Water Services Entities Bill

I present a legislative statement on the Water Services Entities Bill.

💬 DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website. Can I just ask members leaving the Chamber that you do so quickly and quietly, please.

I move, That the Water Services Entities Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 11 November 2022.

I te tīmatanga: whakataka te hau ki te uru; whakataka te hau ki te tonga. Kia mākinakina ki uta, kia mātaratara ki tai. E hī ake ana te ata kura, he tio he huka he hauhū. Tihei mauri ora.

[As an introduction: the wind swirls in the west, and the south; the piercing cold is felt inland and the coast too; the dawn rises, indeed it is icy, frosty and the wind is cold, ‘tis the breath of life.]

It’s with great pride that I read this bill a first time. It follows years of research and analysis using the best of local and international expertise, comparative examples, and extensive consultation with local government, iwi Māori, and the water industry. We’re taking decisive action to ensure all communities have safe, affordable, and sustainable drinking-water services, along with stormwater and waste-water networks that meet our environmental and cultural expectations.

New Zealand spent more than 20 years getting to this point. The tragic Havelock North drinking-water contamination event in 2016 and subsequent inquiry starkly highlighted systemic failures in our water system across service provision, regulation, and source protection. But these issues have existed long before the Havelock North crisis, and if we don’t act, they will persist long after.

Recent estimates show that up to $185 billion worth of investment is required in New Zealand’s three waters infrastructure over the next 30 years to address the years of under-investment in maintenance and replacements to ensure the network meets modern standards, to provide for our growing communities, and to build resilience to the effects of climate change and natural hazards. Simply put, this is unaffordable for most communities under current arrangements.

It is unsurprising, given the scale of these reforms, that they have generated much debate. There have been requests to stop the reforms and go back to the drawing board, but we have been talking about these problems for the past 20 years. It’s time for action.

The case for change has been made, and now is the time to act. As a Government, we’ve embarked on an ambitious programme to improve both regulation and service delivery in the three waters space. This programme has already seen the establishment of a dedicated drinking-water regulator and the passage of the Water Services Act 2021, which provides a new regulatory regime for drinking-water suppliers. These changes will protect New Zealanders’ health and the environment, and they received near universal support from the sector. But they are a high bar for water service providers and create an additional affordability challenge which councils cannot meet.

The introduction of the Water Services Entities Bill today is a significant milestone marking the start of improving water services delivery in Aotearoa. When passed, the bill will create four dedicated water service entities which will deliver drinking-water, waste-water, and stormwater services. These entities will have the size and scale to deliver water services, invest in infrastructure, and meet the new regulatory standards. This bill is the first step in a significant change to the way water services are delivered in New Zealand, but it alone will not achieve this. A second bill will follow, providing for the transfer of assets, liabilities, powers, and functions to the new entities. Once this second bill is in place, the entities will be able to deliver water services, commencing on 1 July 2024.

Last year, the Government ran an eight-week consultation period with councils to ensure that they had the chance to be heard. This was a formalised process following significant engagement with councils and iwi around the motu. As a direct result of that process, we established a representation, governance, and accountability working group to take a second look at the proposed governance structure. The working group came back with 47 recommendations and, as a Government, we accepted 44 of them. These changes have improved the three waters reform and addressed the feedback we heard from councils and iwi Māori, and I want to thank the working group members for their involvement.

I now want to briefly touch on some of the important components of the bill before us. As a Government, we’ve had four bottom lines when progressing this reform. They are: ensuring water assets remain in public ownership; ensuring balance sheet separation; ensuring that we give effect to Te Tiriti o Waitangi, the Treaty of Waitangi; and ensuring good governance in board selection processes.

These bottom lines are vital for the success of the reform and will enable the entities to have the independence and borrowing capability required to tackle the challenges ahead. Water service entities remain responsible and accountable to the communities they serve. Councils will collectively own the entities on behalf of their communities within their service area. On the recommendation of the working group, councils will be given shares in the new water service entities, ensuring continued public ownership. Councils will receive shares on a per capita basis: one per 50,000 residents, rounded up.

Councils, and councils alone, will own these water entities. Each entity will have two levels of governance: a professional board and a regional representative group made up of council and mana whenua representatives. The entity boards will be made up of people hired for their expertise and skill in water services delivery.

At a strategic level, the regional representative group will be made up of 50:50 council and iwi representation, and their strategic leadership will ensure that decision making can occur by consensus. The regional representative group will reflect the long-term aspirations of their communities. Iwi Māori should be involved at this level. They have never expressed the wish to sell water assets, and will bring an inter-generational long-term lens to the governance of the water service entities. Their input at the strategic level gives further assurance water assets will not be sold off.

These further protections are in addition to clear legislative protections against the loss of public ownership. These provisions will prevent an entity from using water service assets as security for any purpose, divest its ownership in a water service, or sell or otherwise lose control of significant infrastructure. Any divestment proposal would require unanimous support from territorial authority owners, support from at least 75 percent of an entity’s regional representative group, and a referendum with at least 75 percent of votes cast by electors. As a Government, we have sought cross-party support in order to entrench these provisions.

Ensuring a smooth transition to the new system is another key focus of this bill. It creates establishment entities which will make the preparatory arrangements ahead of full operation. These entities will then start delivering water services from 1 July 2024. It also establishes the statutory oversight powers of the national transition unit, a business unit which sits in the Department of Internal Affairs and provides transition provisions relating to employment of the water services workforce. This includes employment security by transferring existing employment positions to the relevant water services entity on terms no less favourable than existing terms.

The reforms at their heart are about ensuring communities have access to water services and infrastructure befitting of a developed country. Ongoing community voice will, therefore, be vital to the success of these reforms. As such, requirements for entity consultation and engagement are specified in the bill. These provisions include the requirement for the entities to establish one or more consumer forums, the requirement to prepare an annual consumer stocktake, and the requirement to engage with consumers and communities on their asset management plans, funding and pricing plans, and infrastructure strategies.

The bill contains robust mechanisms to provide for and promote iwi Māori rights and interests. Mana whenua whose rohe or takiwā includes a freshwater body can make a te mana o te wai statement for water services which the board must give effect to. This approach is consistent with other water services legislation, including the Water Services Act.

The bill enables a Government policy statement to be issued to provide Government’s directions and priorities for all water service entities. A Crown monitor can be appointed to provide a stewardship role from a whole-of-Government perspective. If an entity is deemed to be at risk by either failing to perform its functions, demonstrate sound financial management, or deal with a state of emergency, then a Crown monitor may be appointed to intervene and assist change.

The introduction of this bill marks a significant milestone in the journey to improve water services in New Zealand. The scale of entities will enable them to finance the much-needed improvements in our drinking-water network. I’d also like to thank parliamentary colleagues who have offered their support during this reform programme.

I’m proud to be in a Government that is doing something about a long-overdue issue. I also want to acknowledge the many officials who have worked long and hard in the Department of Internal Affairs and the local government team to ensure that today we are taking action on a serious, long-term issue that has been left overdue. Kia ora.

The question is that the motion be agreed to.

Yesterday, I said that this bill was a 134-page severance letter to Labour’s backbench, and I can tell by the way that those members on the opposite side are looking that they agree with that statement. It is more than that. This is about the spirit of this Government and their approach. National will oppose this bill, and we will fight for our communities every step of the way. National will repeal three waters.

New Zealand’s infrastructure challenges are substantial, and the very human cost of those challenges was laid bare for us in the tragedies that began this work. Every person in this country deserves tap water that comes out clean and drinkable, but that is not the reality for some of our communities. That has to change. With this legislation, we step out of the problem into the ideological realm of one size fits all and “Government knows best”. Then comes the flip, and we’re suddenly told that if we don’t support this reform, we must support the status quo or—worse—that we don’t care. I reject that statement, as do millions of Kiwis around this country. National opposes this bill for a number of key reasons. Any reforms need to work with local communities, not against them.

The opposition to this reform has been resounding. Advocates and community leaders have packed public meetings in town halls across this country, from the Far North to the deep South. Labour has told us that they are listening to their communities. Well, I want to see those MPs on the other side turning up to those town halls and listening. Through their actions and a sham of a consultation, they’ve shown us that public and council involvement in these reforms is an afterthought. For me, it’s a bottom line: representation.

I want to talk about a few aspects in this bill. The bill’s primary purpose is to establish water entities and governance, but I want to talk a little bit deeper about some of those aspects around the representation arrangements. At first, it’s around council representation. At its core, this is simply a maths problem. There are only seven seats on the regional representative groups, yet in entities B, C, and D there are 22 local councils. There’s no way to describe this any better: small councils and small parts of our community and our country will not have a voice at that table. Their voice will not be heard, and they will not be represented.

When I speak to those local communities and those local councils, I hear a genuine concern for the fact that these mega entities will drown out the voices of their ratepayers. The best that this bill does is offer an advisory panel. Well, that is absolutely an insult to local government and our local communities and is no substitute for representation around that table.

