Water Services Entities Bill

Members, the House has resolved to recommit the Water Services Entities Bill to the committee of the whole House to consider the Minister’s amendment deleting subpart 4A of Part 6, set out on Supplementary Order Paper (SOP) 310. Members, this is a limited debate, and all contributions must be relevant to the question of deleting that provision. The question is that the Minister’s amendment deleting subpart 4A of Part 6, set out on SOP 310, be agreed to.

Thank you very much, Madam Chair. It’s a pleasure to rise to speak on Supplementary Order Paper (SOP) 310. And isn’t it ironic that we’re back here in the House when only a few—or literally last week, or the week before, we were in here under urgency undertaking a debate in the committee of the whole House stage lasting nearly 10 hours and a debate that went well into the night and bright and early in the next morning. But the fact is, we’re here today because of, basically, a significant mistake that was made on that evening. And there should be lessons that are taken from what occurred at that point from the Government, in terms of the decisions that were made and the impact of that decision, in terms of the controversial nature of it—and also, I think, what was a dangerous precedent in terms of our democracy.

The Government has, apparently by accident or by mistake, defied a constitutional precedent that is a result of where we are today, now on an embarrassing backtrack. And so let’s go back on some of the time line in terms of what led us to where we are. In December of last year, the concept of entrenchment was first raised by the parties of the House from a letter from the Minister. And on that basis—as has been clearly made—National did not support the Water Services Entities legislation, in general, and we did not support the entrenchment aspect, and therefore we opposed Labour’s first proposal around this model.

But during this time—and as we saw in the debate that occurred last week, in the committee stage, when the Hon Eugenie Sage tabled her Supplementary Order Paper 285 to entrench the privatisation provisions within this bill. But the challenge with that Supplementary Order Paper is that it reduced the usual percentage of 75 percent majority within this House down to 60 percent, and that was quite simply because it was known that National—and, I’m sure, other members of the Opposition—would not support that Supplementary Order Paper or that entrenchment.

But irrespective of that point, and irrespective of the public impression and the pressure around this, the Government used its majority to ram through this change. And I think there’s a perception out there, potentially, by some members of the public, that this was slipped in under the radar. Well, I can be very clear—and for those that were members in the Chamber and in here when that occurred—that is absolutely false. In truth, the senior Labour Ministers and the PM missed this, because it was debated extensively in this House, and during that debate that evening, the Minister herself admitted, under questioning, that the Attorney-General had submitted advice against the entrenchment provisions. She said it in as many words, and I quote, “We know that while this particular SOP may not pass the constitutional threshold, there is a moral obligation of people who believe that privatisation should not occur to support that particular SOP”.

And during that call I made on the topic, I said, and I quote, “it’s quite interesting where, in effect, against the recommendations of the Attorney-General, we’re going to now imply this new trigger point, which is our moral obligation! Who cares what everyone else thinks; we’re just going to come up with a new position! … [and] that’s a real disappointment, but that is what is going on here—and against the advice of other players. They know that it is not practical mechanism—that, even an eventuality which would never occur, this would [not] be effective.” It was very clear that despite the points made by the Minister that there was a moral obligation for the Minister to support this, they clearly did not communicate to the other members within their own party that this amendment was going to be voted for.

So my question for the House today is: how did we get to this place—how did we get to this place? I asked oral questions today to the Minister, in the hopes of an answer, and I wasn’t satisfied in terms of that. So my questions are as follows. When did the Minister become aware of the amendment to push for a 60 percent entrenchment—in particular, what correspondence did the Minister have before the Supplementary Order Paper was tabled? When were the Prime Minister and other members, senior members within the Labour Party, made aware of this Supplementary Order Paper? And what correspondence was entered into before making the decision of what occurred in the House that has led us to where we are today?

We then saw an extended process of back and forward, and as played out further today between Ministers and other members of the Labour Party in terms of basically saying that they were not aware of what occurred on that evening. So what exactly occurred to lead to this screw-up? With all the talk of referrals to the Business Committee that occurred over the weekend—and on Sunday, the Government finally admitted that it got it wrong. And I have a question about that: why was it that the Minister did not recognise that this was a mistake, even when Opposition members in this House raised it in the debate before the Supplementary Order Paper was voted upon, and Opposition parties voted against the Supplementary Order Paper—and, when the Minister knew that the Attorney-General and other senior legal academics had raised it, why did they wait until as late as Sunday to be able to say that this was a mistake? Or was it only when they saw that the public outcry, in regards to this mistake, was clear—they knew there was no way back?

This has obviously raised a number of issues in regards to the outrage of Kiwis across this country, and it’s worth noting why. The New Zealand Parliament can only change some of its statutes simply by amending these statutes, usually by a simple majority of the House of Representatives, and it can therefore amend the New Zealand Constitution. To prevent abuse of this amending power, a very small number—only six statutory provisions are entrenched, and these provisions can only be changed by a 75 percent majority of the House of Representatives, or by more than 50 percent at referendum. All but one of these provisions are contained in the Electoral Act 1993, and one in the Constitution Act 1986. These are all constitutional provisions that protect us and our democracy from dictatorships and long parliaments; all are absolutely fundamental to our democratic rights. It is utterly inappropriate to attempt to entrench a particular policy outcome regardless of the support that it enjoys at a particular time. What is equally inappropriate—indeed, it is cynical—is to attempt to reduce the entrenchment threshold to a level that is lower than what has been used before at 75 percent, simply because it was inevitable that this would not be passed if it remained at 75 percent. All these facts were known leading in to that evening and that decision when that was voted upon, and opposed by National and also ACT at the committee of the whole House stage, when the Minister first raised it.

So I go back to my questions to the Minister: how did we get to where we are today? This is not a new concept. Never in the history of this country have we seen an ability or an action by a Government to try and institute entrenchment around such public policy. This was well understood. So what does that say about this Government and their ability to make decisions and to lead this country into the future? Whether this mistake was deliberate, or simply one where Government of the day here did not care—irrespective; it doesn’t matter. The reality is the decision was made, the vote was taken, and we are now dealing with a colossal mess of having to reverse that change and that is completely inappropriate in a democracy such as ours in this country—one of the earliest and longest-lasting democracies—to have that occur.

