament. This Bill proposed the establishment of a regional authority which would carry out regional works and services over the districts of 32 municipalities and counties and which would, in the process, assume the functions of most special-purpose authorities in the region. It proposed that the regional authority be also the regional planning authority for the region. The Bill was held over by Parliament in its 1962 session. A substantially modified measure was eventually passed in 1963.

It is possible that in the years to come reform of the local government structure will be approached by progressively reducing the number of local authorities by way of merger and amalgamations effected by the Local Government Commission, accompanied by the establishment of regional authorities in particular areas in which regional problems are most acute.

The regional authority established in Auckland is what is known as a two-tier type, the essence of which is that the regional authority exercises powers and functions of a regional nature, including the functions performed by special-purpose authorities, while the territorial authorities remain in existence to perform purely local functions. This is perhaps the type of regional authority most likely to be acceptable in New Zealand. It involves less radical change than other types, such as the multipurpose authority, can be adapted to the existing structure fairly readily, and retains an avenue whereby citizens may perform a public service by taking part in territorial local government.

by Bryan David Crompton, M.A., Executive Officer, Advisory and Research Branch, Department of Internal Affairs, Wellington and Herbert Williamson, Research Officer, Local Government Branch, Department of Internal Affairs, Wellington.

• Appendices to the Journals of the House of Representatives, 1959, B. 4, “Report of the Royal Commission on Local Body Finance”
• 1945, I. 15, and 1960, I. 18, “Reports of Local Bills Committee on the Structure of Local Government in New Zealand”;Local Government in New Zealand, Polaschek, R. J., ed. (1956).

The Local Government Commission Act of 1946 implemented many of the recommendations of the Select Committee which investigated local government in 1944–45. The Act established a permanent Local Government Commission of four members, two of whom were nominees of local authority associations. The Commission was charged with the continual review of the functions and districts of all types of local authorities. Although not recommended by the Select Committee, schemes for the union, merger, or abolition of local authority districts were made subject to confirmation by a poll of electors. This Commission achieved some minor successes, but its efforts in 1949 to reorganise local government in the Christchurch and Auckland urban areas — the two areas where reorganisation was considered essential by the Select Committee — failed, largely because of political considerations. These two failures seriously affected its status, so much so that in 1951 a Bill was introduced providing that it be abolished and that future reorganisation be conducted voluntarily. The counties and municipalities who, while dissatisfied with the Commission, could not agree on alternative procedures, opposed the Bill, which accordingly was not proceeded with.

In 1953 a new Local Government Commission Act adopted another approach. It reconstituted the Commission as a three-man body with different personnel and curtailed its powers. Rabbit boards had already been removed from the jurisdiction of the previous Commission. The 1953 Act provided similarly in respect of electric power boards also. Hospital boards were removed from the Commission's jurisdiction in 1957. Unlike its predecessor, the second Commission was not empowered to initiate reorganisation schemes of its own accord, while petitions for polls on its schemes could now be made by 5 per cent of the electors instead of 20 per cent as previously required. This latter provision was offset to some extent by the fact that the majority required to upset a decision of the Commission was changed from a bare majority to 60 per cent of the electors who cast valid votes. An appeal authority was constituted to hear appeals against the Commission's decisions. The 1953 Commission, not unnaturally in view of these considerations, achieved very little in the way of consolidation of the local government structure.

Continued dissatisfaction with the cumbersome local government structure and the resulting overlapping and diffusion of responsibilities, both within local government and between local and Central Government, led to a further intensive inquiry by a parliamentary Select Committee in 1960. This Committee firmly recommended that the Local Government Commission be completely reconstituted, that many of the powers possessed by its 1946 counterpart be restored to it, and that it be given additional powers. The Local Government Commission Act of 1961, which came into force on 1 January 1962, gave effect to many of these recommendations. The new Commission has three members, none of whom is nominated by local authority organisations. It may initiate inquiries of its own motion or on request and is authorised to carry out investigations and to report to Government in respect of the establishment of any new form of local government in any area. Its schemes for reorganisation of territorial authorities within the existing structure are still subject to polls of electors, but only in certain cases, and the minimum number of electors who may request a poll in these instances has been increased to 15 per cent. Polls may nullify the Commission's schemes only if, when more than two-thirds of the electors vote, there is a bare majority of valid votes against a proposal and, when two-thirds or fewer vote, there are 60 per cent of the valid votes against it. The new Commission is also empowered to adjudicate where local authorities cannot agree on financial adjustments arising from an adjustment of their boundaries. Provisions for appeal against the Commission's decisions have been retained. The 1962 Act, however, did not implement the 1960 Committee's recommendation that electric power boards, rabbit boards, and hospital boards should be brought within the jurisdiction of the Commission.

