The Super City failed. Why Hawke’s Bay council mergers will be a disaster.
- Grant McLachlan
- 10 hours ago
- 7 min read
Wellington wants Hawke’s Bay’s councils redesigned by 9 August.
Auckland already ran this experiment — and the man now advising Hawke’s Bay on the redesign is the one whose mayoralty set Hastings on its debt path in the first place.
Idiocy is when you repeat the same mistake and expect a different result. Repeating the Auckland Supercity disaster around the country is idiocracy.
The Government has given Hawke’s Bay’s councils until 9 August to design their own amalgamation under its Head Start programme, or Wellington will do it for them.
Before Napier, Hastings, Wairoa or Central Hawke’s Bay sign anything, they should ask who is actually drawing up the plan.
The answer is Lawrence Yule, the former Hastings mayor and Local Government New Zealand president whose sector-wide borrowing philosophy Hastings has spent the past decade following.
Contents
The numbers are not in dispute
Hawke’s Bay has answered this question before.
In 2015, 66.18 per cent of the region voted no to merging its five councils into one.
Napier voted 87.68 per cent against.
Wairoa voted 83.99 per cent against.
Only Hastings, at 52 per cent, was in favour.
Those were not conservative voters defending the status quo.
They had worked out that a merger with Hastings meant inheriting Hastings’ debt — and a decade on, the same arithmetic has only got worse.
The debt that never left the room
At the time of the 2015 vote, Hastings carried about $55 million in external debt. Napier had none.
That gap was enough to sink the referendum.
Today, Hastings District Council’s external debt stands at $493.7 million, of which $32 million is unspent cash.
Napier City Council carries $130 million.
The regional council $117 million.
Central Hawke’s Bay $47 million and Wairoa $10 million.
Hastings’ long-term plan anticipates its debt reaching $700 million, Napier’s anticipates $400 million.
Former regional council chairman Rex Graham, who supports amalgamation, is honest about the problem: separating each council’s debt from the capital works it has “actually done” is, in his own words, “very complex.”
Nobody, including Graham, has worked out how.
In 2015, the gap that killed the referendum was $55 million against zero. Today it is $493.7 million against $130 million — and nobody has agreed how to divide it.
The mayor who set the path
Lawrence Yule was Hastings mayor for 16 years, from 2001 to 2017.
By the 2015 referendum, his council’s debt was still a modest $55 million by today’s standards — but the philosophy behind it was already set.
In August 2016, contaminated groundwater gave thousands of Havelock North residents campylobacter poisoning.
Less than a year later, with the recovery still under way, Yule resigned to contest the Tukituki electorate for the National Party — handing the district’s unfinished recovery, and its books, to his successor, Sandra Hazlehurst, elected in a November 2017 by-election.
For most of those 16 years, Yule simultaneously served as president of Local Government New Zealand — eight years, by his own account.
In that role he told councils nationally that debt used well was “good, responsible debt” that let them build and maintain infrastructure, and later pushed for a wider funding toolbox for high-growth councils, including off-balance-sheet vehicles that let debt sit outside a council’s core books.
That was the philosophy Hastings inherited — and the one Yule spent nearly a decade encouraging every other council in the country to adopt too.
The epidemic he left behind
Hazlehurst kept the philosophy.
By 2021, four years into her mayoralty, Hastings’ debt had reached a record $205 million, with no plan to bring it back to zero.
Chief executive Nigel Bickle defended the approach in language that echoed Yule’s almost exactly: refusing to borrow while pipes and treatment plants waited would be “almost negligent from a director’s point of view.”
Hazlehurst backed him, describing Hastings as being in a boom time that justified the spending — spending that went toward playgrounds in Flaxmere, Hastings and Havelock North, an $80 million drinking-water upgrade, and roughly $33 million earthquake-strengthening the Opera House and Municipal Building.
Five years and one cyclone later, that debt has more than doubled again, to $493.7 million.
Meanwhile, Napier futureproofed with dual carriageways, while Hastings fragmented its grid system, lowered speed limits, installed speed bumps, and designating more lanes for bicycles than for motor vehicles for Havelock North.
Napier manages its debt. Napier prioritises core infrastructure.
These are not two councils with different management styles. They are two councils with opposite philosophies. Merge them and the philosophy with the bigger debt and the louder political ambitions sets the agenda. Napier’s low debt looks like headroom. Its reserves look like opportunity. Its disciplines look like timidity.
