The government is seeking advice on whether it could – or should – intervene, writes Stewart Sowman-Lund in today’s extract from The Bulletin.

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Threats ramp up

Government ministers have raised the prospect of intervening in Wellington Council, or potentially even triggering an early election. It all started with comments made by finance minister Nicola Willis in an interview with Newstalk ZB’s Heather du Plessis-Allan on Monday evening. Willis described the council as a “shambles” and revealed that the local government minister, Simeon Brown, was keeping a close eye on the situation. By Tuesday morning, the prime minister Christopher Luxon had weighed in, telling du Plessis-Allan’s colleague Mike Hosking that he was concerned. “If we have to make an intervention we will,” he said. Brown, who actually has the power to step in, later told Stuff that discussions about the council actually started with officials last week and he asked for advice on Sunday.

At this point, these are simply threats – and threats that were only made public after questions on live radio. Politically, it’s understandable why the government would wish to publicly reprimand the Wellington Council given previous demands from the PM to “rein in the fantasies” and ditch the “white elephants”. But to actually do anything would be a drastic move given there is a local election in less than 12 months time which would give the people of Wellington their chance to have a say.

The final straw

We’ll take a look in a moment at what options are actually on the table, but first, how did we end up here. There have been numerous high profile issues in Wellington reported over the past few months (from bursting pipes to drama over the Reading Cinema complex). While not all of this can be laid squarely at the foot of the current council, there is nevertheless a growing perception that Wellington his reached a boiling point – and the council isn’t helping. In her piece for The Post yesterday, Andrea Vance made reference to this by noting that in the same week government ministers consider what to do about the council, “traffic banked up under the windows of the Beehive” from an apparently “controversial” new cycleway build.

Her Stuff colleague Glenn McConnell added that while some of Wellington’s challenges are “not unique”, it has nevertheless become something of a punching bag for the government. But until last week the prospect of any sort of government intervention seemed highly unlikely. The final straw was a frenzied debate on Thursday in which the council voted not to sell its 34% share in the airport, forcing the can of worms that is its long term plan to be reopened and, as explained by The Spinoff’s Joel MacManus in his latest Windbag column, bringing constitutional questions around te Tiriti o Waitangi to the fore.

If it all sounds messy, that’s because it has been. But even on Friday, the day after the vote failed, Whanau was denying need for any sort of government intervention and instead calling the failed vote “a bit of a blow”.

What options are on the table?

Brown’s powers are all clearly laid out in black and white in the Local Government Act, and there is a particular threshold that would need to be reached for any intervention to be permissible (in short, it requires the minister to “on reasonable grounds” believe there is a significant issue impacting the region the council represents).

During that interview with Newstalk ZB on Monday night, Nicola Willis was pushed on what action could be taken should the government choose to step in. “You often hear people talking about a commissioner, but there are things other than a commissioner that he can do.” It could be reading too much into it, but Willis’s comments suggest a less serious option is more likely here. One such possibility, as raised by former mayor Kerry Prendergast in an interview with Newstalk ZB, would be to bring in a a Crown observer to assist the council and provide updates to the government. Or, Simeon Brown could trigger an early election in Wellington – the more democratic option given it would give the city the chance to decide whether it was comfortable with the existing council (but nevertheless an option that comes with a cost, especially given an election is just around the corner). Brown, reported Imogen Wells for ThreeNews, hasn’t ruled out doing this.

If you’re getting déjà vu…

It’s not unheard of to have government step in to address local government chaos. We’ve talked previously talked in The Bulletin about Tauranga, which recently held its first election in five years after commissioners replaced the council in 2019. The then-local government minister Nanaia Mahuta stepped in after “significant governance problems among the council’s elected representatives”, explained the Bay of Plenty Times.

The commission chair was Anne Tolley, a former National minister, who told The Post’s Kevin Norquay this week that the threshold for intervention is high, and can risk upsetting voters who believe they should be the ones to decide who runs the city. “To override democracy is extremely unusual and unique, and the law requires a really high test. The legislation protects the democratic process,” Tolley said.

Wellington Council, while facing very real and urgent challenges, would appear to be in a better situation than Tauranga was at the time commissioners were brought in. Though if dysfunction is the bar, some councillors have publicly backed the need for action. “To quite a few of us, and the public included, intervention has been needed for some time,” Wellington councillor Diane Calvert told RNZ.

But, asks Stewart Sowman-Lund in this extract from The Bulletin, can Winston Peters win his cabinet colleagues over with his ‘future fund’?

