The key to unlocking Auckland

Like many, I am looking forward to riding on Auckland’s soon-to-be-opened City Rail Link, the underground rail connector that will finally move Auckland rail out of the dark ages.

Why has it taken so long and cost so much?

At $5.5 billion for 3.5km of tunnel and two new stations, a 2023 study found it was the world’s most expensive underground rail project on a per kilometre basis. It cost more than four times as much as tunnelled rail in places like Denmark. It also took a really long time to deliver. The planning began in 2013. Construction started in 2018. Over those thirteen years, Singapore added more than 71km of track and 22 stations to its rail network.

Why are so many of the Auckland’s public infrastructure projects late, fiendishly expensive or missing altogether?

Whatever governing failures Auckland suffers from, they are not specific to Auckland Council and its council-controlled entities. The country generally is poor at efficient delivery of infrastructure and coherent, strategic decision-making.

Reports by the Infrastructure Commission show our infrastructure costs a lot, and not just because of our geographic vulnerabilities. The government spends vastly more responding to natural hazards and disasters than developing resilience.

Local government suffers from the same failings. It has a particularly bad case of too many stupid rules and not enough authority. Stupid rules, I argue in a recent book, are complex rules that would be more efficiently replaced by giving decision-makers more authority: more scope to exercise discretionary judgement. Stupid rules create “accountability sinks” where nobody is accountable because they are reduced to following rules and prescribed procedures.

On the surface, this looks like too much bureaucracy creating too many rules. Local government elected representatives are not in control of much of what the council bureaucracy does – witness Wellington’s spectacular failures. More persistently across local government, there is a democratic void.

But it turns out you can have a democratic deficit while also robbing the council bureaucracy itself of meaningful authority. If someone wanted to design a rule-bound system in which real accountability vanishes and capacity for strategic action withers, they would come up with something like New Zealand’s Local Government Act. The Act is a mash-up of aspirational goals and suffocating rules. Rules of procedure, onerous requirements for consultation, rules for reorganization, and even rules for making decisions. Taken together with many other duties and restrictions placed on local government, it’s a wonder our councils manage to deliver anything. 

As plenty of others have argued, councils in New Zealand lack power and resources. Local government spending has remained relatively static as a percentage of GDP for decades, even as the burdens imposed on councils by central government have spiralled.

The quagmire of rules, procedures and compliance requirements that local councils are effectively forced to produce create organizations lacking in command capacity: the capacity to get stuff done. The adept council bureaucrat may be a master of navigating and producing paperwork, and in this sense has a kind of power. But the bureaucrat is also tied down by the paperwork. Talk to any council official, and they are equally frustrated by burdensome contract-management, consultation and compliance requirements.

Take the bizarre case of the housing development built in Auckland’s west without actually being connected to the sewerage system. For all the planning rules, hundreds of households were, as of 2024, forced to live with sewage literally piling up to be trucked out.

Or take the Westmere helipad that finally gained consent after a protracted legal process. The council bureaucracy, elected councillors, the local MP and the overwhelming majority of public submitters opposing the helipad all lacked the authority to prevent a couple of billionaires getting permission to land their helicopter on their waterfront lawn. Stupid rules moved ultimate decision-making power to unaccountable independent commissioners.

The lack of authority at the local government level is pervasive. Instead of clear authority exercised by a hierarchically-organized council, subject to democratic accountability, complex stupid rules open up opportunities for litigation and arbitrary interventions by central government. We see both problems in a proposed major development to Auckland’s south, which council agencies warn poses flood risks – but may be powerless to prevent.

The government’s recent “deal” with Auckland will not fix these problems. It does not deliver either the funding or the authority to unlock Auckland as an economic powerhouse. An economist concluded the deal cannot work: “Devolving responsibility without power or funding is a recipe for failure.” He could have been echoing the philosopher Edmund Burke, who decried the lack of command capacity left by the French Revolution more than 200 years ago: “They are to execute, without power; they to be responsible, without discretion”, he wrote of the people’s supposed representatives. But, he might have added, they will get to write some really long policy frameworks, procedural rules and consultation requirements.