11. Question No. 11—Local GovernmentSIMON WATTS (National—North Shore) to the Minister of Local GovernmentQuestion No. 11—Local Government11. SIMON WATTS (National—North Shore) to the Minister of Local Government: Does she stand by her statement on the Three Waters reform that There are two areas of the Three Waters reform programme that I underestimated and I acknowledge that's my responsibility" and is she confident it is only two areas she underestimated?Hon NANAIA MAHUTA (Minister of Local Government) (remote): Thank you Mr Speaker. Yes and to elaborate further I stand by my comment that it is not widely understood by the public just how bad the situation in relation to the current performance and future challenges of Three Waters is. It shouldn't take burst pipes waste-water overflows or unsafe drinking water with boiled water notices for us to take notice and care about water infrastructure and service delivery. After three years of review the evidence was so overwhelming there was no other option than to proceed with reform. Continuing to ignore the problem in the face of now compelling evidence would be irresponsible and the status quo is not an option.Simon Watts: Does she stand by her statement that "I underestimated that the public really knew what was happening with pipes under the ground and they had a lot more knowledge about the trade-offs that councils were always making"; and if so will she now give actual consideration to the alternatives like those proposed by Communities 4 Local Democracy?Hon NANAIA MAHUTA: Yes I stand by my statements that the public did not know the trade-offs that councils were continuing to make between what was being spent above the ground and below the ground. And in addition to that I consulted with local government to ensure the approach to reform of the Three Waters infrastructure and service delivery arrangements were one that kept the affordability issues for ratepayers in front of our opportunity to reform as well as Treaty settlement obligations—which was a matter raised by the sector—as well as separating balance sheets to enable a financially sustainable model for the ongoing investment in waters infrastructure. Simon Watts: Does she stand by her statement that "the advertising campaign wasn't the best way to tell the message"; and if so will she apologise to local councils for spending $4 million in taxpayer dollars on a campaign blaming them for water infrastructure failures?Hon NANAIA MAHUTA: As referred to in my response around a miscalculation of the sensitivity around the advertising campaign I want to draw a line under the criticism on that issue because it was one where the sector felt that they were being blamed for decades of under-investment in waters infrastructure. But if we look at the budget that was appropriated—and that was around about $3.5 million—$2.8 million was spent in advertising including TV advertising print advertising and social media advertising. I still stand by the view that we need to do more to educate the public with facts around the parlous state of the waters infrastructure network and the need to invest more. Simon Watts: Has she also underestimated the ability of her water entities to achieve balance sheet separation and financial benefits; and if not how can the public be confident given her recent underestimations?Hon NANAIA MAHUTA: I think the member might be conflating a number of things because I'd like to acknowledge the contribution of the governance working group who recently in their recommendations identified a number of areas where we can strengthen the governance representation and local voice aspects of the Government's reform programme to ensure that there is greater line of sight between the aspirations of community and the ability to invest in waters infrastructure. At the end of their recommendations they go on to say that the Government will need to test those recommendations in relation to credit rating and the ability to separate balance sheets.Simon Watts: Given she now acknowledges she underestimated the public's understanding of water infrastructure and trade-offs will she recognise that the majority of the public rejects her reforms and so it's time for her to rethink Three Waters?Hon NANAIA MAHUTA: I join with the local government sector who admit that further work needs to be done to ensure that the public gets good information about the parlous state of waters infrastructure and the need to invest more in that area. The modelling that we have done proves that there is around about $125 billion to $195 billion needed over the next 30 years to ensure greater resilience in our waters infrastructure. We need to find a financially sustainable way to achieve that. At the heart of our reform programme we are trying to separate balance sheets between councils and the ability to invest in water infrastructure. The model that we have in front of us seriously enables that opportunity and it will be a total sum benefit to the affordability aspects that ratepayers are currently challenged with."