Local Government (Water Services) Bill

Members, the House is in committee on the Local Government (Water Services) Bill. We start with debate on Part 1. Part 1 is the debate on clauses 3 to 6A “Preliminary provisions” and Schedule 1. The question is that Part 1 stand part.

Colleagues, I just wish to make a statement in regards to a matter that I think is relevant to the timing. I, firstly, would like to acknowledge the officials from the Department of Internal Affairs that have supported the local government water reform over the last few years. In particular, I wish to acknowledge Michael Lovett, deputy secretary of policy and Te Tiriti, who has passed away today following a short battle with illness.

Michael started at the Department of Internal Affairs in August 2017 and built a strong relationship with the local government sector as a partnership director, then later becoming the deputy chief executive of the local government branch.

I wish to acknowledge Michael and thank him for his service to this portfolio, and I recognise the 20-year contribution he made to the New Zealand Public Service.

Aroha nui e te whānau.

Kia orana, Mr Chair, thank you. Can I firstly join the Minister of Local Government in acknowledging the passing of Michael, which is unfortunate to learn of this evening. On behalf of the Labour Party, we extend our condolences to his family and acknowledge the service to this country in what is important reform across a number of Governments in the past.

This is a hefty piece of legislation that, effectively, does complete the Government’s sort of final tranche of water reform. We on this side of the Chamber will be taking the opportunity to step through what is a fairly hefty bill that’s in front of us. There have been, out of the Finance and Expenditure Committee, 367 amendments, and there are a number of amendments contained in the Minister’s name. There are a number of amendments from members of the Opposition as well that we’ll work to look through.

But the reality is that this is a piece of legislation that is very significant but also has regulatory and legal complexities that come with it, and so our questions will be framed in that particular space. I understand that my colleagues in the Labour Party, when we get to the relevant part of the bill, will have a number of questions as they pertain to their local constituencies that they represent, so I will leave that over to them.

But I want to turn to clause 3, which is the first substantive part of Part 1, and this, fundamentally, is around the purposes. My question to the Minister is how the purposes as outlined in the bill, in clause 3, can in fact follow through to the remainder of the bill, particularly looking at where this is a piece of legislation that would seek to provide a framework for the local government sector around the area of flexibility.

I point out flexibility because the question for the Minister is how he is able to reconcile that statement in the purpose clause around flexibility but also, actually, sustainability—and in this context, the bill does identify that it’s “financial sustainability”. How is he able to reconcile those stated purposes with the fact that this is a bill that perhaps will remove a desire and incentive for what is regional scale and shared service models? Now, we’ll get to that later in the piece, but, fundamentally, first question for the Minister is how he reconciles, particularly, the flexibility and the financial sustainability component of clause 3 with the ability to deliver regional scale and shared service models.

Thank you, Mr Chair. Firstly, I would really like to take the time, too, to acknowledge Michael Lovett, his family and friends, and really thank the Minister for Local Government for taking that time to acknowledge Michael and his contribution—really, really sad to hear that tonight.

My contribution, first and foremost, at the outset, is also picking up on the purpose of the bill, particularly because we know that this bill is already live in the sense that we’ve already had the preliminary bills, and we know that councils are already in the process of various consultation measures that they are undertaking to be set up to actually put in place this now primary bill, which will set out how those potential water entities will be operated, how they’ll be set up. And it has really clear, very significant consequences for our communities, particularly with local government elections this year, and, particularly, it has consequences for our environment. So we’re really keen to be looking at so many aspects of the bill ahead, which we think could be clearly improved on, and to hear from the Minister about questions, particularly about how these clauses then have implications and consequences for our communities and for the environment.

The first aspect that I wanted to pick up on is actually outlined in a number of amendments that I’m proposing to the purposes in clause 3 in Part 1. The first is: the bill sets out really clearly in clause 3(b)(i), in Part 5, that the purpose is to “enable effective and proportionate economic regulation of water services and water quality regulation”. What I’m proposing is replacing those words with “enable effective water quality regulation and proportionate economic regulation of water services”. Why I think it needs to be in that order is because it needs to place water quality and the actual water service outcomes as that primary purpose over the economic regulation, which we know is also central to this bill. But the way that it has it—and the purpose emphasises that—is economic regulation over that of the actual outcomes for our communities’ drinking water in particular but also for the environment. I’d really like to hear from the Minister if he would consider that amendment.

