Turei Metiria: Securities (Local Authority Exemption) Amendment Bill — First Reading 
Turei Metiria: Securities (Local Authority Exemption) Amendment Bill — First Reading 
[Volume:642;Page:11806] 
METIRIA TUREI (Green) 
: 
 I want to take just a short call on the Securities (Local Authority Exemption) Amendment Bill in order to advise the House that the Greens will be supporting the legislation. It is a fairly small bill in the sense of not being particularly controversial but it will be very helpful for councils to be able to have a greater capacity to use this mechanism for getting funding presumably for their major capital works. 
This issue was raised in the rates inquiry as Mr Donnelly has discussed already so it makes sense to have this legislation as a tool. The Greens have been concerned though that by reducing the disclosure provisions for councils there will be ways they can use this process to subvert some of the democratic processes that are inherent in the Local Government Act. 
There is an element of protection in requiring councils to disclose as much information as everybody else is required to both for those who are looking to invest and for the ratepayers who are at the end of the process responsible for the health of that debt if you like. We asked for more information about the issue. We were told that because all of that information is already required under the Local Government Act—because councils have to provide it in their long-term council community plans and because the process for making those decisions is provided in the documents—there is that kind of disclosure anyway and that this process is just repeating it at quite a significant cost especially for smaller councils. 
That argument makes a lot of sense. We understand the argument but there is still the concern that was raised by the Office of the Auditor-General in its review of those long-term plans which came out a few months ago. The Office of the Auditor-General recognised that there were some real problems with some of those plans that they were often extremely large documents and that it was very difficult to tell what was important. Trying to find useful information in those documents could therefore be very very difficult. 
 That raises the concern that if the councils do not have to engage in the same disclosure practices for making decisions around issuing securities because they can rely on these large plans to include that information then investors and ratepayers who are looking for that information could find it extremely difficult to locate. The information might be there but it could be buried in 10000 pages. That is not disclosure. That is not enabling the information to be made available. 
We would like to see the investment statement issued providing more detail so that although councils give less disclosure than other companies they give a slightly higher level than is currently required in the bill. We would like councils to have to identify where the information is in the other documents they produce so that people can find it. It could be as simple as giving page numbers. How councils do it is up to them. It is also about how we structure those provisions in the bill. 
If we are prepared to rely just on these unwieldy huge documents with huge amounts of detail which are comparatively unstructured and difficult for lay people to find information in then there simply will not be disclosure and protection for either the investors or ratepayers who have to foot the bill at the end. We would like to see more information being required in the investment statements and to have them expanded slightly so that there is a cross-reference to information in other documents. 
We will have to work through that approach in the select committee as to how it might work. There may be other ideas from councils or others about how we could do it. But this approach would be a wise way of making sure that we meet the objectives and that councils would be able to engage in the process practically without costing them huge amounts of money in preparing their prospectuses and information. It would be a wise way of making sure that the plans they have to provide under the Local Government Act are already coherent and sound and that they contain all the necessary information. It will also make sure that investors can find the information they need in order to be able to make sensible decisions for themselves and that ratepayers can follow the decision-making process that has led from the consultation and engagement involved in making that decision through to using this tool. They can follow the process through to the long-term council community plans and other documents and then finally through to the investment statements. 
With that approach there is the maximum amount of transparency with a reasonable amount of control over the cost for councils. It could be a very sensible way of engaging with this method giving councils the best possible flexibility and giving investors and ratepayers the greatest amount of protection. Thank you.