Local Government (Water Services Preliminary Arrangements) Bill

I move, That the Local Government (Water Services Preliminary Arrangements) Bill be now read a second time.

This bill is a critical piece of legislation. It makes up the next step of this Government’s Local Water Done Well plan, which is part of our coalition Government’s plan for addressing New Zealand’s water infrastructure challenges. I want to start by thanking the Finance and Expenditure Committee for considering the bill and for its recommendations that it has put forward to the House.

New Zealand’s longstanding water infrastructure challenges require locally led and financially sustainable solutions. Labour attempted a water reform approach which was ultimately an unpopular, mega-entity, co-governed model which cost taxpayers $1.25 billion, and it was overwhelmingly rejected by New Zealanders at the last election. Earlier this year, we delivered on our election commitment to repeal and end Labour’s divisive three waters legislative reforms and to return water services to local communities, to local ownership, and to local control. The previous Government’s three waters legislation was so unpopular, they received 88,000 submissions opposing it at select committee.

Local Water Done Well outlines an approach and provides the settings for councils to have financially sustainable water services while retaining control over the assets their communities have paid for. This bill enables councils to self-determine their pathway to financially sustainable delivery models. We’re not here to impose a one-size-fits-all approach on councils that know their communities best. Councils will determine their preferred delivery arrangements through developing water service delivery plans, and must demonstrate how they will deliver their water services in a way that is financially sustainable and that will meet regulatory standards for water and infrastructure quality.

The Government recognises that for many councils, this would be best achieved through collaboration. That’s why this bill enables councils to jointly submit a plan. The Government also anticipates that some councils may benefit from assistance with their plans and has, therefore, required that a Crown facilitator or water services specialist can be appointed to assist councils or to prepare a plan on their behalf. Councils can request this support, if they wish so.

The bill further supports councils who are ready to transform their water services delivery at pace. It provides a streamlined option for consulting and deciding on forming a water services council-controlled organisation or a joint local government arrangement as an alternative to Local Government Act 2002 processes.

The future economic regulator—the Commerce Commission—will benefit from the disclosure of specific information in the water service delivery plans as it works towards developing a full regulatory regime. Disclosure via the plans will also give councils some lead time to get themselves ready for full economic regulation.

Finally, this bill delivers on our Government’s election promise to provide a financially sustainable approach for water infrastructure in Auckland, and that is exactly what we have delivered. Earlier this year, Watercare projected that there would be a 25.8 percent water rate hike for Aucklanders in July. This 25.8 percent water rate hike would have piled costs on to Aucklanders already struggling with a prolonged cost of living crisis, increasing the cost of average annual household water rates by $348 per year.

The previous Government spent $1.25 billion—$1.25 billion—on their failed three waters plan and it failed to deliver a solution for New Zealanders. We worked with Auckland Council to implement a new model that gives Watercare financial independence while allowing the council to retain complete ownership and control. Local Water Done Well for Auckland will substantially reduce Aucklanders’ future water bills from the previous projections of a 25.8 percent increase in water rates down to 7.2 percent.

Now, members on the opposite side of the House, including the former Minister of Local Government himself, claim that their three waters plan would have delivered lower rates for Aucklanders than Local Water Done Well, but they’ve failed to own up to the fact that their modelling imposed a price cap on the new entity A. The choice that they fail to answer—the choice that they fail to answer—is what would they like Watercare to have stopped doing, because if they were to have had a price cap of 2 percent, they would have had to either reduce how much maintenance they were doing in Auckland, which would have meant leaks on the streets in Auckland as well as leaks on the streets in Wellington, or it would have meant a stopwork on the Central Interceptor. Well, the reforms that we’ve proposed have meant that Aucklanders are able to have lower bills, they’re able to continue investment, and the maintenance is able to continue. This is what Local Water Done Well is all about.

After the bill’s introduction, the Government also tabled an Amendment Paper to address its concerns about the cost to local authorities and ratepayers of reconsenting a number of waste-water treatment plants. This interim amendment to the Water Services Act 2021 means that Te Mana o te Wai hierarchy of obligations in the National Policy Statement for Freshwater Management will not apply when Taumata Arowai sets waste-water standards. These changes are a pragmatic approach to applying the hierarchy while work is under way to rebalance the national policy statement of Te Mana o te Wai, as signalled in our coalition agreements.

I want to thank the Finance and Expenditure Committee for its hard work considering the bill and progressing it at pace to ensure that the foundations of Local Water Done Well are able to be put in place as quickly as possible. I also want to thank the submitters for taking the time to submit.

Recommendations relating to the water service delivery plans include clarifying that the plans are one-off in nature, making implementation plans mandatory to increase transparency and accountability, and specifically allowing plans to include information for periods of up to 30 years, in addition to the minimum of 10 years, where doing so would help to identify future investment requirements or support future housing and urban development. Another key recommendation is to require councils to give effect to some aspects of their plans as a way of ensuring that councils commit to starting to implement them. I think these are very sensible amendments.

The committee recommended several changes to the role of the Crown monitor in relation to Watercare, following submissions from, particularly, Auckland Council. For instance, the Secretary for Local Government will now prepare Watercare’s charter, instead of the Crown monitor, and is required to consult with Auckland Council, Watercare, Taumata Arowai, and the Commerce Commission in preparing that. This ensures an appropriate separation between roles such as the Crown monitor, who will be responsible for implementing the monitoring, and it also addresses Auckland Council’s concerns about too much power being concentrated in the Crown monitor. We think that’s a fair way, and it separates those concerns for Auckland Council.

Finally, the committee recommended that the Amendment Paper be included in the bill in its entirety, noting its intention to be an interim measure while the Government updates the National Policy Statement for Freshwater Management. This amendment to the Water Services Act will give certainty to those involved in infrastructure development and it will prepare the sector for the significant number of waste-water treatment plants that are due for reconsenting.

This bill takes another significant step forward to the implementation of Local Water Done Well, a higher-quality, safer, and more resilient water services system. The previous Government spent $1.25 billion—$1.25 billion—on their three waters plan and had nothing to show for it. Councils and voters resoundingly rejected their approach at the last election. Expensive, bureaucratic—you don’t have to go far to look at all the mess that the last Government created with their centralisation. The mess we see with Te Pūkenga, the mess we see with Health New Zealand—thank goodness we’ve managed to stop this one now, in its tracks, before we saw the mess that this bureaucratic, expensive, and co-governed approach the last Government had to three waters.