The second amendment I have on that clause is just further below that, at clause 3(b)(ii). Currently, it talks about, basically, empowering the Minister of Local Government with powers to act when a water service provider is facing a problem or a potential problem. The rationale with what I’m proposing is to change this to actually say: “provide the Minister of Local Government with powers to intervene on behalf of communities when a water service provider is facing a problem”. Now, the reason I think that this would be appropriate is it actually amends this so that it’s talking about actual problems that communities are facing—and they’re real problems that are identified, not just potential ones—and, surely, if ministerial intervention is warranted, then, surely, the power to act should be granted to the Minister when they actually hear very real concerns from the community, and the community is facing that problem. I’d really like to hear if the Minister would consider that.

Then, thirdly, still on this purpose clause, clause 3, I’m proposing to add a further part to the purpose clause. The point of this amendment is that the purpose itself is so important in actually delivering these clear outcomes that this bill seeks to achieve, and what it’s really missing is reference to not only environmental sustainability but, particularly, equitable access to water services. So I’m proposing that we insert a clause 3(c) under clause 3 that says: “to ensure the environmental sustainability and equitable access to water services by water service providers”. This is particularly important, because we know what we’re seeing—although councils are really doing their best to work together and pull together, there are inevitably these councils that are, essentially, being left out, and what that means in reality is communities are being left out when it comes to actual improvement of water, which they so badly need.

It’s really concerning that there is nothing here in these purpose clauses about equitable access to water services, particularly when we know guaranteeing access to water is a human right, and particularly here in Aotearoa New Zealand, we want it to be really clear that no matter where you go in the country, you can have access to safe, clean drinking water, which we know has, unfortunately, not been the case.

We think that there should be a really clear, upfront purpose clause that speaks to that environmental sustainability and the equitable access to water services of communities, and I’d really like to hear from the Minister what considerations he’s had around this, and why they are not currently in the purpose clause. Thank you.

Thank you very much, members, for those questions. In regards to the points raised by Lan Pham in regards to the two amendments being proposed, the member will be no doubt aware of the water-quality regulator that is in place, which does have, within its remit, water-quality regulation in the setting of the appropriate standards, including environmental standards in that context. That is the entity which executes a wide range of the elements which the member was referring to, and it is where it is appropriately placed. It is an area that is important as part of the overarching package of the way in which water services are delivered.

In regards to the questions on clause 3, in the context of the definitions and the interplay that was noted between flexibility and financial sustainability, the premise of the overarching legislation recognises that water services entities that will be created as a result of this need to be financially sustainable, and the mechanism in regards to how entities are structured is a decision for local councils. So there is no context or no blockage, as the member was implying, around not being able to establish regionalised entities—actually, quite the opposite. You are seeing groupings of councils take that action, so that is within the provisions of the clause.

A large number of amendments made by the Finance and Expenditure Committee actually improved and enhanced the definition clauses of this bill. As Minister for this legislation, the fact that there are over 300 amendments signals clearly that the select committee process played an integral part in improving the bill. It was very much the case, from my perspective, of ensuring that we took on board the feedback from the select committee to enhance the bill so that it was a much better bill as a result, and I do believe we have got to that point.

Thank you, Mr Chair. So on Part 1, we’ve already traversed a little bit the purpose clause in clause 3, and I want to focus on the type of council that we’re talking about and how it relates to the interpretation section. So this is at clause 3(a)(i): “providing for territorial authorities responsibility for providing water services”. I, of course, understand that some territorial authorities are unitary authorities so include that regional council role as well. But then I’m interested in the definitions and how this all links together with a “water service provider”, which includes—so this is in the definitions section, so I’m on page 34 of the bill—at (c), “a regional council that has not transferred all of its responsibility for providing water services”. Then water services is defined on the next page as meaning “any or all of the following: (a) water supply services: (b) stormwater services: (c) wastewater services”.

So I’m wondering if the Minister can comment on the role that regional councils have in this scheme when they’re not a unitary authority—when they’re a normal regional council—and whether they should be then included in the purpose clause if there is an element of them providing water services rather than regulating those water services or requiring permissions to take water or to get consent for stormwater or waste-water discharges.

Then, just while I’ve got your attention, on page 36, the definition of “watercourse” is there: “includes a river, stream, passage, and channel”. But this has been deleted by the select committee: “along which water flows, whether continuously or intermittently”. Then, “along which water flows continuously” is repeated. So the point of this change is that “intermittently” has been removed from the definition of “watercourse” for this bill, and I’m wondering why that is. Obviously, there are a lot of watercourses that can be dry at different times of the year, and these are areas where you might have stormwater overflows and the like.

