Local Government Act 2002 Amendment Bill — Second Reading 
Local Government Act 2002 Amendment Bill — Second Reading 
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Local Government Act 2002 Amendment Bill 
Second Reading 
Hon RODNEY HIDE (Leader—ACT) 
: 
 I move  
That the Local Government Act 2002 Amendment Bill be now read a second time 
. This bill aims to improve financial management transparency and accountability in local government. It will also remove unnecessary consultation requirements and level the playing field for private sector participation in providing local government services. 
First I refer to the provisions to improve financial management in local government. The bill requires councils to develop a financial strategy that includes limits on rates and debt levels. Critics suggest that the strategy will stop councils from responding to community needs. This is incorrect. Councils set their own rates and debt limits and can exceed those if necessary. If disaster strikes the bill will not prevent a council from responding. The financial strategy will encourage councils to be rigorous in prioritising spending proposals and to provide clearer accountability over expenditure and funding. Councils need not fear ratepayer scrutiny if decisions are made wisely. 
Prudent financial management for any organisation includes sticking to core businesses. These are the services that local government must pay particular attention to because they are fundamental to what a community is. This bill requires councils to have particular regard to the contribution of those services to their communities. It does not direct them to be provided but reminds councils to consider these services during planning and decision making. 
Normal financial reporting practices allow much variation on how councils report their affairs. This bill will make council accounts more transparent and allows regulations to be made for standardisation of some accounting disclosures. It also introduces an additional accounting statement that councils must produce which is a funding impact statement. 
It promotes transparency in the management of council infrastructure. Providing roads water services stormwater disposal and flood protection are core local government activities and take the greatest part of council investment funds. If councils neglect infrastructure the future cost of restoring those services would be huge. The bill requires councils to show each service separately in plans and reports with clear information on planned and actual capital expenditure. This gives ratepayers a clearer idea of how prudently councils manage assets on their behalf. 
It is important that ratepayers can compare services offered by the council with those offered by others. Developing standard performance measures enables that comparison. This is not a ploy for central government to tell local government what level of service to provide; each council will still determine its performance targets. The select committee recommended changes to clarify this provision—thank you. The result should be a simple set of measures that informs ratepayers about the major aspect of each service whether it is provided by a council or a council-controlled organisation. 
The bill proposes that councils produce a pre-election report before local authority elections to give candidates and voters important information at a time when elected members can be held to account. The select committee recommended two changes to this provision. One slightly narrows the report’s scope so that the chief executive’s responsibility is limited to statements of fact. The other provides an alternative reporting option for small councils which have limited reporting capacity at this busy time. 
The bill proposes substantial changes to the Act’s community outcome process. Councils should not have to coordinate wide-ranging community debate about services they have no direct responsibility to deliver or fund. This makes them appear accountable for things that they have no control over. The bill also changes some of the Act’s provisions on public consultation such as repealing councils’ requirements to consider the views of affected and interested people four times during decision making. The courts have interpreted this provision strictly. This is leading to repeated and meaningless consultation. Although councils must still consider the views of such people the when and the how is for them to determine. 
The bill repeals section 88 of the Act relating to proposals to contract out activities. This means only that councils need not consult ratepayers about changes in how a service is delivered. Proposals to change the quality or quantity of service still require consultation. We doubt ratepayers greatly care who mows the council’s sportsgrounds as long as they are mown in the most cost-effective manner. The section 88 consultation requirement is unnecessary and repealing it allows councils to get on and manage their services. 
Finally I want to raise the proposals on water services. Local government should have the option to use the private sector to develop new water services investments. Choosing that option is a decision for each council. An example which was established before the 2002 Act is Wellington’s sewage treatment plant. It was built and is operated by a private company. The arrangement works adequately and I doubt that most Wellingtonians know or indeed care that the plant is privately operated. We cannot see why other councils should not have that option. The bill is clear that councils cannot sell existing water service assets to private companies unless it is incidental to and desirable for the proposal’s success. If a private company were building a new treatment plant the council could sell the land on which it was to be sited but not the rest of the network. The bill as reported back also clearly prohibits concession arrangements like that currently operating in Papakura. This bill is not about privatising water services. Local authorities will remain responsible for providing water services but may contract private partners to assist them to do that and they should be able to do so. 
I thank the Local Government and Environment Committee for its excellent work on this bill and particularly the chair of the select committee Mr Chris Auchinvole who has done an outstanding job and a great service to the people of New Zealand particularly those in his own district. The committee has been attentive to submitters and its changes will aid significantly in achieving the bill’s intentions. I commend this bill to the House. 
PHIL TWYFORD (Labour) 
: 
 I preface my comments by congratulating the Minister of Local Government the Hon Rodney Hide on announcing to New Zealand today his impending nuptials and impending addition to his family. I warmly express best wishes to the Minister and all happiness for his family. 
