Water Services Entities Bill

Members, the House is in committee on the Water Services Entities Bill. When we suspended last night, we were considering Part 1 of the bill. Once again, the question is that Part 1 stand part.

Thanks very much, Madam Chair, and good morning, Minister. Thank you very much, Minister, for coming back this morning.

My first question relates to a question that I raised last evening, and it’s in regards to Supplementary Order Paper 283 in my name and it references clause 4, which, of course is part of Part 1. The question in particular that I ask is that the changes that were made late in the select committee process, in regards to the addition of both coastal waters and geothermal waters, were significant changes in regards to the scope of the overall bill. And I think for those that are sitting at home this morning looking forward to another big day on three waters, well, I’m not going to let you down.

The question in regard to the inclusion of, in effect, these other two waters, which makes the bill, in our view, five waters, is why was that addition made late in the process? It did not allow all of the submitters that made submissions in regards to the legislation to make submissions on that specific aspect. And I think that’s pretty fundamental, because we received, as we know, 88,000 or so submissions, but the fundamental change that was made in order to add coastal water and also geothermal water was done after the process in which public submissions were being able to be taken. The question quite simply, as I’ve said, is what is the reason or rationale that we didn’t allow our submitters to do that, with quite a significant expansion of the Te Mana o te Wai statement, which has been very much litigated in the public?

I want to move on in terms of the Minister’s Supplementary Order Paper that she tabled last night. I don’t know about you, but I got home and I thought, “You know what? I might spend a little bit more time having a bit more reading.”, and I started reading through this, and it’s interesting. I refer to Supplementary Order Paper 306, and it is inserting new clause 5A into Schedule 1. And this goes back to a conversation that I’ve been questioning the Minister around in the House a lot, in regards to parks and reserves, and the simple fact that it is our reading of the bill that was on the Table that, actually, local parks and reserves may be transferred from local councils into one of the water services entities. Interestingly, when I questioned the Minister in the House last week in regards to that, the Minister was quite clear. She said only assets which have a primary purpose will not transfer—the primary purpose being a park.

So what I would like the Minister to do is to provide a little bit of clarification around new clause 5A, in Schedule 1, in regards to whether this is a clarification of the overall position around what parks and reserves will transfer into these water services entities, or, actually, is it a change? I think that’s a pretty important aspect in regards to clarification.

The other aspect is how are you going to define the difference, because in the clause here under 5A(3), you’ve got some distinctions around what will be in and out. And so 5A(3)(c) states “whose primary purpose or predominant use is not the delivery of water services”. So my question for the Minister in regards to this is, quite simply: what is the process going to be in order to define or determine what falls within scope and what falls outside of scope in regards to that? Could the Minister provide some examples to help clarify what we mean by that, because the Minister will recall, in oral questions that I asked last week, I mentioned Waitangi Park here in Wellington. I asked whether that would be in or out of scope, and I’d be interested if the Minister could clarify that specific example of where that sits in the context of the drafting of this clause.

The last aspect that I’m interested for the Minister to go into in regards to this clause—[Time expired]

Thank you, Madam Chair, for the opportunity to take a call on Part 1 of the Water Services Entities Bill. I appreciate the opportunity to ask the Minister some questions. My questions relate particularly to clause 4, “Te Tiriti o Waitangi/the Treaty of Waitangi and Te Mana o te Wai”. The clause states, “(1) All persons performing or exercising duties, functions, or powers under this Act—(a) must give effect to the principles of te Tiriti o Waitangi/the Treaty of Waitangi; and (b) must give effect to Te Mana o te Wai, to the extent that Te Mana o te Wai applies to those duties, functions, or powers.”

My question is: what are the principles of Te Tiriti o Waitangi/the Treaty of Waitangi? I can’t find them defined in the legislation. I’ve been through the definitions in the bill, and there’s a range of definitions in terms of the interpretations: board members, chairperson, commission, committee, constitution, stormwater network, green stormwater network, and a whole range of other things, but I can’t find any definition of what the principles of Te Tiriti o Waitangi/the Treaty of Waitangi are.

The question I have that follows that is: is there a difference between the interpretation of Te Tiriti o Waitangi/the Treaty of Waitangi, and which interpretation will prevail? I understand there’s a range of judicial court judgments which have been handed down over the years by our illustrious courts in this land, trying to interpret the principles of the Treaty of Waitangi, and I ask the Minister why this has not been put into the legislation to clarify what is actually meant.

Then the question is: which would be given effect to if there is a difference between the two? If there is a difference between the interpretation of the principles of Te Tiriti and the principles of the Treaty, which would be given preference? I think that’s something that certainly affects this piece of legislation significantly due to the fact that all persons performing or exercising functions under the Act must give effect—it’s not that they must consider or must think about or must look at—to the principles. So if they’re giving effect to something, isn’t it helpful to know what they’re giving effect to? I think that most New Zealanders looking at this piece of legislation think this is the biggest rort ever by the New Zealand Government, taking assets off local councils that have been paid for by the ratepayers over many decades, and possibly taking their stormwater assets too, parks and reserves across New Zealand. I can think of parks and reserves across my electorate of Pakuranga which could be at risk of being stolen by this Government, and it would be helpful to know what is actually being given effect to. A number of people—the boards, the chairpersons, all of these people—are going to get appointed, and they’d probably find it quite helpful to know what they have to give effect to as well.

If it’s so important that it’s a “must give effect to”, what’s so hard about actually putting that in the legislation and making it clear and transparent for New Zealanders to know exactly what is being given effect to? So I ask the Minister to take a call and to answer the question and to list, so it’s on the Hansard, so the courts of this land, when they are trying to interpret this legislation in years to come—if it’s not repealed by then—are able to know exactly what the Minister and the Government were considering when they said “must give effect to the principles of Te Tiriti o Waitangi/the Treaty of Waitangi”. Secondly, we need the Hansard to say which should be given preference if there is a difference between the two—between Te Tiriti of Waitangi and the Treaty of Waitangi. I look forward to the answers from the Minister.

Thank you, Madam Chair. Minister, last night, when we were debating the bill, you described the ownership of the three waters entities, organisations—you stated that councils will continue to own the assets, Minister. We got on to that topic because my question was, how will Te Mana o te Wai statements be given effect to and how will they affect the ability of these three waters entities to actually deliver fresh water to communities and to allow people who grow things in New Zealand, who manufacture things, to know that they can get access to the allocation of water that they need to? And, Minister, in response to some of my questions you stated that councils will continue to own the assets, that Māori are happy with that—I’m assuming you’re referring to people who have Māori ancestry—and you went on to clarify that iwi are happy for councils to own assets and to have a shareholder.

Now, what I want to understand is, if councils continue to own these assets, will they be able to borrow against them? Because if I owned an asset, or if I was a business owner or I had a piece of infrastructure—whether that was a power station or a factory that was an asset my business owned—I would be able to go to the bank and say, “I want to borrow some money to build my next factory or my next power station and use the revenues from my current factory or the collateral that my asset offered.” So, Minister, will councils be able to borrow money against the assets that you stated they will continue to own? That’s question one.