So two questions there. One, why are we getting rid of intermittent watercourses from the definition? And two, how are regional councils seen, given the purpose and those definitions that I read out?

Thank you, Mr Chair. This is a big bill, so we’re going to try and stick very closely to the sections so that we’re also able to indicate to the person in the chair which area we’re on. I’m going to start with clause 3, on the purposes. I appreciated what the Minister mentioned before in terms of what is stated in clause 3(b)(i), which has the inclusion of the term “water quality regulation”. However, I want to look at the broader context of this, I think, starting with clause 3(a).

Now, the reason that I would encourage the Minister to consider my colleague Lan Pham’s amendment, particularly when it comes to water quality but also in terms of environmental sustainability, is—for context, I was born in a city of 15 million people, a small, medium-sized city in China. Growing up, we were not able to drink tap water as a result of severe water pollution in my home city. The only thing we had available to us was bottled water—filtered water, even at that stage, wasn’t a thing. It was a shock and a surprise upon arriving, when my family migrated to Aotearoa New Zealand, when I saw people drinking straight out of the tap. I remember my 10-year-old self being highly fearful that they were going to get sick, because this is what I’d been told growing up.

I think back to that and think about what we are seeing nowadays in terms of our freshwater quality, most recently in Gore with the level of nitrates, and I did think, “How can a country with a low population not manage our water-quality system?” I think this is really crucial to the crux of the purpose of this bill, and I do want to ask the Minister, in this case, even if the Minister thinks that there is enough protection around environmental protection and water quality in clause 3(a), does “accountable manner” accurately capture and encompass water quality in a way that ensures that everyone in Aotearoa New Zealand can have water from the tap by right?

For example, when we were looking at the framing of “accountable manner”—and I do apologise; I was not part of the select committee process—does “accountable manner” address the issue that, for example, we’ve recently seen in Gore and the level of nitrates? When we are looking at clause 3(b), when we are looking at water quality regulation, it’s specified that clause 3(b) is only in reference to Part 5, amendments to other bills. Does it also mean that Parts 1 to 4 are exempted from having to have a degree of water-quality regulation?

I understand, also, the Minister mentioned before that Part 5 is probably where it’s most relevant, but even looking at a cursory reading of Part 5, it covers amendment bills like the Income Tax Act and the Commerce Act. I actually think that if we’re really serious about water-quality regulations, we do need to see that term in subclause (a) as well as subclause (b). That’s my second question.

My final question to the Minister is subclause (b)(ii), which does talk about the Minister of Local Government or the Minister of the day having powers to act when a water service provider is facing a problem or potential problem. I also support my colleague Lan Pham’s amendment on this. But what we are not seeing, at least in the purpose section—and this, I’m sure, may come up later on, but if the Minister wouldn’t mind speaking to it—is what problem, or potential problem, is the Minister seeing? Again, using Gore and the nitrates example, is that sufficient enough to see it as a problem that requires a ministerial intervention? Thank you.

Thank you, Mr Chair. Look, I’ve only had a chance to see our colleague Lan Pham’s tabled amendment’s today, and the Labour Party will be supporting all three of those tabled amendments as they relate to clause 3 because we do believe that the role of environmental sustainability needs to be not just included but given a little bit of shining light in that space, as does the quality of water as a primary purpose in achieving the outcome of this legislation.

The one that I do want to speak on briefly is the tabled amendment that relates to the role in which the Minister of Local Government would be able to exercise the powers that they would have for the purpose of intervention. I want to thank Lan Pham for what is a very sensible amendment, because it, basically, I think, is framed in a way of supporting local decision makers and local democracy. So the Minister would still have powers of intervention and the ability, therefore, to intervene when it comes to the purpose, but only in circumstances where there were actual and real problems that had been identified—not “what ifs”, “what might be’s”, hypotheticals, but actual rational thinking around intervention. I think that is a very sensible amendment. So the Labour Party will be supporting that amendment through this process.

The Minister has touched on the fact that there were more than 360 amendments, and he says that that’s, you know, a responsive select committee. I think it also lends itself to the argument that this was a bad piece of legislation that the Government introduced and it required extra effort on the part of the select committee, those that submitted. Let’s not forget about the fact, Minister, that this was a bill that did require additional time from the Business Committee to progress some of the changes that they wanted to, given the time constraints. This really is part of this Government’s “national water done bad” approach to water reform in this country.

