Securities (Local Authority Exemption) Amendment Bill — In Committee 
Securities (Local Authority Exemption) Amendment Bill — In Committee 
[Volume:646;Page:15219] 
Securities (Local Authority Exemption) Amendment Bill 
In Committee 
Debate resumed. 
Clauses 1 to 5 ( 
continued 
)  
GORDON COPELAND (Independent) 
: 
 I will take just a brief call on the Securities (Local Authority Exemption) Amendment Bill and I begin by congratulating Dr Richard Worth. He set out a very eloquent and very complete analysis of the bill and its importance. It is actually a very important bill. As Dr Worth said it is a very short bill but its ramifications are quite dramatic. 
Before I go on to speak on the bill I think I should respond to the contribution of the Hon Paul Swain who correctly pointed out that the problem we are fixing probably has its roots in the time of the National Government of 1996 to 1999. I say to the Minister that it is now 2008 and if Government members protest too loudly about their great vision of getting things fixed in their country then I say to them that it has taken a great deal of time. It has taken far too long to fix this problem. I just want to bring a bit of balance to that political issue. 
I want to make a slightly different link as well. At the time this bill was being considered by the Commerce Committee we were also talking about housing affordability. I wonder whether the very very large development levies would have been levied on new homeowners by local councils in this country if this bill had been enacted much earlier. As Dr Richard Worth has said we have actually unintentionally I believe shut off the ability of mum and dad ratepayers to invest in stock issued by their own local council. 
I remember the days when for example the Nelson City Council or the Lower Hutt City Council could go to its own ratepayers tell them there was a bond issue coming up and ask whether they would like to buy some stock. Many households of every portfolio large and small always had a fair proportion of their investment in local body stock. Bringing that to an end was a tremendous mistake with ramifications not just for the funding of local authorities. 
I will refer back to the development levies just to make this point. The development levy is actually a levy on the new homebuyer and it therefore makes housing affordability worse. It makes housing less affordable. The right way in my view to fund new infrastructure such as sewerage works and roading works is—as Dr Richard Worth has pointed out and Mark Blumsky has also mentioned it in this connection—through long-term intergenerational debt so that it is repaid over a 30 or 40-year period. That is the traditional way it has been done in New Zealand and removing that opportunity really was a great mistake. I agree with the comments that have been made that removing that opportunity has also forced a lot of mum and dad shareholding ratepaying investors to get into junk bonds with finance companies like Blue Chip with very very sad consequences. 
I look forward to the passage of this bill. I wholeheartedly endorse it and I hope we will see a return to the good old days when ratepayers—mum and dad investors—had the opportunity to put some of their money into their own local council bonds. That really is intergenerational finance in another sense is it not? Those people who are older and better off and who have some spare cash are actually funding—physically and necessarily funding—the infrastructure that is coming on board for the next generation of homeowners and the next generation of citizens. That is the way things should be. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I will take just a brief call in the Committee stage of the Securities (Local Authority Exemption) Amendment Bill to thank members for their contributions to the debate. I understand that my colleague the Hon Paul Swain made reference to the time frame for the repeal of the previous exemption that existed in the securities legislation for local authorities. I think that to say it has taken a long time to put it back ignores another reality which is that I do not think that when the Government of the day actually removed the exemption it believed that the consequences would be as significant as they were. In fact it really was not until this Government set up a Central / Local Government Forum that was able to talk about the issues facing local government that we realised that this issue was one that had been of concern to local government. 
So the issue was able to be brought to the table and the Prime Minister undertook as soon as it was brought to her attention to take it to the relevant Minister who was me as the Minister of Commerce. We set about bringing about this legislative change quite quickly once we had got it on to the legislative timetable. In fact we announced this change last year and here we are on 1 April seeing the bill through virtually its final stage. There is only one more stage to go this week. The bill will be passed by the end of the week and I know that many local authorities are looking forward to this legislative change. 
