Local Government Act 2002 Amendment Bill

We were discussing just a few weeks ago what came to be known as the “Warner Bros Bill”. I propose that we rename this bill the “United Water Bill” in honour of the economic interests that stand to benefit very significantly. We could call it the “Veolia Bill”, because under this bill the public of New Zealand should be very clear that councils will be able to enter into contracts for period of up to 35 years for the private management and control of our water assets, including ownership—including ownership.

The Associate Minister of Local Government, who is currently the Minister in the chair, was candid enough, finally, in question time a few months ago to acknowledge that the bill allows private ownership of water assets. I think the Government has been a little bit unclear in its own mind about whether it would allow the private ownership of pre-existing water assets. We are talking about pipelines, dams, and wastewater treatment plants. Let us be clear: this bill makes explicit provision that it will allow the private ownership of pre-existing water assets if that is deemed to be incidental to the project and important to the success of the contract.

💬 Nicky Wagner: That’s prohibited, unless.

Well, one could drive a bus through that. Not only does this bill allow private ownership of new water infrastructure that is constructed in the course of a build-own-operate-transfer scheme—also known as a BOOT scheme, or a public-private partnership—but also, if it is deemed to be important to the success of a contract, existing—existing—water infrastructure can be sold to the private sector. We have had the bizarre spectacle over the last few months where members on the Government benches have repeatedly denied that that is privatisation. I do not know how they can deny that when it allows 35-year contracts for private control, including the private ownership of our water assets. On any common-sense reading of that, it is privatisation. The member opposite Nicky Wagner is parroting the line that it has to be sold back to the council at the end of the 35 years. Well, you know, it could be sold back, but equally that contract could be rolled over to create a 70-year period of private ownership of our water infrastructure.

I think the public of New Zealand see through the fiction that the National Government is pedalling in this case. There is no way around it; this bill amounts to opening the door to the effective privatisation of water infrastructure. The member opposite may not like it, but it explicitly allows the sale to private interests of our existing municipal water infrastructure, if that is deemed to be incidental to the contract and important to the success of it. It is there in black and white. How members opposite can continue to deny that that amounts to privatisation, I simply do not understand.

This bill could be renamed the “United Water Bill” in honour of United Water’s role in this bill. The Associate Minister made a great play of saying that a few local rural councils would like the ability and flexibility to work with the private sector. But this bill allows Auckland’s new billion-dollar water monopoly to have the whole kit and caboodle contracted out to United Water overnight, without consulting the public.

We are not talking about a little wastewater treatment plan in the back of beyond, I say to Mr John Carter; this bill applies just as much to Auckland’s billion-dollar water monopoly, which has been paid for by generations of ratepayers. That can be handed over to United Water, and, under the cuts to the consultation requirements in this bill, which are in clause 11, ratepayers would not know a damn thing about it. It could be done without any sort of consultation or advanced notification to the community. I believe New Zealanders do not want that.

Mr Chair, you always get a very good equity balance in the calls that you give out, and I think that is admirable.

I have a number of ideas with regard to the title. To start with, rather than the Local Government Act 2002 Amendment Bill, I think it is appropriate that we call it the “Local Government (We Couldn’t Win Auckland in the Local Body Election So We’ll Privatise Auckland’s Assets in This Way) Bill”. That name comes from something that has been discussed quite widely in this debate. It has been about the Government’s agenda with regard to privatising assets, and privatising Auckland’s assets in particular. It has been about the ideological views of members on the other side of the Chamber, who want our local government bodies to act in a corporate way rather than in a community-focused way. That title really is appropriate, given that this bill allows the private sector to own water infrastructure for up to 35 years, which effectively is privatisation, as my Labour colleagues and Sue Kedgley have pointed out. So that title is appropriate.

Although, as we have said before, we support what the bill states it intends to do, which is to increase financial accountability and transparency, we know that in all actuality that is not the case, because the bill is about privatisation and it is about removing the rights of the community to have a say in what is happening, so that corporates can move in and the communities cannot object to what is going on around them. So that is one idea with regard to what the title of this bill could be, and I will repeat it: the “Local Government (We Couldn’t Win Auckland in the Local Body Election So We’ll Privatise Auckland’s Assets in This Way) Bill”. It is a long title, and the one thing I am concerned about is that it is a little bit long. Other than that, it captures the agenda of the National Government and what it intends to do with this legislation.