What is the Local Government Act 2002 Amendment Bill? It is the bedraggled and washed-up remains of Rodney Hide’s nutty Business Roundtable - inspired agenda to remake local government. He set off around the country last year with his TAFM paper otherwise known as the paper on the transparency accountability and financial management of local government. That paper contained a number of elements that alarmed New Zealanders. It contained his proposal for a list of core services that councils would be required to limit their activities to. It contained his rate-capping agenda. It contained proposals for mandatory referenda. If councils wanted to stray from his arbitrarily prescribed list of core services or if they were going to deviate from previously established limits on rates they would have to put that proposal to a referendum. It also contained an agenda for the deregulation of municipal water which the Minister followed up by recommending to Cabinet the total liberalisation of the ownership of municipal water. That would have led to a sweeping away of every single control that exists currently in legislation for the public ownership of municipal water. It is a recipe for small government and an extreme right-wing prescription that really lives only in the imaginations of the members of the ACT Party. 
The Local Government Act 2002 Amendment Bill bears little resemblance to the mad agenda that Rodney Hide trotted around the country last year. One word explains the difference between these two things: Auckland. Auckland became for Rodney Hide and this Government a political disaster zone. His stewardship of the Auckland super-city reforms seriously dented the Government’s political standing with voters in Auckland which holds one-third of the population of New Zealand. His principles and policies to corporatise local government and open up assets for privatisation alarmed Aucklanders so much that a solid 50 percent of them registered serious concerns about his Auckland policies for the last year. Those concerns contributed I believe to the election of a mayor and a council who utterly rejected Rodney Hide’s policy prescription for local government. There was a massive public backlash against his policies: the over-centralisation of power the corporatisation of three-quarters of local government in Auckland and the total lack of consultation and democratic process with which he proceeded to implement the Auckland super-city. 
So I ask what remains in this bill of Rodney Hide’s agenda. Well there are the provisions for water privatisation which will allow a council to contract the private sector to deliver water supply services for periods of up to 35 years—35 years. That is 11 electoral cycles; that is a contract one or perhaps two generations long. This bill legislates for private sector contractors to be able to own water infrastructure for the duration of those contracts. What is worse than the fact that a council will be able to contract out water services for 35 years is the fact that—and this alarms New Zealanders even more— it can do it in the dead of night without consulting anybody. It can contract those services without saying a damn thing to ratepayers who have paid for those assets and whose parents have paid for them with their rates over generations. We will be talking more about the provisions that allow private ownership of treatment plants dams pipelines—private ownership of water infrastructure—during 35-year contracts. 
What else is in here? There is a raft of cuts to the current statutory requirements for councils to consult their citizens. For example if a council wants to contract out public services to the private sector it can do so without saying a thing to its ratepayers and citizens. If a council wants to transfer services to a council-controlled organisation a council-owned company it can do that under this bill without saying a thing to its citizens—without consulting the public. 
The bill contains the provision for core services albeit in a watered-down form. Clause 5 introduces a narrow arbitrary list of core services that councils must pay particular regard to. We believe—and many many submitters to the Local Government and Environment Committee believe—that the list will tilt the playing field in favour of the listed core services and make it more difficult for councils to do many of the things that New Zealanders consider to be very important functions. Mr Hide’s list of core services does not mention environmental protection economic development or social development like for instance pensioner housing. We see in here a watered-down remnant of Mr Hide’s desire to have a rate-capping mechanism to stop councils increasing their rates and we see also that the financial strategy binds councils to limit rates increases and budget expenditure. We will discuss that some more in the Committee stage. 
A number of other issues which are probably the least offensive provisions in this bill relate to financial transparency: the requirement of a financial strategy a pre-election report and a funding impact statement. We are in general support of these provisions with some exceptions but I note that the preponderance of submitters to the select committee was lukewarm at best about them and the overwhelming verdict of the local government sector was that the provisions would have very little consequence if any. A number of the councils said that the main result of the provisions would be a whole lot of extra compliance requirements and significant extra cost to the ratepayer. That will be one of the significant legacies that Rodney Hide—the “Minister of Ratepayers” as he likes to call himself—delivers to New Zealand ratepayers through this bill. 
What did the select committee make of all this and what did the people think? Overwhelmingly people submitted against the bill. By my count there were 414 submissions in total; 360 of those 414 submissions were expressly against the water privatisation provisions—360 out of 414. I think that is a damning indictment of Rodney Hide’s policies. 
Louise Upston 
: How many of them were form submissions Phil? 
PHIL TWYFORD 
: Almost none of them—almost none of them were form submissions. The member might like to go back and check the pile of submissions and she will find that very very few—probably only a handful of them—were form submissions. There was overwhelming public opposition to the water privatisation provisions in this bill. No one except the Local Government Forum which is the Business Roundtable with its local government hat on thought that the core services idea was sensible. Hardly anyone had a good thing to say about it. I am amazed that the Government has seen fit to leave the core services provision in the bill because no one had a good word to say about it. I do not understand that. 
The great majority of individuals who submitted on the bill thought that the cuts to consultation were appalling. As I said the main verdict on the transparency provisions and financial reporting was that it was going to lead to a significant increase in cost to the ratepayer. 
