Water Services Entities Amendment Bill

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

ASSISTANT SPEAKER (Hon Jacqui Dean): 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 Entities Amendment Bill be now read a third time.

This country faces a massive challenge, and that challenge equates to up to $185 billion. That’s a lot of money, and it’s especially a lot of money when you consider that at the moment our district councils—67 of them—are having to face that bill individually. What that means is that ratepayers are having to face a bill that they have to lend at rates that are unfavourable, which will lead to rates that are unaffordable. And that’s the crux of the issue; if we don’t do something, ratepayers in this country, district councils in this country, will face bills that they simply cannot afford, and rates are going up enough as they are. So this bill brings in reforms that will save ratepayers thousands of dollars each year on water services.

It will also relieve councils of the burden of significant amounts of debt that is sitting on their balance sheets that councils are having to service at the moment. Now, members in this House will know numerous examples in their local areas where rates are going up at points where many people simply can’t afford it. That’s without taking into consideration the massive bill that they face at the moment. This is not the fault of local councils; they are doing the best they can in the circumstances they find themselves in. They are often dealing with decisions that were made many, many years ago. But the facts are very clear: there are councils in this country that are facing millions—hundreds of millions—of dollars, and they don’t have a way to deal with it.

This Government, through this bill, is providing a solution to that. And it’s interesting that throughout this debate, throughout the passage of this bill, there have been criticisms of all sorts of things from other parties in this House. None of them have outlined their alternative from a financial sense. None of them have outlined how it’s going to pay the bills. The ACT Party, for example, have put forward—which we did consider in the process of considering this bill. We looked at the alternatives. We tried to find other ways in which to do this; none of them stacked up. The proposal from the ACT Party that they will share GST with councils equates to $1 billion a year. The expenditure we’re talking about is over a 30-year period—$185 billion over 30 years. The ACT Party’s proposal equates to a billion a year. Over 30 years that’s $30 billion—$155 billion short or 150 years short of the problem that we are facing.

The National Party, which we also looked at and considered in good faith, are essentially proposing the status quo; they are proposing voluntary mergers through council-controlled organisations, they are proposing shared services—all of that can happen already. And at the crux of this is that neither of those proposals remove debt from the councils’ books. So we can say “Sure, work together; go for it.” But when it’s happening now and when councils are still servicing debt that they simply are going to struggle to afford moving forward, the simple question is: how is that a solution?

What this bill proposes is that collectively, through 10 entities which largely reflect geographical boundaries, there is a way in which they can get the scale and access to lending at a rate that they can afford to do that investment to maintain and upgrade water services in this country in a way that ratepayers can afford. Originally the proposal was for four entities. When I was given the task of being local government Minister, I took on board the feedback from the local government sector. They said, “We do need reform, but we have concerns about four entities.” So we looked at it. We considered 16, to go along with the regional council boundaries. But what we found was that if we left Northland, Tairāwhiti, or West Coast by themselves, there’d be no change for them because they wouldn’t have the scale. So that’s why we’ve landed on 10: Northland into Auckland as was originally proposed; Tairāwhiti into Hawke’s Bay; you’ve got the top of the South together, the three unitary authorities there alongside the Ngāi Tahu takiwā; you’ve got the West Coast into Canterbury; you’ve got Southland into Otago, and we end up with 10.

What’s interesting is that I think there’s a reason why opponents to this proposal don’t want to talk about rates. It’s because they know their proposals don’t stack up. We can prove—we can show—that the figures that back up this proposal will save ratepayers money. My challenge to the other parties as they contribute to the third reading today is: why don’t they show us how theirs stack up? They won’t. It’s a challenge I’ve put to them throughout this debate; they will not come up with figures to show that their proposals stack up, because they don’t.

And that is the simple thing that equates to this bill that people have to consider: this will save them money; theirs will not. So, with all the scaremongering and all the opposing that we’re about to hear in the third reading, we won’t hear how their bill saves them money. That is the guts of this, and that is why I am proud as Minister to have brought this through the House, and that is why this side of the House will be voting for it. I commend the bill to the House.

The question is that the motion be agreed to.

Thank you very much, Madam Speaker. I do rise to speak on the Water Services Entities Amendment Bill. Isn’t it ironic that we hear the opening words from the Minister in regards to this legislation, talking about the critique and criticism that is being levelled against this bill? You see, the reality is that our role in this House is to represent our communities, to represent the views of hard-working Kiwis across this country. It is not to simply pay lip-service to that feedback and not take into account the views of our community.

Well, National have listened to our communities. We have listened to local government and we have proposed a solution, called Local Water Done Well, that we believe will deal with the reform requirements of water infrastructure in this country. As the Minister failed to note in his address as he opened today, all major parties in this House believe that water infrastructure reform is necessary. It is a question of how we achieve that outcome. This bill is not the mechanism which we believe, nor the majority of local councils across this country—nor, in fact, the majority of Kiwis—is the pathway to achieve sustainable change in an area which is so critical.

I think when the Labour Party members reflect, in 51 days, on some of the contributing factors of what happened in the 53rd Parliament, the water services entities legislation and the amendment bill that we are referring to and talking on at its third reading today will be a significant element and a significant contributing factor to the fact of where Kiwis no longer trust this Government. The three waters legislation and the Water Services Entities Amendment Bill is a litany of errors, it is a litany of broken promises, and it is a litany of making it up as you go. And that is the reality that personifies this Government and its processes.

