Water Services Legislation Bill

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

TEMPORARY SPEAKER (Barbara Kuriger): That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Water Services Legislation 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 25 May 2023.

I’m pleased to read this bill for the first time. It’s the next step to ensure that New Zealanders and our communities are better prepared to sustainably finance our water network for better health and environmental outcomes.

I want to start by recognising that there have been years of research and comparative analysis using local and international expertise and extensive consultation with communities, local government, mana whenua, iwi, and industry. Decades of under-investment in our water network have increased its fragility. The tragic Havelock North drinking-water contamination event in 2016 changed the way that we view water infrastructure. It resulted in an inquiry which highlighted systemic failings in our water system. That was not isolated to the Havelock North area and was evidenced by boiled water and no-swim notices that we continue to see to this very day.

Water services are an essential building block for communities. It’s time to stop kicking the can down the road. This bill enables us to take action and establish the roles and functions of our new water services system. When we passed the Water Services Entities Bill this month, we progressed the publicly owned four-entity solution to deal with the significant infrastructure challenges facing drinking water, waste water, and stormwater.

This is a cost of living issue. The investment needed over the next 30 to 40 years to maintain and upgrade New Zealand’s water infrastructure to the standard required is unaffordable for most communities under current arrangements. Detailed analysis indicates that $120 billion to $185 billion is required to fund our water network over the next 30 years.

We are now at the next milestone with this second bill. It sets out detailed functions and powers of the new water services entities, what they are required to do, the tools they need for their work, and arrangements for the transition to the new system. As a Government, we want to ensure that, come 1 July 2024, the entities will be able to deliver improved water services for communities across the country, big and small.

I now want to briefly touch on some of the important components of the bill before us. But before I do, I want to remind the House of our 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 and te mana o te wai, and ensuring good governance is established in these new entities. Throughout this programme, we’ve continued to listen and make adjustments to the solution that is before us, and we have put the community in the forefront of our thinking through working groups, engaging directly with local government, iwi, Māori, industry bodies, and submitters. Everyone who has contributed in some shape or form has strengthened our reform.

Rural water supplies that are owned by local government and provide both drinking water and water for farming-related purposes will be transferred to the water services entities. However, we have recognised that mixed-use rural water supplies are different to those in urban networks and some exceptions may be needed. Based on the recommendation of the Rural Supplies Technical Working Group, some users will be able to seek ownership of their water supplies. I’m grateful to the experts that sat on this group, whose insight helped us with these provisions.

There’s no doubt that as a nation we need to spend a lot more on the pipes and other infrastructure that supplies our water services to make up for decades of under-investment to meet future challenges. With better financing, we can achieve these goals more affordably and effectively for all New Zealand families.

The bill establishes pricing and charging mechanisms to provide fair, transparent, and affordable charges to households and businesses for their water services. Not only will the entities be provided with the legislative authority to charge for their services but an economic regulation and consumer protection regime will be established in a separate bill led by the Minister of Commerce and Consumer Affairs.

The Rates Rebate Scheme is also being extended to include bills from the entities, facilitated by the requirement of both territorial authorities and water services entities to share specific billing information. For the entities, the information shared is where the bill recipient has applied for a rates rebate, allowing a streamlined application process for beneficiaries of the scheme. For territorial authorities, the information shared will be the rateable value of the property to enable water services entities to charge for stormwater services.

As we secure an affordable and robust water network, we need to also keep environmental outcomes front of mind. Last year it was reported that at least 270 companies had breached trade-waste consents in 2020. Frankly, this isn’t good enough. Councils, communities, and environmental groups have all said that trade-waste powers needed to be strengthened, and we agree. This bill will enable entities to create the rules they need to manage their water network and control what is discharged back to the environment. There are provisions for compliance, monitoring, and an enforcement regime. Each water services entity will appoint a Director of Compliance and Enforcement and the boards of water services entities must issue compliance and enforcement strategy. Compliance officers will be given the necessary authority to monitor, investigate compliance, and take appropriate steps to enforce where breaches occur, and it will be consistent. These officers will have the powers of entry, search, and seizure, subject to detailed safeguards. There are special arrangements for homes, marae, and other types of Māori land, where warrantless entry can only occur by consent. This is consistent with other legislative provisions that enable similar things. Under the bill, an infringement regime will be established that allows water services entities to issue fines for minor offences.

