1. INTRODUCTION

1.1 This submission on the Department of Internal Affairs’ draft proposal ‘Simplifying Local Government’ is made by The New Zealand Initiative (the Initiative).

1.2 The Initiative is a Wellington-based think tank supported primarily by major New Zealand businesses. We undertake research that contributes to the development of sound public policies in New Zealand and advocate for a competitive, open, and dynamic economy and a free, prosperous, fair, and cohesive society.

1.3 A well-functioning local government system is critical to democratic accountability, fiscal discipline, and long-term economic performance. The Initiative has published extensively on local government reform, most recently in Making Local Government Work (December 2024), AI in Local Government (June 2025), and in multiple submissions on recent local government legislation.

1.4 The draft proposal represents the most significant reconfiguration of local government structures since the 1989 reforms. It raises fundamental questions about democratic representation, subsidiarity, efficiency, and the appropriate balance between local autonomy and central government direction.

1.5 This submission recognises that the draft proposal identifies real and longstanding problems within New Zealand’s local government system. However, while elements of the proposal align with concerns we have previously raised, its core architecture also entails substantial centralisation and a weakening of direct democratic accountability at the regional level.