Labour Ministers, and the Minister we have just heard from, are accountable for this reform. They are accountable for its failures and they are accountable for not listening to New Zealanders in regards to how this could have been improved. Because this bill could have been improved, had we given it more than six weeks of consultation with the public. On 22 June, this bill was read, and on 27 July it was reported back to this House. Well, is that acceptable? Is that the way in which we do business in this democracy? I say no. I say that is a complete derogation of our democracy and the fact that we should be taking this legislation that we pass through this House very seriously. We got that feedback loud and clear from submitters on this bill throughout the process—that they did not have adequate time to be able to consider the inputs and requirements of this bill.

This bill is a back-down bill. This bill came as a result of the release of the National Party’s alternative, Local Water Done Well. Following that, with a new leader of the party and a need for a policy bonfire and a policy reset, and following the release of our alternative model, then this bill came into play. What is so frustrating is that, actually, none of the substantive aspects that needed to be changed in the bill, the elements around the mega-bureaucracies that are co-governed—an opportunity was there begging to be able to make the amendments and changes in this bill that went without any due consideration. And that is a great shame, because all this bill does is change the number of the mega-bureaucratic co-governed entities from four to 10. That’s pretty much it. It doesn’t deal with the significant pushback across this country on co-governance within the water services and public service delivery—pipes under the ground is not the appropriate mechanism. Co-governance remains unchanged in regards to this legislation. The mandating of the fact that the assets and liabilities across councils will have to go into these new entities is unchanged, with the exception of the Chatham Islands, because don’t forget that the Chatham Islands is actually the one territorial authority in this country which was exempted from this legislation. Well, there’s always one, but I do wish the 668 residents in the Chatham Islands all the very best, but they will not be alone in regards to the only entity that is outside this legislation; post 14 October, all other councils will join with them, and rightly so.

The other element of this bill that has not been modified and that received significant feedback—1,997 submissions; that’s quite a lot. The challenge is that only 28 individuals were heard through the select committee process, and I think one doesn’t have to be too good at maths to work out that’s not a large number, but you can see why people are fired up and annoyed that their voice has not been heard. But the undemocratic element of this bill in regards to the Te Mana o te Wai statements—and the Minister continually says, and I acknowledge, that in the prior National-led Government, there was the introduction of the principle—the principle—of Te Mana o te Wai. The principle is very different to the introduction by this Government, and reinforced in this bill, of Te Mana o te Wai statements. The statements are not the principle; there is a very clear point of demarcation between those two aspects, because the statements, in effect, bring into play powers and obligations on a number of individuals in regards to this legislation. It is not a principle; it goes further. And so for the Minister to say that the Te Mana o te Wai statements in this bill are simply just a continuation of prior principles under a prior Government is not consistent with what we heard in regards to the feedback during the select committee process.

New Zealanders are sensible and they understand that this is going to be legislation that does not deal with the underlying aspects that we need in this country. This is a back-down bill, and what is interesting to hear from the Minister in regards to the fact that this legislation will remove debt from all of those councils that are burdened with debt, and this will mean that their rates are not going to go up—well, where does that debt all go? Where does it all disappear off to, because the costs and the debt required to fund the water pipes under the ground will still continue irrespective of where that ends up. So maybe the debt’s coming away from the council, but it’s going into another entity. And I’ll tell you what: there is no magic money tree. There is no magic money tree that means this debt just sort of disappears and that no one has an obligation in regards to paying. Ratepayers and taxpayers will continue to be on the hook for the funding of infrastructure in this area. So to simply say that removing the debt from councils, and, as a result of that, a reduction of rates, is going to solve all the problems, is, again, inconsistent and, again, not noting the reality that we are simply moving this problem from one side of the boat to the other. And it will still exist, and that obligation will still exist. And, yes, we do have a deficit of infrastructure, but simply ignoring the fact that this needs to be repaid is, I think, something that Kiwis will see through and have already seen through in regards to this bill.

The opportunity that was placed upon this Government in regards to this legislation, as I have highlighted, is absolutely there for the taking. The elements within this bill—there was a real opportunity in order to reset the position around water services and three waters infrastructure. That opportunity has not been taken up by this Minister, and this Minister, when reflecting on the performance of the 53rd Parliament, in 51 days, will need to take accountability for the actions that have been taken in regards to this piece of legislation and the other elements of the bill that are connected, because there is no one else that the blame can be laid upon other than the Minister, the Hon Nanaia Mahuta, and the Prime Minister, for pushing through reform that was so strongly opposed by all New Zealanders. And that’s the reality: you’ll hear a lot of comments and excuses around that, but that is the reality of this bill. National opposes this bill.

Thank you, Madam Speaker. I want to make a short contribution today and just note a couple of specific points that came up through the select committee process and a couple of other matters just in response to the previous speaker, Simon Watts.

The first point I just want to note is around the establishment date of the water services entities. We received a lot of feedback from local government authorities wanting some certainty around when they would move to the new dates for establishing their new entities. We also heard from officials that there had been significant consultation, but there was still work to be done to ensure there was agreement around the best dates.

So in order to add that certainty into the legislation, we did add in a requirement for the Minister to put the dates for the new entities into an Order in Council within six months of the legislation being passed—which is now. So within six months of this time, we will have those establishment dates noted by Order in Council by the Minister, which is a good thing for certainty from those councils

The next matter that we considered was around community priority statements. One of the amendments we made to those statements was to ensure that those who make those community priority statements do have a genuine interest in the area they’re making them for. In my area of Nelson and other parts of the country, we have had issues related to water where people from outside of our region—with no connection to our region—have been able to take court action or try to influence activity in our water areas, and it has ended up costing Government and costing other agencies significant amounts of money. So we did want to limit that to ensure we weren’t going to have vexatious approaches from people outside of particular areas.

