Mooney Joseph; Salesa Jenny; Webb DuncanJOSEPH MOONEY (National—Southland): Thank you very much Madam Chair. Minister I just want to ask some more questions around this—the purpose of this part and how some of the issues that were identified in the regulatory impact assessment on this are going to be addressed. The problem definition I suppose is that there's been an establishment of four financially and operationally independent water services entities which are intended to address current problems of poor water quality in some places and customer service insufficient infrastructure investment and inefficient pricing practices. But what they also will do is these four new entities will create natural monopolies and there won't be necessarily these strong members or directors of those monopolies who will have incentives to ensure that these inefficiencies are addressed that the community voice is expressed and ultimately that people get good quality service for a reasonable price.I'll just read a little bit of this regulatory assessment. It says Without economic regulation the monopoly nature of the entities combined with the lack of equity market and local government oversight will likely be detrimental to consumer welfare. This is because the entities will have the ability and incentive to charge higher prices and provide services that are lower quality and less efficient and innovative than what would be seen in a workably competitive market. There is also an inherent power imbalance between large vertically integrated monopoly suppliers and the consumers they service creating a risk that customers of the four new entities will suffer unsatisfactory outcomes."So if I look to the purpose of this part which is to promote the long-term benefit of consumers of water infrastructure services in markets where there's little or no competition and little or no likelihood of a substantial increase in competition I'd be curious about how this will address these issues raised of a natural lack of competition or will actually reduce the competition potentially that's available with these four large monopolies which would have a natural incentive to charge higher prices offer lower services and less investment.If I think about my region I mean my electorate alone is bigger than Belgium. That's just one small part of the lower half of the South Island and we have these large areas where there are very many many hundreds of kilometres between different settlements in some cases across the lower South Island. How will there be the ability to ensure that those areas actually have better investment? Because obviously there will need to be decisions made about where to invest. There won't necessarily be sufficient capital available for investment in all things. And if I just look at say Gore—like how will the needs of Gore in terms of this be expressed in a monopoly that's also concerned with say the needs of Christchurch? So just how are you going to deliver on this issue that's identified with the natural monopolies that these entities will establish?CHAIRPERSON (Hon Jenny Salesa): Before I call the Minister if I could just say to members there's been quite a number of questions just about this particular part clause 12 "Purpose of this Part". It's beginning to be a bit repetitive but I will call on the Minister if he wants to address this again.Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you Madam Chair. Good to see it comes back down to the interests of Gore. I would invite the member to catch up. There's now 10 entities so Gore won't be part of the same entity as say Christchurch and that was in fact one of the drivers of that under Minister McAnulty which was indeed to ensure there was a better local voice.One of the changes there—a separate bill but happy to just comment on it briefly—was to ensure that each local body would have a voice in the governance structure of those entities. And of course ensuring the long-term benefit of consumers which is this bill—the regulatory aspect of this bill includes all consumers. I note that one of the very good improvements of the Finance and Expenditure Committee was to identify vulnerable customers. Now that might identify as perhaps people on low incomes but I think it also identifies people in rural locations who might not otherwise get good access to water services. So those things have been addressed and I think we're in a good space in that regard."