Many of the provisions in the bill reflect powers under the Local Government Act 2002 that have been attempted to align with the powers of other utilities. This includes arrangements for accessing infrastructure on private land, including Māori land. However, these existing powers are being modified to enhance protections for Māori land. These regulations can only be made following engagement with the council and mana whenua, who are the subject of the arrangements.

Alongside the Water Service Entities Act, this bill sets out a detailed framework for water reform developed by decades of discussion and more than two years of concentrated work by the Government, local government, mana whenua, and industry partners. It’s our second significant milestone on our journey to improve water services delivery across the whole of Aotearoa New Zealand—communities big and small.

I stand proud as a part of a Government that tackles overdue issues, instead of putting them in the too-hard basket. It’s true—this issue isn’t easy, nor is it popular. But fixing a problem that has been around for far too long is necessary, and New Zealanders need us to come up with long-life solutions that will help the challenge ahead of them, especially as climate change continues to demonstrate how vulnerable our water network is.

Enough is enough when, just yesterday, one-third of Auckland beaches had no-swim notices due to bacterial contamination from waste-water overflow. We say enough is enough. We say public ownership of our assets and safeguarding against privatisation is a priority—we’ll guarantee that. And we say affordable, robust solutions that will provide effective water services for generations to come so all of our children have the ability to swim in their local stream, lake, river, or beach—it is actually not a luxury but a necessity to the quality of life we will guarantee them if we are brave enough to ensure that tackling the hard solutions is something we’re all committed to. It’s our responsibility to do that, and I commend the bill to the House.

The question is that the motion be agreed to.

Thank you very much, Madam Speaker. It’s a pleasure to rise on the Water Services Legislation Bill first reading. This bill is “Three Waters: Part 2”, and this evening I’ll provide an overview in terms of the National Party’s position on this bill and the key areas in which we want to provide comment.

National opposes this bill, and that should not come as any surprise to anyone who is watching this evening. It is our intent that we will repeal and replace this, if elected in 2023. The legislation that we are reviewing this evening was tabled only hours after the Water Services Entities Bill was passed last Thursday morning. This bill that we are talking about this evening significantly expands on the legislation that was passed only last week.

It, in effect, doubles the length of the original bill that was only passed three hours earlier to when this bill was tabled, and it provides a number of provisions and clauses which, in our belief, are ones in which the Government did not want to talk about through the select committee process that nearly 88,000 people made submissions on. What we are going to, in terms of the overview—in terms of the key challenges with this bill—is outline what we see as the issues and then it will go on to select committee, where it’ll go through a thorough process.

The key principle in regards to water assets—and the Minister’s articulated in terms of a future state—and no major party within this Parliament does not believe that improvement of water infrastructure is required in this country. The conversation, and the difference, between this side of the House and that is in terms of “How do we achieve that outcome?” And we still absolutely, categorically do not believe that a four-entity, co-governed, mega-entity model is the model which will deliver the sustainable health outcomes in regards to water infrastructure for this country.

We believe that other alternative models exist which can achieve the requirements about capital expenditure while also managing the constraints around funding and financing, and pressure on consumers in regards to their water bills.

The other element, of course, is that we still remain committed to the water regulator, Taumata Arowai, and it is our belief that that regulator will play a significant role in terms of dealing with the water-quality aspects which the Minister has articulated has underlying problems.

But it is very clear that the bill on the table this evening is not going to assist and enable us to get to that future state. There is a number of issues in regards to it, and we have already articulated one of the key aspects in terms of the simple timing.

So let’s work our way through some of those components. The first aspect within the bill is in regards to provisions around the charging for water. It’s interesting that a lot of the narrative to date by the Government has been “Don’t worry, your rates aren’t going to go up under this new model. Everything’s going to be fine.” But what they fail to recognise is what’s in this bill is actually water pricing and water charging will actually be undertaken by the new water service entities. So while your rates may not be impacted, you’re going to get another bill in the mail from the water services entity, which will be charging you for that water infrastructure.

So I think Kiwis can see through the fact that, actually, this is not a zero-sum game. And the reality is that consumers are going to be faced with having to pay the price for the significant bureaucracy and complexity that will be within these water services entities. And we’ve already seen the rampant expenditure in regards to consultants and contractors in those entities, and this bill brings the provisions to actually on-charge those costs to hard-working Kiwis.

