Local Government (Water Services Preliminary Arrangements) Bill

Members, we come now to Part 2. This is the debate on clauses 8 to 46B, “Water services delivery plans and foundational information disclosure requirements”. The question is that Part 2 stand part.

Thank you, Mr Chair. Part 2 is in relation to water service delivery plans and foundational information disclosure. There are three subparts to it.

The first subpart is in regards to water service delivery plans which are required to be repaired by local authorities—they’re required to prepare one and submit one. The water service delivery plan will outline the council’s position in terms of its assets, its needs, and its financial position.

Subpart 2 is in regards to ministerial powers in relation to water service delivery plans. It provides ministerial powers in relation to these plans, and this is a point that has been already traversed, to some extent, in the first part of this debate. This is in relation to where there’s a range of circumstances where local authorities may find challenges in terms of preparing them, and this provides some powers in relation to supporting councils through that process.

The reason for that is, effectively, to ensure that councils do have the support, and if there is difficulty there are intervention powers available, but, ultimately, these are backstops—with the intention of this legislation for councils to be able to work together putting forward these delivery plans for their local communities as they own, manage, and deliver water services in their community, and to demonstrate how they will be financially sustainable in doing so whilst meeting the regulatory requirements.

Subpart 3 includes foundational information disclosure requirements and sets out a framework for specified entities to disclose foundational information for the purposes of economic regulation. It also includes provisions relating to information sharing and enforcement, and this is a really important part because this is the beginning of economic regulation for water infrastructure in New Zealand. There’ll be more; the Government will have more to say about this in terms of the next piece of legislation which will bring in further economic regulation. This is about ensuring that councils are providing water infrastructure in the most cost-efficient, effective, and efficient manner possible for those consumers who utilise those services.

So there is a number of key elements to it, but, fundamentally, this is the key part of this bill. It delivers the key elements to allow councils to move forward with the ownership, management, and delivery in a financially sustainable way of their water infrastructure.

Thank you, Mr Chairman, and it’s good to take a first call in what is the most substantive part of this legislation. As the Minister has identified, this Part 2 is divided into three subparts—and, by and large, for the purposes of this committee stage debate, the Labour Party intends to address this subpart by subpart, in this Part 2 of the bill. So we have a number of questions in the first subpart of this, which is clauses 8 to 15 of the bill, and that is where the obligations for councils to prepare those plans is outlined and it lists the specific information that must be included in each plan, plans that must cover a consecutive 10-year period.

Now, one of the questions that we have for the Minister here is around the time frames for preparation of these plans. One of the things we heard very clearly from a raft of submitters at committee was that 12 months was simply not enough time, and a number of councils submitted that they needed longer—18 months or two years—in order to do this correctly. I would like to hear from the Minister what the rationale was for not including a longer time frame for the preparation of those plans. I think this came through consistently, and members hearing those submissions certainly heard that very clearly. So that’s the first of a range of questions that we’ll be putting to the Minister.

The other is around the part in this first subpart which makes the provision for two or more councils that can work together to submit plans that convey an intention to jointly deliver financially sustainable water services across the combined areas of the councils. Joint plans must explain how all councils will deliver water services, and councils have discretion whether to provide some or all of the stormwater services jointly. This really is the opt-in part of this legislation, which is contained within this first subpart of Part 2, and I think one of the things that we intimated in the debate around Part 1 of the bill that we’d like to raise more fully and have a fuller discussion about in this Part 2 is what happens to orphaned councils. We heard from a number of councils that with an opt-in arrangement they are going to be left on their own.

I intimated that I wanted to talk more fully about Buller and the submission that we heard from Buller in the Finance and Expenditure Committee hearing. What we heard there from the mayor, Jamie Cleine, was that Buller was going to be left orphaned, that they’d asked the councils around them, including over in Canterbury, and no one was really interested in submitting a joint plan for them. What this would mean for Buller—Mr Chairman, I’m sure you have an interest in this—is that water charges would rise from $2,300 to over $4,000 in only the space of four years. So within four years, people living in Westport would be facing $4,000 worth of water charges because they didn’t have that ability to join forces with another council. What I’d like to know from the Minister is what is going to happen for these councils where we are going to see such rapid increases like that that the optimum provision isn’t going to work for them. What we heard very clearly from the mayor there was that the average household income in Buller is almost 30 percent lower than the national average, that 30 percent of the population was aged over 65, and more were on fixed incomes—and the national average is 16 percent.

This bill that we have here has no requirement, when putting together these water services plans, around affordability, so what are we going to do for communities like Buller, which already, we know, has some of the lowest incomes in the country? We have a far greater proportion of people who are aged over 65 and are reliant on superannuation, but are going to see some of the steepest increases. What are the provisions around affordability, in this voluntary model that is outlined in this Subpart 1 that the Minister is putting up? I’m sure colleagues will talk to other parts of the country that are going to have similar circumstances. We know that there’s some very steep increases coming and being signalled by councils, right around the country, of what’s going to happen to rates in order to finance this. But how, when putting together water services plans, are councils going to consider the affordability of their constituents and their ratepayers? And how are they going to consider those very core issues around that? One of the things that that Mr Cleine made very clear is that although, you know, there’s all this encouragement to join forces, it’s just not forthcoming. So what is the Minister going to do in that case?

The other question I’d like to put to the Minister is around how these orphaned councils draw up these water services delivery plans. Are they going to be considered under clause—you know my obsession with clause 3(2)(b), about whether or not that is a difficulty, the fact that they are not affordable? Will the Minister say that is in some ways difficult, and will that be a red line? If we’re seeing people who are facing an increase in their water bills from $2,300 to $4,000 over a space of only four years, is that enough to trigger the Minister to think that it’s difficult? And will that trigger locals’ ability to have their own water services delivery plan? Indeed, it will be the Minister’s and central government’s water delivery plan that will be delivered there.

So there’s a range of questions in there. There will be many more that come, because this is the substantive part of the legislation, but we look forward to the Minister addressing those questions.

Thank you, Mr Chair. I want to follow my colleagues in sticking very specifically to Part 2, Subpart 1, and I want to pick up on an amendment that I’ve tabled, which is specifically related to both clause 11 and clause 13, and it’s Amendment Paper 68.

Now, the reason that I’ve tabled this is for two really key reasons. The first is around suggesting a change to the time frame of the period of time that the water service development plan actually needs to adhere to. So currently in the Act, it says that they have to be a minimum of 10 years, which does allow for longer-term planning—which is great—but it doesn’t mandate it. That’s a concern, and I’m really interested to hear the Minister’s views on this, because it almost feels unnecessary to talk about how important climate impacts are when it comes to our nation’s infrastructure. But, time and time again, when legislation like this is coming through, it seems we’re not quite grasping the absolute immediacy and necessity of actually providing for a more long-term view, especially when it comes to investment in hard infrastructure.

We know that the replacement value of our local government infrastructure that is exposed to the impacts of climate change is in the billions, and that’s just the replacement value. That’s not actually an improvement in infrastructure that means that we can actually face the climatic impacts and changes that we know are coming. So the first part of my amendment is to clause 11(1). After subclause (1), it’s inserting a mandatory part that actually requires councils to put in their “information regarding climate change adaptation and mitigation [as far] as they relate to the delivery of water services:”.

Now, why that’s really important is this—and we heard it time and time again during submissions, particularly from the likes of Taituarā, which is the local government planning professionals. I want to quote from them because they summed it up so nicely by saying, “We submit that a ten-year outlook is far too short a period to make informed judgements … Although long-term plans have a minimum planning horizon of ten years, they are also subject to a test of financial prudent that applies across the useful life of assets”, and that’s what is absolutely key here. We know that the useful life of these assets is outside of that 10-year period. It’s at least 30, if not 40, if not 50 years.

Taituarā asked the committee—again, I’m quoting—“to consider matters such as climate change.” They want these things to be mandatory so that councils are not stuck in this under-investment spiral where they are actually making decisions that are not in the best interests for the long term for their community. They said that “Meeting future resource consent conditions is an issue in some local authorities now, even more local authorities will face this towards the end of, and just outside the ten-year period.” So they’re talking about how frustrating it is that we’re making this legislation to purportedly address this very serious infrastructure deficit, and yet we’re not giving the very clear, mandatory consideration when it comes to a longer-term time frame and also climate considerations.

