Local Government (Water Services Preliminary Arrangements) Bill

Members, we come now to the Local Government (Water Services Preliminary Arrangements) Bill. When we were last considering the bill, we were debating Part 2. This is the debate on clauses 8 to 46B, “Water services delivery plans and foundational information disclosure requirements”.

Thank you very much, Mr Chair. Just a reminder of what we were doing in terms of working through the committee stage of this bill: we were going part by part, but, in actual fact, there are three quite substantive subparts to Part 2 of the bill. We had worked our way through Part 1 and, when the debate last closed on this, we were making our way through Part 2—Subpart 2 of Part 2. So we haven’t yet even begun to address any part of Subpart 3 of Part 2. Indeed, we have quite a few questions left and issues to discuss relating to Subpart 2 of Part 2.

Just as a reminder, Subpart 2 of Part 2 exercises itself with what the Minister can do in relation to water services delivery plans—so, specifically about those ministerial powers. Now, we had just started discussing it but had just a very few speeches on it. There is a particular issue I want to bring up fairly early on, and it’s a point of contrast within Subpart 2 of Part 2, because Subpart 2 of Part 2 gives the Minister the power to do a couple of things—very specific powers that the Minister can exercise. She or he can appoint under clause 20, “may appoint a Crown facilitator”, and under clause 23 he or she “may appoint a Crown water services specialist”. So there are two types of roles to which the Minister can appoint people.

To be honest, looking in terms of what these people can do, they do seem to cross over in quite some degree as to what a Crown facilitator can do versus what a Crown water specialist can do. It’s not even necessarily particularly clear in which circumstances a Minister would appoint a Crown facilitator versus when she or he would appoint a Crown water services specialist. So for the benefit of the many people following at home at 5.40 on a Thursday evening—

💬 Hon Matt Doocey: There’s quite a lot of them.

Yep, plenty of people following along, I should think. Actually, for the benefit of everyone who will want to understand the differences between these two roles—and also in terms of making sure it’s in the Hansard. Again, it’s possible that this could be litigated at some stage, and one point of litigation might be whether it was appropriate to appoint a Crown facilitator versus a Crown water services specialist.

So there are a couple of things that I would like to hear from the Minister in this regard. One is the difference between the roles of these two people. Now, I’m just going to note that the person may be a panel—all right. So the bill does explain that it could be one individual, but it could also be a panel of people. That’s obviously just a decision for the Minister as well. But what I want to understand is the difference between the roles of the facilitator and the specialist.

I’m also trying to understand when the Minister would appoint those people. What would cause the Minister to decide on one of these roles rather than the others? Is it a time-based thing—as in, sort of a time during the process - based thing? Is it based on the particular needs of the underlying regional territorial authority? What exactly is that that would drive that difference there? I think it’s worth getting that on the record for the Hansard, so that we do have an understanding of it recorded. Who knows, it might prevent future litigation or it might not, but it would certainly give us a good explanation as to what is going on.

Thank you, Mr Chair. Just to reinforce what the previous speaker, the Hon Dr Deborah Russell, has said, for us, we’re also currently on Part 2, Subpart 2 out of three subparts for this particular section. In the previous session, one of my colleagues—Francisco Hernandez—mentioned around the criteria for appointment of the Crown facilitator as well as the Crown water services specialist.

I would like to sort of change the focus in a slightly different way and look at, in this case, clause 20(4), which is that when we’re looking at a Crown facilitator—a Crown facilitator can be a singular person—according to subclause (3) of clause 20, it can be one person or a panel of two or more people. And if it is a panel of two or more people, then the Minister must appoint one member as the chairperson. My question to the Minister is if the Minister wouldn’t mind clarifying whether it’s a standard practice to appoint just one person as a chairperson, or is there room or opportunity—why was it limited, the co-chair option?

The reason that I raise this is because subclause 2(b)(ii) of clause 20, which is where the Minister is able to or may consider appointing a Crown facilitator on the grounds that a group of territorial authorities are having difficulties agreeing on the terms of a joint plan. This is interesting in terms of tying it to a previous clause, clause 17(3)(b)(iii). But I want to focus on the fact of what happens if you’re in a situation where the group is having difficulty agreeing to a joint plan and the best opportunity for there to be an agreement is to appoint co-chairs from, for example, either of the group, as opposed to limiting it to one particular member, which then may further create friction between the two groups who may not be in agreement. Of course, the Minister is within their right to appoint this, as someone who is completely independent, but I’m just checking if that option of having co-chairs was considered.

The next part I want to mention, as a part of clarification from the Minister, is around clause 21(2)(da). Now, this is how a Crown facilitator is appointed, which is, essentially, the same clause as clause 24(2)(da) as well. I would like to focus specifically on, if the Crown facilitator or the water service specialist is appointed, how renumeration and expenses of the Crown facility will be apportioned between territorial authorities. Now, I’ve got two points of clarification, and the first part of that has to do with the actual cost itself, which is detailed in clause 29, of the fees framework.

