Water Services Bill

Thank you, Mr Chair. I would ask the Minister, just regarding the potential carve-out—I just go back to the question about the commentary, which says that the bill would provide “the mechanisms that would enable the regulation of drinking water to be proportionate to the scale, complexity, and risk profile of each drinking water supply.” However, it does not, in my reading of this, have any more clarity or clarification for Taumata Arowai or for water suppliers on what the level of scale, the level of complexity, and the risk profile will be, beyond a reiteration of that wording in clauses 3, 31, and 32.

So I would ask whether the Minister would consider this carve-out of a relatively small number—we’re proposing 30 end point users—to ensure that there is some clarity for both Taumata Arowai and for those end point small-scheme users, given that there is a lack of definition or clarity around what the scale, complexity, and risk profile of each drinking-water supply is or is not.

I think it is very difficult to kind of give the responses in relation to the issues, because we’ve had such a general conversation. But if I think about the range of exclusions that apply to small suppliers, which, effectively, have responded to the majority of the issues that have been raised with us by rural advocates, the only outstanding issue is whether or not there will be an exemption regime for a small number of users. And I’ve said, time and time again in the House, no, because we want to make sure that all users are going to be included in that. Will that lead to a cost burden on that small number of users? No, because we’ve tried to ensure that we’ve eliminated the issues that have been of most concern to them.

Also, what we have tried to ensure, on an even-handed basis, is that when we’re thinking about small suppliers in rural communities, which may range from farmers to marae communities, we have been even-handed in the way that we’ve tried to respond to the concerns that don’t create additional complexities that are unnecessary.

Minister, could you just clarify—you just made a statement then that you said it wouldn’t add any additional fiscal burden on rural small communities. Can you clarify how that could be so, and what would be the annual cost of compliance to rural small communities with under 30 or less dwellings?

Thank you, Mr Chair. Minister, I would ask if there will be a consideration of the percentage of water used for household use and the percentage of water used for stock use, which, as the Minister will, no doubt, be aware, is very common in water schemes around rural New Zealand.

In terms of the compliance costs on—and I just want to be really clear which users I’m referring to, as you’re quoting the statements that I’m making in relation to these compliance issues. So I am referring solely to small suppliers, often rural. So the costs that have been identified that might be a cost burden we’ve tried to alleviate—so, for example, having an approved device such as the UV filter at entry point is a way in which to give confidence to users about what Taumata Arowai will accept in terms of assurance of drinking water at the house, in terms of a device.

The other things that we’ve done is how we accredit and approve, for example, plumbers to be able to install the device, again, lessening some of the cost burden. I think that some of the administrative costs that were perceived we’ve simplified that by having templates. That will make it easier to engage with if they have to.

So those are the various aspects of costs that we’ve made very simple, and then, obviously, the registration process—we’ve simplified the process and it will be free. Again, another area that can be seen to be a cost benefit, because we’ve responded to the concerns that rural communities have raised.

Thank you, Mr Chair. I’ve listened with interest to the Minister for the last little while, and I just want to take us back in history a bit, because, if you think about three other pieces of legislation that have gone through this House in my time—the workplace safety Act, the anti-money laundering Act, and the food safety Act—they all had the same span or range of business scale, I guess, that this has, from very big business to very small business. So the Minister has talked about small rural water supplies. I’d like her to, I guess, tell us what a small rural water supply is, for one.

But the second thing, I guess, that concerns me is that, if you think about registering a drinking-water supply or even providing a source water risk management plan, it’s going to cost the same amount to supply that plan for a water supplier supplying 10,000 end-users, for example, as it is for 10 end-users. And I’m interested to know what a small rural water supply—or a small water supply, actually; it doesn’t have to be rural—is, effectively, going to be, and how are we going to guarantee that the Minister’s descriptions to us are going to apply to the Act, because it’s not apparent in the Act. So those are basically my questions.

I would like to ask the Minister—there are a lot of water sources around where areas have been subdivided off farms into lifestyle blocks. You’ve got sections being subdivided where people are supplying water to other people. How much litigation—or has the Minister looked into the clarity of who, in many, many, many of these situations, is actually supplying the water, because there’s going to be a lot schemes where that’s very unclear, and I just wonder how much court litigation will actually go on around who actually is supplying the water.