Our Government is listening to New Zealanders, and our Local Water Done Well will deliver better, financially sustainable, and affordable water services while retaining local control of water infrastructure for New Zealanders. I commend this bill to the House.

The question is that the motion be agreed to.

Thank you very much, Madam Speaker. When a Minister spends half his allocated speaking time talking about the Opposition, you know that what he’s saying isn’t actually quite the case, and that is absolutely the case for the Minister of Local Government. What he has promised New Zealand, he won’t be able to deliver.

Hon Member: He already is.

Hon KIERAN McANULTY: We will see. It’s very interesting, isn’t it, that Government members are quite vocal. I wonder if they will be vocal if ratepayers come into their office with their latest bill that demonstrates the latest increase—because they should, because it’s their fault. Next time New Zealanders see an increase in their rates bill, they would be misplaced in blaming their council because this Government has put that council in that position, and they’ve done that in two ways. One is by repealing the water reform, and two is what the Minister did a couple of weeks ago and completely dismissed every single recommendation from the review into the future of local government.

The reason this bill is going to cost ratepayers money—and I think it spoke volumes that the Minister actually didn’t refer to advice that he’d received; he referred to the same political arguments they made during the campaign, because if he was upfront and did provide the advice, they would demonstrate that what the Government is proposing in this bill will cost ratepayers more than the water reform. The only thing they have is that the water reform cost $1.25 billion. The only point at which that was wasted was when they repealed it, because if they left it alone, things were in place, and all they needed to go—[Interruption] Listen to it. Anybody hearing this online or on the TV can hear the response. The reason they’re reacting like that is because they know deep down it’s true.

I’ll give them an example. In South Wairarapa, there are three towns. Two of them have now paused all development because the council-controlled organisation (CCO) that they are a member of does not have the funds to upgrade their waste-water systems. Now, this is a CCO that is exactly the proposal that exists under Local Water Done Well. This Government is setting up councils with a false promise—a false promise—and if they don’t like that, I’ll present them with this: they went around the country promising councils that if councils supported them when they got into Government, they would help them pay for their water upgrades and their water maintenance. They promised councils that they would help them pay. We’re talking about $185 billion over the next 30 years. Councils cannot do it by themselves, and they cannot afford to do it even if they are under a CCO, because they won’t be able to get the required level of balance sheet separation. But they promised them none the less.

Then they got into Government and they broke that promise immediately. An objective person would say that if you promise something with no intention of keeping it and then you don’t keep that promise, that is dishonest, and yet they walk around now and say that they have saved councils from the burden of the cost of water reform. It is disingenuous. We’re already seeing rates increases around the country, and councils are saying that it is because of the repeal of the water reform. The advice is there from the Department of Internal Affairs—all that has been peer reviewed—this Government’s decisions around water reform are going to cost councils and, therefore, ratepayers more.

It was interesting that the Minister thanked the submitters. I don’t know why, because they’ve ignored the councils that submitted to the Finance and Expenditure Committee that said if this goes through as is proposed, they are likely to be on their own. Now, the problem with that is it’s usually the small, rural councils that are going to be left out. When you have councils with a massive roading network and a number of towns that they are required to service but a very small rate-paying base, they simply cannot afford to pay to do the work, and if no council voluntarily chooses to go with them, what are they going to do? Now, this is a problem that we have raised with the Minister on a number of occasions, and all that he has is the political attack lines that they used in the campaign. There’s no substance there; there’s no sincerity.

What they’ve done is they have repealed reforms not because they weren’t going to work, because all the evidence was there; they’ve repealed reforms because they contained co-governance. So they’ve wasted $1.25 billion, according to the Minister, because they didn’t like co-governance. They didn’t waste that money because it wasn’t going to work. They didn’t waste that money because it wasn’t going to save ratepayers money. They repealed it because they didn’t have the guts to front up to the electorate and say, “This will actually work, but if we do it like this, we’re going to have to look at a way of recognising the long-established special interest that Māori have, via the Treaty and established through the courts, in water.” They didn’t have the guts to front up and have that conversation, so instead they made false promises to councils, they lured support amongst ratepayers and said that the “National Party will help our council pay for it if they get in.”, and they got rid of it with no intention of keeping that, then scrapping the reforms which would’ve worked. Why? Because they didn’t want to front up and have the co-governance debate. I actually think that is disgraceful.

Even now, you know from the Minister’s speech when he’s trying to pre-empt what the Opposition might say that his argument doesn’t stack up on his own accord. It’s the age-old tactic. That’s because it doesn’t. Nothing he has said today stacks up. The reason Watercare was proposing 26 percent was because these guys repealed the water reform. So when the Minister stands up and says, “We saved Aucklanders from 26 percent water charges.”, that was a problem of their own making. It takes a bit of gall to be able to stand up and say, “We’ve saved Auckland from the problem that we started.”, but that’s what they’ve done.

The other issue around Auckland is that was the easy fix. That was the only one that they were able to do what they’ve done in Auckland where it would work, because no one else has the scale. So to the people of Northland, they’re cast on their own. To the people of Tairāwhiti, they’re gone. The top of the South Island: they’re on their own. The West Coast of the South Island: they’re on their own. Because those councils don’t have the scale, even if they join up just with a couple of their neighbours to make this work to the level that it needs to. Even then, a CCO, as is the supposed outcome, doesn’t have the balance sheet separation to be able to withdraw the debt associated to the work that’s already been done and absorb the debt that will need to be taken on in order to do the work. That’s why you’re looking at examples in the Wellington region, under Wellington Water, where that model simply has not worked. It’s not delivering for South Wairarapa, and it’s not delivering for the other councils in the Wellington region.

Now, maybe—just maybe—they will be able to jimmy up an arrangement for these councils that is a slight improvement on the status quo but significantly worse than what would’ve happened if they’d let reform go through. It is all there in the data. All they care about is appeasing those people that were worried about co-governance, but I have a theory which I happen to think is true: that, actually, deep down, people care more about the rates that they have to pay than they do about co-governance. When you look at the projected rates increases across the country, not just this year but next year and every year for the next 10 years, they have all jumped up significantly since this Government repealed water reform. It’s your fault. I say to the members opposite: you’ve all done this.

