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Central control or local solutions – the fight for political control


A battle for the political soul of the country is shaping up for the next election in 2023 at this early stage of the Labour administration.

At issue will be centralisation of control from the top, or more succinctly “Wellington knows best” versus regional communities “better know their own needs”.

The shape of the coming battle can be seen in the Ardern Government’s approach to health services, water delivery reform, provision for Māori seats on local bodies, revision of the services, boundaries and funding mechanisms of local government, and under the previous coalition government the takeover of the polytechnic trades training system.

The common theme is more big government either from the politicians or the public service. And the fear of opponents in many parts of the country is that the combination will enhance central control at the expense of local solutions to local problems.

Also, not necessarily the least of issues that might come to the fore in the central versus local debate, might well be the decision to create a Māori Health Authority. Perceptions that this might mean Māori get their own share of the public purse for their needs, but also access to a proportionate share of general health spending, sit as a potential source of election wrangling.

There seems in the Capital a strongly held view that this trend towards more central control is not being driven by any single person or even a small group within the Government. This opinion sees the moves as an almost logical reaction to the problems apparent in the sectors covered by the reforms.

Fragmented and inefficient in many ways, each was and is ripe for reform.  And in each of these sectors it is only central government with the power that it holds legislatively and through the public purse that could enforce reform.

But do the reforms need to go so far, with aggregation on the scale contemplated and policy decisions on the boundaries of their activities being left ultimately to political figures and public servants? It is a question that ACT and National can be expected to ask.

Indicative perhaps of differences the proposed reforms are throwing up is a rift between a long-time Labour trusted adviser, Heather Simpson, and the Government. H2, as she was termed while acting as the senior adviser to former Prime Minister Helen Clark, is known to be unhappy at what she sees as “muddle” in ministerial ranks. That the health changes ignored substantive sections of recommendations made by the review group into performance of the sector is unlikely to have cheered her. They encompass more centralisation than the group, that she chaired, suggested.

Hovering in the background of this debate is the fact that while reforms envisage a Ministry of Health acting as a policy unit for health, past reality has shown that policy arms of government are often inclined to ignore direction that they should keep their hands off operational performance. Intrusion into that area by policy makers, frequently running counter to the experience of “hands on” professionals, leads to confusion and mixed messaging in delivery of service.

But for parties on the centre right of the political spectrum, a need exists to address the current trend among community, social and single-cause activist groups to call on ”the Government” to fix all of society’s ills as they see them. They consider central government to be the arbiter and “fixer” of such complaints as unfairness, poverty, housing and renting woes, anti-social behaviours, and over-costly consumer prices.

Looking to the Government for hand-outs, or action on a grievance more rooted in individual or group behaviours rather than a reasonable complaint about non-delivery or questionable service from the public sector, has now become such a familiar pattern that extension of central control at government level seems almost a natural progression to many.

That even The Treasury sees it that way can be gleaned from its ready acceptance of the Government’s plan for Finance Minister Grant Robertson to take powers enabling him to direct significant activities of the banking sector. Such a Treasury position would have been unthinkable in the closing years of the 20th century and early 21st.

The contest of central control versus an emphasis on more personal freedoms and local choices will therefore come down to the clarity with which the opposition parties can marshal their programmes, and the benefits to be achieved from them, in presentation to voters. A re-run of stale rhetoric about ill-disciplined government spending and enlargement of the public service is unlikely to cut it.

Unanswered for the moment is whether between them National and ACT have the capability and resources to take the political battle to the Government with sufficient elan and credibility to reverse the centralisation trend.


Bruce has been an economics and business editor, political and foreign correspondent in Washington, London and Hong Kong. He recently retired as CEO of the Building Industry Federation.




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Central control or local solutions – the fight for political control

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