Court Simon; Rurawhe AdrianSIMON COURT (ACT): Thank you Madam Chair and thank you Minister. I do appreciate the forthrightness of your response and I know we're debating something that's very important to all New Zealanders.I just want to come back to your proposal that the costs of improving the three waters infrastructure will be between $120 billion and $180 billion. Last week the Finance and Expenditure Committee went to Hawke's Bay—a majority of Labour members on the committee and a couple of Opposition members—and we heard from mana whenua groups from rūnanga from iwi and we also heard from the Hawke's Bay councils who were at the epicentre of the Havelock North water quality issue which is supposed to have led to many people becoming ill and potentially some people dying. So this is very important to them. This is what they told us: after that event they got together with Government and Government said Could you form a regional alliance to work out where the weaknesses are in your water system and then come up with a plan to fix them and we'll fund it." And that's what they did. They engaged with mana whenua with iwi and hapū and they worked out exactly what were the values to the community including to Māori communities to individual marae and they've addressed their water quality issues to address community needs as a whole.What they told us was they've spent $85 million already and Hastings District Council staff took us—including Labour members on that committee—to look at the new reservoirs and water treatment system that have been built to address just those risks Minister. For $85 million they've built all the baseline infrastructure and they've got plans to spend up to $200 million in total over 10 years on asset renewals and allowing for growth. Yet under the Minister's reform package they've been told they need to spend $2 billion over 30 years—that's $600 million or three times as much as they need to allow for growth and fixing the network in Hawke's Bay. So how can New Zealanders have any confidence in a three waters reform proposal when even the councils at the epicentre of the Havelock North water quality issue—where Labour members were happy to show us the good work going on in their district; that the problem's fixed. How can New Zealanders have any confidence Minister that this reform proposal based on these enormous and outlandish costs—tripling the spend on three waters infrastructure over 30 years—firstly that they could be achieved; secondly that they're value for money? Because what they told us was they don't need the money Minister. They don't need co-governance imposed. They've already got good relationships with mana whenua in Hawke's Bay. What they want is their communities to thrive and their local economy to grow without central government interference. Minister I'd appreciate if you'd answer that question.Hon NANAIA MAHUTA (Minister of Local Government): I'll take the opportunity just in case the debate closes. Look I'm sure as they told you about their regional study they would have also informed you that the Government helped pay for that regional study and that part of the rationale for paying for a regional study at the early stages of our analysis as to what would be the best model to achieve the broader overall outcomes that the Government was seeking is to see whether or not a regional approach could work. What we found along the way—and it was a helpful study that the region undertook—is that there would be regional variance in terms of the benefits of going to a regional model. That would then mean that the Government in some shape or form would have to contribute. That then meant we had to ask the question around scale and aggregation and the separation of balance sheets because if we separated balance sheets it would create more headroom around the way in which we could better fund—albeit at a multi-regional level—into the infrastructure space. I'm sure you heard all of that.What you might not have heard is one of the difficulties with a regional model was the internal challenge that councils were having amongst themselves around cross-subsidisation. So you had Wairoa for example in that region and the extent to which Napier ratepayers would cross-subsidise benefits to the Wairoa community became an underlying challenge within a regional model—it became an underlying challenge within the regional model. So I'm not dismissing that we needed to investigate the merits of a regional model but it also came with a number of challenges: cross-subsidisation within a region and across regions the level of variance and therefore the level of contribution that a Government would have to make.Then the other challenge became whether or not we would get equity of outcome for ratepayers in the more vulnerable parts of those regional areas. So I'm sure as you investigate those elements of considerations with officials you will get a flavour for why a regional model—and I think at the time when Hawke's Bay was undertaking that particular study the considerations were regions aligned to their regional council groupings; 16 or 12 regions I think was the domain of the regional consideration—you should also ask what level of Government contribution would have been required. Again the issues of cross-subsidisation: very real challenges. And then it would have been the impact in terms of affordability and the variance across regions. I'm sure that that will provide you with the other part of the challenge that has been responded to in the Government's plans going forward for three waters reform.So I want to make one final comment. I know this is really difficult and I acknowledge that there's a lot not only for the Finance and Expenditure Committee to get their heads around but also New Zealanders. But from a ratepayer perspective I must be really frank about this: one of the overriding drivers for me was to think about the system change that is absolutely necessary to be able to assure ourselves that the most vulnerable or those on fixed incomes in our society don't miss out because of those who are well-heeled and say "We're going OK here; it's the other folk over there." We can't get inequity as an outcome of the system reform that we're trying to steward through because everyone needs clean drinking water and affordable services. Everyone needs the assurance that we're going to do better for the environment than what we're doing now. I think our kids want us to absolutely make the kinds of decisions that will see livable cities that look for natural solutions as well as smart design solutions but actually that we put that long-term aspiration in front of our minds when we think about a way forward. And that's why I continue to believe unless there's an alternative that's been put up by the Opposition we should continue along this path hard as it is.CHAIRPERSON (Adrian Rurawhe): Are we ready to move on to Police or do you want to? [Interruption] OK. I'm asking the committee. If the member would like to take a call he may—Simon Watts."