DEPUTY SPEAKER: Not my fault, Mr McAnulty.

Hon KIERAN McANULTY: I thought I got in there just in time, Madam Speaker.

DEPUTY SPEAKER: Ha, ha! I’m still listening.

Hon KIERAN McANULTY: I did say, “I say to the members opposite”, but I’ll clarify: I did not mean the Speaker. To members opposite, I say to them, “It is your fault.”, and because they voted for it, they should be held accountable. Where are they fronting up to their ratepayers and saying, “We voted for higher rates bills because we didn’t want co-governance.”? That’s what they should be saying, and I think the ratepayers will look them in the eye and say, “Actually, do you know what? I think I’d rather have cheaper bills.”

Tēnā koe, Madam Speaker.

DEPUTY SPEAKER: Can we just make sure we’re aware and jump up a little bit quicker next time? Almost lost that call.

LAN PHAM: Thank you—thank you. I appreciate that, Madam Speaker. Look, it’s a real privilege to be able to speak to te Pāti Kākāriki’s position on the Local Government (Water Services Preliminary Arrangements) Bill. It’s kind of clever, the name of this bill, because by the time you finish saying the title to anyone, they’ve completely lost interest. See [Gestures to Deputy Speaker]—and case in point. It’s much like this Government’s approach to our very real and very serious infrastructure deficit.

I want to assure every New Zealander out there that this bill matters. It matters because the official advice states really clearly that 35,000 Kiwis get sick every year from simply drinking the water that comes out of their tap.

Simon Court: Fake news.

LAN PHAM: We have this rolling—fake news, I just heard called out, but it’s actually in the official advice and official documentation. So thank you for pointing out that there’s some real misinformation going on over that side.

We have this rolling seasonal nightmare of health warning signs going up at our favourite swimming and fishing spots, needing to avoid certain areas from the risk that our dogs or our little kids could get sick from the contamination of our waste water and our stormwater—the majority of which, I might add, discharge directly into our fresh water or coastal environment. Nearly a quarter of these are operating on expired consents. So, yes, we do have immense challenges on our hands—that needs to be addressed. But, unfortunately, this bill does not spell out a clear way forward.

Firstly, I want to touch on the use of urgency with the bill and the truncated select committee process which has been completely unnecessary. The time frame for submissions on this bill was nine days. It meant that councils and communities were unable to have their voices heard on legislation that has such significant implications for their health, their local community, and their environment. The New Zealand Law Society summed it up really nicely when they pointed out that the use of urgency in this case was, “not demonstrably necessary or appropriate”.

We, as the Green Party, oppose this bill for a number of reasons, and I wanted to start with the most foundational aspect of where this bill falls over and that’s with the role of iwi Māori partnerships and the Crown’s Te Tiriti obligations that should be emphasised in this water service delivery—even in this preliminary bill.

Now, there was discussion about this. It was like, “Oh, you know, that’s covered in other legislation and this and that.” But I want to make it really clear that iwi Māori have specific rights and responsibilities when it comes to water in Aotearoa in their exercise of tino rangatiratanga and kaitiakitanga. So meaningful consultation and collaboration with iwi Māori in terms of forming this legislation, in terms of clear things that were actually spelt out in terms of the Crown’s obligations, are essential for upholding their rights and ensuring that water management practices and decisions actually align with cultural values and Te Tiriti obligations.

Secondly, the removal of Taumata Arowai being able to consider Te Mana o te Wai in the setting of their waste-water standards is really inappropriate. It’s completely short-sighted and it actually introduces considerable complexity and uncertainty into their processes and decision making. We heard really clearly from submitters during hearings on this bill that Te Mana o te Wai was designed as “a cohesive whole and that the removal of Te Mana o te Wai provisions from Taumata Arowai’s considerations would be a significant step backward for New Zealand in our water management.”

We note submissions from public health experts who also considered this removal as “deprioritising the safety and quality of people’s drinking water and potentially increasing the risk of illness from polluted drinking water.” That is entirely unacceptable and unnecessary. Te Mana o te Wai was meant to be the driver that actually forced councils and any water service delivery partners to up the game when it comes to drinking water, when it comes to the treatment of waste water and stormwater, and this is a huge missed opportunity. It actually risks locking in immense under-investment in where we should be as a country. The fact that this removal of Te Mana o te Wai from Taumata Arowai waste-water - setting considerations was tacked on in this last-minute amendment bill that the committee has now adopted shows how little time and consideration these changes were actually given by Government.

We had the Regulations Review Committee and the New Zealand Law Society both clearly spelling out that the proposed amendment is a “Henry VIII” clause in that it allows secondary legislation to actually override existing primary legislation and shouldn’t be used unless absolutely necessary, which, in this case, it is clear it’s not. It’s simply bad law. The complexity for Taumata Arowai comes into it that they’re even saying that their obligations for decision making under Te Mana o te Wai aren’t clear, because they have it in the overarching legislation. It’s a really bad idea and I’m really disappointed that the committee did not adopt a potential to remove the amendment from the bill.

The other aspects that I wanted to touch on at this stage in the process were: the definition of “financial sustainability”, which we proposed was actually widened to consideration of debt and future borrowing, and also affordability for communities, which has been so well covered by my colleagues across the House, and also consideration of environmental sustainability. The current definition of “financial sustainability” in the bill is much too narrow to provide for that comprehensive decision-making that would actually enable us to have long-term resilient infrastructure and make really good decisions towards that.

The other aspect that was really important that, unfortunately, the committee did not take up was about the time frames in the bill, and I want to spell out here that we know that New Zealand is suffering climate impacts now, and this is only going to be increased in the coming years and decades. I did want to point out, though, that the total replacement value for exposed—particularly local government—infrastructure is in the billions and this is just replacement value, not the actual increase and uplift in our infrastructure that we need to actually respond to increasing sea-level rise and other such climate impacts. Unfortunately, the committee has stuck with the 10-year time frame for the water services delivery plans, which are completely insufficient when it comes to planning for resilient water infrastructure and water services, particularly with these climate impacts.