The next piece I just want to note is around the regional representative groups, and there have been calls from some parties to have equal weighting based on proportion of population. We’re very clear—and I’m very clear as a provincial MP—that it’s important that, as part of the reform, our provincial and rural communities have strong voices sitting at the table. That has been one of the challenges around water infrastructure—that our smaller councils with lower populations and larger areas to cover, particularly in rural communities, have found it difficult to invest. So we need to ensure that their voices are strong at the table so that they’re not swamped by our dear friends from the large urban centres.

I just want to note one further point, which is the importance around that particular issue with the representation, as it helps ensure that genuine balance sheet separation. We know that we need genuine balance sheet separation so that we can invest the way that we need to. On the point of debt, by having larger entities with greater numbers of population and that genuine balance sheet separation, we can ensure that that debt will be serviced using lower interest rates, and that allows us to be able to invest properly in the way that we haven’t for generations.

This is an excellent bill. I’m so delighted it’s passing its third reading today, and I commend it to the House.

Oh, thank you, Madam Speaker. Well, this is the “Back-down Bill”. It was signalled that it was coming, I predicted it—or we predicted it—and here it is. We’re finally at the tail-end of this Parliament, considering the Government’s bill that, essentially, gives effect to their embarrassing climb-down over water services.

What a shambolic process it’s been from start to finish—and it’s a frustrating shambles because, actually, across the Parliament, there’s quite a degree of consensus that water infrastructure in this country is stuffed around various different parts of the motu. There is, I think, a consensus across Labour and National and ACT and the Greens that we need more investment, we do have an infrastructure deficit. Councils—some councils, not all councils, but many councils have done a poor job of managing their water assets and we need change. And you’ve just got to step back and ask yourself at the third reading: how have we got ourselves into a position where the Government has managed to inflame local democracy and local communities up and down the country, where what some people would regard as slightly esoteric matters have led to billboards all around rural and provincial New Zealand. It’s extraordinary—

💬 Anna Lorck: They’re not up anymore. You can’t see them anymore.

Oh, you can’t see them anymore?

💬 Anna Lorck: No.

Oh, that’s because they’ve all been replaced with National Party billboards, that’s why. They’ve all been subbed out. Anna Lorck says you can’t see “Stop Three Waters” anymore. The reason you can’t see them anymore, Anna—I’ll tell you why you can’t see them anymore—is because the same people who are opposed to Three Waters have now translated their support over to the National Party and they’ve put up National Party signs.

💬 Anna Lorck: Make a prediction. Make a prediction.

OK, here we go—OK, make a prediction.

💬 Anna Lorck: Come on, Mr Bishop.

Make a prediction, make a prediction. No, no, no—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! I would like to hear the member’s speech.

I want to hear Anna Lorck’s prediction.

💬 Anna Lorck: Oh, I’ll be speaking.

Yeah, but are you going to make a prediction? OK, if you won’t, I’ll make a prediction: Anna Lorck won’t be an MP after 14 October. Because she and a number of other Labour Party members of Parliament in rural and provincial—[Interruption]

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order!

She and a group of Labour Party MPs in rural and provincial New Zealand know in their heart of hearts they have completely stuffed this issue up. It has led to and is leading to a big backlash. And this goes back to my original starting point, which is: how has it got to this point? Because, actually, there is consensus across the Parliament, I believe, that we need sensible water reform. But the Government, from start to finish, has gone out of its way to annoy, enrage, and frustrate the legitimate interests of local communities. It started with the Hon Nanaia Mahuta’s very stupid ad campaign in which local councils were, essentially, insulted—with taxpayers’ money—by TV ads and print ads and things like that basically saying to local communities: “Your councils have got this wrong.” That unsurprisingly put the backs up of local councils.

Then the Government pretended to go through this consultation process and said, “We’re not wedded to anything. We haven’t ruled anything out.” But it turns out, as my colleague Simon Watts discovered, Cabinet had already agreed to a legislated all-in solution. They were out there going around the country saying, “Well, we want to talk to you; we take this very seriously”—blah, blah, blah, all the things that Ministers have to do. But the point is Ministers have to do that, but they have to mean it—the words they say have to mean something. And it can’t just be a fig leaf, which is what it actually turned out to be. Then, essentially, the Government came in over the top and said, “We’re going to confiscate these assets and put them into these four mega entities.” And that’s where the rubber really hit the road. There was a big backlash, a big controversy about that and Chris Hipkins’ so-called reset—the reset that’s not going so well—went from four entities up to 10. OK, that’s a marginal improvement. But, actually, what should happen is we should let councils decide on their arrangements on their own volition.

Our policy, which is I think the correct policy, is to leave councils to sort it out and if they don’t deliver the type of changes that are required, then central government of course has a legitimate role. There is consensus around economic regulation. There is consensus around water quality regulation. There is consensus, I believe, around the necessity for balance sheet separation to use debt to fund these long-lived assets. That’s the crazy thing about all of this—there is actually quite a degree of consensus, but the Government has got the politics all wrong. And that’s my second point, which is that there is a consensus but the Government has stuffed the politics and therefore they’ve stuffed the policy.

However, there are a number of objectionable elements to this bill and to the Government’s water reform programme generally. The first is confiscation. As I’ve already mentioned, this bill does confiscate local assets, it does take those assets off councils, and our view is that is wrong. The second thing we object to is the mandatory co-governance provisions in the bill. The Government has never properly explained why the governing entities have to have fifty-fifty co-governance; they are yet to articulate a proper reason as to why that is required. We have asked repeatedly, and communities have asked repeatedly, and we are yet to hear a reason as to why that is required. And we had the ridiculous spectacle of the now Minister of Local Government, Kieran McAnulty, arguing on Q+A that mandatory fifty-fifty co-governance was necessary for balance sheet separation, which is just ridiculous. It just makes no sense—and that was also the interview in which he claimed that democracy had changed in that the sort of modern notions of democracy were different and that we sort of had to all go along with this idea of mandatory—

💬 Simon Court: He’s going to find out about democracy in a few weeks.

