Te Ururoa Flavell - Securities Amendment Bill
Securities (Local Authority Exemption) Amendment Bill
Te Ururoa Flavell, Member of Parliament for Waiariki
Thursday 3 April 2008
The origins of this Bill are an interesting irony. Those who argued that all activities be subject to the rules of business, now suggest that local authorities are being submerged under an avalanche of red tape and bureaucracy specifically because of the very application of those rules.
We in the Maori Party, agree with Local Government New Zealand, that our local authorities are indeed subject to a rigorous schedule of planning and accountability regimes.
There is an expectation that local government will abide by the commitments in their long term council community plan; annual plan and annual report – all of which are subject to independent audit.
Some parties in this House will criticize the levels of planning documents in this sector and suggest the detail to be unnecessary, but the point of this Bill is that those documents are of sufficient detail to exempt them from rules under the Securities Act when issuing debt securities.
But in considering rules, and their proper application, our primary concern is more about whether or not the opportunities for engagement and co-operation between Councils and Maori, as specified by the Local Government Act 2002, are actually taken up.
All the best laid plans stand for zip, if their intentions are not followed through.
We want to see local government honour their statutory responsibilities and build stronger relationships between local government and hapu, iwi and Maori groups.
One of the most interesting issues set out in the rationale for this Bill, is the inappropriateness of the corporate governance principle of collective responsibility when applied to local authorities.
At the start of last week, the Royal Commission of Inquiry on Auckland Governance offered an interesting perspective on this notion of collective responsibilities.
The Commission raised concerns that each of the eight councils in the Auckland region dealt with Maori issues in a different way, and that this lack of consistency may cause problems for Maori – particularly for those whose rohe cross a number of different council territories.
While problems with issuing debt securities can be dealt with simply by providing local authorities with an exemption to current rules, it is the contention of the Maori Party that exempting councils from their obligations to Maori in the Local Government Act because of difficulties and tension - will never be an answer, and certainly not a simple one.
The full effect of this Bill will be to provide local authorities with exemption from the full disclosure requirements of the Securities Act 1978, when issuing debt securities to the public.
What that means, is that it will no longer be necessary for local authorities to register a prospectus for the issue of debt securities.
Currently all elected members must sign the prospectus to ensure unanimous support for a project – and the subsequent issuing of debt to fund the project.
While we endorse as a general principle of best practice, the value of consensus decision-making, the onus of achieving unanimous support has meant that one dissenting vote can prevent a debt security from being issued, by simply refusing to sign.
And why this is a problem was made absolutely clear by the submission from Local Government New Zealand.
It was their estimate that local authorities are undertaking some $30.8 billion in capital works in the next ten years. The funding will be required for either network infrastructure – roads, sewerage disposal, water schemes, or community infrastructure – libraries, sportsgrounds, stadia.
This unprecedented growth spurt in infrastructural development will place considerable pressure on the financing capacity of our local authorities.
In this respect, if, as the Bill contends, there are such obvious differences and duplications evident in meeting the disclosure requirements under the Securities Act 1978 and the Local Government Act 2002, then the Maori Party is happy to support any initiative which will assist, and create efficiencies.
We understand that only one council has actually been able to raise funds under the current dual disclosure regime – a situation which is obviously undesirable.
We believe that the cost for infrastructural assets should be considered as a long-term investment in the wellbeing of the community.
Borrowing can obviously help to spread the costs over the life of the asset and as such, it is clearly preferable that an asset is able to be funded, rather than community structures eroded because of a lack of capital.
Mr Speaker, the Maori Party supports any moves which will enable and facilitate affordable local and regional development.
But we sound a note of caution around this whole complex issue related to decisions around infrastructure development.
The statutory responsibilities are explicit. The Local Government Act 2002 places specific obligations on councils to facilitate participation by Maori in local authorities decision-making processes.
The Act requires that Councils must:
• Establish, implement and
maintain opportunities for Maori to contribute to
• Consider ways in which they can foster the development of Maori capacity to contribute;
• Provide relevant information to Maori;
• and take into account the relationship of Maori and their culture and traditions, with their ancestral land, water, cultural sites, wahi tapu, valued flora and fauna and other taonga.
This is a clear and unambiguous statement of intention to Council to be proactive and responsive in enabling Maori contribution to local decision-making.
In order to do this councils need to consult mana whenua; they need to have adequate representation on their councils and they need to be able to understand Maori community values, issues and aspirations about our economic, social, cultural and environmental well-being. They also need to commit funding to the building and work-ability of these relationships.
I was interested in a keynote address delivered to Local Government New Zealand’s annual conference a couple of years back, by the Chief Judge of the Maori Land Court, and Chairperson of the Waitangi Tribunal, Chief Judge Joe Williams. In his address the Chief Judge said, and I quote:
“Local Government in our small, rapidly changing country could never be easy. It is, I think, where the rubber meets the road. While so much of the so-called race debate is played out in national politics, it is at the local level that communities must resolve the real challenges of growing diversity.
And they must do that not via media-driven sound-bites but face to face. That is much harder. It is also far more likely to produce positive outcomes”.
Mr Speaker, the key issue for the Maori Party therefore, is not so much about whether or not Councils are to be exempted from disclosing all significant financial information, but more to do with how information about the income to be invested, is shared within communities.
We would hope that once Councils have in place more effective mechanisms to raise income for infrastructure development, they will give ongoing priority to what Chief Judge Joe Williams described as “the real challenges of growing diversity”.
They will invest in the benefits of building good relationships with Maori.
They will understand and appreciate that early and meaningful engagement across the community, can result in better informed decision-making, more stream-lined processes and superior outcomes.
The Maori Party will support this Bill as a pragmatic step that Parliament can take in assisting local government to plan ahead in terms of their infrastructural development.
And our sincere hope is that once the disclosure requirements are sorted, sufficient investment will go into supporting Maori expectations and aspirations, for the wellbeing of Maori and indeed the wider community.