I appreciate the Commerce Committee’s work as well because this bill does not reinstate exactly what existed before. I think it would be a mistake for people to think that we have not modernised the framework so that it is now more in line with what one would expect in this environment. 
I have made the point in more than one of the contributions I have made on this bill that it is very timely to have quality debt products available for those whom I would describe as not being sophisticated investors. We have seen people who believed they were investing in a secure product sometimes because it involved land—for some reason people think that buying an apartment off the plans is somehow a secure investment—without having the proper checks and balances in place. This bill puts a good product back on the market which enables those investors to feel some confidence in that regard. 
That being said local authorities will not be able to give guarantees unless the product is Government guaranteed so those particular issues need to be addressed as well. Unless the product is guaranteed under the Public Finance Act local authorities will not be able to say that it is but it certainly is a lot more secure than some of the investments we have seen people investing their hard-earned money in. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon PAUL SWAIN (Labour—Rimutaka) 
: 
 When I last rose in this Chamber I began a speech in the Committee stage of the Securities (Local Authority Exemption) Amendment Bill. I looked up and saw that the gallery was packed and I thought that it was in anticipation of my rendition of a speech about local authorities being able to issue debt. After I sat down I realised that it was nothing to do with me; it was to do with our colleague Su’a William Sio who was making his maiden speech—and a fine speech it was too. I have now had to lower my sights again and say that although I am sure the securities issue was interesting for the people in the gallery it is an important issue for local authorities. 
Before the dinner break we heard a little bit of history from the National list member Richard Worth. 
Hon Darren Hughes 
: Oh! 
Hon PAUL SWAIN 
: He often provides a little history. 
Hon Darren Hughes 
: A pre-dinner speech. 
Hon PAUL SWAIN 
: It was and it was quite an interesting little speech. 
Hon Judith Tizard 
: In the absence of policy. 
Hon PAUL SWAIN 
: The Minister is right; it was in the absence of policy and history is really a poor substitute for policy but never mind. The member talked about the fact that these amendments were brought about because a previous Government in 1996 and 1998 made some changes that made it difficult for local authorities to issue debt securities. This was in the days when we all knew about local council bonds and health board bonds etc. 
But then the Minister in the chair the Hon Lianne Dalziel—generously I thought because there was some accusation that we criticised the National Party for doing it so how come it has taken us so long—indicated that really it was not until the Local Government Forum which the Prime Minister chairs and which I have had the good fortune and pleasure to go to on many occasions. It is a great partnership— 
Hon Judith Tizard 
: Co-chair. 
Hon PAUL SWAIN 
: In my time the Chair of Local Government New Zealand Basil Morrison co-chaired the forum with the Prime Minister. It was at one of these functions that the issue of the problems that local authorities had with trying to issue debt securities was raised. I think the Minister said that from about the point when the issue was raised to the point we are at today is a little over 12 months so I congratulate the Minister on that. 
The issue is really about local authorities trying to fund large and expensive infrastructure projects. [ 
Interruption 
] 
The CHAIRPERSON (H V Ross Robertson) 
: Cellphones are not permitted to be switched on in the Chamber. Will members please switch them off. I am sorry to interrupt the honourable member. 
Hon PAUL SWAIN 
: That is all right; I thought it was a bit of light relief. I was saying that the issue is about local councils being able to issue debt securities particularly on projects that are enormously expensive. Of course with the issue of bonds and so on drying up more and more councils were left to try to fund projects out of income and it meant that that kind of opportunity was not possible. 
This bill tries to set down some rules. First it exempts local authorities from the full disclosure requirements of the Securities Act. This is primarily because people know that local authorities are pretty secure investments in the sense that there are elected people who are accountable and there is a rateable income that people can work through. It is all very transparent and open. The projects themselves need to be done and are required to be done and people can invest with some degree of certainty at a time when the whole question of investment is before the public. We do not need to dwell on the Blue Chip type of example but people are looking for a little more certainty. 
Hon Darren Hughes 
: A red chippy. 