Well, that’s exactly right—that’s exactly right. And so we object to that on principle.

Then we get to the other thing, which is Te Mana o te Wai and the disjunct between Te Mana o te Wai statements and the community priority statements. And this is really important, because members opposite, including the Prime Minister, have made much of the fact that the Government’s listened and now there’ll be the ability for everyone to influence the new water entities through the community priority statements. Except there’s a big difference: the entities “must” give effect to Te Mana o te Wai, but in relation to community priority statements, the word is “may”. As lawyers in the House will know, there is a big difference between “must” and “may”. One compels the entities to do something; the other gives them the discretion to do something—so there is a disparity. These new water services entities will have to give effect to Te Mana o te Wai statements and, as various commentators have pointed out in the public domain, the breadth of these statements is, essentially, untrammelled, very large in scope, no one knows exactly how they will be used, and the entities will have to give effect to them. The only people who can issue Te Mana o te Wai statements are mana whenua of the local area. So it is not clear how they will be used, it is not clear what they will actually have the effect of doing—all we know is that the entities will have to give effect to them.

Then we get to community priority statements, and, as I’ve said, that is discretionary. A water services entity could be compelled by law to give effect to Te Mana o te Wai, and for anyone else who decides to issue a community priority statement, the water services entity could say: “Well that’s all very interesting, but I’m not compelled. I only have to think about looking at, and we don’t want to.” That’s the reality; that is the legal position. Attempts were made in this House to equalise the two statements between Te Mana o te Wai and community priority statements, and the Government rejected that, the Government chose not to do that—that’s an explicit policy decision made by the Government. So, essentially, community priority statements, they’re not quite legally meaningless, but they may as well be legally meaningless—particularly in contradistinction to Te Mana o te Wai.

Do Māori have rights and interests in water? Yes, they do. The Crown conceded that under the last National Government and that remains the position of the National Opposition. But to give effect to legitimate rights and interests in water, our position is that you do not need mandatory co-governance provisions and you do not need Te Mana o te Wai statements that are legally superior to other abilities for communities to legitimately influence water infrastructure in their patch.

This bill is objectionable, and the National Party will oppose it. We will sort out three waters properly in Government ourselves.

Thank you, Madam Speaker. As I came here this morning, I passed The Paddington complex in Wellington. As I remembered the story behind that whole entire development, it was the fact that we could have built higher apartments instead of two-storey townhouses. But why couldn’t we do it? It was because the city council did not have enough money to upgrade the infrastructure—the pipes under the ground—to support intensified housing.

I think it’s really important to look at the reason why we’re here today. I’ve never thought of three waters as a sexy topic; in fact, talking about probably the other types of waters, apart from the blue water, is probably something I would shy away from in the House. But like our Minister, the Hon Kieran McAnulty has talked about, this is a problem that is staring down New Zealanders, and we need to make sure that we get on top of it. We don’t want the tragedy of Havelock North happening again—and I want to commend my colleague here, Anna Lorck, who has been an absolutely amazing advocate for her area in Tukituki. If we want a first-class country, if we want first-class cities, we need first-class infrastructure under the ground as well. We don’t see these pipes—and a lot of the time we don’t know that they exist or the health that they’re in, but I know that if we don’t invest in them, we definitely feel the consequences of them.

As we went through the select committee process, we heard from local government bodies and we addressed some of their concerns, and I want to commend the Governance and Administration Committee, and our chair as well, in terms of actually working constructively through some of those details—things like the commencement dates, things like having proportional representation on these regional representation groups, but also looking at how we can make sure that we guarantee the voices of these local entities; voices of local communities. Then we balance that with the need of balance sheet separation. It’s a balance on a balance in making sure that we really actually deliver the savings in terms of our ratepayers, but then also making sure that the debt structure that we have—whether it’s through central government, whether it’s through borrowing, or whether it’s balance sheet separation—means that local government can use their debt targets to more efficient means or for more efficient purposes. We need to make sure that at the end of the day, we deliver a package that is helping all New Zealanders to get the world-class infrastructure that they deserve, so that’s why I commend this bill to the House.

The ACT Party engaged constructively with the Government and with officials in the Department of Internal Affairs back in 2020, before the last election, when the proposal for the reform of the way water infrastructure is funded, financed, and delivered was first raised. At the time, when I received a briefing from Department of Internal Affairs officials—that was before I was even elected to Parliament as a representative for New Zealanders—the proposal made some sense. But at that time, back in 2020, officials never mentioned co-governance. They never mentioned compelling councils to hand over their assets; they never mentioned the extraordinary cost, now estimated at $3 billion, for delivering this reform; and they never mentioned that they were about to start some kind of culture war between the councils in the regions of New Zealand and a whole bunch of other people that this Labour Government promised would be given rights and interests in water infrastructure assets—that is, iwi Māori.