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The push for foreign investment

We talked briefly yesterday about Winston Peters’ plans for a $100bn “future fund” – a ring-fenced infrastructure initiative to be used for projects “in our national interest” – which it appears he intends to campaign on at the next election rather. It’s a bold move, and one that appears to show a softening stance on his party’s view on seeking foreign investment.

The bigger picture is that while Peters is arguing for his long term policy, the government he’s part of is making smaller waves in the same area. The prime minister, as we’ll talk about below, is strongly behind his government’s plans for a new National Infrastructure Agency. And in an announcement made during the typical unfriendly news slot of Saturday morning, associate finance minister David Seymour revealed that foreign investment rules will be loosened, as explained by The Post’s Tom Pullar-Strecker. The move will effectively flip the existing burden of proof that requires overseas investors to prove their investment will benefit the country, with Seymour saying “the new starting point is that investment can proceed unless there is an identified risk to New Zealand’s interests”.

It’s no surprise

The weekend’s announcement had been foreshadowed for some time. Back in May, the OECD noted our restrictive foreign investment rules as barriers to increasing productivity, ranking New Zealand at 38th (out of 38 countries) when it came to openness for investment. At the time, reported The Post, David Seymour indicated that the government had gone as far as it could under the existing legal framework in allowing for more investment and signalled that he was drafting up new legislation. “I’m working as rapidly as possible to send the message to the world that New Zealand actually wants people to come in and invest here,” he said. What we have now is just an initial outline of where the government intends to go, and further detail will likely emerge next year.

Beyond a global assessment of our situation, it has been widely observed that New Zealand has an infrastructure deficit. In a statement, Infrastructure NZ welcomed the shift in our overseas investment rules, saying it was necessary to “supercharge New Zealand’s infrastructure uplift”.

Coalition in alignment (almost)

With all three parties pushing for broadly the same thing, the invitation to foreign investors appears wide open. Writing for BusinessDesk (paywalled), Pattrick Smellie said the significance of Winston Peters’ new proposal, which would involve changes to the tax system to attract foreign investment, was less about what he said and more that he said anything at all. “Hostility to foreign investment, quite simply, has always been part of NZ First’s DNA,” wrote Smellie. As he notes, while the announcements by Peters and Seymour were not directly connected, “the coalition’s message is undoubtedly aligned”.

In a recent interview with Smellie’s colleague Dileepa Fonseka (paywalled), Christopher Luxon said that New Zealand needed to make it easier for foreigners to invest, contrasting us with one of his favourite small nations. “At the moment we’ve sort of got this ‘you’re lucky to invest in New Zealand’ and yet in Ireland it’s ‘thank you for coming all this way to spend your money with us’,” the prime minister told BusinessDesk.

In all likelihood, Peters will be taking his policy with him into the 2026 election campaign, though RNZ reported he was confident of getting buy in from his coalition partners. He told Newstalk ZB’s Mike Hosking he hadn’t seen the government’s own announcement on Saturday and “couldn’t quite follow” what Seymour had said. At his weekly post-cabinet press conference yesterday evening, Christopher Luxon confirmed Peters’ future fund idea had not been discussed and parties were “free” to take their own ideas to the next election. However, on the general principle of foreign investment, Luxon reiterated: “I sit down with investors regularly offshore and say what’s the ‘good the bad and the ugly’ of investing in New Zealand, and the messages are pretty simple: it’s too hard to get anything done [and] it takes too long…

A softening on foreign home ownership?

Meanwhile, in that same interview with Mike Hosking, Peters appeared willing to loosen his stance on foreign ownership of property – something that he was reportedly unprepared to budge on during coalition talks. But it would take more than someone with a “lousy $20m” to make that happens, Peters told Hosking, and wasn’t about allowing people to buy up and then abandon homes in “leafy suburbs” like Remuera. “If you’ve got the right investor here, who’s going to argue about them buying a home,” said Peters. In an interview with Bloomberg earlier in the year, the deputy prime minister similarly suggested that he would be open to relaxing the rules for ultra-wealthy foreigners that were prepared to invest more broadly in the economy.

Meanwhile, we have a new political poll that could fuel Peters and his policy push. Last night’s TVNZ poll showed steady support for the coalition, though New Zealand First was heading dangerously close to the 5% threshold at which they would be turfed back out of parliament. Writing for the Herald, Thomas Coughlan suggested that was the figure that would worry the government the most – “a plausible worst-case scenario for the coalition would be for NZ First to slip ever so slightly, crashing out of parliament and taking 4% of the vote with it”.