Securities (Local Authority Exemption) Amendment Bill — Third Reading 
Securities (Local Authority Exemption) Amendment Bill — Third Reading 
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Securities (Local Authority Exemption) Amendment Bill 
Third Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Securities (Local Authority Exemption) Amendment Bill be now read a third time 
. The exemption to sections in the Securities Act provided by this bill allows local authorities to meet reduced requirements when offering debt securities to the public. I say “reduced” because although a local authority will be exempt from producing a full prospectus signed by all councillors it will still have to produce an investment statement containing specific product and provider information. 
The broad policy objective of the Securities Act is to promote confidence in the financial markets and an important aspect in achieving this outcome is to ensure that investors receive full accurate and timely disclosure of information material to their investment decisions. By reducing the disclosure requirements under the Securities Act this exemption will place more reliance on the disclosure requirements of the Local Government Act when making information available. As has been discussed during the Committee of the whole House stage the exemption provided for in the bill includes requirements relating to the investment statement required under the Securities Act to make sure that specific additional information not expressly required in the local government reporting regime is readily accessible to investors and prospective investors in a local authority retail debt security. This additional information mainly focuses on the disclosure of current financial reports and on any material adverse circumstances relating to the local authority issuing the security. 
The issuer is also required to state in the investment statement that the debt securities being offered are not guaranteed by the Crown unless of course they are being guaranteed under the Public Finance Act 1989. This would normally appear in the prospectus but without a prospectus it will need to go in the investment statement. As a consequence the bill will provide for more detail in the investment statement and for the statement to identify information available in other documents. Not only do the added requirements to the investment statement help to ensure the provision of free timely and accurate information but they do so via a less onerous approach to that mandated for full disclosure under the Securities Act. They also ensure that there is no reduction in the financial reporting stringency required of local authorities compared with that of companies. 
Access to disclosure information enables investors to make informed decisions on the potential risks and returns of their investment choices and to take responsibility for their investment decisions. By streamlining this process for local authorities the bill will positively impact the investment market in two ways. Firstly the availability of local authorities securities on the retail market will provide investors with options to expand their investment portfolios as well as give residents in a community an alternative means to participate in that community and the development of its infrastructure. I call that a win-win situation. Secondly this will also be a positive for the local authority issuers. By providing another avenue for them to access capital the bill will lead to more competitive pricing for local authorities debt and consequently will create more accurate pricing in the market for debt products. That is another win-win situation. 
Although this is a relatively short and streamlined amendment bill it will nevertheless make an important contribution to the Government’s economic transformation agenda. By providing an alternative to the current funding options for local authorities it will significantly impact regional and local development at both the business and social levels by contributing to the upgrade of available infrastructure that is necessary to efficiently service these areas. Therefore the bill will progress the recommendation of the Shand report which states that in order to spread costs over generations councils should make greater use of borrowing for long-term capital projects. The bill will also provide a valuable source of alternative funding for infrastructure assets and in so doing it will help to facilitate the growth of New Zealand businesses and encourage innovation entrepreneurialism and new product development through access to a well-maintained regional infrastructure. 
I again commend the Commerce Committee for its work in fine-tuning the bill. Also I thank all of those who made submissions on the bill. I also place on record my gratitude to the officials who assisted with the development of this legislation. I am very proud of the fact that this was raised with the Government by local government last year and now in the first week of April we will have the bill passed into law. I am confident that this bill with the changes made to provide for the availability of more up-to-date financial information will appropriately achieve the objectives of the disclosure regime of the Securities Act as well as those of the Local Government Act. I commend the bill to the House. 
Dr RICHARD WORTH (National) 
: 
 In a nicely rounded and well-read speech the Minister has explained the key elements of the Securities (Local Authority Exemption) Amendment Bill. I do not want to traverse that ground at all; I would just like to deal with two points. The investment climate at the moment is particularly treacherous. I will come back to that point in a moment but let me say that the merit of this bill which National supports is undoubted. 