The most galling thing about this process is that this bill is the latest bill that Rodney Hide has brought to this House that takes away the democratic rights of New Zealanders in local government. What do we see? Yet again he is pushing through a bill under urgency that weakens our democratic process and our public institutions. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 I am delighted to stand before the House today to support the Local Government Act 2002 Amendment Bill in its second reading. All one can say with regard to the previous speaker Phil Twyford is “What about the bill Phil?”. We heard an awful lot of criticism of what the bill might do and we heard how Phil felt but we did not hear much about the bill itself. I know that in his heart of hearts Phil thought that parts of it were not too bad at all. 
As the chair of the Local Government and Environment Committee I am very cognisant of the need for this bill to be passed into law and of the issues surrounding it. I would like to thank the select committee for working so tirelessly—all members—on making the bill the bill it is. I think we have got the balance just right. If I may I would like to commend the Minister of Local Government for introducing the bill and bringing these things into good order. 
In spite of what we have heard from the previous speaker I found and I continue to find that local government is supportive of the thrust of this bill. It is supportive of it. When we think about it we realise that local government really is a business. Businesses like to be accountable to their shareholders. They like a good relationship. This bill will help local government to have a better relationship with its ratepayers. 
The general purpose of the bill is to make local authority decision-making more transparent and more accountable. There is really only one question that needs to be asked—only one question. Does the bill do that? The answer is yes it does. The bill also reflects the principle that local authorities should focus on core services and operate within a defined fiscal envelope. Members on the other side of the House should think of those people who are on fixed incomes; when they see rates going up it is a bit overwhelming for them. This bill defines the activities. It will simplify the decision-making process and level the playing field to better enable the private sector to deliver council services. That will improve the financial management of local Government. 
But let us look first at the issue of transparency and accountability. I would like to acknowledge the minority view of the Opposition—so roundly expressed as detailed in the select committee report—that this bill would do the opposite of what it intends to do. Let us see what those members say to explain how misguided their view is. Labour and the Greens believe that by removing some consultation requirements the bill could undermine transparency and accountability. I would like to assuage their fears: this will not be the case. One must remember that the proposals in the bill have been considered and designed in terms of the broader decision-making framework of the Act. We have only to ask builders contractors—people who are dependent on work from councils—whether they would like to have available to them this sort of future planning and they will say yes. The majority of the provisions that allow local people to continue to be involved in council decisions and to be consulted on important issues are retained in the Act. 
The Act also contains several principles relating to local authorities requiring them for example to conduct their business in an open transparent and democratically accountable manner. I do not know of many council officers who if we asked them whether they are happy to do that would tell us otherwise. They are already required to give regard to community opinions. This bill will provide councils with greater flexibility and discretion to determine how to give effect to this principle. It seeks to simplify council decision-making processes and remove some of the more prescriptive elements of the Act so that consultation is not merely a quick tick-box exercise. 
Phil Twyford 
: Speak from the heart. 
CHRIS AUCHINVOLE 
: Very well if the member wishes. Phil Twyford has asked me to speak from the heart. Well I was not really going to do it I say to Phil but honestly his point about privatisation of water could not be further from the truth or further from the mark. The member is completely wrong on that one. I look forward to the various parts of this bill being read and I think we will have fun with that one. No council will be compelled to use private services to extend its water. Members should think about it from a business point of view—but maybe people on that side of the House are not particularly familiar with a business approach. If we are to limit the amount of time that a private service is extended I ask my colleagues on this side of the House what that will do to the price. It will take it up. If one extends it over a longer period one can spread one’s overheads over a longer period. One can reduce one’s profits because one has a longer-term income and that is the way it works. 
The bill’s new provisions will give ratepayers better information about their council so that they are in a stronger position to participate when consultation does occur. 
The provision for a financial strategy will provide transparency for the overall effect of the proposals on services rates debt and investment and this is a very very important thing. We had a presentation from the Deputy Auditor-General. He talked about the debt levels that councils have. He talked about the need to foresee how much is being spent by councils. He talked about the need for transparency of future funding and this is very important. 
Provision is made for a pre-election report to be produced by the chief executive of each local authority. This in effect will be a summary of key financial information about each council covering both the past and the coming 3 years as well as details of planned projects. It will include a statement that compares rates rate increases borrowing and returns on investment with the targets set in the financial strategy. 
With this bill ratepayers will have greater confidence in local government. I must say that I am very pleased to have been part of the planning process. Thank you. 
Hon SHANE JONES (Labour) 
: 
 Kia ora ano tatou. Tena koe Mr Assistant Speaker i tenei po. For a mercifully short period of time I remained on the Local Government and Environment Committee enduring its chairing by the member who has just resumed his seat Chris Auchinvole. I can tell members that since my departure the Local Government Act 2002 Amendment Bill has not improved. That is reflected no doubt in the powers of attention that were directed to it at the instigation of Rodney Hide by our colleagues over there. 