Hon PAUL SWAIN 
: Yes a red chippy from Rimutaka will hopefully be my successor. I apologise to Dr Cullen because I did not get his joke at the start—it was far too subtle for me—but I do now and I formally apologise to him for that. 
Local authorities do not have to follow the full disclosure regime under the Securities Act but some important things do need to be done. We have added a few more subclauses just to give the matter a little bit of certainty which include things like when local authorities are issuing their financial statements they need to refer to the last audited annual financial statements in the investment statement they distribute when issuing debt security. The last audited financial statement from a council needs to be part of the investment statement. The Commerce Committee which I must say was ably chaired by Gerry Brownlee added a number of other requirements. 
We also looked at some other issues. For example when Governments issue debt the Minister himself or herself is not criminally liable. Local authorities rightly said “Well what about us? We are in a similar situation.” The select committee spent some time on that matter and in the end we decided we would not apply that general rule to local authorities. For a start there are a lot more checks and balances within the central government system. It was also felt that Ministers of the Crown are in a very different situation because they have significantly more reporting and accountability requirements. I felt that Local Government New Zealand and others made a reasonable point with their submissions and we spent some considerable time on them. 
There was another issue in relation to the problem of who signs the financial statement. We said that rather than having all councillors sign the financial statement—and that would mean there would be a power of veto and that an important project may not go through as a result of one councillor vetoing it—that as is in the Act two people need to sign the financial statement. Of course if everyone were not collectively responsible then we would not get two people signing it because those two people would be liable. What will happen is that two people sign the document and all the councillors are then criminally liable for the accuracy of the content of the investment statement. So if a particular councillor opposes a project he or she could vote against it but it would not stop the project. The councillor would be required to ensure to the best of his or her ability that the accuracy of the investment statement is correct. 
Chris Tremain 
: Is this a reselection speech? 
Hon PAUL SWAIN 
: No it is not actually. I am very pleased to tell the member who is interjecting that it is not. If he listened carefully he would know why it is not. I can tell the member that I am a shadow of my former self. In the 1990s I was much more pithy witty and sharp. 
Chris Tremain 
: Perhaps it’s an attempt at local government then. 
Hon PAUL SWAIN 
: No no although of course one never says never. 
Hon Judith Tizard 
: My father was elected for the first time into local government in 1983. 
Hon PAUL SWAIN 
: There we go—his first time in local government was in 1983. 
Hon Judith Tizard 
: To the district health board. 
Hon PAUL SWAIN 
: Well there we are you see; there is hope for us all. I thank Chris Tremain for his confidence in me but it is nothing to do with that. I am attempting to try to point out some of the vagaries of this legislation. 
As I was saying a councillor needs to make sure that the investment statement is accurate. Of course the question will be “Well look if I did try and it wasn’t accurate am I criminally liable?”. There will be checks and balances along the way and I presume that as long as minutes are recorded that people will make sure there is outside advice and help. That raised the question of compliance costs. The reality is that in this legislation the most important thing is that compliance costs are lowered. I think there will be more certainty in the legislation for local authorities to raise funds for their projects. 
One issue that was not raised at the Commerce Committee which I was just thinking about before was uptake. Perhaps I can ask the Minister in the chair Darren Hughes about it. I know he has extensive knowledge of this issue—probably coming from a more statistical background. We know that he is the fount of all wisdom and knowledge in that particular area. I hope there is an opportunity for the Minister to take a call so that I can ask the officials a question via him. One of the questions I did not ask the officials at the select committee—I came a bit late to the select committee not physically but just because I was appointed late to it and I do not know whether this question was asked—was what work had been done by local authorities to suggest what the uptake would be when this legislation is passed. I think that would be interesting to know. 
Everyone says that this legislation will make things easier and better. We can all sit here and say “Yes let’s pass the legislation” but I suppose the question really is what work has been done to get some sort of an idea about when it is passed what the likelihood is of its actually being taken up and relatively quickly. That is something that presumably I probably should have asked Local Government New Zealand when it came to the select committee but I hope there is an opportunity for the Minister to take a call. Then again the Minister might not want to take a call because he might think it is obvious and would not want to waste the time of the Committee explaining something to me that he can explain later on. 
