Water Services Entities Amendment Bill

Members, the House is in committee on the Water Services Entities Amendment Bill. We come first to Part 1. This is the debate on clauses 3 to 27 and Schedules 1 and 2, “Amendments to Water Services Entities Act 2022”. The question is that Part 1 stand part.

Thank you very much, Mr Chair. I’m looking forward to a good evening this evening in regards to the committee of the whole House stage on the Water Services Entities Amendment Bill. For those at home getting ready to settle down for what will be two hours of some of the best political debate you have seen in a long time, get some popcorn, get some chippies and maybe a little Diet Coke, and settle in, because we’ve got a little bit to talk about this evening.

Todd Muller: We need a West Coast perspective.

SIMON WATTS: It’s good to have you here, Todd Muller. Thank you very much for that. I’m looking forward to your contribution soon.

So let’s start with clause 16, eh? Let’s do that. Clause 16. I’ve actually got a Supplementary Order Paper on the Table here in regards to this. This is a topic of which will come as no surprise, but a topic of which has raised significant controversy across this bill.

Don’t forget this is the “back-down bill”, right? This is the bill in which the Government did their big master reset plan, remember? The policy bonfire—remember the policy bonfire?

Nicola Grigg: Damien didn’t burn anything.

SIMON WATTS: No, only some of them did the bonfire. Anyway, the policy bonfire resulted in this change in the water services entities, and this is the bill that’s going to take it from four mega-bureaucratic co-governed entities, to 10 mega-co-governed bureaucratic entities.

But clause 16, of which my Supplementary Order Paper 407 is on, relates to the proposal around these proposed community priorities statements. Remember those Te Mana o te Wai statements that the Government put into the legislation, which said that, say if you’ve got a stream that runs through your farm—I don’t know, if you’ve got a farm in Canterbury, maybe, I don’t know, anyway, somewhere like that, maybe the Waikato—that makes sense, farmer owns the farm. In order to make some recommendations in regards to that stream that runs through the farm, well, you’d sort of expect the farmer who owns the farm and owns the land would be able to input and make some comment on that. Well, originally, that wasn’t the case; it was only iwi who were able to make comment on that stream, even though it was stream that ran through private land. But irrespective, the Government recognised that was a bit of a gap and they put in place these community priority statements.

The community priority statements—the challenge with these, and the legislation as it stands, is that the governance groups that need to consider these, the wording in clause 16, in the heading, under new section 145C—and for those watching at home, this is going to be quite hard to follow, because this bill is amending a bill that’s just got passed in only a short amount of time before this new amendment bill came in.

Anyway, it amends the wording to say—at the moment, they say they “may be considered”. Well, there is a difference between the words “must be considered” and “may be considered”, right? Te Mana o te Wai statements must be considered, right? So that’s pretty clear. But the community priority statements—remember the farmer that I referred to who owns a farm and the stream runs through the farm, the statements and the contributions that that individual makes are only “may be considered”, right? So there’s a hierarchy—a lower hierarchy—even though that person owns the land and the stream runs through the farm, and, actually, by all accounts, cares deeply about the environmental impact of that water stream that passes through, or whatever, going on.

But my Supplementary Order Paper says, actually, we should be replacing the word “may” with the word “must”, because we’re into simplicity here, aren’t we? We want to keep it simple. We’re just going to change one word, right? Easy as that. Simple as.

I appreciate that we haven’t got too many more days of this House sitting here, but I think maybe tonight the Minister may see the logic of this and go, “You know what? What a great idea. There is one thing that I want to do before I finish up my role as Minister, and that will be to actually say, ‘This is a sensible Supplementary Order Paper. We’re going to change the word from ‘may’ to ‘must’.’ ” That means that places everyone on a level playing field.

Why should farmers in the Wairarapa sit at a lower tier than iwi in the Wairarapa? Why is that? Is that fair to anyone? Well, currently, under the Minister’s bill, there’s a hierarchy, and the farmer sits below iwi. Well, we don’t think that’s right. That’s not fair. That’s not sensible. We should have all stakeholders that have an interest in regards to those water flows be having the same ability—an equal ability—to be able to contribute and inputting feedback in terms of that. That’s not unreasonable; that’s just basic fairness. So, hence, we’re really encouraging the Minister to consider clause 16 and the modifications in regards to that portion.

The second aspect that I’m keen for the Minister to have a consideration around is in regards to clause 5, which is around the establishment dates. Don’t forget that this piece of legislation originally was all going to be all on, all happening by mid-2024. Remember the good old days of those? Remember that? Well, before the policy bonfire—before the petrol got thrown on the fire—that was the plan.

Hon Scott Simpson: Who was Prime Minister then?

SIMON WATTS: Well, I can’t remember. There’s so many changes, haven’t there, the Hon Scott Simpson?

Hon Scott Simpson: Who was the Minister?

SIMON WATTS: I can’t even recall. Jeez, nearly lost count on that as well. Crikey! You’re putting me under the pressure, but I’m not in the seat.

So the point around the establishment date is that—so this bill is now changing the date from mid-2024 to sort of a sequenced drop date right out to mid-2026. Well, that’s kicking it for touch for another, give or take, three years from now. You can imagine the bureaucracy and the spending and the consultants, the gravy train, the conga line of consultants that are lining up behind this—the “three waters conga line”, just heads in the trough. Plenty of money going to consultants and high-paid contractors, meanwhile it’s all funded out of the back pocket of hard-working Kiwis.

So around the establishment date in clause 5, I’m keen to get a little bit of feedback from the Minister around why we are wasting so much time doing more bureaucracy. Look, if they really want to do this, and they’ve got the parliamentary majority, they could do this tomorrow if they wanted to, right? But they haven’t; they’ve just sort of kicked it around and dragged it out. Why are we kicking it to touch to mid-2026?

