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The Pamphlet Collection of Sir Robert Stout: Volume 68

Some Suggestions on Reform of Local Government and Decentralisation of Parliament

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Some Suggestions on Reform of Local Government and Decentralisation of Parliament.

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Reform of Local Government and Decentralisation of Parliament.

The great value and importance of a good system of local government has been fully recognised by the most eminent writers, publicists and statesmen. De Tocqueville, speaking of England and America, says "I have heard citizens attribute the power and prosperity of their country to a multitude of reasons, but they all placed the advantages of local institutions in the foremost rank." The distinguished author of "The Dutch Republic," Mr Motley, does not hesitate to speak of local Government as the "life-blood of liberty." Mr Goschen, one of the wisest English statesmen of the present day, may also be quoted to the same effect, and when advocating a reform of the English county system he says that "He would lead the rural districts to political life through local life. Let them learn practically to manage their own local concerns, and then they will be better fitted to take part in the management of Imperial matters." At the present time, however, both in New Zealand and in England the incomplete and imperfect state of local government is fully and generally acknowledged and the necessity of a reform in it admitted.

Before suggesting any measures of reform of local government in this colony it may be well, for the better understanding of the question, to consider briefly:—I. What is meant by local government; II. The conditions essentially necessary for its successful tad beneficial working; III the present condition of local government in New Zealand; and IV. The defects in its present constitution and working in New Zealand.

I.—Local government then, as contrasted with general or national government, is a comprehensive term and includes all local governing bodies having control and charge over local districts of various areas and over natters of greater or leas importance within these areas. It exists under many names and with reference to its territorial extent is variously known by the terms "pariah" or commune," "county" or "shire," "district" or "province" or "state." Where population is concentrated it exists under the form of town boards or municipal corporations. The political unit or smallest territorial local governing body varies in different countries according to the nature of the soil and climate, the density of population and the occupation of the inhabitants. In agricultural countries, where the population is come paratively dense, this unit is known by the name of parish or commune in Europe and of township in North America, and usually comprises an area seldom exceeding 23,000 acres, which is the area of most of the townships in the new states of the American union. In England the parish varies greatly in area, from fifty or a few hundred acres to 10,000 acres or more, Some local government reformers in England have, however, advocated that the Poor Law Union should be the political unit, and on an average each union comprises about twenty-three parishes, there being 650 unions in England and Wales. Between the political unit and the national government there are in England, the Poor Law Union and the county; and in North America the county and the province or state. In France there are between the political unit and the national government the canton, the arrondissement, and the department. In England it is expected that a bill for the reform of local government will be introduced during the present session of the Imperial Parliament, and the correspondent of a New Zealand journal informs us that—"The subject was discussed by the Farmers' Alliance who passed a resolution declaring that no scheme will be satisfactory which does not provide for the direct representation of all ratepayers and complete control by them over the administration of local government; also recommending that the county, the polling district, and the parish should be the areas of local authorities; the county board being at the head with district boards and parish vestries under it." It thus appears that it is now proposed to retain the old parish as the political unit, but to constitute a second body intermediate between the parish and the county, thus providing for three local governing bodies as in Canada and the United States; and to place them all under the control of the ratepayers, which has not been the case hitherto as respects the English county, for under the present unsatisfactory state of English county government the administration, and the imposition of rates is vested in the Lord-Lieutenant and Court of Qaarter Sessions or Justices of the Peace—the sound principle that there should be no taxation without representation being departed from.

The chief duties and functions of these local bodies both in Europe and America are the construction and maintenance of roads and bridges, gaols, lunatic asylums, the relief of the poor, and power to make bylaws or local regulations on matters of local interest. In both England and New page break Zealand there are various other local governing bodies, such as sanitary boards, school or education boards, land boards, and hospital and charitable aid boards, and it is recognised that the functions of some, if not of all, of these boards might advantageously be devolved upon one or other of the three territorial local government bodies first mentioned.

