Water Services Acts Repeal Bill

I move, That the Water Services Acts Repeal Bill be now read a third time.

Today, we stand at the final stage of deliberation for a crucial piece of legislation: the Water Services Acts Repeal Bill. This bill, which repeals Labour’s failed three waters legislation, is now before Parliament, ready to be passed into law, ending their misguided policy of stripping locally owned water assets from councils. I want to start by extending my gratitude to our coalition partners—the ACT Party and the New Zealand First Party—for their support in bringing this legislation through Parliament.

This bill moves the responsibility for water services and ownership of water assets back to local councils, where they belong. Councils know what is needed for their communities and should not be forced or mandated to take a one-size-fits-all approach. This bill provides much-needed clarity about the choices available to councils now that they must include water services into their long-term plans (LTPs).

We’re aware that councils are in different stages of completing their long-term plans, and some have already begun consultation. This bill provides flexibility to councils by enabling a range of voluntary options that help councils complete and adopt their long-term plans. We want to help councils meet their statutory obligations.

The bill provides a range of options that recognise that different councils will have different needs and preferences and will be at various stages of developing their long-term plans. The options include having an unaudited LTP consultation document, adopting their long-term plan up to three months later than usual, or deferring the LTP by one year and preparing and consulting on an annual plan for 2024-25 instead.

This is about providing flexibility to councils, not just simply telling them what to do or mandating them, like the former Government did. All of the options are voluntary and councils can choose to use them or not, depending on their local circumstances. This bill provides much-needed clarity about the choices available to councils in addition to the standard processes and what is required if particular options are taken up.

As reiterated in my previous speeches on this bill, the policy implemented by the prior Government was not only fiscally irresponsible but deeply divisive across New Zealand—costing $1.25 billion but not even able to implement it after six years in Government. It pursued an unpopular co-governance model that lacked the foresight and lacked working with councils to find out what worked for them. The extraordinary amount of money did not result in the improvements needed to our water infrastructure in New Zealand. Hundreds of millions of dollars were spent by the last Government, but they failed to actually achieve the reforms they said they were going to set out and do. As with many aspects of the last Government’s reforms, this reform was top-down and not driven by local communities and local councils who best know their communities. This Government is not in the business of simply stipulating to local councils how they should be investing in their water infrastructure. We are ensuring that councils are able to put forward their own plans.

From its inception, the previous Government’s reforms faced opposition from councils who rightfully felt their ownership of water assets built over decades by their communities would be forcibly removed. This policy stands in stark contrast to the principles upheld by our side of the House. Our plan, Local Water Done Well, recognises the importance of local decision-making and flexibility for communities and councils to determine how their water services should be delivered in their communities.

Ensuring water services are financially sustainable and rules for water quality and investment infrastructure are met are core parts of our approach to ensure that New Zealanders receive high-quality drinking water and water services at a fair price. We’re intentional in ensuring that councils are in control of this process. Local Water Done Well recognises councils and requires councils to provide the Government with plans to set out how they will deliver financially sustainable water services and water services infrastructure for ratepayers. If a council is unable to provide such a plan, the Government will have access to regulatory backstops, and we’re developing that policy and implementing it over the coming year.

As the Government confirmed in our post-Cabinet press conference yesterday, the Government intends to set out the first part of the new regime in a second bill by mid-2024 which will establish the transitional arrangements for the new water services system. This bill will set out provisions relating to council service delivery plans, transitional economic regulation, streamlined requirements for establishing council-controlled organisations under the Local Government Act, and it will also support Auckland Council to determine how they wish to create a financially sustainable model for Watercare.

A third bill will be introduced in December and be passed by mid-2025. This bill will provide for a long-term replacement water services regime. This bill will set out provisions relating to long-term requirements for financial sustainability, provide for complete economic regulation, and a new range of structural and financing tools, including a new type of financially independent council-controlled organisation. With Local Water Done Well, we will enable councils and communities to determine what works best for them while establishing clear expectations and bottom lines.

The National Party, the ACT Party, and the New Zealand First Party stand united in repealing the three waters legislation. We campaigned on this policy, we were elected on this policy, and we are now delivering on what the voters of New Zealand voted for. We’re committed to addressing these issues differently, prioritising localism and flexibility while ensuring robust investment in infrastructure and adherence to regulatory requirements. We believe we can work with councils and provide them with a level of autonomy to set out their long-term financially sustainable water service plans with the tools that we will provide.