The question that I have for the Minister is still on clause 3, although it takes a different particular tack, and it is around the evidence to support the claim that has been confirmed by the Minister that, in actual fact, this particular framework that is, essentially, established under this bill will be more cost-effective than what was the previous reform model. We hear a lot about the cost of infrastructure and, in particular, water infrastructure, ageing water infrastructure, that councils around the country are facing. The Government doesn’t seem to want to accept the fact that the figure of around $185 billion over a 30-year horizon in this particular space—those are real issues that need to be thought through.

My question to the Minister—and I do acknowledge his previous response to my other question about flexibility and financial sustainability, but, Minister, I’m interested to understand what actual evidence exists to support that claim that the framework will, in fact, be more cost effective than the previous reform model that was on the cards.

Thanks, Mr Chair. I’ll come back with some responses to prior questions, starting with the Hon Rachel Brooking’s questions in regards to regional councils’ role in water services. The member is correct in the context of unitary councils, which obviously include components of regional council responsibilities with them.

Basically, this bill enables regional councils to transfer some of those water responsibilities. It’s not part of this part, but it is part of a part that we will come to soon, so I won’t go too much more into it. But a good example in that context is Greater Wellington Regional Council, who currently provide bulk water supply, as one of the examples.

The other question asked by the member was in regards to why the definition has been removed in regards to watercourse. It is primarily to make a distinction between the overland flow paths, which have stormwater and the sea, and the watercourses that have water in them all the time. That’s the reason why the change was made, in that regard.

There were a number of questions in regards to intervention powers by the Minister. I mean, I think the reality is that intervention is done as a last resort. The last time that we’ve seen that is in Wellington’s instance, and I think there was plenty of evidence to support the deployment of that, and it’s actually been a positive outcome, in the context of the work there. But the threshold is high before that’s considered—I think it’s in the right place.

Clause 3(b)(ii): I don’t believe there’s sufficient basis for any changes from where the select committee has reached in those aspects. I’ve noted already around clause 3 in my prior response around the aspects around water quality. We’ve actually got a separate water-quality regulator, which shows the importance of water quality and the environmental impacts. It is that important; hence we’ve got a separate regulated entity, and I think having a separate independent regulated entity is also important.

The other element the regional councils play is, sometimes, in some instances, such as Auckland Council, they act as an enforcement agency for some of the consents of water care—so there is an interplay between the levels of local government and these entities, and I think that is just an acknowledgment of the question asked.

Hey, thank you—that was a bit informal, wasn’t it? Thank you for those answers. I look forward to the part where we discuss the empowering role of regional councils. On the overflow paths—I thank the Minister for his answer about the watercourses removing intermittently—I wonder, though, if there are intermittent watercourses that aren’t overflow paths that would still relate to stormwater.

I wanted to move on to clause 6, and that is “Act binds the Crown”, but then there’s an exception from that, which is to say that the Crown is exempt from paying those development contributions. That specific section—section 109—comes up later in the bill. It doesn’t apply to Kāinga Ora, but it does seem to apply to every other Crown thing that might happen that might require some sort of development contribution—perhaps hospitals, or perhaps universities. These are things that I think about in my part of the world. Maybe the Minister could comment on what exempting them will mean for the councils that have these water organisations that might be requiring development contributions, or we can deal with that later on as well.

Then, at clause 6A, the Treaty clause has been moved by the select committee to the front of the Act, and the commentary of the select committee is that the wording aligns with legislation such as the Fast-track Approvals Act 2024. To that, I would say that is probably not the best piece of legislation to be looking for good Treaty clauses, and all it is is “All persons must act consistently with Treaty settlement obligations”. Does this Government see that there is no place for any Treaty obligations under this bill for non-settled iwi, noting, of course, that we have large parts of the country that do have real water services problems having no settlement? Of course I’m thinking of Northland as the obvious case in point.

Thank you, Mr Chair. I wanted to move on slightly just to clause 9, but it’s really to do with the entirety of Subpart 1 in terms of responsibility for providing water services. There’s a number of clauses—

CHAIRPERSON (Teanau Tuiono): Just to confirm, clause 9 is in Part 2. This is the debate for Part 1.

Oh, sorry. You’re right. I’ve moved on to Part 2—sorry. My apologies.

