Bill English and Rod Hide are planning to set up a bulk lending authority that will pass discounted lending rates down to local councils who participate in the scheme.

A Bill setting up a new local government funding agency is expected to be introduced to Parliament shortly, according to Finance Minister Bill English and Local Government Minister Rodney Hide. “The agency will lower the overall cost of borrowing for all councils by allowing a co-operative approach to raising finance,” Mr Hide said. “It is estimated the agency could save local authorities collectively around $25 million a year.”

Not a bad idea, but there’s really a much bigger issue here that seems to be overlooked, and that is rampant borrowing, not only by councils but by government.

Rod introduced his Regulatory Responsibility Bill into parliament yesterday. This bill if passed sets up some criteria that any proposal for new regulations must be tested against before they can proceed. A great idea. If it makes it through parliament I’ll be very pleased, (but more so amazed).

What is badly needed is a similar kind of restraint on council’s borrowing money and plunging ratepayers into debt for years to come. Council borrowing is wildly out of control in NZ, typified at the moment by Len Brown’s attempt to borrow billions to build rail in Auckland. Improving infrastructure is fine, but it has to be affordable.

If Rod Hide gets his Regulatory Responsibility Act through, he needs to start work on a similar legislative restraint on council borrowing. And Central Government borrowing. They’re both completely out of control.