II.—As to the conditions necessary for the beneficial working of local government. The work must be judiciously divided amongst territorial governing bodies of various sizes and with functions in proportion to their area; that is to say between bodies of the first, second and third rank, according to the nature of the country and the occupations of its inhabitants. In an agricultural country such as a large part of New Zealand is, the political unit or smallest body must be of comparatively small area, corresponding somewhat with the European parish or commune, the North American township, or with our own New Zealand read boards, but in a thinly-peopled pastoral country such as the greater part of Australia and South Africa, then the political unit may be of much greater area, corresponding somewhat with the English and colonial county or the French department. Between the political unit and the general or national government in an agricultural country there are usually one, or two, or three other bodies, such at, in England, the Poor Law Union and the County; in France, the canton, the arrondissement and the department, and in North America, the county and the province or state. The importance of the functions and powers of these bodies having a correspondence with their areas. These institutions should be permanent, not liable to extinction at the caprice of the ratepayers, as has been the case with our New Zealand road boards, but only by a special Act of Parliament. They, or the larger of them, should have power to enact bylaws or local laws on matters of local interest. They should have power to raise all the money necessary for carrying on their functions without requiring pecuniary assistance from the general government, though it may be necessary for the latter to limit their powers both as to borrowing and levying rates. There should be a complete separation between general government finance and local finance. The credit of the general government should never be pledged for works or loans of local bodies, nor is it desirable that subsidies or grants-in-aid should be given to them. And, though this has been done to a large extent in New Zealand and to some extent in England also, it is condemned as being impolitic by Mr Goschen and other eminent public men, as being calculated to sap the independence of local bodies, and to encourage a lavish and reckless expenditure.

To sum up, the essential conditions of success are:—(1) A suitable political unit must be established, and between it and the national government such other larger territorial local bodies as the peculiar nature of the country may require. (2) To give then ample powers to raise all revenue necessary for the accomplishment of all works devolved upon them without the necessity of procuring assistance from the general government. (3) A complete separation between local finance and general government finance; as indeed, in the case of New Zealand, was most emphatically promised by the Premier and Colonial Treasurer, Sir Julius Vogel, in hit financial statement of 1876, when the Abolition measures were carried. (4) There should not be too many local governing bodies, as is the case at the present time both in England and in New Zealand, but the work now done by the sanitary boards, land boards, education boards, and hospital and charitable aid be ards should be devolved upon one or other of the territorial boards, whether county, district, or province. (5) The functions of each local body must be clearly defined (6) These bodies must not be liable to extinction by a vote of the ratepayers but only by Act of Parliament.

III.—As to the present condition of local government in New Zealand: To understand how the present unsatisfactory state of things came about we must go back twelve years, to a date previons to the destruction of the old constitution of New Zealand, by tie Abolition of Provinces Acts and other supplementary measures. At that time the territorial local governing bodies in existence were the road boards and the provinces With the exception of certain defects and abuses of the provincial system which needed reform, this system of local government worked fairly well, though no doubt as settlement progressed and the country districts became more populous it might have been expedient to constitute another local governing body with a larger area and larger powers than the road boards and intermediate between it and the province. This requirement was recognised by the Provincial Government of Otago which passed I Counties Act, not actually creating counties but making it optional for the ratepayers to form them by combining the areas of several road boards into a county; the road board* still retaining their previous areas and functions. The settlers, however, did not avail themselves of this permissive bill up to the date of the abolition of the provinces, which seems to show that at that time a third body, was not considered necessary. There were also school committees empowered to levy rates, erect school buildings and administer the common schools: also, in Otago, there were the hundreds, whose Wardens had control over matters connected with the depasturing of live stock on waste lands of the Crown within the hundreds. The party of Abolition having by promises of ample subsidies and substantial endowments, obtained a majority at the elections, succeeded in abolishing the provinces, and in showing how much easier it is to pull down than to build up, for it signally failed page break in providing any sufficient or efficient substitute for the old form of local government which it bad destroyed; In place of the nice provinces about seventy comparatively small local governing bodies under the name of counties were established. The old road boards were allowed to remain, and it was left optional with the settlers to put the County Act in full force or to allow it to remain in abeyance. Provision was also made that, even when the counties were organised and rates levied, the work of road making, Ac., could, by arrangement, be devolved upon the road boards, so that the county in that case required no staff of engineers, overlookers, &c., and in a few cases the counties have not been organised at all. A provision having also been made that road boards might, on a vote of a certain majority of ratepayer*, be merged into the counties and so cease to exist, it has happened that in some cases all the road boards in a county have been merged and thus the county has become the political unit or smallest territorial local body. There are also the land boards, education boards, and hospital and charitable aid boards. The result of the Abolition measures has therefore been the present mixed and as it may even be termed, chaotic state of things which we now see around us.

