Minister for Regulation, David Seymour, has welcomed the publication of the first report by the Regulatory Standards Board (the Board) today, saying it shows why council disclosure rules should be brought in line with other government organisations.
The Board’s inquiry examined the Local Authorities (Members’ Interests) Act 1968 (LAMIA), which governs financial conflicts of interest in local government and can affect whether a person is able to stand for election, remain in office, or participate in council decision-making.
“The Board found the legislation to be inconsistent with principles of responsible regulation under the Regulatory Standard Act 2025 relating to clarity and accessibility, liberties, and effective, efficient and proportionate regulation,” said Mr Seymour.
“The Board found that LAMIA is difficult for candidates and elected members to understand and comply with, despite potentially serious consequences for breaches, including disqualification from office and criminal conviction.”
It also found that some provisions can prevent otherwise qualified candidates from standing for office or participating in decisions they were elected to make.
“The Board’s role is to consider legislation rather than individual cases. However, recent examples have highlighted the real-world impacts LAMIA can have on candidates, elected members and the communities they represent,” said Mr Seymour.
“In Wellington, an elected member was prevented from voting on the future of the Golden Mile project because they owned a small business on Courtenay Place. Supporters argued that voters were denied representation on an issue that had been central to the member’s election campaign, because they campaigned on their opposition to the project. This raised questions about whether the legislation strikes the right balance between managing conflicts of interest and democratic participation.
“In Nelson, questions were raised about whether an elected member could remain in office because a family-owned transport business subcontracted to companies undertaking council work. Although there was no allegation of misconduct or personal gain, the case raised the possibility that the elected member could be disqualified from office, highlighting how the legislation can produce serious consequences even where conflicts are indirect and openly declared.
“There does need to be reasonable and proportionate conflict of interest management processes in place. For example conflicts can be managed through disclosure, clear policies and principles that define what a conflict of interest is (which in some cases will be non-pecuniary interests), and withdrawal from discussions and other measures.
“I encourage the Minister of Local Government and MCERT to carefully consider the Board’s findings and what opportunities may exist to address the Board’s concerns.”
The Regulatory Standards Board’s full 5-page report is available here: Regulatory Standards Board publications.