The bill will enable local authorities to access capital in a way that has been denied to them for a number of years. Effectively the law which is now being changed made it just too onerous for local authorities to access public money in two ways. First it increased the issuance cost with the requirement to produce a prospectus. Second it created an almost insurmountable hurdle as all councillors are now in the current legal regime required to sign a prospectus. So we had the situation of a particular councillor who had perhaps been elected to office on the basis of reducing council borrowing who was simply not prepared to sign a prospectus for raising additional debt. What was the consequence? Well the consequence was pretty much that local authorities stayed away from the retail market—it was all too hard. That is all to be undone but undone in a way that still provides appropriate protection for the investment public. The Commerce Committee made a number of changes that were intended to strengthen those public rights in what it set out in changes to the bill by way of information disclosure. 
It is as I said a very treacherous investment climate at the moment that New Zealand faces. One sees for example the collapse of Bridgecorp Holdings where 14000 investors could lose $383 million which is the latest estimate that we have at the moment. There have been 15 finance companies that have either failed or got into significant difficulty in the last 20 months—that is about $2 billion of investors’ money that has been affected. Earlier this week there was a report out that 2000 investors in the failed Five Star Consumer Finance may expect even less of their $51 million back than was forecast and there have been all the difficulties around Nathans Finance. Just today there was a media report indicating that Lombard shares had tumbled after the company had admitted strife and it has announced a moratorium on payments by its finance company—and I see just looking at the numbers there that there will be huge losses again for investors. 
So it is our hope—and I am sure it is the hope of both the Government and the National Party—that what we will see associated with the passage of the Securities (Local Authority Exemption) Amendment Bill is that the so-called mum and dad investors will take up local government stock again. That is an excellent outcome because in the current period where the quality of debt products has come under closer scrutiny local authority paper is likely to be received extremely well by retail investors. It provides a broader range of investment grade credit and that is an important initiative in improving the overall quality of savings products available to New Zealand investors. 
The Minister has said and I endorse what she has said that when good legislation is before the House the National Party will give it the scrutiny that it deserves. We have seen in a short time frame this legislation almost passed into law. What lies ahead after the completion of this third reading is simply the Governor-General’s assent to the legislation—a good outcome I would say. 
Hon DAVID CUNLIFFE (Minister of Health) 
: 
 It is a pleasure to take a brief call in support of the third reading of the Securities (Local Authority Exemption) Amendment Bill. The labour-led Government is committed to strengthening the way in which councils may operate and serve their constituencies. This bill will reduce compliance costs for local authorities and allow them greater ability to fund long-term investments such as infrastructure. I concur with the member who has just resumed his seat that in these current days long-term paper from local authorities will be an attractive complement to the securities market. The bill will ease the process for local authorities to offer securities to the public and therefore to fund long-term projects. The Labour-led Government understands that current provisions to raise funds impose unnecessary compliance costs on local authorities and therefore prevent them from raising capital in the most effective manner. 
The bill amends the Securities Act 1978 to exempt local authorities from the full disclosure requirements of the Act when issuing debt securities. That is because the level of disclosure required from local councils under the original Act was burdening them with unnecessary compliance costs—unnecessary because of course the nature of a council; the ownership of a council and its financial and governance structure—is clear from statute and does not need the full repetition that one would typically find in those kinds of disclosure statements. The original Act also I understand required all councillors to sign off on a prospectus essentially requiring unanimous agreement in council for a project or to issue a debt to fund a project. Changes to an exemption from those provisions will reduce compliance costs by easing the process for local authorities to offer those securities to the public. The bill will therefore provide a valuable source of alternative funding for infrastructure assets and provide investors with options to expand their investment portfolios which is a positive move for the investment market. 
It is worth remembering that in this context the Labour-led Government has taken a very strategic approach to infrastructure development and to partnership with local and regional councils. In my own fair city of Auckland—particularly the west of Auckland—that is nowhere more apparent than in New Lynn where we currently have a line of cranes digging a large trench through the centre of our town in order to provide an underground railway system complete with a new station. The key point of this is that this is a decades-long investment that will transform the centre of that town and provide for a completely new urban redevelopment in which some 20000 additional people are expected to live. It is essential that this is done to the very highest standards of development with a compelling long-term vision that suits both the transport infrastructure and the broader redevelopment goals in keeping with the Auckland Regional Council’s regional growth strategy. 