One of the most important things, as local government spokesperson for National, is actually getting out there and getting out on to the ground with our local communities. They’ve copped a lot of flak through this reform process, and this Government has been very happy to lay the blame at their feet. National takes a different view. I want to thank our councils and our community leaders for the work that they do for our communities, often under what are significant challenges in their areas.

The second issue I want to deal with is around representation arrangements and co-governance. Let me be very clear: National opposes a 50:50 co-governance model baked into the core of this bill. At both levels of representation—the regional representation and the advisory panel—there is a 50:50 split between council representatives and those appointed by mana whenua. A co-governance model of public services is something that National will not support. This is a significant departure from the arrangements that National worked on and set up in regards to the Waikato River, and so we will not be supporting that.

For decades now, we’ve talked about two fundamental parts of our democracy: about having equal voting rights for all New Zealanders, and, secondly, accountability at the ballot box. Now, this bill will change both elements of those things and discard both of them. The reality in this bill is that when you strip everything away, this is about pipes in the ground. Kiwis want those things to deliver, and co-governance will not help us achieve that goal. Pipes do not differentiate based on race.

The function of these representation panels is also an area I want to get into. Earlier this week, I questioned the Minister about how councils could affect decision making when they need a consensus of 75 percent and they only have 50 percent of the votes around the table. The Minister said it didn’t matter and that only relates to privatisation and mergers. The only thing you can vote on is to do something no one has any interest in doing. National does not support privatisation, and it is clear that no major party in this House does either. Let’s be clear: Kiwis want accountability. These reforms are not accountable.

I said earlier that this bill is about pipes in the ground. The single biggest issue underlying our challenges in local government is around sustainable funding and financing. The projects require secure funding in order to deliver those services well into the future and they need substantial, upfront investment when the benefits may flow over future years, and I want to talk about two elements in regards to that. We’ve heard the easiest way to fund infrastructure is through economies of scale, and that’s pretty reasonable, but when you look at the entities and how this is formed in this bill, that completely falls apart. The only example you need to look at is entity C, which spans from the top of the East Coast in the North Island to Nelson at the top of the South Island. Any claims about benefits, when you realise that Gisborne and Nelson are in the same entity—despite being in different islands in this country.

The second shows how much Labour cares about the stability of these entities. On day one, before a single measure of pipe is laid, these entities will be in debt because Labour couldn’t sell these reforms: $1.5 billion of borrowing, offering councils to try and buy into these reforms. That money can be spent on pretty much anything. So on day one, the balance sheet of these entities will already be in debt and having to pay commercial interest rates. That could be nearly $100 million a year in interest payments alone. That shouldn’t surprise anyone because this Government is addicted to debt, and they are kneecapping these reforms before they even start.

The second point I want to talk about is in terms of value for money. We know that the cost-benefit analysis in regards to these reforms has not been robust and it has not been substantiated. Labour has a majority in this House, and they will use it today to ram through this bill at first reading. MPs on the other side of the House will ignore their local communities and back these reforms.

Sadly, there is nothing in this entire process that gives me any hope that this Government will listen to any feedback through the select committee process that will follow, and I expect they will simply treat that feedback as another rubber stamp and pat themselves on the back and say, “Job well done.” Well, this Government continues not to listen to Kiwis and our communities, but we are.

National hears the voices of our local communities. National has the backs of our local communities and local government across this country. National will repeal three waters.

Thank you, Mr Speaker. I think that Mr Watts’ speech was about 8½ minutes and never once did I hear a solution. Never once did I hear an alternative. Never once did I hear “We know how we can fix this, we will work constructively with you and we’ve got a solution for you.” Never once did I hear any solution from that side of the House.

But listen up: “Titahi Bay residents frustrated as sewage flows on to the beach, faeces and toilet paper on to the street”, “Wellington water woes becoming daily disasters, council[s] [are] under pressure”. Here’s a good one for you: “Wellington businesses sick of constant ‘poo-namis’ stench after latest burst pipe[s]”, or maybe one from Mr Watt’s electorate: “Auckland’s North Shore beaches are clean, but sewage pollutes inner harbour beaches”. Or this one: “Havelock North campylobacter study estimates 8320 [people] were infected”. I can go on and on and on—pick a different region throughout this country for why this bill is needed, why this bill is a solution to all the infrastructure woes that have led to poor health outcomes.

I quote John Wesley-Smith, the Tītahi Bay Surf Life Saving Club chairperson, “Our biggest worry is sewage. We’ve got sewage coming from everywhere at the moment on our beach. [It is] really affecting our community and our club, primarily because we can’t put people in the water.’ Hundreds of kids come to the beach every Sunday for the club’s water safety programme - but in the past 12 months, one-third of all these were cancelled or scaled-down because of the health risk.”

This is an issue in Tītahi Bay. It is an issue in Porirua. It is an issue in Wellington. It is an issue in Gisborne. It is an issue in North Shore. But, again, that side of the House has not come to the table with an alternative solution to provide New Zealanders with a constructive way to fix the issues that this bill is trying to solve. New Zealanders do have a right to expect that when they turn on the tap, the water that comes out is clean and that it’s going to be safe to drink and that it won’t make them sick.

In a developed country like New Zealand, we should not be having these problems. We should be trying to keep our communities safe. We need to allow for growth. Kāpiti Coast is one of the biggest growth populations—it’s estimated to be the biggest growth population—but the infrastructure needs to be able to set up in order to allow for that 30,000 growth that’s going to occur. Recent estimates show up to $185 billion worth of investment is required in New Zealand’s three waters infrastructures over the next 30 years to address the years of under-investment in maintenance and replacement.

For decades, councils have had to make a trade-off—decades. For over 20 years, this problem has been on the table. We’ve had a Minister who has worked incredibly hard for four years—four years—and the members on the other side of the House still laugh, but they still don’t provide an alternative solution. Instead, we have a Minister who’s worked with officials, who’s worked with councils, who’s spoken to real experts—real experts—in this. They’ve helped her to develop a decision that is bold and one that has had to be made because, again, in the alternative, there is nothing. In the alternative, there is nothing.

So privatisation protections—I heard on the other side of the House issues around privatisation, and yet when the Minister approached them and actually asked them to help us secure those privatisations, what did they say? Again, no. No solution—nothing—nothing constructive has been brought to the table to be able to help New Zealand communities protect their assets.

So what does this bill do? It allows for continued public ownership of the water services entities. It contains a number of safeguards. It requires a minimum of 75 percent of votes in a public referendum for any privatisation proposal to proceed. Furthermore, no privatisation proposal could proceed without the agreement of all councils and the communities they represent. Again, that’s based on a longstanding provision in the Local Government Act 2022. The bill requires that an entity must not use its assets as security for any purpose, divest its ownership in a water service, or sell or lose control of significant infrastructure—that is the status quo.

But, again, no alternative solution—nothing to help our communities throughout the country. This country, my electorate, and Mr Watts’ electorate of North Shore deserve much better than this. So, therefore, I stand in support of this bill. I commend the Minister for the work that she has done across our communities with her officials, looking at international experts, as opposed to those on the other side of the House, who have provided nothing. I will commend this bill to the House.

ASSISTANT SPEAKER (Ian McKelvie): Just before I call Matt Doocey, I remind members on my left that the select committee stage starts in two or three weeks’ time.

Thank you very much, Mr Speaker. I would like to start with a question for the Government members: if this was such a good idea, when Christchurch ratepayers organised a public meeting on three waters, where my colleague Nicola Grigg attended to debate the issue on behalf of the Opposition, why did not one Labour Government MP attend that public meeting? Where was Sarah Pallett? Where was Tracey McLellan? Where was Poto Williams? Where was Megan Woods? Where was Duncan Webb? Why would not one Labour MP turn up to that public meeting if this was such a good idea? Why would not one of them turn up to that public meeting for Christchurch ratepayers? It’s because—let’s be very clear—New Zealanders do not want this reform.

So today I rise not only on behalf of the National Party, which opposes this three waters bill, but I stand and rise on behalf of the people I represent: the electorate of Waimakariri, which actually went to their ratepayers and consulted them, because at that time, this Government had led them to believe, in good faith, that they would be able to opt out: 95 percent of Waimakariri ratepayers oppose this and wanted to opt out—95 percent of those who were consulted.

Then we found out after that that papers revealed that what was good faith was actually bad faith, because this Government had agreed to forcibly seize ratepayers’ own water assets to compulsorily centralise well before that consultation period had started. That is the bad blood that this bill comes into the House today on.

New Zealanders have been misinformed, and look at the advertising campaign: $3.5 million, publicly funded by taxpayers. Remember the ads where there was sludge coming out of the taps? One commentator called it “propaganda spreading false truths”. Another commentator called it “scaremongering” and “full of misinformation”. Another commentator said, “Irresponsible, misleading, and inappropriate”, and the gall of this Government last year to publicly recruit misinformation analysts. Well, they should have got those misinformation analysts to work on the advertising campaign of three waters.