From shortly after its inauguration in 1876 the structure of local government in New Zealand has been the cause of much dissatisfaction, primarily because of the proliferation of local authorities of all types. In the 70 years to 1946 it was investigated by select committees of the House of Representatives on five occasions (1889, 1890, 1938 (2), and 1944–45), and once by an administrative committee (1932). Each inquiry confirmed the need for consolidation. In the same period five Bills designed to effect a major reorganisation of local government were introduced into Parliament in 1895, 1912 (2), 1932, and 1937. There was a parliamentary motion to the same purpose in 1927, while various Governments have over the years promised to effect reform. The 1944–45 inquiry was the only one of these moves which led to any definite action. The failure to adopt earlier recommendations showed very clearly that the prospect of reform by direct parliamentary action was remote. The idea of empowering an extra-parliamentary commission to act in this field, although first put forward in 1895, took 50 years to achieve actuality.

Central Government control of local authorities is effected in various ways through various governmental or parliamentary agencies. The Minister of Internal Affairs, through the Department of Internal Affairs, attends to the constitutional aspects of all territorial and many special-purpose local authorities, and he also administers legislation of general application, such as that governing local elections and polls, rating, local authority members' contracts, the public's rights of access to meetings, and so on. Further, he plays an important advisory role in the local legislation field, a topic which has already been mentioned. The Controller and Auditor-General is responsible directly to Parliament for the general financial audit of all local authorities. The control of borrowing and roading subsidies is exercised by the Local Authorities Loans Board and National Roads Board respectively, while the Department of Health, the Ministry of Works, and other Departments of State also have important control responsibilities in their different spheres. In all, in 1960, 21 Departments of State were concerned with territorial local authorities in the administration of more than 60 statutes. Twenty-two statutory boards, councils, and other bodies were likewise involved. Eleven Departments of State and 12 statutory boards are similarly associated with special-purpose authorities.

Of the various methods of control, that exercised in the financial field as a whole is probably the most influential. It is one of the most vital aspects of the relationship between local authorities and Central Government for, in addition to the close supervision of their financial affairs in general, local authorities are completely subject to Government in respect of the maximum local taxation leviable and State grants and subsidies payable. This is inherent in the New Zealand system of government, under which the Central Government is responsible through Parliament to the people for the overall supervision of all funds diverted from private to public use.

Rates on land and buildings provide the greater part of the revenue of territorial authorities and of many special-purpose authorities. Prior to 1896 there were only two systems of rating — rating on the capital value (the sum a vendor might expect to receive from the sale of his property on reasonable terms and conditions and free of mortgage) and rating on annual value (the rent at which a property would let from year to year after certain specified deductions are made). Rating on unimproved value (the sum a vendor might expect to receive from the sale of his property on reasonable terms and conditions, free of mortgage, and if no improvements had been made) was authorised in 1896. Since then there has been a slow but steady swing to this system, until today more than 80 per cent of the territorial authorities use it. Rates on the capital value and unimproved value are based on valuations made by the Government Valuation Department, while the annual value is usually determined by the local authority concerned. The maximum rates which may be levied for general expenditure and, to some extent, for specific works or services such as water supply or sanitation, are fixed by legislation. Special rates to meet loan charges are not fixed by statute but are effectively controlled by the supervision of borrowing exercised by the Local Authorities Loans Board. The one territorial authority without power to rate property is the Chatham Islands County Council which, because of its location and the economy of the islands, levies dues on imports and exports.

Some important types of special-purpose authorities can also rate, although they do not always do so. Some which can rate do not do so directly, but instead make a levy on territorial local authorities, which in turn are required to meet the levy out of rate revenue.

