Wellington (Tuesday, 30 June 2026) –
The Government wants to merge New Zealand’s councils into
a smaller number of big councils. A new report from The New
Zealand Initiative says this is the wrong
fix.
In Head Start Done Right, Senior
Fellow Nick Clark says the real problem is not that we have
too many councils. It is that too much power has been taken
away from local communities and moved to central
government.
“New Zealand already runs one of
the most centralised systems in the developed world,” says
Clark.“Fewer and bigger councils will not fix that. It
will make it worse.”
This matters for ordinary
people and for business. Bigger councils are further away
and harder to hold to account. Rates keep going up. And the
basics that people rely on, like roads, water pipes and
building consents, keep falling behind.
The
report looks at the Government’s Head Start plan,
announced on 5 May 2026. Councils have until 9 August to put
forward plans to merge. Those that do not, or whose plans
are turned down, will have a merger arranged for them.
Regional councillors will not stand again in
2028.
Clark says the idea that bigger councils
save money does not stack up. The Infrastructure Commission
looked at this in 2022 and found no link between the size of
a council and how cheaply it runs. Auckland’s big merger
in 2010 was never properly checked, so the promised savings
were never tested. What we can measure is not encouraging.
Spending per person and household rates both rose
sharply.
Advertisement – scroll to continue reading
“Auckland is the example to learn
from, not to copy,” says Clark. “The savings never
showed up. But Auckland is not the worst council either. Its
spending and debt have grown about the same as everyone
else’s, or a little slower. If bigger really meant
cheaper, the country’s biggest council would be the star
case for it. It is not. That tells you size is not what
controls cost.”
The report says the plan
ignores four things: whether merging councils actually
works, the value of having councils compete with their
neighbours, how the new councils will be paid for, and the
loss of local voice when councils get
bigger.
The report does not argue against
change. It sets out five simple rules for doing it well. Do
not merge more than you need to. Draw boundaries around real
communities, not lines on a map. Give local communities a
layer of government with real power. Find a proper home for
region-wide jobs, like managing rivers and flood protection.
And at the same time, fix how councils are run, so that
elected mayors and councillors, not council staff, are the
ones really in charge. It also calls for changes to the way
councils are funded.
“The Government has asked
councils to lead their own reform, and that is the right
call,” says Clark.“Councils that build their plans on
sound rules will be in a much stronger position than those
that just do a standard merger. The choices made in the next
few weeks will shape local government for
decades.”
Head Start Done
Right is available from The New
Zealand Initiative
website.