IV.—As to the defects and evils in the constitution and working of our present system or rather want of system of local government. These are now fully recognised by nearly all those colonial politicians who assisted in abolishing the provinces. Some of them bad no intention of establishing a centralism such as now exists, but were actuated by a desire to abolish the petty centralism which, as regards the distribution of the land revenue, unfortunately did exist under the provincial system. By the arrangement made in 1856 though the Constitution Act gives the control and administration of waste lands to the general government, these were then practically devolved upon the provincial governments. The proceeds of tales and leases going into a common fund, the provincial treasury, and the expenditure being voted by the provincial councils—it resulted as it now does under the present colonial centralism that the most money was expended not where it was most wanted, but where there were the most votes to allot it. Hence too much of the land revenue was allotted to the more populous districts, whilst the outlying districts in which it accrued were neglected, or it may be said were plundered. This evil might easily have been remedied by the constitution of land districts of moderate area with a provision that not less than a certain per centage of the land revenue, say from 50 to 70 per cent, should be secured to them, and Indeed this was petitioned for by the settlers in the neighbourhood of Oamaru. Unfortunately however the leading politicians of the day seem to have been actuated more by feeling and prejudice than by reason and sound statesmanship, and were determine d, not upon reform, but upon revolution; an d having succeeded in bribing the electors by promises of large subsidies and substantia endowments, they accomplished their pur" pose. In place of the nine provinces abolishede' about seventy new road boards under the name of counties were set up, for practically these new counties were only road boards and somewhat larger scale than the old road of boards, and with some increased powers making bylaws. Many of the Abolition party have Lad the candour to acknowledge this as, for instance, Mr Hurst house, M.H.B. for Motueka, who, speaking in 1881, says, "1 shall be ready to give an intelligent vote, I hope, on any system of local government which will be better than we have at present. My own '.view is that county councils should be entirely abolished. I have a great respect for the road boards of the country and little or none for the county councils. There are same exceptions, but I consider it will come to this, that the General Government will have to take over the main roads and bridges leaving the road boards to maintain the by-roads and carry out similar works in their several districts. The present double-barrelled system of local government is very unsatisfactory" (see Hansard, June 15, 1881, page 49). Sir F. Dillon Bell also speaking on the county question said—" Without going into the very wide question raised by the change which Abolition had made in the form of government, he would express his own opinion that the county system as a substitute for the provincial form of government had been a conspicuous failure. . . . Whereas the cost of the legislative bodies of the provinces had amounted to less than L40,000 a year, the cost of the county' form of government already amounted to L80,000 a year without any good work being done. "(See Hansard, vol. xxix, page 363). Indeed the impotence of the county system became apparent even so early as the very next session of 1877, when demands for money for roads and bridges were made all round the House; the first to set up a claim being the member for Waikaia, who had voted for Abolition, and who moved a resolution that all main roads and bridges should forthwith be undertaken and maintained by the colonial government. Notwithstanding the pledge given by the Premier during the previous session that roads and bridges were never to be heard of in that House except by way of congratulation that they had all been made by the local bodies without the necessity of parliamentary assistance, the House entertained the proposal for general government help. However, before the existing Ministry could take action in the matter they were displaced the same session and succeeded by the Grey-Macandrew Ministry. The new Ministry insisted on the new form of local government being put on its trial, and resisted all claims for money for local works exclusive of the page break subsidies already guaranteed by Act of Parliament. But towards the close of the next session of 1878 a great flood having carried away all the bridges on the Olutha river they yielded to pressure brought to bear by many Otago members, and placed fifty thousand pounds on the estimates—nominally as a loan to the counties on the Clutha—but in reality as a gift for replacing these bridges, for the so-called loan has never been repaid, but taken over by the colony. No further action in this direction was taken by the Grey Ministry, a vote of no-confidence having been carried against them early in the next session of 1879. The Hall Ministry coming into office in the second session of 1879 with a very small and doubtful majority supported a vote of about L165,000 for roads and bridges north of Auckland, and thereby gained the votes of four Auckland members and made its position secure. Since then in addition to the subsidies large sums of money have been voted for local works all over the colony and which together with the subsidies have up to the present time amounted to probably not less than three millions. Nominally these amounts are voted out of the consolidated fund, but in reality they have come out of loan and have increased the debt of the colony by that amount. This money has been supplied to the local bodies in various ways: by the subsidies, by special votes, by the Roads and Bridges Construction Act and by the Loans to Local Bodies Act, passed by sir Julius Vogel, under which Act the credit of the colony may be pledged to the extent of L200,000 a year in direct violation of the pledge given by himself in 1876 that the credit of the colony should never be pledged for local works, The result of these abolition measures in addition to the public works scheme has been to degrade the Parliament of New Zealand from its proper status as a legislative body and to pervert it into a huge board of works in which log rolling and localism have run riot. The squandering and misapplication of public money and the enormous increase of the colonial debt are not however the worst evils of the present system of combined centralism and localism. For much of the time of Parliament is taken up with local matters and the votes of individual members, and even the fate of Ministries has been determined by these local questions. The sessions have been much prolonged and too often the proper national business of Parliament has been hurried over in a perfunctory manner or totally neglected owing to the great amount of time given to comparatively small local questions. Moreover for years past the constituencies have returned men to Parliament much less with reference to their capacity as legislators than to their suitability as agents or brokers to obtain concessions and votes of money for local works, or as the phrase is "to get all they can for the district," and in some cases it has been expected that the M.H.B., should give or withold his support to a Ministry not with reference to the good of the colony as a whole but simply as it might conduce towards obtaining concessions for his own district, In short it is not using too strong an expression to say that under the present pernicious system of combined centralism and local, ism the constituencies have been corrupted, the Parliament degraded, and the Ministry demoralised, whilst at the same time the colonial debt has been greatly increased.

