Brooking Rachel; O'Connor GregWATER SERVICES ENTITIES AMENDMENT BILLSecond ReadingHon RACHEL BROOKING (Minister for Oceans and Fisheries) on behalf of the Minister of Local Government: I present a legislative statement on the Water Services Entities Amendment Bill.SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon RACHEL BROOKING: I move That the Water Services Entities Amendment Bill be now read a second time. This bill will implement the decisions made by this Government to refocus its reform of water services. Everyone on this side of the room understands our water infrastructure deficit needs to be addressed now. The cost of meeting the upgrades that our water infrastructure is projected to cost is up to $185 billion over the next 30 years. That level of required investment is outside the reach of most individual councils. They can't do it by themselves. If we do nothing it means households face increased water costs and ratepayers will be faced with an unaffordable cost burden.Throughout this process we have not changed our bottom lines. These include public ownership of water services entities balance sheet separation on operational and financial independence to allow the entities to make much needed investment joint oversight of the entities by their local authority owners and mana whenua and strong regulation of the water services entities to ensure fair prices for consumers and quality of services.Councils across New Zealand accepted the need for change on how we run our water services. There was feedback about how the reforms could be refocused particularly around localism. This Government has listened to these concerns and will implement new arrangements for 10 water services entities changes to their boundaries and ensuring that every council has a seat on its entity's regional representative group.New Zealanders can agree on the basics for water in this country. However these basics have not been met under the status quo. Proper investment in water infrastructure will also result in long-term significant cost savings for households compared to the status quo model.The recent extreme weather events we have witnessed have demonstrated how vulnerable our water infrastructure is. As the climate continues to change more communities and assets are at risk. The window to taking action to avoid the worst impacts of climate change is closing fast. Long-term thinking is needed to set a strategic and integrated approach for water services and I believe this reform achieves that.I would like to take this opportunity to thank those who made a submission on this bill particularly local government and iwi who have been engaged throughout the course of water services reform. I do want to acknowledge that it was a short select committee process with a limited time for submissions. However this Government has been clear that it will implement its reforms before this Parliament rises. Alongside this legislative certainty around the reform programme is needed for water sector planning and employment and to provide clarity for ongoing transition and implementation activities.I would also like to thank the Governance and Administration Committee which considered the submissions and made more than 60 amendments to enhance the bill's workability. Let's look at some of the key changes.Many councils were concerned that the legislation did not provide clarity around entity establishment dates. They submitted that greater certainty about go-live dates for the entities was crucial to enabling them to meet their planning obligations and providing assurance to affected staff. The committee has recommended that the entity establishment dates be set by Order in Council within six months of the enactment of this bill. This would allow a period of consultation with territorial authorities and mana whenua before setting establishment dates before at latest the first quarter of 2024. The process of determining when entities should go live will require the input and perspectives of many including the councils mana whenua and the National Transition Unit. Ultimately entities will be established when territorial authorities and mana whenua are ready to ensure the best outcomes for their communities.I want to take a moment to acknowledge staff working in the water sector. I understand that this is a time of uncertainty. The committee heard from councils and union representatives on this area and in response made several key changes to staff transfer provisions. The bill now enables collective bargaining to occur with a designated representative prior to the establishment of all entities. This will enable unions to have input on the collective employment arrangements that will apply across all water services entities. This is a significant step forward for employees.The bill also ensures that retention payments are to be paid to employees who transfer from their council to a water services entity. This will help councils by encouraging staff to stay employed with them until their role is transferred. It will also incentivise staff to stay in the water sector. We acknowledge that skilled staff are key to delivering ongoing mahi and driving innovation. Retaining water services staff in Aotearoa is critical to the success of the reforms.There were also changes to make sure the small group of Watercare staff based within the Waikato water services entity boundary will have employment continuity when the Northland and Auckland entity goes live. While initially being transferred to the Northland and Auckland entity they will be offered a position in the Waikato entity when it's established.Some submitters sought clarity about the purpose of community priority statements. The committee recognised that these are an important mechanism for ensuring local voices and perspectives are heard but considered the bill was unclear on who is eligible to submit a community priority statement. Incorporating a definition of eligible person" will ensure individuals or organisations making statements have a clear connection to the entity service area and their organisational purpose relates to a water body.The bill contains provisions that allow locally led volunteer merger of water services entities to occur if the communities served by their entities want this to happen. The committee heard concerns from some councils about the 50 percent threshold for a merger where it was initiated by a Crown intervention body appointed to a water services entity because of significant financial stress irreparable governance difficulties or inability to deliver minimum levels of service to consumers. The committee has agreed that all merger proposals must have 75 percent agreement. This aligns with other voting and decision-making thresholds across the water services legislation. The committee also agreed to include a comprehensive list of factors that must be considered when a decision on a merger is made by an entity's regional representative group. This is to safeguard good decision making around a merger and will help ensure consensus before a decision is made.Some submitters raised concerns about the ministerial powers to direct entities to share services together as being too broad. In response to this the committee tightened the purpose for which the Minister can direct entities to share services. Ministerial directions must now be consistent with the operating principles of an entity and consider input or feedback back from stakeholders relating to the proposed direction. Directions that are made after the establishment period cannot direct the entities on how they should implement the direction.I want to acknowledge the hard work of the committee committee staff and Parliamentary Counsel Office on this bill. They have worked tirelessly in a short time frame to improve the resilience and efficiency of New Zealand water services infrastructure. I consider the proposed amendments will help strengthen the legislation governing the delivery of our water services and ensure it is workable for water services entities and communities. This bill shows how we have listened to concerns of New Zealanders and it will make sure we can all enjoy safe reliable and affordable water services. This is a reform that will benefit our communities our children and our children's children for generations to come. For that reason I commend the bill to the House.DEPUTY SPEAKER: The question is that the motion be agreed to."