Twyford Phil: Local Government Borrowing Bill — In Committee 
Twyford Phil: Local Government Borrowing Bill — In Committee 
[Volume:675;Page:21163] 
PHIL TWYFORD (Labour) 
: 
 We do not have long for this debate this afternoon and that is a good thing because there is a lot of consensus about the Local Government Borrowing Bill. There was good discussion at the Local Government and Environment Committee. One of two minor items were debated but there was broad agreement if I am not wrong with the intent and the content of this bill. 
The purpose of the bill is pretty clear. It is the recognition that debt is a necessary tool for local government in this country. A significant amount of ratepayers’ funds are used for the cost of borrowing money particularly for capital items. The Local Government Funding Agency which this bill establishes will save a significant amount for the ratepayer. There is some question I think about whether the amount of $25 million will in fact eventuate given the fall in interest rates over recent times but I think it will probably still save a significant sum. The Auckland Council alone estimates that this bill will save it about $10 million a year and perhaps the Minister in the chair the Minister of Local Government might like to take a call and let us know what the latest estimates are. 
Part 1 makes a number of legislative adjustments that will give lenders confidence that the Local Government Funding Agency is an institution that they can rely on and will reduce compliance costs for the agency. The Local Government Funding Agency will be borrowing offshore. The bill changes the Local Government Act to exempt the Local Government Funding Agency from the prohibition on local authorities borrowing in foreign currency. The funding agency will also provide a vehicle that will be able to make retail offerings to the so-called mum and dad investors in New Zealand and that is another really positive benefit of this bill and this initiative. It will add to the efforts to deepen and strengthen New Zealand capital markets by giving mum and dad investors the opportunity to buy bonds and invest in New Zealand’s infrastructure. 
I congratulate the Minister of Local Government on this bill. We have supported this bill all the way along and we have supported the efforts to push it up the Order Paper to ensure that it would be progressed through all its stages and passed before the House rises for the general election. It is particularly important to note that the issue of debt raises different responses from parties across the political spectrum. Parties on the right tend to want to rise to the challenge of how we make the really significant investments that are needed in infrastructure by having recourse to privatisation and public-private partnerships. What we like about this mechanism is that it provides one alternative to those responses. It allows councils and ratepayers around New Zealand more of an opportunity to own their own future and it mobilises the savings of New Zealanders to invest in water treatment plants transport infrastructure and all the necessary capital items that local governments have to invest in. 
I will leave it there as an opening statement and I look forward to hearing from the Minister.