Thank you, Mr Chair. I’m intrigued by the Minister saying that there would be no cost to these smaller rural schemes. Even if there are templates, I would have imagined that there would be a cost to preparing a safety plan, a risk management plan, a complaints process, an annual audit, reports on the audit, and end point UV filters are around $4,000 each. So could the Minister explain how there would be no cost?

A couple of things. Firstly, to member McKelvie’s point, the changes that I foreshadowed in the Supplementary Order Paper are the changes that significantly improve the bill, based on reflection from what the Health Committee had suggested and the submission process. Much of those changes cover off rural small suppliers as well as the areas of trade waste. But part of the conversation around small suppliers is not the conversation that we would have as legislators. So can I draw the member’s attention, in the bill, to clause 10, which gives the interpretation of the “Meaning of domestic self-supply and domestic dwelling”. For the most part, I think the nature of the changes that, certainly, Opposition members have raised with me, are in that particular area. So I didn’t want to rehash the legislation, the Health Committee has made some changes to the way in which clause 10 is to be read and understood, I accept that. But, again, that is the reference.

The other point in relation to other bits of legislation that member McKelvie raised, can I just say that the Water Services Bill is based on a risk management regime. It’s the same approach if we consider the Health and Safety Act and the Food Act, and both of those Acts, as the member will know, deal with small businesses and those interests, much in the way that we’re trying to deal with small rural suppliers and self-supply for drinking water.

Just clarity, if I may, Minister. In the section you just mentioned—“Meaning of domestic self-supply and domestic dwelling”—I see in the examples offered: a multiple-dwelling building, for example, it says, are “multiple separate apartments contained in a single building”. Well, does that encapsulate a farmhouse, a worker’s house which is off the same scheme, and a woolshed, and would they be liable for any penalties therein should they not be compliant?

I feel we haven’t had an answer around the Minister of Local Government ’s assertion that there would be no additional costs. Given the acceptable solutions haven’t been devised yet, so we don’t know how simplified and how much the reduced compliance would be, even though there are going to be templates, surely there would be a cost to those schemes, even with a template of having to prepare a safety plan, a risk management plan, a complaints process, annual audits, reports on audits—and UV filters cost around $4,000 each for each end user. Could the Minister clarify how there would be no additional costs, please?

In relation to the UV filter, costs would be significantly minimised because they would be part of an acceptable solution that Taumata Arowai will have approved. So that gives some guidance.

The other area of cost benefit—and I know that the member received this information at the Health Committee—is that these small suppliers will not be audited; again, another cost benefit, back to that nature and profile of user.

Thank you, Mr Chair. Minister, can you just explain—for example, I’ve been on a farm with mountains immediately behind it, and the water comes straight off the mountain and goes straight to the house, and it also goes to another house but it’s coming from one set of pipes. Could the Minister explain: is this caught by the meaning of “a supply”? And would the operator of that therefore be liable under clause 162, potentially, to a fine not exceeding $600,000 or a term of imprisonment not exceeding five years if they are found guilty of recklessness in supply of unsafe drinking water.

Yeah, just to the Minister in the chair, the Hon Nanaia Mahuta, I really want to say, on this side of the House, the National caucus supports the intent of this bill and really does support Taumata Arowai, but the questions around the simplicity of those small suppliers—in not wanting to repeat myself, I would just ask one more time, really our issue is around the small suppliers, to see if we could have some leeway in the Minister supporting Christopher Luxon’s Supplementary Order Paper to the point where her time frames kick in and we could have some certainty around what the regulation looks like. The reason I’m labouring that point is: often in the House when we do legislation and then it goes off to become regulation, people get really concerned because they don’t know what that looks like. Some of the things that Mr McKelvie referred to before around the Food Act and things like that—you know, it’s always the biggest fear of what happens next. I genuinely would like the Minister to reconsider with a time frame that meets the time frame that she has put for those small suppliers.

I genuinely want to acknowledge the advocacy of the member in relation to the concerns she’s presenting. However, the longer lead-in time for Taumata Arowai to mature its regulatory system while it’s working with rural suppliers of drinking water, in effect, provides an exemption—well, I wouldn’t say an exemption, but a lead-in time to be able to come up with a practical solution. Now, that’s got to be a good thing, because Taumata Arowai has expressed, certainly to me—and certainly that is the intent of the changes in the bill—that they’re going to need about that much time because of the differing profile of New Zealand’s rural water supply arrangements. So I think that that’s actually going to have the effect that the member might be seeking in a very practical way while working towards one system that will be fairly applied to all small supply users. Again, we could probably contest this space for a period of time, but the simple response to the member, in relation to an exemption, is that we certainly don’t see any need for that type of an exemption based on a working approach that Taumata Arowai must observe in the way that it seeks out practical, workable solutions for rural small suppliers.