Question two: will councils be able to generate revenue from these three waters assets? Because you’ve stated that they continue to own them. So will councils be able to generate revenue from these assets?

Question three, Minister: will councils be able to choose how these assets are used? Because, if they are, in fact, owners, will they be able to have a say in how the three waters assets are used—whether it’s drinking water or whether it’s in the provision of wastewater services and connections, say, to enable housing development or to up-zone and densify existing cities? Will councils be able to choose how the assets that these three water services entities are meant to have collated together—if they own them, will they be able to say how they’re used, or will they lose the right to say that? Because so many of the submitters who came to select committee, Minister, said that based on the legislation that was proposed, they wouldn’t have control over their assets and they wouldn’t be able to say how they were used, how water is allocated. In fact, the loss of control and the centralisation of the management of these water assets in one of the new water service entities meant that communities would no longer feel that they had an ability to influence how those assets were used.

In many cases, councils around New Zealand have invested in their water infrastructure and have put aside money. We heard from the Mayor of Ōpōtiki District Council, who told us that they have not only upgraded their waste-water and water treatment assets but they’ve put aside $10 million in cash to fund the next round of upgrades. Minister, the thought that that asset from Ōpōtiki District Council and their cash would be hoovered up by one of these water service entities and that they would lose control over it was one of the most powerful, motivating factors in opposition to this bill from communities up and down this country, that led to 88,000 submissions arriving at the Finance and Expenditure Committee for us to consider.

So, Minister, three questions. Will councils, if they own these assets, be able to borrow against them? Will they be able to generate and take a share of the revenues that these assets generate? And will they be able to choose how the assets that you state they control, and the services that arise from those assets, are allocated? Minister, those three questions—an answer for those, please.

Thank you, Madam Chair. I wanted to be able to ask a couple of questions to the Minister based off some of the other comments that were raised by the opposite member Simon Watts, because he does raise a good point around Te Mana o te Wai definitions.

Simon Court: Just let the Minister answer.

BARBARA EDMONDS: My question around this is—and again that member is welcome to ask the question, which he just has, so in the same respect, I’m also allowed to ask a question.

So during the select committee process, we had heard from submitters, including Federated Farmers, around Te Mana o Te Wai. One of their particular things they asked the committee to look at was to ensure there was a legislative definition of Te Mana o te Wai in this particular bill. So, therefore, off the back of that, the committee sought advice from officials, officials agreed, so what the committee agreed to is to put in—in Part 1 in the definitions—an actual definition of “Te Mana of te Wai” as a result of that Federated Farmers submission. Now what I understand, though, is that the Minister—

Hon Gerry Brownlee: It doesn’t mean anything.

BARBARA EDMONDS: So it actually sets out that Te Mana o te Wai applies, for the purpose of the Act, not only to freshwater but also to coastal water, and geothermal. Those three terms are defined in section 2(1) of the Resource Management Act. Now Minister, I’ve just noticed that your Supplementary Order Paper (SOP) 306 amends clause 6 by making a different definition of “Te Mana o te Wai”. My question to you, Minister, is: how does your definition, which you put in SOP 306, reflect the call from Federated Farmers to make sure that there is an actual definition within the legislation of Te Mana o te Wai, and how does that reconcile or align with the Resource Management Act? Thank you, Minister.

I thank the members for such vigorous questions at this time of the morning, on this particular bill, and I want to go through some of the core elements of the questions that have been asked.

Firstly, in relation to Mr Watts’ Supplementary Order Paper (SOP) 283 and his amendments to clause 4, we stand by the inclusion of a broad definition of water in relation to Te Mana o te Wai, and outlined in the Government SOP, to ensure water service entities will have to work with mana whenua to protect water and water bodies. The definition is holistic and creates a stewardship set of responsibilities for the way that water is used and cared for. In other words, the health and wellbeing of waterways sits at the heart of why Te Mana o te Wai has been recognised and why the water reform approach in this bill has been proposed in the way that it has.

Coming to Barbara Edmonds’ particular question, what we’ve done is draw on existing convention in relation to Te Mana o te Wai, which was established in 2014 and which is accommodated for in the Resource Management Act. What I have in my SOP is the legislative clarity that was sought at the Finance and Expenditure Committee, through submitters, and for the purposes of applying this Act how it will be integrated and implemented within water service delivery. What that will mean, if we think about the inclusion of coasts, estuaries, lagoons, and puna, which is the broadest set of definitions, is that water services like waste water and stormwater, which commonly discharge into coastal areas, harbours, or estuaries, will actually be included in the way in which we improve environmental outcomes.

Coastal areas are places where iwi have really strong interests, but not just iwi alone; it’s a recreational place for many New Zealanders, and there are lots of connections that many of us across this House have in order to ensure that we can go to our favourite beach and swim there without a no-swim notice. Let’s go to an example: Wairoa, perhaps, is a really good example. The wastewater plant there has breached resource consent requirements for years now and discharges directly into the coastal part of the river mouth. Local iwi have lived there continuously for many generations. People who live there now preserve that way of life to ensure that the coastal area is clean, that the beaches are able to be swum in, and so what we have is an opportunity, by integrating Te Mana o te Wai concepts, to ensure that discharge to coastal areas does no more harm to the environment, because as we protect source water, as we use it for whatever purpose and then discharge through wastewater treatment plants, or as we better regulate stormwater, we can guarantee our communities a quality of life.

But let me come, again, to a particular example. In Simon Watts’ area, in Auckland, what we have is that there are 18 wastewater treatment plants provided by councils. Of these plants, seven plants discharge to freshwater and eight discharge to the ocean. In 2019, three of Auckland’s wastewater treatment plants were operating on expired consents, with a further eight due to expire in 2029. So if ever there was a reason to ensure that we took a holistic approach to the way in which water service is delivered, but also discharging back into our environment, like the coast, our estuaries—

Hon Members: Beaches.

Hon NANAIA MAHUTA: —our beaches; that’s right—we have to have a holistic system. That’s why Te Mana o te Wai is there.

Now, Mr Brown and Mr Mooney asked about the Treaty of Waitangi in clause 4. What we have there is a reference that is consistent with the Treaty of Waitangi Act 1975, which is legally certain, which is articulated in case law and, actually, on that side of the House, has been accepted by many a National Minister, especially when it comes to Treaty settlements. But, if you look down into clause 5, what you have is a clear articulation of how the principles of the Treaty of Waitangi relate to elements of this Act, and it is set out clause by clause, no more, no less. The intent is clear. The way in which the Treaty provisions apply is articulated in clause 5—no more, no less—but it does enable the Crown to uphold its obligation in terms of Treaty settlements, which both sides of this House are committed to. It does enable a partnership approach, which has already been expressed through Treaty settlements and relevant at local government level, to be integrated into this particular model of reform.