To come now to suggestions for reform of local government. The essence of the reform needed may be gathered from the Financial Statement of the Premier and Colonial Treasurer, Sir Julius Vogel, delivered in 1876, part of which it may be well to give from Hansard, vol. xx., pave 287:—"We purpose then to constitute districts divorced from the towns, and not possessing powers of lezislation, but endowed with clearly defined duties, revenues, and authority to augment revenue. We shall call them counties; and we aim at separating them from road districts, towns, and the colony in regard to their duties and finance. With the finance I have chiefly to do; and the essence of our plan is that the counties, the road districts and the towns will not be able to pledge the credit of the colony, whilst their own credit and revenue will be sufficient to enable them to perforin the work assigned to them. Mr O'Borke, I dreaded doing away with the provinces, because I thought we should have to sit here in judgment on local works, and that gradually we should find creeping upon us the demoralising system of mutual compromise, called by the Americans 'log-rolling.' Bat we have avoided this difficulty. If our system be carried out, the name of any particular road or bridge or of any work indeed, bat the buildings for the Government services and the main railways of the country, should rarely be heard in this House—at least not for the purposes of supplication, though it might be as the subject for congratulations as the triumph of the form of local government that could give to the country the works it required, without the necessity of Parliamentary intervention,"—Had the promises then given been fully carried out the new system might have bees fairly successful; but as was clearly foresees and predicted at the time by many members of the House, it was impossible in the nature of things that such a scheme could succeed. Very soon log-rolling—which it was prefessed had been guarded against—became rampant, and instead of congratulations that all necessary local works had been made without the necessity of Parliamentary intervention it was loudly and incessantly proclaimed in the House that the new bodies could not undertake them and demands for parliamentary grants of money sprang up all round. Bad as the new system it it will no doubt be difficult to remedy its evils. It has existed now for twelve years and the settlers have become so accustomed to general page break government help that it may be very difficult to induce them to forego it. However, necessity will effect what nothing else could, and now that it is no longer possible for the colony to go on borrowing enormous loans and scattering money broadcast amongst the local bodies the settlers must perforce consent to be weaned and no longer crave for general government milk. Supposing it to be practicable to consolidate the small Counties by reducing them to, say, twenty, and to maintain the present road boards and to revive those which have been merged, making their areas and boundaries the same as those of the ridings, then a county system night work well and its powers might be increased and the work of the education boards and charitable aid boards, and perhaps the control and maintenance of the police Bight be devolved upon the counties, it is, however, doubtful whether the settlers having been for twelve years accustomed to these small counties, will consent to have them merged into larger ones; for hitherto the tendency has been rather towards subdivision than towards consolidation. It may therefore be more expedient to allow the counties to remain as they are and to constitute other local governing bodies with much larger areas and greatly increased powers. Unless these new local districts comprise large areas it is obvious that they will not be able to undertake the main roads and bridges. This became apparent in 1878 when the small counties on the Olutha river failed to replace the bridges carried away by a great flood but immediately begged for pecuniary assistance from the Colonial Government, and by dint o! political pressure in the House of Bepresestatives succeeded in obtaining it. The boundaries of these new local districts should be as far as possible adapted to the natural and geographical features of the country, so that they may include a large tract of country whose inhabitants have interests in common. In some cases the present education districts might be adopted, as in the die of Southland and probably Taranaki. The former province of otago might be subdivided into three districts—North, South, and Central—Canterbury into three—the northernmost one including a portion of the present provincial district of Nelson. The remainder of Nelson, Marlborough, and Westland, one each, making ten local government districts in the South Island. In the North Island there might probably be eight local government districts, say two for Wellington, one for Napier, three for Auckland, and one for Taranaki, Recognising the great evils which result from allowing these bodies to depend upon the General Government for subsidies and grants-in-aid (which, if charged nominally on the consolidated fund, yet practically come cut of loan), and the necessity of their being independent and self-supporting, the great difficulty involved is no doubt their finance. In addition to the license fees, dog tax, &c, it may become necessary either to hand over to these local districts the proceeds of the present General Government property tax or to pass a permissive local government property tax act, with a provision that it can be put in force only by a vote of a majority of votes within the district. In England the local government reformers advocate this course as regards the English counties. They justify the proposal by showing that all classes, whether resident in the towns or the country, benefit by the main roads and bridges, and that it is unfair and impolitic that, the whole coat of these should be devolved upon the owners and occupiers of land; that other property holders in the towns, such as brewers, millers, manufacturers, merchants, and people of independent property also benefit by them, and should therefore contribute to their construction and maintenance.

