Burns Brendon: Local Government Borrowing Bill — In Committee 
Burns Brendon: Local Government Borrowing Bill — In Committee 
[Volume:675;Page:21165] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I join with my colleague Phil Twyford in acknowledging the role of the Minister of Local Government in bringing the Local Government Borrowing Bill to the House and through the House. This bill may be the last bill he brings to the House and I want to acknowledge that I think it is very sensible legislation. I acknowledge the good work he has done to bring it to this point. 
The bill is good sensible legislation because it embodies a collectivist approach. It uses what sometimes might be regarded as the collective power and might of a collection of local authorities—not the power and might of the State—to bring down the rates at which they borrow and to pass those lower rates on to their ratepayers in order to get more done for their ratepayer dollars. That is a good option for local authorities and when we consider some of the options and alternatives that are in the market place—and in Government policy at the moment such as asset sales—I think this is a very sensible measure indeed. 
My colleague Stuart Nash picked up on a point that I was going to raise and it is about one of the options that I think this bill might preclude—one hopes—but it is not clear. My city of Christchurch obviously faces enormous debt costs in respect of the earthquakes of the past year. A very fine plan for the rebuild has been released. It is a futuristic focused plan from the city council which has been put together by the city’s planners in just 3 months when normally a long-term plan like that would take some years. The estimate of the cost of the plan for the rebuild of the central business district alone for the city council is of the order of $2 billion. 
That is a curious figure in one respect because the Christchurch City Council also owns about $2 billion of assets. I applaud the council for its visionary plan and I say that we need instruments like this bill to allow the council to borrow. Christchurch ratepayers are already facing a rates rise this year of about 7.1 percent—7.1 percent—and about 1.5 percent of that is directly related to earthquake recovery costs. 
But there is another option that I fear which is that the city council will be forced to sell its assets by this Government. I would like to ask the Minister in the chair the Minister of Local Government whether he has been aware of any discussions in respect of that as this bill has been brought together. This bill embodies a sound principle around an entity like the Christchurch City Council being able to use the funding agency to borrow at competitive rates and to hold down the cost of rates increases for the good citizens of Christchurch as we try to fund our way through the enormous disaster that has befallen our city. As a matter of record in the 2011 report on the estimates of the finance Minister from the Finance and Expenditure Committee there is in fact a recognition of the sale of Christchurch City Council assets as an alternative to the measures that this good bill introduces; it is there on the books. 
As the report of the Finance and Expenditure Committee recorded “As the Canterbury Earthquake Recovery Act allows the sale of Christchurch City Council assets to fund the rebuilding of the city we asked the Minister of Finance whether he could guarantee that this would not happen. The Minister said that this was a matter for the city council to decide. He added that the Government would discuss cost-sharing with the city council but that it was important that the council have a stake in the process which included sharing the costs to ensure that value for money was achieved.” 
So there on the record of the Parliament is the fact that the Minister of Finance has acknowledged that there is capacity under the Canterbury Earthquake Recovery Authority legislation to require the sale of the city council’s assets in Christchurch. I ask the Minister whether he can confirm for us please whether that issue was discussed as this bill was brought together. This bill is a sound logical sensible pragmatic way to deal with the debts of Christchurch and other cities. Selling assets is a one-off sugar hit and it carries enormous long-term costs. 
Those assets in Christchurch have returned many hundreds of billions of dollars to our city. Orion—the power network—alone has provided a billion dollars in returns over the last 20 years. Even the Minister of Finance might acknowledge that that is a pretty formidable rate of return for any commercial organisation. The thought that my ratepayers and the citizens of Christchurch may face an option other than the one this good bill provides is a very very scary prospect. I would like the Minister in the chair to comment on that at some point through the Committee stage.