The second element within the bill that raises a number of concerns that I expect the select committee will get into details into regards the penalties regime. Clause 414, for example, provides a fine of up to $20,000 for an individual who breaks water restrictions. While it’s pretty difficult to get locked up if you do a ram raid, if you leave your sprinkler on, Ian McKelvie, then you might be out for $20,000. You know, we’re talking about years of due diligence reviewing this bill before it came to the House, but some of these things—look, and that’s fair enough; it was only one clause. But let’s move on to new section 407, set out in clause 22, which is undertaking works if you’re next to a stormwater network asset, of which parks and reserves and the majority of parks and reserves are in scope. So if you dig a hole in your backyard, Matt Doocey, and you don’t notify the mega-entity before you dig your hole, then you could get a bill for up to $100,000 per individual. I’m not making this up. Have a look at new section 407—and I know it’s Christmas, but I’m not going to go on on any more of those clauses.

New section 372, set out in clause 22, also provides provisions for entry to premises without a warrant—and I see the Hon Mark Mitchell’s just walked into the House—for checking water meters and stuff like that. I mean, I think I’ve covered enough in terms of the penalties regime within this bill that are going to be pretty much open to quite a significant element of review within that.

We talked about the ownership of water assets, and the key differential between this side of the House and the Government is that we believe that water assets should be controlled and owned by local communities and local councils, not in bureaucratic, non-democratic mega-entities. These reforms, reinforced through the asset transfer mechanisms that are within this bill, are that these assets will not remain under the control of local communities, and that is a significant issue. This lack of ownership is particularly concerning for those communities that have funded these assets over generations and generations. This bill will see the usual rights and responsibilities of ownership transferred across to those mega-entities, and the territorial authorities will not have the power over those. This will just simply increase that degree of tension that the community have raised through the submission process on the Water Services Entities Bill, and it definitely will not make it better.

Changes in regards to stormwater are interesting. The Government have taken the decision to remove transport stormwater systems from the stormwater networks. So if you live in rural—particularly in Northland, potentially, you think about all of the stormwater networks up there, pretty much 70 percent, 80 percent of stormwater in Northland would be on the side of the road, so all of those corridors are now excluded from this bill. So what’s that going to mean for your roads up in Northland? Well, I can tell you what. I can pretty much guess where the maintenance in that is going to go.

The issue around that brings more complexity and confusion to a bill in regards to—in effect, I sort of worked out that it was three waters, and then it got two more waters added, so it’s five waters. We’re now taking half the stormwater out, so it’s four and a half waters now, I think is where I’m at, but I’m sure by the end of the select committee process it’ll be at a different number. But that sort of shows the mockery in regards to, you know, all of these years of planning, and we’re still making significant changes in regards to the scope of the bill.

I want to get into the changes around the Treaty provisions and Te Mana o te Wai statements, because the Government have not missed the opportunity to strengthen the provisions that were in a bill passed only three hours earlier. They’ve now doubled down and increased the provisions in regards to that. Te Mana o te Wai statements—this bill significantly expands those provisions that were set out in the original bill, and that’s in clause 16. The water services entities now must respond and action these statements that are submitted exclusively by mana whenua. It’s also got the provision that the CEO of these water entities, for every report that’s provided to the CEO of the water entity, they must do another report—so we’re into a lot of reports—in terms of how that affects or how that gives effect to the Treaty, for every single report. That’s now in this bill as well, under clause 13. So much for doubling down, but that’s basically what we have seen in regards to this bill.

The other elements in regards to this bill is it also allows the water services entities to set up subsidiary organisations. So we sort of talked about the concept of privatisation and all that stuff. Well, now these entities can go off and create subsidiary organisations underneath them, so I’m not sure why that’s necessary or why that’s required, but again, the select committee are going to need to get into this very thoroughly.

Madam Speaker, I’d love another 10 minutes, but I know you’re not going to give it to me—

ASSISTANT SPEAKER (Hon Jenny Salesa): No, I’m not.

But in context, I really am looking forward to a thorough assessment by the Finance and Expenditure Committee. This bill is a dog. It is an absolute dog. It is absolutely “Three Waters: Part Two”. This is a trilogy that has got a sad ending. But for those at home, the ending is coming soon, so I do not commend this bill to the House.