Thank you, Madam Chair. Firstly, can I say to the Minister that it would be nice if the Minister actually took to the floor to answer the questions that were, I think, quite reasonably posed by my colleague Simon Court—those are fundamental to the public understanding of this bill and to ensure that the words that are often spoken by the Government in favour of this bill are not just a deception to make people feel comfortable with what is effectively a massive asset grab from the ratepayers of this country. Those simple questions: can they derive a revenue stream from the assets they own, and can they borrow against those assets? One of the things that is important about that answer will be the debt ratios held by local authorities now based on the assets that they are able to control. And “control” is the important word. It’s all very well and somewhat a bit of sophistry to say, “Well, they continue to own them.”, but if they’ve got no control over them and have no capacity to realise those assets in some form at some point, then quite clearly their debt covenants could be affected adversely. I don’t think any of the compensation that’s been talked about by the Government at the moment would go near to sorting that out, so we look forward to those answers from the Minister.

When it comes to Te Mana o te Wai, I think the concept itself is easy enough to understand, but it becomes confused, I think, by the provisions that are further on in the bill, which set out who can in fact make these statements and provide them to the water authorities. So in the South Island, we’re going to have—should this bill progress—for a period of time anyway, one water authority for the entire South Island. Throughout that area, there are any number of hapū—maybe just the one iwi with a few smaller iwis at the top of the South Island—who are able to provide these Te Mana o Wai statements.

My question is: when a body of water that travels across greenfields, effectively, is split across different hapū, how is the water authority expected to deal with the expectations stated in those particular Te Mana o Wai statements provided to them? It’s very simple, in my head, to understand the way in which the South Island river structure works, both east and west and south and north, and across all of those there are multiple hapū who will have an interest. In some cases, there will be egress of awa, rivers, that will have the lagoon structures that will cross a couple of hapū and have, therefore, different interests. So the question becomes in my head: how does the authority ultimately rationalise the many Te Mana o te Wai statements that they’re going to be presented with to get some sort of reasonable response to the expectations that those statements are going to prefer upon them? As the previous speaker made clear, Mr Brown in fact, there is an obligation on them to do that. It’s not something they can just tick-box and shove to one side, unless, in fact, that is the intention of the Government—to simply sell a few views by putting it in here but not making it terribly important in the long run.

The question also becomes about the rights and interests in water preserved, in clause 9A. Some greater explanation of that, I think, is needed from the Minister, because there are, across the Canterbury Plains, numerous water rights and, across any farming district in New Zealand, numerous water rights are held through the existing legislation and responsibly used by farmers. There are also numerous numbers of irrigation schemes across the country entirely designed to preserve the water source to make the best use of it, to capture as much of the rainfall that would provide some fill for the plethora of dams and storage ponds that would exist across the country. Now, all of these, under this legislation, come under the purview of the new water authorities. So the question really is: what is the value, now, of the consents that those people hold? What is the life of the rights? It doesn’t seem to me at all clear in clause 9A that while it used the words, once again, “Rights or interests in water preserved”, there is, in fact, any ongoing opportunity for the length of whatever their consent might be to continue taking the water that the right preserves to them.

Further to that, where is the interface expected to be between the new water authority and something like the Central Plains Water scheme? The Central Plains Water scheme, for those who are unfamiliar with it, has been a massive boon to protecting the aquifers under the Canterbury Plains and has had an enormous effect on the ecology of the of the area—of the two rivers it’s between—

Hon Eugenie Sage: Detrimental, not positive.

Hon GERRY BROWNLEE: Beg your pardon? I was asking a question. There’s someone down there mumbling. I can’t understand. Take the mask off so we can hear what you’re saying.

The point is: how does that scheme, which is being administered very responsibly at the present time and is doing a great job in ensuring that the water resource on the Canterbury Plains is used responsibly—what is the overlay, now, for the water authority? Is the organisation and structure of that particular scheme, and the many other schemes that we could name throughout the country, now subject to the overarching authority from the new water structure or water entity that’s being put in place?

I think one of the things that this bill denies is that there has been a growing awareness in New Zealand of the need to preserve the water resource that the country has, and that will often be, interestingly, on an area by area basis. So if you conflate those two things a little bit, Te Mana o te Wai, which means that a small group in any particular area can have a huge say over how the water resource should be treated but that others who have done a huge amount of work and made massive investments into the structures that look after water in the regions apparently have very little say—and a much lesser say than those who have that other connection. I think that’s something we need to have clarified by the Minister in the Chamber today.

So rather than taking a lot more time, I’ll just go over those questions that I’ve raised. How does the new authority operate in conjunction with, or alongside—or is it over the top of?—existing water authorities that are privately held, essentially, but are held with the proper consents granted by the wider community? How do the individual farm properties that have a water right have any surety that they’ve got some tenure over the consent that they have been granted? Then those two questions from my other colleague Simon Court, asking about the ability of councils to use the asset that apparently they’re going to continue to own as collateral against some of their borrowing, making their debt covenants more viable. And then, of course, the questions: will they continue to be able to get some revenue stream from those assets?

Given that it’s the member’s first time taking a call and that the material is significantly new, can I just respond to the issue of consents for water use in the first instance. This bill is not about consenting. In fact, the existing consenting regime through the Resource Management Act remains, and those consents that have been already awarded stay intact. This bill is about water service delivery and covers councils primarily and those water supplies that currently sit under councils. I know that the member’s brought up private water suppliers and independent water suppliers, mixed-use suppliers. To the degree of intent that we have in this legislation, it was always very clear that the legislation covers those councils who deliver water and those supply schemes who currently sit under their councils and are primarily managed by their councils. So that’s that in the first instance.

In the second instance, the member raised an issue in relation to the South Island. Far be it from me to perhaps explain the mana whenua interests in one’s own area, but given that the member was a part of the Government who settled the Ngāi Tahu Treaty claim which confirmed the legal identity of Ngāi Tahu and their Papatipu Rūnanga, Te Mana o te Wai statements will be developed through that particular structure, which actually makes it administratively more seamless for that iwi. And in the instance that the member relates to, it may well be that under a Papatipu Rūnanga there will be many hapū that sit under that organisational structure, but it is within the context of Ngāi Tahu, in their structure for their iwi, that those interests will be accommodated for and relate in a relevant way to the catchment across the South Island.

In relation to the questions that both Mr Brownlee and Mr Court raised around borrowing and security against water assets, the whole premise of this reform is to be able to derive benefit from scale and aggregation. Yes, the councils will continue to own the water network assets. The debt and liability of those water assets will transfer to the water services entity to be able to create that aggregation of scale, to be able to derive broader benefit across the entity region. It’s not appropriate probably in this part, but perhaps if the member looks forward to clause 166, that would be the appropriate place to get greater clarity about what can’t happen in relation to water service assets. So councils independently as a result of this legislation will not be able to take security or borrowing against the assets once this bill goes through.

Thank you, Madam Chair. Minister, I have a woman in my constituency who asked me about her husband who works for Watercare. Obviously, we’ve had really good submissions come in from the union that supports those workers in support of the bill because they have really moved from the transition from the old system to Watercare and now they’re moving again.

That woman was asking me a really bread and butter question, and I think it’s what a lot of New Zealanders really want to know. How is it going to be for the workers who transfer into these new entities, what kind of change will they have to cope with, and how have you provided for them?

CHAIRPERSON (Hon Jacqui Dean): Order! Can I ask the member to confine her comments and questions specifically to Part 1?