But, actually, if you look at new section 6A, inserted by clause 5, on page 8—I’ll just give you some page numbers, Mr Chair, because it’s quite hard to follow some of those—the Auckland, Northland entity actually kicks in in July 2024. Well, it’s interesting, right? I’ll tell you what, do you think the Auckland Council are in behind these reforms? Do you think Mayor Brown thinks this is a good idea? Gee, I tell you what: the Government is spending a lot of capital up there having teas and coffees and meetings, trying to negotiate on that. But I’ll cut to the chase: don’t waste your time having teas and coffees; he thinks this is a dumb idea—he thinks this is a really dumb idea.

But yet, the legislation—they had the chance to make an amendment to kick this for touch but they’ve actually brought this forward, and, according to new section 6A, it’s 1 July 2024. Well, that’s not listening to the feedback of local government, because that’s what we’ve heard in the narrative all through this bill, haven’t we? “Oh, we’ve been listening. We’ve done a lot of listening.” Don’t forget they read the bill on 22 June and it reported back on 27 July. That’s not really a long process of feedback. But anyway.

So I’m interested in the Minister’s comments in regards to the Auckland, Northland date. Can the Minister clarify that, actually, pretty much every mayor in Auckland and in Northland don’t support these reforms, right? Well, what a great place to start—what a great place to start in terms of, “Let’s all work together. Let’s listen to local government. We all want to do this.” Well, guess what! Every mayor in the entity A—of which is going to be first off the rank, which is going to be the sort of poster child of these reforms—is strongly opposed to the reform. This is a failure from the start. Why is the Minister not listening to the feedback from local government and going, “Well, actually, everyone thinks this is a dumb idea, but, no, let’s keep trucking on, head down, no listening.”? The only ones that think this is a good idea are probably only the Minister, and definitely not those people and those residents within those entities.

So a little bit of feedback on clause 5, on the establishment date, and a little bit of feedback on new section 6A in regards to the Auckland, Northland date. We’ll have a look at the actual phasing of all the other dates for all the other entities. Just in regards to the Northland and Auckland Water Services Entity—actually the names of the entities are in Schedule 1 on page 48, so we’ve got the Far North District Council, Kaipara, Whangarei, and Auckland Councils. Those are the ones that I’m referring to when I’m talking about new section 6A around the establishment date of 1 July 2024. Thank you.

Thank you, Mr Chair. For the sake of the people who are at home, we are in urgency. The normal procedures of the Parliament have been set to one side so the Government can push through its legislative agenda, of which this Water Services Entities Amendment Bill is just one bill in a very long list that will keep the Parliament occupied probably right through till the end of the week.

Now, what’s interesting about this bill, and particularly about Part 1, is that it represents everything that is wrong with this current Government in terms of the schmozzle and bamboozled approach to not only water services but the whole water issue. Here we are, in the dying days of this current Labour Government, amending a piece of legislation that was only passed towards the end of last year. The principal Act that we are amending is the Water Services Entity Act 2022. Here we are, in August 2023, already amending it, to make changes that will be superficial at best, and complicated, confusing, and costly at worst, but driven by ideology.

So I want to turn to—as an example of that—clause 4A in Part 1 of this bill; it’s on page 6 of the bill that’s sitting on the Table. At 4A(4), it says that “After section 3(2)(d), insert: … [the words] providing a locally led process enabling them to merge if their regional representative groups decide to do so”. Therein lies the rub. This is warm, fuzzy words that actually mean very little in terms of local democracy, local accountability, or electoral accountability. This is the sort of wording that lies at the very root of the criticism that has been so loudly voiced up and down the nation, across the countryside, by not only local government representatives of every colour and hue but by ratepayers all over the country.

The words “providing a locally led process enabling them to merge if their regional representative groups decide to do so” is the epitome of what is wrong with this legislation. The whole concept behind the current Government’s three waters proposals that created the four mega-entities, soon to be replaced by this piece of legislation that turns those four mega-entities into 10 mega-entities, was little more—and has been little more—than State-sanctioned theft. That’s been the criticism up and down the countryside.

So my question to the Minister in the chair is: why can’t his Government listen more closely to ratepayers, have a better regard for their views, and a better regard for democratic processes that have underpinned local government in this country since local government was established? Why has the current Government got such disregard for the views of ratepayers and indeed those elected local government representatives? “Providing a locally led process enabling them to merge if their regional representative groups decide to do so”—well, you couldn’t get anything more waffly than that.

We’ve got a range of other questions that we will proceed to ask the Minister through the course of this debate on Part 1. That’s my starting contribution. I know my colleagues on this side of the committee will be wanting to speak to the various Supplementary Order Papers. Simon Watts, my colleague, has just referred to his Supplementary Order Paper that amends clause 16, and that’s a good piece. I know that my colleagues in the ACT Party—Simon Court—have a number of Supplementary Order Papers on the Table as well. Thank you, Mr Chair.

Thank you Mr Chair. In response to the comments and questions from Mr Watts, specifically around his proposed Supplementary Order Paper (SOP) 407, the flexibility of “may consider” means that entities can determine the most appropriate response to a statement. Resource and effort can be scaled according to the nature of the statements and entities’ particular circumstances. This makes absolute sense to me. This is an issue that was traversed in great detail at the select committee stage. It was deemed by members of the committee that it was important to ensure that people that did not have a close connection to the area in question could not provide a statement of their own, and the deputy chair of the committee had particular examples where that may happen.