Today we have the grovelling back-down, but the stain on our democracy, the damage to our constitution, will remain. And that must sit on the conscience of the members opposite, who sought, under urgency, in the dark of the night, to entrench a policy position against all constitutional norms, against all democratic norms. Not content with confiscating community-owned water assets, not content with introducing a Byzantine co-governance structure without the support of the people, not content with riding roughshod over the hundreds of thousands of New Zealanders who have spoken out against three waters reform, of the councils up and down the country who have begged to maintain ownership and control of their assets, this Government thought it would push its votes even further. And it took the extraordinary, unprecedented, non-constitutional step of entrenching a matter of public policy.

💬 Hon Chris Hipkins: It’s not non-constitutional, otherwise it wouldn’t have passed.

And these are not my words, Minister Hipkins. These are the words of the New Zealand Law Society, who said that it was undemocratic, constitutionally objectionable, and inappropriate. And be that on the conscience of the members opposite, that when given the opportunity that is how they sought to abuse their seats in Parliament.

💬 Rachel Brooking: Then why are we here?

And it’s fine for Rachel Brooking to shake her head, but she should answer this question: who was it that directed that the whip vote in support of this measure? Because there’s been a lot of ducking and diving on that one, hasn’t there? First we had the Prime Minister trying to blame Minister Mahuta. Then we had Minister Mahuta let the media know that, in fact, this had been discussed by the caucus. Now we learn that, actually, it was the responsibility of the Labour members on the Finance and Expenditure Committee.

Now, I think my colleague Simon Watts has been charitable. He’s accepted that this was a grand and incompetent mistake. I’m inclined to see something a little darker going on here, which is that the members opposite thought they could get away with it—they thought they could get away with it. That is the arrogance that has set in to this Government—that they are prepared to thumb their noses at basic principles of our democracy if they think they can get away with it. Well, they got caught this time. They tried doing it under urgency, they tried doing it at night, and they got caught. And I say thank you to the constitutional experts and lawyers across the country who raised the red flag and said, “No, not in our New Zealand.”, because we can too easily take for granted the principles that have underpinned the continuous democracy that we have in this country, the unwritten constitution which has been respected by blue Governments, red Governments, and all the bits in between. But it took a Labour-led Government with its majority to abuse those principles.

And today in the House, they attempt to turn back the clock. Well, New Zealand will not forget, because those who are prepared to act in an anti-democratic way when they think people aren’t watching, they are people that can’t be trusted. And this is not the first step. First they came for one person, one vote with the Rotorua bill. Then they decided to push on with three waters without public mandate or council consent. Then they went for entrenchment. New Zealanders will remember. And when you’ve woken up and decided who you’re going to blame, they’ll be listening and they will remember that the only people to blame are the Labour Party, its leadership, and every member opposite.

Thank you, Madam Chair. National obviously has privatisation on its mind. Some of the first things that Mr Watts said were that this Supplementary Order Paper (SOP) in my name attempted to entrench the privatisation provision. It did not; it sought to embody and embed in the legislation a commitment to public ownership of key public assets. I would like to note that this was about entrenching one clause in the bill, not the whole bill, as some people writing to me seem to think. It was one clause, and it reinforces the Green Party’s commitment to public ownership of key three waters assets: the provision of drinking water, waste water, and stormwater. Water is essential to life. We could not vote without having water, so the Greens believe that this is of such importance, constitutionally, that the public ownership of three waters assets deserves entrenchment. It’s certainly not the 75 percent supermajority that you have for matters in the Electoral Act, but it is the 60 percent majority.

We would have preferred that is wasn’t debated under urgency, but, as members of the National Party well know, the committee stage is the only stage when you can table and have amendments voted on. And National Party members should also know that the Standing Orders indeed provide for entrenchment, provided the same majority in the House pass the provision the SOP was seeking to entrench. That happened.

The Green Party has a long history of supporting assets being managed and operated in public ownership. As a first-term MP back in 2012, I and hundreds of others stood and gathered signatures on the citizens initiated referendum to keep our assets. Hundreds of people all around the motu signed that petition—as many as a thousand people in a day. More than 300,000 people signed the petition. We got a citizens initiated referendum; 67 percent of people voting in that referendum—more than 1 million New Zealanders—voted to keep our energy companies, to keep Air New Zealand, and to keep Solid Energy in public ownership. What did the John Key National Government do? It totally ignored the result.

CHAIRPERSON (Hon Jacqui Dean): Order! Order! Order! The member is getting too wide of the mark. The debate today on this SOP relates to the provisions contained in this SOP in the bill, and I’d ask the member to confine her comments to that—and anyone else in the Chamber who wants to make a contribution.

Thank you, Madam Chair. In terms of the context, though, it was because, feeling as an MP, what was I doing in a Parliament where a simple majority of the Parliament could move to reject the views of such a substantial number of New Zealanders, hence the commitment to maintain public ownership of these assets. That’s why the SOP—

CHAIRPERSON (Hon Jacqui Dean): No. I’ve asked the member to confine her comments to the SOP. Now, I’m also letting the committee know that that will apply to any other contribution today. So, again, I’m going to ask the Hon Eugenie Sage—have you stopped the clock? Yup—to confine her comments to this SOP on the Water Services Entities Bill.

Point of order, Madam Chair. It was just that previous speakers have spoken at length about the Electoral Act—

CHAIRPERSON (Hon Jacqui Dean): No, no. The member won’t dispute my ruling, but I do want to be fair to the member. The member has one minute and seven seconds to go. Again, I’m going to ask the member to stick to the bill at hand and to the SOP that is being addressed by way of this SOP.