I did want to pick up, as well, on Wellington and Horowhenua’s joint council submission, because they are one of the regions which has actually come quite far in trying to wrestle with their own water service delivery challenges and have come up with some opportunities. Now, they too—like all other councils, might I add—had this very clear submission that they wanted their water services delivery plan to be a 30-year minimum. Now, they said, “These include network renewal, regulatory requirements, resilience, climate change, enabling growth and improving the health and quality of waterways. It is only over this longer-term period that these issues can be addressed”, and I’d love to hear the Minister’s view on hearing that from local government.

Thank you, Mr Chair. I appreciate the opportunity to take a call. It’s the first opportunity I’ve had to take a call on this important piece of legislation that we are scrutinising tonight and seeking responses on from the Minister of Local Government. I will just note that I intend to keep my commentary to Part 2, Subpart 1, around water services delivery plans, just quite succinctly so that we can focus on the first part of Part 2. So I am looking forward to hearing some responses from the Minister on the questions that have already been raised. I’ve got three matters that I do wish to speak to, and I recognise I may not have time to cover all three of those matters, noting that if need be, I’ll seek to make a further call.

There have been submissions from councils but also just observations from colleagues around the development of the water services delivery plans and the resourcing in order to do that. An important matter that I’d like to get a response from the Minister on tonight, if I may, is that councils are under significant strain. As chair of the Governance and Administration Committee, we hear regularly from Taituarā, who are the representatives of the staff in local government organisations. We hear from Local Government New Zealand; we hear from the Department of Internal Affairs, through the scrutiny process but also on other matters, and while we didn’t hear this legislation, what we do hear from them is that local government is under significant strain. It has been for some time, and the concern that councils and those involved in the delivery of water services raised is that we are asking, over a 12-month time frame, for councils to develop a water services delivery plan, and this is off the back of a number of years of involvement in water reform.

Councils have been working on this for a long time, but we’re asking them to do these plans again, yet there’s no resourcing being provided to councils to do that. We hear from councils that they’re often struggling to retain some of their qualified staff. They’re often competing with the Public Service; they’re often competing with the private sector for people who actually have the capability to do this work. So the concern from councils, and it’s valid, is: where is the money coming from, from central government, in order to provide that support? You know, the Government during the election campaign was insinuating that there would be support for councils, financial support, in these matters, but yet when it comes to the very first piece of work we’re asking councils to do, there is nothing forthcoming. So that’s my first question to the Minister.

The second matter I just wish to bring to the attention of the Minister, if we look at clause 11(1) (da)(i) and (ii)—and so this is on page 15 of the bill, for those reading along—I have submitted an amendment, which is now on the Table tonight, to add, to this clause, clause 11(1)(da)(iii) and to insert the time frame for how the anticipated or proposed model or arrangements provided under paragraph (j) will be made compliant. My reading of this clause—and I recognise that there are other references in other parts of the bill to time frames for the delivery of the whole water services plan, but this particular clause speaks to water services that don’t comply with current regulatory requirements or will not comply with any anticipated future regulatory requirements. It asks that the water services plan includes the “description of the non-compliance; and—(ii) a description of how the anticipated or proposed model or arrangements provided under paragraph (j) will assist to ensure water services will comply”.

My addition is the time frame for that, because I think that ratepayers and consumers need clarity of time frame. If there is a water service in a territorial authority that is non-compliant, I think the water services delivery plan needs to be explicit that this particular model is going to be made compliant within six months or within five years or within whatever time frame is needed to ensure that that water is made safe and compliant. I think that that would be a useful addition to have in the bill, and I hope that the Minister will take that under some serious consideration.

I just note before I finish that I will have some further questions to ask, particularly around joint arrangements of council, which is quite relevant to my area of Te Tau Ihu in the top of the South. Thank you, Mr Chair.

Thank you, Mr Chair. A number of questions here in relation to Part 2. The Hon Megan Woods asked the question around why one year rather than two years in order to do these plans. Councils should be able to prepare plans in 12 months, as they will use long-term plan (LTP) data. Of course, they’ve just recently gone through the process of setting their LTPs, and many councils want to get on with these new arrangements. If councils are struggling with their plans, they can ask for support from—

Hon Dr Megan Woods: Sorry, point of order, Mr Chairman. I’m really loath to interrupt the Minister, but it’s actually incredibly hard to hear him. If he could pull the microphone closer, thank you.

Hon SIMEON BROWN: Sorry—is that better?

Hon Dr Megan Woods: It is—we’re able to hear every word.

CHAIRPERSON (Greg O’Connor): Very legitimate point of order, I might say, actually.

Hon SIMEON BROWN: I’ll speak up as well.

Hon Dr Duncan Webb: Imagine it’s question time.

Hon SIMEON BROWN: I’ll imagine it’s question time, Duncan.

Hon Members: No, no, no—that’s OK. That’s all right.

Hon SIMEON BROWN: He asked me to.

CHAIRPERSON (Greg O’Connor): That’s Dr Webb you’re speaking about.

Hon SIMEON BROWN: Dr?

CHAIRPERSON (Greg O’Connor): Duncan.

Hon SIMEON BROWN: Honourable?

CHAIRPERSON (Greg O’Connor): Webb.

Hon SIMEON BROWN: Is it “honourable” first?

CHAIRPERSON (Greg O’Connor): Carry on.

Hon SIMEON BROWN: Hon Dr Duncan Webb.

CHAIRPERSON (Greg O’Connor): And just refrain in future from using first names.

Hon SIMEON BROWN: I apologise, Mr Chair—I appreciate your guidance. If councils are struggling with their plans, they can ask for support from the department or ask for support from a Crown facilitator, which, of course, is outlined in this part as well.

In relation to the issue of Crown facilitators, Crown facilitators could be used to help councils define solutions such as coordinating or negotiating a joint arrangement and joint plan, which of course is also envisaged in this part.

In relation to land farms—questions in relation to the 10-year view versus the 30-year view—this issue has actually been addressed in terms of the report back from the Finance and Expenditure Committee in relation to clause 13. Councils may include information that covers an additional 20 consecutive years if the information identifies investment requirements for water services infrastructure or to support future housing growth and urban development. And so that issue was addressed following submissions.

In relation to other elements of Lan Pham’s Amendment Paper 68, the issue in regards to climate change adaptation and mitigation as they relate to water services—these are covered in clause 11(1)(d) in terms of regulatory requirements, and also paragraph (i) of clause 11(1): “a description of any issues, constraints, and risks that impact on delivering water services:” So, again, those issues have been have been considered and addressed in terms of the bill, so we won’t be supporting that Amendment Paper because we believe those issues have been addressed and responded to in terms of the legislation.

In terms of Rachel Boyack’s questions around financial support, this is requiring councils to put forward these water service delivery plans. The department will be available to support and provide advice. Ultimately, councils hold the information. We’ll be requiring them to put forward those plans. And I would note that the department has been working with councils around some of the so-called Better Off funding that was allocated by the previous Government, which I would have thought would have been used to fund water infrastructure but was used—a very small percentage was going to water infrastructure, a lot of it was going to a whole range of other things. We have asked the department to work with councils to reallocate that funding towards water infrastructure or towards supporting councils with setting up these new arrangements, which is a critically important part of Local Water Done Well.

Thank you, Mr Chairman, and thank you to the Minister for that very audible reply—much appreciated. One of the things that the Minister responded to—and why it was that he wasn’t willing to countenance an extension from 12 months to two years for the adoption of the water services delivery plans—is that councils had their long-term plan (LTP) data that could be fed into it. One of the things that did come through in a legal commentary that has been published is the question around councils that want to defer their LTP adoption to June 2025. That presents a very difficult timing issue, given that the water service delivery plans would need to be adopted within only a few months of that date. And there will be a high need—I think everybody recognises the very high need for the content alignment between the water services delivery plans and the LTP of any given council.

I think everybody in this House would agree that it seems eminently sensible and practical for the water services delivery plans to be adopted first, and the LTP—the instrument which will offer the funding—to follow on that. So I want to ask the Minister: has he given any consideration to that scenario? Will that be a ground for granting an extension? We’ll come to the clause that does cover the discretionary ministerial powers around granting extensions—I’m sure we’ll come to that in the fullness of time—but one of the things I’d like to know is, given he raised that in an answer: is that something (a) he’s given any consideration on; (b) had any advice on; and (c) whether he sees that as a scenario that would be grounds for the granting of the extension?