Government grants for various purposes also provide a substantial portion of local authority revenue, roading subsidies being the most important to territorial authorities. Although Crown property is, in general, traditionally exempt from the payment of rates, nevertheless the Government makes substantial ex gratia payments to local authorities in lieu of rates on its property. These payments are frequently the equivalent of the rates which would be levied on the property concerned if it were not owned by the Crown, and this is invariably the case with residential property fronting dedicated roads. Rate subsidies are available to rabbit boards, while fire authorities, catchment boards, and nassella tussock boards also receive substantial assistance. Other special-purpose authorities may also receive subsidies and grants for specific purposes. Hospital boards are unique in that, since 1957, the responsibility for providing their finance has been completely assumed by Central Government.

Other local authority revenue derives from the proceeds of trading undertakings, such as the sale of electricity, and from licence fees, fines, and other charges. Urban transport undertakings of local authorities have not, in general, been a source of profit in recent years.

Local authority borrowing has been controlled since the inception of the local government system in 1876 and the principles laid down in legislation at that time still apply. These, in general, require that loans shall be raised only for the construction of public works and utilities or to permit engagement in any undertaking (but not for normal maintenance expenditure), that all loan proposals be publicised, and that ratepayers be given the opportunity to vote on loan proposals. Such loans require the sanction of the Local Authorities Loans Board, a statutory body established in 1926 to ensure more effective control and authorisation of local authority borrowing. Within defined limits money may be borrowed in anticipation of revenue, usually by way of bank overdraft.

The volume, incidence, and nature of local government taxation, and the difficulties caused by the competition for capital among local authorities, have been controversial questions for many years. A Royal Commission investigated the whole problem of territorial local authority finance in 1958. Some of its recommendations have since been adopted, including the suggestion that portion of the national petrol tax be diverted to the National Roads Board for distribution to local authorities as roading subsidies. Its more radical recommendations, including the recommendation that a citizens' tax on earnings and profits be collected and distributed by Central Government, that Crown rating exemption be abolished, and that a local authority finance corporation be established, have not been implemented. The financial difficulties experienced by territorial local authorities are undoubtedly a contributing cause of the increasing interest in the structural reorganisation of local government.

A local authority has no legislative powers beyond the authority to make bylaws within limits defined in its constituting Act, but it can promote legislation on matters which affect the government of the area under its jurisdiction and which it is not already empowered to deal with. If the subject is transient and not contentious and is approved by Government it is usually dealt with by the inclusion of an appropriate section in the annual Local Legislation Act passed by Parliament for this purpose. If, on the other hand, the local authority seeks powers of a permanent or major nature additional to those conferred on it by general Acts it must submit to Parliament a special local Bill. The extent to which the foregoing privileges are used may be gauged from the fact that the annual Local Legislation Act usually contains 40 to 45 sections, while about 15 local Acts are passed each year.

Although local government has been broadly defined as that element of the governmental structure which deals with affairs of peculiarly local significance, there is no immutably fixed line of demarcation between its responsibilities and those of the Central Government. The allocation of functions between local and Central Government changes constantly as circumstances warrant. There is a wide range of powers and functions for which local authorities as a whole or as individual units may have varying degrees of responsibility. Traffic control, for example, may be undertaken by a local authority itself or by the State by arrangement with a local authority. Approval of land subdivision within municipalities has for many years been the responsibility of borough councils, but county councils were not given similar powers until 1962. On the other hand functions such as motor registration and hospital finance were at one time the responsibility of local authorities but are now that of the State.

A contributory cause of this state of flux is the fact that the territorial local authority structure is based on a system originally designed to meet the needs of the 1870s — a period when New Zealand consisted of many small and comparatively isolated settlements and resembled the present integrated community very little. Further, not only has the population more than quadrupled in this period but its distribution also has changed. In spite of minor adjustments made from time to time it is generally accepted that the territorial local government structure has not kept pace with these changes. Consequently, some local authorities have not the area or resources to carry out adequately functions involving works or other projects which require integration in national or regional schemes or the maintenance of a uniform approach and standard, at least without substantial assistance. This fact has direct relevance both to the extent to which powers can be delegated to local authorities and to the amount of financial assistance required to be provided by Central Government. Financial assistance to territorial local authorities by Central Government naturally involves some degree of supervision over the manner in which the finance provided is expended, and to that extent involves also Central Government control of local government actions.