These reforms, as proposed, sounded OK; as delivered by Labour, they have been an absolute disaster. That is why New Zealand needs the ACT Party: practical policy solutions for people. I’m going to outline what they are, but first let’s have a look at the problem. The problem that this bill tries to solve is the lack of funding and financing for infrastructure, whether that’s renewals, asset management, and maintenance on existing networks. When you look at some parts of New Zealand, the age of the assets is well over 40 years old. And the thing is, concrete or clay pipes in the ground, particularly in a country like New Zealand with sensitive soils and high rainfall—they don’t last as long as maybe they do in very, very stable geology, so we do need to do regular maintenance. A lot of councils didn’t do it. Why didn’t they do it? Well, I mean, maybe one reason is because Labour, in a previous iteration, gave councils the power of general competence—some people might say the power of general incompetence. Because if they are going to be allowed to focus on painting rainbow-coloured pedestrian crossings on the road or investing ratepayers’ scarce and precious funds on convention centres instead of fixing the underlying pipes, sewage treatment plants, and all of these things—in Wellington, they don’t even have water meters in residential properties, so residents don’t even know how much water they’re using and neither does the council. Maybe that explains why there’s drinking water running down the road and losses amount to 30 percent of the water delivered from the dams to the network. Maybe Labour is to blame for the problem with three waters and it goes back well prior to this Labour Government.

Funding and financing—well, where would the money come from? Well, under this model it’s going to be, apparently, borrowed and lumped onto water users. Because, the thing is, it doesn’t matter what the solution is, somebody has to pay, to catch up with all the deferred maintenance and to provide for growth, because if we want to grow up in our cities, if we want to live in fun cities where more people live closer to transport infrastructure, closer to town centres, and in higher-density communities, then that infrastructure is very, very expensive. Building enormous stormwater and waste-water collection systems in our cities is much more expensive than building them in greenfield areas, but there is a way to do it.

Then we come to quality assurance. Who’s going to make sure that the drinking-water quality is delivered and that the outputs from stormwater and waste-water discharges are acceptable? And who’s going to assure that, actually, the investment in infrastructure, whether it’s maintenance or for growth, meets the needs of communities and actually meets the targets or the growth plans set out in local government’s regional plans, district plans, and spatial plans? Well, we don’t know. I mean, the water quality thing has been partially sorted by Taumata Arowai, but let’s see where they get to. What did Labour propose? Divisive co-governance: allocating seats on regional representative groups to create the most complex governance strategy ever devised. Te Mana o te Wai is a concept which puts the spiritual health of water—channels gods from one particular culture in New Zealand, channels their energy, and gives the task to decision makers to make decisions about water quality and infrastructure based on spiritual and animist concepts. Nowhere else in the developed world would any Government try to do that.

But, unfortunately, this is not just a problem caused by Labour. Back in 2014-15, Te Mana o te Wai was proposed by a previous Government. And, look, if someone comes along to my office and says, “Hey, there’s some concepts here we’d like to write into law; we’d like to get some policy up; we’d like to recognise that iwi Māori, for example, or Māori in general, might feel that they’re connected to their gods spiritually and that water is part of that. We’d get that into legislation, make them feel better.” How’s that going? How’s that going? Because you cannot make decisions about infrastructure and water allocation referring to a concept that is, essentially, spiritual and animist. There’s no country in the world that does that; that’s what Te Mana o te Wai does. It’s flowing through to resource management policy, freshwater consenting all around the country right now—

💬 Mark Cameron: Freshwater farm plans—make sense of that one.

Freshwater farm plans even include Te Mana o te Wai. This country is at a crossroads. We either go down a route where decision makers, people using resources, are forced to consider metaphysical concepts like Te Mana o te Wai—a spiritual life force, mauri—or we can just focus on delivering good infrastructure and drinking water to people in communities that need it. [Knocks glass of water] Whoops! Just like that.

So what would ACT do? What would ACT do? We need better three waters infrastructure, including in the House! What would ACT do? Well, it’s quite simple. We would solve the funding and financing problem by incentivising councils to not just sign off consents and not just sign off consents for new builds but also incentivise them with cash. That is, by returning $1.2 billion per annum, we forecast, from the GST collected on new builds, back to councils.

Now, the Minister this afternoon—this morning, sorry; I mean, it’s actually still yesterday according to House time. The Minister stated this morning in the House that $1.2 billion a year wouldn’t go anywhere near to closing the infrastructure deficit. Well, let’s apply the same logic this Government has, which is if you can borrow against revenue, potentially councils, or whatever entity comes next, can borrow $4 billion to $6 billion a year based on the leveraging allowed for under the water services reforms. So, over 30 years, that equates to about the same amount that Labour proposes: $120 billion to $180 billion. But ACT would make sure those councils or entities have $1 billion to $1.2 billion a year in revenue coming back from the GST on building, and that would help cash flow and allow that debt to be raised.

Then, of course, there’s the opportunity for large-scale land developments to enter into public-private partnerships through other revenue-generating opportunities, which could include putting targeted rates on properties or simple things like putting a water meter outside somebody’s house or business and charging them for the water they use, to raise revenue. That’s really constructive, practical policy. Of course, rather than following the prescriptions in the Water Services Entities Amendment Bill or any of the other legislation Labour has proposed which enshrines divisive co-governance over infrastructure assets, ACT would get rid of that. As per the amendments we tabled last night, we’d say that, in fact, if councils are going to have so-called ownership in these assets, they should be given at least one share per 50,000 of residents. They should be able to vote on or off any representatives to water services entities or council-controlled organisations. They should be able to form their own voluntary associations with whichever councils or other entities they wish to. All of this is ACT’s plan. We look forward to implementing it.

Tēnā koe, Madam Speaker, thank you. I think we’ve just heard speeches from the ACT and National Party representatives that underline exactly why they shouldn’t be in Government after October. We have heard from National that they’ll leave it to the councils to sort it out, but we haven’t seen that happen to date. The Green Party would certainly have preferred that there was more incentive for revenue sharing with councils and that there was a better programme across Government to revenue share so that local government had the resources it needs to do the vital work that it does. But we have not seen a plan from either National or ACT about how they would deal with water services. I have a real fear that the corporate model that we are moving into with this legislation and the sister pieces of legislation—if National and ACT did get into Government, what we’ve just heard from ACT talking about public-private partnerships, is that there would be privatisation of these entities, and that is why we’re disappointed that there weren’t stronger provisions in the original legislation to really provide a strong protection against privatisation with this corporate structure.