One of the things that I am also interested in, in terms of clause 9 of the bill—which grants territorial authorities the ability to enter into the arrangements to submit joint plans within here. One of the things that the Minister has talked about, and I recognise that the ministerial intervention is a continuum and it can range from advice—and we’ll hear more when we get to this, but the Minister can “assist or intervene” is the language that the bill uses around that. If we did get to a point where there was a council that is—as I alluded to in my earlier contribution on this part—like Buller, that is orphaned, is this a power that he would be willing to use in terms of assisting or intervening to bring together? I think he has, in some of the replies that he has given, talked about how it may be used to bring together councils. I just want to know how he envisions doing that, and where in the continuum of ministerial interventions he would see that coming together. Or is this not something that he is willing to countenance?

I think the ability to have those joint plans is going to be critically important for one of the key considerations for us on this side of this House, which is affordability and has always been affordability. It’s about not seeing rapid rates increases like we’re going to see in Buller. I’d be interested to hear what the Minister has to say about a situation like Buller where we’re going to see the increased rise from $2,300 to $4,000 within four years, and I think anywhere in the country that was looking at that kind of increase is going to be thinking, “How am I going to pay that?” That just isn’t doable, particularly when you overlay that it’s from a part of the country that I sketched out has a high proportion of lower-income households, a higher proportion of superannuation. So, in terms of the interplay between clause 3(2)(b) and clause 9 of the bill, does he see those coming together or is that something he’s willing to countenance?

I thank the member for the questions in relation to Subpart 2, “Ministerial powers in relation to water services delivery plans”, and the role and the approach the Government will take. I mean, I think the key message here in relation to Subpart 2 is that these are a range of powers that are available, but, ultimately, the responsibility lies and rests with local governments to put forward water service delivery plans—there is a requirement to put forward one within 12 months. There are the powers to be able to work together with other councils: the bill includes provisions in terms of setting up joint council-controlled organisations.

Ultimately, these are backstops. Some of these are not powers which I think are envisaged—that are in terms of any particular scenario. These are backstop provisions that are made available to ensure that councils have the support—whether it’s assistance, advice, or more direct involvement—available. That is ultimately what the Subpart 2 is there for. In terms of particular scenarios, I don’t think it’s helpful for the House for me to comment on particular councils or particular scenarios due to the fact that this is about putting in place a framework which then councils will respond to, and there are backstop provisions which then enable a range of different levels of interventions.

Thank you, Mr Chair. I think I have only a short point, but it’s in respect of joint plans, which have been touched on, and the Hon Dr Megan Woods has identified the problem of orphans. I want to identify a different problem that I’m actually just genuinely not clear what the legislation anticipates, and that is the islands problem—that is to say non-contiguous territorial authorities clubbing together for a joint plan.

Now, I say this because it was raised personally with me that there are territorial authorities that are, essentially, going shopping for partners. You might have somewhere like Hurunui, which is relatively sparsely populated, with a small rating base, and difficult to service. And then you’ve got Blenheim city to the north of it, and Amberley and Waimakariri to the south. Now, what would happen if Waimakariri and Blenheim clubbed together but left Hurunui out in the cold?

The problem I have is that you’ve got a definition of “joint service area”, which kind of implies that you’re intending it to be contiguous, and then in clause 9, in Part 2, you’ve got that territorial authorities may submit a joint plan where they propose delivering water services through a joint arrangement. Now, is that joint arrangement? Is it enough if that joint arrangement is the engineering and accounting departments sitting in one set of offices, but there being absolutely no shared services whatsoever, there being two entirely separate water networks.

It strikes me that that hasn’t been contemplated. It strikes me that, in the back of our mind, is contiguous areas clubbing together to have geographical and economic efficiencies—and that’s a good thing, right; that was always part of the plan—whereas a joint plan which cherry picks well-managed, well-capitalised councils is kind of undermining that entirely. But it’s not clearly prohibited. And if it’s not prohibited, it’s allowed. I know that there are—and they’re only doing their job—councils out there looking for the best advantage they can get in this framework, for their people, as they should. That may mean that there’s, essentially, a highly inefficient delivery of water networks with islands of well-capitalised councils cooperating with a sea of undercapitalised councils around them. I’d be really interested if you could address whether that’s in or out.

Thank you, Mr Chairman. Still picking up on Part 2, Subpart 1, I have another separate amendment that relates to this really important issue of time frames, and this is amendment 67, and it’s to do specifically with clause 16. I’d really be interested to hear whether the Minister would consider amending this to the bill tonight, because it’s so important to the actual delivery and success or failure of this bill. It’s about extending the deadline for local authorities to actually deliver these water service delivery plans. This is an acknowledgment of the fact that actually every single council that did submit on this bill asked for this extended time frame. Local Government New Zealand asked for it; Taituarā asked for it. And it’s really in recognition that the development of these water service development plans will take time. It’ll take specialist skills, and councils really need to hear from Government here that we’re listening in terms of granting them that pragmatic time frame.

Now, I want to pick up on this because the water service delivery plans themselves require information on the current state of councils’ water services. They not only want councils to set that out; they want to see, included in them, a strategy for how councils will deliver that financial sustainability that we’ve covered in previous areas, and how they will actually meet regulatory standards and the information that will actually lay the groundwork for the economic regulation of the water services. This is really extensive stuff. And what we heard really clearly from submissions on this is—and this is a quote from Taituarā: “The decisions that local authorities are likely to make will have significant impacts on lands and waters, and these decisions could give rise to a breach of the Crown’s Treaty of Waitangi obligations.”

This is a concern when it comes to time frames, because they elaborate in saying, “We are unconvinced that genuine processes with iwi Māori can be run against a clock, and we submit that any reform process for three waters must result in arrangements that are enduring. In that spirit, surely Parliament would want these processes to be done right, rather than done quickly?” And I think that’s definitely the sentiment that we’re hearing from the Minister. There is some urgency around it, because of our infrastructure deficit, but we want it to be done right. We don’t want this back-and-forth that we’ve seen with the previous Government and then this Government in place.

I want to also pick up on the Public Health Communication Centre, because they spelt out really clearly the importance of extending these time frames. They talked about their research which demonstrated that New Zealand’s water infrastructure has a really low resilience when it comes to climate change impacts, and they said, “For this reason, we also suggest that 12 months is an insufficient time frame for the development of these water service development plans. These are long-term complex and vital infrastructure investments, and they should be rigorously developed.” The amendment that I’m proposing is simply to change the 12-month period to two years. Now, I’m noting that, in the bill, there is the ability for councils to ask for an extension, but what councils are saying is this is going to be such a collaborative effort, and they want to be able to map it out properly, they want to be able to fund it properly, and by doing that with really clear set time frames, that actually helps them in their decision making.

I also wanted to hear from the Minister—because there was this quite interesting part of the regulatory impact statement that estimated that preparing the water service development plans would only require one fulltime-equivalent working 40 hours for a small council and up to 100 hours for a larger council—whether he has actually revised those time frames and expectations, given that, in the submissions we heard so clearly from local government that it’s going to take so much resource and that they want to do it properly, and that they’re really asking for that pragmatic extension in time frames. Thank you, Mr Chair.

Thank you, Mr Chair, and thank you, members, for the questions. In relation to the issue around joint plans, “Territory authorities”—as it says here; I mean the legislation is quite clear—“can prepare a joint plan in relation to delivering water services in the joint service area covered by a joint arrangement.”, and, ultimately, councils will decide and have those conversations and make those decisions. There are obviously some backstop powers in here as well, in relation to the role that Government may have, but, ultimately, councils are required to put forward their water service delivery plans and make those arrangements as this legislation requires.

In relation to Lan Pham’s questions here in terms of the issue around time frames—and I understand the point that she’s making in relation to one year and two years, and that is the reason why we have clause 17, to allow for there to be an extension granted by the Minister following an application—the reality here, though, is we’ve got a tension between the infrastructure challenges and the need for a clear plan from councils to ensure that we can deliver this infrastructure for New Zealanders, which is the Government’s priority, and the urgency that we’re applying to this issue and the member’s suggestion around wanting to take longer to grapple through those issues. I put it to her that, if we provide two years for all councils, most councils will utilise two years, and, actually, we need to provide a level of urgency in terms of requiring councils to put forward these plans in an efficient manner so that decisions can then be made and that can then be executed so we can get from the planning stage to the delivery stage, which is critically important for New Zealand’s water infrastructure. Twelve months is an adequate time for preparing it. There is an exceptions process in place, which we think is adequate if an extension is required.

