Water Services Legislation Bill

on behalf of the Minister of Local Government: I present a legislative statement on the Water Services Legislation Bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon DAMIEN O’CONNOR: I move, That the Water Services Legislation Bill be now read a second time.

I present a legislative statement on the Water Services Legislation Bill. As I said, I move that it be read a second time. I’m pleased to speak on the bill, today—

Hon Member: No, you’re not.

Hon DAMIEN O’CONNOR: —on behalf of the Minister of Local Government—I’m thrilled to speak on the bill, actually. Forming part of the water reform suite of legislation, it will help to optimise New Zealand’s water system to help us better manage new challenges and to provide water infrastructure services that are safe, reliable, resilient, and affordable—because they are not, now. It’s another key step towards ensuring New Zealand will have the water infrastructure and services we need to support better health and environmental outcomes and healthy, prosperous, and growing communities—now and into the future, which is something this Government is concerned about.

This bill is a step towards ensuring that New Zealand has water infrastructure and services that deliver safe and affordable drinking water. It is a step towards ensuring that our water network is resilient to extreme weather events. It will help to support new housing and urban development, and it will ensure that our water infrastructure and services operate sustainably within our environment.

As mentioned, this bill is part of a suite of legislation that will reform the delivery of New Zealand’s drinking-water, waste-water, and stormwater services. For those who didn’t notice, it did have an impact in Auckland—some of those storms. The Water Services Entities Act, which passed in December 2022, enabled the reform and set the framework for establishing the water services entities.

This bill sets out the function of those entities and provides them with the tools they need to carry out these functions. It enables modern regulatory and service delivery arrangements that will replace existing powers under existing local government legislation.

I’d like to briefly remind the House of the most important components of the Water Services Legislation Bill. This bill contains the regulatory functions and powers for the entities. It enables the entities to make secondary legislation to effectively manage water services infrastructure, deliver safe drinking water, and protect the environment, among other objectives. For example, this includes stormwater management strategies, which will comprehensively set out the entities approach to managing the impacts of stormwater. This is, of course, important in the country’s work to develop solutions to challenges around the changing climate. The entities will have their own modernised compliance and enforcement regime to enforce these functions. This is a major step forward as the Local Government Act, which was passed in 2002, is no longer fit for this purpose. New Zealanders need to be sure their drinking water arrangements are appropriately protected.

The bill also establishes charging mechanisms to provide fair, transparent, equitable, and affordable charges to households and businesses for water services. It sets out the path for transitioning to the new system and integrates the water services entities into wider regulatory frameworks—for example, the resource management system.

I’d like to thank the Finance and Expenditure Committee, who considered more than 460 submissions on this bill. I’d also like to thank the local government sector and other interested groups and individuals who made submissions on the bill. In particular, I’d like to acknowledge the work of councils and other water sector specialists in this respect, who engaged deeply with the bill and provided specific, technical recommendations that assisted the committee’s work and, ultimately, provided more practical, workable legislation—the Government does listen, always. As a result of this work by submitters and the committee, we now have in our hands a further optimised piece of legislation, along with amendments, that will ensure the legislation is workable for the water services entities and the communities that they serve.

Let’s look at some of the key areas of change recommended by the committee. The bill provides for relationship agreements, which will be critical in supporting the important links between the entities and other parties, including councils. These agreements set out how the entities and other parties will engage with each other and work together. For example, they set out how territorial authorities, regional councils, and water service entities will work together to effectively plan under the resource management system. Relationship agreements ensure that there is an ability to reflect the unique circumstances of different regions around the country, and ensure that entities and councils have the flexibility to agree on day-to-day operational arrangements that work for them. The committee has strengthened the relationship agreements by making them binding on the parties, with a statutory disputes resolution process. The committee also recommended that relationship agreements will need to be entered into three months before the entities’ go-live date, to ensure that they are in place before each entity does go live.

Secondly, under the affordable water reforms, around 75 council owned mixed-use rural water supplies will transfer to the water services entities. These supplies provide water for agricultural or horticultural purposes, along with drinking water for households. The Government has listened to rural communities’ concerns about this change in arrangements for these schemes, and recognises their importance. That is why this bill allows for the users of these schemes to work together with water service entities to transfer ownership and management of these supplies back to the communities they serve. In addition, the committee has introduced rural supply plans in this bill, which the entity must have for each small, mixed-use rural water supply in its service area that remains under its ownership. The rural supply plan will provide better recognition of the special nature of these schemes and ensure that farming communities can continue to be involved in their management.

Thirdly, there is a change with regard to the bill looking to the challenges we are facing as a result of changing climate, with new mechanisms to support the comprehensive management of stormwater. The committee has recommended that stormwater management plans and rules will be integrated into a single instrument: the stormwater management strategy. This will provide a system-based approach to stormwater networks and their regulation. The bill also provides for stormwater risk management plans. These seek to identify risks and hazards relating to watercourses on land not owned by the entities. There is a new requirement that the entity must work collaboratively with landowners to ensure that the risk is managed, controlled, monitored, or eliminated, if a—Madam Speaker, sorry. If a collaborative approach cannot be agreed upon or is not implemented, the entity must implement a solution.

The Government has also listened to councils’ concerns about the transfer provisions for councilcontrolled organisations. These will now only apply to a council-controlled organisation whose predominant purpose is to support territorial authorities in their management and operation of water services. The “predominant purpose” is defined in the bill as 85 percent or more of revenue from provision of water-related services.

Christchurch’s Citycare is now exempt from the transfer provisions due to the special nature of the contracting work it does for councils across New Zealand. The bill, as reported back from the committee, also provides that council-controlled organisations can be excluded from the transfer arrangements in the future if it is determined that they also have special characteristics that mean a transfer would be undesirable.

By-laws are an important and complex area for councils and entities. Existing by-laws will continue either until an entity makes an equivalent water services, or until the end of the transitional period. The water services entities will have the compliance and enforcement powers in relation to by-laws. Water service entities will be required to enter into relationship agreements relating to bylaws.