We would have liked to see the required time frame be a minimum of 30 years and have really clear expectations on councils that these plans would consider climate change as recommended by numerous submitters. We would have equally liked to have seen the committee adopt the submissions from local government in granting a more pragmatic 18- to 24-month time frame for submitting their water services delivery plans. Because, as the public health experts summed up really concisely, there’s a high risk that councils and communities with fewer resources or more significant challenges may be underserved by the water services delivery plan processes as currently outlined.

In those nine days that submissions were open for, there were 182 submissions only; 102 were in opposition and only 19 were explicitly in support. I want to quote the official advice that so clearly spelt out that all councils submitted that “The cost and resource implications are both unclear and significant for councils, making it challenging to plan or fund the reforms.” And yet this Government is ploughing on. So, in the absence of these really fundamental changes that we’ve just spelt out, the Green Party is hugely disappointed by this missed opportunity to prioritise the health and wellbeing of our communities. We oppose the bill.

ACT supports the Local Government (Water Services Preliminary Arrangements) Bill. I just want to clear up some of the misinformation that has been shared by members of the Opposition, not least that member Lan Pham from te Pāti Kākāriki who has just resumed her seat.

The problem that this bill seeks to solve is that many, if not most, local government entities, councils around New Zealand have failed to fulfil their obligations to maintain and renew their existing water, waste-water, and stormwater assets in a way that meets community expectations, and they’ve failed to provide for growth in the cities and towns that need it. Some cities, like Dunedin, failed to detect that lead solder in pipe joints was poisoning people in suburbs like Karitane. They absolutely failed their communities and they failed their most basic obligations to provide for assets that support the necessities of life.

Local government was only created because it was a problem when people kept tipping sewage—buckets of sewage—from their windows into the street. It was suggested that maybe if property owners get together and form organisations, which became local councils, we could put pipes in the ground and we could get all of that waste away from the places where we walked and shopped. Now, out of that, councils have then, through successive Government reforms, taken it upon themselves to think they can do just about anything—just that “anything” didn’t include maintaining and operating their assets and providing for housing growth.

Look, they collected the money which they supposedly attributed to depreciation of these assets, they collected development contributions from people wanting to build a new home or develop a section, but no one actually checked if they were maintaining their assets and developing them. What that has meant is that not only are we left with a significant deficit in infrastructure quality, which necessitates a very significant investment—and I’ll get to that amount shortly—it means if you want to buy a new home or buy a home in Auckland now in 2024, the cost of that home relative to your income is now 10 times your income, on average, for the average home and the average-income earner.

In the 1980s, when I was a kid growing up in Auckland, it was about three times the average income, notwithstanding changes in interest rates. Three times in the 1980s, 10 times average income now—unaffordable. A large part of that unaffordability is the fact that over many, many decades, councils have failed to provision the infrastructure to enable land to be serviced and that serviced land to be used for housing.

This Government is going to fix that, not just with this Local Government (Water Services Preliminary Arrangements) Bill but through our Going for Housing Growth programme, our urgent reforms to the existing Resource Management Act, and our replacement of the Resource Management Act with a new resource management system based on enjoyment of property, so people can actually get on and enjoy building and living in and developing their property. Most importantly of all, in order to enable these things, we are reforming the infrastructure funding and financing system so that it is easier for local government and developers and anyone else who wants to build infrastructure to get access to the finance and, importantly, that the funding stream that will pay off all of that debt through user charges and other mechanisms will also be significantly simplified.

So why is this bill so good? Well, firstly, it gets rid of co-governance, which was that awful, divisive, race-based solution to everything that the previous Labour Government tried to impose—who knew?—on concrete pipes and manholes and sewage treatment plants. I mean, who in their right minds in any iwi organisation would want to be responsible for sewage treatment plants? That’s how wonky the previous Labour Government was. Instead of actually addressing specific rights and interests conferred by Treaty settlements, they went all wonky and they said, “Oh, well. We’re going to stand up these co-governance entities and we’re going to create these massive bureaucracies, and somehow that’s going to discharge the Crown’s obligations to specific iwi and hapū in terms of the Treaty of Waitangi.” What a load of rubbish. How wrong they were. Not only that, for the $1.2 billion the previous Government spent, most of it on consultants and navel-gazing, so much of it on developing IT systems for asset management.

I mean, who knew a spreadsheet that tells us where the manhole is, in which street, how deep it is, what it’s made out of and so on—who knew a spreadsheet could be a very simple asset register? No, the previous Labour Government wanted to spend hundreds of millions, and they’re well on track to spend half a billion dollars, on the ultimate spreadsheet. That’s one of the reasons why they got voted out, because not only does no one trust them to deliver anything, not only do New Zealanders reject out-of-hand crazy co-governance of things like water assets, also if you look at what they spent and what they got, off you go to the Opposition benches for a very, very, very, very, very, very, very long time.

So what will we do? Well, this Government’s delivering on what ACT campaigned on and what the coalition Government agreed on. Councils get to keep their assets. They can form council-controlled organisations voluntarily. Do you hear that, Labour, over there? Not taking the assets, forcing all of these, what you call, arranged marriages, basically, trafficking all of these councils into the basement and forcing them all to hold hands. No, we will let them form these arrangements voluntarily.

Councils will, however, be accountable for service delivery, providing for growth, and linking rates and user charges to investment in water, waste-water, and stormwater assets. This is not just a trust model, though. No, not like any previous Government’s policy—we just blow money out the door and, you know, we all hold hands and maybe we say a prayer and we really, really hope the money that we signed away turns into something good. No, this is a trust and check model. This Government’s setting up an economic regulator, which is under development with the Minister of Commerce, which will also include a regulatory backstop power should councils or these water service providers fail to meet their obligations to maintain and operate their assets and provide for growth.

This bill also requires councils to deliver water services plans within 12 months. Now, we’ve heard some bleating from councils, echoed by the Opposition—they will echo and amplify any complaint about what this Government might be doing around water and infrastructure and the environment. But, of course, imagine a council complaining that they had to table an asset management plan within 12 months. If they don’t already have one, they should be sacked. The voters should vote them out. I mean, for goodness’ sakes, a water services plan is simply an asset management plan that says what pipes have we got, what manholes have we got, how many people live here, how much water will we have to supply, how much waste water will we have to take away. If councils don’t have this now, they are in dereliction of their duty and that’s another reason why this Government’s water reforms are so desperately needed.