Thank you, Mr Chair, I want to pick up on clause 4, which is the definitions. There are a number of changes that have been made to the definitions. One of the interesting ones is, basically, removing a definition of “infrastructure”. What was originally in the bill was a very broad—well, it was infrastructure. It wasn’t traffic corridor infrastructure, it wasn’t water service infrastructure; it was just infrastructure. My sort of take from what now lies within this clause is a new definition which largely expands the definition of “water services infrastructure”. So I do think it is very important, given that’s what this is largely about. When one compares what was in the former, now struck out, definition for “infrastructure”, it is very similar. The only point of difference is that the previous definition for “infrastructure” excluded the conveyance of water. So my question to the Minister of Local Government is whether he is comfortable, on the advice that he has received, that that definition of infrastructure for water services, which is very vital to this bill and what it seeks to achieve, has been drafted in a way that, basically, covers all aspects. No issue with removing the “infrastructure” in isolation as a definition and inserting it somewhere else, but just interested in the Minister’s thoughts around that one.

I want to also look at clause 5, which relates to Schedule 1, which I understand we are debating as part of this part. This is around the “Transitional, savings, and related provisions” piece. The question to the Minister is: what does he foresee as the level of support that would be made available to councils who are in a process of navigating what could be complex transitional processes as part of this, especially those that might be some way through some form of reform process? Now, there are many councils around the country who are already on some particular path to water reform. I reflect that my own constituency of Palmerston North is certainly in that particular boat. What sort of level of support is available to councils who are part way through some form of reform? Now, I appreciate that local authorities are expected to deliver a water services delivery plan by—well, within the first week of September or thereabouts. But that’s what the question relates to.

Specifically on Schedule 1, this is a level of more detail that relates to various individuals that might be impacted and the like. The question for the Minister is: when it comes to smaller or rural councils—and we have many of those around Aotearoa New Zealand—what is the justification in what appears to be a lack of flexibility in transitional arrangements for smaller or rural councils? So, on the one hand, the Government is saying that there must be some provisions related to a transitional phase—OK, we understand that. But why is it that there is a lack of flexibility when it might come to the arrangements for smaller or rural councils in that particular space? But also, why is there no capacity to provide any review opportunity? You know, this is a huge piece of work, and we fundamentally have issues with the Government’s approach to this. But, none the less, has the Minister considered some review mechanism at some point that might look at, as part of that transitional approach, where there is a provision for ensuring that, yes, there is some form of continuity around service, whether that’s waste water, stormwater, or drinking water delivery? But why is there no opportunity to have any sort of mechanism to review what the impact would be on communities as part of the Government’s reform approach?

Thanks very much for those questions. With regard to the question from the Hon Rachel Brooking, in regard to Treaty clauses, there was quite comprehensive engagement with iwi, in regards to this bill, through the select committee process. The reality is—the question around iwi that have not undertaken settlement—the Treaty settlement obligations apply when the settlement is made; therefore, as and when those iwi enter into agreements, that will be covered off through that. There are also requirements around the entities and how they must interact with and meet obligations in regards to that, and councils themselves already have those obligations.

In regards to the points around rural councils and a review mechanism, as part of the water services delivery plans, those plans include reasonably comprehensive milestones in terms of points. As you would expect with any long-term capital plan, there will be regular points of reassessment of that. There’s no difference between a small rural or semi-urban council and a large rural or large urban one. It’s not one size fits all; their plans will be appropriate to their needs and requirements.

In regards to clause 6A, which is around functions and duties and powers within the Act, the select committee did expand the scope of the requirements in response to submissions. You can see enhancements of that clause, which is positive.

The other question, I believe, in regards to clause 4, the interpretations, which is the definitions section, I think the key element there to highlight is that the definition element within that, for example, deals with the Watercare entity and ensuring that the definition of “water service provider” and “water organisation” clearly incorporates that Auckland water organisation, which is the primary purpose of that clause 4.

Thank you, Mr Chair. I have two questions for the Minister regarding clause 4 of Part 1. I know the Minister has touched on Treaty settlements, but we do see a conflation between Te Tiriti obligations and Treaty settlements, because not all hapū and iwi would have those kinds of Treaty settlements. Treaty settlements are very separate and have been well covered in the definition and certain parts of this bill. What I’m more interested in is the broader Te Tiriti obligations, understanding that there aren’t any specific Te Tiriti clauses within Part 1 of this bill, neither under clause 3 nor, as far as I can see, under clause 4. However, I do note that, for example, under the definition of “shareholder”, it has been suggested that iwi and hapū, potentially, are able to join by agreement of the territorial authority to actually enter as a shareholder. That was suggested as an inclusion into the definition of “shareholder”. However, that wasn’t included with the reasoning that “any other body that is permitted to hold shares under an exemption granted under section 57”—not to preclude other things that could be covered under section 57.