Another idea I have with regard to an appropriate title for this bill is along the same lines but a little bit shorter. Rather than call it the Local Government Act 2002 Amendment Bill 2010, we could call it the “Government Wants to Sell Off Your Water and Now We Can Bill”. That would also be appropriate. I will not go into too much detail about why, because I think it was covered in the explanation of my previous recommendation of a good title for this bill.

On a different note, going back to the concerns that have been raised about the Government’s desire to erase the community’s ability to have a say in what is going on in local government and to hold their representatives to account, I think another appropriate title would be the “Local Government Doesn’t Have to Ask You What You Want or Think Bill”. That would be appropriate, given that this bill removes the need for local government to actually consult with communities on long-term strategic goals, on the long-term outcomes that are strategically put into place for the particular cities that will be covered. That is of concern, because one would think that with local government, and with central government as well, actually, constituents, ratepayers, and taxpayers should be able to have a voice in decision making. They should be able to go to their elected representatives and say that they believe that their representatives should be focusing on this, this, and this outcome, and then they should be able to push for their representatives to do that. Unfortunately, this bill removes the right for that to occur. Again, that recommendation for an appropriate title for this bill is “Local Government Doesn’t Have to Ask You What You Want or Think Bill”. I am pretty sure that that would give New Zealanders a good indication of what the National Government is trying to do, if they do not already know what it has been trying to do for the past 2 years it has been in Government, or for the entire history of National’s existence.

I said earlier that the Minister driving the Local Government Act 2002 Amendment Bill is a Minister who has lost a lot of credibility in the eyes of the community, particularly in the eyes of the Grey Power community. It is the people in the Grey Power community who spend considerable time being part of their communities, and considerable time participating and engaging with their local government. Many of the Grey Power community members who are supporters of the National Government will now be saying that this bill should be called the “It is Time to Change the Candidate in Epsom Bill”; that is the name the bill should be given.

I also say that this bill—and many of my colleagues have said so—is really designed to enable the privatisation of water assets. If the Minister is so keen to promote transparency and accountability, why can this Government not be transparent and just name the bill the “It is Time to Sell Our Water Assets Bill”. Heck, it is time to sell all of our assets and, while we are at it, why do we not just sell New Zealand, as well? We have done that recently with the Hobbit film, so why do we not go all the way? Those are the names that come to mind because of the way this bill has been rushed through in this Parliament, and because of the way the clauses of this bill are designed to gut local government.

While I am at it, I tell members that we should also give this bill a name such as the “Removing Community Outcomes From Our Communities Bill”. Let us be open and transparent: that is what this bill is designed to do. It removes the right of ratepayers to identify and determine their own outcomes, and the bill will give the power to the local authority to decide those outcomes for the community. That is not right—that is not right, but that is what this bill will do. I have a suspicion that ratepayers, and Grey Power members in particular, up and down this country, will be listening with interest to hear whether the Government takes a step back, and takes their word seriously about transparency and accountability. This bill does nothing for transparency and accountability. It closes shop for the few who are now being given power to make decisions on behalf of the community.

Another thing is that the bill also removes the right of ratepayers to be engaged in the consultation process from the beginning to the end. Let us be open and transparent for all New Zealanders and name this bill the “Removal of Community Participation in the Consultative Process Bill”. Let us just be open about that, and declare that once and for all.

💬 Phil Twyford: It’s a bit long.

Well, it is a bit long. Nevertheless, it is being open and transparent; is that not what this Minister has been talking about? The bill is removing the right of ratepayers to participate in the consultative process.

