Financial Management Reform in New Zealand Local Government: A Central Government Initiative or a Response to Local Needs?

Abstract

While New Zealand’s central government reforms are well known internationally, the reforms at the local level have been equally dramatic. Changes following the introduction of the Local Government Amendment Act (No. 2) 1989 constituted the most radical restructuring of local government, its finances and its relationship with citizens since the abolition of provinces in 1876. New Zealand local government is currently experiencing a second wave of reforms, this time with a longer-term emphasis, as a consequence of the Local Government Amendment (No. 3) Act 1996. Further local government reform (including another round of amalgamation, corporatization of roads, and privatization of other utilities) also appears to be on the government’s agenda. In each round of changes, accounting has been a crucial ingredient.