Cunliffe David: Securities (Local Authority Exemption) Amendment Bill — Third Reading 
Cunliffe David: Securities (Local Authority Exemption) Amendment Bill — Third Reading 
[Volume:646;Page:15368] 
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.