There’s been a couple of other tabled amendments put on the Table. Rachel Boyack has put forward a tabled amendment in relation to clause 11—inserting, after clause 11, the time frame of how the anticipated or proposed model arrangements provided were made compliant. This is the same as the member’s—the time frame is set by the time frame of the plans. It’s up to councils how long their plans cover. Effectively, I’ve already answered that question in relation to—the legislation does allow for plans to be up to 30 years. The point is to allow a view of investment that falls outside of 10 years, if they wish.

In relation to the other Amendment Paper, made by Lan Pham, in terms of clause 8A, around replacing “Wellington Regional Council” with “regional councils”—we won’t be supporting the Amendment Paper—the reason for this reference to include “Wellington Regional Council” is that only the Wellington Regional Council provides water services. They are the bulk water supplier for the region. No other regional councils are directly involved in water services delivery, hence why we did that. I thought I’d just answer that there’s specific reason for having that in this legislation.

Meitaki, Mr Chair. I appreciate the call. I want to follow on from an issue that my colleague Rachel Boyack canvassed in part, and that is the workload on councils in terms of preparing water services delivery plans. I also want to, like my colleagues in the Labour Party and in the Green Party, at this stage confine my remarks to Subpart 1 of Part 2 because we do want to discuss this subpart by subpart.

We’re working through Subpart 1 at this stage, and it concerns itself with a number of issues but it talks about the water services delivery plans that territorial authorities must prepare; that’s in clause 8(1), sitting there. They have to prepare these water services plans and we go through clause 11, and this is where the workload really comes on for territorial authorities, because clause 11 goes through and specifies the contents of these water services delivery plans—and there’s a lot in them. If we go through subclause (1) of that, in (a) it’s a description of the current state of the water services network; (b) description of the current services of the current levels of services; (c) a description of the areas in the district that get water services, and the water services infrastructure associated with a variety of population growth and so on—to what extent water services comply with regulations. I’m going to come back to this in a minute, but I just want to go through how much detail is required, for the benefit of the committee and for the benefit of people watching at home, so they understand the workload that is being imposed on territorial authorities.

In (e), the details of the capital and operational expenditure required to deliver services—and on it goes. There’s more, there’s more—(f) the financial projections for delivering water services, the operating costs and revenue, the projected capital expenditure—this is a lot of information—the projected borrowing as well. And still it goes on: (g) an assessment of the current condition, lifespan, and value of the networks; (h) description of the asset management approach; (i) description of any issues and constraints and risks. But wait, there’s more: (j) the anticipated or proposed model or arrangements for delivering water services; the possibility of any joint arrangement. In (k), a description of how the revenue from and delivery of water service will be separated from the territorial authority’s other functions—so that’s going to be an interesting one for councils that don’t particularly separate out, you know, a separate charge. They’re going to have to do some work around that. In (l), a bit of a summary of the consultation; (m) an explanation of what they’re going to do to make sure it’s financially sustainable—and we’ve discussed some of those issues already with the smaller territorial authorities—and (ma) an implementation plan.

That’s a lot of information that councils are going to be required to produce, but the bit that’s really, I think, going to add an extraordinary workload—and I really want the Minister to clarify some stuff around this—is what’s required in clause 11(d)(ii) and clause 11(da), and there’s a phrase in both of them: “anticipated future regulatory requirements”. Not only are councils going to have to describe what’s going on in their water services network at the moment, they’re going to have to find a crystal ball and have a little think about anticipated future regulatory requirements.

Now, that’s a big ask. The Minister is asking councils to go project into the future, and I think this is really problematic. For starters, they are being asked to project 10 years into the future under the standard version of their water service delivery plans that are required, or if they choose to develop a plan that extends for longer, they might have to project at least 30 years into the future as to how long they’re going to have to project what those regulatory requirements are for. I’m just wondering where the funding for the crystal balls is coming from. But, you know, that’s not all, and I’m going to seek an extension of this call because there’s another aspect of this which I don’t see is being canvassed in the bill, and I think we need some clarification.

The “anticipated future regulatory requirements”—with respect to what? With respect to what? Is it with respect to water services, or are councils going to have to project what regulatory requirements might be put in place due to, say, climate change requirements? Now, in the Finance and Expenditure Committee, at the moment, we are working through an extensive inquiry into climate adaptation and the sort of future frameworks that Government might put in place for dealing with climate adaptation. It’s a huge workload and we’re anticipating that coming out of it Government will eventually be setting regulations. Is the way this bill is framed—is it asking councils to anticipate those regulations? Is it asking councils to anticipate regulations, I don’t know, with respect to green space? Is it saying that councils have to anticipate regulations to do with import rules, with customs duties for bringing in particular—

Rachel Boyack: Allowing pollution into rivers, perhaps?

Hon Dr DEBORAH RUSSELL: Indeed, oh yeah. There’s all sorts of regulations that Government make, so I think we need a little bit of clarity here.

This is a lot to ask of councils. They’re going to have to buy the crystal balls—these anticipated future regulations—but it looks to me like they’re going to have to buy a whole bowling set of them or maybe a pool-table set. You know, there’s going to have to be a lot of crystal balls that they’re going to have to use to look into the future. So I would like some clarity from the Minister about these anticipated future regulatory requirements. I’d like the Minister to sort of give some clarification. This is going to be important that it gets into the Hansard, because this is going to be interpreted by lawyers and in the courts when it turns out that councils have not gazed into crystal balls correctly, when they have not anticipated regulations because they couldn’t know. Some lawyer, some court is going to be looking at the Hansard and saying, “What on earth did the Parliament mean when it said ‘anticipated future regulatory requirements’?” So, Minister, I’d like to know how good these crystal balls have to be, and I’d like to know what sets of regulations they need to apply to. How well do councils have to engage with this, and in respect of what?

Now, it’s probably straightforward; it could probably be easily fixed with a little tweak that said something about anticipated future regulatory requirements with respect to water services; you could probably clarify it that way. I hope that is what the Minister intends and if, in fact, that is what he intends, perhaps we can have an amendment to that effect. But, beyond that, I want an understanding from the Minister as to how far into the future that councils have to try to work out what regulations are going to be in place in order that they can devise these water services delivery plans.

Thank you, Mr Chair. I thank the members for their questions. I noticed there is another Amendment Paper in the name of Lan Pham, No. 70, in relation to upholding the principles of the Treaty of Waitangi. The Government won’t be supporting this Amendment Paper. It’s not necessary to amend the bill to incorporate the Treaty or Treaty settlements. Councils will have to continue to comply with all requirements under local government legislation and existing Treaty settlements, this includes requirements to consult, where relevant, with iwi or Māori. So that Amendment Paper is not required. In relation to—[Interruption]—oh, sorry, I need to use my question time voice.

CHAIRPERSON (Teanau Tuiono): Use your question time voice, Minister.

Hon SIMEON BROWN: I know how much everyone appreciates it when I’m a bit quieter.

CHAIRPERSON (Teanau Tuiono): Move closer to the mike.

Hon SIMEON BROWN: Well, I’ll try and get closer to the mike. There we are. Sorry about that.

In terms of the question around workload—and I think the Hon Deborah Russell did a very good job of reading out clause 11. I appreciate that that is now in the Hansard. But the answer there is: a lot of the answers to these questions can be found within existing long-term plan data. They can request assistance from the department. A description of current levels of service, etc., are in other planning documents already. A lot of this information already exists. The purpose of this water service delivery plan is to bring it together in a water service delivery plan to outline the council’s intentions and strategy using that data as to how it’s going to implement it. The department will also be providing guidance and templates and Excel models for councils to populate, which will assist, I’m sure, greatly—and I’m sure the member will be very appreciative to hear that, that excellent work that the Department of Internal Affairs is doing to assist our councils.

In relation to the other part of the question around the crystal balls, which she spent quite some time talking about—and she suggested that we made the anticipated future regulatory requirements relate to water services—if she just read the first part of that sentence, it says, “if any water services do not comply”. It already was referring to water services. The intention here is to require councils to identify when consents of critical infrastructure may expire outside of the 10-year period or plan and to, obviously, look at those issues as part of these plans.

Thank you, Mr Chair. And thank you, Minister Brown, for making sure that we can hear your answers. I’ve got a number of questions that I hope the Minister can clarify, given that the three waters are such a critical responsibility of local government.

I’d just like to refer to a very recent presentation in the Wairarapa, by Professor James Renwick, which, unfortunately, no other MP was able to attend. He was talking about the increasing climate change effects of both drought and floods. I do concur that looking further than 10 years is going to be absolutely essential, given that in many parts of the country, water for drinking in urban and peri-urban areas comes directly from rivers. So my first question is about the issue of the regional council. The Minister’s already addressed that being an existing part of Wellington Water is why you’re including the Greater Wellington Regional Council. But surely the issues of catchments, of the amount of water take for water races—all of those matters are within the purview of regional councils, and it would be extremely useful to have their advice and their thinking directly involved in these water services entities.