HELEN WHITE: Yeah, so that is Schedule 1 of Part 1, Madam. [Interruption]

CHAIRPERSON (Hon Jacqui Dean): Let me sort this out; do this properly. OK, Helen White.

HELEN WHITE: Thank you. Actually, that’s the end of my question. I’d just like to know about the transfers.

Thank you, Madam Chair. I want to turn the Minister’s mind, please, to Part 1, clause 6—seeing as we’ve been traversing much of these parts—and the definition of “green stormwater infrastructure”. As the Minister will be acutely aware, the Canterbury province suffered some one-in-200-year storms almost two years ago, in May 2020, and then again in June 2021. What we’ve seen in that intervening period of time are large-scale landscape changes, and the Minister will also be aware that the regional council has lobbied the Government for financial assistance to continue to clear rivers to ensure future flood-proofing.

Now, if the Minister drives south from Christchurch, there are three large rivers. There are the Waimakariri, the Rākaia, and the Rangitata River, and in between there is a slightly smaller chain of braided rivers called the Ashburton River, which runs out to sea on the township of Ashburton. If you drive inland from the Rākaia River specifically, you’re on a road called Thompsons Track, and then I’m thinking of a specific area where you turn right on to Tramway Road. This was an area of farmland that suffered enormous damage. I think up to 20 if not 30 hectares were submerged. Now, what we’ve noticed there, when I refer to landscape change, is that particular wetlands have arisen: bog, or you might call it a lagoon of sorts. But my question really is around the definition of “green stormwater infrastructure”, particularly when we’re referring to “a natural or semi-natural area, [etc., etc., etc.] … managed to provide stormwater services;”.

In this particular area that I’m thinking of—and there are multiple instances of this across the Canterbury region—there is an intersection of roading and stormwater drainage of a natural river and farmland. In this particular corner, I’ve noticed in the last 18 months—and when I say “corner”, I’m talking of probably two, if not three, hectares of crack willows arising. These, as we all know, will cause floods because they do cause blockages, and this is right on the Tramway Road bridge, which I presume is going to be managed by the Ashburton District Council.

So here, to my mind, we have a confluence of different authorities. We’ve got to some degree the New Zealand Transport Agency (NZTA), we’ve got to some degree the Ashburton District Council, and we’ve got to some degree the landowner, and, presumably, in future, if and when this bill passes, Entity D will have the overarching authority over this space. Where is the demarcation as to who manages the future flood-proofing, the flood mitigation work, of situations like this? As I’ve said, these are occurring multiple times throughout Canterbury, with all the network of braided rivers we have, all the roads that run along the rivers and run across the rivers, the bridges that run across the rivers, and, of course, the stormwater systems that have been established, both naturally and man-made, to feed water back into the waterways.

We’re also seeing instances—and, again, I’m talking about the stormwater infrastructure in, particularly, my part of the world, in Selwyn, around Te Waihora / Lake Ellesmere. Historically, there’s been a large flood bank that has been built and managed by the regional council—by Environment Canterbury. Over the past year, we’ve seen a number of large southerly swells and southerly storms that have come in, and they have, effectively, smashed that flood bank to smithereens. There’s now a landowner who’s got 60 hectares of land covered in flood debris, rocks, sand—you name it. Right alongside that farm is the Taumutu marae, and already they’re seeing that their urupā has been exposed by the sea and they are being moved away by this change in sea swells.

So with regard to the provision of flood banks and flood protection, at the moment the regional council and the district council have thrown up their hands and said, “We don’t manage this any more. The climate is changing. This is unaffordable.” But in regard to the fact that this flood protection bank has traditionally protected both farmland, and urupā and marae—again, to what degree is there a demarcation, and where is the ongoing responsibility for the management of these kinds of what I presume would fall under green stormwater infrastructure and the way that they will be managed to provide stormwater services?

So the picture I’m trying to paint is that there are multiple existing authorities, there are multiple flood-mitigation measures, and there’s also the ongoing conversation about the lack of financial resourcing to continue this flood mitigation work. Then, of course, I could further extend that definition of “green stormwater infrastructure” to the large-scale aquifers that fall underneath the Canterbury Plains. One might describe this as naturally occurring stormwater infrastructure, of course, allowing the free flow and drainage of water from the underground aquifers or rivers out to sea.

We’ve seen again that we’ve had a particularly wet winter and spring. You only need to fly into the Canterbury Plains to see how very, very waterlogged they are. Obviously, in recent times they have dried up, but that water did stay for at least four to six weeks. The whole plains were like a sponge full of water—absolutely logged with water. There is no drainage, so, of course, with that surface water building, you increase the risk of more surface flooding on to roads, particularly, and into our stormwater networks.

The networks are starting to fail because they are being overused and they haven’t had the investment put into them. That is because there is so much confusion and complexity in the system, but I think that was made more particularly convoluted by this particular clause—clause 6—in that there does not seem to be a definition—a true definition—of “green stormwater infrastructure” as it applies in reality. So, Minister, I would like some clarification around the responsibility for the multiple agencies: the NZTA, the Ashburton District Council, the Selwyn District Council, Environment Canterbury, the landowners themselves, and, of course, the potential for this Entity D.

Tēnā koe, Madam Chair. Thank you. I think the member Nicola Grigg makes a good point, and it’s one of the reasons that the Green Party—and there is a Supplementary Order Paper (SOP) in my name—seeks to withdraw all of the provisions around stormwater from the bill—because of the huge complexity in managing these areas and in areas like Canterbury integrating with flood protection management.

I know that in SOP 306 there are changes to new clause 5A, in Schedule 1, which talks about the “guiding principle for treatment in allocation schedule of secondary water services.” I’m just asking the Minister whether there’s been any consideration if/when councils are developing their asset registers—and it highlights what Nicola Grigg and I talked about yesterday with the stormwater assets that are fundamentally natural areas where there are a range of agencies involved, where local authorities are also providing for recreation and other values—of relooking at including stormwater because of the complexity of the landownership and the management of these areas. And I’m asking whether, in the Minister’s SOP, in terms of Schedule 1, new clause 5A, those guiding principles could lead the Department of Internal Affairs and the entities to decide that a lot of these assets which have got multiple agencies involved for stormwater stay with the councils, and then what provision there will be to ensure that councils can continue to fund management of stormwater there, because they won’t necessarily be able to borrow against the revenue they get for charging for water services because that’s all been transferred to the entity.

Stormwater is incredibly complex to the land asset and it’s not a pipe system, so I’m wondering whether the Government considered actually putting a pause on the transfer of stormwater or coming back to that issue in the subsequent legislation that’s going to be introduced, primarily around the transfer of assets so that entities can focus on drinking water and waste water and not have the complications of stormwater management.

Thank you, Madam Chair. What a pleasure. First of all, I just want to pick up on my good colleague Hon Gerry Brownlee’s comments earlier.

I’m referring to the definition of “water supply”. In clause 6, “Interpretation”, “water supply” includes, in paragraph (c), “water supplied for agricultural or horticultural purposes”. I’m keen for the Minister just to give us an indication: what is the threshold for that definition for water supplied for agricultural or horticultural purposes?

