LGNZ: Funded by the People, But Not Always for the People

LGNZ: Funded by the People, But Not Always for the People
Recent events in the Bay of Plenty show exactly why local government needs a bottom-up rethink. Tauranga’s new mayor, Mahé Drysdale, has been in office for less than a year and he's already pushing a dramatic change, amalgamating the region’s councils into one super-council. His argument is that having “seven councils around the table means seven times the overhead.” He claims a merger would deliver efficiencies and improve service delivery.

But the way this proposal dropped says everything.
There was no campaign. No community conversation. No clear evidence that a forced merger would even work. Just a media announcement and a remit submitted to LGNZ.

Local leaders didn’t take long to respond. The mayors of Whakatāne, Ōpōtiki, and Kawerau came out swinging, warning that amalgamation would swallow smaller communities into Tauranga’s shadow, silencing local voices and stripping away the accountability that smaller councils provide.

Whakatāne Mayor Victor Luca pointed to the core problem, there’s no evidence this will save money or improve services. A 2022 Infrastructure Commission report (Does Size Matter?) found little to no efficiency gains from larger councils. A 2024 economic study backed that up, showing that unless services are actively cut, simply merging organisations doesn’t magically reduce costs. Bigger doesn’t mean better (or cheaper).
And Drysdale didn’t offer any local evidence to back his proposal either. As Mayor Luca put it, “The real evidence is there and he completely ignores it.”

A Community Left Out of the Conversation
What’s even more concerning is how this was rolled out.
Drysdale went public with the plan before engaging with the communities it would affect. No workshops. No briefings. No mandate. Just a surprise announcement from a first-term mayor who, so far, has shown little regard for meaningful community input across a number of key decisions.
Ōpōtiki Mayor David Moore rightly stated, “The first thing you learn in local government is you need to talk to your community first.” That didn’t happen here.
Drysdale has since tried to walk it back, saying he just wanted to “start a conversation.” But by then, trust was already damaged. The way this was delivered felt less like an invitation and more like a direction from above. The remit was already drafted. The media lines were ready. It looked like a rollout, not a dialogue.
This is exactly the kind of move that breeds public cynicism where bold changes are floated from behind closed doors, with little community buy-in and no clear path to opt out. It's a familiar playbook and one that puts political positioning above public process.

Does LGNZ advocate for communities or lobby for Itself?
Drysdale’s amalgamation remit gained traction in part because Local Government New Zealand (LGNZ) [the national association of councils] appeared to back it. LGNZ is supposed to be the collective voice of our local authorities. But we have to ask, whose voice is it really? And who is actually being heard?

Here’s the issue we see. LGNZ is funded by councils, which means it’s paid for by (you guess it) the ratepayers. Yet it doesn’t directly speak for the public or represent community interests; instead it seems to speak for councils as institutions. Increasingly, elected members and watchdog groups are raising concerns about this arrangement. In interviews we’ve done around the country, councillors who know their communities well are saying the same thing, LGNZ doesn’t always help. In fact, sometimes it works against what the community actually wants.

Take the 2025 LGNZ Annual General Meeting. Member councils voted, by an 82% majority, to launch a campaign, funded with ratepayer money, to oppose a Government proposal to cap rate increases. Think about that. LGNZ chose to spend public money to lobby against cost-of-living relief for the public. The Taxpayers’ Union called it “gaslighting ratepayers.” Provocative language aside, the core issue stands, whose side is LGNZ really on?

It increasingly feels like LGNZ behaves less like a neutral bridge between communities and power, and more like a defensive lobbyist for council bureaucracies. They appear quick to close ranks and protect the status quo, even if that means sidelining the very people who pay the bills.

And unlike elected councils, LGNZ isn’t directly accountable to voters. Its meetings and decisions often happen out of public view. Earlier this year, a leaked memo revealed LGNZ was holding private meetings with councils to plan a PR campaign against the rates cap, all paid for by ratepayers.

Let’s not forget that LGNZ also struck an approx. $2 million deal with central government to support the controversial Three Waters reforms under Labour, on the condition they wouldn’t publicly criticise the policy. That deal blindsided many member councils and left communities wondering who LGNZ really works for.
Margaret Murray-Benge, a long-serving Western Bay of Plenty councillor, didn’t mince words. She called LGNZ an “expensive layer of democracy that cannot be trusted.” Since then, major councils like Auckland and Christchurch have also left LGNZ, citing similar concerns about politicisation and poor value.

So again we are asking, who is LGNZ listening to? When they back remits like Drysdale’s, whose agenda is being advanced? The public’s, or a policy club of insiders?

These questions aren’t rhetorical, but they do go to the heart of whether public funds are being used in the public’s interest, or against it.

Communities Across New Zealand Are Being Shut Out
What’s happening in the Bay isn’t a one-off. From Northland to Southland, we’re seeing the same pattern repeat, big-ticket decisions being made without proper consultation, while community feedback is watered down or ignored entirely.

We’ve heard it directly from elected members. They’re frustrated. Staff reports are becoming the final word. Consultation is increasingly treated as a procedural formality. Public forums are held, but real decisions have already been made. Some councillors are quietly saying they feel more like passengers than representatives.

And it’s not just elected officials feeling it. A 2020 national survey found only 30% of New Zealanders trust their council’s decision-making. Just 31% believed they had any real influence. That means nearly 70% of people feel left out of decisions being made in their name, and with their money.

The results are that communities feel disconnected. Councils feel embattled. And organisations like LGNZ seem to step in as de facto powerbrokers, but without the transparency or accountability that public decision-making demands.

This is not how local democracy is meant to work. It’s time to flip the board and put people back at the centre.

We’re not just here to point out what’s broken. We’re here to name what needs to change.
Here’s what a real bottom-up rebuild could look like:
1. Transparent Lobbying Rules: New Zealand still has no lobbying register. No cooling-off periods. No public visibility into who’s influencing what behind closed doors. That needs to change. If LGNZ or any group is using public money to influence policy, it should be logged, declared, and open to scrutiny.
2. Ban Ratepayer-Funded Political Campaigning: Ratepayer money should not be used to fund lobbying efforts that communities haven’t agreed to. Councils should be required to consult their communities before spending public funds on campaigns, especially those run by external associations.
3. Real Community Consultation Requirements: Not just a tick-box form. We need binding rules that ensure early, inclusive, and transparent consultation on major decisions, including asset sales, amalgamations, and large-scale development plans.
4. Citizen Oversight Panels: For every council, there should be a standing public committee that can review major decisions, challenge process breaches, and request independent audits where transparency fails.
5. Stronger Local Government Ombudsman Role: We need a strengthened, independent body that can investigate local government conduct, including misuse of public funds, flawed consultation processes, or conflicts of interest.
6. Open LGNZ Meetings and Funding Disclosure: If LGNZ wants public trust, it needs to open its meetings, release its voting records, and publish full accounts of where its funding comes from and how it’s spent.
Local democracy should be the most accountable tier of government. But right now, it’s one of the hardest to scrutinise. That’s not just a flaw, it’s a systemic vulnerability.
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Let’s fix that.  
Tell us your thoughts on ways we can flip the system in the comments.