For example, I think South Wairarapa District Council must have one of the longest water races, at 240 kilometres long: the Moroa Water Race. I’m sure my colleague at the other side of the Chamber knows it well. So the first question is: are there not some more considerations about why regional councils, with their broader issues of forecasting, knowing water levels in rivers, and so on, are not included?

My second question is somewhat connected with that. Including regional councils would go some way to addressing the Hon Dr Duncan Webb’s question about whether we will end up with, frankly, a spotty patchwork of well-resourced councils with those that—it may well not be the fault of the existing council; things may have happened, whether it’s earthquakes or floods that the current council has got a much more expensive row to hoe ahead.

My further question there is whether it’s almost a backdoor attempt to force amalgamation with councils. For example, what would the Minister say to a Greytown resident who today asked me—or, he made a comment that central government didn’t fully understand local government. He said, “Wellington may be able to manage their future requirements, Masterton may be able to manage their future requirements, but the South Wairarapa could become bankrupt.” What is the result for a council like that? So that’s another reason for being concerned about orphans, or, if you like, dry islands in the provision of water services.

I’m also interested in looking at how on earth a council is expected to create a water services delivery plan when we haven’t got bill three, which may look at financial support and how it’s achieved. Minister Brown will be well aware of how we form regional land transport plans, and they are not a limitless list of projects. Whether it’s a road, rail—thank you for the Wairarapa train—or even walking and cycling, those are worked together knowing what the financial assistance rate is for those different aspects. We know nothing about how central government will make any form of partnership. And there is—I guess I could call it a whakataukī, if it wasn’t English, which is “cut your coat according to your cloth”. How can a council do that?

Tēnā koe, Mr Chair. Thank you very much. I just wanted to talk briefly to Subpart 1 in Part 2 and follow up, really, on the contribution I made earlier, which was about Part 1. But still, I do want to bring in the submission from the Chatham Islands Council. Many councils will be in a similar situation, and some of my colleagues on this side of the House have raised this, but I don’t believe we’ve yet really had an answer from the Minister.

I mean, the first point was around the time frames for developing water services delivery plans. Chatham Islands Council, like many other councils, asked for that to be extended. If the Minister is unwilling to consider two years, maybe 18 months would be a reasonable compromise. Otherwise, I do believe the Minister is going to get many applications for extensions and even the process of making the application is a certain amount of time and resource that’s taking away from actually getting the water service delivery plan done and the infrastructure in place.

Secondly, coming back to the Minister’s answer to me around how the water service delivery plan would identify the financial sustainability, and if we look at clause 11(1)(m), an explanation of what the territorial authority proposes to do to ensure that the delivery of water services will be financially sustainable, I’m sure the Chatham Islands Council isn’t the only one that is actually reliant on central government to know what they’re able to do, so this legislation is only asking for the council to do it.

In this case, what the Government is, effectively, doing, in their bottom-up approach, is putting a whole lot of legal responsibilities on councils: responsibilities to develop water services plans, to go out and find partners to make arrangements with, to do all of this work and they have very limited funding sources. Councils, like the Chatham Islands, have no ability to borrow, and unless they team up with a larger water delivery organisation, they will probably be unable to meet this. But how are they meant to deliver their water service delivery plan and specifically explain what they’re going to do to ensure that it’s financially sustainable without having the information from Government about funding that might be available to small councils like this?

I mean, ultimately, the crisis that we are facing in water infrastructure was not created in the last three or six years; it was created over several decades. There’s no magic money tree, the money has to come from somewhere to pay for the infrastructure. In the case of small rural councils, they simply do not have the rating space to pay for this, yet we still expect and want them to have safe drinking water, waste-water services that protect public health—we still expect all of that. So the question that the Minister has, of course, completely avoided and is unable to answer, I think, fundamentally, is where central government’s responsibility is and what their commitment is to funding this vital infrastructure or making additional revenue-raising tools available to councils.

I think that would help councils maybe like Auckland or Wellington or Christchurch, but it’s unlikely to help a council like the Chatham Islands. Who are they going to raise this revenue from? It’s a population of 700 people, extremely remote to the rest of New Zealand, with a population that is facing higher costs for everything they do, every single thing that the Government puts on them to do, like even a water service delivery plan or investing in infrastructure—all of that costs more in the Chatham Islands, and yet they have fewer people to pay for it.

Ultimately, the heart of this is, like, here we have the legal responsibilities and requirements that central government is putting on local government. Where is the partnership? Where is the commitment to funding? Central government raises far more revenue across New Zealand than local government does through their revenue-raising tools, and, really, it should be central government’s responsibility to fund this public good infrastructure, to a certain extent. I would love to hear the Minister respond to that.

Thank you, Mr Chair. I’m just testing this new microphone angle; I’m not sure if that’s any better, and I just want to get some feedback.

CHAIRPERSON (Teanau Tuiono): Is it better?

Hon Members: It is better.

Hon SIMEON BROWN: Is that great?

CHAIRPERSON (Teanau Tuiono): That’s better.

Hon SIMEON BROWN: Oh, that’s good—I don’t have to use my question time voice.

Hon Rachel Brooking: Not quite.

Hon SIMEON BROWN: Not quite. That’s good—that’s good. Well, I’ll just respond to a couple of those questions. The first one, from Her Worship Celia Wade-Brown, was in relation to small councils and amalgamations. The issue here is around shared services, so it’s not around amalgamations, and I think this legislation does put in place a framework which will enable far greater shared services between councils, which will achieve a greater level of economies of scale, but it doesn’t anticipate or require amalgamations. I think that shared services is a way in which councils can achieve those cost-effective efficiencies for consumers, and this is certainly one of the areas we expect councils to be working together very closely on.

In terms of the Hon Julie Anne Genter’s questions around the time frame, I’ve already addressed this question. There is an ability for councils to apply for an extension. Our expectation is that councils will comply with it. As I’ve already outlined, the Department of Internal Affairs (DIA) is going to provide templates—Excel spreadsheets which will be populated with the data. There’s going to be an ability for advice from them, as well. A lot of that information is already available or has to be prepared by councils, and so it’s putting that together as part of this plan.

In terms of the question around funding—and I’ve addressed this question already, as well—the last Government put half a billion dollars into the so-called Better Off Fund, or whatever they called it, and very, very little of it went to water infrastructure. A very small percentage went to water infrastructure. It went to all sorts of other manners of projects and cycleways and footpaths and other random things, and, actually, what we’ve asked the DIA to do is to work with councils who haven’t yet spent their Better Off funding to actually look at how it can be reallocated and utilised towards supporting them with these water service delivery plans, the advice they may need, and also then actual infrastructure, because, ultimately, that is what that fund should have been used for.

Thank you, Mr Chair, meitaki. This is my first contribution on Part 2 of this bill, and we are still on Subpart 1 of Part 2. I want to start at a fairly high level and then I’ve got some more specific questions. We’ve heard from the Minister of Local Government in the Part 1 debate that this legislation is mysteriously going to help our councils, and I say “mysteriously” because I never got an answer to how that was going to happen. But here we are in Part 2 of the debate and we see that councils are going to have to do these water service delivery plans. That is what we are debating right now: the water service delivery plans.

We’ve heard from the Minister; he said, “Well, the previous Government’s approach, it was top down.” There was $120 billion minimum—figures derived from, as the Hon Barbara Edmonds has pointed out, information gathered from councils. The Minister says, “That doesn’t work. That’s top down. We need bottom up. And so how we’re going to do bottom up is we’re going to ask councils for this information to make the plans.” We’ve had discussions in this debate, which I won’t repeat, but there’s been questions about—well, what are the time frames for these plans and where are councils going to get the information for the plans? And the Minister has replied, “Well, there’s going to be an Excel spreadsheet. It’s going to be really easy for the councils to do this. They can decide their own time frames, because, of course, that is in the long-term plans and it’s up to them.” We’ve heard questions on—well, what is the planning for hazards and climate change? We know that a whole lot of this infrastructure is in areas where there will be sea-level rise. We know that a whole lot of this infrastructure is in areas where there are heavier rainfalls. I think the Minister’s answer has been “Well, it’s just up to councils. They can do what they like.”