Today, we are in the 12th week of our Government’s first hundred days. We are proud to report that we’re on track to fulfil another commitment to New Zealanders as part of our 100-day plan and to introduce and repeal the previous Government’s three waters legislation. I’m pleased that we are achieving our 100-day plan and we’re achieving it with this bill being passed as well tonight. Repealing this legislation paves the way for the introduction of a new regime, one that emphasises local delivery and ensures financially sustainable delivery of water services across New Zealand. I commend the bill to the House.

The question is that the motion be agreed to.

Thank you very much, Madam Speaker. Today is a significant day because we will be able to point back to today when, in the future, people receive rates bills that they can’t afford, they can look back to the decision that this Government has made to repeal a provision that would have prevented unaffordable rates bills but they repealed it anyway.

They went to the electorate at the election, and the Minister of Local Government crows that they were given a mandate at the election, that this was what they campaigned on—and, technically, that’s true. But they also campaigned on the basis of funding councils to do this work. They also campaigned on the basis of reducing rates. They campaigned on the basis of having council control, council ownership, and balance sheet separation. And that is dishonest, because you can’t do them all—the advice says so. Their own advice says so: the Department of Internal Affairs has on their own website, even today, advice that criticises the analysis that the Government has based their policy decisions on. This won’t work, and I think deep down they know it but they don’t care. They don’t care because this gets this issue off the table.

It also gets the issue off their books. When the Minister, on Morning Report today, declared that this will be cheaper, he didn’t say it will be cheaper for ratepayers; he said it will be cheaper for them. This makes it easier for the Government to pay for their tax cuts because they don’t have to continue to support councils to go along with this reform process. They promised councils they would help them pay. Many of the councils that opposed the original three waters proposals did so on the basis that the National Party promised they would help them pay for it. I know because I sat down in front of every single rural and provincial council in the country and looked them in the eye and walked them through what it was we were trying to do, and they got it. But they said, “The National Party, if elected, will help us pay for it so that we can keep council control and have our water services paid for.” They have broken that promise, and they have the gall to stand up and crow about being elected to do this. They told the electorate they would do one thing, and now they’ve done another and they’re patting themselves on the back—I think it’s disgraceful.

I didn’t come to this House to talk about water pipes, and I’ve listened to a lot of maiden speeches in the last six years—

💬 Hon Rachel Brooking: I did!

—and no one else except Rachel Brooking has mentioned water pipes—and, actually, Rachel, I don’t think you did in your maiden speech, if I’m honest—but at the end of the day, this is the issue facing the country. I came to Parliament to advocate for working people and for fairness and equality. How is it fair and equitable, and how does it look after those that work for a living, when what the Government is about to pass will lead to rates bills that they cannot afford? It is not unfeasible to say that there will be some councils that go bankrupt without a financial guarantee that this Government promised them when they were campaigning. It is not unfeasible to say that there will be people on fixed incomes, many of whom are retired, that will have to sell their homes because they can no longer afford their rates bills. It is a sad fact, but this is what happens when a Government in Opposition promises something and doesn’t deliver it. There is a list of councils that, unless they join into an entity that has genuine balance sheet separation, will only have one option, and that is to increase rates.

Now, I live in Wairarapa, and in South Wairarapa that council has had no choice but to increase rates by 20 percent for two years in a row, and that doesn’t account for water services. But with the water regulator requiring councils to meet a minimum standard—which is a good thing—but without the economic efficiencies and the ability to borrow and the ability to remove the associated debt from councils’ books, they are hamstrung.

There will be councils that want to join with others but can’t because those others don’t want to, because why on earth would they voluntarily agree to sign up to take on the debt and the burden that the other council brings? They will be left in the lurch, and many of those regions are represented by the members sitting opposite today.

So when you think of places like the Wairarapa electorate, which has five district councils and each and every one of them is predicted to have bills in the thousands, per ratepayer, per year, just for water, and then you vote in favour of something that’s going to make it even more expensive, that’s going to be a difficult thing to justify in a couple of years. It’s not just limited to Wairarapa; it’s also every region in the country. The West Coast is now left stranded. There is no way that Canterbury will join them—no one will. I feel sorry for people like Jamie Cleine, who’s fought hard for his community, but has absolutely nowhere to go now—nowhere to go.