Labour opposes this bill. The reason that we oppose the bill lies in its very secretive and clandestine agenda. It avoids the challenge of how the community will pay for the underlying costs of the infrastructure that local government has a stewardship role in providing to its citizens. That debate is buried because the democratically elected representatives will no longer be under a statutory duty to seek out the views of the people who actually own those assets. They are assets that have been paid for over many generations. The long-term capital plan which has been deeply eroded as a consequence of this legislation played a very important role. The Auditor-General’s staff came to the select committee on numerous occasions and no doubt I was one of the few people who paid attention on that particular day. The staff came and they reminded us that local government had to seek if not the consent then a mandate from the rate-paying community as it sought to commit the rate-paying community to a capital strategy. That is the long-term capital plan which is being gutted as a consequence of this wretched legislation. 
The long-term capital plan at a very deep level was designed for families firms and communities to have their say through the long-term capital plan provisions as to priorities and their costs and benefits and which services might be cut or expanded. We should allow that debate to take place rather than its having to be abandoned because of the ideological innovations brought forward by Mr Rodney Hide. He seems to think that ratepayers are suffering a growing burden of pain through the cost of local government because local authorities are splitting out into more extraneous activities. 
The truth of the matter is that there is a rising tide of cost associated with the development of infrastructure. Indeed the rate at which the cost of infrastructure has risen actually goes beyond the rate of inflation. That is the real problem that this bill ought to deal with but it tries to leave local government people with the obligation that they have no real duties to the communities that they purport to represent. They can monetise and they can privatise. There is nothing wrong with economising but when one is going to privatise one should seek the informed consent of the owners of those community assets. One should not use a piece of legislation that under the camouflage of Rodney Hide’s language is designed to strip every single member of the community of the ability to stop these furtive transfers. 
Water treatment assets water harvesting assets—whatever the asset is the real damage being done here is being done by the fear on that side of the House of going out to seek a mandate. It is a rather novel concept in their view of democracy to have to get the informed consent of families and ratepayers as to whether they think it is a good idea for a 33-year period of a property right to be handed out to preferred and favoured interests. They want to do that without seeking meaningful community input or without seeking the community’s imprimatur. That is really what is going on here. 
We had the organisation that represents all regional and local government in New Zealand come and make a submission to the Local Government and Environment Committee. My colleague Mr Twyford has already referred to its contribution. It came and said this bill will have the effect of worsening red tape. This bill it said will have the effect of adding layer upon layer of more paperwork and more material— 
Phil Twyford 
: But he’s the “Minister of Red Tape”. 
Hon SHANE JONES 
: I know it sounds ridiculous that this bill comes from the man who purports to be the destroyer of red tape. That is just one of the many contradictions that adhere within Rodney Hide’s psyche but that is another matter for another time. We have the most authoritative voice on behalf of all local and regional government actually saying that the impact of this bill is to worsen the dead-weight effect of Rodney Hide’s hand upon the affairs of local government. That is what will happen here. It is hard to imagine anyone more important than the organisation that represents all local government when it came to see us. We should pay particular attention to the fact that although it made quite a strong attempt to avoid alienating anyone on the select committee in particular anyone skilled in understanding bureaucratese would know that its contribution was a stream of disdain for Mr Hide’s very narrow and wretched ideas about how local government should be restructured. 
The pith of this bill is an attempt to turn local government for community purposes into corporatised local and regional governance. That member aided by his colleagues over there has lost confidence in the ability of democratically mandated organisations and indeed democratic communities to chart a course as to where they are to go. Nowhere is that more evident than in the very clumsy language that is employed in this bill in relation to those responsible for delivering on outcomes. Communities own outcomes. Communities embrace them and they have to live with the consequences of them whether they are successes or failures. This legislation by constraining the opportunities for communities to be consulted actually allows the decision makers within councils to arrogate all the power and authority in order to quietly and secretly dispose of assets without bringing that power back to the people who represent not only current generations but future generations. Fortunately after 2011 help will be on the way. 
Perhaps the final point that I should round up on in this brief but nevertheless important contribution lies in the fact that community consultation which was the hallmark of Labour’s style of governance in relation to local government has been both abandoned and stigmatised in this legislation. Members on the Government side of the House are endeavouring to treat community consultation as an unbearable cost and threat to the financial viability of ratepayers in their capacity to contribute to local government. Consultation with the community gives legitimacy to local government. If we remove local government from the community it is no longer local. It then grows into something akin to a Gordon Gekko creature more at home in the Wall Street marae than in the halls and the community centres etc. of local government. That is why we do not support this bill and we certainly do not support a single thing that that member over there is bringing forward for local government. But we will provide and make allowances for the lost members on the Government side of the House. Kia ora tatou. 
SUE KEDGLEY (Green) 
: 
 Here we are once again in the dead of night at almost midnight debating under urgency another sinister bill the Local Government Act 2002 Amendment Bill which implements the radical agenda of ACT and the Business Roundtable—what I call Rogernomics part 2—to reduce democracy in local government gut local government consultation requirements and corporatise or privatise as much of local government’s commercial activities as possible including water. 
