Local Government Borrowing Bill

We had some debate at the Local Government and Environment Committee about the commencement clause, and I will make a few comments about that. The Local Government Borrowing Bill as referred to the select committee provided in clause 2 for a deferred commencement. It provided for the bill to come into force on a day appointed by the Governor-General by Order in Council. We received a submission from the Regulations Review Committee, chaired by Charles Chauvel, that set out the committee’s general disapproval of deferred commencement dates. It reminded us that the general issue is that if we provide for legislation to come into force by Order in Council, we are handing over a power to the executive to decide not only when but also whether that legislation should come into force.

The submission cited the Legislation Advisory Committee guidelines about the risks of deferred commencement—namely, that the will of Parliament could be frustrated by an executive that no longer supports the policies in the bill, and that ultimately there was a risk that courts could be drawn into the legislative process if judicial review was invoked in an argument like that. There was a fair bit of discussion at the select committee about that, and I am sure my colleagues on the Government benches would be happy to get up to take a call and flesh out the discussion about this.

We ended up, I think, wanting to accommodate the concerns of the Regulations Review Committee but mindful that we wanted to get this legislation passed before the recess. We do not want to risk losing the momentum and the great work that had been done in the pre-establishment phase of the Local Government Funding Agency. So we have ended up, under clause 2(1), saying that Part 1—which is really the meat and potatoes of the bill—will come into force “on the day after the Funding Agency is registered under the Companies Act 1993.” That is the compromise, which we thought will go some way towards addressing the concerns raised by the Regulations Review Committee. The commencement is not an open-ended deferred commencement; it is tied to the fact that Part 1 will come into force on the day after the agency is registered under the Companies Act. There is a rider to that that if the agency is not established or registered under the Companies Act, Part 1 will be repealed 12 months after the date on which it receives Royal assent. That is a compromise, and one that goes some way towards meeting the concerns of the Regulations Review Committee.

Part 2, on the other hand, has no amendment proposed by the select committee. It will come into force on the day after the date on which it receives Royal assent. It treats the provisions relating to the Auckland Council’s ability to borrow on international markets quite separately, and will come into force on the day after Royal assent is given.

Clause 1 agreed to.

Clause 2 agreed to.