The Green Party won’t be supporting the SOP, because a key way to guarantee a water-secure future for our children is to reduce emissions, is to protect the climate, and is to keep our three waters infrastructure in public ownership. This SOP removes that protection of entrenchment in the bill. It removes the entrenched provision, which would require any future Government wanting to amend the Water Services Entities Bill to get a 60 percent majority of the Parliament. The SOP would mean that a Government could just change that obligation, in clause 116, to maintain water services to not divest water services by a simple majority. For the Green Party, the public ownership and operation of three water services is essential to the way in which we operate as communities and to good environmental outcomes to ensure that our waste water is well managed, that discharges are of a high quality, and that we protect the sources of our drinking water and ensure that everybody has access to it. In our view, entrenching—[Time expired]

Thank you, Madam Chair. Minister Mahuta appears to feel no contrition at all for being the first Minister in 168 years of Parliament to try and entrench her own Government’s policies, creating a constitutional crisis in the process. For a moment, it was also the greatest win the Green Party had ever had in this Parliament, having failed to achieve anything else practical around transport or the environment, but it turns out that it was just another pyrrhic victory—like declaring a climate emergency. In 168 years, with all that has happened in New Zealand politics, no Government has been arrogant enough to think that its own politics, its own policies, are so important that they should survive and endure longer than the next Parliament, which has the right to change the laws of New Zealand. Even if it’s true that the Minister says that she was not aware or she didn’t realise what would be the consequences of this particular amendment to the bill—it was tabled during the committee stage—the Minister should still take responsibility for what has been a constitutional disaster, which New Zealand had avoided for 168 years, until Labour and the Greens teamed up to deliver this outrage.

Now, as ACT said in our reply to the letter that the Minister sent to ACT, this is a shallow political stunt, Minister, this entrenchment provision and this claim that it was only intended to protect these water assets from privatisation. ACT’s been clear throughout the entire three waters process that our position is to return the assets to local government control. It’s the Government that is transferring assets out of local democratic control into new statutory corporations that it is allocating governance—50 percent of the governance—to unelected, appointed iwi Māori elites who will have the ability—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! Order! Order! Order! Order! I’m going to say it again: the member is straying into matters provided for in other parts of the Water Services Entities Bill. I’m going to ask him to confine his comments to the Supplementary Order Paper (SOP) which is in front of him.

Thank you, Madam Chair. So for 168 years, every Parliament has been sovereign, which means that New Zealanders can vote out the Government which doesn’t deliver, and replace the members in the House with new members and a new Government which will deliver for them. ACT fully intends to be part of that new Government. But I just want to come back to the provisions, which most likely will be repealed at the end of this committee stage, which are around the entrenchment of provisions against privatisation in the Act. So the section that’s being repealed requires an obligation to maintain ownership and control of water services and significant assets, and it goes on to say that the reserved provision cannot be repealed or amended unless the proposal is passed by a majority of 60 percent of all of the members of the House of Representatives, or under a referendum.

Now, I do have a question for the Minister: what does the Minister understand privatisation to mean? Is this the partial sale, Minister, of a share in assets or a sale of assets, such as the Government’s enabling legislation which will allow Kiwibank to be floated—

CHAIRPERSON (Hon Jacqui Dean): No. No. No. Sorry.

Madam Chair?

CHAIRPERSON (Hon Jacqui Dean): No. No. The member is to confine himself to the very narrow question of what is contained in the SOP, and I’m speaking to the whole committee again, and I’m warning the member that he has strayed several times now. This is a very, very targeted and confined debate.

Just to be clear, I will confine myself to discussion of the clauses which are to be amended and the purpose of this proposed amendment.

So if we look at Subpart 4A, the “Reserved provision”, 206AA, the restrictions on amendment or repeal of certain provisions as they relate to ownership and control of water services and significant assets. The Minister will be aware that when I come to the House to ask questions, it is not in the pursuit of some flippant political objective. As a civil and environmental engineer, I speak for many people around New Zealand who are really genuinely interested in reforming the way water services are delivered so that we have better outcomes. So I wanted to ask the Minister: what does the Minister understand privatisation to mean? And I just wanted to give the Minister—with your grace, Madam Chair—a couple of examples around the mixed-ownership model, such as Air New Zealand or the big power generators like Genesis, which have 50 percent or less Government shareholding in what are otherwise—

CHAIRPERSON (Hon Jacqui Dean): No. No. Sorry. Again. Again, the member still has six seconds left, which I will preserve for him, but I’ve already ruled that another member may not stray as far as that member is attempting to stray. So, in his remaining six seconds, I invite Simon Court to stick to the SOP in front of him.

The ACT Party will support this amendment on the basis that it restores constitutional—[Time expired]

Every now and then, New Zealand seems to go through a constitutional crisis—call it a crisis, call it an inflection point. We had one in 1976 when Rob Muldoon turned up after the 1975 election and purported to suspend the provisions of the New Zealand Superannuation Act and said to public servants, “No need to pay anymore—I’ve decreed it.” The High Court sorted that out in Fitzgerald v Muldoon and I’m proud to say I have a copy of the judgment in my office. After the 1984 election, again, Mr Muldoon had to be sorted out by the National Party caucus, and that led, of course, to the Constitution Act 1986.

Now we have a similar crisis where either through conspiracy or a cock-up—and I’m one that tends towards the conspiracy element of this—the Government has sought to entrench a matter of public policy into New Zealand law. It was a constitutional collusion, a collaboration between the Green Party and the Labour Party—and, frankly, I thought better of the Greens. I will tell you something for free: Rod Donald and Jeanette Fitzsimons would not have gone along with this constitutional chicanery. Here’s the test: if the National Party had got up and said, “Three strikes is fundamentally important to the National Government and the public policy of this country, and we’re going to collaborate with ACT and put into law that the three strikes sentencing regime is so fundamental, so critical, to the confidence that people have in the judicial system”—

💬 Hon Eugenie Sage: Point of order. Other speakers in the debate have been reminded to stay on the Supplementary Order Paper (SOP).

CHAIRPERSON (Hon Jenny Salesa): Can the member bring it back to the entrenchment in this SOP.

If the National Government of the time or a future National Government had done this, the Greens would be up in arms—and I’m responding specifically to what Eugenie Sage raised in her speech. They would be up in arms, and rightly so, because entrenching a matter of contentious public policy in law and making it more difficult for a future Government or future Parliament to repeal, is wrong.

So my question for the Minister is a really simple one: what on earth were you thinking? What on earth possessed the Government to think that this was appropriate or constitutional? We have three particular concerns about this that I want the Minister to address. The first is the process point—it was done under urgency, and a long stretch of urgency. It’s not correct that the Government was trying to pass 24 bills, but they certainly were trying to get the House to deal with around 24 or maybe 25 bills at the time. And quite rightly it was a long stretch and there were people in the House for that long stretch, and it’s not appropriate that something so constitutionally significant should be dealt with in a long stretch of urgency.