My questions, assuming that I am correct in my summation, there, of where the Minister’s thinking is—and he said there’s going to be a third piece of legislation that’s going to work with regulation. I can only assume that that regulation will be something about water meters, given the comments in the regulatory impact statement and, of course, the blocked out bits of the funding constraints that we’ve covered as well.

Clause 8 is the primary clause in this part, about what is going to be in these water service delivery plans. It’s for the council to meet regulations, but the plan also has to be financially sustainable for that council—there’s “ands” in this clause—and it has to meet water quality standards, and it has to supports the council’s housing growth and urban development. I think this is where the Minister before said that the climate change piece fits in. But what happens when you can’t do “and, and, and, and”? What happens then? Is there a hierarchy in this? What are the Minister’s expectations? I know this Government likes to talk a lot about balance. How is the council to implement, when we hear over and over again that there are all these councils that simply cannot afford to provide this necessary infrastructure? What happens when there is a conflict between those Roman numerals in clause 8(1)(b)?

Then, of course, we know, and we see in clause 18, that there is a process—and there’s been some discussion about central government needing to approve these plans. So that’s at clause 18. And at subclause (4): the councils “must comply with the requirement to amend and resubmit a plan by the date specified.” A question to the Minister here, a very specific question: are there any parameters for that, and does that relate to the hierarchy, or is there any hierarchy, back in clause 8? So I think that relationship between clauses 8 and 18 is very important.

Very quickly, I’d remind the Minister of that very good point raised by Dr Duncan Webb about when councils aren’t contiguous—what happens then? And specifically, what happens—[Bell rung] Mr Chair?

CHAIRPERSON (Teanau Tuiono): The Hon Rachel Brooking.

Hon RACHEL BROOKING: I’ll be very, very quick with this—rounding up my contribution here. What happens with those councils in Northland? We’ve got that block with Auckland happening. Can they join with other councils? What is the thinking that’s gone in into that? So I would very much like some answers on those questions.

Kia ora, Mr Chair, thank you. I want to take it back to the beginning of Part 2.

Ryan Hamilton: Genesis.

STEVE ABEL: I do want to take it back to Genesis, in a sense, the genesis of our nationhood, because you could say that we have a Government that’s busy kind of trying to rewrite Genesis, if you like, trying to omit Genesis and burn it and remove it from various bits of legislation. I’m here to save the Minister of Local Government from this terrible omission of our founding agreement, Te Tiriti o Waitangi.

I know that members on the other side, their better instincts are not to deny Te Tiriti, not to undermine it, not to eat away at it, and so I have prepared, Minister—and I know you’ve earlier suggested that you don’t want to accept this amendment, but I would make a case to you, Minister, that it would be a major improvement to the legislation if you did put Te Tiriti o Waitangi in there. I’ve got the perfect place for it: it can come under Subpart 1 in Part 2, in clause 8, “Territorial authority must prepare water services delivery plan”. In clause 8, at subparagraph (v), we can insert “upholds the principles of the Treaty of Waitangi (Te Tiriti o Waitangi);”—you could omit the term “the principles”, we’d be happy with that; you could just say “uphold Te Tiriti o Waitangi”—“and is consistent with any obligations arising under a Treaty settlement Act or Treaty settlement deed.”

Subclause (2A)(a) of this clause could rightly also have “Treaty settlement Act means—(i) an Act listed in Schedule 3 of the Treaty of Waitangi Act 1975; or (ii) any other Act that provides redress for Treaty of Waitangi claims, including Acts that provide collective redress or participation arrangements for claimant groups whose claims are, or are to be, settled by another Act, including—(A) the Maori Commercial Aquaculture Claims Settlement Act 2004: (B) the Ngā Mana Whenua o Tāmaki Makauru Collective Redress Act 2014: (C) the Nga Wai o Maniapoto (Waipa River) Act 2012: (D) the Ngati Tuwharetoa, Raukawa, and Te Arawa River Iwi Waikato River Act 2010: and (E) the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992;” And, finally, the “Treaty settlement deed means a deed or other agreement that—(i) has been signed by or on behalf of a Minister of the Crown and representatives of a group of Māori; and (ii) is in settlement of the claims of that group or in express anticipation, or on account, of that settlement; but (iii) does not include an agreement in principle or any document that is preliminary to a signed and ratified deed.”

We’ve taken some time with this, Minister, and I would invite you to consider, again, accepting this amendment. And I would invite your colleagues opposite, given the importance of this legislation—

CHAIRPERSON (Teanau Tuiono): It’s important that you direct your comments to the Chair, not to the Minister directly. So you’re having a conversation with me, yep?

STEVE ABEL: Pardon me—pardon me, Mr Chair. The advantage of adding in this Treaty clause is significant in the context of the thing we’re talking about, which is wai—water—that fundamental resource on which we all depend but which we must acknowledge is enshrined in our founding agreement as a taonga, as a treasure that belongs to tangata whenua. To omit Te Tiriti in that upholding of the recognition of Māori say and access and self-determination in the management of their lands’ resources is a serious omission and one that we believe the Minister should seriously consider correcting for the good of our nationhood. That is my submission.

Thank you, Mr Chair, and I thank the members for the questions. The questions from the Hon Rachel Brooking: there is no hierarchy in clause 8 and that is an important point. Those are all elements in terms of what must be repaired as part of those water service delivery plans.

In terms of the question around the Treaty of Waitangi, we’ve already outlined the Government’s position on that in relation to the Amendment Paper No. 70.

Thank you, Mr Chair. It’s a real pleasure to be able to take my first call on Part 2, Subpart 1. As I remind members of the committee, the Labour Party—because this particular part is where the rubber meets the road for this bill, it is quite substantial for us to structure it in a way that we can structure the debate. Because we had a number of members in the committee, we said we would go through it, through Subpart 1, which is clauses 8 to 19—that obviously covers what should be in the water service delivery plans. Then members would start to take calls on Subpart 2, which is the ministerial powers in relation to the water service delivery plans. We haven’t even touched on that—none of our members has even touched from clause 20 on. Then we would look at Subpart 3, which is the additional information disclosure, which is the remaining clauses of Part 2. So I go back to the start, which is Part 2, Subpart 1, and it’s really just a comment and, actually, a request to the Minister.

I know if we had a bit more time to proofread this in the Finance and Expenditure Committee (FEC)—I just want to check the drafting of clause 9. There is a lot of interchange between “joint plan”, “joint arrangement”, “joint water services delivery plan”, and I understand that all those three different terms are defined within the definitions part of the Act. But I want to just double-check that it reads correctly, because there’s a lot of interchange between the joint water services delivery plan and then a joint plan. So I just want to make sure—oh, sorry, joint arrangement, which is at the end. I just want to make sure that that particular clause 9(1) is actually correct. I think if we had more time at FEC, we probably would have redrafted that because it’s a little bit clumsy. But, of course, that’s what happens when you’re, basically, rushed to try and do the revised track of the bill.

Actually, my main question, really, is to the Minister and it’s in relation to his Amendment Paper 65: clause 15. So the Minister proposes to replace clause 15, which the select committee had provided as a revised-track version of the bill, and I’ve had to scribble it out to ensure that I could read it correctly with the Minister’s Amendment Paper. As my good colleague Rachel Brooking—who, like myself, is a lawyer—knows, there are many times when you have to do submissions for both court or for papers, for whatever reason when you do opinions, where you have to look back into the Hansard. Not that you really want to go through the annals of the Hansard, but you do to understand the intention of the Minister in relation to his amendment.

Now, this Minister’s Amendment Paper—the Minister hasn’t spoken to clause 15. This Amendment Paper is a new paper that has been tabled as part of this particular part of the bill. It does actually bring in a new requirement for consultation and it brings in a requirement “In relation to an anticipated or proposed model or arrangement for delivering water services in its water services delivery plan, a territorial authority must—(a) undertake consultation; and (b) ensure that its consultation and [the] decision-making complies with [the various] sections 51 to 54.” However, when we considered this clause 15 in the Finance and Expenditure Committee, we actually had a number of conversations at the select committee around the requirement to consult. Was it consulting on the draft plan once the draft or the draft joint plan had been completed? Do you have another round of consultation? Because there are quite stringent consultation requirements as part of the Local Government Act. That’s basically some of the conversations that we had at select committee.

