Sage Eugenie: South Taranaki District Council (Cold Creek Rural Water Supply) Bill — Instruction to Committee In Committee 
Text is incorporated into the Bound Volume 
Sage Eugenie: South Taranaki District Council (Cold Creek Rural Water Supply) Bill — Instruction to Committee In Committee 
[Sitting date: 20 February 2013. Volume:687;Page:8057. Text is incorporated into the Bound Volume.] 
EUGENIE SAGE (Green) 
: 
 I am pleased to take a short call on the South Taranaki District Council (Cold Creek Rural Water Supply) Bill. 
At the first reading the Green Party supported the bill’s referral to select committee but when we did that we signalled our view about the importance of safeguarding water in public ownership and our concern about any erosion of that. We also signalled that we had quite significant concerns about the very low level of consultation with tangata whenua undertaken by the South Taranaki District Council and we looked forward to those concerns being allayed by further information from the bill’s sponsor the Hon Chester Borrows or by submissions to the select committee. But what we heard at the Local Government and Environment Committee from submitters exacerbated rather than allayed those concerns. That is why the Green Party is opposing the bill because it enables the privatisation of significant water infrastructure and because it potentially continues more than a century of injustice to Taranaki iwi. 
As the Hon Annette King noted the bill itself does not privatise the infrastructure but it provides the mechanism to do that. I think it is worth noting that the scheme itself does not supply water; it is nature that does that. It is thanks to the water cycle to the rain to the seepage and then to the slope of Mount Taranaki and the evaporation that we get the water cycle and that we get the water that the scheme is then able to deliver. It is very generously provided by nature. 
We do not support the bill’s divestment of the Cold Creek water supply because on principle we believe that significant community assets should stay in public ownership and be managed to deliver benefits to the wider community and not just the users of the scheme. It was never very clear to me through the submission process nor listening carefully to the bill’s sponsor what the rationale was for privatisation. Certainly the council had given some commitments some time ago that the scheme could be divested but the actual rationale for that is still unclear to me. The Hon Annette King talked about tidying up but just what is it in the way that the scheme has been operated to date that is so problematic? 
Labour members in particular will be very aware of the Local Government Act 2002 and the quite explicit provisions in that Act in section 130 that create a strong barrier to privatisation of water infrastructure. Those provisions were inserted for a reason: to protect these assets in public ownership. 
Nor was it clear from submissions as to just what is the exchange of value that would occur if the scheme was privatised. Would Cold Creek Community Water Supply Ltd be paying for the scheme or would it be privatised for a peppercorn the scheme shareholders getting the substantial benefits of the construction of the scheme which was made possible as we know by quite a substantial Crown grant through the Ministry of Works of $1.28 million? That Crown grant paid for half the construction costs. The scheme would not have gone ahead if it had not been for that. Certainly there has been a sizable investment by users of the scheme both financially and in work to operate the scheme but it seems to me that it has been very much a partnership between those using it and the council. 
As the Department of Internal Affairs noted in its report there were quite significant amounts of staff time and council resources that were devoted to the scheme in the 1980s. That support was in terms of providing meeting administration support organising the levies and the contributions and doing the financial reporting and it was the county engineer and other staff who managed and supervised the scheme’s construction when it was first built. It was only in 2001 that the water supply company took over the day-to-day operations but even then it has been the council that has continued to treat the water and has charged out its services for doing that at what the department says were very friendly rates and lower than market rates. So it has been one of partnership. 
Mr O’Connor talked about an $8 million cost for doing more works to upgrade the scheme but it is unclear to me as to why the company would be wanting to take over that potential cost if there were not substantial private benefits from owning the scheme. It is not being run as an irrigation scheme at the moment but we know that water is the new gold and that there is the potential to do that in a drying climate and then deliver quite substantial benefits to private users. 
That is one reason we are opposing it: the privatisation. The other is the concerns that iwi have raised. The scheme’s privatisation potentially reduces the rental return to Maori land holders who have leases in perpetuity over their land in the scheme area. It is the leaseholders who would own the scheme not the landowners. So that whole privatisation process may in fact reduce the value of the land for those Maori owners and we have heard concerns from a number of iwi and the Taranaki iwi group about the inadequate consultation and that their interests have not been adequately recognised. 
We will be supporting Supplementary Order Paper 179 which is in Andrew Williams’ name because that would ensure that the referendum was open to all of the residents of South Taranaki. That in our view is a much more democratic option and it would help recognise that there was significant public funding involved in the construction of the scheme. Also it is important because when the council talked about the divestment in its long-term plan it did not do that in enough detail for people to be really aware of what was going on so the referendum is an option to make sure that the whole of the district community can have their say. That would be a slight improvement to the bill but because of those concerns about iwi interests and the fact that it would set in train the mechanism to privatise the scheme the Green Party will be voting against the bill.