The committee also made amendments to ensure that the integrity, intent, and effect of the Treaty settlements are upheld by the entities. These changes represent a holding pattern until such time that the Crown and iwi have completed discussions on the changes required to Treaty settlements in greater depth, and provide a process for amending Treaty settlement Acts that are impacted by the water services reform.

In addition to the improvements I have mentioned, I have tabled a Supplementary Order Paper to make a number of minor and technical amendments to the bill in order to ensure the legislative regime is consistent and workable across water services legislation and the new resource management system. This includes changes relating to establishment dates for the entities that result from the move to a staggered approach in the now amended Water Services Entities Act. The Supplementary Order Paper includes a few other—

Order! Order! Unfortunately, the member’s time is up. The question is that the motion be agreed to.

I think you were right, Madam Speaker. The time is up! And that’s exactly what’s happening tonight. Another round of urgency and isn’t it interesting that out of all the four three water bills—because that’s what it is; we’re not allowed to talk about three waters any more on that side of the House, but it’s another three waters bill—all four of them have been brought in under urgency. All four of them! The Leader of the House, when he passed the urgency motion, talked about all these bills having a common feature. Boy, do they have a common feature. They’ve been rushed through under urgency because they’ve gone down like a cup of cold sick out around New Zealand.

I’m not surprised that they’re now trying to lowball this bill, because really, who on that side of the House would want to be talking about three waters after last night’s poll? They walk in today battered and bruised and then they say, “Well it couldn’t get any worse.”, and then the whip says “Yes, it can. You’re on the speaking list to talk about three waters again.”, and then the member for the West Coast has to get up and talk. Boy, you could see the tail of that rat dangling out his mouth as he chewed on it, as he knows how three waters has gone down on the West Coast. But he’s been around a while and, in fairness, he kept a brave face. He had to, for the young ones. He had to keep the ship steady because he knows it’s tanking and he knows what’s going to happen.

Of course it is interesting, when I heard the Minister speak and he went through his very perfunctory report—it’s interesting that back in the days it was about the cost of living. Remember what three waters was about? It was the cost of living. Now I think there was some sort of mumbled response to weather events. That’s the problem with these bills. It’s that every time they’re changed—but in fact all they need to do is listen to the submitters. And what I thought was very interesting from that member’s speech tonight was that there was very little about the select committee stage and the overwhelming opposition from the submitters to this bill.

Let’s remember what this bill is about. It’s an omnibus bill that will establish and empower the water services entities. Remember them, the water services entities? The Government started off with four of them and then, obviously, they had to have a back down. So they put another bill in and now there’s ten of them and it’s going to establish and empower water service entities. The reason why the submitters opposed this bill is that under these water service entities they will facilitate State theft of locally owned water assets. That’s exactly what this bill does: it enables the transfer of locally owned public assets from councils to unaccounted, unaccountable mega entities. That’s exactly the detail of this bill that we’re talking about in the second reading as it goes through under urgency, because the reality is the Government’s run out of time. It’s an absolute shambles and that’s why the submitters overwhelmingly opposed the bill.

So for the Minister to get up tonight and say that, well, they listened in the select committee process; they didn’t, because the submitters were opposed to it. Of course, let’s also remember, not only will it be State theft of locally owned assets, this bill will set up the pricing and charging arrangements for water services, and overwhelmingly the submitters oppose that. The reason they oppose that is because there’s going to be a blanket charge across the whole water entity. There will be no variation for communities that local governments and councils allowed for in their pricing structures. So you’re going to have small communities cross-subsidising larger ones. That was the point of keeping it locally controlled for local councils, because they know their communities. Now there’s only going to be the mega entities who will set a fixed price across the water entity. That’s what people are opposed to.

They’re opposed to the confiscation of their assets and they’re opposed to the uniform charge across, because of course—and I’d like to say, “Well done, Simon Watts”. He’s been very clear and concise, outlining very articulately National’s policy on three waters and what we will do. It is very clear that this issue will come straight back to Parliament after the election, because when National is in Government, we will repeal this bill and replace it. What we know is that communities know best, and we’re going to back local councils because they know what’s best in it for them.

If we go back, we’ve had the Water Services Entities Act 2022, which set up three waters. Then we had to have an amendment, the Water Services Entities Amendment Act 2023, which backed down on the four entities and set up 10. Now we’ve got the Water Services Legislation Bill, which will establish and enable water services entities. What’s been very clear through this whole process is that this has been a sham. Decisions have been made before consultations have proceeded. It’s all been about decisions made behind closed doors. Remember when the Government promised councils that they could opt out? Then Official Information Act documents revealed it was a legislated all-in right from the start. So there’s no good faith. These trilogies of bills have turned up in the House. In fact, it’s bad blood. And that’s exactly why three waters has gone down like a cup of cold sick.

The reality is voters don’t trust this Labour Government. They’re sick of them talking out both sides of the mouth. Remember that advertising campaign with the green sludge coming out of taps that they had to pull off the ads that used taxpayers’ money? That was disingenuous. This Government talks about misinformation and disinformation. They should look at themselves.

Let’s be very clear. National will repeal three waters and scrap the 10 co-government mega entities. We will restore council ownership and control, set strict rules for water quality and investment in infrastructure, and ensure water services are financially stable. On behalf of the National Party and our local government spokesperson Simon Watts, soon to be the Minister for local government, who will work with that sector—he will listen to them and most of all he will return assets stolen from this Government back to the councils so they’re locally controlled and accountable to the people who paid for them. But of course, as we’ve learnt through this whole process of four bills through three waters, Labour knows best, Wellington knows best, and what they’re going to learn on 14 October is that they didn’t know that at all. Thank you, Madam Speaker.

As the chair of the Finance and Expenditure Committee which oversaw this, I’d like to report to the House that despite the polarisation of the affordable water reforms, the select committee amendments passed unanimously. It shows a level of collegiality and consensus that’s not captured in the political debate and media coverage. It is clear that the previous speaker, Matt Doocey, wasn’t actually across the bill, which is unfortunate because it would have been good to have a debate about the really detailed and technical aspects of this bill, which covers 292 pages.