The second point is the point I made around precedent. What precedent does entrenching a provision like this set into law? I made reference to other things that other Governments might consider to be important, and the constitutional scholars have rightly made that point.

Then the third point is the undesirability of having non-constitutional provisions entrenched into law, because there are just five or six parts of our constitution that are entrenched, and that’s at a 75 percent majority—nothing else, other than one provision of the Constitution Act 1986 and the Electoral Act 1993. It is undesirable, as the Law Society and various other public law commentators pointed out, to entrench non-constitutional provisions in legislation.

I have a further question for the Minister. How did this come about? What we have at the moment is like that Spider-Man cartoon—everyone in the Government is pointing at everyone else and saying, “They’re to blame.” Jacinda Ardern says this is Nanaia Mahuta’s fault. Nanaia Mahuta says, “It’s nothing to do with me. I’m blaming the Finance and Expenditure Committee.” David Parker says, “I’ve always been opposed to entrenchment.”, and then everybody just wants to hang it on the Greens, and, ultimately, it was their SOP in the first place.

I want to, for a start, agree with some of the comments that have been made by the Opposition—that I agree, and the Government agrees, that the entrenchment of the anti-privatisation clause is an inappropriate use of the entrenchment tool, which is why we have brought the amendment to the House today in order to fix what the Prime Minister has called and what the Minister in the chair has agreed was a mistake.

I want to deal with some of the exaggeration that we’ve had from the other side. This bill didn’t proceed through any more stages in urgency than it would have in ordinary business—the second reading was done previously, the third reading wasn’t done in urgency. It’s actually a good example of why we should be—in respect of contentious legislation—slow to put a big bill like this through all stages of urgency. And because we didn’t, it is easier to fix the mistake that was made in respect of this particular clause.

The other comparison that was made by Chris Bishop was to say this was comparable to Fitzgerald v Muldoon: no, it’s not. On that occasion, what happened was that the Prime Minister of the day broke the law. There’s no law being broken here. Neither is it the same as the refusal of the Rt Hon Robert Muldoon to, effectively, let the Treasury cooperate with the incoming Lange Government in the face of a run on the currency which cost the country hundreds of millions—if not billions—of dollars. Arguably, you can say there would have been a serious constitutional mistake made if this Act was passed with this provision in place, but it is not going to be, because, a week after the mistake was made, we are fixing it. Now, that—

💬 Erica Stanford: Only after significant pressure.

Well, actually, the Cabinet minute, which the media have referred to and the Minister herself referred to at question time today, records that Cabinet agreed that the bill should not entrench privatisation provisions in bills. So there is a mistake that has been made here. I can understand why the Greens promoted this idea and I can understand why even some members of the Labour Party were attracted to the idea, because we don’t like privatisation.

💬 Simeon Brown: You were too.

No, I wasn’t ever attracted—

💬 Simeon Brown: Well, you voted for it.

I was never attracted to this idea and—

CHAIRPERSON (Hon Jenny Salesa): Order! Order! I did not vote for it.

—I have stood against using entrenchment clauses for policy purposes throughout this process.

Now, as Chris Bishop has said, there is very limited use of our entrenchment provisions in respect of constitutional norms that are long settled. It’s very important that we keep it that narrow for a number of reasons. There are two main reasons: one is that this Parliament cannot bind a subsequent Parliament, that’s how democracy works in respect of policy choices. If we get kicked out and someone else gets elected on a different platform, it is the right of the new Parliament to change the law. Whether it’s important to us on privatisation of water issues or on tax rates or on labour relations laws, it’s really the same, and there are only very limited exceptions in respect of constitutional matters.

I also want to say why it’s so important to guard that boundary around constitutional matters, because it’s always been a moot point as to whether those constitutional entrenchments in respect of Electoral Act provisions or the Constitution Act work at law. You know, they have been upheld by convention now for 50 years or so, and it’s fantastic that this Parliament has upheld that convention so that convention has not been abused for that lengthy period of time, but it remains a moot point as to whether those entrenched provisions could themselves be repealed by a simple majority of the Parliament repealing either the section that includes the entrenchment or the Act which includes the entrenchment. Now, that’s not a legal issue that we ever want to approach in this House, and one of the ways we don’t approach that, and the way we protect the entrenchment provisions that importantly sit in our constitutional legislation, is to not use them for policy processes, which, if we started to, you would find that a subsequent Government that couldn’t get to the 60 percent majority would just come here and they would repeal the section by simple majority of 50 percent plus one. They could come to a future Parliament and repeal the entrenchment provision by a majority of plus one and it would probably be effective against a challenge through the courts because I can’t see the courts wanting to intervene in respect of that.

The issue of whether the courts, after this long period of entrenchment of the constitutional provisions, would see it as something that is a convention that can be overridden by a future Parliament by simple majority overriding the 75 percent entrenchment provisions in the Electoral Act or the Constitutional Act is a debate that I hope never to see. I hope that we maintain the strength of that convention by not undermining it, and I leave open the moot point as to if a future Parliament did try and override those voting provisions by simple majority, I think there would be a contest before the courts and it would be a very, very interesting constitutional question for the courts to grapple with then. On the one side, you would have the people that would say that the legal effect of those clauses is not to bind a future Parliament, that they have political, maybe moral force in support of a convention not to abuse those provisions and always change them either by way of 75 majority or a referendum. And the referendum route was what was used to change these provisions, most recently, in respect of the MMP change to how you cast a vote in an election.

So that’s one view, that it just has a moral or political force that causes Parliament to always honour it; the other is that it does actually have some legal effect that can be given force before the courts. I hope in my lifetime that we never have to explore that boundary, and that’s why I am grateful to the Minister for bringing this amendment before Parliament. Even though I understand the will of other people to want to guard against privatisation, from my perspective it is wrong in principle to entrench—

💬 Erica Stanford: She spoke in favour of the Supplementary Order Paper (SOP).

I’ve spoken in favour of—

💬 Erica Stanford: She spoke in favour of the SOP.

I am speaking in favour of this SOP, which the Minister has rightly—

💬 Erica Stanford: The original SOP—the Minister spoke in favour.

