Auchinvole Chris: Local Government Borrowing Bill — Second Reading 
Auchinvole Chris: Local Government Borrowing Bill — Second Reading 
[Volume:675;Page:20994] 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 It is a pleasure and a privilege to be the last speaker during this second reading of the Local Government Borrowing Bill. The bill is to facilitate the establishment and operation of a new company: the New Zealand Local Government Funding Agency. It has been a pleasure to see this bill come through our Local Government and Environment Committee. It was one of those occasions when basically we were all in agreement that it was a good idea—not only a good idea but also that it had true purpose true meaning and was significant legislation. 
I remember during the early stages because as has been evidenced by the way people have spoken we were pretty much in accord on this issue there was very much a bipartisan discussion about the whole thing. I did none the less feel obliged to ask the officials why if it was such a good idea now we had not done it before. The answer to that question really was given by Local Government New Zealand which is a very very strong supporter of this particular bill. It said that in the past without the pressures of the difficult economic times we have been having money was reasonably easy to facilitate for local councils and the interest rates were always competitive because they were such blue-chip financial institutions. But without that with the difficult times we have had with banks being more careful whom they lend to with councils being more cautious about borrowing this has certainly become a timely operation and it is a good thing to be doing. 
Local Government New Zealand has estimated that the funding agency will save local government in the order of $25 million each year. At the Local Government and Environment Committee we are quite familiar with the level of debt that various councils are engaged in and we are kept up to date with that. So if we can make savings and easier facilitation of money the operation of the agency will also strengthen New Zealand’s capital markets by providing a new high-quality investment option and that will be a good thing too. Unsurprisingly the bill has a very high level of support throughout the local government sector. We are advised that 35 local authorities have indicated they intend to participate as shareholders in the funding agency and a further 14 have indicated they will participate in this scheme as guaranteeing borrowers. There is strong support for the proposal and there is very little opposition to it. 
If I may I will take just a moment to reflect on the response to local government requirements that the current Minister of Local Government has shown throughout his tenure of that portfolio. The Hon Mr Hide has repeatedly come out with legislation that is tailor-made to suit the requirements of local government. It goes from the very large effort in Auckland down to this sort of consideration which is really for smaller councils’ maximum advantage. 
This bill is most worthwhile legislation. It gives the Minister of Finance authority to lend money to the agency in exceptional circumstance but it specifically states that the Crown does not guarantee the obligations of the funding agency. As I say I am pleased to be the last person speaking on this particular reading of the bill. The recommended amendments we brought through the select committee will be most worthwhile if they are incorporated into it. I think that of the six submissions we had five were in support and there were very few recommendations for change. It has been very tidy legislation. I am deeply grateful to the committee members who assisted in the passage of the bill and to the officials who provided us with the assistance we required. Thank you.