Parker DavidHon DAVID PARKER (Labour): I hope so. Thank you Madam Chair. The history of the regulation of monopolies in the water space is an illustration of why you actually need it. Theoretically if you have a community-owned monopoly you would think the incentives for excessive profit-taking are not as strong as if you have a private sector owner of a monopoly. But you can still have the problem of under-investment by the monopoly and we've seen that up and down the country in the water and sewage space for a long space which is why we have the problem in New Zealand of poor water quality delivered by some of our councils and inadequate treatment of their sewage. So I accept that history in New Zealand shows that we need a regulatory model around the monopoly services that councils provide for water and sewage.My question though is: what should be the pricing model that we apply to that monopoly? There's been quite a long-time controversy—or not so much controversy but divided views within the economist communities in New Zealand as to whether we've got the right regulatory oversight model and pricing model for our monopolies whether it's water like this case; sewage; electricity transmission; or some of the other monopolies. And there's a very capable economist Geoff Bertram who points out that we run a different regulatory model for monopolies in New Zealand than they do in the United States. In New Zealand we tend to try and value the overall asset base and give a fair return on the overall asset base with some incentive for new investment. In the United States they tend to give a greater incentive to the next investment because you need the next investment in the new piece of infrastructure. So they'll allow a high rate of return on the new investment but they don't increase the value of the existing asset base by inflation they effectively only allow a decent rate of return on that historic cost. So they incentivise the new investment very strongly but they don't allow the old assets to be constantly revalued upwards.My question of the Minister in the chair Hon Penny Simmonds is whether in these arrangements that we are setting for the oversight of the revenue model which of course is associated with the services that are to be supplied by Watercare we are leaving open policy space for that debate to continue in the future. Because I for one think that the experience in New Zealand suggests that our under-investment in infrastructure might suggest that it is worthy for New Zealand to have the policy space to be considering whether we should be reconfiguring the incentives based on the pricing mechanisms that apply or the oversight mechanisms that apply to these providers of monopoly services so that we really incentivise the new investments that we need but we don't unnecessarily lift the value of the asset base and inflate the rate of return that is given on the historic investments.So just to be clear again my question of the Minister is: do we have the policy space in this regulatory framework to allow both of those options going forward or are we effectively putting in place a regulatory regime that entrenches the status quo model that we've seen in New Zealand which doesn't take the same approach as in America?