The history of roading as a function of territorial local authorities is a relevant illustration. The responsibility for construction and maintenance of roads has traditionally been their responsibility. Indeed, roading is still a primary function of county councils and one of the more important functions of municipal councils. Since 1876 the power of initiative and the responsibility for roading finance have progressively and to a marked degree passed to Central Government, operating today through the National Roads Board. This Board, with its District Roads Councils, is representative of Government, local authorities, and road users. It has the sole ultimate responsibility for the construction, maintenance, and control of arterial routes, although it may delegate the actual work to local authorities and meet its cost. The Board also plays an influential part in the ordinary roading activities of local authorities through the payment of roading subsidies, which depend upon its prior approval of roading programmes.

The first effective measures to set up any form of local government were taken after the provinces were established under the New Zealand Constitution Act of 1852 (U.K.) and made responsible for local government. The provincial councils adopted various approaches, with the result that, by 1867, 21 municipal local government units had been constituted under no fewer than 14 separate provincial ordinances. Some of these purported to vest municipalities with powers which, although undoubtedly necessary, were beyond the legislative jurisdiction of the provincial councils. The General Assembly rectified this state of affairs by the Municipal Corporations Act of 1867. In addition to regularising the position of the 21 municipalities already established, the Act served as a blueprint for the constitution of additional ones by the provincial councils. It provided that any such new boroughs should not exceed an area of 9 square miles which must contain not fewer than 250 householders.

The Municipal Corporations Act of 1867 succeeded in being passed because it regularised existing municipalities and contained no proposals for new taxation. Its projected rural counterpart was much more far reaching. It was proposed that it should repeal all provincial legislation establishing road and highway districts, provide a new system of counties and reconstituted road districts, and institute a uniform system of finance for them. This Bill was not passed by the General Assembly.

Upon the abolition of the provinces in 1876 the central legislature became wholly responsible for local government administration and the way was open for a uniform approach to the whole question. The Municipal Corporations Act of 1876 reconstituted 17 boroughs already constituted under the 1867 legislation and provided that 19 others, originally established under Otago provincial ordinances, be reconstituted upon petition of 50 ratepayers in each instance. The greatest changes, however, were made in rural local government. Three hundred and fourteen road boards or their equivalents originally established by the provinces were in existence, some ridiculously small. One Taranaki board had a total revenue of only £14 in 1875. The Counties Act of 1876 divided the country into 63 counties. While it did not abolish road boards, it clearly placed them in a subsidiary relationship to the counties, a relationship intended to lead to their gradual disappearance and the consolidation of rural local government in larger county units. This latter aim has been only partly successful. Although road boards have now practically disappeared, the number of counties had increased to 129 by 1929. Even today 115 controlled by county councils still remain. This fragmentation of the county structure was caused almost entirely by conditions applying to Government subsidies and loans. Maximum subsidy limits introduced in 1885 meant that the land area included in a given county would be eligible for a larger total amount by division into smaller counties, each of which could claim the maximum. The limitation of Government lending to individual counties, introduced in 1886, accelerated the trend to division.

The desire for some form of local authority suited to the needs of smaller settlements led to the enactment of a Town Districts Act in 1881. Town districts were limited to areas not constituted as boroughs, not exceeding 2 square miles, and containing not fewer than 50 householders. Their establishment led to some friction between town boards and county councils over the division of functions. Accordingly, in 1906, it was enacted that no town district with a population of more than 500 should form part of a county. Urban settlements arising in counties are now commonly first constituted as county towns.

The administration of certain local activities by special-purpose authorities has long been a feature of New Zealand local government. Their numbers are usually attributed to the multiplicity and consequent weakness of the territorial authorities. While this has undoubtedly been a major factor, especially since the turn of the century, the origin of some can be traced back to the days of provincial government, while others date from the inception of the present system of territorial local authorities.

Experiments with the control of harbours by specially constituted local authorities were carried out as early as the 1860s, and in 1870 a Harbour Boards Act empowered provincial superintendents to establish harbour boards. The year 1876 saw the first legislative provision for the supervision of rabbit destruction by boards of trustees and in the same year a Christchurch Urban Drainage Board was in existence. Even if the very numerous local authorities involved with education and with minor functions, such as the control of domains, cemeteries, public halls, and the like are excluded, the types and numbers of special-purpose authorities have steadily increased over the years until today there are more than 20 types totalling over 600 separate authorities.

Notwithstanding some small reduction in the number of territorial authorities in recent years, a reduction resulting mainly from the decrease in road boards and town councils, the total number of local authorities has increased steadily because of the greater number of special-purpose authorities. This is one reason why there have been two parliamentary inquiries since 1944 into the structure of local government generally.