Well, actually, the Minister wasn’t in the chair when the SOP was put to the House, and that is perhaps a fair criticism in respect of the effective urgency, because we do sit longer hours and the Minister can’t always be in the chair. So, you know, I put that on the record as well.

So, for those reasons, I’m pleased that this mistake is being fixed. There is no constitutional crisis, this bill is being fixed before the third reading. It is not yet law. It is the debates that we have in this place, and, because of good work by members of the Opposition and members of the Government and members of academia, we are fixing the mistake that was made and protecting that convention properly in respect of constitution—in respect of which there are provisions in the New Zealand Bill of Rights Act that ought to be entrenched.

Thank you, Madam Chair. That was a very interesting speech from the Attorney-General. I suppose the fundamental question I have in relation to Supplementary Order Paper (SOP) 285 is: is this SOP to fix a mistake or does it represent a change in policy? That is the question that I want the Minister ultimately to answer, because we heard from the Attorney-General that he didn’t believe in entrenchment provisions. But it’s my understanding that the Labour caucus did agree to entrenching at 75 percent and then they wrote to other parties trying to achieve that, and we declined. Then, it’s my understanding that this SOP that we’re trying to overturn occurred because having failed at 75 percent—the clear rule of Parliament is that no party can entrench anything without the same percentage voting for it—of Parliament to agree to entrench at 75, the next step was to get 60 percent of Parliament, which Labour and the Greens combined represent; they could do that and they did do that.

So the question I have for the chair is: was there a policy on the part of the Government coming in here to entrench at 60 percent or not? Or was it a genuine mistake? Or was that the policy? That is not clear and it’s very fuzzy to hear the Attorney-General saying that he is not in favour of entrenchment, but it was clearly the policy of his party to entrench at 75 percent, if not at 60 percent. And so that’s what’s not clear there. What’s happened is that the Labour Party and the Government voted for the entrenchment at 60 percent. Now, what’s not clear is again whether that was a clerical mistake—that they didn’t mean to vote for it—or not.

💬 Hon Dr David Clark: Point of order, Madam Chair. The member seems to be broadening the debate somewhat to previous debates rather than focusing on the SOP that is before the committee now.

CHAIRPERSON (Hon Jenny Salesa): I will ask the Hon Paul Goldsmith to come back to the SOP.

Yes, well, my understanding is that it’s quite legitimate to be talking about why the vote was cast and the series of events leading up to and post the vote and that’s what I’m talking about. So that’s what I’m trying to understand and unravel: was this a technical mistake of standing up and saying “We vote for it.” or not, or was it a political mistake that they voted for it and then found out that, actually, everybody disagreed with them and then they went back on it?

Because the reality is that if it wasn’t for the constitutional experts putting up their hand and us recognising the importance of it, this would have been enacted. And there is a strong argument to say that the Government indeed intended this to happen and they were hoping that they were going to get away with it and they were keeping their heads down and everything was all quiet for a couple of days and they thought they might have got away with it and they were quite happy with that.

The alternative that they’re expecting us to believe is that this went through and nobody in the Government noticed it.

💬 Hon Dr David Clark: Point of order, Madam Chair. The Chair prior to you, and I think you have also, reinforced that this is a narrow debate on the SOP in front of us now. The member continues to expand into a broader debate about the previous debate that was had in the committee and the merits of it. I would ask, respectfully, that he is brought back to the order of the House.

Tim van de Molen: Speaking to the point of order—thank you, Madam Chair. We’ve had a few instances now where members from the Government and from the party that put the original SOP in have tried to close this debate down, and you will be well aware that it’s your role only to decide on what is or is not within scope, and points of order, such as we’ve seen taken by those members, are actually out of order and bring the House into disrepute by impacting or reflecting on your ability to rule the committee stage appropriately, Madam Chair.

CHAIRPERSON (Hon Jenny Salesa): I’m well aware that it is within my ambit to actually rule, and the advice that the Clerk had just given me was talking about the mistake or how we got here to this mistake that we’re trying to fix today is actually within—well, it’s in order. So keep it limited. Don’t stray too far.

Thank you, Madam Chair. I’m trying to get to the bottom of the mistake. Was it a mistake? Was it a technical mistake or a political mistake or was it a change in policy? And that’s what I want to hear from the Minister on. I want her to explain that, because, as I outlined, it seemed that the Government was keen on 75 percent entrenchment and couldn’t get that over the line and therefore did vote for 60 percent entrenchment. Was it the case that they were hoping to get away with it and failed and then, once it blew up, they realised that, actually, New Zealanders didn’t want these sorts of constitutional experimentations and they didn’t want to move away from conventions that are well understood and they have back pedalled? They’re quite different things.

It’s not clear at all from everything that’s been said from the Attorney-General, from the Prime Minister, and from the Minister herself, as to what actually transpired, and I think it’s a reasonable thing for the committee to get a better understanding of. So what was the intention? Did she, the Minister, believe when this was voted for originally—the previous SOP—that she had the support of her party to vote for it? It’s a very basic question.

For those listening to this debate, we are still in the committee stage of the Water Services Entities Bill. And, all the way along, the Government has been very clear that we want to protect the public ownership of water infrastructure assets as we move towards improving the services that people get to assure themselves that they’ll have safe drinking water, better environmental outcomes, and more sustainable ways of financing infrastructure, recognising that households are facing a cost of living crisis.

But let me come back to the specific Supplementary Order Paper (SOP) and what we want to ensure. Through this parliamentary process, we want to ensure that we are fixing a mistake, because, as the debate has transpired and I have made through the committee stages of the House, we have been unable to get cross-parliamentary support for a 75 percent entrenchment of privatisation, and we accept that that is why the Government did not put forward an entrenchment clause in the bill as introduced, as debated in the House. However, Standing Order 270 creates the opening which the Green Party utilised to be able to offer another threshold, 60 percent, to be able to re-put the consideration of an entrenchment threshold. At this point, I want to reflect on the Leader of the House’s indication that, actually, perhaps the Standing Orders Committee needs to consider the basis on which entrenchment clauses should be used to give guidance to lawmakers for matters other than constitutional issues, of which the convention is a 75 percent threshold, and I think that is worthy of consideration. I hope other members in this House do too, because we do want to ensure that we are making good laws.