The Chatham Islands had a bespoke arrangement for them. They’re now out in the lurch with no promise of how to pay for it. The most isolated community in the country is left out in the cold, yet again. There are communities from the Far North down to Southland who will now be wondering what on earth they are going to do.

Now, let’s remember that the original proposals of four entities did indeed meet a lot of opposition from local councils, but there hasn’t actually been any talk from the Government about the reaction to the proposals once they were amended. Those amendments took on board the feedback that councils gave, and, actually, a majority of councils supported that because it was regionalised and because it achieved balance sheet separation. Because every council had a seat on the regional representation group, they had input and they had influence, but they were able to remove the debt from the books, and that is the crucial point.

The Minister refused to answer questions about balance sheet separation. I suspect that’s because, deep down, he knows that he can’t deliver it. They promise financial sustainability when answering about balance sheet separation, but they don’t talk about balance sheet separation.

The Prime Minister today was asked by Newshub about his numbers to justify their predictions. He walked away. It is shameful—he walked away. He didn’t want to front up. Why would that be? The Prime Minister fronts up on any topic and on any question and he does so, on most parts, with a smile, although the smile’s not as wide as it once was these days, I might say. But you don’t just walk away when a question is inconvenient. He walked away because he didn’t have an answer, and they have never had an answer.

We have been asking the National Party to provide numbers to back up their claims right from when they first announced this policy 12 months ago and they have refused every single time, and now they’re in Government and they’re refusing again because they know it doesn’t stack up. They know that their claims can’t be met. They know that ratepayers will pay more under their plan than they would have done under the affordable water plan, and it is a concerted effort to the point where they won’t even refer to the actual name of the thing that they’re repealing, because they know that if they utter the words “affordable water”, people might click to the fact of what it is that they’re trying to repeal here.

They’re talking about presenting this as if it is the thing that was originally proposed, not the thing that they’re actually repealing, and I think that’s disingenuous. What they are repealing, and what the members of the National, ACT, and New Zealand First parties are about to vote to do, is repeal the affordable water reforms—the reforms that the Government’s own advice shows would save ratepayers thousands a year by 2051. It’s not a $9,000 saving in 2051; it is a $9,000 a year saving then, and it doesn’t jump up in 2050. This is an accumulative cost every year—rising every year because councils have no option but to raise rates.

They opposed the thing that would save ratepayers money on one clear promise from the National Party—that they would help them pay for it—and they have broken that promise. They have walked away, and I think they’ll rue this day.

Tēnā koe, Madam Speaker. This repeal, this evening, is reckless, irresponsible, and absolutely a sign of the direction this new three-headed Government is taking us.

It is a lot of marketing spin in the Minister of Local Government’s speech which, by the way, totally contradicts his attitude in many other areas. Supposedly, he cares about local decision-making; let’s see that happen in transport. Absolutely not. Supposedly, he cares about local communities, but, in fact, as we know, that is all just marketing spin put around a repeal. In fact, there was a lot of good work done; there was a lot of consultation done with local councils, with iwi, with hapū, to present a collective and informed approach for us to deal with the historic under-investment and under regulation of our water services.

This is a problem that built up over decades, starting probably in the 1980s and 1990s when we had the neo-liberal reforms that asset-stripped local councils and Government, and led to downward pressure on the contribution towards our infrastructure from people who live in our communities, and now we’re paying the price. Here in Wellington we’re paying the price, the Chatham Islands will be paying the price—I’m the representative for the Chatham Islands as well as Rongotai, south and east Wellington. The reality is that even if the reforms put forth by the last Government were not perfect—and the Green Party had a lot of constructive feedback and worked constructively and we were able to improve a lot of things—I think, towards the end, the process actually delivered quite a good outcome.

What we heard tonight from the Minister in the committee stages was a whole lot of nothing. Who did he actually talk to? What councils has he actually consulted with? What iwi and hapū have actually been consulted with? Almost none. No, they believe their own rhetoric. That is the scary thing; that is very clear. When that Minister talks, he believes, zealously, the rhetoric of the campaign, yet the things they campaigned on—as the previous speaker, the Hon Kieran McAnulty, quite astutely put—were contradictory promises. So they’re somehow promising that it would cost less under their plan, that ratepayers wouldn’t be receiving this huge rates burden to deal with the decades of under-investment, and, you know, they promised the world and we’re going to see very soon that it’s not come to fruition.

