Shearer David: Local Government Borrowing Bill Local Government (Auckland Council) Amendment Bill (No 2) — Third Readings 
Shearer David: Local Government Borrowing Bill Local Government (Auckland Council) Amendment Bill (No 2) — Third Readings 
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DAVID SHEARER (Labour—Mt Albert) 
: 
 I would also like to support the legislation as my colleagues have and to pay a tribute to Rodney Hide. I imagine that this will be the last legislation that Mr Hide will put through this House. It is not a bad way to go with the Labour Party sailing along behind him. I consider that he will probably put that on his CV for whatever he will be doing—that he passed legislation with Labour Party support. 
I applaud this legislation because as people have said before it shows some foresight and for local bodies raising cash it is certainly a much preferred alternative to privatisation and the selling-off of our assets. Certainly one of the issues that we were concerned about when the Auckland City bill was going through last year was that much of the infrastructure of Auckland City might be sold off. This legislation keeps the assets basically in New Zealand hands and certainly when we look at the opinion polls we have seen on the privatisation process until now we see that probably two-thirds or more—between 65 and 70 percent—of New Zealanders do not want their assets to be sold off. They want to keep them in New Zealand hands. I think that certainly one of the defining issues at the coming election will be how we resolve our debt issue which has marched on to about $18 billion now—whether we bring in a capital gains tax or sell off the majority of our key assets. 
This legislation also goes beyond that. It deepens our capital markets which was a recommendation of the Capital Market Development Taskforce. It is good that some of those recommendations have been picked up. Not a lot of the recommendations of that task force have been picked up but this is one of them and it is good that that is actually happening. 
This legislation engages ordinary New Zealanders—I do not like the term “ordinary New Zealanders”—New Zealanders who may not otherwise be attracted to investing in a stock market. This provides a very safe vehicle for those people because it looks like one of the bonds that they will have the opportunity to invest in would probably be rated triple A in terms of the high level of its security. That is largely because the rating base by which it is supported is pretty much as good as a Government itself being local government. 
All in all this legislation provides a real choice for New Zealand investors to invest in something that will contribute to their communities and will help their children. Whether it be parks sewerage waterways or whatever these are the sorts of things that all of us will benefit from in time. Because many people are more interested in investing in ethical-type investments this is the type of investment that will satisfy people in that regard as well. It provides that alternative to the appalling investments that we saw go down the tubes with our finance companies. This is a real opportunity for New Zealanders to invest in their communities and to do that safely and securely knowing that their money will come back and that they will get a reasonable rate of return. 
It gives local bodies access to capital. About 85 different bodies I understand could potentially line up to use this facility. They will have their own sense of control. It will mean that savings for the local bodies—particularly if they have a triple A rating and the funding agency can do away with much of the administration costs—are estimated to be in the order of 40 basis points or as one of the law firms estimated possibly in the order of $25 million. Obviously local bodies—that is us—are there because of our rates and what we pay into them so that is a big saving for us as well. 
Quite a lot of borrowing is estimated down the track. There are estimates of $10 billion and even up to $20 billion over the next 10 years but certainly local bodies and local government will need access to capital in order to fund the various pieces of infrastructure that they will need. Up to now local bodies were going to banks to be able to do this or they sold assets. This legislation will enable them to go to their own ratepayers and to ask them whether they want to invest. 
I am particularly pleased given the size of the Auckland Council that the Auckland Council will be part of the scheme as well. With 1.4 million people in Auckland—about a third of the population of New Zealand—having the Auckland Council in the mix is to be welcomed. 
In the rare times I have agreed with Louise Upston about the cost of borrowing and whether that would provoke more borrowing I agree with her that I think that is right. I do not believe that lowering the cost of borrowing will encourage councils to go off and raise more money through the bond market but what it will do through the funding agency is to be able to keep a track of some of the local body funding that is out there and that is ongoing. 
Of course there is a degree of risk if there is to be any sort of borrowing. Sue Kedgley raised a couple of those issues. But I do not really think in the context of what we are trying to do here that the oversight to some degree of the funding agency in terms of how much each local body will be taking out and the separation of the funding agency debt alongside some of the other debt is necessarily a valid concern. 
What this legislation will do for many of these agencies—and I think the Auckland Council in particular is relevant at the moment—is to enable the Auckland Council and other councils to raise funds for their own infrastructure. Auckland definitely needs that sort of funding because as we have seen over the last few days the lack of investment in our public transport in particular has meant that our public transport has really let us down. Although we do not plan for one-off events like we have seen at the Rugby World Cup nevertheless over the last 5 years we have seen the use of trains and the patronage of trains in Auckland double. We know that in a couple of years when the line is electrified and we finally get the electric trains to run on it there will be a massive spike in the patronage on those lines because that is exactly what happened in other places in the world. It is what happened in Perth. By the way we have Perth’s diesel engines that were about to be put on the scrap heap. We managed to buy those and keep them running for another 20 years. That gives us an understanding of why we need to be investing in our own infrastructure. Aucklanders I believe understand that and they understand the need to be able to make that investment. 
I hark back in the case of Auckland to the regional transport levy which was imposed under the Labour Government. No taxes and no levies are ever welcomed by anybody but the regional transport levy was welcomed to a large extent in Auckland because Aucklanders recognised that this money was going to help them move around Auckland—and it did. It did and they accepted the levy. It was well and truly accepted. What happened? It was taken away by Mr Joyce. He consolidated it into the consolidated account so now Auckland which gets less tax money back for the amount that it pays— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the member. His time has expired. 
Bills read a third time.