There is no alternative—that acronym “TINA” existed under the fourth Labour Government. We have seen tens of millions of dollars spent on analysis, consultants’ reports, work by the Department of Internal Affairs, the Water Industry Commission for Scotland and others to develop a framework, legislation go through this House following on the establishment of Taumata Arowai as the regulator for water quality in terms of drinking water, this other legislation to establish the regulator with the Commerce Commission to provide consumer protection which we still have to complete dealing with; there is a whole framework being established here. I have not heard from either National or ACT what the elements of their framework would be. We all agree on the need for increased investment in three waters infrastructure, but we haven’t heard a clear plan from the Opposition.

I do acknowledge this bill and the Minister’s effort to ensure that the entities are more closely connected to their local communities who are having 10 rather than four entities. There’ll still be a lot of work to do once they go live through the discussions between territorial authorities in terms of how many representatives they will have on the regional representative group, and how their votes should be weighted in the constitution to ensure that there is an adequate democratic voice from around the region. There is more flexibility now with the go-live date with the Order in Council process, but also more certainty that they have to be done within six months of the legislation being passed. There are more safeguards around the Minister’s powers of direction for shared services, there is the ability for a locally led merger process, and there is a longer establishment period.

But the recognition of the need for increased investment, moving things off the council balance sheet so that there can be much more debt funding of that—we do need to look at what has happened in the United Kingdom with the privatisation of their two waters entities and the huge level of debt which entities like Thames Water as a privately owned company have incurred. Their level of debt increased from $5 billion in 2010 to $14.3 billion, and now that company is in serious difficulty. So the Commerce Commission will have a key job in its oversight of these entities, ensuring that the debt doesn’t get too burdensome, and ensuring that there is no temptation that they be sold off in future.

So the Green Party is supporting the bill. It has made improvements on the principal legislation, but there will need to continue to be a lot of scrutiny of how these entities actually operate once they’re established.

Thank you, Madam Speaker. Very happy to take a short contribution on this, the Water Services Entities Amendment Bill.

I think sometimes in this House, we talk in a bit of an echo chamber. As I’ve been out there in our communities, when I’ve tried to engage “Joe Public” out there—salt-of-the-earth people—about what the water reforms look like, they get confused. They get confused. On our side of the House, we’re adamant that we need reform in this space. They get confused by some of the messages from the Opposition. Just earlier this year, I found myself sitting in a room full of school principals—all in charge of intermediate and high schools—and I wanted to talk to them about this reform. They didn’t know what it was about. They didn’t know what was being achieved here. They were confused about it and maybe I reflect on it and think, “Could we have done better in trying to take New Zealand on this journey?”

What we do know is that we do need reform in this space. You heard it from our Minister Kieran McAnulty, who said he’d visited a whole lot of councils up and down Aotearoa New Zealand. The one thing they were incredibly clear about was that we needed reform in this space and they didn’t have the money to be able to invest in it.

When I was on that day, talking to these principals, having lunch, we talked about the messages that were out there in the public. We talked about words like “asset grab” and they were confused about whether or not it was an asset grab. I had to let them know that it wasn’t necessarily an asset grab; it was actually a “liability grab” from the entities that were going to be charged with the liability of looking after the water infrastructure for the whole of New Zealand. I had to talk about the fact that we needed some kind of mechanism, or entities, across the country that looked after their own particular regions so that they could deal with that at a local level as well. It’s not an asset grab by any stretch of the imagination. It is absolutely a liability, and it’s a liability that we’ve been bold enough to be able to say, “This is big and it’s bold and we need reform in this space.”

One of the earlier contributors talked about Te Mana o te Wai and I want to just acknowledge the group that put a lot of work into that. I do believe that if we had switched onto actually just looking after our precious resource of water—fresh water—then we wouldn’t be in this situation right now. We need to take a different approach, and all of us stand to benefit from accepting that Te Mana o te Wai—the actual mana of the water—should be first and foremost, and the commercial gain that we might be able to get from that should come not even secondary but after that. We have to look after the water. We have to look after the ecosystem around that water and then if we can make some commercial benefits of it, then let’s do that.

But actually, we all rely on fresh water. We know that we need the reform in this space. Councils know they need the reform. We’ve been bold and led out on this reform, but as our previous speaker from the Green Party, Eugenie Sage, said, it’s still going to take a lot of work to get to the place where we need to be from the place where we are—which is dire at the moment. I commend this bill to the House.

The next call is a split call. I call on Nicola Grigg for five minutes.

Thank you, Madam Speaker. I must commend Tāmati Coffey for that heroic effort in trying to rewrite history and for very, very diligently trying to avoid the words “asset grab”, but, at the end of the day, the whole principle of this legislation, the whole principle of these reforms, is to remove the three waters assets from the ownership of local territorial authorities. That is an asset grab. Ratepayers will no longer own the three waters assets that they have paid for and that have been administered by the councillors that they have voted into public office.

The National Party is continuing to oppose the Water Services Entities Amendment Bill at this third and final reading. We find it deeply sad—I suppose that’s the best word—that where there could have been a collaborative process where parties on this side of the House have put up fully costed, robust alternate proposals to improve the delivery of water services in New Zealand, they have been roundly ignored. But not only have our proposals been ignored, the will of the New Zealand public has been ignored.