This was nothing but misinformation, because this Government only has one trick in its playbook: any reform they do is about centralising. It’s about taking things away from local people. This bill will pass today because Labour has a majority in this Parliament. I expect the select committee to go around the country and hold select committee hearings in every region of New Zealand to hear from New Zealanders what they think about this bill, because, let’s be very clear: this bill is theft. This bill is about forcibly seizing ratepayer assets in areas that have worked hard over generations to fund their water assets. This Government comes in and is going to seize their assets.

Let’s be very clear what water assets are about: water assets in regional New Zealand are about a relationship. They’re about a relationship with landowners, who’ve given up their land for councils to put in water assets. Let’s look at what happened after the Kaikōura earthquakes, where water engineers and staff got together with council staff and farmers and concerned members of the community. Within weeks, they had those water assets in North Canterbury up and running again. How would a mega-entity the size of the South Island have the institutional knowledge and experience—

💬 Maureen Pugh: And relationships.

—and the details—and, as Maureen Pugh says, because she knows exactly what happens in West Coast - Tasman, it’s about the relationships. These are positive relationships. They’re about goodwill and trust.

This Government—this arrogant Labour Government—think they know best. They know best, because for them it’s about bureaucrats in Wellington. We know the running count under this Labour Government: 14,000 extra bureaucrats in Wellington, who are now going to tell ratepayers in Selwyn, in Waimakariri, in West Coast—from the beltway of Wellington, they’ll be telling you how to run your water assets that you actually owned and now will have no control over. So what we see is a Government that was always going to centralise these assets.

We’ve heard the call from Government members who’ve said, “Well, what about alternatives?” Well, what about the group of 23 councils that got together—Communities 4 Local Democracy—to put an alternative together? That was dismissed. Their alternative would have given local people control of their water assets. I say in response to our spokesperson Simon Watts and our previous spokesperson Christopher Luxon that they actually have been very clear the whole way through with an alternative.

A National Government will repeal this three waters legislation, and then we will work in partnership with each council. We will co-invest with each council; not only that, we won’t ram through amalgamations. We will work with councils that have common goals around collaboration. That’s what we will do, because Labour will take “local” out of local people’s views. But we have been very clear: we will work with councils. We will partner up with councils because councils know their communities. Bureaucrats don’t know the communities of the regions of New Zealand, but the councils know them.

We will have an alternative because we will co-invest and we will collaborate with councils, because all this is is a race to the bottom. It actually incentivises councils who have been negligent. What we say to the councils who have worked hard is that all you’re going to do for your good work is to have your assets taken away from you.

In the time of a cost of living crisis, at a time when every family around New Zealand is tightening its budget, this Government that’s addicted to spending is going to blow billions of dollars into a flawed reform. At a time in regional New Zealand where they’ve seen no investment into infrastructure such as transport, they’re going to watch a Government blow billions of dollars into a reform that is flawed.

We know it’s flawed. That’s why it’s taken over a year from when it was first suggested to be introduced to the House, because it actually is flawed. It’s gone to working groups to look at workarounds, but nothing will work. Why would a Government not listen to New Zealanders? They know it’s unpopular, but, as my colleague Simon Watts alluded to, it will be left until the day after the next election, when the Labour MPs who have lost their seats start to think back to where it went wrong. That day will be today, when an arrogant, out-of-touch Government is ramming through a centralisation agenda, a central-planning agenda, for any issue that they want to centralise.

But the issue here is that this isn’t your assets. The Government is actually in court this week because they’ve been taken to court by councils—that’s the level of feeling.

This is only the start. It is the first reading. You are going to have to go out and take this bill around the country, and then you will hear what New Zealanders think about this three waters bill and why they are opposed to it. I’m proud to stand on the right side that will repeal and replace the three waters legislation in 2023.

I’ve got three words for those eloquent, passionate speakers from across the floor: gone by lunchtime. Because if one cares to go through the record of debate here, you will see that equally passionate, long speeches were made against so many of the things that Labour have done when in Government. I think even the leader of the ACT Party pointed out here, early in the week, that not one of the things that the Labour Government has introduced has ever been reversed when a National Government has come back in. And, actually, this will be true this time. I see Maureen Pugh over there, ready to pounce, ready to stand. She knows full well from being a Westland councillor, and I think Westland mayor, just how bad things are, water-wise, there, as they are in most other places around New Zealand.

I want to remind that last speaker, Matt Doocey, of one thing: he’s making a big mistake, because what he’s talking about is this piece of legislation taking the assets of those councils he mentioned. Oh no—they are taking the liabilities, and if the situation should arise, and God forbid it does, that there was a centre-right Government at the end of the next electoral cycle, then what they will be standing and doing on this mythical first day after the election is returning those liabilities to those local bodies, because that is what this is about.

Now, the previous speaker, Barbara Edmonds, went through a list, and I won’t repeat that, of the various councils, whether it be Wellington Harbour here. Every one of you electorate MPs over there will know that you have major issues around water, around sewerage, and around all other aspects of water in your electorates. Now, you know that your councils can’t do anything about it. You know that each of those facilities is only going to deteriorate over time, because, quite frankly, no one can do anything about it. Oh, and, of course, you could ask your local ratepayers to pay for it. And the costs add up to about $1,900 to $19,000 over the next 30 years, depending on the location. Under three waters, yes, there will still need to be a contribution, but it will be between $800 and $1,600.

So go back and tell, honestly, those ratepayers of yours that what you are opposing here is something that is going to reduce their rates bill considerably, because what it is going to do is ensure that those small councils that you have, who have got an inability to invest what needs investing, will now be able to be centralised to a body that will have the borrowing power, that will have the sheer grunt, to be able to deal with these issues.

One doesn’t have to look very far from this House to see what happens if you don’t have good infrastructure. In fact, you know, I’m somewhat of a student of history, and recently I read about the Thorndon area here in the late 1800s, in the area of Katherine Mansfield. It was rife with typhoid and cholera because there weren’t any sewerage systems. It was all going into the streams, which people were forced to drink out of. In fact, I saw a statistic that said that 550 people were killed by typhoid at a time when there was only a population of 30,000 here. Now, we learnt and that was fixed, and each of the metropolitan areas, or even rural areas, we live in have learnt over the years that you simply must invest in your infrastructure. The genesis of this piece of legislation was, I think we all agree, what happened in Havelock North. That was a time when we were reminded that if you don’t get it right, people do die.

Now, go through, again, a list of the places in New Zealand that currently have boiled water notices. I know my own family in Westport have been under a boiled water notice for a number of years. The Buller District Council is no way in a position to invest the necessary resources to ensure that they are able to ensure that they can turn on the taps and drink out of the tap. Now, I look around the House. I guess most of us here have travelled; probably many have travelled to Third World or even Second World countries. And what’s one of the first questions we often ask when we get there? “Can you drink the water?” It’s often a sign of the country, of how well the infrastructure works, as to whether or not you can drink the water out of the tap. In New Zealand, we’ve always prided ourselves that we can drink the water out of the tap, that when we flush the toilet it will go into a place that is not going to add or cause diseases locally. And, again, these are the types of diseases, these are the types of results, of not getting it right with our infrastructure.

So, again, I’ll go back to what the previous speaker talked about. Why would we do this? It would be so much easier for a Government to do, essentially, what the previous Government did and do nothing, to sit on the status quo and just wander through, don’t get upset, make sure that people don’t go to public meetings because nothing is happening. Well, I’m proud to be part of a Government. I mean, I’ve come to politics late, and I probably won’t be here for that long, but I’m certainly not interested in spending the time I’m here in politics on just sitting and watching the status quo, protecting the status quo. We have an absolute obligation while we’re in this House to be courageous.

How many times do you hear commentators saying, “If only we had some courageous politicians.”? Well, what you’re seeing across the House—and I see all the heads are down. You may well keep your heads down, because what you are seeing on this side of the House and what you are seeing from the Hon Nanaia Mahuta is courage. What you are seeing from the Cabinet here, who’ve endorsed that, what you’ve seen from the caucus here, that have endorsed it, is courage. Yes, Mr Doocey, it may well be that there is some nervousness, because around these decisions there should always be nervousness. If you come to this House as a backbencher or, in fact, at any level, and are only governed by your fear of not being re-elected, then you shouldn’t be here. So for you, Mr Doocey, to sit here and say “You should be sitting over there doing nothing so you won’t be worried about being thrown out in the next election.”—well, shame on you, Mr Doocey, because I didn’t come here to do that and I hope you didn’t come here to do that either.

I’m very proud and I’m very pleased also to be on the select committee that is going to be able to consider this bill. Like many, when this came in, one of the first things you always ask is, where is the case for change? Well, the case for change is there. There’ll be speakers, and I’m sure there are probably speakers on the other side of the House. Mr Watts dared to actually stand up here and say that there’s nothing wrong, essentially; that everything’s right. Everything is fine in the State of Denmark. Well, Mr Watts, it is not, and I’m sure that even in your own electorate it is not either.

