New Zealand Legislation: Regulations

Explanatory memorandum

This explanatory memorandum is not part of the determination, but is intended to indicate its general effect.

A provision in the Local Government Act 2002 gives the Remuneration Authority (the Authority) responsibility for setting the remuneration of elected local government representatives.

The legislation requires the Authority to have regard to the need to—

• minimise the potential for types of remuneration to distort the behaviour of the elected member:

• achieve and maintain fair relativity with levels of remuneration received elsewhere:

• be fair both to the elected members and ratepayers:

• attract and retain competent persons.

In order to meet its statutory obligations, and in particular to achieve transparency, fairness, and consistency between members, the Authority established appropriate models to assist in determining the cost of governance and representation for each local and regional authority. The models utilised adopted 4 criteria that are transparent and readily verifiable from published data, namely—

• population:

• operational expenditure:

• assets controlled:

• rate of population change.

The application of these models results in an indicative pool of money notionally attributable to each local authority. These indicative pools are used by the Authority to assist in ultimately determining the remuneration for each elected member.

This determination uses indicative pool totals derived from audited annual accounts for the year ended 30 June 2007 and population figures as at the same date.

Local authority members carry out their responsibilities on a diverse basis. In order to assist the Authority to recognise that diversity, councils and members are given the opportunity of proposing to the Authority remuneration levels appropriate for the responsibilities of each position within the council and its community boards. The Authority then determines the remuneration for each member after considering the council recommendations, any dissenting views, or other factors.

The Authority also determines allowances and expenses. The rules governing these are determined by the Authority and must be available for public scrutiny at each council.

Vehicle mileage allowance

The Authority has retained the vehicle mileage allowance, in clause 14 of this determination, at the rate of $0.70 per kilometre. There were 2 main reasons for retaining the allowance at this rate, notwithstanding the considerable increases in the retail price of motor fuel over the last year.

First, according to the most recent information published by the New Zealand Automobile Association, at $0.70 per kilometre the allowance more than covers the running cost of a mid-size motor car.

Secondly, it is increasingly apparent to the Authority that the inclusion of a provision for travelling time in the motor vehicle allowance is problematical. It advantages those who use motor vehicles rather than public transport. Furthermore, it provides an incentive for elected members to use private motor vehicles on council business at a time when many councils are encouraging greener, or generally more sustainable, transport and environmental policies.

The Authority intends to review the basis and application of the motor vehicle allowance prior to the 2009/10 Local Government Elected Members Determination.