So is that a pipe system coming off—one operated by district council—a reticulated system, which means there’s a pump, and is the pump one that must be operated by a council operation? Because if it’s an agricultural pump—one operated by the local farmer—that gives a different intent to that piece of legislation.

Secondly, what is the threshold? Because if it’s just turning on one small tap, that’s one thing, and obviously it should be a de minimis level in that. But I don’t see any sort of threshold at which stage something that is a water supply for agricultural or horticultural purposes would be captured under this bill, which will obviously be of real concern to horticulture producers, particularly in my electorate in Pukekohe.

The other thing is about natural watercourses. Already they’re under a lot of pressure with water that flows through their land, and now we get back into the definition of stormwater. Is the ability to capture that water on their land—obviously as the councils are starting to impose rules and regulations on that, does this bill anticipate any further restrictions on farmers and growers being able to capture that water? So that’s the first question.

Now I’m going to turn to Schedule 1, which is part of Part 1. I suppose the first big thing is the appointment of the establishment chief executive. The establishment chief executive is nominally accountable to the department as it’s defined in this part of the bill. Yet that nominal chief executive is then required to do a stack of things in this Schedule. For instance, the establishment chief executive must do a 10-year plan and must lay all that out.

So I’ve got a couple of questions. First one, with the establishment chief executive effectively being appointed by the department, what are the rights of the new board to fire or change that establishment chief executive? Secondly, what is the process for the establishment plan for the infrastructure that’s put in place for the new entity—one of the four entities—to be able to review that immediately or, in fact, reject it if it’s not thought to be properly taking into account the individual council priorities around its infrastructure?

So what is the process to do that, or is it just an annual review or can they do it straight away? What will happen if they do reject both the CEO and the plan? So I’ll start with that; I’ve got a stack of stuff I want to talk about to do with this establishment phase.

Thank you, Madam Chair. Minister, last night you and I canvassed the green stormwater aspect in clause 6, “Interpretation”, and both Nicola Grigg and the Hon Eugenie Sage brought up how convoluted this could actually be for the ownership structure and the operation of these freshwater assets as they go over land. Now, I just want to give you a bit of pause here. I live in the Kaipara district area and we have the Raupo Drainage Board. That has gone through 130 years of reclamation. All of those water assets up there have been managed locally, Minister. In this instance, the operation, the monetisation, and the oversight of those local assets would go.

Now, I’m trying to reconcile that. When you take that story anywhere in rural New Zealand, green overland flow, water infrastructure—how it’s managed, who has oversight, where the revenue streams are coming from—in a lot of cases, these are local catchment groups that have got very nuanced—very nuanced—methodologies, funding streams, etc., etc. Now, we were very collegial after the fact when you and I spoke last night. Again, do we need to actually have the stormwater aspect—the Hon Eugenie Sage and Nicola Grigg and myself have brought this up—taken out of this piece of legislation? This is massively—to use Nicola Grigg’s words—convoluted.

Following on from the question about stormwater, I have a similar one related to concern from my own area, the New Lynn electorate, which includes the entire Waitakere Ranges. A number of people in the Waitakere Ranges have expressed concern that the land there might transfer to the new water services entity and pass out of local control, because it has significant water catchment dams there. They’re very beautiful, very important to Auckland, near 100 percent full, but the real worry is the surrounding water catchment. So I’m asking if the Minister could please give some assurance that the land, the park—the beautiful Waitakere Ranges Park—will remain in local control under the new water services entity. Thank you.

Thank you, Madam Chair. Given that there’s been a significant contribution around the issues of stormwater, can I perhaps cover them off in a complete response. Firstly, there was a rationale around going through the process of whether or not to consider stormwater, and in urban areas what we recognised is that many councils had identified that, by and large, in urban, dense areas you have a stormwater system that sits alongside your drinking- and waste-water system and you would have better integration for urban planning processes in order to achieve better outcomes.

When we think about, for example, the work of Minister Woods and the current Government contribution to support councils to have housing developments, that particular contribution to the infrastructure cost is a real cost on councils, so it made sense to really consider whether or not stormwater should be in or out. Then we created a Stormwater Technical Working Group, and what was most helpful about their considerations is that they identified the range of stormwater examples that we would have to take account of were we to include stormwater. Around about 60 to 80 percent of stormwater assets are currently listed in asset management plans, so the intention of this legislation is that those assets, by and large, will transfer, but there are mixed-use assets, and the questions that’ve come up in the House relate to those mixed-use assets where we need to determine what is the predominant use of these areas. If the predominant use of these areas is not for stormwater but they have a particular purpose, then there is a way that the council can negotiate with the water service entity about its long-term management or whether in fact it indeed needs to transfer or whether there need to be access rights. That’s all contained within the context of the bill. It will be done on a case by case basis and in accordance with a conversation with the council.

Simeon Brown: It’s all up for grabs, the whole bang lot.

Hon NANAIA MAHUTA: No, it’s not—

Simeon Brown: Yeah, it is.

Hon NANAIA MAHUTA: —and, in fact, the continual mistruths coming out of that member because he doesn’t read the bill—it’s a shame, because these are serious issues, and—

Simeon Brown: No, no, no, this is what you’re saying. It’s all up for grabs.

Hon NANAIA MAHUTA: No, it’s not.

When it comes to ensuring that we have really good urban design, when we look at including stormwater and clarifying the provisions around green infrastructure and providing an opportunity to enable water service entities to—rather than underground solutions, they could surface solutions. Like we’ve seen in Wellington at Waitangi Park, like we’ve seen in Christchurch, like we’ve seen in Auckland with the Manukau transport centre, we know that there are better solutions rather than just undergrounding them when it comes to stormwater.

I want to come to the particular question of the member in relation to parks and reserves, because I think the question is broader and it is one that warrants a response. The criteria for transferring stormwater infrastructure is based on whether it is predominantly used to manage stormwater, as I’ve said many times in this House, and whether it’s critical to the stormwater system. In general, parks’ predominant use is not for stormwater. Their predominant use is as a park, a public recreation place where people love to go, and therefore they will not transfer to the new entities. That’s something that needs to be said very clearly. Territorial authorities will be heavily involved, as I’ve said previously, in identifying which infrastructure will transfer to entities. I must stress this point because it is by consent of the councils, not over and above them, because everybody preserves their quality of life through having good recreational places to take their children and the like. A park would never, therefore, be transferred out of a territorial authority management if it was not the wish of the territorial authority. So I really wanted to highlight that.

The other thing is that Helen White raised the issue in relation to Schedule 1—and it is relevant because it’s referred to in clause 7 of Part 1—and those are the transitional provisions. We were at pains to ensure that one of the key priorities in this reform programme was to make sure the people who are actually doing the work and needed certainty and assurance that their jobs would be protected will be provided for going forward into the future as a result of this reform. The member who asked the question will be aware, as a select committee member, that in Schedule 1 there are a range of areas that give those protections to people who are employed in this sector and want to know, want to have the assurance, that they have job certainty. There will be job progression in scaled-up entities, and if they choose to live and work in their own locality, which is often the case, there are options there. There are many other aspects that protect the employment conditions of workers who make such a fundamental contribution to water service delivery. We want that to continue.