Hon DARREN HUGHES (Deputy Leader of the House) 
: 
 I had not intended to take a call but I am happy to indulge the member for Rimutaka the Hon Paul Swain who has raised some very interesting issues before the Committee regarding the Securities (Local Authority Exemption) Amendment Bill. What I would say to the member is that this bill is driven entirely by a desire to remove a lot of the administrative inefficiencies that have previously applied to local government under the securities legislation. 
Dr Richard Worth 
: Administrative inefficiencies! It is about getting more debt security for local government. 
Hon DARREN HUGHES 
: It is a pleasure to welcome Dr Worth to the debate because I understand he took a call before dinner and he has come back after dinner and will continue to speak on the bill I am sure. 
The whole drive of why the Government has introduced this bill to the House and brought it before the Committee this evening is to try to make sure it is easier for local government to make use of these measures but without having to go through— 
Dr Richard Worth 
: What administrative inefficiencies? 
Hon DARREN HUGHES 
: There are several administrative inefficiencies that local government currently has to go through and if the member had been paying attention during the select committee process he would be aware of them. I am sure he will recall that his own local council the Auckland City Council his own regional council the Auckland Regional Council Local Government New Zealand the Society of Local Government Managers the Property Council of New Zealand and the New Zealand Exchange all submitted to the Commerce Committee around these very issues and that is what the committee of which he is a member has reported back to Parliament. 
I come back to the point raised by the Hon Paul Swain: what will be the uptake by local government in the initial period if indeed this bill of five clauses is passed through the Committee stage tonight by majority vote in the House? I have consulted the officials and there is no direct answer for the member at the moment but I am happy to supply his office with that information when it becomes available because I know he will be interested to see it. It seems to me— 
Hon David Parker 
: It’s millions. 
Hon DARREN HUGHES 
: Given that we have only 73 territorial local authorities it might be a little shy of that figure but I do think there will be some enthusiasm particularly regarding infrastructure projects. 
Mr Swain outlined the easier access that local government will have to— 
Hon David Parker 
: Intergenerational equity! 
Hon DARREN HUGHES  
Intergenerational equity I am sure will be an argument debated around community boards and council tables all around the country as people try to work out how they want to fund their local infrastructure projects. Of course as we all know in this Chamber there are always many more projects we would like to see in our communities than there is money available particularly through the National Land Transport Fund. So local government in terms of its own share and its own contribution will be looking to find mechanisms for ways in which it may raise capital and cash in order to pursue these projects. 
To assist Mr Swain a big project in our own region—the greater Wellington region where his constituency of Rimutaka is situated and my own constituency of Otaki is located—is Transmission Gully which is a 27 kilometre stretch of road presumably costing around $1 billion although we will not have the numbers for that until May. If central government is able to put up its proportion of the share for how much it would like to pay for a roading option like that and there is money available through either a public-private partnership or tolling but the critical green light is some local government involvement through some funding commitments I say to Mr Swain that it may well be that the bill currently before the Committee tonight is a way in which local government could meet its obligations if it intended to do that. 
As I mentioned the bill is a short one. It has only five clauses. I have already given the Committee the list of organisations that submitted on the bill when it was before the Commerce Committee. There were really only five issues that came out of the committee’s deliberations and they affect only one clause. The clauses remain unchanged with the exception of clause 5 which is the meat of the bill for want of a better description and that is where the committee has made its changes. As Mr Swain said criminal liability in clause 5 was of huge interest and concern to councillors. They saw themselves in the same position as Ministers of the Crown who approach these issues. The Commerce Committee has made its recommendation and the Government has picked that up in its progression of this bill through its second reading and now the Committee stage. 
I turn to the issue of two councillors signing. The select committee made quite a—[ 
Interruption 
] 
Dr Richard Worth 
: More misery. 