In regard to the difference between community statements and Te Mana o te Wai, we won’t be supporting the SOP, because we as a Government wish to be consistent with the view of the previous National Government in 2014, when they established the requirement for Te Mana o te Wai. They, themselves—at the time when in Government—recognised that there is a role for this, and it is a requirement of this Government to be consistent with that, and that is what’s being proposed in the bill. I would propose that this is pure politicking. I would also propose that it is—

Hon Member: Oh, hypocritical!

Hon KIERAN McANULTY: —quite telling that—point of order. Point of order?

CHAIRPERSON (Greg O’Connor): Point of order, the Hon Kieran McAnulty.

Hon KIERAN McANULTY: There are very few things that you cannot accuse members of being. I’ve just been accused of that and I would ask the member to withdraw and apologise.

CHAIRPERSON (Greg O’Connor): I didn’t actually hear any words. If any member over there has used a word that should rightfully cause offence to the Minister, could they please stand, withdraw, and apologise. Well, in the absence of that, carry on.

Hon KIERAN McANULTY: Well, that says it all. To Mr Simpson’s points, the points in the bill around potential mergers and his question around listening to the sector, all the changes that are in this bill have come about as a result of listening to the sector, and that includes the provision that allows for mergers. Councils have asked for this to be included in the bill so that in the future, if they themselves choose that it is in their community’s interest to merge, they would like a mechanism to be included in the bill. We have listened to the sector. That is why these changes are being made.

Hon Members: Ha, ha!

Hon KIERAN McANULTY: The members may scoff, but I can guarantee they have not visited as many councils as I have. Many months ago I challenged Mr Watts to visit councils and sit with them and listen to them. He didn’t. So the point here is that what they’ve asked for—they’ve said we can’t do this by ourselves. This country has met $185 billion. When I was in Selwyn speaking to that council, they told me themselves that they can’t do it by themselves. They recognised across that they collectively could do this; individually, they can’t. There are many councils—all 55 rural and provincial councils—that I met in person. They all told me one simple thing: they need reform. They need reform and they can’t do it by themselves. That is what this bill does. They had concerns about four. They are much more comfortable with 10.

Here is a challenge for those members tonight: tell us what they’re going to do and show us how that adds up. We’ve asked them to do that for months. They haven’t. They can’t because their plan does not add up.

Thank you, Mr Chair, and, Minister McAnulty, thank you for the opportunity to describe an alternative vision about how we solve the problem of funding, financing, and delivering three waters infrastructure. Now, let’s just start with the bill—

CHAIRPERSON (Greg O’Connor): Mr Court, that will be within the confines of Part 1 of the bill?

SIMON COURT: Absolutely, Mr Chair. Problems with the bill: it’s the latest in a series which seeks to reform three waters infrastructure, the way it’s delivered and operated. Despite the limited time frame to consider this bill, which transforms the four-entity model to a much less efficient and more expensive 10-entity model, as the Minister himself was happy to confirm in the House, at select committee—much more expensive, much less efficient, but, you know, that’s what Labour’s come to in its dying weeks of its six-year term.

Minister, why on earth did a member of the Labour Party sitting on that committee think—given the limited time available—it was sensible to try to introduce some kind of collective bargaining, fair pay agreement thing into a water services bill that would bind all future water services companies? Minister, I mean, the explanation—I’m looking heavenward, because I don’t think there’s anywhere else this could come from; it doesn’t make any sense except for it to be maybe a bolt of lightning.

Minister, this bill proposes to amend an Act only passed eight months ago—eight months ago—to fanfare by a Minister, the Hon Nanaia Mahuta, who, even though that Minister had claimed co-governance, ethnic representation on boards, 50 percent of the seats allocated on the regional representative groups that will govern the three waters entities must go to iwi Māori because of an intrinsic relationship that they have with water.

Now, let’s be clear: the State and its agents, local government, treated iwi Māori, hapū, whānau, and marae terribly. When it comes to building infrastructure like sewage treatment plants right in front of the marae, like they did at Māngere in the 1960s, destroying their shellfishing grounds—treated them terribly. Now we have the Resource Management Act—whatever you think of it—which weighs up the needs of people and property owners and customary rights holders against the need to build infrastructure, and that would never be allowed today. But using that type of example or reasoning about intrinsic relationships with water, to put 50 percent of the representatives on regional representative groups, that they must be iwi Māori, makes no sense.

Even the former Minister, the Hon Nanaia Mahuta, said, “To my knowledge Māori have not expressed rights and interests in three waters assets over and above those [of] ratepayers within their respective communities of interest.” That’s it, Minister—cogovernance is done. But, no, this Government’s persisted.

So what would ACT do? ACT is a positive party. We’re looking for practical solutions. You know, there’s a lot of stuff in the three waters reforms that ACT would agree with. It’s important that we have better funding and financing mechanisms. It would be very helpful that councils and local government entities that are failing as asset owners have more technical support. Maybe that means being part of a larger entity, but doing it by stealth, pretending it wasn’t going to be compulsory then making it compulsory, pretending, “Oh, four entities and iwi co-governance is the solution; oh no, now it’s 10, but it’s inefficient.”—I mean, Minister, come on. Whatever you go on to do in your next career, Minister, this will not be your finest moment.

That’s why ACT is here to help, Minister—that’s why ACT is here to help. Here’s an amendment to the bill: Supplementary Order Paper (SOP) 400. Rather than having to face down these local councils when you go back to Wairarapa, Minister—you have to face your local council saying, “Why are you taking our assets, Minister?”—you can adopt ACT’s SOP: give each territorial authority, each council, one vote per 50,000 on the entities. Let them retain ownership and control, Minister. There you go—there’s SOP 400, an amendment to the bill. Instead of forcing iwi co-governance—complex, unnecessary, unfounded even, according to the Hon Nanaia Mahuta—well, ACT says you can give respectful representation, consultation, and input to mana whenua, Minister.