I have a copy of ACT’s local government policy. It states: “Local Government will be required to shed its commercial activity. … Roads and piped water will be supplied on a fully commercial basis.” Council services will be contracted out and councils will be required to focus on their core activities. This of course is exactly what this bill does. It may not go as far as Rodney Hide’s extreme agenda which he released last year but it implements this policy—the ACT local government policy. It removes the consultation requirements of local government. It allows councils to get rid of their strategic assets or to enter into 35-year contracts with private water companies without the inconvenience and the nuisance of having to consult their local residents first. 
It sends a signal to the world that New Zealand is now open to water privatisation. It makes water privatisation extremely attractive to global water companies which are on the prowl for new markets. Now in New Zealand they can own as well as manage and control water infrastructure for 35 years. 
The bill requires councils to focus on a narrow range of so-called core activities. When Rodney Hide introduced this bill he said: “it gives councils a clear indication first that they need to do core services well before they engage in any other services”. The narrow and arbitrary range of core services listed in this bill is supposed to become the No. 1 priority of local government. 
It is the water privatisation provisions that are most alarming because once a private corporation has taken over the management and ownership of local water supplies its focus will not be on protecting the public interest or ensuring everyone has access to clean fresh water but on maximising profits for its shareholders. 
We know from the experience of water privatisation around the world that there are three ways that water corporations maximise their profits once they get their hands on a local water supply. The first thing they do is sack most of the staff that run the water services and reduce their working conditions. The second thing they do is charge more for water. The price of water soars and becomes unaffordable for large numbers of people who then have their water cut off because they cannot afford to pay their water bills. Thirdly they allow the water infrastructure to be run down just as Fay and Richwhite ran down our rail network. They do not bother to fix the leaks or invest in basic infrastructure; instead they siphon off the profits for their shareholders. That is what has happened wherever water has been privatised: higher prices for water; huge profits for the corporations; more and more people being disconnected; no incentive to conserve water because it is in the interests of the company to sell more water to maximise their profits; and no incentive either to address long-term health problems associated with water. 
The United Kingdom is a case study of what happens when water is privatised. When Margaret Thatcher introduced water privatisation into the United Kingdom the water industry fired 25 percent of the workforce and increased the price of water by 50 percent in the next 4 years. Then it cut its investment programme and used the increased dividends to pay huge salaries and bonuses to the directors of the water companies. While customers were faced with 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. What happened in the United Kingdom is what will happen here—mark my words—if we go down the path of water privatisation that the Minister of Local Government is desperate to take us all down. 
Another problem with the long-term contracting out of water supplies is that once a private corporation owns or manages the water supply for 35 years the public and its elected representatives their councillors will have very little input into or say on water supplies for the next generation. The long-term contracts that are negotiated will inevitably be commercial-in-confidence—that is secret—so ratepayers will be completely in the dark about the deal their local council has struck with their water company. 
Many contracts have guaranteed rates of return for the company regardless of its performance. Chile had to guarantee a profit margin of 33 percent to Suez as a World Bank condition regardless of its performance and in Argentina Suez pulled out when it could not get a guaranteed rate of return. It said that the contract was not profitable enough and it just pulled out leaving an incredible mess behind. 
Another thing is that once councils are locked into the 35-year contracts they cannot get out of them even if the circumstances change radically or unforeseen circumstances arise. What happens pray tell if a company goes bankrupt or is unable or unwilling to deliver on its water services? What happens then? Many councils especially smaller ones do not have the expertise to negotiate contracts for water services with large private multinational corporations. The United Water contract in Auckland for example was negotiated by local solicitors. It did not include any conditions on customer service. There is a clause in the contract that states the contract can be extended by an additional 20 years and that is not even linked to performance. 
Water privatisation has a terrible track record around the world and there is a huge backlash against it. Communities are fighting back against water privatisation and more and more councils and Governments are trying to get out of contracts they have entered into with private corporations. In France more than 40 towns and cities have taken back their water services into public hands and in June this year Paris took back its water service after huge controversy. Other countries such as Uruguay have brought water back into the hands of the State at a national level because privatisation has been such a fiasco and caused such problems. In Bolivia hundreds of thousands of people lost their connections when their water was privatised and thousands of people took to the streets until the Government finally backed down and told the company to leave. Is that what we want here in New Zealand? 
Water is a precious resource. It is one of the life-support systems of the planet. It is really the ultimate public good and it should be controlled in the public interest not handed over to the private sector to make profits out of. Water is simply too important to our health and well-being and to the environment to be handed over to the private sector. 