Hon DARREN HUGHES 
: Oh the member has been to a caucus meeting today. He is stuck in time again. If I were going to the same meetings as that member I would be worried about getting exemptions for security purposes as well in that regard for Dr Worth. 
Dr Richard Worth 
: Tell us something new. 
Hon DARREN HUGHES 
: Oh there is a lot that is new to tell the member. For example many members of his caucus do not support the climate change policy which could cause some difficulty— 
Dr Richard Worth 
: About the bill. 
Hon DARREN HUGHES 
: Oh I see. So it is not such a broad wide-ranging debate after all as the Chairman advised us at the beginning of this process. We were told it was going to be a wide-ranging debate. Dr Worth is freely interjecting on me while I am trying to explain parts of this bill. But when the tough questions come back he does not want to talk about it. In fact since the time that interjection started he has scurried from the second row back to the third row and he is hiding there under his desk. 
But I do want to touch on this issue of the number of councillors required to sign these proposed requirements. 
Dr Richard Worth 
: Two. 
Hon DARREN HUGHES 
: Dr Worth is quite right. There was some discussion at the Commerce Committee on this very point. It may well be that a council with 10 or 12 members may spend some time debating whether it wants to make full use of the provisions in this bill consult the community and receive a green light for it because it was to be attached to a project very much supported by that community. But there might be one or two councillors voting against it as is their absolute right and who would be errant in the sense of the majority decision if we are requiring every single councillor to sign up in the same way that we might require a full board of directors to have a unanimous view. It is not practical to require a whole council to sign up. So providing the council has voted and it can be clearly shown in its minutes that yes there was a majority decision for the council to embark on that course of action then under clause 5 the requirement is for only two councillors to sign the investment statement. So I think that does clear up the issue. That was the background to that issue under clause 5. I know the Property Council in particular had issues that it wanted to raise on that matter when it came before the Commerce Committee. Therefore with those remarks particularly directed to the comments made by Mr Swain at the moment this is all I want to contribute to the Committee stage of the Securities (Local Authority Exemption) Amendment Bill. 
SUE MORONEY (Labour) 
: 
 I appreciate having the opportunity to contribute to the Committee stage of the Securities (Local Authority Exemption) Amendment Bill which the Committee has agreed to have a wide-ranging debate on rather than to debate it part by part or clause by clause. This bill is easy to debate in a wide-ranging way because it is a big picture bill. This Labour-led Government is committed to strengthening the way in which councils may operate and serve their constituencies. It looks as though the Commerce Committee received very fine submissions from Local Government New Zealand and from some of the larger local authorities and they urged the House to support this approach. The bill will reduce compliance costs for local authorities and will give them greater ability to fund long-term investments such as infrastructure. 
Under this Labour-led Government we have seen significant improvements in the funding of infrastructure and certainly my own area in the Waikato is a very fine example. Work has started on many of the roading projects and that will make a big difference to economic development in the region. Additional Government funds have also come from the Joint Officials Group process. We see the effects of Government funding accelerating that infrastructure development and all that it means for the economic development of our region. The region is absolutely booming. 
A similar disclosure exemption used to exist for local authorities but it was repealed in 1996—by the previous National Government I believe. That was done in order to subject local authorities to a thing called a level playing field where they would compete with private companies. In those days the market was the best tool that National could think of in Government. It was not our Government of course; I want to be very clear that this did not happen under a Labour-led Government but under the previous National Government. Its mantra was “the level playing field” and “the market is the only thing that determines what shall go on in this country”. National sat on its hands and let the market run rampant over everything basically in the 1990s. 
However the exemption does not take into account the differences in legal frameworks between companies and local authorities. This bill seeks to redress the fundamental mistake that was made by the National Government in 1996 when it did not recognise the fundamental differences in the legal frameworks between private companies and of local authorities. This Labour-led Government understands that the current provisions of the legislation impose unnecessary compliance costs on local authorities and prevent local authorities from raising capital in an effective manner. 