Can I just check with the Minister that under the definition of “shareholder”, should hapū or iwi want to be shareholders alongside the territorial authority, how would that work in terms of getting that exemption through either a Minister or through any other avenues? That’s my first question.

My second question is around the removed definition of “infrastructure”. It is also kind of peculiar that there was no indication that such a definition should be removed, especially since that the recommendation by the department was to amend the definition to include other aspects. I want to check with the Minister on what the rationale is to remove the definition for “infrastructure” here. Is it covered in another section? Those are my two questions for the Minister.

Thank you, Mr Chair. I didn’t have the joy of sitting through all of the debate and the submissions in the Finance and Expenditure Committee, but I have a number of questions.

I’d like to start with clause 4 and the focus on stormwater. I’ve got some questions that I would like you to answer about “stormwater service zone”, first of all, and where you’re talking about a geographic area with one or more urban areas, how does that relate to smaller settlements? I went to a meeting of Hawke’s Bay Regional Council, talking about resilience in Pōrangahau, and they are very concerned about how the stormwater and the dangers of flooding will affect that small rural community. They probably wouldn’t think of themselves as an urban community, but would they be included in that urban area?

Another question I had about the stormwater services—and I would thank my colleague Rachel Brooking for mentioning intermittent streams. I think they might also sometimes be referred to as “ephemeral”—ones that run in the winter but not the summer. I’m not sure whether you think that’s exactly the same or not.

My third question for the moment about stormwater is about why you’re excluding the transport corridors. There has been a lot of work done by urban design organisations, by Biophilic Cities Network, and so on, about permeable surfaces. Those permeable surfaces might well fit within the transport corridor. Often, people think the transport corridor is just kerb to kerb, but quite often, technically, in district plans, it’s wider than that. The potential is for using—where you don’t have houses that will be damaged—where you’ve got excellent run off from the tarmac on to potential areas that could absorb water if they were well designed with planting, with the right kinds of surfaces. Often, you have car parks, either adjacent to or within a transport corridor, and, all too often, the cheapest, non-permeable surface is chosen rather than something that could actually cope with the increasing intensity of rainfall.

Again, from my experience, the unplanted clay soils in and around our urban areas, or some of our urban areas, if they’re not planted up, if they do not have permeable design criteria in their construction, it actually makes it worse and it runs off faster. The opportunity is also not just potential for reducing the risk of flooding but potential for being able to use that water for the local communities, whether it’s a community garden, whether it’s for emergency water—those sorts of issues. I would like some answers to the Minister’s thinking on that.

I move, That debate on this question now close.

Thanks. I’ll just answer the last remaining questions. The question in regards to the Treaty obligations and shareholder questions I raised before, the councils have obligations to support the Crown in meeting its Treaty obligations under sections of the Local Government Act, so that’s where those components of coverage apply, and they obviously continue to apply as well. The question around shareholders and around iwi, shareholders of these entities can only be local authorities, consumer trusts, or a cooperative company, which is, basically, another mechanism around consumer ownership. The mechanism in which this has been proposed is not something that is possible under the arrangement, because the premise being that these are owned is outlined by the entities that I’ve described. In regards to the other question, I have answered the point around clause 4, subclause (3). The other element that was raised in regards to the exclusions around stormwater as well is relevant to the points I raised around the overland flow paths before.

Thank you, Mr Chair. I thank the Minister of Local Government for that. I was hoping to hear from the Minister a response to the issue around the “infrastructure” definition.

💬 Hon Simon Watts: Oh.

You want to get up?

“Infrastructure” was replaced with “water services infrastructure”.

Thank you, Mr Chair, and thank you to the Minister for that. I guess the related point to that question—and Dr Lawrence Xu-Nan talked about the removal of “infrastructure”. I didn’t pick up on the concerns around whether it was adequately removed or not. But the follow-up question was the issue around water conveyance, which was not in the original definition of “infrastructure” but now is in the “water services infrastructure” piece. So I’d be interested in in the Minister’s response around that.