To use that one example it therefore follows that it is essential that local and regional councils like Waitakere City Council and the Auckland Regional Council and its subsidiary the Auckland Regional Transport Authority are able to take a long-term view to issuing debt securities and to do so with the minimum necessary and appropriate compliance costs. Part of my work as a local MP has been to work with partner agencies to ensure that that long-term vision prevails upon the present so that we do not make short-term decisions that could impact on the realisation of those long-term gains. It is therefore entirely appropriate that the Securities (Local Authority Exemption) Amendment Bill is in support of those objectives by facilitating lower-cost access to the kind of long-term bond and debt securities that are required to ensure that local authorities can take that type of perspective. 
We all know that it is essentially good accounting practice to match the life of debt to the life of assets. That requires councils which are increasingly under this Government’s Local Government Amendment Act to be able to take a strategic and proactive approach to development. It requires them to be able to match their financial profiles to suit and that will probably over time result in local authorities taking a somewhat more activist approach in debt markets. Therefore the value of the potential savings from the bill which has wide bipartisan support in the House today is likely to be magnified over time. 
With those few words I repeat that this Government is committed to strengthening the way in which councils operate and serve their constituencies. The bill will reduce compliance costs and facilitate the kind of long-term strategic development that the country longs for and in particular that the people of Auckland and west Auckland long for. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou to tatou tokotoru e noho atu nei. Ka nui te mihi ki a tatou. 
[ 
Greetings to you Mr Assistant Speaker and to we three seated here. Huge greetings to us 
.]  
The origins of the Securities (Local Authority Exemption) Amendment Bill are an interesting irony. Those who argued that all activities be subject to the rules of business now suggest that the local authorities are being submerged under an avalanche of red tape and bureaucracy specifically because of the very application of those rules. 
We in the Maori Party agree with Local Government New Zealand that our local authorities are indeed subject to a rigorous schedule of planning and accountability regimes. There is an expectation that local government will abide by the commitments in its long-term council community plans annual plans and annual reports all of which are subject to independent audit. Some parties in this House will criticise the level of planning documents in this sector and suggest that the detail is unnecessary but the point of this bill is that those documents are of sufficient detail to exempt them from rules under the Securities Act when issuing debt securities. 
But in considering rules and their proper application our primary concern is more about whether the opportunities for engagement and cooperation between councils and Maori as specified in the Local Government Act 2002 are actually taken up. All the best laid plans stand for zip if the intentions are not followed through. We want to see local government honour its statutory responsibilities and build stronger relationships with hapu iwi and Maori groups. 
One of the most interesting issues set out in the rationale for this bill is the inappropriateness of the corporate governance principle of collective responsibility when applied to local authorities. At the start of this week the Royal Commission of Inquiry into Auckland Governance offered an interesting perspective on this notion of collective responsibilities. The commission raised concerns that each of the eight councils in the Auckland region dealt with Maori issues in a different way and that this lack of consistency may cause problems for Maori particularly for those whose rohe cross a number of different council territories. Although problems with issuing debt securities can be dealt with simply by providing local authorities with an exemption to the current rules it is the contention of the Maori Party that exempting councils from their obligations to Maori in the Local Government Act because of difficulties and tensions will never be an answer and that the answer will certainly not be a simple one. 
The full effect of this bill will be to provide local authorities with an exemption from the full disclosure requirements of the Securities Act 1978 when issuing debt securities to the public. That means it will no longer be necessary for local authorities to register a prospectus for the issue of debt securities. Currently as I understand it all elected members must sign the prospectus to ensure unanimous support for a project and to ensure the subsequent issuing of debt to fund the project. Although we endorse the value of consensus decision-making as a general principle of best practice the onus of having to achieve unanimous support has meant that one dissenting vote can prevent a debt security from being issued where one person simply refuses to sign. 
Why this is a problem was made absolutely clear by the submission from Local Government New Zealand. It estimated that local authorities are undertaking some $30.8 billion in capital works in the next 10 years. The funding will be required for either network infrastructure à la roads sewage disposal and water schemes or for community infrastructure such as libraries sports grounds and stadiums. This unprecedented growth spurt in infrastructural development will place considerable pressure on the financing capacity of our local authorities. 