The bill amends the Securities Act 1978 to exempt local authorities from the full disclosure requirements of that Act when issuing debt securities. It does that because the level of disclosure required from local councils under the original Act was burdening them with unnecessary compliance costs. Local Government New Zealand clearly outlined that issue in its submission to the select committee. The original Act required all councillors to sign off on a prospectus essentially requiring the unanimous agreement of a council to a project or to issue debt to fund the project. That does not happen with any other council decision I would say. This legislation was getting in the way of the normal democratic procedures that take place on pretty much every other decision that a council might make on behalf of its constituencies because in this case the legislation required a unanimous decision. So the changes which are intended to allow an exemption from these provisions will reduce compliance costs by easing the process for local authorities to offer securities to the public. 
This bill will provide a valuable source of alternative funding for infrastructure assets. It will also provide investors with options to expand their investment portfolios. That is a positive move for the investment market. 
Without further ado I am very happy to stand and contribute to this debate in the Committee stage. I was not on the select committee but I feel certain that it would have given due consideration to the very fine submissions that came in on the bill. It is good to see the wide-ranging level of support in the Committee for this positive move because this bill recognises that the whole mantra around the “level playing field” was nonsense and that there are differences between private companies and local authorities. Finally this bill has come forward to put things right. 
Hon DAVID PARKER (Minister of State Services) 
: 
 The reason that we have the Securities Act is to protect the interests of investors so that investors have adequate information upon which to judge risk. That is relevant because obviously if one is facing a higher risk then one ought to seek a higher rate of return and in many cases if one fully appreciates the nature of the risk when making an investment then one may decline to make it. We can see the importance of appropriate Securities Act disclosure very clearly in the current environment where there have been finance company collapses and where the information disclosure that is required to be given to people who are thinking of investing in finance companies is absolutely essential for them to be able to assess risk properly. 
This bill recognises that there are some entities for which the additional information disclosures are not necessary because of their size. An obvious example is the Crown. The Crown issues Government stock and other securities and because the Crown is probably just about the best debtor that one can have given the tax base of the Crown the assets of the Crown the ability to levy taxes and the reputation that the Crown has for meeting its debt the Crown is obviously seen as a very good bet by investors. 
The next tier down in terms of institutional size and the ability to repay moneys loaned to it is local government. Most local government entities are very large and they at times have the need to borrow money. It is necessary that they have a practical set of rules under the Securities Act that they have to deal with. 
Until now local authorities have been faced with the same set of rules as have applied to private company borrowers and those private company borrowers have had to meet the full rigours of Securities Act disclosure including information statements full prospectus and the related company accounts. This has meant that borrowing by local authorities has become more administratively expensive for those local authorities. As a consequence rather than issuing local government stock directly to people who were wanting to invest money in local government stock much in the way in which they have traditionally invested in Government stock local authorities have not availed themselves of the issuances of debt securities through the Securities Act route because it has been a bit complicated. 
There are good reasons why councils ought to at times borrow money. Many infrastructural projects have a lifetime measured in many many decades. For example once in 50 years it might be necessary to upgrade sewerage infrastructure or stormwater infrastructure—or to build a new motorway as the Minister in the chair the Hon Darren Hughes has mentioned. The assets that are built have a useful economic life that could be five decades and it would be inappropriate to put the full cost of that particular project on to the ratepayers who happen to be ratepayers in the year that these things are built. It is appropriate to spread the cost of those expensive infrastructure assets over a number of years and the way in which a council often does that is by borrowing the capital sum required for the project and repaying it over a long period of years often decades in order to achieve some matching of the cost against the ratepayers who benefit from that investment. Of course borrowing enables local authorities to do just that. 
So the purpose of this legislation is to recognise the reality that it is appropriate at times for local authorities to borrow money through the issuing of local government stock as used to happen recognising that in this instance local authorities are more akin to the Government than they are to private enterprise and to reflect that in the Securities Act settings that apply to them. That is what this bill achieves and I recommend it to the Committee. 
