Cole report is reminder, says Andrews

Member for Gosford Ms Marie Andrews says the fallout from the Cole Report into council investments is a timely reminder of the need for local government to be responsible with ratepayers' money.

Ms Andrews said the exposure of Gosford Council to the fall-out from the US sub-prime mortgage market was a concern for ratepayers.

"When the situation in the United States deteriorated and the flow-on effects were apparent to those councils that invested in financial products linked to the sub-prime mortgage market - the NSW Government acted swiftly by commissioning the Cole Report," Ms Andrews said.

Ms Andrews said the Government accepted Mr Cole's recommendations and would work with local government to implement them.

The recommendations included tightening permissible investment products and clarifying some existing definitions, grandfathering existing investments that are excluded by the changed regulations and barring the manufacturers and distributors of investment products from acting as investment advisors to councils.

The recommendations also included temporarily suspending councils' ability to make any new investment other than through TCorp or in land, cash, bonds or other councils, ensuring councils are more fully aware of their obligations by requiring a signature demonstrating understanding of the investment requirements, and Issuing an investment policy guideline for councils in addition to the existing.

Ms Andrews said it was important to safeguarding ratepayers' money.

"It's also important councils seek independent financial advice before making investment decisions," Ms Andrews said.

Press release, 3 Apr 2008 Marie Andrews, Member for Gosford