Some of the areas that the select committee worked on together collegially, as I said, were about making the relationship agreements between water services entities, councils, and transport corridor managers binding. That was making sure that the binding nature of that underpinned any servicelevel agreements in that there was a prescribed set of mandatory requirements, that there was a binding dispute resolution system, and that the agreements be signed three months prior to the establishment of the water services entities. It also enabled the Minister of Local Government to step in and prescribe the terms not agreed to so that the relationships would be negotiated in good faith and with a willingness to support the reform system.

There were changes to the rural water supplies, and I’d like to thank the submitters from the Clutha district in my own electorate of Taieri for giving us plenty of food for thought. The really big area of change was around stormwater. That was big, it was significant, and I’d really like to acknowledge the Hon Phil Twyford for his hard work and perseverance in this. The Minister that just gave the legislative statement spoke about collaboration. I would like to say the characterisation, from my perspective as the chair of the committee, added to that collaboration is clarity around responsibility and accountability for those waterways. I’m sure my colleague will speak to that more.

The Act now supports urban growth. It requires the water services entities to be responsive to developers via a development code, and that’s able to be enforced by the Commerce Commission to avoid the chilling effect of protracted litigation. Matt Doocey referred to the pricing, but, actually, as well as enabling geographic averaging to achieve pricing efficiencies, there are also added provisions to recognise vulnerable consumers and the fundamental right of all people to have access to clean and safe water.

My final comment, despite anything you might hear in this House to the contrary, is that we made some comments about the process as a select committee. Given that what is technical and what is substantive can be a moot point, we ourselves took the approach of creating a schedule of all changes so we could be across absolutely everything. We had the added scrutiny of two independent advisers in this regard. It is my firm view that the officials did their job; we did ours. We made our comments and the system worked as it should have. Let me be very clear for the record that that is what happened, nothing more, nothing less, and I am very happy with where the legislation landed.

I want to acknowledge the Hon Nanaia Mahuta for her initial work, and the Hon Kieran McAnulty for shepherding it through. I want to thank all the officials for their incredibly hard work and the independent advisers and the committee for their scrutiny of this very technical bill. It was a privilege to chair the committee through this important piece of legislation and I really recommend it to the House.

Thank you, Madam Speaker. The Water Services Legislation Bill, the National Party will oppose. As our previous speaker, Matt Doocey, said, we will reverse this legislation later this year.

The nature of three waters and the Labour Party is quite interesting—why they actually want to progress it at this stage. Why have they been so keen on having this Parliament in urgency for the last couple of weeks, and this week, to pass this bill?

Angela Roberts: We’re taking responsibility.

Hon DAVID BENNETT: The Labour member over there says “responsibility”—I’ll come back to that. The reality is that they have no faith in what they’re going to deliver at this election. This is an insurance policy from the Labour Party if they have to go into coalition with other parties. They’re pushing through as much of their agenda now so that—just say they were in a coalition which they don’t have control over—they’ve got the vast majority of what their agenda is. That’s the only reason you would do that now. Why would you have your MPs here, not campaigning, and have them doing bills like this if it isn’t an insurance policy? I see a couple of smirks from the Labour members of Parliament, because they know that they’ve discussed this at caucus and that is the reason they are doing it. They know they’re not doing it out of any genuine legislative requirement. The member over there said, “We’re doing it because we needed to.” That’s a falsity. The Labour Party has dressed up the idea of water quality in New Zealand as requiring them to do this agenda.

They have used one example of an issue that can happen any time. After this legislation, it could well happen. That has enabled them to promote legislation around three waters, because it’s so vital now because everybody’s at risk from the water they drink! The water we drink tonight could be at risk! That’s what the Labour Party is saying. Our fundamental water system is broken! We need to be out there doing it! What a load of rubbish—an absolute load of rubbish. New Zealand has some of the best water quality for drinking water in the world, and the Labour Party are using one instance as an excuse to try and create an agenda. This isn’t about getting better water quality for our communities, it isn’t about saving money for our communities—and I’ll come back to that—this is simply to reinforce their co-governance role that they have dictated to. This is what the Labour Party has done. They’ve done a deal in their caucus around co-governance of water, and they have to push that through before the election, just in case they’re in coalition with Winston after the election—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! The member will now talk about this bill.

Hon DAVID BENNETT: Oh, I thought you wanted his full name—Winston Peters, they’ll be in coalition with. But, coming back to the bill, one of the big things in the bill is actually the cost. The Labour members over there have talked about that already. They’re saying this will save consumers—save ratepayers. It just doesn’t happen that way. How can a water system that is deficient—that’s the Labour Party’s argument. If you just put it all together, it’s suddenly got a lot of capital to change all the problems that you’ve got in the system. How does that work? Where does that come from? That’s what the Labour Party is saying. All they’re really doing is robbing one council to pay another council, and they are doing that time and time again.

Now, when submissions were in around the water services bills, all these councils came forward and said that they were against the bills.

Glen Bennett: Which bill?

Hon DAVID BENNETT: It’s not just this bill; it’s the combination. They were against them, and the Minister went on this glorious trip around New Zealand listening to these councils. Not one of the councils’ wishes was actually made to happen. The bills still went ahead; they didn’t stop it. It’s predominantly rural councils that have invested more and got their infrastructure at a good level that are now going to pay for some urban councils that have spent their money on cycleways and playgrounds. That’s, effectively, what’s going to happen. The greatest example is actually Whangārei. Whangārei has actually got one of the best water systems in New Zealand—they’ve invested in it—and they’re going to take that off them and make it part of Auckland. Then Whangārei is going to lose that investment—the growth that could have happened in Whangārei—because, over the next 20 years, that’ll be run down. That’ll be run down because that money has got to go into Auckland.