This bill is a technical one. It’s nuts and bolts, basically to sort the pipes, and that is about getting clean, safe drinking water, stormwater, waste water for all New Zealanders. It’s a technical bill. It basically allows fairness of pricing. It allows the transfer of assets and liabilities to happen in a timely way by 1 July 2024.

Without reforms, all New Zealanders will face significant hikes. Now, we didn’t say that they wouldn’t face hikes, but the hikes will be significant—including in Auckland, the projected hikes without the reforms would be doubled over the next 10 years to 2031.

In Kaka Point, in my own electorate, they were recently—in fact, they may still be—on boiled water notices because of broken pipes. This is the nuts-and-bolts bill that gets us through the next phase of three waters. I proudly commend it to the House.

Thank you, Madam Speaker. I was waiting for the explanation of this—how many pages is this bill? I’m just waiting—217-page bill. I thought that the Labour member might have just spent a little bit of time going through it—

💬 Joseph Mooney: Sixty seconds. Gone in 60 seconds.

—but gee, 60 seconds was it? Sixty-seven seconds. And nuts and bolts: why don’t you just miss out the bolts bit and start off with nuts, because that’s what this bill is. As my good colleague Simon Watts highlighted, yes, this is stage 2, but wait for it. Do not disappear, because after this one we’ve got stage 3 coming up, which, hopefully—oh, I don’t know whether we’re going to get to that tonight. But if you’re listening at home, tune in at about 9 o’clock tomorrow morning, because we’ll be into the third instalment of this beautiful cascade of water bills!

Now, I just don’t think my colleagues are taking this seriously enough, because what I see in this bill is quite serious, actually. But I do find it amazing, as my good colleague mentioned, this bill has added 275—I’ll just repeat that, 275—new clauses that were introduced immediately following the passage of the last bill. And here we are; we’re back in the debating chamber—and I’ve just worked it out; I got my phone out—131 hours after we debated the last bill to go through this and look at how we address the first bill. That is outrageous.

💬 Nicola Grigg: Shoddy.

That is shoddy workmanship, not only by the Minister but I think also by many of the officials, I’ve got to say.

This is the type of detail that in the select committee—and I look across the House at members of the Finance and Expenditure Committee—we have been seeking this advice so we had a context for the first bill. And without it, it was pretty hard to understand how it was all going to work. But this bill—131 hours later, here we are in the House, we’re going to have a chat. And I do find all the issues around compliance absolutely staggering. I was just checking, and there are five or six pages all about compliance. So as my good colleague highlighted, if you dig a hole—and I think the Government is digging a really big hole—that’s $100,000, if you happen to put it in the wrong spot near a stormwater asset; $20,000 for breaking a sprinkler water ban. But the other things are—there’s just pages of them; honestly, there are pages of them. I’ve been looking at them.

Compliance starts at clause 380. And if you just roll over to clause 397(1) “A person commits an offence if the person negligently engages in conduct relating to a wastewater network that causes a specified serious risk.” Well, I’m not quite sure—I don’t think specified serious risk is defined. But if you do, I don’t know who determines that, but you are also up for a fine of $100,000; and for a body corporate, $600,000. Discharging trade waste, up to $500,000 and $3 million. And I heard the Minister talking about I think it was 275 trade waste claims or allegations. And I’ve just got a note that there was 535,000 small businesses in New Zealand, about 350,000 operating. So as a percentage, it’s a pretty low percentage, but gee don’t get caught out. And Mr McKelvie, on your farm, for God’s sake, don’t do something wrong, because you’ll be up for, as an individual, well, it’s hard to determine, but it might be personally—

💬 Ian McKelvie: I’m very worried that a cow might break a trough.

Yes, a cow does break a trough. But, look, this bill has some significant issues around compliance.

The other thing is the ownership that this bill clearly sets out. One of the big things is around the so-called perception that the councils still own these water assets even though the assets and liabilities have been transferred to a new Crown entity of some sort. I’ve got to say to you this is a legal point, and for some reason it’s never really been debated properly. But it is clear that the councils, first of all, will have no right to appoint the directors. They can only do it through a regional representative group, and that group is the one charged with ultimately appointing the board. So there’s no direct right to appoint a director, and that’s normally the first thing—the first thing—in terms of determining ownership.