The amendments that we had put in—which are in the revised-tracked version of the bill—say, at 15(2) that “A territorial authority must comply with the Local Government Act 2002 … except as provided in Part 3 of this Act.” Then (3) goes on to “This Act does not require a territorial authority to consult in relation to a water services delivery plan. However, a territorial authority must comply with the Local Government Act 2002”. That’s now been removed. The Minister is proposing an amendment to the bill, and I think what he’s trying to do is just remove that grey bit, but I’m not the Minister. Again, as Rachel Brooking has said, it’s quite important to have the Minister’s intention quite clear. This was not part of the select committee process; it is a new Amendment Paper, and I haven’t quite understood what’s the Minister’s intention in relation to that clause of the Amendment Paper.

Thank you, Mr Chair. We’re still on Subpart 1, and this will be my only contribution for Subpart 1 of Part 2, and I want to pick up on what the Minister mentioned before in the conversation that the Minister had with my colleague Lan Pham. But I want to specifically focus on clause 17 in terms of the extension that the Minister mentioned.

Now, one of the things that the Minister mentioned previously was around the timing of the 12-month period and why he is not supporting, in this case, one of the amendments. But, considering that, for a lot of councils, in anticipation of the bill that the Minister mentioned will be coming later, around the financing, some of the councils might be waiting for a little while until there is a firmer idea of what that looks like before putting some of the plans together—specifically clause 11(1)(e) and (f). I want to check in terms of when territorial authorities are able to apply, to start the process of applying, for an extension.

Clause 17(2)(d) is very clear that you can’t apply for an extension any later than one month before the last date for submitting, but it doesn’t actually say how far in advance you are able to apply for it. So is it possible for territory authorities to start applying immediately—once this bill comes into effect—in anticipation of the delay in terms of getting some of the financing and some of the bills that are going to be coming later in the year, and start that process immediately? That’s my first question around clause 17.

The second one I have is: how long are they able to extend for? It is specified in (6A) that the Minister, if he decides to grant an extension, can notify the length of the extension. But it would also be quite nice to get some sort of intent from the Minister on what are some of the frameworks. If we’re looking at some of the requirements under clause 13(1)(a) in the sense that it has to start with the 2024-25 year, a natural assumption is that a territorial authority cannot extend or ask for extension for five years. So is it that we are looking at roughly a maximum of a 12-month extension, for example? Some sort of framework or some guidelines from the Minister would be quite helpful. That’s my second question.

My third question is that it says the Minister may grant “if the Minister is satisfied”. I want to know how long it will take for the Minister to decide. Now, if you’re looking at clause 18, when the secretary accepts a plan, they said, “as soon as reasonably practicable”. But, for the Minister, let’s say a person applies five weeks before their deadline and it takes three weeks for the Minister to make a decision—which is fair enough, because there’s a lot of factors the Minister may consider—if it is accepted, great, and then the Minister, under subclause (6), will outline that extension. But if it is declined, what would that mean? Does that mean that the territorial authority only, again, have two weeks left to quickly put everything together, or even if it’s declined, the Minister will respect the duration of clause 17(2)(d), of that one month? That’s my last question. What happens if it’s declined?

I wondered if it’s possible for the Minister for subclause (6A) to add something that is akin to clause 18(3)(a), which is “[may] notify the applicant of that decision.”, with a “resubmit it to the Secretary by a specified date;”. In that way, it’s an understandable duration, but it also could be unsettling for the territorial authorities if they’re like, “We’ve asked for extension. Are we going to get it? If we don’t get it, are we supposed to put something together in two weeks?”

So those are my four questions. When can people extend? How long can they extend for? How long will it take the Minister to decide? And if it’s declined, will they still be given a bit of a break? Thank you.

I thank the members for their questions. In relation to clause 15 and the tabled amendment, that is responding to submissions that were raised and are clarifying that particular clause.

In relation to clause 17 on when they can apply and those questions, the key, overarching point that I think is important for the committee to understand in relation to extensions is that this Government’s position is that we’re wanting councils to deliver these water service delivery plans within 12 months. An extension is not something that will be granted lightly or easily. There are clear criteria, and we have clear expectations that councils will deliver it.

So, look, there’s a lot of potential scenarios or game theory you could try and apply on how or what or when they should apply, etc. The point I would make, though, is we are legislating and requiring councils to put forward their water service delivery plans within 12 months. There is an exceptions process for an extension, but there are very clear criteria that need to be met, and these are not something that will necessarily just be given lightly.

Thanks, Mr Chair. I do now want to move on to Subpart 2, because I think I’ve checked in with my colleagues and because the Minister’s engagement has been really high during Subpart 1, we feel satisfied to move now to Subpart 2, so that’s from clauses 20 right through to 31.

This particular subpart discusses the ministerial powers in relation to water service delivery plans. It’s actually quite an important part of the bill because it’s the one part of the bill, similar to other legislation, where if Ministers are not satisfied with the water service delivery plan including the implementation—which is a new element that was introduced in the bill by the select committee—then the Minister, the executive has a particular power, and it’s in some ways almost unfettered power to intervene and to appoint a Crown facilitator.

I appreciate the advice that we have received through officials. It’s one of those situations where there has to be a particular threshold in order for the Minister to feel the need to appoint a Crown facilitator is needed. I want to be able to test a bit more and understand what that threshold is. Because in the absence of, obviously, the Hansard, again—I referenced the cases that we had talked about before and the Minister’s purpose and intention and Parliament’s purpose and intention being really clear in the Hansard. There is not that much information within the advice to help determine some of these grounds or when that threshold is crossed, as the Hon Dr Megan had said in an earlier part of this debate, kind of when those red lines get crossed.

So, if I can work through clause 20, it advises that: “The Minister may, in the circumstances set out in subsection (2), appoint a Crown facilitator … if (a) the territorial authority or the … territorial authorities requests, in writing to the Minister, that the Minister do so”. That one, I think, is pretty normal. Basically, they’re requesting the Minister to come and help them. They’re saying to the Minister, “Can you please come and grant our request?” I think that’s a relatively easy subsection, but I think it’s the next subsection which is where things might get a bit more difficult, particularly if the local authority and the Minister disagree. We know that our regional local authorities are very proud areas. No one likes, basically, central government coming in and saying, “We’re going to put a commissioner in.” or “We’re going to put a facilitator in and look after your assets because we don’t think that you’ve met a particular threshold.”

This is where I want to be able to ask the Minister—it says here that “the Minister believes, on reasonable grounds, that it would be beneficial to appoint a Crown facilitator because (i) the territorial authority or the group is otherwise unlikely to submit its plan to the Secretary in accordance with subpart 1;”—so, basically, the requirements of the water service delivery plan—“or (ii) in the case of a group of territorial authorities, the group is having difficulty agreeing on the terms of a joint plan.; or (iii) contrary to section 19A, the territorial authority or the group of territorial authorities has not given effect to its water services delivery plan.”

That clause 2(b)(iii) was an insertion by the Finance and Expenditure Committee because we think that that was a direct correlation to the implementation plan not being carried out by councils. But, actually, it’s the second clause which is that it would be beneficial to appoint a Crown facilitator—the “beneficial” part, for me, I believe, is somewhat subjective. It then brings a couple of objective tests into subsection (1) and (2). I’m just trying to understand from the Minister, it’s got an “or”; it clearly mustn’t be a hierarchy. It could be one or the other, but also from his perspective, the subjective test of “beneficial”—are there other types of precedents that you’d see in other parts of legislation that would help to define what “beneficial” means?

Second of all, in relation to Part 2, in the case of a group of territorial authorities, the group is having difficulty agreeing on the terms of a joint plan. I kind of don’t understand why that would be necessary, because then if they can’t agree to a joint plan, they don’t have a joint plan. It doesn’t meet the definition which is in Part 1 of this bill, which is what a joint service delivery plan is, which I kind of had talked about the drafting in clause 9 being a little bit muddled and trying to understand that.

So my question to the Minister, really quickly, is just about understanding the beneficial part, the subjective part of it, and the hierarchy of subclauses (1), (2), and (3). I think there is no hierarchy, but I just want to make it clear for Hansard. And also, what is the point of subclause (2)? Because, actually, there is no joint plan if they cannot come to an agreement. It is again an agreement; if there’s no agreement, then there’s nothing there sitting in order for them to disagree on.

Thank you, Mr Chair. I guess the key issue here in terms of Subpart 2 is a range of different interventions, but the key overriding point is that these will, ultimately, be used on a case by case basis. This bill sets out the situations when powers or interventions can be used in relation to plans. For example, if a council fails to submit a water services delivery plan, or if a council’s failed to have a plan accepted by the Secretary for Local Government, or a council’s failed to give effect—there’s a range of different scenarios. There’s a range of possible scenarios, and I don’t think it’s helpful for the committee to speculate, but, ultimately, this is a broad range of powers which can be applied in a broad range of circumstances, and which option is required will be used depending on what the circumstances are.