In fact, local councils now are being put in a very difficult position because they had already planned for the transition to these other entities and now they’re being told that they have to put all the water services back into their long-term plan right at the last minute. Yet another example—classic in New Zealand; this has been happening for a couple of decades—of central government just putting more responsibility on to local government without the funding to support it and then blaming local government when things start to fall apart.

So that’s what we’re seeing; we’re seeing a reckless, irresponsible, and shallow approach to policy making that is chucking out years of work that was actually going to start to address something that everyone in New Zealand, I think, right now, agrees is a serious problem. Because I know we’re seeing the problem in Auckland, we’re seeing it in Wellington, we’ve seen it in Havelock North, we’ve seen it in Queenstown: insufficient investment in the infrastructure that’s needed for clean, healthy water, and insufficient regulation on the part of the Government to make sure that councils were meeting their obligations. Now they have to meet those obligations, but they need to be given a funding mechanism.

Any time this National Government runs into a funding problem, they promise that there will be some sort of private interest or some private source of funding. Well, we’re going to have to pay for it at some point. Somebody has to pay for it. I think it would be fair if we acknowledged that as a community we all benefit from investment in this infrastructure and we should be using general taxation to pay for some of it and we should be using user charges where that makes sense. But I don’t see how repealing this legislation tonight is going to result in the kind of responsible, practical, pragmatic solution that we need to have. So I’m really disappointed.

I think that the voters of Aotearoa New Zealand are going to be disappointed when they realise that they voted in some people who are not very serious about solving problems but are very serious about tax cuts for the incredibly wealthy and their corporate donors—a lot of action on behalf of the corporate donors, but not a lot of practical problem solving when it comes to long-term infrastructure. There is a whole lot of rhetoric, and I know that the Minister believes it, but it is just that—it is just rhetoric. I look at the members opposite. I don’t know; they want to trust their leaders, but I think they’re looking a bit dubious now. They’re suddenly realising that, actually, the people they represent out in the rural areas are going to be hit with bigger rates bills because of the National Government’s irresponsible approach.

Let’s just be honest: there was nothing divisive fundamentally about the approach of the water reforms, because it was started under the previous National Government after the incident in Havelock North, where people died due to lack of safe drinking water. That process started under the Department of Internal Affairs. Now, what happened under the last Government was very clear: there was an organised political campaign from the right, from the classic divisive politics, the sort of John Ansell—what are they called? Hobson’s Pledge?—types. They’re the ones who bring the division. There’s nothing divisive about co-governance, because the previous National Government actually used co-governance and introduced it, but as soon as they’re not in Government they will stir up anger and division and they will use that to disrupt a constructive process. There’s no such thing as constructive opposition from the National Party or the ACT Party. Maybe a little bit from the ACT Party—I apologise. Mostly from the National Party. It’s not constructive opposition; it’s not serious policy making, and we’re not going to have the solutions we need.

The really scary part of all of this is that we need it now more than ever, because as climate change hits—and it’s coming in fast now, as we saw last year with Cyclone Gabrielle, as we saw with multiple flooding events—we’re going to be hit by this stuff year after year, and it’s going to get worse and worse. And there’s no plan to reduce the climate-heating pollution that New Zealand is contributing to the atmosphere. There’s no real plan to put in place the infrastructure and the community resilience, because the priority is to let the rich get richer, let the tobacco companies make more profits at the expense of our youth—

💬 DEPUTY SPEAKER: Back to the bill. It’s about water.

It is—it is. And it’s all related, Madam Speaker, because it’s all about priorities and what the real priorities of New Zealanders are and whether it is possible for us to work together to solve our collective challenges, like climate change, which is going to affect water, which is going to affect the way we grow food, which is going to affect the way that we move around our country. All of these things are interrelated, and the Green Party is standing here saying this repeal is irresponsible, it is reckless, and the country will have to pay for the lack of investment at some point in our infrastructure. So goodnight. Pō mārie.

Members, the time has come for me to vacate the Chair. The House is suspended until 9 a.m.

Sitting suspended from 10.03 p.m. to 9 a.m. (Wednesday).