You can adopt the model that says in the Auckland super-city plan—one which I participated in—where, as a representative of Auckland Council, I had to go and represent Auckland Council talking about infrastructure plans that involved cleaning up old rubbish tips in the coastal area to the 19 mana whenua representatives. Because many of them do have genuine concerns about the way the State—or its branch, local government—treats them. [Bell rung] Mr Chair, just a couple more things to get through.

CHAIRPERSON (Greg O’Connor): Simon Court.

SIMON COURT: Thank you, Mr Chair. So there are other opportunities, such as establishing a mana whenua forum or having a mana whenua representative on a governing body. That is why ACT proposes, on Supplementary Order Paper (SOP) 401, to amend clause 10. “Each entity’s regional representative group must include territorial authority representatives.”, and, “One non-voting mana whenua representative must be appointed to provide advice on whether provisions of any relevant Treaty settlement Act may affect the operation of the water services entity.” Because ACT is a party that respects property rights.

We respect customary rights, and where property rights have been infringed, then what ACT would say is that we need to recognise that, but that is not through allocating voting rights to iwi Māori based on their whakapapa and somehow claiming that that addresses some grievance that is better addressed—more honestly addressed; more openly and truthfully addressed—through a Treaty settlement process. Where an entity that has customary rights in water, or that has had their customary rights infringed by the State, has an opportunity to seek redress through the Waitangi Tribunal rather than having cogovernance imposed on—let’s be honest—pipes, manholes, and sewage treatment plants, Minister. I mean, it sounds mad when you actually say it out loud, doesn’t it? For the voters and for the people listening at home.

Then I want to come to another amendment—ACT has thought deeply about this, we’ll get through it, Mr Chair. Amendment to clause 10, proposing to insert clause 10A: The appointment of territorial representatives. Council representatives may be revoked by a council. In other words, if they appoint someone who’s not suitable, then council can pull them off. Whereas at the moment, they have to be proposed and it’s actually up to the regional representative group whether they accept or reject the nominee. They might keep someone on who’s really not helping their local community—really not representing them—because it’s politically convenient to the regional representative groups that will essentially be, unfortunately, compromised on the day their established, Minister, under this legislation.

So what ACT says: we should amend this bill so that the representatives on the regional representative groups for water service entities, council-controlled organisations—whatever they are in the future—must be democratically accountable back to their communities. Without democratic, legitimate, one-person - one-vote, or the ability of the people to recall their representatives, Minister, the water service entities will lack any political or popular legitimacy—if you hadn’t noticed, Minister, judging by all the “Stop Three Waters” signs up and down the country. There you go, there’s a proposed amendment to clause 10.

Now, we’re going to get through this very quickly, Minister. Pretty much, if you accept these amendments, I can have a chat to my caucus and leader—we might even support the bill passing. Very simple amendments: restore democracy; respect mana whenua, but not through co-governance; let councils own the entities; one share for 50,000.

Then we come to this one. We want to amend a further clause, Minister: clause 11A, the “Territorial authority owner may leave Water Services Entity”. Who knew that a council or a shareholder or an asset owner that becomes part of a larger corporate, a council-controlled organisation, a regional water authority, a water service entity, might decide, Minister, that they’re really, really unhappy with the way their assets have been managed for their small or large community as part of a larger entity. They might decide to leave and go and join another water service entity. I mean, the ACT Party believes that if you want to take your assets and your property and go and enter into contract agreements with someone else, the State shouldn’t stop you.

In fact, if Auckland Council wants to get together with Wellington—I mean, I don’t know why they would; if anyone’s seen all the water running down the streets in Wellington, you’d know that their council has failed—or conversely, if Waikato District Council wants together with Auckland and Northland, which they’ve said they would, Minister. They’re not allowed to under this bill, Minister. But with ACT’s proposed amendment to clause 11A on SOP 404, councils that want to leave an entity because they’re not getting good service or value for money—because their communities are not getting the service they expect—can leave and join another entity, or just go out on their own. Because maybe councils like Whangarei District Council, which are cash flow - positive and which are going to lose out by tens or hundreds of millions of dollars through this legislation, Minister, would prefer to go it alone; back themselves; trust their engineers and planners; trust their own ratepayers. Minister, I’d love you to respond to this. This is practical stuff. ACT is here to help, Minister.

Thank you, Mr Chair. Before I respond to Mr Court’s comments, I’d noted that I neglected to respond to the establishment date questions by Mr Watts, so I want to do that now. The establishment date for the northern entity of Northland and Auckland hasn’t changed, because the proposed entity boundary hasn’t changed. All the work that had gone into establishing that entity still remains relevant. It was the original date and so we’ve stuck with that.

In terms of the range of dates available to the other entities, the original proposal was, obviously, for four entities and they were able to do so by a set date. With larger entities, there needs to be a longer time in which to do that. We’ve gone through a process with councils to get a gauge as to when they would like to go. Some want to go early, some want to go late within the time frame, and we’ve done our best to try and give them an indication as to where we think they might be able to fit through. But, of course, those dates may change depending on their circumstances. They may get through their work quicker. So we’ve left that open to Orders in Council to establish the date once they’re in a position to give us a firm indications.

I thank Mr Court for his comments and questions. I’ll go through them one by one. It is true that the Government has been very clear right throughout that the reason we landed on four is because four entities would be more efficient and would provide more savings to ratepayers. We were firm on that. When we listened to councils and heard what they had to say about wanting more local input, more local say, we landed on 10. But as a result of doing it, it did enable us to have a representative from every single council within each entity to have a seat on the regional representative group. That’s the trade-off. Four would be more efficient and would save more; 10 not so much, but considerably less than the status quo—and that’s the point here. These reforms will prevent unaffordable and unsustainable rate rises that people will have to face.