Now, members on that side of the Chamber would have us believe that just because we’re establishing these four big entities, people will lose their jobs—they will not. Conditional on the transitional provisions that we have outlined here, the ability to look after people and ensure their employment security is a core pillar of our reform approach, because we know they matter. We know that they’re looking at these reforms in a way that their direct interests and contribution will be provided for, and I’m pleased that the select committee put such rigour over those provisions in Schedule 1 of the bill.

I move, That the question be now put.

No. No, not yet. I’m ruling on this. This a substantive part of the bill. I’m following the debate very closely. I’m fully aware that this is the second session that we have been considering Part 1 and Schedule 1. I would note that the committee of the whole House is fully engaged. Every party present in the Chamber is fully engaged in this debate. I notice a shift occurring to new matters that have not been traversed. How do I know this? Because I’m keeping track of everybody’s contribution.

Thank you, Madam Chair. To the Minister: I have a question, Minister, about Te Mana o te Wai and the Treaty obligations, and also clause 9A(1), which refers to “(a) any rights or interests in water are preserved, consistent with assurances—(i) given by the Crown to the Supreme Court in 2012; and (ii) recorded New Zealand Māori Council v Attorney-General [2013]”.

Look, I note that the Water Industry Commission for Scotland said that it’s important that regulation has to be independent of Government for this to work. So for effective regulation, it has to be independent of Government.

I also note that the S&P global ratings agency, who did a report on the credit implications of New Zealand’s proposed three waters reforms, was asked by the Department of Internal Affairs to evaluate the scenarios for hypothetical credit consequences on the ratings for New Zealand Sovereign, New Zealand Local Government Funding Agency, and several local councils. And they noted that the entities proposed were structurally separated from local councils and the New Zealand Government.

Now, I note that Te Mana o te Wai—if you look at clause 6, it says it “has the meaning set out in the National Policy Statement for Freshwater Management issued in 2020 under section 52 of the Resource Management Act”.

My question is: why has not Te Mana o te Wai been specified? Why has a definition not been put specifically into this legislation instead of it being in a national policy statement, which the Government, of course, can change at any time? Where does any certainty come from? Anyone who’s looking at loaning money to any agency for three waters infrastructure cannot have certainty as to the principles on which are being relied and that this is not independent of the Government, because the Government can change the Te Mana o te Wai national policy statement at any time.

I note that the Minister has pointed to scale and aggregation as being the rationale for these reforms. The Government’s point is to say that $120 billion to $185 billion is required over the next 30 years for water infrastructure, and supposedly we’re being told that entities will be in a better position to borrow sufficient capital to invest in three waters. My question is, how will those entities be in a better position if they cannot provide certainty to anyone looking to loan money to those entities if the regulation is not independent of the Government and there is not certainty as to what regulation will be applied?

That also points to the question which I asked the Minister last night and has not been satisfactorily answered to date. Part 1 makes it very clear that the matters of most importance are “[giving] effect to the principles of Te Tiriti o Waitangi/the Treaty of Waitangi.” Why have they not been specified? Why have they not been outlined in this bill? What are the principles of the Treaty of Waitangi, or Te Tiriti o Waitangi—because it’s either/or here? Why have they not been detailed in this bill? Where will the certainty be for anyone, again, looking to loan money to these entities for those $120 billion, $185 billion that Government is saying is going to be required over the next 30 years if there is no certainty as to what those principles are?

Going, again, to the certainty—or, I would say, the lack thereof—is clause 9A in Part 1, which says that “(1)(a) any rights or interests in water are preserved, consistent with assurances—(i)given by the Crown to the Supreme Court in 2012; and (ii) recorded in New Zealand Māori Council v Attorney-General [2013]”. I note that decision is 59 pages long; it has 151 paragraphs. Why hasn’t the Government specified specifically in this legislation what it means by “any rights or interests in water preserved”, instead pointing to a 151-paragraph decision by the Supreme Court for people to try to wade their way through to ascertain what the Government means by that?

This, I would suggest, is creating a huge amount of uncertainty. It certainly is not—that meaning—independent of the Government, particularly because the Government can change the national policy statement on Te Mana o te Wai at any time.

And why has the Government turned its mind to these risks to the entire programme it’s setting in place? I would suggest no one’s going to want to loan money to these entities given these significant risk factors and this uncertainty, which the Government has left in this particular piece of legislation.

Thank you, Mr Chair. I just want to pick up on a couple of comments from the Minister, the Hon Nanaia Mahuta. The first comment is that I’d like the Minister to confirm that the Hunua dams and also the Watercare dams in the Waitakeres will be transferred to the new water entity, and what does that mean? Does that mean the dams and associated pipes? And does that mean there will be restrictions around access to those dams in particular? So that’s a very specific question that the Minister raised before.

The second question that the Minister raised before was the issue of transfer of staff. My question to the Minister is: what is going to be the business model for the four new entities? There is an assumption—and she made the inference—that staff from the existing council operations will be able to transfer to the new water companies in a seamless manner. But the simple question is: if there is only one head office for each of the four water companies, how the dickens will someone, if they’re living in Gisborne, be able to move to Wellington if that’s where the new head office is? Or vice versa: if the head office is going to be in Gisborne, how do they move and transfer and, in fact, work? Is it going to be a remote model? I know the transition plan includes some ability to claim back mileage, but there is the simple practicality around how the dickens that’s going to happen. In many cases, people will not actually physically have the opportunity to work for a local provider. So understanding the business model—if there is going to be lots of hubs and one central head office, or whatever the case is going to be—would be very useful.

I want to now carry on with Schedule 1 because there is a stack of stuff in there that we need to talk about. The issue is around the transfer of the assets. The Minister has been talking about how the assets will be transferred and that councils will have to nominate those. The first question I’ve got is: what is the dispute mechanism if a council decides that it wishes to retain some assets and yet the new water company believes that it should have ownership of those? What is the independent process? I know it goes through to the Minister, but what are the criteria, and how will that be decided, and over what period of time? And what’s the process for coming to a resolution around that transfer of assets?

The fourth thing I want to cover—and I’m glad the Minister is writing things down—is that I want to turn the Minister’s mind to clause 5(6) of Schedule 1. This to do with the transfer of assets from a council-controlled organisation (CCO). An example of this is Watercare, and “The allocation schedule for a water services entity (a) must not specify assets, liabilities, or other matters that belong to any mixed-shareholder CCO; but (b) must list the shares in that mixed-shareholder CCO that are held by the 1 or more shareholders …”. Now, there are other CCOs that do have mixed ownership. What does this mean? My understanding is that what will be transferred to the new water companies would merely be the assets; the councils would be reimbursed for transitional costs, a one-off payment. I forget the name of it—some flash name—

Simon Court: “no worse off”—“better off”.