Dr RICHARD WORTH (National) 
: 
 We are being treated to an unusual event tonight and the unusual event tonight is that the Labour-led Government is in disarray and panic. We have heard a series of speakers on the Government side saying nothing of consequence at all and saying it with an apparent sincerity which I do not accept and with an apparent earnestness which I do not accept. That makes us wonder what in fact is happening behind the scenes in this Government. 
We know that the Order Paper is very short. We know that this is a short bill; it has five clauses. We know that the points have been thoroughly canvassed yet a string of speakers two of whom are Ministers have spent a substantial amount of the Committee’s time talking about aspects of the bill. So let me talk about an aspect of the bill that has not been spoken of at any great length. It concerns an issue that Mr Copeland and I both raised in the earlier contributions we made and it is this issue of junk bonds against the type of debt security offered by local government. I made the point and he has followed up on it that local government securities at a previous time were popular securities well removed from the junk bond class. 
We have a situation in New Zealand at the moment with Blue Chip. With these finance companies there are for many investors huge tensions huge difficulties and huge losses. I would just express the hope in that context that the Commerce Commission and the Securities Commission which are well resourced take the steps that are appropriate to be taken in pursuing those who have been responsible for setting up these schemes or their implementation. What is the relevance of that to this bill? It is a very easy linkage. What this bill will offer when enacted is a security pathway that will be attractive to I guess what one might call mum and dad investors. So I invite you Mr Chairperson to close down this debate so we are not treated to more of these games of vexatious play that the Government for some unknown reason has embarked upon. 
DAVE HEREORA (Labour) 
: 
 I take the opportunity to have a short call on the Securities (Local Authority Exemption) Amendment Bill. I just want to remind the previous speaker that simply the intention surrounding this bill is to lower compliance costs. At the end of the day that is exactly what the bill is designed to do. The Government is committed to strengthening the way in which councils may operate and serve their constituencies. The bill will reduce compliance costs for local authorities as well as allow them greater ability to fund long-term investments such as infrastructure. 
As a member of the Commerce Committee I think it is important to talk about some of the submitters who came to us and some of the comments they raised. Submissions were received from the Auckland City Council the Auckland Regional Council Local Government New Zealand the New Zealand Society of Local Government Managers and the Property Council. These submitters raised about five main issues with us. One in particular was the criminal liability aspect. Submitters said that councillors should be exempted from criminal liability because they are similar to a Minister of the Crown who is not criminally liable in such circumstances. I suppose that the committee in raising that issue gave some serious consideration to submitters’ concerns surrounding that. 
The other issue was the proposed requirement that only two councillors sign an investment statement and the fact that that may lower investment confidence. That again was designed to lower compliance costs. In respect of indemnities in insurance submitters said that local authorities should be exempt from sections 61 and 61B of the Securities Act. In respect of trustees submitters said that local authorities should be exempt from the requirement to appoint a trust of the debt security as is the case for the Crown the Reserve Bank the National Provident Fund and the Housing New Zealand Corporation. 
I thought it was important to highlight some of the issues those submitters had raised with the committee and to reiterate that the level of disclosure required for local councils under the original Act was burdening them with unnecessary compliance costs. The original Act also required all councillors to sign off on a prospectus that essentially required unanimous agreement in council for a project or for issuing debt to fund a project. Again I just reiterate that the whole intention of this bill and the commitment from this Government is to lower compliance costs. Kia ora. 
GORDON COPELAND (Independent) 
: 
 I want to take just a brief call on the Securities (Local Authority Exemption) Amendment Bill. I simply say that if the Government speakers—and we have now had quite an array of them—are determined to run a filibuster on a bill that has the unanimous support of the House then I would like to sow the thought in their minds that it might be appropriate to move that the House rises early so that we can all get on with something else. I do not think it is necessary for us to sit here and have repetitious speeches covering the ground that has already been covered adequately by Dr Richard Worth and others. 
Clauses 1 to 5 agreed to. 
Bill to be reported without amendment presently.