In this respect if as the bill contends there are such obvious differences and duplications evident in meeting the disclosure requirements under the Securities Act 1978 and the Local Government Act 2002 then the Maori Party is happy to support any initiative that will assist and create efficiencies. We understand that only one council has been able to raise funds under the current dual disclosure regime—a situation that is obviously undesirable. We believe that the cost of infrastructural assets should be considered as a long-term investment in the well-being of the community. Obviously borrowing can help to spread the costs over the life of the asset and as such it is clearly preferable that an asset is able to be funded in that way rather than have community structures eroded because of a lack of capital. 
The Maori Party supports any move that will enable and facilitate affordable local and regional development but we sound a note of caution around this whole complex issue related to decisions about infrastructure development. The statutory responsibilities are pretty explicit. The Local Government Act 2002 places specific obligations on councils to facilitate participation by Maori in local authorities’ decision-making processes. The Act requires that councils must establish implement and maintain opportunities for Maori to contribute to decision-making processes consider ways in which they can foster the development of Maori capacity to contribute provide relevant information to Maori and take into account the relationship of Maori and their culture and traditions with their ancestral land water cultural sites wahi tapu valued flora and fauna and other taonga. This is a clear and unambiguous statement of intention to councils to be proactive and responsive in enabling Maori contribution to local decision-making. 
In order to do this councils need to consult mana whenua. They need to have adequate representation on their councils and they need to be able to understand Maori community values issues and aspirations about our economic social cultural and environmental well-being. They also need to commit funding to the building and the workability of these relationships. 
I was interested in a keynote address delivered to Local Government New Zealand’s annual conference a couple of years back by the Chief Judge of the Maori Land Court and chairperson of the Waitangi Tribunal Chief Judge Joe Williams. In his address the Chief Judge said: “Local Government in our small rapidly changing country could never be easy. It is I think where the rubber meets the road. While so much of the so-called race debate is played out in national politics it is at the local level that communities must resolve the real challenges of growing diversity. And they must do that not via media-driven sound-bites but face to face. This is much harder. It is also far more likely to produce positive outcomes.” 
The key issue for the Maori Party therefore is not so much about whether councils are to be exempted from disclosing all significant financial information but is more to do with how information about the income to be invested is shared with communities. We would hope that once councils have in place more effective mechanisms to raise income for infrastructure development they will give ongoing priority to what Chief Judge Joe Williams described as “the real challenges of growing diversity.” We hope that they will invest in the benefits of building good relationships with Maori. We hope they will understand and appreciate that early and meaningful engagement across the community can result in better-informed decision-making more streamlined processes and superior outcomes. 
The Maori Party will support this bill as a pragmatic step that Parliament can take in assisting local government to plan ahead in terms of its infrastructural development. Our sincere hope is that once the disclosure requirements are sorted out sufficient investment will go into supporting Maori expectations and aspirations for the well-being of Maori and indeed for the well-being of the wider community. 
Hon PAUL SWAIN (Labour—Rimutaka) 
: 
 I rise to speak in this third reading debate—[ 
Interruption 
] Oh Mr Roy welcomes me to the podium. 
Eric Roy 
: Absolutely. 
Hon PAUL SWAIN 
: That is great; thank you very much. I hope to enlighten the audience as to why I am speaking on this. The reality is that I was on the select committee for this legislation. 
Hon Georgina te Heuheu 
: The member probably knows something. 
Hon PAUL SWAIN 
: Oh thank you very much; I am obliged to the member for that. As a result I am hoping I do not let her down. This is a high expectation that she has now set upon me. 
This is good legislation. As a member mentioned before this is about trying to ensure that it will be easier for local authorities to issue debt securities. There have been some good contributions in the debate up until this moment particularly during the Committee stage. I thought that some of Richard Worth’s contributions were quite helpful. 
Most people—and it depends how old they are I suppose—and certainly I can remember when local authorities used to issue local authority bonds. There were hospital board bonds and other forms of arrangements whereby people could invest in their local community organisations like councils and hospitals. The councils and hospitals then used that money to fund pieces of important infrastructure. The rules were changed in the late 1990s in order I suppose to deal with some of the concerns that people had that maybe the regime was not robust enough. As a result lending arrangements were a bit looser than what would have normally been required of ordinary companies that were going out and looking for debt securities on the open market. It is probably fair to say that those arrangements were made at that time for good reason. But as a result and as local government people tell us it has now become very very difficult—virtually impossible—for local authorities to issue debt because of the huge compliance costs and because the authorities are a slightly different animal from the normal publicly listed company that would be required to follow the full Securities Act regime. 
