Kedgley Sue: Local Government Act 2002 Amendment Bill — Third Reading 
Kedgley Sue: Local Government Act 2002 Amendment Bill — Third Reading 
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SUE KEDGLEY (Green) 
: 
 Roger Kerr of the Business Roundtable will be listening with enormous satisfaction to this debate today. For 20 years he and the Business Roundtable have been lobbying to privatise our water supplies and the Local Government Act 2002 Amendment Bill is the prize the culmination of 20 years of intensive lobbying. In fact with this bill Mr Kerr and the Business Roundtable have achieved their wildest dreams. This bill once it is passed will allow foreign-owned multinational corporations to own our water assets for 35 years. The bill also lets them get their hands on any other strategic assets without having to consult local people because the bill takes away the requirement for councils to consult before they sell strategic assets. 
Best of all for the bill’s supporters is a little clause that was sneaked in after Local Government New Zealand and others had made their submissions. I am referring to a provision whereby councils can sell any water infrastructure if they believe that the sale is desirable for the success of the joint arrangement. Members of National and ACT have been trying desperately to deny that this bill will allow water privatisation but that clause which was sneaked in at the last minute says unequivocally that any council will be able to sell any water service if it believes that the sale is desirable for the success of the joint arrangement. That is water privatisation by any other name. 
One can only speculate on the intense lobbying that must have gone on in secret by the powerful vested interests—the major water companies Roger Kerr and the Business Roundtable—to get this bill passed. I think it would be very much in the public interest if the public were to have an answer to the question of whether the Business Roundtable and global water corporations made large financial contributions to the ACT Party and the National Party. Perhaps one of the next speakers from National could answer that question. 
There has been a big debate recently in New Zealand about our opposition to foreign ownership of land but what will New Zealanders think when they realise that once this bill is passed in an hour or so our water supplies which have been built up over generations by ratepayers can now be sold to any of the huge private multinational corporations which I might add are literally scouring the world looking for water supplies to take over? They have worked out that as water is becoming increasingly scarce they want to take advantage of water shortages—it is of course a natural monopoly—by buying up water supplies around the planet. 
Once a water corporation takes over a water supply as corporations will now be able to do in New Zealand its goal will not be to protect the public interest or to ensure that everyone has access to safe and clean water. Its goal will be very explicit—to maximise the profits for its shareholders. It does this in three ways. It is almost a formula; these corporations do it all around the world. The first thing they do is sack most of the staff that run the water services. Secondly they charge more for water so the price of water soars and becomes unaffordable for many people who then have their water cut off because they cannot pay their water bill. The third thing they do is run the water infrastructure down. They do not bother to fix the leaks or to invest in the infrastructure. Instead they siphon off the profits to shareholders. 
I will use England as a bit of a case study although I could give examples from all around the world. When the water industry there was privatised the corporations immediately fired 25 percent of the workforce increased the price of water by 50 percent in the first 4 years and slashed their investment programmes. They used the savings to increase the dividend and pay huge salaries to the management and directors of the water companies. While customers faced continual price hikes and the number of people having their water supply cut off tripled company profits soared by 142 percent in the first 8 years. That is what will happen in New Zealand if any local community has its local water supply taken over by a private water company. I was about to say “if the local community allows it to happen” but of course it will not be up to the local community any more because under this legislation the local council will be able to flog off a water supply without having to consult the locals. The locals need not even know about it. 
One of the problems is that once these corporations own or manage a water supply for 35 years or if they sell it under the provisions I was just reading out locals and their representatives will have virtually no say over water supplies for the next generation. The contracts that the local council will enter into will be secret. They will be commercial-in-confidence so ratepayers will be completely in the dark about what the provisions are and about any deal that has been struck between the council and the water company. Many contracts have guaranteed rates of return for the water company regardless of its performance. Chile for example had to guarantee a profit margin of 33 percent to Suez as a condition. 
Another thing is that once these contracts have been signed one is locked into them. It is very difficult to get out of them even if over 35 years circumstances change radically or if a company happens to go bankrupt. What happens then? It is hardly surprising to learn that water privatisation has a terrible track record around the world. There is a huge and growing backlash against water privatisation. Literally all around the world communities are fighting back against the water privatisation of the 1990s. It happened in many parts of the world particularly in Latin America aided and abetted by the World Bank. 
More and more councils and Governments are trying to get out of contracts they entered into with private corporations. France used to be known as the home of water privatisation but more than 40 towns and cities have taken their water services back into public hands. Paris took back its water service amidst huge controversy earlier this year and other countries in Latin America are doing the same. It will be ironic if it happens here just as around the world water companies are being thrown out by grassroots opposition because communities have woken up and understood what happens when they allow water a precious resource one of the life support systems of the planet to be handed over to private corporations who will decide whether to turn off the tap if someone cannot afford it. And of course it is not in the companies’ interests to worry about water quality and so forth. 
Around the world even across the Tasman private water companies are being booted out. Adelaide has decided not to renew the 15-year contract that Veolia Water had to run their water services. Now Veolia Water and all the other private multinational corporations can pack up their bags and come to New Zealand because they have achieved their wildest objectives with the Local Government Act 2002 Amendment Bill. Councils can now not only contract out water for 35 years but they do not need to alert or consult the public and the sinister little clause that National members have failed to mention enables any council to sell its local water supplies to any private water company if the council considers that to be desirable for the success of a joint arrangement. 
We have opened our doors to water privatisation. We have gutted consultation not just for the sale of water but for the sale of any strategic asset. This bill is the implementation of Rogernomics part 2 which is the corporatisation and privatisation of local government in New Zealand.