Lees-Galloway IainHon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you very much Madam Chair. It's a pleasure to speak to Part 1 of the Local Government Act 2002 Amendment Bill (No 2) and in particular to Supplementary Order Paper (SOP) 323 introduced by the Minister a not in-substantive Supplementary Order Paper which makes some reasonably fundamental changes to a bill that was introduced by the National Party when they were in Government. I have to say I'm surprised at the lack of participation in the debate this evening from the National Party because this was their answer to the infrastructure deficit that does exist—that does exist. [Interruption] Oh they're getting noisy now. Take a call lads. Take a call if you want to participate in the debate. But this was their answer to the infrastructure deficit in local government and we do know many councils suffered from years—decades in some cases—of a lack of investment in fundamental infrastructure such as water services transport and roads. CHAIRPERSON (Hon Anne Tolley): The Minister is getting to the bill isn't he? Hon IAIN LEES-GALLOWAY: The Minister is going to get closer to the bill. CHAIRPERSON (Hon Anne Tolley): Part 1. Hon IAIN LEES-GALLOWAY: At the core of this were council-controlled organisations (CCOs). Madam Chair will recognise CCOs multiply owned CCOs—CCOs that cover multiple councils. This was the answer that was presented by the National Party when they were in Government. That was a central part of Part 1 of this bill which has been changed by the Supplementary Order Paper introduced by the Minister of Local Government the Hon Nanaia Mahuta to remove the definition of multiply owned CCOs and to remove that concept from the legislation. I know that many submitters came to select committee and expressed their concerns not only about the lack of transparency the extra layer and the distance between the voters and their democratic right to control the assets owned by their council on their behalf by CCOs but the concern that the creation of these multiply owned CCOs that would control infrastructure across a number of councils could create an incentive for a Government that was so minded to embark on a privatisation regime creating a significant asset that was at arm's length from the council—already partially corporatised it's not a big step then to take the next step to privatisation. That was a significant concern of many submitters and that is I believe—and I would appreciate some clarification from the Minister if this is the case—part of the motivation for removing those multiply owned CCOs from this legislation. But also on this side of the House we do not necessarily believe that the corporate mentality the corporate approach is the right approach or is a better approach for controlling what are essentially monopoly assets. You're not going to get competition in water services whether it be the provision of drinking water or the treatment of waste water. This is not a business proposition. This is not something where you're going to have multiple actors competing against each other to provide the best service to the public. This is by its very nature a monopoly service and by and large on this side of the House we believe that the services that have monopolistic characteristics like that are best provided by the State or by some other public entity—in this case the local council—because that gives local control over local assets and provides democracy and transparency whereas what you get when you have private control of monopolistic assets is often price gouging because there is no competition. There is no one else to create an incentive to drive down prices or to make sure that they are run in the most efficient way and what ends up happening is the private owners take the opportunity to generate as much income and often—I heard someone on this side saying—asset stripping. That occurs as well. So the claim from the one member opposite who has deigned to participate in this debate so far that taking a corporate approach results in more efficient more effective delivery of public services—[Bell rung] Madam Chair. CHAIRPERSON (Hon Anne Tolley): I call the Hon Lees-Galloway—Iain Lees-Galloway. Hon IAIN LEES-GALLOWAY: Yeah Lees-Galloway"—to my friends. It is I think demonstrably wrong and we have multiple examples of this happening not just in New Zealand but around the world as well. "Private" and "corporate" do not automatically mean better and in this case when you're delivering public services monopolistic services that are a fundamental piece of infrastructure required by everybody living in a community on this side of the House we believe they are best delivered by public entities and with public control—not the arm's length council-controlled organisation but actually owned by the council under public control. I notice that one of the provisions which have been changed by the Supplementary Order Paper is to remove the requirement to align the objectives of a CCO with the priorities of central government. So not only was there a privatisation agenda behind some of these changes but very much an agenda of central government takeover of locally owned assets and this is a great concern to many councils—that they fall under central government. There are often regulations and laws passed by us in central government and they are expected to deliver on them but they certainly are concerned about central government agendas impacting on their ability to deliver local services. So again I'm very pleased to see that the Minister has introduced the SOP that also does that. It's absolutely securing the role of local councils as the owners the operators and the controllers of that local infrastructure. I don't think my voice will last a heck of a lot longer so I will just finish by saying that I support the SOP introduced by the Minister. I have to say given that this was the Opposition's great answer to these issues when they were in Government I am surprised that we haven't heard a more vehement defence of their position in this debate. Clearly they've realised that this side of the House is right and they were wrong all along."