O'Connor Greg; Mahuta NanaiaPart 3 Operation of water services entitiesCHAIRPERSON (Greg O'Connor): Members we now come to Part 3. Part 3 is the debate on clauses 115 to 128 and Schedule 4 Operation of water services entities." The question is that Part 3 stand part.Hon NANAIA MAHUTA (Minister of Local Government): As we move on to Part 3 it's important to remind the committee that core to the design features of this water reform was to ensure that we had a public model for water service delivery that would safeguard against privatisation in the interests of all New Zealanders. In this particular part we have protections against privatisation. However can I say that there will be many around this House who will feel and also to those who are listening that we should have gone further and the Government wanted to go further. We wrote a letter to every party in Parliament seeking their support to entrench a clause within the legislation to give an absolute assurance that privatisation would not occur. That is certainly the view of members on this side of the House and the Government. However National and ACT clearly did not want to give that type of assurance.We regret that because when we stand in front of this House to progress this particular bill we want all New Zealanders to know that the House when they say they're against privatisation actually mean it—when they say they are against privatisation they mean it. But some people want to create a perception that they don't want privatisation; however they are offering up ways in which you could better privatise the system and we have already seen what happened in relation to the electricity reforms. So this particular part has a protection against privatisation as best as we could achieve. It ensures that contracts and joint arrangements are lessened from 35 years to 15 years and there are members around the Finance and Expenditure Committee who are able to actually tell the story.But just a little insight: Labour supported initially within the context of local government contracts 15-year contracts because we knew that that would deliver local advantage. It was the National Party that changed the legislation to 35-year contracts and some of those contracts now are not held by New Zealand companies. We want to see a return back to contracting locally. We want to ensure that those who are already in the service delivery space of the water sector those small plumbers or those medium-sized enterprises can grow and they'll have the opportunity to do that. Part of the rationale of bringing the contracts back to a 15-year period will give a horizon of growth to those medium-sized entities to be able to be strong contenders to secure contracts within their local regions and I support the select committee in their considerations on this front.There are also employment provisions within Part 3 that are clearly outlined and I am sure that there may well be members around the select committee who can add value to the conversations that they had around these provisions. But insofar as a water services entity is concerned it is actually our ambition to ensure right from the get-go when these entities are established that they will be good employers. So I welcome again the addition and the recommendations of the select committee in clause 120(2)(i) and (j) of the bill where they said in (i) we want to "recognise the importance of achieving pay equity between female and male employees" and in (j) "recognise the importance of decisions about remuneration being free from bias including but not limited to gender bias" because we know in certain sectors across industries and especially hard infrastructure industries there is a significant difference. But heck let's be real: we know that there's a significant gender pay gap across a number of sectors. So I'm really glad they wrote that into the legislation. It makes absolutely clear our intent.In terms of the role of the water service entity and the professional board that sits over it let me just assure for the sake of clarity—and I am impinging on the will of the committee—the professional boards that direct these water service entities do not have co-governance around the board; it is skills based and it ensures that we have the very best skills to guide and direct the role of the water service entities. There's a bit of conflation that's been happening around the committee in relation to the role of these boards but what we have learnt in terms of Crown entities is that we migrate many of the provisions of Crown entities to the professional direction of these entities that we are standing up. We know that we can continue to ensure for the public's interest that the requisite skills will be there to direct these four entities."