Thank you, Mr Chair. Just with respect to the answer to the last question, and some of the answers that we’ve had earlier, with respect to the exemption process, there is an exemption process proposed in the bill, and I wonder if it’s possible that that exemption process might, in the course of further work done by Taumata Arowai, eventually lead to exemption, or it is possible that it might eventually lead to exemption on some of those schemes if they’re not considered to be, I guess—well, there’s a whole lot of exemption clauses in the bill that provide potential for exemption. I wonder if it’s possible that that would happen to those schemes that we’re talking about now, and that it’s a possibility that some of those schemes could in the future be exempted, although included in the bill initially.

Can I come back to the basic premise of the bill, and it is very much targeted at public supplies. Then there’s a mechanism by which Taumata Arowai will work through some of the complexities around self-supplies, private supplies, of drinking water, and while much of the debate is very much focused in that area, the majority of the emphasis of the bill’s workings is very much geared towards council—public—supplies of drinking water.

Then, what we’ve tried to do is ensure that there are workable, practical solutions based on the nature and profile of the geography of how drinking water is supplied to rural and small suppliers, and that we’re giving it a longer lead-in time to be able to work through the issues. And it’s not as simple as saying that there’s going to be a one-size-fits-all approach.

I think, the way in which Taumata Arowai have been offering advice and insight into the nature of the challenge but the opportunity to work with the rural sector certainly gives me confidence as Minister that they are sensitive to the challenges and opportunities in this space. That is why, on the back of the Health Committee, again, signalling it needed a longer lead-in time, I encouraged and supported a further additional bit of time so that we enable the system to mature and enable Taumata Arowai to gather good information to be able to work with the rural sector to be able to enable better solutions for them, and that’s been the intention.

Thank you, Mr Chair. Thank you, Minister, and we do acknowledge that the bulk of this bill is around council and public supplies, which is why we support it so fulsomely in those areas. And, in many ways, this is just a distraction from that, because the concern is that, while the assurances are given that workable and practical solutions will be found for those smaller rural schemes, it’s that lack of clarity and that lack of certainty and that lack of understanding of what the costs might be that is causing the anxiety around having these included in the legislation. So, in many ways, some sort of compromise where they could be kept out until there is surety around those issues would perhaps take away the anxiety that our small rural schemes have.

I move, That the question be now put.

Thank you, Mr Chair. Turning to the Supplementary Order Paper (SOP), Minister. Thank you for the explanation you gave before, but when the Health Committee considered the whole issue of the performance standards, we had a letter from the Parliamentary Commissioner for the Environment, who raised some quite significant concerns about the risk of having Taumata Arowai being established as a regulator when it is the Minister for the Environment under the Resource Management Act and regional councils which have those major regulation functions. So the parliamentary commissioner was particularly concerned about the wording around waste water and stormwater in Subpart 7 of the bill, especially the references to environmental performance measures in clauses 136 and 140, because that created the impression of Taumata Arowai being a regulator.

So, in response to those concerns, the select committee recommended some changes, including the use of the words “infrastructure performance measures”, and so the focus of Taumata Arowai would be on the performance of the waste-water, stormwater, and drinking-water infrastructure. No one wants sewerage discharges that don’t comply with resource consent conditions that lead to polluted waterways. No one wants those sorts of spills. But the parliamentary commissioner, having done a very thorough report on the state of the environment reporting in New Zealand, and environmental research in New Zealand, was sufficiently concerned to raise these issues with the select committee. But I noticed in the Supplementary Order Paper that it goes back to referring to “environmental performance standards”, and I just ask the Minister to expand on how to avoid the risk of our environmental regulation system becoming quite confused if we’ve got Taumata Arowai setting these standards as well as regional councils setting the standards. I think the Minister referred to some standards being included in resource consents. So, my concern there is that there is the potential that if two agencies—regional councils and Taumata Arowai—had this responsibility, it potentially could fall between the cracks or it results in a regulatory system that is not integrated.