In regard to—I’ve just realised I’ve overlooked another comment that was made around the community priority statements around a stream on a farm. The committee must remember that the only areas in question here are those that are currently served by a council-run scheme. Most rural areas, be they a rural supply scheme or ones that are self-sufficient, don’t come under the remit of these proposals.

Mr Court’s comments around collective bargaining: of course, this Government will look to enable collective bargaining wherever appropriate at every opportunity. We’re firm in the belief that it’s through collective bargaining—if people choose to engage in that—that people get better wages and better conditions. We’ve heard from the sector and the water industry that they are concerned about retaining staff and they want to be able to attract staff, and one way to do that is to ensure good wages and good conditions.

In regards to Supplementary Order Paper (SOP) 400, we won’t be supporting that. There’s nothing stopping an entity being able to adjust the proportionality of representation through their constitutions. We also have serious concerns with these proposed changes, whether balance sheet separation would still be able to be achieved, and, of course, that’s a key element to these reforms. We’ve heard numerous proposals, some late in the piece, but nevertheless alternatives were put forward. None of them will be able to achieve what we need to achieve here.

With $185 billion, now deemed to be a conservative estimate of the cost that we need to find as a country, 67 councils, none of which can do it by themselves, we have to find a way forward. We could do as has been proposed and can already be done, and that’s allowing councils to work in a council-controlled organisation model or shared services, etc.

But there’s one key element that that approach would overlook, and that’s the debt that’s currently associated to water services would still sit on councils’ books. Right across the country, we have councils that are—through no fault of their own, through the position they find themselves in—having to put forward considerable proposed rate increases that, for many people, are on the verge of being affordable. That trajectory will only continue, particularly if the debt associated to water services sits on their books. These proposals remove that debt. No other proposal that’s come from any other party in the House will achieve that.

SOP 401 doesn’t reflect the special interest in water that was established through the Supreme Court, in part by testimony from Sir Bill English. As a result of that—

Simon Court: Oh, water’s not sewerage pipes, is it, Minister.

Hon KIERAN McANULTY: This may be a debating point, but I’m answering the question. This is why we’re doing it and I find it. It’s really interesting, though, that Mr Court was focusing on co-governance and not on an alternative funding model. A proposal that he put forward previously was to share GST with councils. Of course, that would equate to $1 billion a year. This isn’t a $185 billion issue that we’re dealing with here. So this is—what we’re proposing—going to deal with the issue over 30 years—[Bell rung] The ACT Party, 155 years later—

CHAIRPERSON (Greg O’Connor): Are you seeking a call?

Hon KIERAN McANULTY: Yes, Mr Chair. SOP 402: we won’t be supporting that either, because entities’ constitutions can address this through themselves already. Of course, SOP 403—there’s no need for this because every single ratepayer that is currently being served by a council-run scheme will benefit from these reforms.

Thank you, Mr Chair. Look, for the viewers watching Parliament TV, the people listening at home, it’s clear there’s not a lot of point litigating this stuff with this Minister. This Minister has offered barely a defence of the three waters reform and the Water Services Entities Amendment Bill. This Minister hasn’t even bothered to book in Department of Internal Affairs’ staff to appear with them here tonight. He’s sitting here, unsupported in the Chamber—for those of you who are listening and not watching. Where are the officials that this Minister would usually have lined up behind him? Or have they given up on the reforms as well?

Because I’ll tell you what: those officials from the Department of Internal Affairs who have been given this task, who might have actually delivered something coherent and workable based on what they briefed David Seymour and I back in 2020 before the election, I think they’ve given up too. I don’t think they even care if this passes or not. Their heart’s not in it. You’re here all by yourself, Minister.

So here’s the question for you: did they give up and throw in the towel on your reform programme, Minister, when one of your Labour Party colleagues, Rachel Boyack, proposed to put fair pay agreement collective bargaining nonsense into a water services bill? Did they say, “We don’t have time for this. We’ve got to get a water services piece of infrastructure through.”? I think that’s what they said. In fact, I might have heard them say it. Minister, you’re going to pass this tonight.

Hon Scott Simpson: No.

Nicola Grigg: No.

SIMON COURT: Maybe tomorrow, maybe this week. Certainly in the next three weeks. Minister, when this bill passes, instead of four chief executives required for four ginormous water service entities, there’s only going to be one needed—one that’s going to go to the northern entity, “entity A”, the Auckland and Northland entity. The three chief executives the Department of Internal Affairs have hired as implementation or transition chief executives for the other three entities, well, those three entities are gone with this bill—they’re gone.

Minister, I asked you this afternoon in the House in the Estimates debate on local government, will the Department of Internal Affairs make the three chief executives whose roles are made redundant when this passes—will they make those chief executives redundant? Or will they keep them warm? Will they keep them warm? Will they put them in the warming draw in case some new, juicy roles come up that they might just want to apply for? Or will they do the right thing and send them back to the job market so the private sector can determine if those three spare chief executives—maybe the private sector can discover what they’re worth.

Are they worth between $600,000 and $800,000 a year or are they not? Because the Department of Internal Affairs won’t need them, the water services entities won’t need them, the taxpayers won’t need them. So when this bill passes—whether it’s today, tonight, whenever it gets Royal assent—Minister, will you tell the Department of Internal Affairs (DIA) to make those people paid millions of dollars in taxpayer money, currently for sitting around doing goodness knows what—will you tell the DIA to send them packing, get them back on to the job market? Maybe they can do something efficient in the private sector. Maybe they can even apply for a role with one of the 10 water service entities or the other nine, hopefully at much lower chief executive pay rates. Because it beggars belief—

CHAIRPERSON (Greg O’Connor): Mr Court, you’re getting off the section—well off.