ANDREW BAYLY: No worse off—yeah, one of those ones, Mr Court. But the reality is that there was not going to be a transfer of liabilities to the new water companies. But if you are transferring shares, obviously that gives rise to—you’re basically taking over an entity, and that entity will no doubt have assets and liabilities and also contingent liabilities. So I’m trying to understand: what is the mechanism—what is the transfer? Will the new entity, in fact, pick up the liability for that? In some cases, that would be substantial. I know that Watercare doesn’t have third-party investment in it, but it does have $11 billion of assets and it has quite a significant pile of debt on its own balance sheet. So what would happen? In that case, would the new entities be picking up that debt as well as all the contingent liabilities that go with the staff—all that type of thing? Just understanding that transaction would be a very useful and helpful process.

Thank you very much, Mr Chair. So I’ll just go through some of the questions that Ms Mahuta hadn’t already addressed. So speaking to Mr Mooney’s questions, the water service entities will still be required to seek resource consents, just like any other party. Clause 9A has two outcomes. The clause seeks to preserve any rights and interests in water, consistent with assurances given by the Crown to the Supreme Court in 2012 and recorded in New Zealand Māori Council v Attorney-General in 2013. This records the acknowledgment given on behalf of the Crown that Māori have interest and rights in water and geothermal resources. That acknowledgment was given by the Rt Hon Bill English. Reference to the principles of the Treaty is consistent with the Treaty of Waitangi Act 1975. In regards to the regulation that the member was referring to, touching on the Water Industry Commission for Scotland, that was specifically in reference to economic regulations, not in reference to Te Mana o te Wai.

Mr Bayly’s questions: nothing in the bill would interfere with the public’s existing access to, or enjoyment of, parks and reserves in the Hunua Ranges. While the bill requires the activities of head office to be within the same entity—that’s clause 128—the entities will continue to have local officers throughout the service area, and therefore there’s never been any suggestion that what the member outlined will be the case.

Thank you, Mr Chair. It’s wonderful to have a different perspective from the Associate Minister Kieran McAnulty. So I just want to offer ACT’s helpful suggestions, Mr McAnulty, to this dilemma of what on earth a Te Mana o te Wai statement means and who should give it, and how we might define the principles of the Treaty of Waitangi. What I would propose, Minister McAnulty, is that if the Government were to adopt ACT’s Treaty principles, which I’m going to describe in a moment, and take up and support the Supplementary Order Paper (SOP) 291, where we proposed to replace the definition of “Te Mana o te Wai” in the Act with, actually, Te Mana o te Wai means “the objective of keeping freshwater in a safe and suitable condition”. And, if you look carefully, Minister, at SOP 291, that definition of “safe and suitable” is taken directly out of the Health Act. Imagine a Government that’s so efficient that when it’s designing new legislation, it adopts definitions that already exist. So, Minister, the ACT Party offers you Supplementary Order Paper 291, which simplifies the definition of “Te Mana o te Wai” and aligns it with safe and suitable water in terms of the Health Act.

Secondly, Minister, I want to come to the proposed Te Mana o te Wai statements for water services. This is clause 6. ACT proposes—and we think this would get widespread support from communities around New Zealand. In fact, for members like Helen White and Anna Lorck, who have expressed concern that, you know, the constituents who speak to them are really worried about Labour’s prospects in 2023 if this three waters bill goes through—look, if the Minister and the Government were to adopt ACT’s proposed amendments set out here in SOP 295, which says that Te Mana o te Wai’s statements could be “provided to a water services entity”, of course by mana whenua, but also by a local community—a local community—which includes everybody who lives in a place that needs drinking water, that discharges waste water, and that also has to manage stormwater properly.

And those local communities could be rural communities, as my colleague Mark Cameron has pointed out, or urban communities. For example, a new subdivision in Auckland called Three Kings, which is built partly in an old quarry, and where the playing fields, which are delivered by the developer and which will transfer into the ownership of Auckland Council on completion of the development—those rugby and soccer playing fields are also the blue-green soak pit for stormwater overflows when it rains heavily, and then that stormwater will discharge into the ground via a massive soak pit and underground lava tunnels that run out into the harbour. So when we’re thinking about integrated catchment management, Minister, we’re thinking about what’s important to local communities. ACT’s Supplementary Order Paper 295 would allow local communities, such as the people who live in Three Kings, to also make a statement to a water services entity about what’s important to their local community.

Now I want to come to the really, really difficult thing that this bill proposes. It’s that all persons performing, exercising duties, functions, or powers under the Act will have to give effect to the principles of the Treaty of Waitangi—those undefined principles, which have resulted in regulatory creep and a cultural veto for many vital projects that have to apply for consents—and there is no standard; there is no benchmark to understand what these principles are. This is what ACT offers you, Minister. Three principles—the New Zealand Government has the right to govern, and the New Zealand Government alone; the New Zealand Government will protect all New Zealanders’ authority over their land and property; and all New Zealanders are equal under the law, with the same rights and duties.

Now, that’s what we think the three principles in the Treaty of Waitangi say in English and in Māori. So, Minister, would you agree to adopt those principles and put them in the Act?

Just from the Chair, I’ve been watching this debate. I was in the Chair last night; I watched for an hour. There is a lot of repetition coming in here, and different members saying the same thing does not constitute a new argument. So just be aware, members.

Thank you, Mr Chair. In response directly to Mr Court’s contributions, many of the issues that were raised have been addressed already in this committee stage. But we finally got to a question and the answer is no.

To complete the response to Mr Bayly’s contribution—apologies, there were just a couple of matters I wanted to look into in more detail for you. The first bill does contain a process to allow councils and establishment entities to work through water services assets and liabilities. But specifically to the transfer arrangements, that will be included in the second bill.

Thank you very much, Mr Chair. I want to traverse four aspects in the questions I’ve got on this part. The first is in regards to the Minister’s Supplementary Order Paper (SOP) 306 in regards to new clause 5A in Schedule 1. I asked a number of questions in regards to whether this is a clarification or a change—these answers have not been provided to date—and whether the actual comments made by the Minister in terms of providing clarity of assets that have a primary purpose or—and we’re now using the term “predominantly”, and I appreciate that those words can be used interchangeably, but can we clarify what that looks like, and what advice has the Minister got from the Department of Internal Affairs (DIA) in regards to the parks and reserves that would be deemed to be clearly out of scope and clearly in scope. But, in particular, I’m interested in the advice from DIA around those that are in effect in a grey area, because I think it’s fair to say that there is a lot of confusion in this specific point, and I appreciate that the key reasons why the Minister has tabled an amendment in order to try and clarify that would be appreciated.

The second point that I wanted to raise—

Nicola Grigg: Mr Chair.

SIMON WATTS: —I acknowledge the enthusiasm of my peers, but please give me three more minutes—is in regards to my SOP 289, something that we haven’t discussed today, in regards to changes to clause 6. What I’m tabling here is the opportunity to quite simply remove the confusion and lack of clarity that has been created by the inclusion of the two aspects around overland flow paths and green stormwater infrastructure as part of the stormwater network. I’m sure other members will get into detail in their respective regions of where that complexity lies, but drawing a clear line, particularly around transport corridors, farming environments, it is very, very challenging, and think this is going to the heart of why there is such a degree of confusion. The quite simple way when you look at it is that these assets will be transferred into entities, and I think then the concern that Kiwis have is that these mega-entities are co-governed and Kiwis don’t like that, and that the democratic accountability model around the governance of those entities also has issues. So I’d like the Minister to make comment in regards to my SOP in regards to changes to clause 6 and the definition around “stormwater network”, and provide a little bit of context around that.