How do you pay for the changes in Auckland around stormwater? Because they’re not going to be a billion dollars. Nobody can tell me that you’re going to be swimming in those eastern suburbs or North Shore beaches for a billion dollars. There’s no way that’s going to happen—no way.

Helen White: Do you think we should be able to swim in the beaches?

Hon DAVID BENNETT: “Do you think we should be able to swim in the beaches?”—well, of course you should be able to swim in the beaches. But somebody’s going to pay for the change. They’re saying, “It’s only a billion dollars to fix up Auckland stormwater.” I don’t think it’s going to happen that way. Wellington—what’s the percentage of water actually lost every day in Wellington through leaky pipes? It’s horrendous. And you’re going to fix that? How much is that going to cost? “That can’t be a billion dollars. That’s got to be, like, $200 million, because it’s not as big as the Auckland problem.”—that’s the reality for these guys. They actually believe that they can do something with nothing.

Mark Cameron: They’re mathematically illiterate.

Hon DAVID BENNETT: No, it’s not that they’re mathematically illiterate—because Grant knows, and Grant’s told them in caucus that this will work, and they all believe Grant, because Grant has never been wrong!

Ingrid Leary: Point of order. I believe that, if the member is referring to a member of this House, he should use the member’s name, not the first name.

Hon DAVID BENNETT: Well, I’m quite happy to say Grant Robertson can’t be wrong! Grant Robertson has told these members and they’ve lapped it up as good little lap dogs would, and they believe in what Grant Robertson said about the economy coming right and “Don’t worry about the economy.” Suddenly, it’s dawning on them now, two months out from election, that Grant Robertson might have told them a fib. Grant Robertson might have actually not told them the truth.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! I would like the member to come back to this particular bill instead of talking about someone who might not have told—you were not there. Can you just come back to the bill. You’re trying to make a story up.

Hon DAVID BENNETT: OK. I wasn’t there, but I’ve heard from others that were there about what actually happened, so I’ve got a pretty good idea what happened there. You can see it on their faces, because they’re starting to realise; it’s starting to tick over in their minds that maybe this isn’t such a great idea. Maybe we have been conned—

ASSISTANT SPEAKER (Hon Jenny Salesa): And maybe you should just come back to the bill, before I get you to sit down.

Hon DAVID BENNETT: It takes some time to get the Labour members to understand what is actually happening to them, and it’s very difficult, because they’ve been brainwashed in caucus time and time again—

ASSISTANT SPEAKER (Hon Jenny Salesa): No—talk about the bill, the Hon David Bennett. Come back to the bill.

Hon DAVID BENNETT: Three waters is their great solution to the water issues in New Zealand, but nobody’s going to pay for it! Now, I’m sure Simon Court is going to stand up and say the same thing, because he’s brought up the same arguments in the select committee. He understands that you’re not going to magically solve Auckland’s stormwater issues—stormwater is a big part of the bill; around $1 billion. You’re not going to solve Wellington’s failing water system with the small amount of money they are talking about. What this bill actually does is co-governance and then makes New Zealand ratepayers pay again for it, and it won’t actually achieve anything, because the Labour Party has never achieved anything in six years. While they think they can do something out of nothing, the reality is that nothing actually happens. That’s what we’ve seen from them.

New Zealanders aren’t that silly. New Zealanders understand that you just don’t put all the entities together and suddenly have this magic pot of money that’s going to solve all the issues and that you can swim in the beach because the Labour Party has put the three entities to 10 entities and made them all perfect. The reality is that the New Zealand public don’t believe Grant Robertson. The Labour Party members of Parliament—the 30 on the backbench—that have believed him are starting to realise the folly of their ways. This bill is just another example of a failing Labour Government.

A river runs through my electorate called Te Waio-Pareira, otherwise known as Henderson Creek, and every time there’s a heavy rainstorm, raw sewage floods that river. And the reason it does that is that for decades, successive councils have failed to build the infrastructure needed to support a growing city. In January, about 1,000 people in my electorate in West Auckland suffered catastrophic flooding. Why? A heavy rain event, sure, but, again, a total failure by Auckland Council over multiple decades to build the stormwater infrastructure needed to support a growing city.

I am happy to say that with the passage of this bill through the House, we will see a specialist water agency whose job it is to deliver, maintain, and manage stormwater and waste-water networks in the city. It will be able to borrow two to three times as much as Watercare currently can, because its balance sheet will have been separated from Auckland Council’s balance sheet and it will be freed from the shackles of the rating agencies. Thirdly, it will have a detailed and comprehensive legislative mandate that, for the first time ever, will require these entities to do the job of managing stormwater in our communities. There is no such legislative mandate currently. There is no way to hold councils accountable for, in the case of Auckland, its manifest failure to manage stormwater properly in that city.

I want to make a brief remark about one aspect of the work that the select committee did in scrutinising this bill, and I want to thank the Minister, the Hon Duncan Webb, for his willingness to engage with our committee and allow us—and when I say “us”, I mean all the members of the committee, because in spite of the huffing and the puffing by ACT and by National in this House, in the select committee room the members of that committee worked together in a way that was sensible and adult and collegial in the best interests of our country. Together we developed new policy. The committee developed new policy to change the way that the responsibility for managing the streams that make up the urban stormwater network in Auckland is managed.

The current problem in Auckland, which was so exposed by the weather events earlier this year, is that Auckland has had a stormwater by-law from 2015 which says that if an urban stream passes through private property or abuts private property, the responsibility for maintaining it and clearing any blockages lies with the private landowner. It is a nonsense, an absolute nonsense, because those urban streams pass through literally dozens of suburban properties. It’s not feasible for a suburban property owner to spend $50,000 to hire a heavy digger and equipment to clear the stream. Every time there’s a heavy rain event, debris flows down from upstream and can block that property.

What happens currently is that the landowner rings up the council and says, “I’m worried there’s going to be another catastrophic flood because there’s a big blockage in the stream next to my property.” What happens right now is that the council says, “It’s not our problem, you deal with it.”, and that is one of the main problems—the blockage of streams and the refusal of the Auckland Council to take responsibility for maintaining those streams. That is one of the big problems that emerged from the floods earlier this year.