As water has become scarce around the world global corporations are seeking to take advantage of the water crisis by trying to take over water supplies. They are lobbying Governments all around the world and the Business Roundtable here in New Zealand is frantically lobbying to privatise our water supplies. Those lobbyists must be rubbing their hands together with joy as tonight this Parliament agrees to allow water privatisation here in New Zealand. Some of them will try to argue and the National Party will too that it is not water privatisation but I can assure any listeners that contracting out owning and managing water for 35 years is precisely that—water privatisation. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker kia ora tatou katoa i tenei po. Kua tu ake me te ahua awangawanga o te ngakau mo te ahuatanga o tenei pire. Ana na runga i te aha? Na runga i te mea ko taua ahua no ra me ki mo tenei momo kawanatanga me ki ara kua whakakorengia ko nga whakaaro o te hunga kainga o te tangata whenua ka mutu kua whakakorengia o ratou tumanako o tatou tumanako o roto i nga whiriwhiringa o te komiti. 
[ 
Greetings to you Mr Deputy Speaker and to us all tonight. I rise but with some misgivings about the context of this bill—and for what reason? Simply because of the supposition once again shall we say in the context of local government where it appears the views of the home people their aspirations and ours have been largely discounted in committee deliberations 
.] 
I rise to speak to the Local Government Act 2002 Amendment Bill with some considerable discomfort in the sense that yet again we come to the context of local government and find that the views of tangata whenua have been largely minimised and discounted and the challenges laid out in submissions largely ignored by the majority of the Local Government and Environment Committee. It was for that reason that the Maori Party made the decision to submit a minority report alongside the views of others on committee. In that report I noted that there are some key areas in respect of the Local Government Act 2002 that must be addressed but none more so than that of tangata whenua participation and involvement at local government level. 
In light of the views of mana whenua being silenced from the record I will bring some of the key points from the submissions back into the discussion and the debate. This House must take note of the words of Te Ora o Manukau. It stated that if public participation is marginalised in local authority decision-making the utilisation of Treaty of Waitangi models of maintaining effective working relationships as well as Government aspirations of effective community engagement will be further undermined by this bill. The analysis by Te Ora o Manukau states: “This bill is a lost opportunity in that it does not make any proposals that will result in improved Maori health.  
Indeed the proposals restrict participation overall in the local Government processes.” We in the Maori Party do of course acknowledge that there are some local authorities that engage with tangata whenua in positive ways. But there are also some local authorities that distinctly lag behind. 
Ngati Haua tangata whenua and other Whanganui River tribes gave a very strong message that the implications of this bill will directly impact on the lives of Maori. I quote from their submission: “The Bill removes the means whereby Whanganui Maori continue to hold customary rights to the Whanganui River and its tributaries … and other Taonga.” Ngati Haua and Whanganui river tribes were united in their concerns about the way the legislation addresses the matter of water management and in particular how that will impinge on their claim for the Whanganui River. It was their view that the Crown must acknowledge its Treaty obligations to consult on any activities that may impact on Treaty claims. Ngati Haua and the Whanganui River tribes were concerned that at no stage were they consulted on the impacts of the proposals of this bill on their claim to the Whanganui River. 
Concerns permeate about the water services provisions of this bill and they were raised by a number of submitters. Colleagues from across the board have also mentioned some of them in the debate tonight. We take into account the points raised by Te Wai Maori that local government cannot deal with fresh water in isolation from Maori and that Maori have an ownership right of water which is subject to this bill. A major concern about this bill is that it proposes actions that in the opinion of Te Wai Maori will serve to privatise water services. The increase in the terms of contracts from 15 to 35 years and the delegation of management illustrate the creation of a form of privatisation that is often described as a public-private partnership. 
Wakatu Incorporation also had a very clear view and concern about the provision of water services. Wakatu Incorporation is based in Nelson and is a key Maori enterprise within Te Tai Tonga electorate. It is driven by the aspirations of shareholders and whanau members from four tribes: Ngati Koata Ngati Rarua Ngati Tama and Te Atiawa. I give this background merely to provide some justification for the fact that when Wakatu Incorporation makes a statement to a select committee we in the Maori Party pay particular attention to its advice. In its submission it stated: “We disagree with the Bill’s intention to relax restrictions on private sector involvement in the delivery of water services. We think this proposal needs much more debate and consideration at the community and national level taking into account tangata whenua views about the ownership and management of water.” 
I could go on a little bit longer about the concerns that iwi and Maori organisations raised about this bill. Suffice it to say that the underlying theme of those submissions is that tangata whenua do not have adequate comprehensive and mandatory representation at the local government decision-making table. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I notice that the acting Opposition whips are attempting to telephone the acting Government whips but the member concerned appears to be asleep. I wonder whether you could draw attention to that; it would be helpful for the phone call to be put through. I think they are very keen to speak to them. 
Mr DEPUTY SPEAKER 
: Well I guess at this hour of the night that is to be expected. I am sure one can communicate without having to use the phone—that is just interrupting the member. 
TE URUROA FLAVELL 
: As I was saying before I was rudely interrupted the underlying theme is the desire of Maori to be involved in decision-making processes. But from all accounts from the submissions provided that is pretty much missing in this bill. 