Another thing is that simply handing over to local authorities the right to determine outcomes and to determine when ratepayers can participate in the consultative process does not make that right, and it does not make a local authority the community. The community are the ratepayers. Councils are elected representatives and can be part of the community, but they are not solely the community. The community are Grey Power; the community are ratepayer associations; and the community are Manukau, Auckland region, Waitakere, and Porirua where my friend Kris Fa’afoi is fighting tooth and nail to keep this Government out there, come this Saturday. I would say they are the real communities. They are the real communities, but this bill, this Minister, and this Government have no desire to allow the participation of the wider community. That is why Kris Fa’afoi would not agree with this bill. Kris Fa’afoi would say that we should be open and transparent, and simply call this bill what it is; it is the “For Sale of Assets Bill”; it is the “For Sale of New Zealand Bill”.

I move, That the question be now put.

I have two particular names I would like to suggest for this bill. The first one is the “Rogernomics Part 2 Bill”, and the second one is the “Business Roundtable Implementation Bill” or the “Roger Kerr Implementation Bill”.

It is the “Rogernomics Part 2 Bill” because it implements the agenda of ACT and the Business Roundtable of corporatising as much of local government as possible, and allowing the councils to sell off their strategic assets without having to go through the inconvenience of informing their residents or even bothering to consult them. That is what this bill does. Mr Hide and the Business Roundtable are having to sit on their hands for 3 frustrating years because the privatisation of State-owned assets has been ruled out by this Government this term. That is for what it hopes will be its next term of Government. While they have to sit on their hands in frustration, unable to sell off State-owned assets, they have bided their time by focusing on local government. Nobody is surprised that Mr Hide got his prize of being the Minister of Local Government and immediately set about making radical, far-reaching changes to local government. He has not just got rid of Environment Canterbury and obliterated eight democratically elected councils in Auckland; he has worked on the prize of this bill, which, through a series of provisions, will encourage the councils to corporatise as many of their assets as possible. It will allow them to sell off their assets without having to consult—even their water assets.

The second possible title for this bill is the “Business Roundtable Implementation Bill” or the “Roger Kerr Implementation Bill”, because Roger Kerr has been lobbying for the provisions of this bill for two decades. I have here a series of his papers, and I will read from them. This bill is what he has been lobbying for through two decades. It is the prize of opening up local government to the multinational corporations that he represents. He will be listening with mounting satisfaction to this debate.

💬 Hon Dr Nick Smith: That’s just awful—just outrageous.

I say to Dr Smith that this is exactly what is happening. He may pretend otherwise, but this bill will allow Veolia Water, the largest multinational water corporation in the world, to own our water assets for up to 35 years, and if Dr Smith thinks that is not water privatisation, I say dream on.

Roger Kerr has been lobbying for this outcome and one can only imagine the amount of behind-the-scenes lobbying by Veolia Water, the Business Roundtable, Roger Kerr, and Suez to get this bill. Vested interests have been lobbying in secret to get this prize, which is what this bill is for them. Mr Kerr has been pointing out since the 1990s that owning water is a $300 billion business, and he asks why we cannot open up our water supplies in New Zealand to water privatisation and water companies. He acknowledges in this series of papers that it is controversial, but he says water is not a human right, not a precious resource, not one of the life-support systems of our planet; he says it is an economic commodity, it should be treated as an economic commodity, and it should be run by the market, run by multinational corporations. Then he talks about the opposition to water privatisation, which he is increasingly frustrated by. His strategy is to say we should go for partial water privatisation, not complete, outright privatisation. We should pretend that the councils will still retain ownership of water supplies. We should come up with what he calls partial privatisation, which is allow the councils to hand over the water supplies for 35 years to private corporations.

I move, That the question be now put.

In addressing clause 1 on the title of the Local Government Act 2002 Amendment Bill, I say that one could call it the “ Rodney Hide Special Bill”. I for one am not at all surprised that Mr Hide has brought in this bill. He has talked about transparency. What is his tag line when he is in the political mire, as he has been, day after day? It is to say he has to go out and do the best job that he can for the people of Epsom. I say to Mr Hide that this bill reeks of hypocrisy. Mr Hide has a long, long track record of talking about transparency and accountability. He talked about it when the issue was about perks, and we all know he came a gutser on that. He talked about transparency and accountability in respect of law and order, and we know he came a gutser on that too, when he covered up for David Garrett.