The Minister will be well aware that the Environment Committee’s had a number of hearings on the inquiry on the Natural and Built Environments Bill, and the proposal for a national planning framework where you have consistent standards set now through the national policy statements, and national environmental standards under the Resource Management Act (RMA) going on to be set under a new national planning framework. But how will Taumata Arowai fit with the existing regime under the RMA and with the—I may be looking a bit too far into the future, so I’ll stick with: how will Taumata Arowai’s responsibilities in relation to environmental performance of waste water, in particular, fit with regional councils responsibilities under the RMA? And there were submissions from some regional councils expressing some concern about having to provide information—because of the cost of that. So it’s just that the SOP goes quite a lot further than what the select committee did, and changes the language.

The question also is: what engagement has there been with the Parliamentary Commissioner for the Environment, who raised these significant issues and brought them to the attention of the select committee? Kia ora.

I move, That the question be now put.

Thank you, Mr Chair. Minister, I’d just note that 15,000 people have signed a petition by the National Party asking for an exemption for small suppliers. One of the questions that would be on the mind of some of those would be an example I’ve seen of a group of properties that have a bore on one of the properties and the water scheme is, effectively, owned by all the properties that come off it—so about 15 households, in effect. So my question is around clause 13, “Meaning of point of supply”, and is each property who is connected to that bore responsible for the end point installation and maintenance schedule or is the property owner who has the bore on their property responsible for not only the bore or the source but also the network right up to the end point treatment device?

Yeah, I’ll just add to that if I can, and I’ll probably truncate it a little bit more, Minister. A single property with multiple farm buildings on it—and quite often we’ve seen rather large dairy farms, especially down in the South Island, with several properties on it; they’re reticulated together from a single source. Would the owner of that property therefore be considered a provider and be subject to any punitive legislation therein because of it?

Can I just come to the Hon Eugenie Sage’s question around the role of regional councils in relation to Taumata Arowai. We’ve been very clear from the outset that the regulatory function of regional councils will remain, in relation to environmental standards. However, one of the reasons why we ensured that Taumata Arowai could play a role to ensure greater coherence in reporting oversight of storm- and waste-water systems is because there was a variable way in which reporting occurred in this area. So the member is right to highlight that we did amend the Supplementary Order Paper to ensure that there was a greater emphasis on environmental performance, because we are not, effectively, talking about infrastructure. And within the scheme of the approach for Taumata Arowai, we needed to ensure that if there was going to be a higher obligation on compliance monitoring and enforcement, we needed a more coherent picture to understand what was happening. That does not impact on the regulatory role of regional councils, and we have stressed this in the way that we’ve designed Taumata Arowai’s responsibilities, and we’ve tried to ensure that that is at the heart of the oversight and reporting role that Taumata Arowai will have.

I move, That the question be now put.

Before I give the call to Joseph Mooney, I will say that we have had nearly an hour of this debate—most of it has been on Part 1. Members can address, therefore, other parts as well. The Government side has moved closure motions, and I’d just encourage members to use the time wisely.

Thank you, Mr Chair. Minister, I’m just having a look at the meaning of “drinking-water supplier”, and my understanding is that, if there is a bore where the water is sourced and it goes to more than one household, then the person who is responsible for that bore is a drinking-water supplier. I’ll point to an example—actually, I’ll come to that.

I’ll just move again to offences, which I raised earlier, and I note that, in clause 162, a water supplier who is responsible for the supply of unsafe drinking water is subject to a maximum penalty of imprisonment not exceeding five years or a fine not exceeding $600,000. I have an example in my electorate where a farmer who has four households taking water from his bore has disconnected those in anticipation that this would pass, given the Government’s majority, and concern about the offence provisions and that it would place too onerous a burden on him, and that those households will now be reliant on rainwater if and when they can get it, which is not always a guarantee in parts of my region. So I would ask, Minister, if it is appropriate for persons in that small water scheme to be subject to an offence of such magnitude—whether that is proportionate.

I call Joseph Mooney.

Maybe I’ll let the Minister—the Minister is conferring. I’ll wait for the Minister.

CHAIRPERSON (Adrian Rurawhe): Well, you need to speak.