This bill sets the scene for the next two years where this Government will be setting clear rules and objectives for delivery of infrastructure, how it’s to be funded and financed, making a lot more tools available, but also making it very clear that we do not accept that different parts of Government, whether they’re public sector agencies or local government, can just stand back and say “Crikey, we hope that somebody from Government comes along and solves our problems.” Or, if you’re an agency, “Crikey, I hope we get more money in next year’s budget.” We’re actually going to hold them to account for solving the problems that those agencies and those parts of Government are tasked to solve—in this case, local government—make sure that the pipes aren’t leaking, make sure you’ve got sufficient capacity to allow for growth, make sure that when your waste-water treatment plant comes up for consent renewal, you’ve actually got a design in the back pocket that’s ready to go.

And by the way, if people are telling you, “Oh, geez, you know, we’ve got to think about the cultural impacts of where we put the waste water.”, well, in places like Singapore, the waste water from buildings with 5,000 apartments and 5,000 people living in apartments can get turned back into drinking water. So if we can’t treat our waste water to drinking-water standard and put it into a river, put it into a stream, put it into the harbour, because of some kind of cultural constraint, this country’s never going to succeed. We have to solve that too, and that’s why we’re changing the hierarchy of the national policy statement for fresh water and we’re going to make sure that it’s going to be cost-effective and simple to deliver these solutions for Kiwis.

Thank you, Mr Speaker. Look, we have major infrastructure challenges across this whole country, and it’s not just water. In fact, when we talk about water in local government, sometimes we forget that central government is not particularly good at this at all either. Simon Court, the asset management plans you talked about—I love asset management plans. One of the problems we’ve got in this country is we don’t have enough of them, particularly in central government, and central government is not very good at managing its assets either. It’s got to get better at it.

This is the next stage of replacing Labour’s convoluted, divisive, massively over-expensive, centralised three waters legislation. To listen to what the Opposition is saying, you’d kind of think that if we’d left that in place, all the water would be fixed now. But that was never going to happen. It was going to take years, decades, to be delivered regardless of what the model is. It’s as though there was a magic answer there in the three waters model. The other thing to remember—and we’ve had commentary there about the rates increases this year—is that three waters under Labour’s model wasn’t going to come in this year or next year. I think it might have started to come in the year after that. Those rates rises would still have been happening, three waters or no three waters.

Kieran McAnulty talked about rates rises, and, look, yeah, in a way what they were trying to do is take the waters away from councils, give them to somebody else, give them to those four, then 10, water entities, but somebody was going to have to pay for that. There was no magic money tree—there was no magic money tree. The people that were going to have to pay for that were the people that consumed the water or used the wastewater. And guess what! They are the same people, by and large. So it was still going to be a cost on the same people. In fact, what it probably would have done is it would have released councils from some of the discipline that they would then have to have in fixing the water system first. That is really, really important. This is the next stage in this Government fixing the water system. Councils at the moment are clearly struggling. We’ve seen those rates rise. I’ve talked about that. They’re very high—they’re unaffordably high—at the moment, but this is the first stage, or the next stage, in helping them.

I also wanted to mention that we are also helping them in reducing the cost of working on the roads. In fact, sometimes we hear from the Opposition benches mocking of the work that’s being done to reduce the cost of working on the roads. But that is really, really significant. It’s not just about work on the roads; it’s also about the utilities that go underneath the roads. I’ve talked to council CEs, and they’ve said that the cost of the working on the roads, the traffic management, is up to 40 percent—40 percent—of the cost of delivering those projects, driven by health and safety and all the other things. That is a huge cost. If we can get that cost down—and we’ve had this confirmed at the Transport and Infrastructure Committee; we’ve had this confirmed—that will flow directly through into the cost of delivering new water services or replacing water services. That is a really significant part of helping them.

We’ve heard a comment about two towns in the Wairarapa which have paused development. Again, three waters wasn’t going to magically fix that. What fixes that over time is being able to levy development on growth so that growth pays for the new capacity that is needed. One example of this—the cost of working on the roads is definitely going to be part of this—is that in the last year, right before the 2022 election, we were faced with Wellington Water coming to the Wellington City Council and saying, “Oh, by the way, we’re going to have to revalue all the underground assets that we’ve got by”—10 percent, 20 percent, 30 percent?—“80 percent.”—80 percent. Now, imagine what that does to your rates bill—a catastrophic effect. We went back to them and said, “Hey, I think we need to rethink that. We need to talk that one through, because that is far, far too significant an impact to be able to be worn, especially in one year.” We should be expecting that councils should be rethinking their costs, not only in the light of the changes that we are making to legislation now, the changes that will come, but also in the reduction of the cost of working on the roads.

What does this bill do? Well, first of all, it creates greater oversight from Government, and actually that matters, because, actually, Government has been overseeing councils for decades through the Office of the Auditor-General (OAG). But how high has the OAG raised the red flag and been saying, “Hey, we know that there has been under-investment for decades.”? Have you seen that red flag being raised and them saying, “You must do something about this, councils. You must do something about that.”? They’ve started to do that in the last couple of years, but it’s too late. That infrastructure deficit is already there. Government needed to be overseeing councils and saying, “We expect changes to be done.” And if the asset management plan is not good enough, do something about it, because otherwise we’re not signing off your annual plans, your LTPs, etc. You must do something about it.

What else does the bill do? Well, it requires water service delivery plans. We’ve heard the comment that 10 years is not long enough. Actually, I’d be inclined to agree; a longer term is a good thing, because these assets are going to be assets which, by and large, should be lasting 100 years. That actually is really, really important. The longer-term thinking is really important. But having a water services delivery plan is important.

The second thing is transparent information for the community. Well, it should already be there, but that’s really, really important as well, because that’s how you hold councils to account. It’s also how we should be held to account in terms of our asset management of the assets that the Government looks after.

Making it easier to establish or change CCOs and other collaborative arrangements—that’s a good thing. It allows councils to be more flexible in getting together, working together, and, hopefully, delivering some economies of scale. It allows the financial separation of Watercare from Auckland Council, which has already been announced. Obviously, financially, that’s a significant advantage to the ratepayers of Auckland. So that’s a really, really good thing.

The other one I just wanted to mention was that it requires Taumata Arowai to set standards. That is really, really important, but what those standards are is going to be really, really critical, and that those standards are realistic—they give us better quality water, better quality discharge to water, but that they are also realistic.