So I’m very much looking forward to being part of the select committee that is going to be considering this bill. Yes, there are issues, and I’m certainly very keen, as challenged by Mr Doocey, to go to every corner of New Zealand to hear from these people, because I know that I will learn. But I just hope that those people that do turn up at these meetings—and I’ll challenge anyone who’s listening now that’s going to be coming to a meeting to also bring your ears with you and prepare to learn that there may actually be a bigger world and bigger issues than that which you are being leveraged by the Opposition at the moment. Because if we don’t do this, someone else will have to do it. And I’ll tell you what, that someone else will be charging a lot more, and, ultimately, the ones that will pay will be the very ratepayers that those opposite pretend to be representing here today.

So I have no hesitation in commending this bill. I’m looking forward to working on it, and I, again, challenge those who are coming to come with your ears open and your eyes open, and we will all learn something from this bill.

Thank you, Mr Speaker. I’m pleased to take a call on the Water Services Entities Bill. There was quite a spectacular thunderstorm at lunchtime, with some of the loudest peals of thunder I’ve heard. I was reminded of that, because there’s a lot of sound and thunder coming from the Opposition at the moment, but not a great deal of light.

This bill is the result of a phenomenal amount of work, led by the local government Minister, Minister Mahuta. There’s a huge analysis—the regulatory impact statement alone is this thick [Holds up regulatory impact statement]—and a lot of reports on the Department of Internal Affairs website, and yet all National can do is oppose it. I encourage the National Opposition to take a much more constructive approach—as they did on the Water Services Bill, which established Taumata Arowai—of looking at how the bill can be improved, looking at the issues that have to be dealt with, rather than just making these bland statements, in strong terms, though, that they will repeal it. That doesn’t help anyone when there has been a comprehensive investigation of some of the issues in the management of three waters and the huge infrastructure deficit.

Our three waters are some of the most important infrastructure we have in Aotearoa. They’re worth $55 billion in terms of their replacement value, but study after study has shown that the 67 local authorities which are largely responsible for providing three waters have, for a long time, been under-investing in maintaining and improving the infrastructure, particularly with the rapid population growth we’re having in Aotearoa New Zealand. So there is a big gap. It’s been shown there’s about $120 billion investment required—$120 billion to $180 billion—and yet at the moment, in their long-term plans, local authorities are proposing to invest between $42 billion and $81 billion over the next 30-year period.

How that gap is to be filled is one of the reasons why we’ve got this bill, because it’s been a decision by Labour that there needs to be larger-scale entities which enable the three waters assets to be taken off council balance sheets so that they are freed up from the constraints on borrowing that apply to councils, and that will enable the entities to borrow more, to invest more, to smooth the costs of maintaining and upgrading infrastructure over future generations as well.

The Green Party has got concerns with some of the provisions in the bill, and I’ll talk about that in a minute. So we are certainly supporting it to select committee and looking to play a constructive role there, because this reform is happening. It would be a huge waste of time, energy, and resources, and all of the mahi that the Minister has led in terms of engagement with iwi Māori, engagement with local authorities, engagement with communities on developing the legislation if that was just overturned and we stuck with the status quo. Sticking with the status quo doesn’t recognise that we need change. Mr Greg O’Connor talked about people on boil-water notices. There are over 40,000 people throughout Aotearoa who are under permanent boil-water notices. We don’t have the drinking water infrastructure that is appropriate for a country in the 21st century which says it is a developed country.

I’d really like to acknowledge, as well as the work of officials, the work of parliamentary counsel. This bill is a very clear, readable bill, and it’s easier to actually read the legislation to find the structure than it is sometimes to go through all of the background reports. So these four water service entities will take over the responsibilities of territorial authorities from 1 July 2024. The regional representative groups that the bill provides for are a key part of ensuring that there is community representation and real input into the management and delivery of three waters services. Now, these groups will have about 12 to 14 members, an equal number of territorial authority and mana whenua representatives, and the opportunity that the bill provides for genuine co-governance is something that the Green Party thinks we should embrace as a country, because it better implements Te Tiriti, and because there are a number of other provisions in the bill which ensure that the entities actually have the capability, the systems, and the processes in place to implement the principles of Te Tiriti, and to implement te mana o te wai.

So equally divided between territorial authority representatives and mana whenua representatives, the regional representative groups will appoint the committee which appoints the board of the water services entity. Those boards are to be competency based. Those competencies include mātauranga Māori, tikanga Māori, and an understanding of Te Ao Māori. It’s the regional representative groups which set the strategic direction and the performance expectations for the entity in their delivery area, and it’s the regional representative groups which actually review the entity’s performance. So they’ve got to issue a statement of strategic and performance expectations and their priorities for how the entity will operate. The entity itself has got to provide the regional representative group with a statement of intent, an asset management plan, a funding and pricing plan, and an infrastructure strategy.

So the regional representative group, in providing comment on these, must take account of the diversity of the community, and it’s able to set up regional advisory panels within subregions to actually help provide that community perspective. So that is a strong sort of governance regime that’s set out in the bill, and the boards are to be six to 10 members for each of the entities. They’ve got to really have that knowledge of performance monitoring, of governance, and they’re really accountable as an entity to the regional representative group. And as the Minister noted, the consumer forums that the entity has to establish and the boards must hold at least two public meetings a year. As the Minister noted, too, there’s been a lot of concern about asset ownership, and that’s why the assets that are currently owned and managed by territorial authorities, those local authorities will have a proportional share based on their population, and that shareholding interest will help ensure that the community can see that the assets continue to be owned by the community.

So the benefits of these large-scale entities are—like Watercare has shown in Auckland—that it is about having the scale to actually significantly upgrade infrastructure. Water services are not about relationships, as Mr Doocey suggested, potentially in some of those smaller local authorities, but it’s about infrastructure. For a lot of our big councils—the metropolitan councils—the drinking-water pipes are anything between 50 and 60 years old. We saw the result of that in Dunedin with problems there. The waste-water pipes are 40 to 50 years old; there’s a huge need to upgrade and maintain those.

So the concerns that the Green Party has are with the scale of the entities. A lot of the contracts that are currently operated or contracted out by councils to smaller contractors within their communities—there’s no protection for that. There’s a potential for some of the larger engineering companies to take on contracts, because the divestment provisions certainly apply to where assets are divested, which would prevent the entity delivering three waters services, but that’s a very high threshold. There’s nothing to prevent the entity contracting out quite large parts of its operations. We’d like to see some protection for the more than 1,000 local contractors and businesses that are involved in three waters management.

We still, in the Greens, have a very big question over whether stormwater should go immediately to the entities. Stormwater management relates very much to the land-use planning that local authorities do in their district plans, in their resource consents for land use. Councils like Christchurch City Council are making an enormous difference in terms of reducing flood hazards in the Ōpāwaho / Heathcote River through large retention basins which they are putting in, which provide for recreational opportunities, for walking, for mountain biking, and a lot of riparian planting, so they’ve got biodiversity benefits, and they’re really essential in stormwater management. So I really hope that the select committee looks at this whole issue of stormwater management.

The other issue is entrenchment. With the Opposition having failed to support the Minister’s suggestions for 75 percent entrenchment, we hope that the select committee looks at a mechanism for potentially 60 percent entrenchment, representing those parties that are prepared to support the bill. But I look forward to constructive consideration of the bill at select committee. Thank you.

ACT opposes this bill, ACT opposes this three waters reform, and should we be part of a future Government, we will act to repeal it. This current system is not up to scratch, but there is nothing in the Government’s reform agenda which will fix it. Taking control of assets away from councils is wrong. Centralising assets and new bureaucracies only adds complexity and won’t get water services fixed.

This bill says nothing about who will pay for the infrastructure and how it will be funded. Now, the role of a Minister, bringing a bill to the House, is to explain how this legislation will actually solve a problem. The Minister has failed on all accounts. The Minister claims all communities in New Zealand will benefit by receiving better water-quality services while paying less than they would without reform. That is farcical; the evidence put up by the Minister is not credible. How can a system with four new corporate headquarters, hundreds of iwi Māori and council representatives, multiple representative groups—it’s going to be like a Parliament of three waters. There’s going to be multiple councils all across the country, representative organisations—how could that possibly be cheaper than if local councils simply delivered the work and fixed the pipes? The Minister’s claims about cost savings are nonsense; the Minister does herself and the water industry no favours by continuing to peddle this nonsense.

Now, the worst aspects of these reforms are the divisive co-governance proposals, which give iwi Māori organisations and their nominees a seat at the table just because of who their ancestors were. All New Zealanders want clean and safe drinking water, not just iwi and Māori. There is no rationale for continuing with the co-governance nonsense. Nanaia Mahuta, the Minister, has herself admitted that Māori have not expressed rights and interests in three waters assets above those of ratepayers in their respective communities of interest. There it is, Minister; you have no justification for pursuing co-governance as part of this reform.