It was also helpfully brought to our attention by the Minister of Commerce that as a result of the dialogue this excellent Labour-led Government introduced meetings between local government and the Prime Minister. As I recall meetings occurred every 6 months. I went to a few of them myself as a Cabinet Minister. 
Hon Darren Hughes 
: In the good old days. 
Hon PAUL SWAIN 
: “Bring them back.” some people would say. 
Hon Darren Hughes 
: I hear it a lot. 
Hon PAUL SWAIN 
: Yes; we hear it a lot. 
Those meetings were co-chaired by the Prime Minister and the head of Local Government New Zealand—Basil Morrison; a fine fellow—and issues were brought forward. I recall a number of very important things coming forward. For example a lot of the issues to do with some of the funding that now heads towards Auckland transport were addressed at that meeting and it led to a number of really important developments. 
As I understand it an issue that came forward at one of those meetings was the whole issue of local authorities being able to issue debt and it was pointed out just how difficult that was. This bill has come forward in order to address that issue of local authorities being able to issue debt. What does this mean? Essentially this means that before a local authority can issue debt it has to do a number of things. The first one is that it needs to issue an investment statement. It needs to be put forward to the public and two councillors are needed to sign it off. The reason the signatures of only two councillors are needed is that if the whole council had to sign it it would take only one councillor to object for the important piece of infrastructure investment to be funded by way of these debt securities to be stopped. That would mean a power of veto of only one which is hopeless in organisations such as councils. 
The problem with having only two councillors sign it is that if only those two councillors were to be held liable we would never get two councillors signing it. So the legislation now states that as a result of two councillors signing off the investment statement all the councillors are criminally liable for the accuracy of the content of that investment statement. A councillor could disagree with the proposal but all councillors would be required to make sure that the investment statement is accurate. If it is not accurate then all councillors are criminally liable. That means that there is a much greater opportunity for councils to have access to this kind of debt security arrangement. 
The issue of criminal liability was obviously really important to consider. I think it was Local Government New Zealand that came forward to the Commerce Committee and said that members of Parliament were applying rules on criminal liability that they do not apply to themselves. Ministers themselves are not criminally liable when the Government issues debt—for example Government bonds. Representatives of Local Government New Zealand said that if that convention applies to Ministers then why would Parliament not make councillors exempt from that criminal liability situation as well. To be fair it was a reasonable point. But in the end we decided to keep criminal liability for local authorities primarily because as far as central government is concerned the checks and balances are far greater. A lot more auditing is done in central government and a lot more Government department and agency eyes and hands are all over this type of situation when the Government gets into borrowing. The feeling was that given that there were more checks and balances and given that central government organisations are much bigger than local government organisations we should keep criminal liability for local authorities. 
The committee looked at the whole issue and thought that as we were making it easier for councils to get debt from the public—and remembering as a couple of speakers have said earlier that the reason for this legislation is to be able to fund long-term investment projects such as water sewerage upgrades transport and motorways and libraries—it is important that this vehicle be made available. Other speakers have mentioned the importance of having what they called intergenerational equity rather than trying to fund infrastructure straight up front—that is if we are to have a water pipe that is to be useful over 60 years then the generation of ratepayers at the end of the life of the water pipe should be contributing as well as the generation of ratepayers at the start of the life of the water pipe. It is not fair to have just the ratepayers at day one paying for it when ratepayers down the line will also benefit. The idea of debt security is about spreading out that risk and being able to spread out the benefit. 
Having done all that the select committee said that there should be some additional things to make sure that there are some firm rules and that Parliament could rest easy knowing that although we were relaxing some of the rules there was still some regulation around this situation. One example is that the local authority is required to refer to the most recent audited annual financial statements in the investment statement that is distributed when the council is issuing debt. It is a pretty obvious thing and I suppose that councils would probably do that but it is important to say it. 
