Mahuta NanaiaHon NANAIA MAHUTA (Minister of Local Government): Thank you Madam Chair. I think the member very well made his case quite clear on a number of fronts—and clear to the extent that he is correct; the bill does not enable shares to deliver a dividend to shareholders. The reason for that is to provide safeguards around the model that we have which is a public model of water service delivery and an interest that preserves—going forward into the future—the nature of interests in relation to public assets and how they can be leveraged and used for a broader benefit.But let's just take that member's point and take it to a natural extension because if dividends were ascribed to a shareholding interest it defeats the purpose of the bill. And what we may end up finding is that again if dividends were ascribed to a shareholding interest we wouldn't be doing what we said we need to do which is invest in infrastructure which has been underinvested in for some time. So that's one element of it.Let me come to Watercare. The member asked the question that if this is going to work Watercare is a really good example to show how it could work. What we know right now is that Watercare is constrained by Auckland Council's debt limits.Andrew Bayly: Different points.Hon NANAIA MAHUTA: No no it's not. In fact fundamental to clause 166 is to get balance sheet separation to enable water services entities to be able to debt finance into infrastructure which are long-life assets and to leverage from the aggregated assets debt and liabilities under their purview and then enable councils to have a shareholding interest and direct the way in which those water services entities operate.But let me come back to Watercare because right now Auckland Council's long-term plan has the average water bill increasing 7 percent in each of the next two years followed by 9.5 percent per year for the following six years and that's by the disclosure of Watercare's own numbers. Over 10 years this would see bills for Aucklanders increase from $1069 to $2261. Now even in a city like Auckland where aggregation has taken place where they have seen the advantages of services through Watercare further efficiencies can be gained through this reform model. A study was done and it demonstrated that this was the case.So despite being our largest city and benefiting from the earlier decisions to amalgamate what we know is that Auckland has significant challenges still outstanding. So recent work with Watercare showed that there is still scope for further efficiencies with the potential of 55 percent efficiency gains over the next 10 years. But in the event that we continue with this reform programme and create Entity A I am informed that the additional borrowing capacity of Entity A compared to the collective council borrowing capacity under the status quo will unlock an additional $1.2 billion for the council to invest in communities across Entity A—and that's got to be good. Why? Because Watercare now in the current situation has deferred renewals and maintenance initiatives across Auckland for about two to three years because they cannot fund that—and that's not including growth assets.If we know anything—if we've been observing what's happened in Auckland over the last at least two or three years—the Government has to step in to support critical investment to support infrastructure such as the provision of housing. Now if we want a future that takes the challenge off council balance sheets puts the responsibility into these water services entities by doing so and ensures that also the Government is released of some of that burden which it is currently picking up—because taxpayers and ratepayers are the same people—then the water reforms that we're proposing provide a solution to those challenges.