OK, very well; I’ll speak in the meantime. There was a question I had earlier that I would be interested in—and I know that many people in rural New Zealand would be interested in—and that is whether there is intention for Taumata Arowai to take into account the percentage of water that is used for stock and the percentage of water that is used for households, because it’s very difficult—well, in fact, impossible—to distinguish between the uses of the two in many rural water schemes.

My apologies, in responding to the member, but just to get clarity of my own in terms of the way that the legislation is intended to apply. The whole reason why we want to ensure that drinking-water suppliers of a small category such as that that you’ve explained, and other members in the Chamber, is that if they go through the process that is outlined in the bill, which is to apply for an acceptable solution in the provision of drinking water, therein is the regime by which they will be regulated by, if you like, or managed by. If they do not provide safe drinking water, then there is a level of liability that will fall to them, to the drinking-water supplier.

Thank you, Mr Chair. I just wanted to get on to one or two other issues. I think that one of the challenges that we have in our communities at the moment is that this bill is very much confused and, I guess, mixed up with, effectively, what is the three waters proposal. So a lot of the challenges that we have, as MPs and people explaining this in our regions, and, in fact, councils have got the same issue, is that a lot of the issues that arise in this bill are actually issues that could be compromised—or not compromised so much, as could change as a result of the three waters bill.

I want to go to a couple of things where, effectively, we’re merging—and the Supplementary Order Paper, to some extent, merges—the link between drinking water, stormwater, and waste water. In my history in local government, we’ve often talked about water metering and how you might utilise that. And one of the things that occurs to me is that this bill, and the regulator, could eventually—not this bill but the regulator could then start to impose conditions on whatever arises from the three waters proposals, that adds significant costs that may not have been foreseen in the process of the three waters work being done, or, in fact, in the cost relating to the smaller water supplies involved in this. If, for example, you put water meters into a system like this—I’m not going to argue the value of them, because, actually, I think they’re quite valuable; the problem is they’re hugely expensive. So you could add a massive amount of cost because of the actions of the regulator. They might end up adding a massive amount of cost to a process that we don’t fully understand.

So, I guess, that’s another fear that I think’s been raised in our community, not only around water meters but also around how you might link the water-in, water-out process, effectively, because a lot of talk has happened in my lifetime, or in my experience in local and central government, around how if you put the water into something, you’ve got to take the water out again. So I think there’s some fear in the community, particularly the smaller communities and particularly the small rural towns, around the implementation of cost in those instances that might then add significantly to the cost of those small water supplies.

I know I’m taking the Minister down a bit of a path into the three waters stuff, but I don’t really want to go there. I think the question relates to what the water regulator will have the power to do and what they’re likely to do. I know that’s a bit of a difficult question too.

To the Minister the Hon Nanaia Mahuta, if a water supplier stops providing water to households that were drawing from their source, what happens?

Actually, that’s a really good, practical question, because if that did happen, then it would be beholden on the council to provide drinking water. Those provisions are within the Act. I would have hoped that where those arrangements are currently in place, those drinking-water suppliers would see the benefit of looking at the acceptable solution process to give assurances as to what their responsibilities are, let’s say, because they could be providing drinking water to the local farmhand living on their property before they just cut the lines. But if they cut the lines, then the obligation will fall to the councils.

I move, That the question be now put.

Thank you, Mr Chair. Mr McAnulty’s very keen! Has the Minister received any advice on the anticipated number of small water-suppliers who will disconnect their schemes, given this, and, therefore, the number which will fall on local councils to supply an alternative solution?

Only from members of the Opposition, speculative though it is.

Very quickly, Minister—just Part 2, clause 47. It talks about the aesthetic values of the drinking water. Notwithstanding we’re, obviously, now encapsulating properties with 30 or less dwellings in this, is the Minister concerned that that is potentially purely subjective when it talks of what is deemed to be aesthetic values without limitation?

I thank the member for the question. The reference to clause 47 was, in fact, a provision that’s been carried over from the Health Act into this legislation.

I move, That the question be now put.

Point of order, Mr Chairman. I couldn’t find the Standing Order, but I understand that a member can only move a closure motion once.

No, that is not correct.

The question is that the Minister’s amendments set out on Supplementary Order Paper 62 be agreed to.

Amendments agreed to.

The question is that Christopher Luxon’s amendment to clause 8 set out on Supplementary Order Paper 61 be agreed to.

Madam Speaker, the committee has considered the Water Services Bill and reports it with amendment. I move, That the report be adopted.