We heard in the prior bill that came before this piece of legislation that over 80,000 submitters voiced their opposition to this. This time, around 1,900 submitters have voiced their opposition. Barely 2 percent of those submitters were even heard by the select committee because the select committee process was truncated from six months down to just over a month. That is anti-democratic.

The reason we oppose this bill so much is because the fundamental principle is not being achieved. It is not going to improve the delivery of water services in this country. And I look to my own patch and to the example of what will now be called Entity I, where there will be an amalgamation and a merger of the water assets owned by the Canterbury councils on the East Coast of the main divide and the West Coast councils on the West Coast of the main divide. That’s about 14 different territorial authorities.

On the East Coast, you’ve got large, large councils like the Christchurch City Council, which represents about 650,000 people, and then in my patch, the Selwyn District Council, which is about 85,000 people, rapidly heading towards 100,000 people. We’re going to be merged in with West Coast councils who have far smaller rate bases and far smaller asset and balance sheets. The Government members will argue that that’s the point—that there are councils that need to be subsidised. But it is not the job of the councils with large rate bases, with large asset holdings, to subsidise other councils.

And the reason I’m so convinced of this is that it’s actually been the mayors and councillors across the Canterbury and West Coast regions who have been the most vocal opponents of this. And I have to shout out to the likes of Nigel Bowen in Timaru and Neil Brown in Ashburton, Phil Mauger in Christchurch, and Dan Gordon in the “Waimak” and the councillors on the Selwyn District Council, like Grant Miller, who have put forward not only vocal opposition to it but fully costed, reasonable alternative proposals which have been ignored. And that will be the greatest folly of this Government—it has ignored the voice of the ratepayers, the elected representatives. It has ignored the ideas that have come from the grassroots up, and one of the largest causes for concern with this particular bill is that baked-in co-governance.

This will be a folly of the Government. It has not had the obligation to explain to New Zealand why it sees the necessity for the equal representation of the elected members and the mana whenua across an entity. I, for example—we have 14 of each. Nobody on that side of the House has explained to the people of New Zealand why this is necessary.

We also deeply oppose the priority placement of the Te Mana o te Wai statements over the community priority statements. It is fundamentally unfair and fundamentally anti-democratic. We will continue to oppose this bill.

Helen White—I assume it’s a five-minute call.

💬 Helen White: Yes, it is.

ASSISTANT SPEAKER (Hon Jacqui Dean): Thank you. Helen White.

Thank you, Madam Speaker. I wanted to talk about the power of the issue of water in our lives. The United Nations in 2010 declared that safe drinking water and sanitation was a human right. This map I’m holding up is from the regulatory impact statement. You can see that the map is of places that have drinking water notices in New Zealand. These are the temporary ones, and these are the permanent ones. And so, as an Aucklander, while Auckland looks relatively good, I travel all around this country and I am exposed to this risk, as are my children and my whānau. So it’s incredibly important that we get it right, because this has to be a country where we know that the water will be safe to drink and there won’t be the issues that there have been, which tragically affected people who were in Hawke’s Bay and Havelock North. That was the beginning of this process, because what had happened was that a lot of the councils had just not had sufficient funding, and so they weren’t able to make sure that the water supplies and the sewerage systems were all right.

Now, in the floods in Auckland, I saw the danger of that in my own community, where the water overflowed from the pipes, infrastructure, etc., because that’s the nature of the pipes in that area. So even in Auckland, which is better than most places in the country, I saw the risk. I saw people swimming in the floodwaters and I was worried about the quality of what they were swimming in, because it would have mixed with sewage.

So that’s our reality; that’s what we have to fix. While there are a lot of distractions, this has been a very good learning process where submissions have been taken into account, and this third bill takes the number of entities up so that there is a happy compromise between people. And we have done something here that will be significant for the country, as the bill seeks to make sure that water is quality in all its aspects throughout this country and safe to drink. Thank you. I commend the bill to the House.

Thank you, Madam Speaker. This is an opportunity for me to talk about Hawke’s Bay and the contribution that Hawke’s Bay has made to the Water Services Entities Amendment Bill. Hawke’s Bay put forward a proposal that agreed that reform was necessary. Hawke’s Bay put forward a proposal about how joining forces together, as councils, they could provide an option for an entity that would enable the region to deal with its water infrastructure. As the local MP for Tukituki, I strongly advocated for Hawke’s Bay in their solution towards water reform. This bill has seen and listened to a large part of what Hawke’s Bay was saying.

We now have 10 entities that will look to implement affordable water reform. When you join forces, you enable a cross-subsidisation for rates, and one of the reasons that we need to have councils working together is being able to afford the massive cost of infrastructure that is needed to bring our water infrastructure up to world-class standards. So by joining forces for the entity that will serve Hawke’s Bay and Tairāwhiti, we now have our councils welcoming this reform, and that is a significant improvement in how we’re going to go forward in enabling access to safe drinking water where we know that, when we turn the tap on, clean water that is safe to drink will come out of the tap. This is what this water reform is about, and this is why we need to work together to make sure that those costs that ratepayers are looking at are not too big for the ratepayers going forward.

But we all know—in this House, and right across New Zealand—that affordable water reform is necessary. I don’t want to see what happened in my electorate, where over 5,000 people got sick, and people died, and a large part of that was because despite warning after warning to invest in maintaining our water infrastructure, we didn’t, and that can never be allowed to happen again in New Zealand. I think this bill will make sure that what happened in Havelock North never happens again in this country. And that is why I commend this bill to the House and thank Hawke’s Bay, my region, for the enormous contribution they have made to ensuring that we put forward a bill that will work. Thank you, Madam Speaker.

