Viewpoint – Reforms roll out at pace

Based on late 2025 Central Government announcements and planning for 2026, local government is facing a major structural transformation aimed at reducing costs, improving efficiency and redefining the core purpose of local government. These reforms are happening at pace, but there could also be future uncertainty, as we move through 2026 towards the General Election and its outcome. Some of the major issues and reforms are:

Core services & proposed rates cap

The Local Government (System Improvements) Amendment Bill (introduced Aug 2025) aims to remove “community wellbeing” from the Local Government Act, focusing councils strictly on infrastructure, regulatory functions and public services. The government also aims to restrict annual rate increases by introducing a 2-4% rates cap by 2029, requiring councils to focus strictly on core services and reduce spending on ‘nice to haves’. Concerns have been raised about the potential level of service cuts and infrastructure development. The Long Term Plan process is starting soon for council staff and elected members. It will be challenging finding a balance between community expectations, current levels of service, increased costs for infrastructure and restricted rate increases.

Water services (Local Water Done Well)

Continued implementation of new water infrastructure models, with a focus to ensure quality, affordability and infrastructure investment via collaboration between Far North, Whangarei and Kaipara District Councils, who have agreed to form a Council Controlled Organisation (CCO) for water services (water and wastewater). The new water CCO is planned to be live from 1 July next year.

Infrastructure funding reforms

The government is looking to replace current development contributions with a new Development Levies System, to support housing growth, which will be monitored by the Commerce Commission.

Resource Management Act (RMA) replacement

New Planning and Natural Environment Bills are expected to be passed into law this year, redefining how councils manage land use and environmental protection.

Simplifying Local Government

The proposed reset process will provide for a new decision-making body, tasked with taking over regional council functions and also identifying opportunities to streamline governance and service delivery. Functions are likely to be transferred to Combined Territories Boards made up of city and district mayors, who will be required to develop regional reorganisation plans starting next year with changes signalled throughout 2026 in the lead up.

These reforms constitute the most significant structural changes to the sector in decades, aiming for a more cost-effective and accountable local government. With councils moving toward a more centralised and tightly controlled model.

Kaipara District Council has prepared submissions on the Planning & Natural Environment Bills, Development Levy System and Simplifying Local Government. Watch this space!