I want to move into an area that we haven’t discussed yet, which is in regards to clause 11 of Schedule 1, which relates to Part 1. It relates to an SOP that I have on the Table, SOP 301. This SOP, in effect, removes the provisions requiring territorial authorities to comply with the water services entities. The reason I have put forward this amendment is that right from the outset, whether it was intended or not, the intention was that the central government should be working with local government in regards to the implementing of reform in this regard. And we will recall that right from the outset, originally, there was the ability for councils to opt in to this legislation, and then quite rapidly when the Government determined that the vast majority of councils and Kiwis were against this reform, they changed that and it was mandatory to be in the scheme. So my SOP is removing clause 11 from Schedule 1. All those involved with these reforms were originally, particularly councils, very much under the premise that they should be able to opt out, and I think that’s a key element that should remain in the legislation.

The bill contains provisions, obviously, that require councils to undertake work for water services entities, but councils are under a lot of pressure across this country and so my amendment provides options to councils to not be mandatorily forced to undertake work that should be optional. So if Labour are so confident in their reforms and they think that everyone’s bought into these reforms, they should support my amendment and make it allowable for councils to voluntarily contribute to this.

To address the concerns raised by Mr Watts, the changes proposed in the Minister’s Supplementary Order Paper will clarify—by including in clause 5A, “Guiding principle for treatment in allocation schedule of secondary water services assets or property”—a provision which states that secondary water services assets or properties whose predominant use is not the delivery of water services are actually listed in as “should not transfer”.

To directly address the query around Mr Watts’ SOP, on clause 11, this clause concerns the transition of critical infrastructure, the very thing that his colleague Mr Bayly was imploring us to make sure went smoothly.

I move, That the question be now put.

Thank you. Thank you, Minister. I don’t think the Minister has answered Mr Watts’ questions about clause 11 and also clause 12 in relation to the two Supplementary Order Papers (SOPs) that he has put in. The Green Party will be supporting those two SOPs, because there’s a very broad commitment in clause 11(1) that “During the establishment period, a local government organisation must co-operate with the department and any relevant water services entity to facilitate the … reform.”

Now, we are aware that the Minister has gone round, has visited, and has engaged with local authorities all over the motu. There needs to be a good relationship between local authorities and central government—one of partnership where they each respect each other’s responsibilities. It seems to the Greens that this clause and also clause 13, which allows the chief executive (CE) of the Department of Internal Affairs to issue directions of non-compliance, are fundamentally changing that relationship in having central government, in a very directive way, telling local authorities what to do. We want this reform to work. It will work when the two partners—local authorities and central government—engage well, and it seems that clause 11 and clause 13 are really undermining that relationship.

So I would encourage the Minister to properly answer the questions: why doesn’t the Government consider that, given the earlier undertakings that the reform would be voluntary, an SOP which removes the ability of the CE to issue the direction of non-compliance and actually makes it much more of a cooperative relationship, rather than a command and control one, has merit in helping reduce some of the concern about this change process?

Thank you, Mr Chair. I just want to turn the Associate Minister’s mind to some comments made by the lead Minister earlier. So I know that this is new ground to canvas. The Minister, when I asked some questions around the definition and provision of green stormwater infrastructure, my questions were wide ranging, there was a lot to canvas, but the Minister, in her response to me, indicated that there was room to negotiate, particularly around “mixed-use assets”, as she described them. When I asked the question around who would have the overriding responsibility for the management of services whereby you have crossover of various territorial authorities, or a Government agency or, indeed, the new entity deed, speaking with a particular reference to the South Island, who would manage those water services in those vicinities where there’s a lot of crossover, her words were, she said, you know, that it would depend on—she acknowledged that there were some mixed-use assets and that it would depend on what was the predominant use. So I think that in a bill that is creating such enormous transformational change, there does need to be some very, very definitive clarification as to the hierarchy of decision making and funding processes, contractual processes, and procurement processes. She also said that the councils—and again I quote—“Councils can negotiate with the entity on a case by case basis.” So, again, I’d ask the Minister, can we have some clarification as to what those case by case bases might look like, particularly in reference to clause 6 of Part 1.

And then finally, the comment that I’m really interested in having teased out was that territorial authorities will identify which infrastructure will transfer to entities. Well, therein lies the crux, I think, of the opposition to this bill—that the vast majority of territorial authorities and, indeed, regional councils across New Zealand have objected to the transfer of these assets and of this infrastructure. So, therefore, we now have a Minister in the Chair not 30 minutes ago saying that territorial authorities will identify which infrastructure will transfer to entities. What is the rationale behind that? What is the rationale that a territorial authority can use to negotiate and discuss with the new entities as to which assets will transfer? If I look further down the track, wherein does that funding mechanism step in? If the territorial authority agrees and—sorry, negotiates and agrees with the entity that they will manage the ongoing maintenance and upgrade of existing infrastructure, then where does effectively—who pays, is what I’m trying to say in a roundabout way? Where is the line drawn? So I would appreciate some clarification around those areas, please, Minister.

I move, That the question be now put.

The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 306 be agreed to.

Simon Watts’ amendment inserting a new clause 3AA set out on Supplementary Order Paper 304 is ruled out of order as not being a serious amendment.

Simon Court’s amendment deleting clause 4(4) set out on Supplementary Order Paper 305 is ruled out of order as being the same in substance as a previous amendment.

Simon Court’s amendment to clause 6, deleting the definition of “Te Mana o te Wai”, set out on Supplementary Order Paper 305, is ruled out of order as being contrary to a previous decision of the committee.

The question is that Simon Court’s remaining amendments to Part 1 set out on Supplementary Order Paper 305 be agreed to.

Simon Watts’ amendments to clause 4 set out on Supplementary Order Paper 283 are ruled out of order as being the same in substance as a previous amendment.

Simon Court’s amendment to clause 4 set out on Supplementary Order Paper 290 is ruled out of order as being the same in substance as a previous amendment.

The question is that Simon Court’s amendments to Part 1 set out on Supplementary Order Paper 293 be agreed to.

The question is that the Hon Eugenie Sage’s amendments to clause 6 set out on Supplementary Order Paper 286 be agreed to.

The question is that the Hon Eugenie Sage’s amendments to clause 6 set out on Supplementary Order Paper 307 be agreed to.

Amendments agreed to.

The question is that Simon Watts’ amendments to clause 6 set out on Supplementary Order Paper 289 be agreed to.

Simon Court’s amendments to clause 6 set out on Supplementary Order Paper 291 are ruled out of order as being contrary to a previous decision of the committee.

The question is that Simon Court’s amendment to clause 6 set out on Supplementary Order Paper 295 be agreed to.

The question is that Part 1 as amended stand part.