Another important issue which was really interesting was that we wanted to make it quite clear that when local authorities are issuing debt this would not be Government-guaranteed. A lot of people would assume that because a council is issuing debt somehow the Government is guaranteeing it. This could give a false or misleading impression as a result. That aspect needs to be stated as well. We also said—and I think that the previous speaker Te Ururoa Flavell said this—that the financial investment statement distributed to investors and potential investors needs to made available on request and free of charge. We thought that that was an important issue to make sure that councils are not trying to ramp up the cost of doing this and are not putting off potential investors. 
The summary of it all is that this measure will be an important vehicle for local authorities to be able to raise debt to fund long-term infrastructure projects. Under the chairmanship of Gerry Brownlee I think that the committee did well. I thank all the members who have contributed in the House to this very important debate. 
Hon DARREN HUGHES (Deputy Leader of the House) 
: 
 I will take a very brief call on the third reading of this bill. I notice that it amends the Securities Act of 1978. I think that that year is a very interesting year and this is very good legislation. I do not think that things of that age necessarily need amending but they may be touched up. 
Eric Roy 
: What date in 1978 was that? 
Hon DARREN HUGHES 
: I think that it is the same date that is on the Order Paper today as it happens. That is very very interesting. I will leave members to do the research on that. 
I think that this Securities— 
Eric Roy 
: Can I wish the member a happy birthday. 
Hon DARREN HUGHES 
: I thank the member. 
Hon Paul Swain 
: I raise a point of order Mr Speaker. Some members may be struggling with the relationship between the dates. I will just point out that it is Darren Hughes’ birthday today. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is hardly a point of order but all members now know. I call the honourable Minister on his 30th birthday. We will not sing happy birthday. 
Hon DARREN HUGHES 
: Thank you Mr Assistant Speaker. On this occasion I say to Mr Swain that that is not a breach of privilege but it comes very close to a breach of mateship in that particular regard. 
The Commerce Committee has done great work on this legislation which is now coming up for its third reading. The point about the bill that is most attractive and most interesting I think is the ability it will give to councils and local authorities to have alternative funding arrangements for some of those long-term projects. I am sure all members have projects in their constituencies where they would like to see things happen but we know that the ratepayer dollar just does not stretch far enough on a cash year-by-year basis. That point of the bill is certainly the one that I think provides a tool for local government to be able to address some of those long-term challenges. In my own constituency of Otaki the Transmission Gully project which I am a very strong supporter of needs every possible tool in the tool box in order for us to progress it so I hope that this is yet another measure that may be available to local government. 
But as Mr Swain said water is also an expensive project for local councils. This bill provides an ability for councils to be able to fund these projects over a much longer period of time particularly on the Kapiti coast where the security of water supply is such a big issue with the coast’s growing population and the pressures that inevitably come with that. I think it will be very important for the Kapiti Coast District Council to have this extra tool; I am certainly in favour of what the bill allows. 
I was interested during the Committee stage to look at some of the actual technicalities in the bill. The thing that was most interesting to myself and I know to my parliamentary colleagues in the Labour Party was the requirements around a disclosure statement. We believe that politicians who are obviously councillors on a territorial local authority should have to be very upfront about disclosure statements. Through amending the Securities Act we are shifting the exact requirements for them to reduce those compliances but there is nothing wrong at all with good full disclosure to the public by elected officials. I think that is very very important not only for the security of the money concerned but for the security of the faith and the trust that their electors have in their officials. That is why I think that some of the things that need to be disclosed by elected officials should apply to us here in Parliament as well. 
That is why I am so surprised that the National Opposition will be joining the Government in voting for this legislation. It seems to me that Opposition members are not very big on disclosure. I think that if they are going to vote for this bill tonight they have to make a commitment that they will disclose far more of the policies that will be in their manifesto than they have done to date. I think there are some real difficulties in terms of the security people can have when they are investing their vote in the future if these policies are not disclosed. So I think that some of the issues we have seen around such as people paying higher doctors’ fees if National were the Government of this country for example are the sorts of things that should be in a party disclosure statement for voting investment purposes under the legislation before the House this afternoon. 
Hon Ruth Dyson 
: No one would vote for them if they knew their policy. 