The other point around definitions—and there are a lot of definitions in here, and a lot of them have had significant and substantive change. The only other one that, at this stage, I do want to touch on is reference to the definition of a “district plan”. My colleague Celia Wade-Brown just referred to a district plan. As part of the “Interpretation”, clause 4, there is a change in that the district plan has been modified, as a definition, to be a term that is defined in section 43AA of the Resource Management Act (RMA). What was there was that it was an authority’s district plan prepared under the RMA. It might be semantics, but semantics matter. So my question to the Minister is: are there specific changes envisaged here that a council, in the preparation of a district plan, which is a completely different process to actually having a district plan—where is the interplay with that? Is this a specific move to redefine the relevance of a district plan, whereas all the work, or some of the work, that may have gone into the preparation aspects is now being not part of the consideration? So that’s a question for the Minister there.

The other one is: looking at all of those interpretation facets, is the Minister concerned that there could potentially be a risk around inconsistent approaches to the definitions in different councils, or is that something that he doesn’t see as an issue, or, if so, he accepts that there is a possibility for inconsistency—that that doesn’t matter; and if so, why?

Thank you, Mr Chair. I asked a question earlier about development contributions and I don’t think the Minister answered it.

CHAIRPERSON (Teanau Tuiono): Could you say that again?

I asked a question before about development contributions, which I don’t think the Minister answered. We have at, I think, clause 6: “section 109 partially exempts the Crown from making development contributions”, and you go to that section, and it says there’s an exemption for Kāinga Ora. What analysis and thought has gone into the sorts of development contributions that the Crown might be not paying by this exemption?

Just in regards to that question by the Hon Rachel Brooking, the provisions within the Local Government Act 2002—this basically preserves the status quo in regards to those aspects. The development contribution will obviously be replaced by development levies, which is the work under way at the moment, but the Local Government Act clause, as I’ve noted, deals with the aspect that’s been raised. So that covers that point.

Thank you, Mr Chair. I would like to actually move to clause 5 of Part 1, which is around Schedule 1. I think there are actually a lot of really important questions for the Minister around transitional savings and related provisions, but I want to start by asking the Minister, hopefully, a really simple and straightforward question, which is around Part 1 of Schedule 1, clause 1, “Identification of affected employees” and a transfer of any from one service provider to another water service provider. I just want to check with the Minister, in those kinds of cases, what sorts of precautions, if any, have been put in place around collective agreements? Are there any water service employees that are part of collective agreements that may be affected by this? And how would one, then, untangle themselves from this as part of the transitional measures? I just want to start by asking the Minister that question.

I can keep asking the Minister questions. I’m guessing the Minister is still waiting to get some advice on that. I think, in terms of other transitional measures, and there are still quite a lot, if we’re looking at clause 6, when it comes to “water services annual report”—actually, Mr Chair, may I ask a point of clarification?

CHAIRPERSON (Teanau Tuiono): Sure.

What I’m mentioning, in terms of clause 1 and clause 2, is related to Part 1, but when we’re looking at Schedule 1—Part 1, for example—clause 5 refers to Part 4 of the bill. Would it be more appropriate to have those discussions of Schedule 1, even though they’re in Part 1, when we get to Part 4? Would that be appropriate? I’m seeing nods from the Minister.

CHAIRPERSON (Teanau Tuiono): I mean, this debate includes Schedule 1. Let me read it out—

Yes—this debate includes Schedule 1, which is in Part 1, but within Schedule 1, it makes references to Part 4. For example, in clause 5 of Schedule 1, it says, “Despite Part 4 coming into force sooner,”. The question would be: would it be OK to have the debate on Schedule 1, on Part 4—that refers to Part 4—when Part 4 comes up?

CHAIRPERSON (Teanau Tuiono): No, the debate on Schedule 1 is now.

OK. In that case, my question to the Minister, for clause 6, “first water services annual report”, regardless of what happens in Part 4—we might discuss Part 4 around that—I wondered, with the dates that have been provided, are there any sorts of precautions or any thoughts that the Minister may have around the provisions of that water services report and what those transitional measures would entail?

Thank you, Mr Chair, and thank you for the clarification around Schedule 1 in its entirety. That does open up, actually, quite a number of points and a number of questions that I’ll now sort of commence on the pathway.

💬 Suze Redmayne: Tangi, you’re a lawyer; you know how it works.

No lawyer, no lawyer, no lawyer here. Feel free to take a call and share your thoughts with the committee.

The interesting thing is that this actually spends a little bit of time identifying what would happen to employees who are, effectively, part of a transfer as part of this process. That is quite a significant implication for people in the community when we think about—regardless of the option that councils might choose to head down, and there will be there will be a number of different options that some do take—that there will be, as outlined in clause 1(2)(b) of Schedule 1, a number of employees who basically will cease, in terms of their employment with a provider, as a result of the transfer.