We’ve had Te Mana o te Wai mentioned. One of the things about Te Mana o te Wai is that it is a hierarchy. At the top of the hierarchy, it says we look after the health of the water, then we look after the health of human beings, and then we do all the other things that we need to do for our economic, social, and cultural good. The problem with hierarchies is that I’ve seen them interpreted. No. 1 is the one that gets picked, and Nos 2 and 3 are there, but if there is any conflict between Nos 2 and 3 and No. 1, Nos 2 and 3 get ignored. If you ignore the needs of the people and the needs of their social, cultural, and economic impacts, that becomes a real problem. Getting the model right, getting the incentives right, getting the oversight right is really, really important. This is the next step in that, and I commend this bill to the House.

My understanding is that the next call is a split call.

Kia ora. E mihi atu ana ki a tātou tēnei wā. I’d like to acknowledge Andy Foster, the previous speaker from New Zealand First, highlighting te mana o te wai, because te mana o te wai is holistic. Te mana o te wai looks at the entire ecosystem: tangata, whānau, hapori, and then, ultimately, that wai-inu, so that it is free, the taiao is clean. I struggle when I hear that the hierarchy limits the way that we look after our wai māori, because te mana o te wai is about fresh drinking water, te mana o te wai is about the needs of the community, and te mana o te wai is, ultimately, about social, economic, and cultural wellbeing. So I’d encourage us to really think about the fact that the indigenous models that are gifted to the Government are an asset and something to provide guidance. It’s, again, another example of plus-plus.

It is sad, because we can be giving mihi to Māori one day, and then the next day we’re passing legislation that will takahē Māori. So here we are again, another piece of legislation—e takahē ana e te mana o te wai. Reflecting on submissions that have been received and considering the fact that there was unity around the lack of engagement with te iwi Māori on the process in this bill. Now, that came through really strongly from Te Whakakitenga o Waikato, Tūwharetoa Māori Trust Board, Te Arawa Lakes Trust, Ngā Iwi o Taranaki, Te Rangapū Mana Whenua o Tauranga Moana, Taumatamakuku, Te Kahu o Taonui, Te Rūnanga o Ngāi Tahu—all said, there’s been a lack of engagement. In fact, this bill needs to give effect to Te Tiriti o Waitangi, this bill needs to give effect to te mana o te wai, and this bill needs to recognise our special rights and interests of hapū and iwi in wai māori.

It’s so disappointing that we’re at this point, because the Crown is not meeting their obligations to Te Tiriti o Waitangi, they are ignoring the fact that councils themselves submitted, saying, “We appreciate Māori at the table.” In fact, Andy Foster, who spoke previously, was one of the biggest advocates for iwi voice at the table in Wellington, and, you know, provided voting rights to my whānau of Ngāti Toa and Taranaki Whānui in the standing committees, plus they got paid the same amount as counsellors. So I mihi to my colleague because, ultimately, Māori at the table is a plus-plus. You get our skills, you get our expertise, you get our tirohanga Māori, and there you go, we’re at the tepu. Co-governance is not something to fear. Ultimately, if we’re all in it together, then we move out into the community together, and that’s what three waters provided.

May I speak to being a previous CEO and working with Waipunarangi for entity A. We spent, as iwi, months and months of time with the transition groups, talking about HR, we were talking about data, we were looking at asset management plans from Tāmaki ki Te Rerenga Wairua. We were working hard with our council colleagues and also with the Department of Internal Affairs—mō te kore take noa iho—[for no purpose at all.] It became nothing and that was such a shame. Ultimately, what was interesting was that many hapū and iwi never had a look at water asset management plans until Waipunarangi lifted the lid for them to take a peek, because councils had had exclusivity in that space. They had not engaged us until there was a resource consent. Waipunarangi opened the opportunity for hapū and iwi to be at the table. What a moumou—it’s such a waste.

As our colleagues have shared, “Hey, there’s nothing wrong with tūtae in the moana. Let’s let the tūtae go out into the moana.” Hey, you know, the whānau in Hokianga went to the Environmental Court and fought against that tūtae to go out into Hokianga Whakapau Karakia. Ultimately, Te Mana o te Wai is the framework that protects all of us—Māori mai, Pākehā mai, tauiwi mai—and Te Tiriti o Waitangi is the central pillar for us to mahi tahi. That is why it is so disappointing that we’re at this point. Why remove Te Mana o te Wai? Why relegate us just back to the Local Government Act and cross our fingers that Māori will get a say? Because if you don’t entrench the requirement for councils to engage with us, then we’re chasing them like we have in the past. Kia ora.

Well, thank you very much, Mr Speaker. I’d just like to point out, actually, every New Zealander has rights and responsibilities and interests when it comes to water. Everybody does, and, actually, this bill restores equality when it comes to governance arrangements and access to water, and that’s as it should be. That’s modern democracy and that’s where we should be.

This bill was great. It’s true it was a shortened report-back date that we had. None the less, we had 182 submissions and actually they were high-quality submissions. The submitters that appeared before the Finance and Expenditure Committee really added to the process, and so I’d like to thank them on behalf of the committee. I’d like to thank my fellow Finance and Expenditure Committee members who worked very hard on this bill in a shortened report-back date, so it really added to this bill.

It had some unique features, this bill. We had to get clearance under Standing Order 295(1)(b) to get the power to consider an out-of-scope amendment, which was Amendment Paper 41, which was appropriate, but I think it’s the first time I’ve struck that in select committee, so it was rather unique, and that brought a lot to the table.

This is the second of three bills. Ultimately, it replaces three waters with Local Water Done Well, which is a fantastic plan, actually. As my colleague from New Zealand First mentioned before, having more Government oversight of what’s going on with councils is a great help, because, obviously, when we look around, some councils have made a real hash of their water infrastructure assets. We don’t have to walk too far from this building to see that bubbling up in the street ourselves. So that was very good.

We had also a good old “Henry VIII” clause. We had a submission from the New Zealand Law Society and the Regulations Review Committee on clause 102 in regard to the danger of it being a “Henry VIII” clause and the dangers around that—well, it is a “Henry VIII” clause; let’s be clear: we looked at the guidelines and absolutely it fits within that. However, the clause doesn’t pose a constitutional risk, because Parliament actually had a policy that that will give effect to. Parliament and the executive gives policy, right? But the executive can’t do that on its own. Having that regulation-making power so an Order in Council can extinguish those particular clauses—that’s what it does. Until the National Policy Statement on Freshwater Management is replaced, that is still in line with the policy intent. So it was a really good lesson, I think, for the committee; a few new members on our committee—I don’t know, probably the first time a “Henry VIII” clause has come up, and it was a very interesting discussion on that.