Thank you, Madam Speaker. It’s a pleasure to be talking on the third reading of the Water Services Entities Amendment Bill. Having been a member of the Finance and Expenditure Committee during the long period of hearing submissions on the first two of the four bills that now represent the water services changes, and, like many in this House, having witnessed the cascade of submitters who turned up and were virulently opposed to these changes and came with good sound reasons—they weren’t just emotional reasons; they were well validated views on why they opposed the three waters reforms. It was a pretty sobering exercise as we went around the country listening to all those submitters in their genuine attempts to try and get the Labour Government to at least change some elements of these proposed reforms.

But, unfortunately, they all fell on deaf ears, and it was a pretty sad indictment of what consultation means, given some of these issues that have been pushed through by this Government, because many New Zealanders do not agree with these reforms. In fact, in many of our electorates, we’ve still got signs going up: “Stop Three Waters”, which is interesting, because people remember this and they will remember this for certain when we’re going over the next few months.

The big issue, I think, around this—and I was involved in the British reforms of the water entities—was about going from being council-owned right through, ultimately, to privatisation, which, in hindsight, I don’t think was a good idea. But the reforms around how they restructured the entities and moved into more commercial operations—I think if we’d put up the governance structure that is proposed here in New Zealand, it would have been laughed at—it wouldn’t have even been considered, given the complicated governance arrangements that this bill and these proposals entail. This different layering up of diffused ownership and governance and control—and, ultimately, no one has ever explained to me who’s going to own the shares, because my view of ownership of shares is that if you have a share, you need to either have directorial right to control it or you must have some form of management influence. Under these arrangements, whilst the Government is keen to say that it is controlled and owned by the local authorities, that, legally, in my view, is wrong, and always has been, and no one, not even the officials who took us through this weird process, were ever able to give a proper view on who will own the shares. I think if these reforms were to be put in place, from an accounting perspective, no one, actually, would be able to say who owns the shares.

I think that’s the first thing around ownership, but the diffused governance structures have councils, representation boards, then we’ve got regional advisory boards, then we’ve got the boards of the entities themselves, and, of course, we’ve then got the murky arrangements around co-governance. That is not to say that mana whenua don’t have a role to play in water; they do, they’re very important, and we should value their input, but the structural arrangements, the structural impediments that the arrangements will embed, are just something that only a weird academic would ever conjure up in terms of coming up with an optimal solution to restructure the water industry in New Zealand. It is a phenomenally complicated structure, with a lack of accountability, a lack of control, and what we’ll end up with, inevitably, is very powerful CEOs, and we’ve seen them being put in place at vast cost, and they will be the ones that will run these entities, because there will be little accountability above them. And the worse thing is the lack of accountability back to the original people who currently own those assets, namely the councils, and, ultimately, the residents of the areas that they represent.

So, of course, we oppose these reforms because we want to make sure that ownership stays with councils, on behalf of the residents of New Zealand. That is the first and primary part of this. But it is very important that we put in place good oversight with these organisations around quality. Of course, we supported, way back, even before these reforms came about, the particular arrangements here. But the Taumata Arowai reforms are about making sure that we have good regulatory oversight of councils around water quality. I take Anna Lorck’s point earlier in her speech: it was inappropriate. That deals with the issue around having an independent oversight of the councils around water quality; that is important. But these reforms are murky, muddy, unclear, and will ultimately lead to poorer outcomes.

Certainly, if you’re sitting in one of these regions, like Gisborne or whatever, or some small town, and you’re trying to ring a head office that might be based in Wellington and talk about a broken pipe, there’ll be a lack of ability to actually get someone to know where you’re talking about, a lack of ability to get a local operator involved, someone who can turn up quickly and do it. Instead, there will be a monolithic organisational structure. It will be wrong, it would be poor, and we would do a disservice to New Zealanders if we were to allow these reforms to go through in their current form. Therefore, on that basis, I’m happy that we’re opposing these reforms.

As it stands, this bill will provide significant savings for New Zealand and also, in addition, better health outcomes. The average household will be seeing savings of between $2,700 and $5,400 per year. Without these reforms the cost for the consumer will be significantly more. And I just want to also touch on the health aspect of this. What I have here is a Facebook post from the Waimakariri District Council—so just in North Canterbury there—and it’s about the boil water notice and I just want to read it out for the house just quickly. It was from four days ago: “A boil water notice has been issued for the Oxford No. 1 Water Supply … Please inform any neighbours or friends on the scheme who may not be aware of this notice … We are carrying out extensive flushing of the well and will be monitoring [it] closely over the weekend. If it does not improve, we will have to consider taking it offline for re-development … which could take up to a month … Residents on this supply need to use boiled tap water or store-bought bottled water for drinking, cleaning teeth, making ice, washing dishes and preparing food until further notice. Tap water should be boiled on a rolling boil for one minute.”

So that’s a significant concern. This is in one of our communities in North Canterbury. And Mr Bayly and Mr Bishop, in their contributions, mentioned the “Stop Three Waters” signs. When I get out and about around the community, those “Stop Three Waters” signs are, interestingly, in the same locations as where all the boil-water notices are—in the same areas.

Anna Lorck, in her contribution, talked about what consumers really want. Most people just want to be able to turn on the tap and have clean water come out. It’s as simple as that. Unfortunately, the Opposition has decided to make it into an issue that’s trying to divide our country when, in fact, the average punter doesn’t care. The average punter just wants clean water to come out of the tap. And it’s important that—we owe it to New Zealand; we owe it to Havelock North—we do not have a repeat of those instances that we’ve had in the past. So it’s for that reason that I commend the bill to the House.

I declare the House in committee for consideration of the Education and Training Amendment Bill (No 3).