Our committee has fixed that problem, and the bill, as it stands in the House today, says that it is the responsibility of the new water entities to maintain the entire stormwater network, including the urban streams. Property owners will still be required to exercise their responsibilities and not allow, through their own actions, for blockages to occur, and the new water entities will have all of the powers and tools needed to enforce that. But suburban property owners in our cities will no longer be able to be held responsible by a council like Auckland Council for messes and blockages in the streams that happened as a result of someone else’s omission or commission further upstream. I say to the House, that is a significant improvement and advance, and I thank our colleagues on the select committee for the work they did.

Thank you, Madam Speaker. The ACT Party agrees that there is a problem with three waters infrastructure, in that, for too many decades, some councils have failed to uphold their responsibilities to care for community assets, to make provision for maintenance and renewals, and instead have wasted money on things like painting rainbow pedestrian crossings on the road.

So, of course, New Zealanders have lost confidence in local government and their ability to manage assets. That actually goes back to 2005, when a previous Labour Government gave councils the power of general competence, which means they could do anything. Of course, what did they do? Anything but asset management well. Then we come forward—we leap forward—to the current Labour Government, which has given councils the instructions to focus on the four wellbeings: social, environmental, cultural, and maybe economic.

Well, what should this Government have done? What should any Government have done? They should have said, “Focus on the infrastructure needed to support growth, intensification, new urban development, and manage and maintain your assets. Invest in them in a way that doesn’t lead to a whole lot of liabilities—like waste water overflows onto beaches, for example.”

Let’s just come back to this bill. ACT took a constructive approach. In fact, we’ve taken a constructive approach to engaging with the Government and with officials and with submitters right throughout the three waters reform process going back to 2020, prior to the election, where Department of Internal Affairs officials gave David Seymour and I a briefing on what the reforms would involve. They omitted stuff like centralisation, and taking the assets without compensation. They omitted to talk about co-governance, creating these awfully complex water entities with two levels of governance, including giving 50 percent of seats on a co-governance entity to unelected, appointed iwi Māori representatives when it didn’t appear there was any justification for it.

So Labour has behaved appallingly when it comes to this reform. A problem that New Zealanders from Cape Reinga to the Bluff and the Chatham Islands—whether they were involved in farming or they lived in a small town or they lived in an urban metro like I do—

Ingrid Leary: Come on Simon, you know more about the bill than this.

SIMON COURT: —could have agreed there’s a problem with three waters. Something to fix. Labour ruined that opportunity by focusing and listening to some people with some kind of misguided agenda to try to allocate decision making over water assets and infrastructure to unelected iwi Māori—for some reason, without justification—and to centralise the assets and confiscate them from local councils.

It turned out what we heard during consideration of this bill at select committee—which I must acknowledge, was admirably chaired by Ingrid Leary in her role as chair of the Finance and Expenditure Committee. She enabled wide-ranging investigation of the bill and its implications, and I certainly want to acknowledge her for that. But what we learnt throughout the process is that this is the implementation part of the three waters reform. Labour had no idea how they were going to implement the reforms. That’s what we learnt. It was like “Holy, what have we done?”

What did we learn? There was no plan to integrate local government planning, land use planning, and the asset management functions that the water service entities were supposed to take from local councils. There was no plan to integrate how stormwater would be managed by water service entities and land use planning. In other words, the planning that goes on to say where homes should and should not be built, where businesses should and should not be built because of natural hazards wasn’t going to be integrated into the way water services entities managed stormwater.

There was no consideration of how rural water supplies, which typically supply 50 or 80 percent of their water to rural use—farming, irrigation, stock water supply, washing down, hosing down—all of that water and only a few residential users. How on earth would those rural water suppliers’ mixeduse supplies going to be integrated into water service entities? No idea. How was the demand for infrastructure connections meant to respond to growth when these water service entities’ role was set up basically to deliver clean drinking water to residential consumers, but completely ignored the fact that metros like Auckland are going to grow from 1.5 million to 2 million to 2.5 million—the volume of water required to supply Auckland’s growth is enormous. It can only come from places like the Waikato River or new dams. As developments proceed, they must be able to call on water connections and waste water disposal so that more houses can be built on affordable land. None of that was answered.

Then we come to the point raised by the Hon Phil Twyford—a Minister, some might say, in a past role who could have been a genius for coming up with a National Policy Statement on Urban Development that encouraged more high-density development in our metro areas. So for example, where once there were four homes on residential sections, now there are 11 or 13. Like where we live—where the Hon Phil Twyford and I live—in Te Atatū Peninsula. But what the former Minister of Housing didn’t allow for was the infrastructure needed to support that growth. So where we live, in Te Atatū Peninsula, it’s true there’s been housing intensification—which is welcome. But the waste water overflows from the sewage system right by our boat ramp at Taipari Strand—right next to the waka ama club, the multi-sports club, the rowing club. Why on earth was that not addressed when that former Minister did his colouring-in exercise and said, “You can build up, but we haven’t taken account of or funded the infrastructure.”?

What was missing? What was missing? The hundreds of millions of dollars spent by building construction companies in Te Atatū Peninsula alone, where I live, in the past four or five years. Not a single cent of the GST collected on that revenue has gone back to local councils to fund infrastructure. What ACT says is if we want to have growth, if we want to enable housing growth to respond to demand, then the proportion of the revenue—half of the GST, which would amount to $1.5 billion a year that central government currently collects—must go back to local government. Phil Twyford’s speech sums up everything that’s wrong with this Labour Government. Great at colouring in, great at announcements, great at press releases, but absolutely hopeless at implementation and solving the hard problems.