So the mistake that is being fixed is that it is inappropriate as far as we can see to take a piecemeal approach to using an entrenchment clause for this particular purpose. So, once we ensure that the SOP can be supported across the House, we will, effectively, not use an entrenchment provision in this particular way without further consideration by the Standing Orders Committee to provide proper guidelines in the way that matters, other than those constitutional in nature could be considered. I hope that all parties will see fit to support the SOP.

Thank you, Madam Chair. So I think we have got some clarity from the Minister that this was not a technical mistake—they didn’t accidentally vote for it—but it was a political mistake that they voted for it. They wanted to have that Supplementary Order Paper (SOP) 285 passed, bringing in a 60 percent entrenchment. They voted for it, but when the cat got out of the bag and people saw it for what it is, they realised that it was a political mistake, and they have reversed it after a week and a half of growing tensions across the country.

Why should people be concerned about these things? Why has it touched such a chord in the New Zealand voting public and New Zealanders as a whole? Well, I think we can offer some suggestions. This Government, frankly, has been quite experimental in its approach to the constitution. We’ve heard the Attorney-General talk about electoral law being something that has elements of it that have been entrenched as part of our conventions, but this is a Government that has actually moved away from some fundamental things such as equal voting rights at local government without any support, and so people are rightly suspicious of the constitutional appropriateness of how this Government operates.

Most people would think that something as fundamental to how our democracy operates as equal voting rights would be something that wouldn’t be changed without widespread support, but the Government has done that, so the people’s antennae are up to what the Government is doing on constitutional matters. Then, in this broader three waters context, there have been very widespread demonstrations against it, so it’s by no means a policy that’s universally agreed to or admired across the country, and yet it has been pushed through regardless. Again, it has involved taking away properties that have been owned by councils and moving them into a central operation.

Again, suspicions or nervousness or doubt has been widespread about the intentions of the Government in this operation, and so that, I think, is why New Zealanders have been concerned and why cooler heads—and there does seem to be very marked division within the Government on these matters, because we’ve just heard the Attorney-General saying that he is opposed to such entrenchments for policy matters. But, clearly, the Government decided to do it. They voted for it, and so he was obviously outvoted in that internal debate which led to the passing of the SOP that we are now trying to un-pass by Government actions.

So there’s clearly a division within the Government about how to handle these matters, but the political heads such as Mr Hipkins over there decided that the Government couldn’t get away with carrying on—

CHAIRPERSON (Hon Jenny Salesa): Order! Order! The member will come back to this SOP.

Thank you very much, Madam Chair. The only point I was making was that I was talking about the constitutional implications of this series of events that has led us to this very unusual situation, as—I’m sure we all know—it’s pretty rare that you find a piece of legislation introduced to the House, it goes through the first reading; it goes through the second reading; it goes through the committee stage of the House, where we go through a bill line by line—and it took about 10 hours of debate. It concludes that debate, and then the next and final step is the third reading, and it’s very unusual to have a bill brought back and pushed back to the committee stage to undo something.

This is an unusual situation and one of constitutional meaning and understanding. So what we’re trying to understand is how this happened, why it happened, and whether this is the sort of thing that we can expect to happen again and again under this Government. Do they push a little bit here and see if anybody reacts, and if they do—if they’re caught red-handed—then they’ll pull back and say it was a mistake, and will they try that again somewhere else? It’s a fair question for all of us to be asking, and it is part of the reason why I think there is widespread distrust about the motives of this Government when it comes to how it operates at a constitutional level.

So I’ve raised those many questions. Was it a technical mistake or a political mistake? My assertion is that it was a political mistake, and they’ve realised that and they’ve sought to undo it, but I’d be very interested to understand the Minister’s impressions on that.

Thank you, Madam Chair. It doesn’t happen very often, but there are moments when you realise that there are events that happened that are shameful. And I think this is one such event.

This has been a shamble and it has been a shameful episode in this Parliament. I think, having coming back today to debate this, after many of us spent hours in here going through on this bill with much opposition not only across this House but from the general public, and to be able to have to deal with this issue today, I think just shows how—what a shambles, really.

The issue with this is that we’ve heard smoothing words from the Attorney-General, talking about how he opposes entrenchment. And yet, as my good colleague the Hon Paul Goldsmith’s been saying, the Labour caucus clearly agreed to entrenching this in this legislation prior to this coming to the House. It just makes you wonder, how could Mr Parker, as the Attorney-General, have lost the debate in caucus when he’s made it so clear just a few moments ago that he is opposed to and always has been opposed to entrenchment, where he is the Minister responsible for these matters in the House and to have lost that debate in caucus. And yet, this Supplementary Order Paper (SOP) was passed by the same Labour Government. It just doesn’t make sense, and it just makes you wonder what in the dickens went on in that caucus, and it also may draw you to the conclusions that the comments from Mr Parker must—or could—be construed as being a snow job, because the comments do not reconcile with what’s actually gone on.

Now, I also want to just turn to this issue. The Minister, in her contribution—and I thank her for standing up and I hope she’s going to stand up again—is saying the reason why Labour’s supported this SOP of the Greens was to protect the ownership of these assets. I just want to say that I believe that the Greens have been scaremongering this whole issue and just show how out of touch they are with their whole issue about privatisation and wanting to make sure that there were further provisions in this bill.

I think the first thing I would say here—many people have sort of forgotten about this—but in the bill, the provisions that this relate to are set out in Schedule 4. And what people don’t realise is that first thing, if there is even the concept of talking about privatising the assets, it requires a 75 percent majority of the regional representative group who must, prior to coming to that view or that vote, have talked about and talked to all of the territorial local authority owners of the water services, mana whenua, and also the Minister, before they can decide—and then they must decide with 75 percent approval.

The second thing is: the proposal to go out to the general public on it requires 100 percent approval—or unanimous approval—by all of the territorial authorities. So, many of these water companies will have so-called owners or territorial councils of up to 20, 22 councils. It requires unanimous agreement by all of those councils before you can even put a poll to the general public.