Now Mr Hide has brought into Parliament this bill, which could be titled the “Biggest Act of Hypocrisy That We Have Seen Come in Here Bill”.

💬 Hon Dr Nick Smith: Calm down.

At least I have not had a couple of crates of V this morning, as that member has. If any member in this Chamber should calm down, it is “Old Psycho” over there. He should not tell me or any other member to calm down, because Nick Smith does not want councils to be accountable, not even his own council in his own patch. The old windbag over there, the old hayseed, does not want his council to be accountable to the community or to consult it. Oh, the pills must have kicked in! He is a bit silent now.

I say to Mr Hide—

💬 Hon Dr Nick Smith: I raise a point of order, Mr Speaker. I take offence at the coarse allegations that are being made by Clayton Cosgrove. They are both untrue and unparliamentary. I ask him to withdraw and apologise.

I withdraw and apologise.

The CHAIRPERSON (Eric Roy): I am on my feet. The debate has been quite passionate, but on a reasonably respectful plane. We are nearing the end of it, and I would not like us to lose that.

I come back to the point that Rodney Hide and other members of the Government have gone around the country, saying this bill is about transparency and accountability. Mr Hide has made great play of the fact that the people should have their say. He has said the people should be involved in local government, and the politicians in local government should be accountable to them. It is a pity he does not apply that to his own personal affairs, but putting that aside, he states that politicians should be accountable to the community.

💬 Hon Dr Nick Smith: Always in the gutter.

You are no example, I say to Dr Smith. Then we come to this bill, which reduces the requirement on local authorities to consult and be accountable to their communities. I come back to the suggestion that a good title for this bill would be the “Yet Again, a Rodney Hide Special Bill”. It is a case of Mr Hide talking about transparency, accountability, the good people of Epsom, and how every day he has to try to be the best MP that he can be, regardless of his track record in this place, then pushing through a bill under urgency. Every bill on local authority matters that the Minister has introduced has been handled under urgency—

💬 Phil Twyford: Bar one.

—bar one—because he does not want his legislation to be scrutinised and does not want the people to hold him to account.

I challenge the Minister to get up and explain how reducing the requirement on a local authority to actively consult with its community on community goals and outcomes in any way engenders and enhances political accountability to those people. I ask the Minister that question. That is what he said he founded ACT on. It is what he says he lives by, apart from in his own personal and political affairs in Parliament, yet although he preaches that, he does not walk the talk. How will a local authority know which goals and outcomes a community wants to have, if it is not required to consult that community? Even Nick Smith’s council will not be required to consult on those community goals and outcomes. Yet again, Mr Hide preaches accountability and transparency for everybody else. He takes the moral high ground, desperately trying to rekindle a political future that is in tatters.

I will give Mr Hide this: he has guts. Even though he is trying to rekindle his political future and reinvent himself yet again, with or without the spray-on tan, he still has the fortitude to bring into Parliament a bill that does exactly the opposite of what he preaches that everybody else should do. Everybody else should be accountable; everybody else should consult their electorates. He says he consults the people in Epsom, but he brings a bill into the Chamber that reduces the requirement of a local authority to consult its community, its constituency. I ask my colleagues how that shows accountability and how that will hold local politicians’ feet to the fire when they propose to do bad things—and we have seen that occur.

When it comes to water, I challenge Nikki Wagner. We have a major water issue in Canterbury—a major water issue. This bill, of course, allows the privatisation of water assets in the future. So I look forward to future debates with that member over there, Nick Smith, and with Nikki Wagner, as well.

I move, That the question be now put.

I have been present for the entire Committee stage of this debate, and have participated in it. In reflecting on the Committee stage, I believe that the current title, the Local Government Act 2002 Amendment Bill, is not appropriate, and needs to be amended to better reflect the debate in the Committee stage and the amendments made to the bill.

The first change that I would suggest—

💬 Hon Dr Nick Smith: I raise a point of order, Mr Chairperson. Mr Cosgrove, whose call has ended, is continuing to shout abuse across the Chamber when I am trying to listen to the contribution from his colleague. He has finished his time and he should be asked to desist.