The second one is that there is no right for councils to exercise a direct vote. So that’s the second point about ownership. The third thing is there is no right for a council to receive a dividend, and that is the third element of ownership. The fourth issue is there’s no right of the council, or the owners—so-called owners—to provide financing to the water companies. They’re precluded under the legislation. That is the fourth element of ownership. And the fifth one: there’s no right to set the direction of the business. Normally, owners set the direction of the business.

So, on five counts, the councils will have no direct ability to influence it, appoint the directors, vote, provide funding, or, in fact, receive a dividend. My view all along is that whilst the Minister and the Labour Government have claimed that the councils will continue to own the shares of these assets, in legal terms that cannot be the case, because the councils simply do not have the specific rights of ownership that are understood well in law. I think this is one of the big misnomers about this whole thing, that there’s going to be continued ownership by councils.

But the final point I’m going to raise is around the question of rates and the so-called minimisation of costs, and, of course, against the backdrop of the $180 billion that was assessed by the Scottish adviser that was required. Of course, there is a huge amount of dispute about it, including from reputable economic commentators or analysts like Castalia, who are well known for standing up in the courts of the High Court and Supreme Court and debating economic issues, which was written off within a matter of minutes by both the Government and the advisers as being discreditable advice.

The issue about this is if you are taking the assets away from the councils, which is clearly going to happen, the funding for that will disappear out of councils but it will end up in the new entities, but already we’ve seen some of the increased cost coming through with the new head office announced in Auckland, the ripple effect of that going through, the cost of delivery of water to New Zealand consumers. Mums and dads living in places like Eketāhuna, Kaitāia, and Pukekohe will all be in a situation where, over time, their cost of water delivery will go up, their cost for waste-water delivery and services will go up, and, ultimately, we will see some substantial decrease in what it means for the rights of consumers to be able to influence how these water entities operate, because, simply, they will be unaccountable. They’ll be four head offices, and they will not be accountable to the general public of New Zealand.

That is why these reforms are so flawed and the reason why National stands and opposes these reforms, as we will be doing shortly with the third element of this triumvirate number of bills that we’re debating on this issue. This is a bad piece of legislation.

Thank you, Madam Speaker. It’s wonderful to speak on the Water Services Legislation Bill the second, and then we’ll get to the third—I’m not sure which one Andrew Bayly was speaking to—water services legislation bill.

It’s very clear: on 12 December, the New Zealand Herald printed, headlined, “Auckland’s beaches impacted by high levels of faecal bacteria after rainfall”. That follows a number of media articles: “More than 50 Auckland beaches declared no-swim zones”; “Faecal warning at Auckland’s beaches following downpour”; December 2020, “Six Auckland beaches have swimming alerts at the start of summer”. The list goes on.

We’ve got through the first phase, the Water Services Bill. Here we are; we’re moving through to implementation. We have to ask ourselves, what are we really up for—we’ve said time and time again, we all agree that reform is required. Yet, the response from the other side continues to be “we will repeal three waters.”

But the reality is, you haven’t put an alternative. I continue to challenge the Opposition to tell us what you will do, because Aucklanders—

TEMPORARY SPEAKER (Barbara Kuriger): Don’t bring the Speaker into the debate, Mr Halbert.

Apologies, Madam Speaker—because Aucklanders demand that we have clean beaches. We need to take action, and this particular bills moves us through an implementation. I look forward to the Finance and Expenditure Committee receiving it, and I commend this bill to the House.

Tēnā koe e te Māngai o te Whare. I’m pleased to take a call on the Water Services Legislation Bill. So we know that four water services entities are going to take over responsibility for service delivery and infrastructure for three waters from local authorities on 1 July 2024. Those four entities will provide three waters services to 85 percent of the population: around 4.3 million New Zealanders. The remainder of the population have got their own supplies or are on small community or private schemes. The Parliament passed the Water Services Entities Bill last Thursday that established the governance, accountability, and reporting arrangements for the entities, and included some of the transitional arrangements and the Department of Internal Affairs oversight powers.