SIMON COURT: Unfortunately, Mr Chair, all of this came up in select committee and it was not resolved. But, I take your point.

Let’s not punish this Minister any more. He’s suffered enough with this hospital pass of a Water Services Entities Amendment Bill. He’s suffered enough. Soon the voters will end his suffering. He’ll be a backbencher like me. I tell you what: I reckon being a backbencher is a lot more fun than being a Minister in a Labour Government. Minister, the voters are going to offer you that opportunity. But in the meantime, what ACT says is you can adopt our Supplementary Order Papers. If you do that, I’ll go back to our leader David Seymour and our caucus and I’ll ask, “Could we therefore support the bill passing with ACT’s recommended changes?” It’s quite likely we could. But if you won’t support it, Minister, there’s no point in ACT continuing to labour the point. The voters will make up their mind. Minister, the ball’s now in your court.

Thank you, Mr Chair. I think it’s pretty poor form for a member of this House to directly criticise officials individually. I think it’s appropriate, of course, to criticise departments. But for a member to question openly the motivation and work ethic of officials, I think, is poor form.

In regards to the question of the CEOs, that was already—at the member’s own admission—answered today in the appropriations, but I’m happy to go through it again. As explained earlier today, the CEO of “entity A” will continue in that role, because there are no proposed changes for that entity. The other two that have been hired will continue in a role within the department, going through the proper change process. They have expertise that can be utilised through the transition period.

I think it’s inappropriate to suggest that a Minister should direct a department to sack people; that would be beyond the realms of what is reasonable for a Minister, so I totally reject that. As I’ve said earlier, in regards to member’s comments around the Supplementary Order Papers 400, 401, 403, and 404, we will not be supporting those, and I’ve already outlined the reasons why.

Well, thank you very much, Madam Chair. I’m wanting to have a discussion in regards to both clauses 10 and clauses 11: clauses that we haven’t discussed so far this evening in detail. Clause 10, firstly, is in regards to the regional representative groups, and the point that I’m interested to converse with the Minister about is in regards to how this will work in practice. Because the regional representative groups in this clause outline that there will be one member for every territorial authority that will sit on that committee—and, of course, there is 50:50 co-governance embedded within this, which means that for every one of those roles there will be an equal and opposite position for mana whenua on that.

But when you look at—and this is linked with clause 11—the water services entities that will be established, and you have to reference Parts 1 to 10 of Schedule 2 to get the list of those entities, but one of the entities is in the Waikato. The Waikato Water Services Entity has 10 separate territorial authorities: Waitomo, Waipā, Waikato, Matamata-Piako—I could go on.

So, in effect, 10 representatives on these regional representative groups, plus 10 mana whenua or iwi groups—you’re going to have 20 people on this regional representative group, and what’s interesting is this isn’t the biggest one that’s there. I’m sure we might hear a little bit more about that later on. But just for simple pragmatism, the Minister noted that one of the consequences of the Government listening to feedback is that they’re going to implement that one representative group, but how in practice will a group operate with 20 different individuals? I’m sort of laughing a little bit because I’m just thinking of the practicality of actually—with all the will and a bit of divine intervention, no doubt.

I still don’t think it’s going to be possible to get those 10 entities plus then the 10 iwi representatives—and, of course, in the North Island, particularly up in that neck of the woods you’ve got a large number of iwi groupings which will be wanting and seeking representation. How is that group ever going to be able to get to a consensus—make a decision on anything, let alone, you know, what time they break for morning tea? Even that conversation, I think, might be a tough one. So I don’t think that’s at all workable or practical or pragmatic.

My question to the Minister is quite simply: how has he sought assurance himself that actually this is going to be able to work in practice when in reality we all know that it is challenging at best even with eight or 10 around a table to get to a position where you need consensus? Of course, don’t forget the legislation underpinning this, of which this is amending, requires 75 percent consensus across those stakeholders on those groups—75 percent consensus. Well, that is a threshold that puts us up into orbit and beyond, I think, in regards to the practicality of decisions being made.

So that’s the question in regards to clause 10, I then refer on, subsequently to that, surprisingly, to clause 11, which follows clause 10. This is in regards to the establishment of these entities, and don’t forget, the whole purpose of this amendment bill is to, in effect, establish six additional water services entities over and above what were previously envisaged. So the list, again, in clause 11 refers to Parts 1 to 10 of Schedule 2 and it outlines all of the entities in regards to what will be established.

The specific question I have, and the Minister’s referred a number of times—I think it was in reply to one of the supplementary order papers from the ACT member Simon Court—around, “Well, that’s not going to allow us to meet balance sheet separation etc., etc.” Well, when you look at—and don’t forget; remember back in the day when there were some suggestions around forming council-controlled organisations, and the pushback was when you’ve only got three entities, that wouldn’t necessarily meet balance sheet separation. That was the pushback that we had in the early days.

But now you look at Taranaki Water Services Entity—and you’ve got New Plymouth and South Taranaki, and you’ve got Stratford, and that’s it! There’s three! So that’s a pretty small entity, but that seems to all of a sudden miraculously meet the criteria. Then you get down to Canterbury and West Coast, and you’ve got Tasman and Marlborough, and then you’ve got split entities—this gets into where the Ngāi Tahu boundary is, of course, which creates another degree of complexity in this whole legislation. You’ve got parts of Buller District Council and parts of Grey District Council, so it’s sort of like a shadow boundary line. I mean, if you want to make this more complex, you’d think, “Crikey, that’s one way to do it”, and they’ve been successful, so I do acknowledge the Minister’s success in that regard, of creating a governance model which is borderlining.