When three waters came up from the previous Government, I don’t think I’ve seen as many road signs and had so much email traffic about anything, so water is very dear to people. Why is it so dear to them? Because, obviously, none of us can survive without water and none of us can survive, really, as we found out—and I’m sure my colleague Catherine Wedd will talk about what happened in Havelock North—without having clean and safe water, so getting this right is really important.

I congratulate the Minister of Local Government on the work that he and his team have done, and the officials that advised the committee for the work that they did under such a tight time frame, and I think this bill is actually what we need in New Zealand and it gets New Zealand back on the track of democracy. With great pleasure, I commend this bill to the House.

The speaker who just took his seat, Stuart Smith, said this is a bill to get New Zealand back on track. This is yet another example of a Government that is taking New Zealand backwards. We see this through this bill. Up and down the country, before the election, parties of the then Opposition paraded around, telling people across the land that they were going to restore local decision-making and democracy to our water services and that they were going to relieve the cost burden. Labour will not be supporting this bill, because, in fact, on both of these counts, this bill goes backwards. This bill imposes more costs on the ratepayers of New Zealand. Despite the rhetoric of what we’re hearing from members—and I’ll go into it in some detail—actually, there is nothing in this bill to give local councils any comfort that they are going to be in charge of their own destinies when it comes to this.

Let’s talk about that local decision-making, the much-vaunted local decision-making that was paraded around the country prior to the election. One of the things that we know is that the Government talked big about the Affordable Water Reforms, alleging they undermined local decision-making, but this bill that we’ve got fails to provide for community involvement in the preparation of the water services plans that sit within this legislation. Under this bill, the community—and I think this is very important for people to understand—will have no guaranteed right to be part of the process where their local councils prepare the central government - mandated water services plans. I think that’s something that people need to understand very clearly—that there is no guaranteed right for people to have that local say in these water services plans.

There’s a major gap in this bill, and this is highlighted by the bill providing that the consultation must occur to establish, join, or amend council-controlled organisations that are to deliver those plans. The obligation to consult does not extend beyond that. It does not extend to the water services plans, itself; it is merely around the vehicles that will be putting together those water services plans. So anyone who is sitting out there in viewer land, thinking that, upcoming, they’re going to have a chance—and a guaranteed chance—to have a say on their local water services plan, I’m afraid that is not the case. You may well have been misled. You may well have been led down the garden path by a Government that went on the campaign hustings, saying one thing, but has come to the House with a piece of legislation that does the exact opposite.

It does not stop there. One of the things that we know in terms of the vehicle being what is required to be consulted on, rather than the plans, there’s also an obligation to consult imposed on the secretary of DIA—or the Department of Internal Affairs—when exercising the power to make rules in relation to the water services plans. But the secretary of DIA is obliged to consult with named organisations when considering the water services plans submitted by local councils. This is not the ratepayers. This is not everyday people in the street who thought they were going to have a say on what those local water plans would say. There is lots of mandatory consultation embedded in here but none of it is directed at communities. This is not about communities having their say; this is about a Government putting up a bill that is maintaining that control.

The Government does retain the whip hand in this, and I think they need to be very clear with New Zealanders that that’s what they’re doing. We’ll go through some of the obligations that are imposed on councils, and what councils had to say. But here’s the cracker, because the Government made sure they got in here the ability to appoint a Crown facilitator for recalcitrant councils in addition to appointing a Crown water services specialist—so “Do what we say or we’ll take over.” That is what this legislation is saying. So this much-vaunted return of democracy to local communities was nothing but a sham. It is not hiding in this bill. It is not there.

Now, let’s turn our attention to costs, because that’s one of the other key things that, up and down the land, the Opposition—as they then were; they nowadays call themselves the Government for the next two years—went around the country telling people that they were going to reduce costs. They talk about how much we spend on it. That is because we have to, as a country, spend money to upgrade our waters infrastructure. This is not some kind of thing we can put on the “never never” and kick the can even further down the road. What this bill has done is impose a whole lot of compliance on council, but nowhere is there a mention of funding; nowhere is there the ability for councils to actually carry this out. Who is going to pay for it? That still is not clear. Remember, let’s go back to that ability for the Crown to appoint that facilitator; for the Crown to walk in and take over if they don’t do exactly what the Government says. So impose a whole lot of very unrealistic expectations around time lines and what is expected, provide zero funding, but say you’ll walk in and take over if you need to. That’s what we’re seeing in this bill.

What does this mean for New Zealanders in terms of cost? Someone has to pay for this—that the infrastructure needs to be upgraded. Let’s look around our country. Let’s go through some numbers: 15.8 percent rates increases, that’s Tauranga City Council; 17 percent, that’s Kāpiti Coast; let’s look at 18.5 percent, that’s Wellington; and 14.75 percent, that’s Kaikōura. These are the kinds of rates increases that New Zealanders around the country are facing because—and councils are saying this themselves—they have to fund their three waters work. That is what this means for New Zealanders. We’ve seen this much-vaunted community democracy sham. What we’ve seen is imposed costs on New Zealanders in terms of increased rates and having to dig into their pockets because this was a Government that decided it was going to be fun; that dog-whistled some billboards to put up around the country in the lead-up to the general election, and parties who took great delight in doing that, and we’re seeing many provisions of that in this bill.

The problems with this bill don’t stop with the fact it doesn’t return local decision-making; it doesn’t stop with the fact it’s imposing costs on New Zealanders. Let’s have a look at the fact that it fails to protect public ownership. Under Labour’s legislation, there were protections around public ownership—that was not something that Government members were even willing to countenance. One of the things that we said is that we need to ensure that these are assets that stay in public ownership—this is in the public interest to do so. So we have a Government that is imposing requirements on council with no money to do it and a cost that has to be borne through rates increases, yet won’t protect public ownership. I can add: I know what those things usually add up to. I need a Government member to stand in this House today and give an ironclad guarantee that they are not setting up to hock off our water assets and get them out of public ownership. Because the fact they would not commit to that is something to be afraid of.