So as I understand, it’s a circumstance where the water services are being transferred across to a water service provider. As a result of that, it means that there will be some employees who will be retained as part of that transfer process, and there will be some that are not retained. For those whose employment will cease as a result of the transfer under clause 1(2)(b) of Schedule 1, there are some following criteria that actually identify, for those who do receive an offer of employment, what happens in certain circumstances. Now, the interesting thing around that is there is this reference that where the offer for employment is for, substantially, the same position as the position the employee held at the previous provider prior to the transfer, that, basically, there would be no entitlement to any additional benefit. OK, I understand that. But my question for the Minister is: what specifically guides the criteria outlined in clause 1(3)(a), (b), and (c) of Schedule 1? I’m happy to yield my time for the Minister.

So the provisions within the Local Government Act deal with the rights protections in regards to collective contracts, and those apply irrespective of where these individuals will transfer to. It’s obviously acknowledged that a large number of local government employees are under these type of arrangements and the mechanisms I’ve outlined. To the question that the member’s asking—what over-pins that—well, the provisions from the Local Government Act over-pin it.

I move, That debate on this question now close.

Thank you, Mr Chair. I think my colleague Tangi Utikere might have some more to say on this Schedule 1 as well. I have a question around clause 5 of Schedule 1—so that’s at page 337—and it’s: can the Minister of Local Government explain why the phrase “water service provider” is used in subclause (2) and subclause (1) but not subclause (3)? So I will explain, and I note that both these terms are defined. “Water service provider” can mean a range of different things, and a “water organisation” has a specific meaning as well, and that can include a range of different groupings. “Water organisation” includes a council-control organisation—and there are some commencement dates in that—an Auckland water organisation, as well as an organisation established under section 36, whereas a “water service provider” includes a territorial authority that has not transferred all of its responsibilities, a water organisation to which a territorial authority has transferred responsibility, a regional council that hasn’t transferred responsibility, and an Auckland water organisation. So there seems to be a lot of crossover between the definitions of “water organisation” and “water service provider”.

Then going to clause 5 in Schedule 1, we have subclauses (1) and (2) talking about a water services provider and the commencement dates for those, when they have to produce their first water services strategy. But then the Finance and Expenditure Committee has added in subclause (3) to say that those timings don’t apply for a water organisation that is established after the date on which this clause comes into effect. I can understand the rationale for having a different timing there, so that’s not my question. The question is: why is subclause (3) only referring to a water organisation and not a water service provider, and does the Minister want to comment more generally on those two definitions back in the definition clause—also in Part 1—about a “water organisation” and “water service provider”, and when they overlap and when they don’t overlap, and why there’s that difference in terms?

Thank you, Mr Chair. I do have a final question. I promise this is the final question for Part 1, but I’m just taking advice from the Chair that we need to ask all of the questions relating to Schedule 1 here at this moment, rather than in the relevant sections.

So I have a question for the Minister of Local Government regarding clause 7 of Schedule 1. This is on page 338. This is about the “Alternative form of funding impact statement”. Now, understanding that when we’re looking at other clauses, which will be mentioned a little bit later, there are two alternative ways—

Did you say page 338? That looks like it’s in Schedule 4.

💬 Dr LAWRENCE XU-NAN: Page 338. That is Schedule 1.

Are you on the bill? Sorry, we’ve got the revision-tracked bill. Sorry.

💬 Dr LAWRENCE XU-NAN: Schedule 1, Part 1, clause 7. Now, it does give the option for two alternative ways for the funding impact statement. One of them is in terms of the water services strategy as a financial matter; the other one is around a funding impact statement. But I’m curious about clause 7(2), which says that a water service provider must provide the funding impact statement for the purposes of preparing a water services strategy—form 2—or for the purposes of preparing a water services annual report—form 4. I can’t see form 2 or form 4 in this bill, so I’m just wanting to check with the Minister, if the Minister wouldn’t mind pointing to where we can find form 2 and form 4.

I’m happy to take this session offline, on exactly the point and page, but I can clarify the Schedule 1, clause 7 aspect, which is primarily around the transitional arrangements for—where you’ve got an example of an existing council-controlled organisation that is going to become a water organisation upon commencement, basically, those aspects of detail, in terms of the board adopting a document and within the time period, is what that clause of that Schedule is outlining primarily.

Members, the time has come for me to leave the Chair. The committee will resume tomorrow at 9 a.m.

Sitting suspended from 9.59 p.m. to 9 a.m. (Wednesday)