I think, ultimately, the Government’s very clear message here is our expectation is that councils will work, either themselves or collaborate with other councils, to put forward these plans within the time frame and that they will put them forward, that they’ll be accepted, and that they will implement them and then they will deliver against them. These are backstops. These are provisions which are available to be used if a council requests or if there is assistance needed in terms of needing to work through those issues.

I move, That debate on this question now close.

Tēnā koe, Mr Chair; thank you for that. Now, I am really noting that we’re wanting to move on with the bill. I have one amendment. I’ve been calling diligently to speak to my final amendment on Part 2, Subpart 1. I’m going to be really short. It’s very short, but it’s very important, so I really want to be able to speak to it to the committee, because it’s really a listen up moment. It’s a listen up moment because this could not be more important.

CHAIRPERSON (Teanau Tuiono): Do you have the number of the amendment?

LAN PHAM: Yes. The amendment is No. 66 and it’s to do with clause 8A. Now, this is about the intention of what the bill should do in terms of allowing all regional councils, not just Greater Wellington Regional Council, to be part of the planning and decision making on these joint water service entities. I acknowledge that the Minister of Local Government has already explained the obvious, with Greater Wellington Regional Council being included because they have specific water service delivery responsibilities already, but this is about the intention of the bill being about communities across the board, outside of existing territorial authority boundaries.

Now, why it’s so important that regional councils are actually involved in the planning, the alternative consultation, and potential joint water service arrangements is that we know that councils, particularly district, city, and unitaries, swear this oath when they’re elected—councillors do—and they are subjected to their oath and then making the best decisions for the citizens in their rohe or their territorial authority boundary. Why it’s so important, when we’re talking about collective water services, that regional councils actually have a voice in this is because it automatically gives the elected member representation to be a voice for the good of the entire region. That is so important.

I’m noting a lot of my local government councillors across the Chamber tonight—and knowing that, you know, councils can be quite narrow in their view and it’s tricky to enable them to have a broader view. Now, I note that in the bill it says that councillors may take that broader view, but to allow regional councils to actually have that voice would be a way to unlock this and unpick this in a really pragmatic way. Wellington Region and Horowhenua District’s joint council submission picked this up really clearly when they talked about the impacts and views relating to an entire joint service area—i.e., considerations beyond the council’s own district and communities. They talked about how having a broader regional view—which would be the case if we had regional councils able to be part of these processes—would be critical to ensure that councils can fully consider the needs and challenges of the broader regional grouping rather than being bound by making decisions only in the best interests of their councils.

I think this is a very pragmatic, very clear amendment that we could put forward as a Parliament to really make sure that this bill is in the best position to actually not result in these orphan councils and these decisions that actually leave out certain areas of the country—rather than the collective good. Thank you.

Thank you very much, Mr Chair. This is a really interesting subpart of Part 2 of the bill, and we do want to sort of go through this particular subpart in a bit of detail. The interesting thing is that going back, under Subpart 1, to clause 8, where it says, “(1) Each territorial authority must prepare a water services delivery plan”, and, of course, the question is: well, what if they don’t—what if they don’t—and there has to be in legislation something that compels the performance?

I think one of the interesting things about this is that it seems to contemplate a range of reasons as to why a council might not complete its water services delivery plan, and one is that the council kind of just refuses to do it. That would be an extreme case—councils in this sort of country pretty much do comply with the law, as much as they are able to—but it also contemplates that councils might not be able to do it and that they are actually going to be in a position where they say, “Well, actually, this is beyond us.” I think one of the ways we can see this most clearly is in clause 22 in Part 2, under Subpart 2 in Part 2 of the bill, which is the subpart we’re discussing now.

Looking at that clause 22, it uses a variety of verbs to describe what the Crown facilitator may do. The Minister may appoint a Crown facilitator, and there is a process for doing that, but then there is a description of what the Crown facilitator may do. The Crown facilitator may “assist” the relevant territorial, may “advise” the relevant territorial authority, or may “assist” again—this is clause 22(1)(a), (b), and (c)—but in paragraph (d), it has the interesting word, which is “direct” the relevant territorial authority to prepare a water services plan. So that’s a very commanding sort of word. I would like to hear from the Minister in what circumstances, really, he would expect that a Crown facilitator wouldn’t just assist or advise, but would actually direct a territorial authority to prepare a water services plan.

Now, there’s a bit of a time frame involved here. We know that the initial legislation says that this water services delivery plan has to be prepared within 12 months of the date of the Royal assent of this bill or such other date as the Minister may specify, or whatever, and that territorial authorities may apply for an extension on that. I’m just curious as to when a council is sufficiently non-compliant. Is it the point at which they perhaps don’t complete a water services plan and they don’t apply for an extension, or would the Minister perhaps be working with the central government officials to work with the territorial authority to actually assist them to prepare that plan and try to get them over the line? Is the Minister going to wait until the time period in which they could have got an extension is up, and at what point do we move from “assist” and “advise” to “direct”, and in what circumstances? What is the case? Is it just that they have refused to do a water services delivery plan altogether, or is it because some part of the water services delivery plan hasn’t been completed?

Previously, we discussed all the information that has to sit in a water services delivery plan, and there’s a lot of information there. Would the Crown facilitator get involved in directing when some parts of the water service delivery plan are not involved? There’s a lot of flexibility on this. I’d just like a little bit of a discussion from the Minister as to when a Crown facilitator is appointed, possibly against the will of territorial authorities. I can imagine that this might lead to disputes—

The member’s time has expired.

Thank you, Mr Chair. Just responding to the question from Lan Pham relating to her Amendment Paper and the question on regional councils. I think it’s a good question. The issue there—and, obviously, I dealt with one part of the Amendment Paper before, but not the other part. The other part relates to regional councils. We don’t support the proposal there as regional councils are regulators and should not be involved in decisions about service delivery. So that’s the reason for not supporting that.

In relation to the Hon Deborah Russell’s questions and comments, I’ve addressed that in prior answers in relation to the fact that there’s a broad range of potential examples and circumstances, I don’t think it’s helpful to speculate but these powers are broad and flexible and provide for a range of potential circumstances.

Thank you, Mr Chair. My question to the Minister—and I’ll keep my contribution quite brief—is that, you know, the role of the Crown facilitator and the Crown water services specialist has been defined.

There’s a description here that “Crown facilitator means a Crown facilitator for water services delivery plan appointed under section 20”, and the definition for “Crown water services specialist means a Crown water services specialist appointed under section 23”. But my question is: what is the criteria that someone might become either a Crown facilitator or a Crown water services specialist? Is it basically any person who the Crown sees fit to appoint under, you know—there is an appointment process described here in clause 21(1) for the Crown facilitator, and it includes descriptions of how they do it and the notice. But I think there is something lacking here in that there’s no kind of, you know, job description—there is a job description but there’s no kind of competency requirement that’s been described here. So is it that basically anyone can be a Crown facilitator and anyone can be a Crown water services specialist, or is it intended that these people are people with technical skills or knowledge, or even connection with—potentially—iwi or knowledge of te ao Māori? Like, what is what is the kind of intention?

I’m seeking guidance here because my understanding from my colleagues who have taken part in the select committee is that this hasn’t come up yet under the kind of discussions that have been held in the select committee, and in the previous discussions as well during committee of the whole House. So that kind of criteria might potentially be useful because, you know, people might rely on the discussions during committee of the whole House for guidance on the criteria for these. Because the work that they’re doing is actually very important—I mean, they have quite strong powers. We’ve heard discussions from colleagues on the Labour side about the potential of what might happen when someone might refuse. So I really would like, I guess, an answer on who is intended to kind of fill these roles and whether the Minister has thought through any kind of potential appointment criteria or whether that will be potentially gazetted at a later point. Thank you.

Mr Chair, just in relation to that question, there aren’t criteria listed in this bill—this is consistent with the approach taken in the Local Government Act. In relation to interventions under that Act, it will depend on the skills needed in the circumstances.

Members, the time has come for me to report progress.

Progress to be reported.

House resumed.

Mr Speaker, the committee has considered the Local Government (Water Services Preliminary Arrangements) Bill and reports progress. I move, That the report be adopted.

Motion agreed to.

Report adopted.

The House stands adjourned until 2 p.m. tomorrow. Have a good night.

The House adjourned at 9.58 p.m.