It is acknowledged by almost everyone except perhaps the Minister of Local Government that at the local government level tangata whenua have been unfairly inequitably and disproportionately underrepresented across selected councils. In general less than 5 percent of elected local councillors in any term of local government have been Maori. I repeat—less than 5 percent. The Maori Party had hoped that serious consideration might be extended to the concept of Maori participation and engagement at the local government level. Although there are established processes to maintain tangata whenua participation at the local government level including through iwi management plans ultimately there is a lack of Maori enfranchisement in local government. So it was ultimately extremely disheartening that Maori participation in local government was not given more thought by the committee. 
We have raised three serious and longstanding concerns. We raised them during the first reading and during the select committee’s consideration of the bill and we want to revisit them. The first is the issue of the lost opportunity to improve relationships with Maori at the local government level. I have given the background to that—there is no more to be said. 
The second is the issue of the provision of water services. Although major concerns were raised in submissions about the provision of water services they have for the most part been ignored. Only one further amendment was made to those provisions. This amendment will prohibit the sale of existing local government infrastructure to a private partner except when a local government organisation reasonably believes that the sale was related to the joint arrangement and is desirable for the success of the arrangement. That appears to bring with it a level of looseness that will not provide any assurance to Maori submitters that their rights to Treaty-based processes have been respected. 
The third issue is about the broader context of community outcomes. As a result of this legislation there will be a new definition of community outcomes. Under the new definition community outcomes are “those a local authority aims to achieve” replacing the definition in the Local Government Act of community outcomes as “the outcomes for that district or region that are identified as priorities …” It should also be noted that periodical reporting on community outcomes is removed. Both of these decisions are in our view disastrous in the context of community development and provide us with considerable concern. In light of all those issues the Maori Party has no alternative but to vote against this bill. 
NICKY WAGNER (National) 
: 
 I rise to support the Local Government Act 2002 Amendment Bill. This bill is all about better transparency more accountability and improved financial management of local government. There has been much concern among ratepayers that rates are rising continually and dramatically and that they can do nothing about it. In response to this concern this bill makes amendments that will allow ratepayers to assert greater influence on the work of their councils. It is aimed at providing ratepayers and residents with better information about council costs rates and activities and at encouraging them to understand and to play their part in influencing planning and decision-making processes. 
The bill supports standardised and plain English financial reporting and it introduces pre-election reports. Both these measures are to ensure that residents and ratepayers can know more about their council how it operates and what they are paying for. The pre-election reports are designed to stimulate informed debate amongst voters before council elections. Too often we see innuendo and misinformation in local body campaigns. The pre-election reports will provide a factual base for any debate. 
The Local Government and Environment Committee was aware that we needed to find a balance between the cost of providing information and the benefits of that information to the community. We realised that providing a pre-election report increased costs to councils and for that reason we have lessened the requirements for councils with fewer than 20000 constituents the idea being that the smaller the community is the more transparent it automatically is. 
The amendments are also designed to simplify long-term planning processes and to give them a more strategic focus. There has been concern from a number of submitters that some consultation requirements have been removed in this bill and that is true. However the proposals in the bill need to be considered as part of the broader decision-making framework of the Local Government Act 2002. The vast majority of provisions in that Act that enable local people to be involved in council decisions are retained and consultation requirements on significant issues are untouched. 
A huge amount of consultation is still required. Public consultation is required to make changes to the level of service of any significant activity. It is required to start or to end a significant activity and to change the way a service is funded. Public consultation is necessary to establish a council-controlled organisation and consultation is required to transfer ownership or control of a strategic asset. 
Sue Kedgley said that the consultation processes are being gutted; that is nonsense. In fact 24 provisions of the original Act remain only five are repealed and one has been added. The principal Act also requires local authorities to conduct their business in an open transparent and democratically accountable manner. Councils are already required to be aware of and to have regard to the views of communities. Several submitters including the Wellington City Council said that they would consult on issues even if they were not required to do so under the Act. We also heard from some councils that in meeting the requirements of the present Act were actually paying people to come and give their opinion. In many cases we heard that the ordinary public has consultation fatigue. It is a costly waste of time and energy to go through the process just to tick the boxes to say that it has been done. Everyone agrees with and supports the need for meaningful consultation and the amended Act requires consultation on significant matters but we do not want expensive consultation processes merely for the sake of consultation. 
Finally the amended bill gives councils more flexibility to choose effective and efficient delivery methods of water and other services. Again I say it was interesting to hear from the Wellington City Council which has very successfully contracted out its waste-water treatment system. The Government believes that the changes in this bill represent significant progress towards better more effective local government and that they will make it easier for ratepayers and residents to participate in the important activities and decisions of local councils. Thank you. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 The Manukau City Council made a submission on the Local Government Act 2002 Amendment Bill and opposed it. I will give members some reflection on why. When Mr Hide became the Minister of Local Government it was believed by many in Manukau that he had the National Government firmly on a leash and that he took that leash led the National Government and designed for the Auckland region a structure that would create local government in Auckland as a business unit. It was designed to gut local government. It was designed to break up the income-flowing assets of that region and put them into council-controlled organisations. Again Mr Hide led this Government by the leash and told the people of Auckland that it would be good for them. 