So this bill is the third in a package of four bills. The first one, the Taumata Arowai bill, establishing Taumata Arowai as a regulatory agency, we supported. The Greens opposed the Water Services Entities Bill at its third reading last week, and that was largely because of the failure to secure the protections against privatisation of the new corporate entities because we favoured a council-controlled organisation model such as Watercare, where it was very clear—point of order, Mr Speaker. The members in front of me are talking quite loudly. Would it be possible for them to be quiet?

💬 Simon Court: Speaking to the point of order, we accept that heckling is allowed, but as long as—I understand—it’s witty and infrequent. If the Speaker could just clarify.

💬 SPEAKER: I certainly will, thank you very much. The reality is that members on the cross benches—and there are Speakers’ rulings; I haven’t got them in front of me right now—need to be mindful, need to adjust the volume so that the member can be heard. Every member has the right to be heard in the debate. And so the Hon Eugenie Sage has felt the need to express that, and so I just want to let members know on the cross benches they should be not so loud as to interfere with the giving of the speech.

Thank you very much, Mr Speaker. So because we favoured the council-controlled entity model; because we favour seven not four entities, because we think seven entities would better reflect regional boundaries, catchment boundaries; because we wanted stormwater to stay with councils, we won’t be supporting this bill because it provides the mechanics of how the entities will actually operate. It provides the details of how the assets and liabilities which local authorities currently hold will be transferred to the entities. It provides a lot of detail on the functions and powers of the entities that they will have in place of our local authorities, and the regulatory functions and powers so that the entities can make the rules to provide for three waters and also engage in compliance and enforcement.

It would have been very helpful if the Minister had talked about subsidiaries, which the bill enables, because it was very clear that the entities are not-for-profit Crown agencies—they don’t pay a dividend, as the previous speaker noted. But this bill provides for the establishment of subsidiaries which are able to pay dividends and there’s quite a lot of detail in Schedule 5 about that but it’s unclear as to whether these subsidiaries are to enable public-private partnerships or exactly what they are for. So the Greens have got some concerns about that.

In terms of the regulatory powers and functions that the bill provides for, it means that the entities can establish controlled drinking-water catchment areas such as Watercare operates in the Hunua Ranges and the Waitakere Ranges. We think this provision should have more power because the entities cannot make any rules about what happens in that land area unless they have the permission of the landowner. And if it’s good enough under the replacement for the Resource Management Act to be able to have designations for renewable drinking water, the Greens think we need to be able to give much more attention to protecting our water sources, which is what controlled drinking water catchments should be all about, and controlling the activities that occur in those catchments. And while the Government is saying that the entities will mean that in a generation or so we will get swimmable rivers, I would like to point out that, yes, some of our rivers are polluted because of waste-water discharges, but it is generally the land uses in catchments—particularly, intensive agriculture—that has led to the pollution of rivers, not always three waters.

The bill also includes pricing and charging arrangements for water services, and it signals a move away from these being paid by rates to an approach which involves direct billing of homeowners. Currently, households pay an average of about $1,300 annually for three waters, and it is $1,400 annually in Auckland. It’s much lower in smaller councils where those councils haven’t been investing adequately and aren’t covering depreciation.

The Department of Internal Affairs says that this regime will be more affordable, and I think the jury is obviously out on that. The charges will be paid by property owners, regardless of whether they are in residence or not, and they’ll be passed on by landlords to renters. I understand that Internal Affairs considered direct charges on tenants and residents, but decided that that regime would be too complex.

But here the Greens have some concerns, because access to drinking water is a basic human right. We want to see more clarity around what basic allocations of water will be provided to households. What are the guard rails around the entity’s ability to restrict water supply as a compliance measure, and what are the guard rails around the penalties on unpaid water charges? We want much more certainty around what a minimum sufficient water supply is.

While the bill doesn’t provide for a free base allocation of water, it does set some pricing principles. But we note that entities such as—well, Watercare has got very clear policy in this area about when restrictions on supply can be imposed, and a clear policy that if it’s in doubt about the situation of a household and whether it’s got people who are elderly or with medical or health concerns, it does not restrict supply.

So there are certainly some mechanisms in the bill to protect vulnerable citizens with this concept of geographic average pricing to smooth out and share costs across communities, but there are also provisions for volumetric pricing. That’s certainly a mechanism for encouraging water conservation, and in places like Christchurch, where the city council has installed water meters but doesn’t use them, it is now concerned about the inadequate attention to water conservation. But volumetric pricing can also potentially penalise large households, which may use a certain volume per person which would be smaller than a small household, but they end up paying more.