Now, in my last minute, if New Zealanders needed any greater evidence of the fact that this wasn’t a return to local decision-making, it has happened in this House this afternoon. We had a member of the executive in Simon Court—who is an under-secretary who was sworn in as a member of the executive—stand up and talk about sacking councils if they fail to provide what was expected of them. This is what members of the executive of this Government—how much they value local democracy and local decision-making. That is the very vibe that is entwined through this bill. It is a bill that does not protect local democracy; in fact, it erodes it. It is a bill that imposes cost, and it’s a bill that fails to protect public ownership.

Look, I would just like to answer to the member who’s been speaking, Megan Woods, about costs on the other side of the House and I’ll give her a figure: $1.2 billion of wasteful spending on consultants, on your controversial, divisive three waters—$1.2 billion worth of wasteful spending with nothing, absolutely nothing, to show for it. Nothing to show for it: bureaucracy, undemocratic, centralisation, $1.2 billion on three waters with no delivery. Look, we’re a Government of delivery and we are delivering good legislation which is going to deliver local democracy and going to deliver good water infrastructure.

I am from Havelock North, which is where a lot of this stemmed from. The Havelock North water crisis—everyone will remember it—where four people died. I would just like to acknowledge those families who lost their loved ones and have had their lives changed for ever. I do remember it very, very clearly. It was a Friday afternoon and reports were coming through from our local schools that half our kids were coming home sick. They had a vomiting bug. Everyone thought a vomiting bug was just going around. Little did we know. My husband had left for a weekend of hunting. He’d filled the water bottles up before he left with Havelock North water, contaminated water, drinking it all weekend, becoming sicker and sicker. My young babies were drinking the water and becoming sick. Our whole community literally felt like we were being poisoned by the water. For days, we were drinking contaminated water that was making thousands of people sick—over 5,000 people. This was not OK. Our council was in charge of our drinking water and they failed us. It was horrific. It was like a horror movie. Four people died because we did not have safe drinking water. My neighbour contracted a severe health condition. He’s never recovered.

When water is unsafe, it impacts our most vulnerable, our elderly, our sick, and our babies. Havelock North prompted change. We all know that we must do more to ensure that we have safe drinking water, but the way to do it is through localism and democratic processes. Hastings District Council has already spent $100 million on creating a world first, a world-class drinking-water system. It’s been done locally and it’s been the first in the world. Hawke’s Bay councils were the first to be against the three waters legislation. They got together and they supported National’s “water done well”, because councils support localism and keeping our assets in local ownership, and that is why this is a good bill. It is about localism, it is about democracy, and it is about delivery, and that is why I commend this bill to the House.

I take the points that the member who has just spoken, Catherine Wedd, made about the need for safe drinking water. What happened in Havelock North was a tragedy. People died because the water that came out of their taps that should have been safe was not. This is a deeply serious problem which we need to solve. We need to ensure that the drinking water in this country is safe. So the question is how to do that. What is the best way to do that? How do we ensure that each of us up and down the country can turn the tap on, get a glass of water, and drink it, knowing that it is safe?

On this side of the House, we believe that burden should be shared up and down the country. We believe that all of us need to contribute to that—that all of us need to look after each other. I want to call to the House’s mind a submission that was made by one particular district council. I’m not going to name who this district council was because, frankly, I was appalled by what they said. What they said was, “We’re OK. We’ve spent the money. We don’t care about our neighbours. We don’t care about the people one town over. We don’t care about the people in that district to the north of us. We’re OK. To hell with them.” That was the gist of their submission.

Now, when we looked at that particular district council, it turns out that that particular district council comes from a relatively wealthy area with relatively few urban areas to serve. They were able to charge rates in a way that enabled them to set up their water supplies so that they could do it going forward into the future. But their neighbouring district council was not in such a wealthy area, had not been able to rate in a way that enabled them to build up infrastructure, and was desperately worried about how it could meet the regulations that were to be imposed by that side of the House. Let’s be clear, we need the clean, safe drinking water. The issue is how to pay for it. On that side of the House, they are saying to some district councils, to some areas of the country: “To hell with you—to hell with you. We don’t care that you’ve got to put your rates up. We don’t care that your ratepayers can’t afford it. To hell with you.” That’s the essence of the solution that they’re proposing over there.

We already know that rates are going up dramatically across the country. My colleague Megan Woods ran us through it: 15.8 percent in Tauranga, 17.1 percent on the Kāpiti Coast, 18.5 percent in Wellington, 14.75 percent in Kaikōura. Rates are going up, and in some areas, ratepayers can no longer pay. In the Far North, 20 percent of ratepayers have not been able to pay their latest rates instalment. And this Government over there wants to add yet more costs on to them. We had a solution in place. We had a solution in place that meant that all of us cared for each other in this country, that meant that all of us shared in the burden of ensuring that everyone had clean drinking water, that meant that those of us who live in the urban areas could go to other parts of the country when we’re on holiday and turn the tap on and be assured that the quality of the drinking water was as fantastic as it was in our homes.

We were going to share the cost across the country, because that’s what we do as New Zealanders: we look after each other. We try to ensure that all of us have access to the same standard of living. But not on that side of the House. “To hell with the poor.”, they said. “To hell with the areas that simply couldn’t afford to pay the rates.” They are just abandoning them, and they have no solution in place. This is an appalling bill.

I want to say, first of all, thank you to the Minister and also all of the Finance and Expenditure Committee (FEC) members and all the submitters—people who have written to us, came to speak to us, came to present to us—and all of the FEC members and clerks who sat there and listened patiently to understand their perspectives. Now, this bill is here to provide the preliminary and the foundational provision for the framework of long-term, new, sustainable, certain, water-quality infrastructure for all of New Zealand. So this is actually us giving the framework, giving the powers back to local people who understand what is needed to be done locally for the peoples in our local community.

New Zealanders need better water quality. New Zealanders deserve to have good, clean water. Our future generations need certainty—our future generations need certainty of the sustainable water infrastructure going into the many generations. What New Zealanders don’t need is the waste of time. So, with that, I commend this bill to the House.

Members, the House stands adjourned until 2 p.m. on Tuesday, 30 July 2024.

Debate interrupted.

The House adjourned at 5.57 p.m.