Now, in clause 29(2), it talks about the fees framework being determined by the Government. When we are searching in terms of the fees framework, we have both the Government fees framework as well as local government and also territorial authorities fees frameworks. To give an example based on 2022’s determination, the Government fees framework for someone who is in a position of a chair and scores a score of 24 to 28, is $594 to $1,265. However, for Auckland Council, for the same band of score 24 to 28, it is the cost of $540 to $1,150, which is less. So, in this case, if the territorial authority—the reason that they’re being appointed a Crown facilitator is because they have not been able to manage the plan or been able to manage some of the cost. Having the Government determination as opposed to the local government determination may also add additional financial burden to the local government as well—so that point of clarification as well from the Minister.

If he wouldn’t mind clarifying whether that has been taken into consideration—that if we’re using the Government determination, it will be at a greater cost to the territorial authorities.

Thank you very much, Mr Chair, and just to acknowledge Lawrence Xu-Nan, who gave me flashbacks to the time he kept me here till midnight for the ACC debit instalment bill—something I am still trying to recover from! Clearly, he’s getting settled in for another marathon effort.

To the Hon Dr Russell, in response to some questions around appointing a Crown facilitator versus a Crown water services specialist—is the crossover clear? What are the circumstances around appointment?—I’ve been advised that a Crown facilitator is mainly for assistance to councils during the preparation of water services delivery plans. It’s the intention that they can be available to advise and assist councils, whereas Crown water services specialists are for when a council fails to submit a plan at all, and mainly when the Minister has lost confidence in a council’s ability to develop a suitable plan or to give effect to the plan. So which of the appointments might be needed will depend, clearly, on the situation and what kind of skills are needed at that point in time.

I have some comments on Subpart 2, but then I’m going to move to Subpart 3.

On those last comments from the Minister, I’d like to go back to something another Minister in the chair said earlier: that the point of these plans is to not be top-up, like apparently the last Government’s approach was, according to the Minister, and to go from the bottom-up. These plans are supposed to be simple for the councils to do. We heard that internal affairs is going to provide Excel spreadsheets to make it all very easy. So I’m wondering why it is that there needs to be either of these sets of people that the Hon Dr Deborah Russell was asking about—which you’ve just answered about, Minister—but also why, at clause 30, there needs to be the recovery of remuneration and expenses from local authorities such that the “territorial authority owes a debt to the Crown”. If this is just all about being bottom-up, surely there is no need for clauses such as that.

Now, moving on to Subpart 3—and I’m not saying that my colleagues don’t have further questions on Subpart 2, but I’m now on to Subpart 3. I’ve spent a bit of time on the purpose of this subpart. This is at clause 32, and I think some parts go against other parts of clause 32, so I’m looking for some clarity from the Minister on this. We have at clause 32 that “(a) The purpose[s] of the subpart [are] to promote the long-term benefit of consumers of water services”—that sounds quite good—and “(b) to ensure that sufficient information is … available”. Then we go to clause 32(2), which talks about for innovation, for improving efficiency, and for providing water services “at a quality that reflects consumer demands”. Again, this all sounds good, but the rest of this part seems to be about information.

So my first question on how this purpose works is: how is it that incentives are going to be provided that go beyond the provision of information, which is what the subpart seems to be about? To my reading, it looks like a contradiction there. But then there’s some further strange drafting in this part, because at clause 32(3) it says, “This subpart—(a) relates only to delivering the purpose of this Act under section 3(1) and (2)(c);”. So those purposes relate to the overall framework and the disclosure of information, and “applies in relation to delivering water services only in circumstances where there is—(1) little or no competition … and (11) … no likelihood of that competition.” Is this entire subpart only to areas that aren’t going to have competition? And why are we thinking about competition for the delivery of stormwater measures?

This all goes back to water services. Water services are defined to include, of course, stormwater, so I’m wondering what clause 32(3) is about, and then how it also links with clause 33. In clause 32, you’ve got this specific subpart restricting what it relates to, and then you have another clause—clause 33—just over the page, which says, “Application of this subpart”. If you’ve already said in the clause before that it only applies to some of it, why do you need another clause to go on about the application of that subpart? So how do those two link together?

Then also on Subpart 3, at clause 40A, there’s provision for a levy. The Finance and Expenditure Committee report says, “Well, this is for any Commerce Commission work that might happen.” But what is that work that might be happening and how is that levy good for councils? The Minister in the chair yesterday asserted that this bill is going be good for councils. I’m not sure wh the levy is there. I’d also remind the Minister that Duncan Webb’s point about councils that are not contiguous has still not been answered.

Thank you very much, Mr Chair. I’m mindful of the time boundaries, so I did want to get on my feet and just respond to some questions—but potentially not all, as they might have to come back at the next round of the committee of the whole House. One question we were asked around the expenses and fees framework—I’ve been advised this approach is consistent with what happens in the Local Government Act in relation to other appointees made by the Minister, potentially such as a Crown manager or Crown observer if there are problems with the local authority.

The time has come for me to report progress.

Progress to be reported.

House resumed.