1. INTRODUCTION

1.1 The New Zealand Initiative welcomes the opportunity to submit on the Draft Guidance on Regulations for Groups of Activities for Councils’ Planning and Reporting.

1.2 The Initiative is a Wellington-based think tank supported primarily by major New Zealand businesses. In combination, our members employ more than 150,000 people. We undertake research that contributes to the development of sound public policies in New Zealand, and we advocate for the creation of a competitive, open and dynamic economy, as well as a free, prosperous, fair and cohesive society.

1.3 This submission draws on the Initiative’s extensive research on local government, including its 2024 report Making Local Government Work and its 2025 submission on the Local Government (System Improvements) Amendment Bill.

1.4 This submission supports the move to standard groups of activities. Comparable reporting across all councils is a precondition for the benchmarking and comparative performance reporting the Initiative has long advocated, and central publication of the resulting data will let ratepayers better compare their council with its neighbours.

1.5 The Initiative’s support for standard reporting should not be read as support for greater central control. The Initiative advocates localism, and it opposed rates capping in its February 2026 submission to the Department of Internal Affairs. Comparable reporting is different in kind. It equips elected representatives, residents and ratepayers to judge their council’s performance and hold it to account directly, rather than substituting central government’s judgement. Put simply, transparency strengthens local democracy.

1.6 It is important to recognise that consistent labels will not necessarily produce consistent measurement. Councils allocate corporate overheads in very different ways, and the draft guidance does not change that discretion. Two councils with identical operations could report materially different costs for every group. Because the data will inform the proposed rates capping regime, weak comparability must be avoided. The guidance needs allocation rules.

1.7 Some of our recommendations concern the composition or names of the regulated groups, rather than the guidance alone. Where these matters cannot be addressed through the final guidance, the Ministry should advise Ministers that the regulations should be amended.