Localism

A Swiss town hall with a clock tower and cantonal flags
Points of viewDecisions belong as close as possible to the people they affect, and councils should gain when their towns grow.

I grew up in the Ruhr, a region of neighbouring cities that compete for every resident and every business. New Zealand runs one of the most centralised governments in the developed world. Since 2012, I have argued that it should trust its towns and cities with more.

Core beliefs

Decide things at the lowest level that can handle them

Subsidiarity means that where a city can deal with an issue, a region should not do it, and where a region can tackle it, national government should stay out. In most OECD countries, local government runs health and police services and controls about a third of public spending. New Zealand is an outlier.

Switzerland shows the alternative. Its communes and cantons set their own taxes, hold frequent referendums and compete with their neighbours. It is the most decentralised country I know, and it does most things better than New Zealand.

Read: Swiss lessons in subsidiarity (Insights, 2017)

Councils should gain when their towns grow

Central government collects roughly 90 percent of all public revenue in New Zealand. When new houses go up and new workers arrive, the GST, income tax and company tax all go to Wellington. The council is left with the bill for roads and pipes.

Mayors who resist growth are doing the sums correctly. Sharing the GST on new homes with the councils that consent them would turn growth from a burden into a windfall.

Read: Paying for growth (Insights, 2026)

Voters should know who runs their council

Most New Zealanders believe their mayor runs the council. In practice, a mayor has little more power than any other councillor, while unelected chief executives hold the levers.

North Rhine-Westphalia, the German state I come from, inherited the same British model. In 1999, it switched to directly elected mayors with executive powers. Voters there now know whom to reward and whom to blame.

Read: German solution for New Zealand’s local government woes (Insights, 2024) and A local rescue plan for democracy (Quadrant, 2024)

A city deal should change who decides

Auckland’s city deal of 2026 promised a roof for the tennis centre and a review of Eden Park’s ownership. Its one bold fiscal idea, a levy on visitor accommodation, was deferred to 2027 at the earliest.

Danish municipalities levy their own income tax. A real deal would give Auckland powers and revenue of its own, not a list of projects approved in Wellington.

Read: Auckland’s new city deal shifts nothing (The Australian, 2026)

Localism belongs to neither left nor right

In 2017, I recommended our report Go Swiss to a Labour-led government whose three parties all leaned towards subsidiarity. In 2023, a National-led coalition took office with localism as a common thread, and ACT had already proposed sharing GST from new homes with councils.

When the Taxpayers’ Union asked whether some tax from new development should stay in the communities that host it, 70 percent of New Zealanders said yes. So did majorities of National, Labour, ACT and Green voters.

Read: Localism: The initiative that has won over the nation (Insights, 2023) and Localism: The common thread in New Zealand’s emerging coalition (The New Zealand Herald, 2023)

How I came to this

I was born in Gelsenkirchen, grew up in Essen and studied in Bochum, three cities a few kilometres apart. Each had its own council, its own budget and its own reasons to attract residents and jobs.

In England, a county councillor told me that new housing was a bad deal for English counties. The costs stayed local while the extra tax revenue went to London. In Australia, Adam Creighton and I surveyed all 558 councils in 2011. Almost a third of those who replied said population growth was damaging their bottom line.

When I arrived in Wellington in 2012, the word localism was unknown in New Zealand. The New Zealand Initiative made it part of its work from the start. In 2017, we took 39 business leaders to Switzerland to see a radically decentralised country for themselves. Christopher Luxon, then chief executive of Air New Zealand, was among them.

  1. 2009Beyond Symbolism makes the case for a stronger place for local government in Australia.
  2. 2011Australia’s Angry Mayors, with Adam Creighton, surveys every council in Australia.
  3. 2012I move to Wellington. Localism is still an unknown word in New Zealand.
  4. 2013A Global Perspective on Localism compares New Zealand with other OECD countries.
  5. 2017Thirty-nine members of The New Zealand Initiative join our Go Swiss study tour.
  6. 2019#localismNZ sets out a plan. Local Government New Zealand and the Initiative start a year-long project on localism.
  7. 2023A Taxpayers’ Union poll finds 70 percent support for sharing the proceeds of growth with local communities.
  8. 2026Auckland signs a city deal with the Government. The Budget creates a $400 million fund to encourage councils to permit more development.

What happened next

The ideas spread faster than the money. The OECD adopted our case for rewarding councils for growth in its recommendations to New Zealand. The Productivity Commission opened an inquiry into local government finance, and Local Government New Zealand made localism a unifying theme of its advocacy.

Politically, localism has won. Labour, National, ACT and New Zealand First all speak its language, and seven in ten voters support sharing the proceeds of growth.

Fiscally, little has changed. Central government still collects about 90 percent of public revenue. The coalition promised to consider sharing GST from new homes with councils. The May 2026 Budget created a $400 million fund to encourage councils to permit more development instead, and Auckland’s city deal put off its tourist levy until 2027.

Reports

Cover of Australia's Angry MayorsAustralia’s Angry Mayors2011 Cover of A Global Perspective on LocalismA Global Perspective on Localism2013 Cover of Go SwissGo Swiss2017 Cover of #localismNZ#localismNZ2019

In my own words

“Is it any wonder mayors are hostile to growth? They are acting rationally within a system that punishes them for success.”

Paying for growth, Insights, 23 January 2026

“My own journey has been one of coming from localism, and I hope my new home of New Zealand embarks on a journey towards localism.”

From localism towards localism, Policy Quarterly, 22 May 2019

“The point is to change who decides, not just what gets funded.”

Auckland’s new city deal shifts nothing, The Australian, 16 April 2026

Watch

How to establish localism in New Zealand, Building Nations Symposium, Rotorua, 21 August 2019 · Watch on YouTube

Start here

Insights · 23 January 2026

Paying for growth

The domestic political year has started with housing density back on the agenda.

Everything I have written on this

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