Sage EugenieHon EUGENIE SAGE (Green): Tēnā koe e te Māngai o te Whare. I'm pleased to take a call on the Water Services Entities Amendment Bill. Can I acknowledge the value of the change in Standing Orders which allows members of parties who don't have a permanent representative on a select committee to attend. I really appreciated being engaged with the Governance and Administration Committee and acknowledge the chair Ian McKelvie and the deputy Rachel Boyack for quite constructive discussions.It was a really truncated consideration period of just over a month which did lead to challenges particularly for submitters with the limited time that they had to analyse and comment on the bill. But the committee did the best job it could and I would also like to acknowledge the work of officials from the Department of Internal Affairs the Parliamentary Counsel Office and select committee staff for the work that they did as well. It was a lot of work to get done in a very constrained period.The Green Party had opposed the principal Act and we continue to oppose the corporatisation ethos that's at the heart of this but we recognise that there do need to be significant changes in the provision of three waters and that this bill does take on board the concerns of local councils and many members of the public in ensuring that there is much stronger local representation and that the entities are better connected to local communities by increasing the number of entities from four to 10. So we will be supporting the bill.We also continue to oppose having stormwater connected with drinking and waste water and passing to the entities. Because stormwater is so related to planning to the way our cities and towns grow to the provision of green space recreational areas to ensuring that nature can absorb stormwater this is a major problem in the principal Act: that it has stormwater passed to the entities.But turning to the bill there were quite a lot of submissions about the start date the go-live date for the entities and quite a lot of concern about the uncertainty that having Orders in Council to establish the go-live date created not least from the unions—the PSA and E tū in particular—because of the uncertainty that that created for staff and councils who will be transferring or going across to the entities. We heard quite a lot of submissions on this and Entity A—Northland and Auckland councils—is the only entity that has its establishment date in the legislation. But the committee stuck with having the Order in Council process because there wasn't enough time in our truncated consideration to reach a consensus across councils mana whenua and stakeholders over what the golive date for each entity should be.There was certainly useful feedback from the representatives of the National Transition Unit on what they had been hearing on the roadshow. There is some discussions about that but there were changes in relation to requiring consultation before the Order in Council established a go-live date and ensuring that those Orders in Council are released six months after the bill becomes law. So there is increased certainty there.The staff retention issue which others have commented on was quite a big one. The committee did consider whether there should be specific provision for the nature of retention payments in the bill but local authorities already have an ability to offer retention payments for staff. There are some 7500 staff working on three waters across councils and council-controlled organisations around Aotearoa—people with a lot of expertise a lot of knowledge—and it's really critical that they stay in this water service space because otherwise there's potential disruption to council services and also a loss of expertise going across into the entities.So the provision that the committee inserted around collective bargaining and enabling collective bargaining to occur through the Department of Internal Affairs or representatives that they nominate before the entities are established should assist there in ensuring that the importance of those employees in councils and their expertise is really well recognised. There was the issue of potential loss of staff from the entities that are established first poaching others. We did understand too that while retention payments in the private sector could be between 10 and 25 percent of salary it's likely to be much smaller in this space.Going on to another issue of representation because we've now got 10 entities and there is now in the bill no minimum or maximum in terms of the representation from councils—in terms of their numbers—it's up to the councils to really negotiate that amongst themselves in the entity areas and to establish that through their constitution; other than Northland and Auckland where the numbers of representatives from the contributing councils are set out in the bill. There's one issue here: in terms of Canterbury - West Coast that will have 30 members on the regional representative group and big metros like Christchurch City Council are potentially then underrepresented because they may be able to negotiate with other councils that they should have more than one representative but the principal Act ensures that votes cannot be weighted; that they're all equal. So there is a real issue in terms of that formation of the entities about the number of representatives that goes to the metropolitan councils so that they are truly representing their communities and the populations in those communities.There are other factors in the bill in terms of the scale of infrastructure and delivery needs the relative urban growth and development which can contribute to that process of determining how many representatives each territorial authority gets on the regional representative group but groups that are 30 in size I think will find it quite challenging in terms of how they operate just because of the sheer number of mana whenua and territorial authority representatives that are there. Again the issue of balance sheet separation was really what was driving this issue of ensuring that councils are distant from key decisions. We seem to be being informed by what Standard & Poor's wants to ensure that you get that balance sheet separation and that is influencing the representation arrangements. So I don't think they're as democratic as they could be.One other issue that the select committee spent quite a lot of time on was shared services because of the desire with 10 entities to retain the efficiencies that you theoretically get with four entities—so the ability of the Minister to provide quite a lot of direction around what services should be shared. I understand that the Department of Internal Affairs through the National Transition Unit is wanting to establish a digital shared service which will be jointly owned and controlled by all 11 entities once they are established to operate the corporate systems technology how people access and store documents how they receive emails how they interact with customers and also the system of record in terms of asset management.The costs of this are going to be significant. The previous member Simon Court talked about $500 million. The regulatory impact statement estimates that $150 million has been budgeted for the shared services work. Particularly in the IT sector when a number of councils already have their own IT systems just combining these or just having one multinational provide one system across the country might sound efficient but I remember Novopay. This whole area of IT needs to have a very robust business case and very close ministerial scrutiny and accountability to ensure that we don't get some of the IT disasters that we've seen in the past when you're going to just one system. I think it creates almost a monopoly so it would actually be better potentially to have a couple of providers so that there is no monopoly situation with just one provider.The committee did amend some of the provisions to put a check on the Minister's power of directions and as the Hon Rachel Brooking in making the first speech in the second reading noted there is now no ability for the Minister to provide direction around shared services after that 1 July 2026 debate and there were some other constraints put on the Minister's power there. The bill has been improved—as bills always are—through the select committee process and it's unfortunate there wasn't more time.