10. Question No. 10—Local GovernmentSIMON COURT (ACT) to the Minister of Local GovernmentQuestion No. 10—Local Government10. SIMON COURT (ACT) to the Minister of Local Government: Does she stand by her statement regarding Three Waters reform There are about 30 various models that we tested against the Government's objectives"; if so against what criteria were they tested?Hon GRANT ROBERTSON (Deputy Prime Minister) on behalf of the Minister of Local Government: I stand by the full statement I made. There were a wide range of models tested during the policy development process including modelling of 30 aggregation scenarios. These ranged from a one entity scenario covering the whole of New Zealand to a 13 entity scenario. These are summarised in the final report by the Water Industry Commission for Scotland which was published by the Department of Internal Affairs as part of the national evidence base supporting the reform proposals. In addition a wide range of alternative policy options were considered including not pursuing aggregation. These include for example support for voluntary reform proposals by local government and Waka Kotahi - style funding models. The range of options considered are also outlined in the department's regulatory impact statement.In answer to the second part of the question the options were assessed against the criteria of whether the reform proposals improve economic efficiency and support a financially sustainable system—including achieving balance sheet separation improving infrastructure delivery improving decision making and performance—and can be easily implemented. The current system of 67 different council water providers is clearly not meeting delivery of safe affordable and sustainable three water services and this is something that most people agree on. Aggregation is required to achieve the outcomes we want and we are confident that the model we have chosen is the right way forward.Simon Court: What if any input did councils have into generating or testing the 30 models against the Government's objectives prior to Cabinet signing off on the Government's preferred model?Hon GRANT ROBERTSON: On behalf of the Minister over the course of the last four years the Government has been consulting across the community including with local government about the reform process. A series of workshops have been held around various options and scenarios in which local government has participated.David Seymour: Point of order Mr Speaker. It was a very specific question about the 30 models that were on notice. Now he's given a bland answer that there's lots of consultation. He did not address the question about the 30 models that the primary question put him on notice to answer about.SPEAKER: Well I think it is unreasonable to suggest as part of an answer to an oral question in this House that the consultation on each of the 30 models is outlined in any detail whatsoever. In this particular case on the supplementary question the Minister did indicate that there were workshops involving local government consulting on this matter.Simon Court: Can the Minister give an example of a change that was made to the proposed model because of council concerns?Hon GRANT ROBERTSON: Well it's not just the concerns of councils. Throughout this process the Government has looked at the model modified the model as we've gone through. It would be impossible for the Government to be able to accept all of the issues and all of the concerns raised by local government. But we have continued to look for example at where entity boundaries sit as a result of conversations with local government. I would say on behalf of the Minister that there definitely is an easy path forward here: that's to do nothing. And the result of that path is more people getting sick people paying more for their water more sewage spills. The Opposition by all means can take that position but it is irresponsible.David Seymour: Point of order Mr Speaker. The Minister was asked to give an example. He's addressed that and he's now going on a tirade about alternatives which is irrelevant.SPEAKER: Yes yes and that member as I indicated yesterday is one of the more knowledgeable people in the House on the Standing Orders and he knows absolutely that the length of the ministerial answer is a matter for my judgment and not for point of order.Simon Court: Supplementary question.SPEAKER: No. Well the Minister was interrupted.Hon Grant Robertson: No no.SPEAKER: He's said enough. All right.Simon Court: Why didn't the Cabinet papers that Cabinet signed off to decide Government policy on three waters on 14 June refer to or analyse any of the 30 models?Hon GRANT ROBERTSON: On behalf of the Minister Cabinet has had many discussions about the three waters reforms. There have been subgroups of Ministers there have been Cabinet committees there have been papers going to Cabinet. The member shouldn't just focus on one paper. Christopher Luxon: Does she stand by her Cabinet paper that said Standard & Poor's had ruled out a council-controlled organisation (CCO) model when Standard & Poor's own advice never mentioned a CCO model at all?Hon GRANT ROBERTSON: On behalf of the Minister six scenarios were tested with Standard & Poor's. Among these included scenarios that are akin to a CCO model including where councillors have approval rights over the statements of intent where there would be no independent selection panel or councillors voting on the appointment and where councillors could remove members of a water service entity. There is no one single CCO model.Simon Court: Did any of the 30 models look at different governance or financing structures like Auckland's Watercare model and what is the Minister's response to the Mayor of Auckland who's been reported saying that Government declined an invitation from Auckland to jointly analyse alternative models?Hon GRANT ROBERTSON: As I've just said in the previous answer a number of models were analysed. Six scenarios were put to Standard & Poor's that mirrored a CCO-style model. Watercare is one example of a CCO model and I would note that all of its debt sits on the Auckland Council's balance sheet which is one of the significant issues we were trying to address—balance sheet separation.Simon Court: Is it correct that of the 30 models that were analysed really they were just different groupings and numbers of entities and none of them considered alternative governance or investment models such as the Watercare option?Hon GRANT ROBERTSON: As I said in my primary answer there were 30 aggregation scenarios but other alternative policy options were also considered."