That should have meant the end of it, but it hasn’t. Now, when I was a university student and I sat in my engineering class, I can’t imagine another student sitting there thinking, “Because of my grandparents, who they were, and my great-grandparents, or my cultural ethnicity, I somehow know something more about how to manage water quality than the student sitting next to me.” It’s a nonsense, Minister; it’s demeaning to tens of thousands of New Zealanders who work in the water and environmental space.

But the Minister’s doubled down on it. There’s now two layers of iwi Māori and local government co-governance, before you get to the actual water services entity’s board. If this was a satirical TV show, three layers of governance to fix three waters, it might be funny, but this is Labour Government policy, and New Zealanders will be expected to pay for it if it passes—I doubt it will pass at this point in time.

Now, I just want to define what three waters are—the problem, and how ACT would solve it, for the House, for the Minister, and for those people who might be watching and wondering at home. Firstly, the drinking-water, the waste-water, and the stormwater systems that support our local communities have been paid for over decades by ratepayers through their rates and through things like DCs, or development contributions. There are problems with the three waters system that we currently have. There’s been an under-investment in maintenance and renewal, and we’ve all seen images on the television or in our newspaper of broken pipes, geysers of freshwater in the air, big holes in the road being fixed again—there is a problem.

There’s also a second problem, which is that the cost of providing three waters infrastructure for new housing developments is excessive, and that cost has fallen exclusively on local councils. They don’t have enough money to pay for this, so they react in a perfectly rational way. For example, with Auckland Council, there’s a new development proposed by a private sector developer to build 70,000 homes, a new township around the size of Napier, in Drury in South Auckland. Auckland Council have said they’re going to appeal the consents that that developer has just attained because they can’t afford the billion dollars of infrastructure costs to connect that development to the rest of the network. Now, it’s mad that we’ve got councils actively opposing developers who want to deliver 70,000 new homes because the infrastructure funding and financing model is broken. This legislation, this bill, will not fix that.

But the hand-break behaviour that causes councils to behave in that way actually comes from the incentives in the legislation established by central government. And this is what ACT would do to fix it. Firstly, the drinking-water problem doesn’t need to be solved by this bill, because it’s already being solved by a previous piece of legislation which set up the drinking-water regulator Taumata Arowai. Now, we know that, because the newly appointed chief executive of Taumata Arowai went on Newstalk ZB and he told Mike Hosking on 4 April that, actually, his agency, Taumata Arowai, already has the power to make people change the way they treat drinking water, to manage infrastructure, and even powers to prosecute those organisations which don’t do it properly.

Bill Bayfield said that the investment in drinking water has nearly doubled in three years—council investment has nearly doubled in three years—and that councils are on track to meet their drinking-water obligations. So, Minister, you can take drinking water out of the equation; that is not a justification for this legislation.

ACT’s alternative water infrastructure plan, which we have proposed to the 67 territorial authorities, local councils, and the 12 regional councils—many of whom replied back saying, “Thank you, ACT. We appreciate your constructive proposals. We support much of what you proposed.”—would do the following. We would provide for councils to enter voluntary shared services agreements between councils, local councils, and regional councils, to achieve the benefits of scale, while retaining local ownership and control. Councils like Auckland and Waikato District Council already do this. They share a geographic boundary and they also share water infrastructure. It makes sense for them to enter into voluntary shared services agreements. This legislation doesn’t do that.

ACT would establish long-term central government and regional government partnerships. That means that the regions would identify where they need to build stuff. Central government would agree, and then those upgrades would be tailored to actually deliver new services to unlock land for housing. That model is working right now for transport alliances in Northland between central government and local government roading bodies. It’s working in Auckland with the Auckland Transport Alignment Project, between central government and local government to deliver busways and suchlike. This is a model that works, Minister.

We would also fund infrastructure by sharing 50 percent of the GST that central government collects on new building with local councils, to cash flow and fund the water infrastructure that unlocks new land for housing. Our deputy leader, Brooke van Velden, housing spokesperson, has a member’s bill which proposes to do just that. There’s legislation available right now that the Government could pick up which would solve part of the infrastructure funding and financing problem.

ACT would also establish additional public-private partnerships through our proposed nation-building agency. That’s right: a nation-building agency focused on delivering infrastructure. Now, in the year before COVID-19 struck, over $300 billion was invested internationally by the private sector, by superannuation funds, by KiwiSaver funds, funds similar to ACC, and potentially even iwi investment funds would be interested in investing in infrastructure that actually delivers water services to communities.

For rural water users, ACT would extend the exemption on domestic suppliers so that up to 30 end point users would be exempt from the regulations which currently stop rural communities supplying water to themselves. That water is primarily used for rural use, and that’s why these rural users should be given an exemption.

Now, ACT opposes this three waters bill. If we have the opportunity to be part of a future Government, we will repeal it.

Thank you, Mr Speaker. I think the last speech by Simon Court is a really good example of how the other side of the House are minimising and diminishing the extent, the curliness, of this water issue that was so clearly articulated by Eugenie Sage when she showed the amount of work and thinking that has gone into what really is a wicked problem. Simon Court basically, when I heard him, said, “Let the councils fix the problem.” Well, that’s fine for now—some councils will be able to. Some won’t because they haven’t been able to fix the problem in the past and it’s become overwhelming, and they certainly won’t be able to fix it in the future. They simply don’t have the ratepayer funding to do so. So there doesn’t seem to be an understanding of the scale of the problem.

What is really hypocritical is the assertion about this being divisive by our side of the House, because the main thing that has been divisive is the deliberately divisive narrative peddled by the right side of the House—the other benches—and that has been to lead people away from doing the serious work of grappling with this wicked problem and understanding the challenges—what the opportunities are and how we’re going to fix it—and instead becoming swayed into a divisive narrative that basically has racist undertones, political meddling, and unfounded counterfactuals. And this was actually articulated really clearly by Bryan Cadogan, who is the mayor of a rural area in my electorate of Clutha. He’s been a mayor for four terms. He’s the chair of the Rural Supplies Technical Working Group, and he knows what he’s talking about. He has said that when we drill down into this issue what we really need to come to terms with is the need for alternative funding streams, and the need to get Government support. He refers to the rate increases in one the townships in his electorate. Prior to him coming in as mayor it had had a 292 percent increase in rates. So he has had his ideas around three waters. He has gone into it with his eyes open. He has worked with us, and I really commend him for doing that.

This week they’ve come up with a report—it’s the report of the Rural Supplies Technical Working Group—that has 30 recommendations. Those recommendations would not be able to be made and we would not be able listen to them as a Government if they had not continued to engage with us. In an article earlier this year, Bryan Cadogan spoke about the difference between the urban issues of water and the rural. For the urban issues, if you stop the three waters reform process you open yourself up to a world of financial pain. For the rural sector, continuity of supply is the key issue. So a nuanced approach has to be taken. It is not as simple as simply dreaming up something quickly at the last minute, as ACT is proposing to do. This is the culmination of years and years of work.

On Tuesday, 2 February 2021 some Otago residents were told they couldn’t drink water from their taps, and the Dunedin City Council issued a “Do not drink” notice. That was in Waikouaiti, Karitane and Hawksbury Village, and that was when they found intermittent elevated lead levels in some of their water sampling. So those water notices were basically telling people not to drink water, not to use water in food preparation, and not to use ice. They had to get their water from a tanker trucks, and that was between February and August—

💬 Simon Court: Point of order, Mr Speaker. The member’s suggested that the ACT infrastructure plan was devised at the last minute. I seek leave to table the letter which I sent to the mayors—including Bryan Cadogan, whom she referred to—with evidence that ACT’s water infrastructure plan was in fact proposed in August 2021.

ASSISTANT SPEAKER (IanMcKelvie): Leave is requested for that letter to be tabled. Is there any objection? There is no objection. Leave is granted.

Document, by leave, laid on the Table of the House.

I think I have a difference in opinion about what “last minute” means, because 2021 is certainly a lot later in the piece than the work that has been done by our Minister for many years on this issue.

But the point about what happened in Dunedin was actually no fault of the council. It turned out that the contamination levels in the water, after extensive examination, looked to be out of the private side of the water supply—it was out of tapware in the houses. But it did cause a huge issue and a huge disruption in the lives of those people. And that was a council that had mainly done everything right, had invested carefully and planned carefully in terms of infrastructure. So it was a really big imposition. What would happen where a council has not done that? We know there are many throughout New Zealand who simply have not done the planning, have not had the ratepayer base to do the planning, and have been essentially kicking the can down the road on this issue, which is what the National Party is suggesting we do, unless, of course, Matt Doocey is sincere in his statement in the House today that they will invest what will need to $185 billion into water infrastructure. That’s what I heard him say—that they do plan to tackle it—but I didn’t hear what his plan was.