The philosophy Yule took to the rest of the country as LGNZ president is the same one that has since quintupled his old council’s books.
Havelock North’s bill comes due
Some of that borrowing was necessary.
Some of it illustrates exactly why sequencing, not structure, is the real issue.
The Government Inquiry into Havelock North Drinking Water found that contaminated groundwater caused the 2016 outbreak, and that lessons from an earlier 1998 contamination event at the same bores had “been forgotten.”
Separately, the Chief Ombudsman found in 2025 that Hastings District Council had “fallen short of its responsibilities” over more than a decade of unheeded engineering warnings about the same dams and streams, before Cyclone Gabrielle struck them in 2023.
Money was found for playgrounds and opera houses. It was not found for the infrastructure engineers said mattered most.
Auckland already ran this experiment
Hawke’s Bay is being asked to make the same trade-off Auckland made at regional scale in 2010, when eight councils merged into one Super City on a promise of efficiency.
The NZ Herald’s March 2026 analysis found combined staff numbers climbed higher than the eight pre-merger councils together, and household rates have risen 85 per cent since 2010 — 2.16 per cent a year above inflation.
Auckland Council now accounts for 54 per cent of all council spending in the country on 32 per cent of the population, employing 42 per cent of council staff nationally on a wage bill that has nearly doubled to over $1.1 billion.
Why does amalgamation make things more expensive? Because management salaries are set by the size of the empire each tier controls, not by the outcomes it delivers.
Layer multiplies upon layer.
Unelected officials accumulate more power than elected ones. Consultants and lawyers charge more when the client has a larger budget and fewer rivals to bid against.
Anyone wanting to be heard needs money. The council will use public funds to bludgeon them with it — then send them the bill.
MMP taught New Zealand the same lesson in miniature.
In 1999, Labour promised to raise the minimum wage above $7. The Alliance promised $7.50. When they formed a coalition, they agreed on $7.70.
Two parties, two mandates, one negotiating table — and the outcome exceeded both platforms.
Merged councils work exactly the same way. Two sets of politicians, two sets of officials, two cultures, two wishlists — and one ratepayer picking up the tab for whatever gets agreed in the middle.
Hawke’s Bay has five councils. The two that matter most to this conversation are Napier and Hastings, and their cultures are not compatible. They are not even close.
Mergers don’t cure cultures, they scale them
The accountability failures did not disappear either — they scaled.
Rodney District Council’s roading division was, in Crown prosecutor Brian Dickey’s words, running “a cascading culture of bribery” before it was folded into the Super City. Its director of transportation, Murray Noone, walked into a senior role at the new Auckland Transport, and payments from contractor Projenz kept flowing for three more years before convictions followed.
Noone and Stephen Borlase were jailed for offending the sentencing judge said harmed New Zealand’s reputation as a place largely free of corruption.
The Serious Fraud Office acknowledged it lacked the resources to prosecute everyone involved.
The lesson is not that some councils have corrupt managers. The lesson is that mergers do not cure the cultures they inherit. They scale them.
The facilitator problem
None of this history has kept Yule out of the room.
Hawke’s Bay’s four mayors confirmed in May that they have been working with independent facilitators Wayne Eagleson and Lawrence Yule to explore merger options ahead of the 9 August deadline.
The man whose mayoralty produced the debt gap that sank the 2015 referendum, and who spent the following decade as the sector’s chief advocate for council borrowing, is now advising on how the region should be redesigned.
That is not a conspiracy. It is a resumé.
But it is exactly the kind of conflict of interest an evidence-led process should disclose and account for — not quietly absorb into a facilitation contract.
What Hawke’s Bay should demand before it signs
Before any council submits a Head Start proposal, three things should be settled, not promised for later.
A published, independently audited methodology for separating each council’s existing debt from the capital works it has already funded — the exact complexity Rex Graham says nobody has resolved.
A binding commitment that any merged entity ring-fences debt by legacy council for a fixed transition period, so Napier’s ratepayers are not retrospectively liable for Hastings’ borrowing.
Full public disclosure of who is advising the process, what they are paid, and what role they played in creating the problem the process is meant to fix.
Auckland was promised efficiency and got a cascading culture of bribery.
Hawke’s Bay is being asked to trust the architect of its own debt to help design what replaces it.
That is not reform. It is idiocracy with a facilitation fee.