The feedback was very clear from the councils down in that neck of the woods that “Please, please Minister, give us a break. You know, just allow us to operate within our defined boundaries; I mean that, in itself, would help us”. That fell on deaf ears, because none of that feedback was taken on board. We’ve kept these secret boundaries, but again in regards to clause 11, which establishes these entities, how is that going to work in practice when you’re, in effect, slicing down parts of the district—I mean, Buller and Grey, just driving a line between those entities, and one town, one little settlement, one house on that side of the road is in one water service entity, and the other house on the other side isn’t when I go up the road. I mean, seriously? Geez. The opportunity here, for this amendment bill, was to sort of reflect back and go, “Oh, maybe we made a couple of mistakes, that’s OK”—

Hon Scott Simpson: A couple!

SIMON WATTS: Maybe a couple; I’m being generous.

Hon Scott Simpson: You’re being very generous.

SIMON WATTS: —very generous. Maybe this is an opportunity to amend it! It’s all in the title, isn’t it: the “Amendment Bill”. Well, that’s another opportunity to amend it. But no, no. We left that there. So the question for the Minister, again, is: how the heck, in practice, is this really going to work? Of course, we set up originally at the start and we said, “This model will never work if we have more than four entities. Remember that conversation? Well, we listened and that’s the feedback and now we’ve created 10.”, but again, how is this going to work in practice?

My last question in regards to clause 11 is what sort of consultation was undertaken with the councils in regards to establishing these entities? Because, as we referred to before, if I look at Northland and Auckland Water Services Entity, Auckland Council are opposed to the reform—well, that’s quite a big issue when they’re quite a big, significant player in that entity. Kaipara: well, they’re definitely opposed; I’m looking to the good member from up that neck of the woods in terms of Far North District Council. Then you’ve got Whangārei.

I mean, no one wants to do this, right? No one wants to do this. They’re pretty comfortable that they can create their own structure, but they haven’t been given the choice to be able to do that. They’ve been mandated to do this. So what sorts of conversations were had with these entities?

Then, of course, as we know, in regards to clause 11, which establishes the entities, we then go on to refer to the clause that we referred to before around clause 5, which then means that actually that Northland-Auckland entity—of which no members of those entities actually want to do the reform anyway—is accelerated and actually kicks off in mid-2024. I think no further questions, your honour. So I’ll leave it at that.

Thank you very much, Madam Chair. I have total faith in local councils’ ability to work with mana whenua on the regional representative groups. Mr Watts made a couple of incorrect statements I’m happy to correct. One is a reference to the 75 percent. That threshold is specifically relevant to proposals for a potential merger. But there are groupings of councils across the country that work together incredibly well. I happen to think that those that are involved in local government are highly competent, highly committed to their communities, and are looking forward to the opportunity to be able to deliver water services in a way the community can afford—which this can do.

Mr Watts’ comments in regards to three councils being in entities—well, he said that himself. I mean, initially, the question was prefaced with “when they propose council-controlled organisations (CCOs) working with three councils, and now all of a sudden there’s an entity with three councils”. It’s not the fact that there’s three councils; it’s the fact that a CCO model, as proposed by the National Party and in fact can already be done, is proven not to work. It will not remove the debt associated with water services from councils’ books, which many councils are absolutely screaming out for—they need it. But an entity will achieve that.

We had advice that—of course, we wouldn’t have proposed an entity boundary if the advice wasn’t that we would achieve balance sheet separation. Even in the two smaller entities, the Taranaki and top of the South Island, we got advice to say that it is workable—not as workable as four; we’ve always conceded that. But this is, again, the trade-off from giving every council a voice on the regional representative groups, which are not governance bodies but nevertheless do ensure that every council there is represented.

The comments in regard to establishment, I went into that in great detail earlier. I think that covers off all the points that were raised.

Thank you, Madam Chair. Just sticking with regional representative groups. The primary legislation provides for 50,000 people and there’s a share in the entity based on that. ACT—Simon Court—is putting up Supplementary Order Paper 400, which provides for every territorial authority (TA) owner to appoint one representative for every 50,000 people.

Minister, the select committee amended the bill to ensure—I think, in clause 10—that every “entity’s regional representative group must include at least 1 representative from each territorial authority owner in the entity’s service area.”, providing that flexibility to better represent the populations, particularly in the metropolitan councils, by having more than one representative on the regional representative group.

I totally agree with the Minister, that members of local authorities are competent and representative of their communities, so certainly, TAs can have the discussion about how many representatives they should have. But there would be some value, I think, in making it explicit that the representation should be proportionate to the population, because that would really underline the democratic representation. So why is the Minister so opposed to having an explicit provision in the bill that relates representation back to the population of each TA area? First question.

The other issue is around the establishment dates in new section 6A in clause 5, which are being done by Orders in Council. When the Governance and Administration Committee considered submissions, we had some benefit of having representatives from the transition unit provide a bit of the operational context. But I did not get a clear impression or clear information about the whole issue of stormwater.

We all know that the transfer of the green spaces in cities, which provide opportunities for stormwater to seep into aquifers to slow the run-off of stormwater after rain—those are managed by councils. They’re a key part of place-making in our cities and towns. The transfer of those assets—which have got a mixed function, for recreation, often, as well as for being part of the stormwater system—will be quite complex.

Could the Minister provide some advice, in terms of the Order in Council, in setting the start date for the entities of how this process of identifying the stormwater assets, which will be transferred and those which will stay with councils is going? Because of the complexity of legal title and the like there, is that a key factor in determining what the go-live dates will be that will be making use of those provisions in new section 6A in clause 5 of the bill?

I thank the member for her questions. To answer the final question: yes, and that’s why it’s allowed for a range of dates for these entities to go live and why we haven’t set a firm date in the legislation, leaving it up to Orders in Council. We have an indicative date for each entity at the moment; that’s as a result of consultation with each council within the proposed entities, to get a gauge to whether they want to go early. Some councils in the entities do, for their own reasons, in part because of the debt that they’ve got sitting on their books that would be removed and taken on by the entity.