We do have cracked, old, defective underground pipes, and in the year prior to the Dunedin example I mentioned, more than 5,750 people in 25 areas were affected by permanent boil-water notices, and many of those have been in place for years. It’s not just drinking water; it’s also waste water and stormwater. Newsroom did a piece earlier this year, in March, which spoke of the previous years of Water New Zealand’s national performance, talking about the many and various ways our water infrastructure is failing: stuffed pipes, huge losses through leaks, unmonitored sewage overflows, massive unpunished non-compliance at waste water treatment plants, significant skills shortages, and historical underspending on water infrastructure by almost all the councils in the country. The article went on to say that a year later—when this report was published, its own report—almost nothing had changed.

In the Finance and Expenditure Committee just two days ago we heard from Treasury in its own report, He Puna Hao Pātiki: 2022 Investment Statement, that there is an infrastructure gap. It looked at the Water Industry Commission for Scotland’s assessment in terms of the needs for three waters. It talked about the need for up to $185 billion over 30 years due to network growth, increased service levels, the need for asset replacement and refurbishment, and potential efficiency gains. Yes, there is a variance depending on the methodology and assumptions, and I have had arguments with councillors at the Dunedin City Council about that. However, the Treasury report goes on to say that even taking into account the differences in the variances and methodologies, there is an infrastructure gap in New Zealand, and high-profile water network failures provide anecdotal evidence that supports quantitative measures of a gap. All of this points to a likely potential need for additional infrastructure investment to maximise the contribution that infrastructure provides to productivity and wellbeing outcomes.

It’s not just the safety issue around water. It is also the unfairness about where we live in New Zealand as to how safe our water will be and how much we will pay towards the services. There’s another article in Newsroom that talks about reinventing the wheel 67 times. It’s simply not efficient and it’s not fair. The average New Zealand property paid $960 for water and waste-water services in the 2020-21 fiscal year, but the highest charge was $2,237. The same goes for the waste-water component. The highest regional waste-water charge was $1,205; the lowest was $140. So there is a massive disparity there. It’s just not fair to be expecting different people to pay different amounts towards the same services.

This is a wicked problem, as I’ve tried to show this House, and there are two options available. One is to do nothing, which is what successive Governments have done for years and which is what the National Party has suggested they will do, since they want to start again and kick the can down the road. There is “do something at the last minute” like the ACT plan, which I think was devised about a year ago. It is very last minute in terms of wicked problems like this. Or there is taking a really strategic approach, and I commend the Minister, because this bill and the series of changes futureproofs water. It is a solution that maintains local ownership. It is in line with Te Tiriti principles, and it ensures the equitable and efficient access to and use of water, and it is strategic.

It took a huge amount of bravery for Minister Mahuta to take this on, and I am quite horrified, actually, by the narrative and some of the undertones that have been levelled against the Minister when what she is doing is in the best interests of all New Zealanders, not only for our generation but for future generations who would otherwise pay the price. I commend this bill to the House.

I call Nicola Grigg—five minutes.

Thank you, Mr Speaker. I think this is what some might call the beginning of the end, and I’d like to make a prediction to the House this afternoon: this is the moment that historians will look back on and refer to as the beginning of the dying days of the Ardern Government. This is just the latest example of Labour riding roughshod over our precious democracy. It is using its absolute majority once again to ram through a suite of bills that are some of the most anti-democratic pieces of legislation that this country has ever seen. This bill that we’re here debating this afternoon, let’s be clear, was not in Labour’s election manifesto. On the back of yesterday’s second reading of the Canterbury Regional Council (Ngāi Tahu Representation) Bill, this is just another example of the Labour Government riding roughshod over our democracy and ignoring the voice of the people. It is the workings of a Government that is tone deaf and utterly arrogant.

Not only that; it is deceptive. Let’s talk about the bribes that have been rolled out to local government across New Zealand—bribes; so-called no worse-off funding—in order simply to not speak ill of the Government. I know councils around New Zealand using that money for roundabouts and cycleways. Tell me how that is going to improve the three waters assets and delivery in this country. Back on the subject of deception, the Government has engaged in the most deceptive advertising regime this country has seen. It has blamed local councils, on a TV ad, for the quality of our waterways. It has spent millions of dollars of taxpayer money to publicise blatant lies. Councils are furious. It is ducking and diving and dissembling and dismissing, and today we have in front of us the first bill in a suite of bills that will tear three waters assets out of the hands of local ratepayers and into the gaping jaw of the behemoth that has become the Wellington bureaucracy. What this reform proposes is a smorgasbord of messy, complicated, convoluted governance structures. Nobody knows who will own what or what share of ownership anybody will have.

💬 Angie Warren-Clark: Read the bill, then.

I have read the bill, Angie Warren-Clark. I suggest you do too. This bill that you are referring to is totally ignorant of the fact that New Zealand does not want it. Councils up and down the country have rejected it. Communities across the North Island and across the South Island are protesting it as we speak. The people of Selwyn do not want it. The ratepayers of Selwyn have spent almost 30 years building, amalgamating, and paying for about $750 million worth of infrastructure asset. The 72,000 people in the district that I represent do not want this. They have not been asked. They have not been consulted. The Selwyn District Council is just one of 22 district councils across the South Island that are going to be shut out of town. This bill does away with their representation. Those 22 councils will be amalgamated into entity D, but we will have just seven seats. Of those 22 councils, there will be seven representatives.

Now, the remaining seven seats will be taken up by mana whenua, by iwi. Before Minister Mahuta can once again challenge us on this side of the House, I would like to repeat the words of my colleague Simon Watts: National opposes a 50:50 co-governance arrangement at a regional representative level. Once again for the record: we do not support co-governance for public services like water delivery. This bill is as unconscionable as it is unconstitutional. There will be just seven voices to represent the million people in the South Island. This is classic Labour. It is ignoring the voice of rural and small communities. It is running a classic command and control and centralisation regime. Just like it has done with doing away with our district health boards and mega-merging everything into Health New Zealand, it’s going to try to do that again with our water assets. So I’m very much looking forward to a select committee decision to roadshow this thing, to take it across the country, to start listening to the people, because, trust me, they will not be shy in telling you what they think about it.

ASSISTANT SPEAKER (IanMcKelvie): Kieran McAnulty—five minutes.

Thank you, Mr Speaker. There’s a major issue facing every single district council in the country, and that is the huge level of expense required over the next few decades, 30 years, on how to upgrade and maintain our three waters services. The fact remains that many councils, in particular small rural councils, can’t afford to do this work—they can’t. I have in my electorate five district councils. I’ve met with all of them, I’ve heard their concerns, and I’ve relayed those concerns to the Minister. Many of those concerns have been implemented in the changes that have come out of the working group’s recommendations, and the bill is significantly improved as a result of that.

So now we’re in a position where we have a clear choice. We have a choice between reform and the status quo. We’ve heard it many times tonight from the National Party speakers: the National Party will repeal and reverse three waters. No alternative, no alternative solution, just the status quo. So we have a very clear choice. We’ve got a choice between reform and the status quo. And whilst many councils may have expressed concerns about the proposals—and the Minister herself has admitted that the process itself wasn’t perfect and that things could have been done better—if you ask councils, they will say reform is needed. Each of the five councils in the Wairarapa electorate have expressed concerns about the proposals as they originally stood. They still express concerns as it stands. But each one of them says that reform is necessary.

So while we’re standing here today in Parliament we can clearly say that we have two choices. We reform or we stay as we are. The National Party are proposing in every single speech that we stay as we are. That is what repeal and reverse means.

💬 Simon Watts: No, we didn’t say that—fake news.

Simon Watts is getting a bit wound up here and saying, “That’s not what I said.” It actually is and Hansard can show that. In the absence of any alternative solution, what other conclusion can we reach? The status quo is not sustainable.

If we look at the Wairarapa electorate, there are two district councils in particular that stand out for me. There’s the Tararua District Council and the South Wairarapa District Council. Both of them are significantly large rural areas with many small towns. The population is very small. The income level of the population is also relatively lower than the average wage of the country. They are facing significant rates increases, as it is, without facing the hundreds of millions of dollars each council is facing over the next 30 years.

If we stay with the status quo, as the National Party are proposing, it is the ratepayers that will face that bill. They can’t afford the rates as they are. They cannot afford the rate increases that are being proposed. And I don’t say that to lay blame on the councils, because every single council in the Wairarapa electorate is full of dedicated and committed community members who are doing their utmost for their community. But the situation they’re in now is one that they have inherited over many, many years. It’s not the councillors’ fault. It’s also not the council’s fault. But it is up to this Parliament to find a solution, because if we stay as the status quo, there will be no alternative but significantly increased rates, or the work won’t get done. Those are the only two options that councils will face.