The people of Auckland reacted and poll after poll told us that they did not want to sell their assets. That was reaffirmed last month when Len Brown won a resounding victory over the National-backed candidate in the local body elections. Mr Brown won by a majority of more than 63000 votes. The win of Len Brown in the Auckland super-city election was a resounding response from the people of Auckland—they do not want to sell their assets. That mood has not changed. 
The people of Auckland are again up in arms. They are angry and outraged that this bill—which again was introduced by this Government led by the leash by Mr Hide—is designed to do away with the valuable water assets of the region. Tomorrow at 9 a.m. a protest is being held outside United Water at 116 Great South Road Papakura. This has been organised by the community which is angry and outraged about the way this Government is rushing this bill through. People do not want their water assets to be readily available to multinational water companies so that they can strip the profits from water companies that are owned by formed by organised by and paid for by ratepayers throughout this country. 
A lot of people are asking whether Kiwis along the length and breadth of New Zealand can say with confidence and with hand on heart that they can trust the Minister who is driving the changes in local government today. A lot of them are wondering whether the changes being introduced in this bill will make things better for ratepayers throughout New Zealand. Will this bill reduce rates over the next 3 6 9 15 or 35 years? After all this is the same Minister who once told the people of Auckland that he would help cut their rates. Can Kiwis have confidence in a Minister from a minority party that received a mere 3.65 percent of the vote in the 2008 general election? 
Hon Member 
: And dropping. 
SU’A WILLIAM SIO 
: Yep and dropping. This is the party that has been dubbed by many as the “1 Percent Party” yet despite its low percentage of the vote and despite its low polling this Minister has been given the power to simply lead the National Government on a leash. Mr Hide leads the Government on a leash just as a master leads his prized dog. Winston Peters’ party New Zealand First got more votes than Mr Hide’s party yet Mr Peters is out of Parliament. Mr Hide’s party despite getting fewer votes than New Zealand First is not only in Parliament but is in Parliament with five MPs and Mr Hide is the Minister of Local Government leading the National Government on a leash. 
If the New Zealand public can say with hand on heart that they can trust this Minister and this Government then my speech is concluded and this country has gone to the dogs. But if the New Zealand public can with confidence and without compulsion say that they cannot trust this Minister and this Government then believe me when I say that the New Zealand public is absolutely correct. Practically every piece of legislation Mr Rodney Hide has introduced into this House as the Minister of Local Government has been passed under urgency with the exception of one bill. How Mr Hide can claim that ratepayers want greater transparency and accountability in local government when he ignores that principle in Parliament? 
Although this bill purports to improve transparency and accountability in local government it will do the opposite. The bill aims to weaken local democracy. It strips away the key consultation provisions that the public and the community currently have. It forces councils to focus on a narrow range of core activities and it will allow councils to privatise water supplies for 35 years. Despite the Government’s weasel-word rhetoric this bill does not increase transparency and accountability in local government. It will not increase transparency and accountability no matter how many times the Government says it will. 
This bill will undermine transparency. It will undermine public accountability by local government. It will undermine the participation of local communities. This bill will remove the right of local communities to participate in consultative processes. It will remove the right of local communities to influence the activities of local government. It undermines transparency and accountability by removing the rights of local communities to participate in reaching outcomes that benefit the well-being of local communities. 
More important and of major significance this bill removes the current requirement that councils must consult if they intend to sell key strategic assets such as water services or change their method of delivery. This bill will force council water supplies to be contracted out for 35 years. A ratepayer who is 70 years old today will be dead before they can have a say in respect of the water they have paid for. 
The number of submissions on this bill totalled about 414. Of those submissions 360 were expressly against water privatisation. I want to quote from two submitters because they were significant submitters form the Auckland region. The first submission is from the Auckland District Council of Social Services an umbrella organisation covering the Auckland isthmus area which opposed this bill overall. Its submission states that it is opposed to this bill because: “it will undesirably reduce democratic accountability; reduce consultation with and responsiveness to local communities; tend to privatise strategic assets and basic services including water supply; and reduce the range of services provided by local authorities to a narrower list than communities actually want local authorities to continue to deliver for them.” 
The final submission I want to quote is from the Auckland City Council Community Board Chairs Forum. Again this is a significant group from the Auckland region. It is a committee made up of chairs of all the community boards across the Auckland City region. Its submission states that “the current legislation is delivering transparency and accountability for ratepayers and that the proposals set out in the legislation are unnecessary and anti-democratic. We believe that there is always room for improvement within Local Government however this can be achieved by best practise guidelines to councils and policy changes within councils.” In other words this bill is unnecessary and the big ado about accountability and transparency just will not wash with the people of Auckland. I suspect that next year they will treat this Government in the same way that they responded when they voted for Len Brown as the super-city mayor in an overwhelming defeat of the National candidate. 
Debate interrupted.