But, obviously, we need to be convinced and satisfied that they are in a position to be able to do that, and that includes stormwater. We’ve already recognised, when we discussed this previously, around the complexity of stormwater—we certainly do recognise that.

In regards to the member’s comments around proportionality, the reason why I am not able to support that proposal is because we’ve had advice that if it gets to the point where one single council has the majority over the other councils by itself in the regional representative group, we won’t have balance sheet separation.

So if we went to a true proportional model, then the Auckland-Northland entity won’t be able to reach balance sheet separation and will miss those gains. But what entities are able to do, through their constitutions, is to look at the number of reps per council and decide whether some councils might warrant an additional rep. We can all think of regions where there’s one dominant urban council surrounded by smaller rural councils. The flip side of that is true, too; we don’t want to make sure that the opportunity for, finally, these small, rural councils—large in geography, small in population—facing massive liabilities, miss out on the opportunity to ensure that the rural voice is heard. Because there is a real concern, under the original proposal, that the needs of the large urban centres would always be met over those of rural areas.

So if an employer might be looking to employ 50 people going to a rural area, that’s massive; going to a large city, it wouldn’t even bat an eyelid. But if all the investment for development was only going to the cities, they would miss out on a good opportunity there. So we’ve got to get that balance, and we believe we’ve got it.

Thank you, Madam Chair. Before I start my contribution right now, I’m just slightly concerned that the Minister seems to be bereft of officials assisting him. It’s usually the case in committee stage that there are officials seated at the right-hand of the Speaker’s Chair to assist and advise the Minister. I am concerned that he may be relying entirely on his own memory and understanding of the legislation, or perhaps he is using some kind of electronic device to communicate with his officials; some kind of a whiz-bang technology that may be unusual in this House. Because normally, officials are present to advise and assist the Minister—

CHAIRPERSON (Hon Jacqui Dean): Order! Thank you. The member has made a point, and I’ll ask him now to return to Part 1 of the bill.

Hon SCOTT SIMPSON: Thank you, Madam Chair. So I want to refer to clause 4B of Part 1, on page 7 of the bill that is sitting on the Table. This is a section that amends the interpretation of the principal Act that was passed in 2022—last year. In particular, I want to refer to the amending clause 4B, which relates to definitions that are used in the Resource Management Act 1991. It won’t escape the attention of members in this Chamber that that is a piece of legislation that is currently under review itself. In fact, as part of the urgency motion that was passed earlier tonight, the replacement legislation to the Resource Management Act 1991 is actually going to be considered by this House towards the end of the week—that’s the Natural and Built Environment Bill and the Spatial Planning Bill.

So my question to the Minister in the chair relates to the use of terminology and definitions that are currently contained in a piece of legislation that is about to become null and void in its own right. Now, having said that and asked the question, I want to make it very clear to members across the Chamber in this committee stage—and also to people who may be listening on their wirelesses or watching on television—that, in fact, the National Party will, given the opportunity after the general election in October, be repealing not only this Water Services Entities Amendment Bill in its entirety but it’s also our intention to repeal completely, before Christmas, the natural built and environment legislation and the spatial planning legislation.

Nicola Grigg: That’ll be a real bonfire.

Hon SCOTT SIMPSON: “That’ll be a real bonfire”, my colleague Nicola Grigg says. So here we have the kind of nonsense that is going on in terms of the dying stages of a Government amending legislation that was passed using their absolute majority just six or seven months ago, replacing definitions in a piece of legislation that they are indeed themselves replacing, but will also be repealed if a new Government is elected in October.

So my question to the Minister relates to the use of the definitions in the existing Resource Management Act 1991, in clause 4B of this amending legislation, and it includes definitions relating to water, amongst which it says “water in any form while in any pipe, tank, or cistern”, “water … in any part of a river, lake, stream, pond, wetland, or aquifer;”. That’s a very wide definition of water.

There are some critics of this legislation who say that part of the problem is that by owning the infrastructure, you, effectively, own the water. Of course, that has always been a principle from this side of the House, that nobody owns water—that nobody owns water. But if you own the water in any form—while in “pipe, tank, or cistern”, “in any part of a river, lake, stream, pond, wetland, or aquifer”—then, actually, effectively, you own that water simply because you own the infrastructure and the network that goes with it.

So I’m keen to know from the Minister—what, effectively, this piece of legislation does is, by abrogating the ownership to these 10 entities, remove the democratic responsibility and accountability that goes with it. Then, defining water as widely as it does—interestingly enough, it doesn’t include, apparently, steam or ice, and, I guess, maybe that could be considered water in any form. But what, effectively, this means is that the control and ownership of what flows through the pipes, tanks, cisterns, rivers, lakes, streams, ponds, wetlands, or aquifers then becomes, effectively—even if not written into the black letter law of the legislation—the ownership of what flows through, namely the water, is designated and deemed to be in the ownership of these unelected, undemocratic, and unaccountable organisations. So, if the Minister could cast some light on those matters, I would appreciate it.

Madam Chair, thank you very much. I thank Mr Simpson for his questions. So the definition of water aligns with that proposed in the Natural and Built Environment Bill and the Spatial Planning Bill. Any outstanding references have been dealt with through the legislation bill. All three of those are included in the urgency motion which we find ourselves in now. What is proposed in this bill is about the management of water, not ownership. There’s nothing in the bill that could reasonably lead to what the member has suggested.

I move, That the question be now put.

The question is that Simon Court’s amendments to Part 1 set out on Supplementary Order Paper 405 be agreed to.