So what is not resolved? Who pays for the water infrastructure is not resolved. Is it the bulk water users? Is it people like me in Auckland? When I turn on the tap, my water metre spins, and every month I get a bill? That’s not very common around New Zealand. You try telling people in Wellington that they’re going to get a water metre and they’re going to have to pay a bill. A lot of the people who live in Wellington will probably revolt. But unless you find a way to charge people for the water they use, it’s not possible to actually provide sustainable funding and financing.

What is unresolved? Who says yes or no to development? Is it a co-governance entity? Is it a group of people who believe in spiritual and animist concepts such as “water has a life force” or mauri, and that that overrides the needs for communities to have water for housing growth or farming or economic development? How would we know? The bill talks about upholding Treaty settlements. Of course, ACT would support any settlement that restores property rights that have been infringed. But that does not help us understand how we provide infrastructure for growth and how these entities, when they’re constituted, will actually be able to fund asset management.

So this is what ACT says. Look, it’s quite simple to solve. These organisations need to be voluntary. If councils are going to be co-opted, they need to get one share per 50,000 residents so at least they have control. If they need revenue, then they need to be able to raise that from water users. Alternatively, if there’s major projects, they can raise it from the private sector and institutional capital and do large-scale multi - master-plan developments using private capital. All the answers are there. ACT looks forward to delivering them should we be in Government.

Thank you, Mr Speaker. I’m pleased to take a call on the Water Services Legislation Bill. The Green Party is not supporting this bill, and I’ll give our reasons in a moment, but I would like to join with others in congratulating Ingrid Leary as the chair of the Finance and Expenditure Committee. The public often thinks that Parliament, this House, is where we argue all the time, but in select committees there is a lot of constructive work done, and, even when we oppose the bill, we try to improve it. I thank Ingrid Leary for the very good, collaborative way she chaired the committee.

We’re opposing this bill because of the large level of corporatisation which is involved in the three waters reforms and the limited accountability that the entities will have. We’re concerned about the loss of community voice and the limited ability of councils to influence the entities’ infrastructure planning, their policy, and their pricing. Yes, there will be relationship agreements, but the entities can choose to take heed of those; they don’t have to.

One of the other major reasons for opposing the bill is that it will be the entities, not councils, that are responsible for stormwater management. Certainly, the committee, as Phil Twyford has noted, has clarified the issue around responsibilities for streams going over private land, but there’s a much larger issue at play here, in terms of stormwater management. We know that with more intense weather events, we are going to get more flooding, particularly in our urban areas. One in seven people in Aotearoa live in flood-prone areas. One study has estimated that over 441,000 buildings are at risk of flooding, most of them in urban areas, and they’re worth about $218 billion in value.

When we’ve got more intense weather events and spikes in rainfall, stormwater management is critical to preventing flooding. It’s closely connected with land-use planning, with the type, the scale, and the location of urban development; the provision of open space, how roading works; how drainage works on road ways; and you need to have a really strong integration between land-use planning and stormwater management.

Drinking water and waste water, the other two waters, are very different services. They are much more related to pipes, they’re not as related to natural waterways, overland flow paths, wetlands, and the permeability of rain into the ground. So the arguments for managing waste water and drinking water together are strong and of course Watercare does that. But, I think, in terms of stormwater, the arguments are much stronger for leaving it with councils.

The bill provides very directive provisions around stormwater management. They, I think, are likely to be very challenging to implement, because councils have got to determine whether assets that they manage to use primarily for stormwater management or for things like recreation and have other benefits to the community—it’s the Minister, in the end, that the schedules provide has the final decision.

The whole process of transferring assets from councils to entities, because of all the land involved, is going to be expensive and complex. I would really encourage the Minister to consider that whole implementation and, if there are major challenges arising, to come back—because, hopefully, Labour and the Greens will be in Government post-election—and really look at that. Certainly, focusing on drinking water and waste water, that logically does go to the entities. But we need a partnership between local government and central government, and if stormwater stayed with local government, we think that would reinforce the partnership.

There’s been a recent report by the Helen Clark Foundation by Kali Mercier, and she looks at the whole concept of “sponge cities”, which was something that was developed at large-scale in China, and it involves recognising that the more we harden our cities, the more we have concrete, asphalt, and large roofs, then the more we increase the amount of runoff after rain and the more we encourage flooding in urban areas. So in China, there’s been billions of dollars spent over the last 10 years in nature-based solutions, putting more permeability back in their cities and towns, using and working with water, rather than regarding stormwater as something to defend against by piping it, putting in stop banks, dams, and the like; working with nature and creating new wetlands in the landscape.

We heard at the Environment Committee, just last week, from the Secretary for the Environment, highlighting the damage we have done to wetlands. We all know that we’ve destroyed 90 percent of our wetlands in Aotearoa. They are our first defence against stormwater in urban areas because they clean the water and they allow it to soak into the aquifers.

So it’s councils, which are involved in planning for recreation, planning for sports fields, ensuring that there are areas of green space that are so important for a more “spongy cities” approach. It is councils that provide the land-use planning requirements about the amount of hard surfaces. If we want to move to more spongy cities, we need more porous surfaces, more of the concrete pavers which allow water to go through, rather than just our continuous asphalt. Councils direct those planning rules, not the water services entities, so it makes much more sense from a land-use perspective if stormwater stayed with the councils.

Our worry in the Greens is that the transfer of stormwater to the entities will see an emphasis and an increase in that traditional approach of defending people against nature using concrete, pipes, and grey infrastructure rather than green infrastructure of nature-based solutions.

The Parliamentary Commissioner for the Environment has estimated that there’s been a major decline of about 30 percent in green space in Auckland alone between 1980 and 2016. That has been largely on private land. We have in the Medium Density Residential Standards a requirement that only 20 percent of sites should be outdoor space. If we’re going to move to porous spongy cities, it’s the councils that will drive that through land-use planning, currently now through the district and city plans but under the Natural and Built Environment Bill through their regional planning committees which would have territorial authority representatives on them.