So there is a power for the Minister to set regulations to limit the proportion of the entity’s charges which are volumetric. We’d like to see a bit more detail around that. We’re pleased that there’s an ability to include water charges as part of a claim for a rates rebate, but we do want to see a few more of these guard rails to protect vulnerable communities.

One of the other reasons we are opposing the bill is the provision around rural water supplies, which the Minister outlined. That means that rural water supplies, which are currently operated by local authorities for the provision of drinking water and also to provide water for irrigation for agriculture and horticulture—they go across to the entities. But then if the entities get approached by an alternative supplier, they can make that decision after a referendum that the water supply be transferred across, because—

💬 Simon Court: Nonsense.

Well, the ACT member is saying, “Nonsense.” The ACT member should actually read the bill. So this provision to allow for transfer, we see as the privatisation of valuable water, which agribusiness will benefit from, because we have got these mixed-use rural supplies in areas like Canterbury, where the council has subsidised the taking of water from rivers like the Hakatere / Ashburton to provide for drinking water but also for stock water and irrigation. If those schemes are privatised, it means that the rivers continue to suffer and the farmers get the benefit of all that investment and subsidies from the past communities. The ACT members are objecting to this, but that is just typical.

So that privatisation of these rural water supply schemes is another reason that we are opposing the bill going to select committee. Nevertheless, we—unlike some members of the Opposition—will be working hard to improve the bill. We will be reading submissions closely and will take a constructive approach.

Thank you, Mr Speaker. ACT agrees there is a need for reform in the way three waters infrastructure is funded, delivered, and maintained. I read with disappointment about the waste-water overflows in Auckland and that beaches are closed for swimming. Where I launch my kayak in Henderson Creek, Te Wai o Pereira, there’s a very large waste-water network pipe that brings sewage and waste water from all the suburbs of the north-west in Auckland past the boat ramp where our waka ama club, where our multi-sport club, and where our rowing club launch.

Now, I’ve met with Auckland Council’s own Watercare and they told me that the fix will cost a billion dollars and take about 10 years. Now, that’s the same as the cost to fix the central interceptor in Auckland which is going to have the result of cleaning up all the beaches in central Auckland so people can swim. Now, Watercare said to me it’s not the money that’s missing. It’s not that the money isn’t there to invest; it’s the system that central government has given local government to work in that’s broken.

This problem’s developed over generations and the fault lies firmly with central government and the architecture they’ve given local government. And despite the best efforts of councils to provide three waters infrastructure, to save and fund its depreciation like Ōpōtiki District Council, which has a fund of $10 million, they told the select committee recently—saved up to build three waters infrastructure—it’s actually central government that’s provided this flawed architecture.

They collect most of the tax in New Zealand and local government is dependent on handouts—the system can be changed and ACT has a plan to change it. But it seems almost unbelievable that Parliament is here again, at almost 10 o’clock at night, debating—and tomorrow under extended sitting conditions—more of this terrible three waters legislation. Labour keeps forcing this legislation through, but the ACT Party says don’t bother; stop now, save your effort, because there’s going to be a change of Government next year and ACT’s going to repeal it.

💬 Matt Doocey: That’s right—listen to Jamie Strange.

Now, this Water Services Legislation Bill—that’s right, Mr Doocey.

💬 Matt Doocey: Jamie knows.

Jamie knows. The Water Services Legislation Bill gives these new entities the powers to take local control away—[Interruption]—Anna Lorck—from Hawke’s Bay councils, for example, and centralise it. Now, ACT’s going to vote against this bill. We’ve proposed an alternative water infrastructure plan which I’m happy to share with the House, with listeners on 882AM, and with those at home watching Parliament TV. Here’s ACT’s water infrastructure plan. Firstly, ACT supported standing up the water quality regulator Taumata Arowai. We need a water quality regulator, but we’ve got one. Taumata Arowai starts their work very soon to regulate water quality.

Labour’s wasted millions on taxpayer funded propaganda ad campaigns to try to convince people this legislation’s necessary. They’ve tried to bribe councils with “no worse off, better off” funding to try to get them on board, but $2.5 million in debt’s going to be dumped into these new water entities on day one; it’s completely unnecessary. But when none of this worked, Labour’s pushing ahead anyway.