And so while I fully acknowledge that there still are some concerns about this proposal, I maintain that what is being proposed today is significantly better for the small rural councils than the status quo. They can’t afford it. They won’t be able to pay for the work that is needed. Ratepayers won’t be able to afford it. Now, some may suggest that councils could borrow and pay that cost over a long period of time. Many councils can’t. Many councils are already at the cap of their borrowing, and that is why this proposal is structured the way it is, because the new entities will be able to access borrowing that councils individually cannot, and it is sufficiently removed from their balance sheet to allow them to do so.

In my final few seconds, I will point out that we actually have had an alternative solution put forward by National. It is the status quo, but Matt Doocey committed a future National Government to pay for these assets. That is $185 billion that Matt Doocey has committed taxpayers to pay. Under these proposals, taxpayers don’t pay a cent. I would put to them that this makes far more sense than this policy on the hoof that Matt Doocey put forward.

Thank you, Mr Speaker, for this opportunity to speak on the Water Services Entities Bill and to speak about pipes. Pipes are something that I’m quite interested in, having been a resource management and local government lawyer for a couple of decades and having worked for many councils in that time. So I’ve worked a lot within this three waters space.

When I started off with the Parliamentary Commissioner for the Environment in 2000, this was not a term that I was very familiar with: three waters. So I think it’s useful just to go over again what that is. It’s the drinking water, it’s the waste water, and it’s the stormwater. So it’s all those pipes and infrastructure that go with those three waters.

This is a term that’s cropped up within that two-decade career—this three waters term—to be able to think about them as whole because, of course, they are all interlinked. I haven’t found the definition of “three waters” in the bill, but if you go to the definition of “water services”, that is defined to mean “services relating to water supply, wastewater, and stormwater”.

This definition of “water services”, the three waters, links to the function of the four entities that are created by this bill. We’ve heard from the Minister that these four entities will include, for most of the South Island—Te Wai Pounamu—the Ngāi Tahu tikiwā, and then the other three are set out, as is that one, in Schedule 2 of the bill. So the function of these four entities that are established by this bill—noting as well that the transfer of assets is not part of this bill. That’s going to come in a separate piece of legislation that will have a lot more detail around it.

So we’ve got then the links. The function of the four entities in clause 12 is to provide “safe, reliable, and efficient water services in its area;”, so that is—

💬 Angie Warren-Clark: Say is again.

—the outcome that we are wanting, Angie Warren-Clark. It is the provision of safe, reliable, and efficient water services in these four areas across our nation. So these entities are about delivering on those three waters.

This legislation and this reform is not about water ownership. There have been long discussions in New Zealand about whether or not anybody owns water. Some people have said it can’t be owned—everybody owns it. There’s different views on that. Given the fact that you can do things with your resource consent, there’s a debate over a property right. That debate has nothing to do with pipes and this legislation, so I think that’s a really important piece to note in this bigger conversation about these three waters.

Now, we’ve also heard these concerns raised over the loss of ownership by local communities of these pipes and of this infrastructure. There are 67 territorial authorities around the country, and those are what are commonly referred to as district councils, unitary authorities, or city councils. So we’re not talking about regional councils here; these are territorial authorities.

These are the councils that own the pipes that deal with these three waters at the moment, and not all of those 67 territorial authorities have been able to finance that infrastructure to the degree that we would all like to meet that purpose of the Act, which, again, is the provision of safe, reliable, and efficient water services. That’s for many reasons. Some of these councils are very large and some are very small, but they have limited financial tools, and there are always trade-offs with ratepayers. If you are saying to your voters in your electorate, “Do you want to upgrade some pipes or would you like a new playground?”, often people will go with the playground.

I’ve seen different people define this issue as saying that the pipes—they’re not sexy. But they are very important and we see that when something goes wrong with them, and we’ve heard many examples today from Barbara Edmonds about the “poo-nami” and different storm events around this Wellington region.

There’s been this big problem, and we know that there’s $185 billion of investment needed over the next 30 years, and, frankly, many of those councils cannot afford to do those upgrades. One of the other reasons for that is because they are regulated in terms of how much they can borrow and what they can borrow against. So if you put all of these assets together, this is going to be very helpful in terms of what debt you can get and at what interest rates, and this—

💬 Angie Warren-Clark: Economies of scale.

“Economies of scale”, Angie Warren-Clark is saying. So this is the reason why this bill is going to the Finance and Expenditure Committee, because it’s about infrastructure and it’s about balance sheets.

These assets still remain in public ownership by the territorial authorities, and I’d like to pay some appreciation here to Tim Cadogan, who is the mayor of the Central Otago District Council. He was part of the representation, governance, and accountability working group. So out of that group came this idea of the shareholding model for these entities that are going to be controlling the assets. That’s based on your per 50,000 people of the population with at least—if you don’t have 50,000 people in your council then you get at least one share. These councils will this year be holders of the entities. So that is still in public ownership by the councils who have them at the moment, and they cannot sell those shares.

Then we’ve heard as well, in Schedule 4, that that provides the divestment requirements. So, again, it’s a 75 percent vote in a public referendum and agreement from all of those councils—those territorial authorities, districts, and cities, and the communities represented within them.

So then, over the top these entities, there is the regional representative group, and we’ve heard about that. This is the group that has 12 to 14 members and it does have an equal number of territorial authority representatives and mana whenua. What is the role of this regional representative group? It is not the group doing the delivery. This is the group that is to, instead, appoint and remove entity board members—you can see that in clause 28—participate in the entity’s strategic direction, and review the performance of that entity. Who are these people on the regional representative board? Well, they can be either elected members of those councils, the CEOs, or specialist senior managers within those councils if they’re the territorial authoritative representative, and it’s for mana whenua to decide their representatives.

The bill also includes a lot of requirements, planning requirements, asset management for the infrastructure, and provisions around the community engagement, and you can see a lot of that in Schedule 3. There are also transitional provisions, which include transferring employees from existing employment to these new entities.

We’ve heard a bit about the Treaty clause. This legislation is to give effect to the principles of the Treaty but also to give effect to Te Mana o te Wai.

In conclusion, I want to really acknowledge Minister Nanaia Mahuta, and she’s been involved in Government and in this place for a long time. She’s—

💬 Simon Watts: She’s not the only one.

“She’s not the only one.”, I’m hearing, and when she first arrived here, she noticed this problem of the pipes and the way that it was difficult for councils to always fund the upgrades of the infrastructure that we expect for our safe water and for good environmental reasons as well. We don’t want our stormwater going into the harbours and we don’t want waste water not being treated and going into the harbour, for instance. So she’s been thinking about this issue for a long time. She refuses to ignore it and she does that hard work, so I commend her for that.

I’d also just like to note, finally, as the Hon Eugenie Sage did, that congratulations go to the Parliamentary Counsel Office. This is very clear drafting. It will be very easy for people to submit on. I commend it, and I suggest that people who are interested in this should have a good look at it and have a read of the legislation. Thank you, Mr Speaker.

Thank you, Mr Speaker. Well, I’m just not sure that any of the members that I’ve heard speaking on the other side of the House understand their own piece of legislation. There’s been some really, really interesting statements in the last couple of speeches. I heard Kieran McAnulty get up and go, “Councils can’t afford this, so let the Government do it. It won’t cost these ratepayers anything.” So how would Mr McAnulty describe the $2.5 billion that’s been given to councils as the encouragement to support these reforms? Where did that money come from? Maybe money grows on trees in the Wairarapa, but it certainly doesn’t where most of us come from.

So let’s just come away from this idea that the Government’s being all generous and it’s not going to cost the ratepayers any money, because, “101” for the people on the other side of the House: ratepayers and taxpayers are often, in many cases, the same people. So we’ll squash that idea. I’m going to squash a second idea this afternoon—that the Government’s been listening. The Government and this Minister, Nanaia Mahuta, have not been listening to the feedback that’s come with three waters. I haven’t seen many things where the public has got so engaged against a proposal as they have with the three waters proposal. They’re absolutely livid, they don’t want it, and there’s no listening to what’s going on. But the other part of the not listening is that the members on the other side of the House stand up and say that the National Party and the National caucus say that there isn’t a problem and are happy with the status quo—now, that is not the truth. But the truth is that there is more than one way to solve things, and the three waters proposed solution—as is in this piece of legislation—is not the answer.

They’re using, again, a centralised model. We had it in the House last week; we had the Pae Ora (Healthy Futures) Bill. If it wasn’t for the National Party caucus members, the word “rural” would not have even been in that Pae Ora (Healthy Futures) Bill. I’m really concerned about this three waters piece of legislation that exactly—over and over again under this Government—750,000 people who live in rural New Zealand are going to miss out. So I get really concerned about this one share for 50,000 people. Now, Angela Roberts will know this, because Angela’s the list MP in Taranaki - King Country, which I’m the MP for. We represent about 65,000 people across eight councils. So there are eight councils either in, or partly in, the Taranaki - King Country electorate. So when we talk about one share for 50,000 people, and there’s 65,000 people across that whole area, and some people are in entity B and some people are in other entities, it’s just absolutely ridiculous to think that anyone that lives on a rural road in rural New Zealand is going to end up getting a say in any one of these four entities as proposed by the Government.