So this sponge city, porous city approach is critical to climate adaptation. But it’s not necessarily going to happen when you separate out the land-use planning from the entities that manage stormwater, and here’s certainly been no consensus across councils that stormwater should be transferred. Both Auckland and Christchurch councils—big metro councils—oppose it because of the severing of this connection to place making. It’s been in Christchurch where we’ve seen major wetlands constructed in south-west Christchurch in the Halswell area. They have stopped flooding in the Ōpāwaho River, and they’ve had major benefits for biodiversity and recreation.

There is no incentive for the entity to make those big wetlands, because they haven’t got the charging mechanism, other than averaging charging across the region, to actually justify the cobenefits: the recreational and biodiversity benefits, the benefits for wildlife, and the benefits for activities like walking. So the councils can do that because they can spread the cost through their rates, but the entities have got to charge for the water services, so I think I think it will be much harder for them to do that.

One of the other reasons we oppose the bill is because of the considerable decision-making powers of the Minister of Local Government to amend and decide the asset allocation schedules in the restructuring. We also oppose it because of the provisions in Part 8, new Schedule 6, which allow for small mixed-use rural water supplies to be privatised. As Minister O’Connor said, some 75 percent of the mixed-use rural water supplies are likely to transfer to the entities. These schemes are currently managed by councils. They provide both stock water and drinking water. They provide water for agricultural use. So if they are privatised—the euphemism is “giving it to the community”. But if they are privatised, once again, it is leading to—because water is used for agricultural development—water assets being concentrated by agribusiness.

So we don’t think this is a good part of the bill, because it allows schemes which service fewer than 1,000 dwellings and where 85 percent or more of the water is used for agricultural or horticultural purposes to be transferred to another operator—i.e., privatised. That’s what we saw in the 1980s with schemes that the Crown had invested in through the Ministry of Works being passed to private entities and used largely for irrigation. So we’ve tried to improve the bill, but the Green Party does not support it.

Thank you. I’m just going to take a short call on this and try and bring things back a little bit to the basics, because I heard David Bennett talk about two absolutely contradictory things and I’d be confused if I was the public looking at this. He talked about how we had the best water in the world. He also talked about leaky pipes in Wellington and he talked about how the problems in Auckland were so big that we couldn’t possibly fix them, so we could never necessarily swim at our beaches.

But the truth is that in Auckland we can’t swim at a lot of our beaches. We have to use an app and we have to look on that app to see whether it’s safe that day. If it’s rained, it’s not going to be safe that day. People get sick from that process. But the most serious issue we had was an issue that happened in Havelock North and people died. That issue was what sparked the original work that led to this bill and to the others that have joined it.

I’d like to thank the Finance and Expenditure Committee for all the work it did, really getting to the nuts and bolts. You’ve heard the Hon Phil Twyford talk about the work that we did that was quite original and careful and very much about making sure that things happened right for Aucklanders after floods which had been so devastating and partly having been contributed to by failures of this water management done by the councils. We can’t have that happen again. We need places like Mount Albert to actually be able to rely on the water systems that they’ve got. It’s really important, because people don’t feel safe in a city where that can happen. We need pure, good water systems in our city, and that is a good thing for New Zealanders and for our Aucklanders and for the people of Mount Albert. Thank you.

A five-minute split call—Barbara Kuriger.

Thank you, Mr Speaker. The problem with this piece of legislation and a number of other pieces that we’re doing is that they’re being done in a piecemeal way. It’s really short-sighted, in terms of climate adaptation and the lack of a climate adaptation bill, to be putting in piecemeal pieces of legislation that deal in water pipes and not think broader than that. I was listening to the Hon Eugenie Sage before about the sponge city approach, and I know we’ve been going through in the Environment Committee, looking at other pieces of legislation—as the cyclones have been happening—thinking about how our stormwater does disappear. I feel like this is being pushed in a way that’s not given each of our councils a chance to think about how they might do that, but aggregates them all in such a way that they’re going to be pushed together—thinking about pipes, thinking about dividing things up, thinking about putting things together, and not thinking about the landscape as it currently sits—in terms of solving this problem.

Labour doesn’t like to use the term “three waters”, because they know it’s become so toxic, so they now call it “affordable water reforms”. On this side of the House, we don’t believe it’s either affordable—or, it’s neither affordable, or it is not a real change to the reforms that were being proposed. It’s still the same three waters, and Kiwis know that it’s the same three waters.

We hear a lot about smaller councils missing out. When you look at a place like Taranaki, where you’ve got three councils around the maunga and you’ve got the Taranaki Regional Council, it’s a nice, compact region. One can see how those councils have been so willing to work together—already do; don’t need to be pushed together; know how to do it in a way that’s constructive. But when you actually look at an entity like the Waikato Regional Council, and you look everywhere from the Coromandel, which is extremely broken at the moment from severe cyclone after cyclone after cyclone—and not only are their roads broken but their water system, a lot of the infrastructure, is broken. Take that all the way down through Hamilton City and down to the bottom end of the Waikato Regional Council, to a place called Mōkau—it’s very hard to imagine how each of those councils, including the small regional councils, are even going to get any thought, I guess, around what might be needed locally in any particular given water situation, because everything is so vast and so different.

That’s why we on this side of the House believe that councils should have the right to be able to aggregate in a way that they believe, if they wish to, because they know where the natural landscape fits, they know where the natural resourcing is around the communities, and they have a vision on the ground of how it all fits together—not something that’s arbitrarily drawn on a map by central government.

There is one thing that really worries me about this, and it talks about mixed-use rural water supplies: “Water service entities must prepare in consultation with farmers and other interested parties a rural supply plan for each mixed-use rural water supply in its service area.” And then it says that that entity must review the water supply plans at least every three years. Someone on the other side might explain to me how they’re going to get through that, even in a three-year process, because rural supply plans are so mixed and varied. One of the things we can see is that those who are supplying houses that perhaps aren’t connected with farming businesses are just as likely to pick up the pipes and go, “Well, if I’m going to be responsible for all of this extra bureaucracy”, and they’re going to actually cut the houses off. The councils will then have to go and find another way and another responsibility to supply those houses with water.