Amongst those who have studied a reform of local government there is some difference of opinion as to whether the large towns should be included within a local government district or should be kept apart with distinct powers and revenues. In deciding this matter it is necessary to recognise that the large centres of population and business owe their prosperity and even their existence to the country, for it is the country which supports the towns. Without the capital, labour and enterprise of the country settlers there could be no towns and, moreover, it is a well-known fact that in all countries the toil of the country settlers enriches the traders and distributors of commodities in the towns more than themselves. Both equity and expediency therefore require that the towns should be included in the largest of the territorial local governing districts, and should contribute towards its revenues. Of course in the event of a property tax being levied for the benefit of the local district, then it would follow that all property-holders should have votes the same as ratepayers. As all these local bodies are administrative and economical bodies, devoid of legislative functions of a national character, a property qualification for voters is both politic and just. As to the mode of election of members of the largest local governing body, some have advised that it should be mediate by the road boards or members of the county ridings. Though mediate election in some cases is undoubtedly the best method it is probable that it would be inexpedient in this case, and that direct election by ratepayers as at present would be preferable. Another obstacle in the way of a general acceptance of any scheme of local government reform which did away with subsidies, grants-in-aid, and loans might arise from the fact of certain districts of the colony having benefited more than others by the large government expenditure which has been going on for the last sixteen years. Some parts of the colony have received but a small share—or no share at all of the enormous loans which have been raised and spent. The in- page break habitants of these districts would naturally urge that having for years past been taxed to pay interest on these loans it was not just or fair to deprive them of the benefits they were intended to bestow; that they ought in equity to be put in the same position as the rest of the colony. As some of these districts are unsuitable for railways or large works it might be reasonable and expedient to square the account with them by a vote of money or some pecuniary concession. However, if anything of this kind were done, it should be done once for all—a definite and final settlement of all claims should be made, so that afterwards the district should be entirely self supporting and have no claim upon the General Government, These large local government districts might also be given greater powers of making bylaws than the present counties possess. The functions of the education boards, hospital and charitable aid boards and land boards might also be devolved upon them and perhaps also the maintenance and control of the police, as in the case of the English counties. Another very important duty which in the original drift of the New Zealand Constitution Act, as prepared by Sir Geo. Grey and accepted and endorsed by the then Colonial Secretary, Earl Grey, was entrusted to the provincial councils, namely, the election of members of the Legislative Council might also be assigned to these district councils.

In conclusion, the reforms now suggested are not such as in the abstract are the best possible, but such as seem to be practicable under existing circumstances. My own conviction is that a system of government resembling that of the Canadian Dominion would have been the most suitable for New Zealand, owing to its peculiar geographical configuration, its great extent in length from North to South, the fact of its having originally been colonised from six different centres, and to the absence of any one natural and national centre of commerce and population. But the past cannot be recalled and we must recognise that the impolitic and injurious legislation of the last twelve years has brought about a state of things very difficult to remedy. A remedy should, however, be attempted, and those politician whose inexperience or rashness brought about the revolutionary changes which have proved so disastrous are bound both in honour and in duty to exert themselves to the untmost to remove the evils they have occasioned.

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