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Local Authority Trading Enterprises

Local Authority Trading Enterprises "More Accountable To Communities", But No "Soft Touch"

Local Government Minister Sandra Lee says local authority trading enterprises such as those set up to retail water or power are to become more accountable to their communities under legislation passed in Parliament last night.

Ms Lee said this was an important feature of the Local Government (Elected Member Remuneration and Trading Enterprises) Amendment Bill that has now gone to the Governor-General to be signed into law.

She said local body water and power companies constituted as LATEs, or local authority trading enterprises, would now be subject to the provisions of local government's equivalent of the Official Information Act.

Ms Lee said they would have similar disclosure requirements to those operating for state owned enterprises during the past decade, but commercially sensitive information held by LATEs would be protected as it is for SOEs.

She said there will also be a less politicised system of remuneration setting for local councillors, which will be done now by the Higher Salaries Commission instead of the Minister of Local Government.

"What local councillors get paid and how these rates are set will remain transparent to the public, as at present," Ms Lee said.

"But the new laws now guarantee confidentiality for information that private sector corporations supply to help the Higher Salaries Commission determine relativities. Similar laws already protect similar private sector information that the Higher Salaries Commission uses to set MPs' salaries and allowances."

"The new provisions will also, for the first time, specifically require the Higher Salaries Commission to ensure that the interests of the ratepayer are factored into the salary setting equation," Ms Lee said.

She added that LATEs will also no longer be forced to ignore the plight of customers such as low income earners, beneficiaries or senior citizens who face losing their water or power supply through unavoidable misfortune.

"Local authority trading enterprises can now operate beyond the strictly narrow commercial focus, and are able to take into account non-commercial factors such as the social consequences of their policies," said Ms Lee.

"This doesn't mean LATEs will be a soft touch for anyone who won't pay their bills," she warned.

"But the law now effectively allows a local body water or power company new discretion to consider other factors—for example—in handling an unpaid bill owed by a widow or widower caught short of funds through the death of their partner."

"That's better than the LATE believing it is compelled to leave a senior citizen without water or power, at least until media queries pressure the local authority trading enterprise involved to restore the supply or look bad," Ms Lee said.

"Of course, some LATEs might decide they want to take a tough line against their customers, but they will not be able to argue in the future that they have done so because the Act prevents them from doing otherwise.

"This legislation is a huge step forward in increasing the accountability of LATEs to the people who own them: the electors and ratepayers of New Zealand," Ms Lee said.


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