Absolutely it’s centralisation, an asset-grab, and it’s been done in the worst sort of ways. We all know that there are some problems out there with water, but this Government has been using scaremonger tactics with advertisements that they’ve spent a fortune on, which been paid for—again, not free—with taxpayers’ money; ads showing slime coming out of taps on TV. They’re showing green slime, they’re scaring our kids so they’re not wanting to drink the water, to make a point, an over-the-top point.

So what is really not certain, and what I haven’t heard anyone on the other side of the House today say since I’ve been here, is what the benefits are of the scale that they are aiming to create with the three waters legislation. There do not seem to be any benefits of scale and I can’t see how rural New Zealand’s even going to be able to participate in this. And I don’t understand, and we don’t understand, how linking Gisborne and Blenheim is going to make anybody feel part of a community that’s going to solve a problem or get a solution.

It’s just ridiculous. It’s centralisation, it’s spreading people apart, it’s giving them no say, it’s leaving them in the outreaches of New Zealand and saying “Government knows best.” This Government thinks it knows best about everything. A majority of councils do not support the three waters plan. They’ve said time and time again they’ve tried to get this Government to listen, they’ve tried to come up with suggestions, they’ve tried to be part of a process, and they’ve tried to offer simple alternatives. But, no, the Government thinks that they know best and they’re not prepared to listen.

Despite what this Government calls engagement, it’s never real engagement because the ears are closed. The Cabinet papers show that the decision to proceed with compulsory centralisation was already made long before the consultation began. So let me repeat that: despite the Government talking about engagement, the Cabinet papers show that the decision to proceed with compulsory centralisation was already made long before the consultation began. So there we are. It’s just a centralisation, it’s just an asset grab, and it’s got nothing to do with fixing the actual water. It’s all to do with this Government taking everything into its own hands and not trusting our local communities and our rural communities to be able to work out ways to solve their issues.

So Labour’s using the minor changes made by the Government working group as a proof that they’re listening to feedback, and that is not correct. The Government has not listened to feedback all the way through it, it’s just an appetite for amalgamation and we’ve seen it before. We’ve seen it in all of the planning. I mean, look at the district health boards. We just talked about Pae Ora before. We can talk about vocational education. It’s clearly ideology for Labour—that’s all it is. They haven’t properly considered any alternatives, and there are many alternatives and there are many suggestions. This one-size-fits-all approach does not work.

Any one of my eight councils, let alone any of the 67 councils that sit across the country—some of them are quite small councils. But, actually, they have their act together. They’ve got stuff done; they’ve got stuff worked out. They’re joining forces, they’re helping each other, and they’re finding ways. Central government may have a role in helping this, but it doesn’t meant to say it has to pick it up and take it over.

We are, at National, going to continue to fight Labour’s centralisation. The public doesn’t like it; we don’t like it. We live in a democracy, and the public want to be able to have their say, as ratepayers and taxpayers want to be able to have their say.

I think the thing that really is interesting here is that councils have, understandably, asked why the three waters reforms and the Resource Management Act reforms are occurring before the Government’s Future for Local Government Review is completed. It seems like, once again—

💬 Simon Watts: That’s right. Horse before the cart.

—the cart—yeah, exactly. The cart is being put before the horse.

The one thing that this Government is very good at is delivering bad legislation. What they’re not good at is delivering on most of the other things that the public of New Zealand would expect them to deliver on. So we’ve got councils out there that don’t like having this done to them, they don’t want to have this done to their citizens, and they’re actually looking at this Government asking “What’s next? What are they going to take next? What’s left for councils to do? What are the alternatives for council or are we going to centralise everything?”

For us National caucus members on this side of the House, 2023 cannot come fast enough because the public has had enough—they’ve absolutely had enough of this Government’s centralisation. I can guarantee you, there was talk on the other side of the House of this going to select committee and the select committee doing a wonderful job. Most of the things that go to select committee don’t get a lot of change because the Government won’t listen to those submissions either. They’ll get the same submissions that’ll come in. They’ll get the people telling them, time and time again, “We don’t want this—we don’t want it.” The Government will not listen and they’ll just push this through. But the good thing about it is that in 2023 the public will be pushing, and the public will push this Government right out the door. Thank you, Mr Speaker.

Thank you, Mr Speaker. I’ve been listening intently to the kōrero that’s happened.

I rise to speak to this bill as one of the pieces of legislation to establish a new system strongly desired by communities within the Aotearoa nationwide environment. There’s also been a strong push and desire to keep those costs low for many households. As you are aware, the Water Services Entities Bill has a number of elements that will be beneficial for our communities, infrastructure, waste water, stormwater services, and more importantly, the new bill provides the framework to deliver safe and affordable drinking water for New Zealanders.

This framework provides new ownership, governance, and accountability arrangements relating to entities providing transitional arrangements during that period of transition. Fundamentally, the bill and the three water reforms are about delivering clean and safe drinking water that’s affordable for New Zealanders. Without these reforms, households continue to face rising costs and the prospect of continued services that do not currently meet New Zealanders’ needs. It does provide solutions that are needed.

The purpose of this bill, under the suite of work within the three waters reforms, is that New Zealanders have a right to expect that when they turn on the tap, the water that comes out is clean, it is safe to drink, and it will not make them sick. It is also important that stormwater and waste-water services are resilient and robust enough to keep our communities safe and to support young New Zealanders to grow and prosper. That’s the minimum expectation for all communities to expect, and currently in councils throughout Aotearoa, that is not happening.

There has been a number of media articles, and I reflect on the Havelock North tragedy in 2016, where 35 percent of that community—over 5,000 residents of the 14,000—became very ill due to the drinking-water supply, and following that a full public inquiry was held to uncover the underlying problems.

Following that, what was discovered was the amount of burst pipes, the ageing, old infrastructure right throughout Aotearoa, and the continued boil-water notices, and still today over 40,000 households have to have those things in place and have to boil water. A huge growing problem is sewage in our waterways because water infrastructure throughout Aotearoa is crumbling—a huge problem.

So referring to the cases around New Zealand, the drinking-water standards are simply not compliant and our citizens are being severely compromised. Our elderly communities right throughout are also suffering. The Government is committed to ensuring that the Water Services Entities Bill addresses a number of issues and that water services remain affordable for Kiwis.

In the bill, as we’ve heard the Minister speak today, the estimates show that up to $185 billion worth of investment to fix the ageing water infrastructure over the next 30 years is required. We’ve also heard about the ageing water pipes, and you’ve heard a number of my Labour colleagues talk about pipes and the ageing infrastructure and what is needed to rectify the huge issues.

Drinking water is a basic human right. Clean drinking water is a basic human right. This is why these changes are needed. There is large support and I’ve heard colleagues from that side of the House offer comments and other solutions. But I’m telling you now, Kiwis around the country—I have sat in, under a previous role, in local government and I’ve heard, throughout a number of conferences, both sides supporting and not supporting.

However, the infrastructure and changes are needed. The framework to do this is needed. We need this bill because action under three waters legislation is needed. You’ve heard the Minister—that the water services entity remain responsible and also that councils need the required framework and will be part of the design framework, will have communities to collaborate with—and yes, mana whenua iwi is also part of those audiences.

The water services entity will remain with a co-governance mana whenua water services delivery. Iwi Māori want to have input that the strategic assets are not sold off, that public ownership remains, that the infrastructure remains. The Government requires, under this bill, cross-party support because the operations of water services entity will help Kiwis, will ensure Kiwis have a community voice that is vital to the success of these reforms.

Engagement is specified in this bill. The consumer forums where we hear Kiwi voices for fixing systematic issues will be welcomed, and the bill contains the robust mechanisms in which our approach is consistent.

So also in the media, what it’s affecting is young Kiwis who are part of swimming programmes. In Auckland, a number of those swimming programmes have been paused because of the problem of sewage—bad water getting into and being mixed up, and young Kiwis cannot be exposed to that. The volatile wet weather problems are quite problematic, and so this should not be happening but still is.

The Water Services Entities Bill includes the principles of Te Tiriti o Waitangi, covers te mana o te wai, and the bill preserves iwi and hapū rights in the interests of water. The Government is listening and has made, as you’ve heard the Minister on the four bottom lines: water assets, public ownership, ensuring good governance, and achieving balance sheet outcomes. The Tiriti o Waitangi principles will also be achieved.

So I am proud to be in a Government that is doing something proactively and is taking action on this long-term issue because we need the scale to improve our water infrastructure network. I congratulate Minister Nanaia Mahuta for leading this work, and thank her and her officials, because as tough as it is, wāhine toa continues to forge ahead with the Water Services Entities Bill. It will provide solutions for Aotearoa. I commend this bill to the House.

The question is, That the Water Services Entities Bill be considered by the Finance and Expenditure Committee.