12. Question No. 12—Local GovernmentDr EMILY HENDERSON (Labour—Whangārei) to the Minister of Local GovernmentQuestion No. 12—Local Government12. Dr EMILY HENDERSON (Labour—Whangārei) to the Minister of Local Government: Xiexie Mr Speaker. What feedback has she received in relation to the Three Waters Reform Programme?Hon NANAIA MAHUTA (Minister of Local Government): Xiexie Mr Speaker. I've received vigorous feedback as was anticipated at the beginning of the eight-week consultation period. During this time the Department of Internal Affairs Local Government New Zealand and I have held over 150 engagements with councils iwi Māori the water industry and other stakeholders. Almost all parties agree that the status quo is unworkable. Despite some much-publicised discontent I am pleased with the number of councils iwi and other stakeholders who have engaged on the substance of the reforms and worked constructively to address several community concerns such as governance arrangements meaningful local voice demonstrable consumer benefits and broader local government roles and responsibilities. As part of this I've signalled that areas like governance arrangements can continue to be worked on. It's a critical aspect to get right and I'm making sure we do. Many iwi I've spoken with about these reforms welcome the opportunities presented to advance their relationship with local government to develop local kaimahi in this industry and see future services that uphold te mana o te wai.Dr Emily Henderson: Is it possible to achieve the stated benefits of the Three Waters Reform Programme through scale and aggregation?Hon NANAIA MAHUTA: Yes and there are other benefits too. Scale and aggregation provide for dedicated focus on water service delivery by professional competent boards and a dedicated water infrastructure workforce and it enables performance benchmarking between entities of a similar scale. Aggregation at this nationwide level also provides a strong platform for the inclusion of economic regulation that can see further efficiencies across the system. It also positions entities strongly to fund the significant investment we need in water infrastructure while making it easier for Taumata Arowai and regional councils to do their jobs in enforcing drinking-water quality and environmental regulations. Our goals are reliable drinking water improved environmental outcomes economic growth and job creation and by meeting these we help tackle some significant wider issues: building more houses climate change and natural disaster resilience. Dr Emily Henderson: Has a regional model as some councils have advocated for been considered as an option?Hon NANAIA MAHUTA: That's a great question. Yes this was considered. A regional model means that some regions particularly our more sparsely populated regions and smaller communities would face either an unaffordable and unsustainable investment requirement or further deterioration in the quality of drinking water waste water and stormwater. This is not acceptable to our Government. We cannot support a model that only looks after urban areas. Approximately one in 20 people receive drinking water that didn't comply with bacterial standards. The challenges in delivering clean healthy water that does not contaminate our beaches are experienced across the country from our smallest towns to our largest urban centres. Even the local government sector's own analysis has concluded that a more regionalised model is not financially sustainable and does not provide the nationwide health or environmental benefits we're seeking. In Otago-Southland as an example their own advisers concluded that the challenges in addressing the ongoing service delivery requirements for three waters will likely exceed the capacity of Otago and Southland as a combined region. On the West Coast independent advisers reached the same conclusion.Dr Emily Henderson: Is she aware of the Auckland Council's claim that they would not benefit from three waters reform and if so has she tried to work through these concerns with the council?Hon NANAIA MAHUTA: I am aware of the mayor's claims and I have engaged with him and the council on a number of occasions to work through their concerns. While I accept that Auckland has had some 10 years of experience of a level of aggregation under the Watercare council-controlled organisation model it is not a perfect option for the rest of the country. Auckland Council is near the limits of its debt capacity and one of the significant constraints for Watercare is a tied balance sheet to Auckland Council. To prove a point in the next five years Auckland ratepayers under the status quo are looking at a twofold increase in rates while also deferring large numbers of three waters infrastructure projects. This would be unnecessary under our proposed reforms. The Auckland Council's desire for proportionate control over entity A would mean that the balance sheet separation from the council and the consequent ability to raise debt to fund its infrastructure deficit would not be achieved without significant long-term commitment to underwrite the entity by the Crown. The whole premise of the reform approach is to move asset debt and liabilities to these multi-regional entities who can leverage from greater scale to fund long-term asset management and infrastructure investment.Hon Eugenie Sage: When the Minister said yesterday that Doing nothing is simply not an option." why does she regard a pause as requested by many councils to enable discussion and further consideration of issues such as entity size governance options and stronger community and council engagement in decision making as doing nothing instead of partnership in action?Hon NANAIA MAHUTA: Because I've given and undertaken to work with the sector around a partnership-in-action model which enables us to work through the governance arrangements that have already been foreshadowed prior to the eight-week consultation and have been amplified in relation to the feedback. There are a number of other areas that I have noted in this House that will continue to be able to be worked through with the reform programme that I'm proposing.Point of order Mr Speaker. I seek leave to table a letter that I wrote on 13 July not in the public domain to Mayor Goff outlining a detailed response to the issues raised by Auckland Council regarding the three waters reform proposals.SPEAKER: Is there any objection to that document being tabled? There is none. That may be tabled.Document by leave laid on the Table of the House."