So we on this side of the House are very sceptical. Again, by the time we get this bill—we get the two Resource Management Act bills that were passed last week, we get the climate adaptation bill, which we don’t yet have, this bill, and local government reform. We’re scratching our heads as to how it will all fit together. It’s not good legislation. Thank you, Mr Speaker.

Three waters is the life force that helps run our villages, our towns, and our cities. We need these 10 entities, and I’m proud to come from Taranaki where we as councils, as iwi, are working together to ensure the future of our waters are safe and are secure for all for generations to come.

This bill sets out more of the detail of the Government’s affordable water reforms. These reforms are about protecting New Zealanders from extreme rates rises to pay for the renewal and replacement of ageing water infrastructure.

Interestingly, I was sitting here quietly, just going through the district council websites of all the members on the other side of the House there, and you’d be quite interested—

Nicola Grigg: Did you go through yours? They hate it.

DAN ROSEWARNE: —at the amount of boil-water notices that actually exist. The member for Selwyn has just piped up, but in Hororata, on only 2 August, they had a boil-water notice, and that led to the water being offline for several days. Over in Oxford, on the No. 1 water supply, we just had an update in Waimakariri, and over there—so their water supply is going to be offline for four to six weeks. Whilst the boil-water notice was precautionary before, it’s now critical as the water quality from the river intake is very poor in comparison.

So for those listening at home, have a scroll through the local council websites and have a look at the boil-water notices, and you’ll probably find that most of those notices are in the same locations as those “Stop 3 Waters” signs. So this is a good bill. It’s an important bill, and I commend it to the House.

I think the technical term for the conception and passage for these water reform bills is a cluster—a giant cluster. Here we are again for the fourth time in urgency, trying to ram through—the Government, sorry; we’re not—bills that they say seek to reform the provision of water services in this country, but in actual fact will do absolutely nothing for the provision of good quality, safe water to the families and people of New Zealand.

Just last week we had the passage of the Water Services Entities Amendment Bill. I’m just having to outline this a bit for anyone listening because it is really complicated and convoluted. So that was the bill that established the 10 mega-entities. Bearing in mind that’s an amendment bill—that’s amending a bill that actually passed just eight months ago which was then called the Water Services Entities Bill. But the Government got such blowback about it it’s had to bring an entire amendment bill back to the Parliament to fix it—or seemingly so. So here we are again with the Water Services Legislation Bill. This too is, effectively, a Supplementary Order Paper to a bill that’s previously passed—the Water Services Entities Bill—last year that we had to debate last year, but they’ve brought 200-odd pages of amendments back to the Parliament this year because they’re still trying to fix it, they’re still trying to make it right. I think the analogy is these guys over there trying to govern this country are trying also to build the plane while they’re flying it at the same time. It’s a monumental, catastrophic disaster. It is a failure.

This Water Services Entities Bill that we have here—sorry, the Water Services Legislation Bill; it gets confusing—in front of us is about changing the status of that Water Services Entities Act that I mentioned previously and their obligations, their powers, and of course how they may amend their constitutions. But there’s a whole lot of stuff in here that is just thoroughly confusing and out of touch.

I think what’s really interesting—and to be able to talk about it tonight, because I really don’t think the New Zealand public know much about it—is this bill brings in the provision for pricing. This is really interesting because this bill contains provisions relating to water pricing which the Government has not talked about. It is very clear now that New Zealanders, when they’ve been told by the Government that this is about saving them money, they’re now having to pay for these reforms that they didn’t want in the first place. But as yet we’ve seen no schedule for payments. We don’t actually know what the ratepayers are going to be hit with when they try to get it off the ground.

So, too, and equally as quietly, they have tried to slip under the radar the schedule of penalties that this bill contains. It contains extensive provisions for penalties that include fines of $20,000 for breaking a sprinkler ban—$20,000 for breaking a sprinkler ban!—and $100,000 for digging a hole next to a stormwater asset. Now, that could include parks or sumps or stormwater drainage systems—$100,000! And doesn’t it beggar belief that a Government that is so soft on crime, who does not arrest serious offenders, does not throw the book at serious offenders, is going to go out and charge $20,000 for someone for watering their garden on a hot nor’west day. That’s quite extraordinary.

Obviously, another provision in this bill is about the ownership of these water assets. Now, on this side of the House, we will maintain until our last breath that the people that own these water assets are the ratepayers of New Zealand, who have paid for them and have built them up over generations. This bill will see the usual rights and responsibilities of the ownership transferred to these 10 megaentities, these 10 unelected, anti-democratic mega-entities, and there is nobody there that can be held democratically accountable. We have a fundamental opposition to that. The fact that this is so anti-democratic that these people on these mega-entities have not been elected by the people of New Zealand to run the water assets that they have paid for.

On that note, we will continue to oppose this bill. We are in urgency, probably for the next 48 hours, and we will continue to build the case for National’s local water done well policy. Thank you, Madam Speaker.

Thank you, Madam Speaker. It’s a pleasure to rise and take a call on the Water Services Legislation Bill, and I’ll tell you why. A little story: back in 2016 when we had the local body elections in Whanganui, there was a group who came in campaigning against—get this—spending money to upgrade our waste-water treatment plant. Guess what! They got in and then they triggered the penalty clause in the contract, which meant ratepayers in Whanganui paid more for our waste-water treatment plant upgrade than they otherwise would and should have. That is why we need to take the politicisation out of the management of our water assets.

I’ll tell you another reason why we need reform in our water service provision. In Whanganui we’ve got a housing shortage; that’s accepted. The council’s housing plan is to do infill housing. That’s fantastic—great; fully support it. But I had a couple of developers walk into my office and say that their consents had been declined because—get this—there’s no capacity in the sewerage pipes for them to build more houses there. We need water reform now. I commend this bill to the House.

I declare the House in committee for consideration of the bill. This bill is set down for committee stage immediately.

In Committee

Part 1 Amendments to Water Services Entities Act 2022