Hon DARREN HUGHES 
: Ms Dyson makes a very important point. No one would knowingly vote for higher doctors’ fees which is why the National Party tried to hide that policy when it brought out its discussion document last year. So one of the issues before us is how we can make disclosure statements cover everything and not leave out the fact that doctors’ fees may go up. When we think for example that we now have 500000 people in the KiwiSaver scheme making active investments in the New Zealand market that is a very important point. Those kinds of disclosure statements around the security of superannuation and the pension then become very important as well especially in a week in which we have celebrated and noted our ninth increase in New Zealand superannuation under the Labour Government and supported by the parties in Parliament—particularly by New Zealand First which negotiated for 66 percent of the average wage to be paid to married people. I think that is very important as well. I think disclosure statements are crucial in politics and I hope that by National giving its support for the third reading of the Securities (Local Authority Exemption) Amendment Bill it is saying that it will be much more interested in disclosure particularly around things like State asset sales the KiwiSaver scheme pensions and doctors’ fees. I think that is very very important to us. 
The other interesting provision in the third reading of this bill this afternoon is the change that this bill will make to the original Act in relation to the number of people who will have to sign off the investment statement that goes out to the public for consultation. Up until now there has had to be unanimity—there has had to be the unanimous support of the entire council for that statement to go out. But under this new law only two councillors have to sign it before it goes out to the public for consultation. We think that this is a very good thing from an administrative point of view but it immediately to me raises an issue. Just as a hypothetical example I ask what would happen if a council having had a full debate about something agreed to a policy and signed up to say “Yes we’re going to put this out to the public as our stated position.” but only two councillors signed it and then other councillors went around the community and said “You know how the council wants to go to the community about this policy for this disclosure? Well actually I don’t really support that myself. I don’t support it. Although I voted for it at the council table because only two of my colleagues had to sign it I’m going to say around the community that I don’t believe in that.” 
I do not know whether it is possible under the law to prevent that situation but I think that before Mr Williamson and Dr Lockwood Smith cast their votes for it this afternoon they might want to check this provision. They have sat around a caucus table and said they agreed with a policy in order to grease up to their new leader and then they have gone out around the community and said “Actually we don’t believe in it.” I want to know whether this kind of law will become a template for the parliamentary membership of a party. It really worries me that we can say we are in support of something in one place and then go out around the community and say we are not in support of it. I think that is just getting a little bit too slippery from a disclosure point of view and in light of the sort of investment that people are trying to make. 
So I am cautioning Mr Williamson and Dr Lockwood Smith in the House this afternoon. Their vote is going to be cast on their behalf collectively by their whip—in fact by the acting whips. I see Mr Roy is on the phone at the moment so he may well be calling the members concerned to ask “Can we cast your vote or have you now read the fine print in this bill and would prefer to cross the floor?”. We can imagine the situation if they were signing up to something for which they would be criminally liable in saying to private audiences: “Actually I don’t believe in climate change. I agree with my leader’s former position which was that it was a hoax and not really happening.” So I think there are some really big issues for Mr Roy. He is on the telephone at the present time—with a furrowed brow one would have to say—and he is trying to work out whether or not he has the votes of those two members for these things. 
Under our local government legislation our councils already have to go through very thorough and transparent accountabilities to their communities around their long-term council community plans their district plans and all those things that make it clear that councils are open. So we are lessening the disclosure requirements in this legislation because we are confident that councils are pretty upfront about their finances anyway. We are trying to make this easier for some of those good projects that I mentioned including some that are in my own constituency. 
I wanted to raise those issues around disclosure and people signing up for things that they then do not have to commit to in another field. I think those issues are worthy of the House’s consideration this afternoon particularly when the week is ending on what we would not call a high note for Her Majesty’s loyal Opposition. 
Hon Georgina te Heuheu 
: It’s your birthday; be charitable! 
Hon DARREN HUGHES 
: I am being charitable! I am trying to be nice about how badly things are going for those members over there. This is me reaching out the hand of aroha and love to the Opposition in this regard. I am trying to be kind about all this. 
I am glad that we are going to get a strong vote in support of the bill. I think it will help the House enormously and I want to see the bill progress through without any further ado. I will be listening very intently when the Clerk calls for the party votes to make sure that if there are any other votes Mr Williamson and Dr Smith get their democratic day on this very important legislation. 
Bill read a third time.