The CHAIRPERSON (Eric Roy): I did not hear the member but a member has taken offence. As I said, we are nearing the end of this debate, so let us just conclude it in the best spirit that we possibly can.

💬 Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. I think it is a tradition in this Chamber that one responds when provoked.

The CHAIRPERSON (Eric Roy): Look, I have just said that we are getting near the end of the debate—very near the end of it, I think.

Thank you, Mr Chair; I say that members on this side of the Chamber have a lot more to contribute in this very important part of the debate. I am very pleased that the Hon Dr Nick Smith is listening to my contribution.

I think a better name for this piece of legislation, perhaps, would be the “Local Government (That was Then; This is Now) Amendment Bill”, because when I look at the issue of remitting rates on Māori land, I am reminded of the comments made by the Hon Dr Nick Smith on this very issue, when he was in Opposition, and when Labour passed the Local Government Act in 2002. The clause is being carried over into this bill—a review period is being put into it. I think the bill should be called the “Local Government (That was Then; This is Now) Amendment Bill” because of the comments made by the Hon Nick Smith, when he was in Opposition, on this very issue of remittance of rates on Māori land. He said: “This is nothing less than apartheid.” The clause states “that a local authority must adopt ‘a policy on the remission and postponement of rates on Māori freehold land.’ It must do that.” He then went on to say: “I ask the Minister to tell me why councils must have a policy on remitting rates on Māori land, … I want some member in this Chamber—maybe Parekura Horomia—to provide me with an explanation. Why must a council develop rates remission policies for your cuzzie-bros and not for mine?”. The Hon Dr Nick Smith then went on to say: “This damn law that we are being required to pass is nothing less than apartheid, and I cannot believe that members opposite want to impose this sort of obscene provision. It offends against National’s principle of one standard of citizenship.”

Well, that is quite a departure from the bill we have in front of us now. I ask the Hon Dr Nick Smith—who said he was listening to my contribution, and I thank him for that—to take a call and tell us whether that is still his position and, if it is, whether he will be voting against this part of the bill. Indeed, maybe he will vote for my suggestion of a new title, which is the “Local Government (That Was Then; This Is Now) Amendment Bill”, because that is quite a U-turn, even for the Hon Dr Nick Smith.

The other title that I think would suit this bill is the “Local Government (Sale of Council Housing) Amendment Bill”, because housing does not appear in the list of core functions in this legislation. Councils around the country have already said quite openly that they are looking at selling off their pensioner housing, because, clearly, central government does not think that it is an area councils should be involved in. That was backed up by the fact that the Minister of Housing has stopped local government from having access to the Housing Innovation Fund to maintain those properties. That is sometimes the sticking point; properties get to a point where they have to be maintained, and the council wonders whether it should sell them or keep them.

If central government is prepared to take the issue of housing seriously, in partnership with local government, and to respect the role that local government plays in housing, then local government should be allowed to have access to the Housing Innovation Fund, as Labour allowed. I was in Kaipara earlier this year, and I was told that the Housing Innovation Fund allowed the council to maintain its properties, and that was part of the reason the council kept them and reversed its policy to sell them. Yet the National Government has said to local government that it does not have a role in housing, and that housing is not a core function, which has already seen the sale of some pensioner housing in districts like Whakatāne. The Whakatāne District Council has said that the Government did not want it to be involved in housing anymore. So we could call this bill the “Local Government (Sale of Council Housing) Amendment Bill.

It could also be called the “Local Government (Consultation is Important for Corporates but Not for the Community) Amendment Bill. Under this legislation—and we heard this earlier in debate on the Committee stage—communities’ consultation rights are being slashed back to the bone. But new procedures for corporates are being introduced—for example, developers can put pressure on a council to review its developer levy and development policies. Corporates will get the right to the special consultative procedure while communities are having the right taken away from them.

CHRIS AUCHINVOLE (National—West Coast - Tasman) I move, That the question be now put.

I move, That the report be adopted.