And having got through those two hurdles, it then requires the general public to approve by 75 percent. So the thought of privatising these assets is absolutely just about virtually impossible under this legislation. We’ve heard the Greens, we’ve heard Labour going on in these spurious arguments about “National wanting to privatise this asset”. You can’t even contemplate how it could possibly occur under the current bill that has been passed through and rammed through by the Labour Government.

This bill—this SOP—is a shocker, should never have occurred, and here now we’re seeing Labour backtracking. And I’ll tell you why it’s backtracking—nothing to do with David Parker, or whatever, thinking it’s the wrong thing—it’s because the general public and the media have suddenly said, “This is wrong” and it’s a political back-down. It’s shameful.

Thank you, Madam Chair, for the opportunity to take a call on this Supplementary Order Paper. I think the words need to be said: never again. Never again should we be in this House doing what this Government has done to our constitution and to its constitutional provisions around entrenchment. I’ve heard the rhetoric from members on the other side where they’re trying to call this a mistake. They’re trying to say it was a mistake that this even got into the bill in the first place. It was a mistake that they voted on it, it was a mistake that it was there, and “We’re just cleaning up a mistake.”

Well, I ask the Minister: where did this mistake begin and when did they know it was a mistake, if it actually was one? Are they thinking that New Zealanders are so foolish to think that this Government just operates on a whim? They just go, “Oh well, this Supplementary Order Paper, we’ll see how we’ll vote on this one today, shall we? We’ll just vote—we might vote Yes on this one from the Green Party, we might vote No for that one from the National Party.” No, this is not how this Government operates. They are deliberate, they are intentional, and they know what they are doing. The Minister knew full well what she was doing when she authorised the Labour Party to support the Supplementary Order Paper from the Greens. And so I call out the language which we are hearing from the Government, from the Prime Minister, from the Minister, from others, saying this was just a mistake because mistakes like this—one, they shouldn’t happen; and secondly, they don’t just happen, particularly when it comes to such important provisions around entrenchment in our legislation. We’ve seen the commentary from the constitutional lawyers, the Law Society, and others who have called out this Government.

The speech from the Hon David Parker—he almost sounded like a true believer. It almost sounded like he was the guy actually speaking against the Supplementary Order Paper that was installed in the first place, when he actually voted for it to be put in the bill. He voted for that Supplementary Order Paper to go through. And there he is with all of the arrogance of this Labour Government to say “Actually, no, I disagree with that approach and it shouldn’t happen.”, and to give us a lecture—a lecture—as to why this shouldn’t happen again. Well, shame on this Government for putting this country through this. They say, “Well, it didn’t happen.” Well, it didn’t happen, because they were caught out. They were caught out by the public of New Zealand, the constitutional watchdogs, the media, and the National and ACT parties who stood up against this constitutional outrage and said, “This is enough, this is not right, and it should stop because it sets an incredibly bad precedent.”

I say never again, because never again should be what all members of this Parliament are saying. But I note that the Green Party, in their righteousness—superiority, should I say, their righteous superiority are still intending to support this Supplementary Order Paper because they think it’s the right thing to do. Well, what National Party policy should be entrenched that you don’t like, Green Party? Because that’s the kind of question that the Green Party needs to think about in supporting this Supplementary Order Paper, because there will be a range of policies that you don’t agree with from across this House, which, if those parties entrenched those political views, the Green Party would be calling out a constitutional outrage, and rightly so.

But where’s the consistency? The Green Party used to stand up in this Parliament, and they used to be the conscience of democracy. They used to stand against urgency being used, they used to stand against the constitutional outrage that we’re seeing here. But they’ve lost all of their principles, and this vote that they’re about to push tonight just shows they had none in the first place. And so I call out the Green Party for their moral superiority which has completely, completely gone tonight. I call out the Government for saying that this was just a mistake, because it clearly wasn’t. I ask the Minister to take a call and explain to the House and answer the questions that my colleague the Hon Paul Goldsmith has very articulately placed on the Chamber, to say: when did the Government make these decisions? Was it a political mistake? Was it a legal mistake? Was it just simply an error in terms of how they decided to vote? And when were those decisions actually made?

I think my colleague Simon Watts had a question which was not answered in question time today, which was: did Cabinet authorise the Minister to make those decisions, and, if so, when? The Minister needs to answer those questions and put the actual facts out there for the public because they’ve had enough. They’ve said, “Never again.” I hope we never see this happening again in this Parliament.

Thank you, Madam Chair. I think it’s really unfortunate that the National Party is just trying to score political points. They’re not engaging with the substance of the issue. The Minister has noted that the Standing Orders Committee is going to consider the whole issue of entrenchment and whether there should be public policies which merit entrenchment—whether we could review the 160 years that we’ve gone without entrenching anything else except electoral law. But from the contributions from the Opposition, they won’t engage with that substantively at all. All they’re interested in doing is trying to score political points about process.

And the other thing that’s really disappointing: thank you, Mr Bayly, for pointing out the detail of clause 116 and the process in Schedule 4 and, yes, that does provide some protection at the regional representative group against any proposals for divestment—it ensures that there is thorough consideration of that. But the whole point of my Supplementary Order Paper (SOP), which the Minister’s SOP will repeal, was to entrench that provision so that a simple majority in a future Parliament couldn’t pull that provision and just not require the regional representative group to go through that 75 percent support for divestment.

So National is not engaging with the substance of what their views are about the future of three waters assets. They have said that, heaven forbid, if they get into Government, they would repeal the legislation, but what do they want for the future of three waters? Because again and again they’ve just focused on process and not the substance of what the original SOP was about, which was to ensure that it is not easy for a future Government to sell off our water assets to the highest bidder, that it is not easy for a Government to ram through provisions which would reduce the consideration by the regional representative group and the requirement for a referendum. Our water assets are too precious to risk, and the original SOP made sure that any decision about their future management carried the support of a large number of New Zealanders.

So National has signalled that it’s not going to engage in any genuine way with discussions about what issues of public policy could be protected by entrenchment, and nor, as it seems, is it going to respond in any positive way to a letter from the Government which suggests that their attitude to three waters is, again, to not be at all worried about future privatisation. That’s why the Green Party won’t be supporting this SOP, because we think that this issue of three waters assets is of critical public importance and reaches that threshold.

Before I call the next member, I’d like to warn everyone that this debate is beginning to be repetitive. I’m not hearing any new points being raised.