Now, this current system’s not up to scratch but these reforms are not going to cut it. Taking control of council’s assets away from communities is wrong. Moving assets from one Government department to another is wrong—[Interruption]—Anna Lorck. Rural water users and communities will be captured by these new water corporations who will have an ability to manage their entire catchment and to tell water users how much water they get and who gets it. New Zealanders think this responsibility should, in fact, lie with democratically elected local councils which represent the needs of their communities, not appointed entities benefiting from the work that Nanaia Mahuta and her cohort have done to take the assets off councils and allocate them to unelected co-governed bodies.

💬 Damien Smith: Undemocratic.

Undemocratic. And the worse aspect of this reform is divisive co-government. It’s totally inappropriate to give iwi Māori organisations a seat at the table just because of who their ancestors were. All New Zealanders want safe and clean drinking water. The requirement to give effect to these vague Te Mana o te Wai statements will simply wrap these water entities up in red tape, and is a recipe for endless litigation and political mischief.

Because there’s no show without Punch, this bill adds to the usual Te Tiriti boilerplate and vague Te Mana o te Wai stuff by requiring the chief executives of these water entities to report on how the entity is giving effect to the principles of the Treaty of Waitangi and Te Mana o te Wai.

Now, goodness me, I’m a civil engineer. When I became a civil engineer, no one said, “If you ever get to be the chief executive of a water corporation, your job will be to give effect to the principles of the Treaty.” I thought it’d be to build pipes and to deliver services to communities so we can build affordable homes. Who knew?

So Labour and their dwindling group of cheerleaders ask, “What would ACT do?” What would ACT do, Anna Lorck? What a good question, Anna. Our purpose is, “Better public policy which benefits New Zealanders.” Better public policy. Policy that protects property rights, promotes the benefits that more private sector brings to the delivery of basic services like water. That’s a purpose that more and more New Zealanders are getting behind.

Here’s a practical example of what that would mean for the delivery of water services: infrastructure and service land for housing. ACT’s water infrastructure plan would provide for councils to enter voluntary shared services arrangements. Actually, Hawke’s Bay councils came to select committee and told those on the Finance and Expenditure Committee that they were already doing that and they didn’t need this legislation. So I’m surprised that the member for Tukituki, Anna Lorck, didn’t let her friends in the Labour Party know that problem’s resolved. It gives the benefits of scale while retaining local control.

We would establish long-term central government and local government partnerships—partnership agreements which would plan water infrastructure upgrades tailored to specific regions and local needs. We would establish public-private partnerships.

💬 Helen White: Privatisation coming through, thick and strong.

That’s right. To attract investment from financial entities such as KiwiSaver funds, ACC, iwi, investment funds—your KiwiSaver even, Helen White.

Expand the exemption, we would, for domestic suppliers from single dwellings to include all those small water schemes servicing rural communities of up to 30 users—mostly rural users. And ACT would let councils keep half the GST on new builds because that’s an incentive to sign off more consents, get more homes built, and actually provides a cash flow of around $2 billion per annum based on the current rate of house construction which councils can use to finance debt and to fund new and upgrade existing infrastructure.

We can improve the current system, but we don’t need to do it through State-mandated centralisation and allowing some people to have more influence than others based on their ethnicity.

Labour doesn’t care about the awful sense of division that their obsession with co-governance and the Treaty of Waitangi is having on New Zealand. They don’t care about the awful sense of division, discord, and disconnection that’s caused in our communities. It’s wrong. The ACT Party says it’s wrong to do this to New Zealand. It’s wrong to pretend to use our drinking water and our beach water quality to push this co-governance agenda through on New Zealanders.

ACT believes it’s time to get this country out of the ditch this Labour Government’s driven us into. We believe, now more than ever, it falls to the ACT Party to do something; to restore that sense of inclusion that I felt as a Kiwi growing up in New Zealand. ACT will respect the communities who’ve spoken out against three waters reform, and we will repeal it if we have the privilege—if New Zealanders give us the privilege—of being part of the future Government. Thank you, Mr Speaker.

Members, the House is suspended, and I will resume the Chair at 9 a.m. tomorrow for the extended sitting. Pō mārie.

Debate interrupted.

Sitting suspended from 10.01 p.m. to 9 a.m. (Wednesday)