Thank you, Madam Chair. Well, look, you make a great point, Madam Chair, that it’s important that we focus on those aspects which the Supplementary Order Paper proposes to repeal, and that is the entrenchment provisions, section 206AA the reserved provision, Subpart 4A, which relates to the obligation on the Water Services Entities Minister to maintain ownership and control of water services and significant assets.

So, Minister Mahuta, I’d like you to respond to a couple of specific questions. Through ownership or control, you’ve stated a number of times that the water services entities will not be in control of the assets and that local councils will retain control, but they can’t sell them, they can’t leverage any debt against them, they can’t generate revenue from the assets. So the challenge, Minister, is to understand whether these provisions, which apparently prevent privatisation, and which the Minister has tabled an amendment seeking to repeal, are actually to stop the water services entities from returning assets to councils, from which they will be taken. So, Minister, could you please give us a response to that in a moment? After this Supplementary Order Paper has been passed, will that allow the water services entities to return water assets to councils, if they wish to in the future, even if this legislation is passed?

And, Minister, I want to ask for your understanding of this concept of privatisation, which this Supplementary Order Paper relates to, because, Minister, you’ve written to the ACT Party today—and, I understand, to other parties—asking will these parties support a motion or the concept that these assets should not be privatised. So, Minister, I want to clarify what “privatisation” means to you. Does it mean a public-private partnership (PPP) where, say, KiwiSaver, ACC, and other institutions invest shareholders’ or investors’ funds in public assets? And that could be schools, such as seven schools and two corrections facilities established as public-private partnerships, including Auckland prison; the schools PPP bundle; Hobsonville School; Auckland South Corrections Facility, Wiri Prison—all established with private capital. So, Minister, did you intend that private capital—investors’ funds, people who wanted to invest in infrastructure—would be excluded from doing so by the provisions of this entrenchment which prevents ownership and control of water services and significant assets?

So, now, Minister, do you support, by repealing this entrenchment clause, here in this SOP, the inclusion of private capital and institutional—like ACC and super funds, my KiwiSaver fund, for example—investing in water infrastructure? All kinds of organisations want to be able to invest in infrastructure, it has fantastic long-term guaranteed rates of return for investors and it also provides the additional capital that’s needed where the taxpayer or the ratepayer doesn’t have any more capital to contribute.

Minister, you’ve made the point a number of times that the reforms, which relate to this reserved position and this proposed amendment, actually would allow water services entities to achieve balance sheet separation. Minister, I’m assuming that that allows for the inclusion of private capital investments in water service entities. So, Minister, will you confirm that the Government and the Minister are open to private capital being invested in water service entities and water services infrastructure?

Thank you very much, Madam Chair. I want to get back to the point around why this vote was cast and the events leading up to that point. I reflect back on that evening in terms of when the vote was actually cast on Supplementary Order Paper (SOP) 285, and the Hon Kieran McAnulty was actually the Minister in the chair at that point of the evening because, as the Hon David Parker noted, the Minister here was not in the chair. The Chair of the committee was Greg O’Connor and the whip on the Labour side was Duncan Webb. So it is no—I mean, I think, to rule out in terms of who was in the room at that point when this was passed through, and when this was voted upon, those were the individuals that were in the chair.

I want to go back to Hansard from the Hon Nanaia Mahuta, Minister, when we were questioned about this exact Supplementary Order Paper, and I quote: “We accepted the advice of the Attorney-General, which says that there is a high constitutional threshold, and that came from the Crown Law Office. Select committee members will be well aware of that advice.” So the Minister articulated on the evening when we were talking about this Supplementary Order Paper that she was fully aware of the fact that the Attorney-General had provided advice in regards to the constitutional threshold of the entrenchment provision that’s on the table. It was also acknowledged that that advice had come through from Crown Law and that the select committee members were aware of that advice.

The Finance and Expenditure Committee, as part of their deliberations, pushed back strongly around the entrenchment of 75 percent. I go on and quote: “There is a high constitutional threshold to be reached in order to put such a threshold within legislation.” The Minister was fully aware on the evening when the Supplementary Order Paper was tabled that this constitutional matter that was in front of us was something that is absolutely breaching a normal constitutional threshold. And I go on and quote: “and often it’s on constitutional matters, of which this bill is not.” The Minister knew that the Water Services Entities Bill was not a bill in which entrenchment measures would be appropriate. And I go on and quote: “and it would be a novel approach to include an entrenchment clause.” The Minister was aware of the fact that while the entrenchment clauses did not meet constitutional thresholds, there was a clear—and I would go as far as saying premeditated, i.e., the issue had been thought about in advance, it had been considered, and when the Minister made the comment that it would be a novel approach to insert this entrenchment order, the Minister knew exactly what was going on.

The definition of a mistake—and this is the language that has been used by the Government around this issue—is “An act or a judgment that was misguided.” What does misguided mean? It is a decision that is based on faulty judgment. I have just categorically quoted from the Hansard that occurred on that evening—before that Supplementary Order Paper was voted on by the Minister, the Hon Kieran McAnulty, who was a Minister in the chair—that the issues and regards that were noted by the Attorney-General on this evening were all known. All of these points were known.

In taking a simple definition of what is a mistake and not a mistake: this was not a mistake. This decision—in the Minister’s words, “and it would be a novel approach to include an entrenchment clause.”, I go on: “We know that while this particular SOP may not pass the constitutional thresholds, there is a moral obligation of people who believe that privatisation should not occur to support that particular SOP.” The Minister was using the opportunity to put in play a new provision in regards to our constitution, one that completely conflicted with the history of this country, our constitution, and our democracy. The Minister, as I have quoted, knew what was going on. There are other members of the caucus that were fully aware in terms of what was and when the vote was taken. This was not a mistake. And so that is in Hansard, that is recorded, and we are now here looking to try and reverse a decision that they knew was wrong.

I move, That the question be now put.

Motion agreed to.

The question is that the Minister’s amendment deleting Subpart 4A of Part 6 set out on Supplementary Order Paper 310 be agreed to.

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

Motion agreed to.

Report adopted.

Members, it’s time for me to leave the Chair for the dinner break. The House will resume at 7 p.m.

Sitting suspended from 6 p.m. to 7 p.m.