Twyford PhilHon PHIL TWYFORD (Labour—Te Atatū): Thank you Madam Speaker. There's a quote that's often attributed to President Lyndon Johnson and it's this: Any jackass can kick down a barn but it takes a carpenter to build one." and that I think is particularly relevant to the legislative record of this Government over the last few weeks. They're really good at destroying things and kicking things down and not great at coming up with solutions to the big challenges this country faces and my goodness New Zealand has a massive water infrastructure problem. The country hasn't invested—well for decades and the result is that too many Kiwis don't have access to clean safe drinking water. In our cities the waterways are chronically polluted because we pump waste water into our streams and creeks and harbours and I hope that the other side of the House agrees with this third point as well which is that the entrenched failure to build infrastructure—that is pipes to carry water—is a major inhibitor of the ability of our towns and cities to grow. It stops houses being built. It stops our communities growing and developing and that drives up the price of housing for New Zealanders. The bill to get New Zealand's water infrastructure up to scratch is estimated to be $185 billion and at least—at least—this Government is leaving Taumata Arowai in place which is the regulator that our Government set up to set environmental standards and standards for clean safe drinking water for our people. But the effect of taking away the affordable water reforms and leaving the regulator in place with no other significant intervention proposed to allow the infrastructure to be funded and financed—the infrastructure that this country desperately needs—can only mean one thing and that is that the ratepayers are going to pay through the nose. There is no other way for it to happen. This Government is setting up a massive liability for ratepayers. It will come at a cost—a huge cost—and the ratepayers of New Zealand should be afraid. They should be very afraid. Far from being a genuine effort to fix the problem for the benefit of future generations this bit of legislation from the National-led coalition is pure partisan politics. It is theatre. It is simply there to say to the people who voted for the National Party and its coalition partners "We campaigned against these terrible affordable water reforms and now we're going to get rid of them." It's theatre—that's all it is—and I think that this country deserves better. The bill repeals all of the work that was done to set up a new financially and environmentally sustainable water system for New Zealand and it puts nothing in place except the bland assurance that councils will have the ability to set up council-controlled organisations. Well newsflash: councils already have the ability to set up council-controlled organisations. I want to focus the time that I have on two particular aspects of this issue. The first is the financing problem and I think it's widely accepted in this House that the way that New Zealand has been financing water infrastructure is a big part of the problem that we've got. Many many councils are up against their debt limits—debt limits that are effectively set by the rating agencies that assess the balance sheets of these councils and their entities—and that says "This is what is going to be the cost of financing that you have to bear with the cost of borrowing money to invest in infrastructure."One of the great benefits of the affordable water reforms was this thing that we just called balance sheet separation. It was based on the idea that the rating agencies regard revenue from water consumers as a much better more bankable bet than revenue from general council rates. They apply effectively a much lower debt limit on councils and a higher debt limit and lower borrowing costs on water entities and they do this internationally. So by separating out the balance sheets of the water entities from those of the councils and reassuring the rating agencies that the councils will not bail out a water entity were it to get into financial trouble the water entities would have higher debt limits. They would be able to borrow more to invest in the pipes at a lower cost to their organisation and that would effectively in the case of Auckland and the new water entity that would have been in place there have allowed Watercare to borrow two to three times more to invest in the water infrastructure that the city needs than it currently can because its balance sheet is effectively integrated or consolidated into Auckland Council's balance sheet. That's what balance sheet separation means. It was one of the major ways that would have allowed the country to invest for future generations in the pipes that we need and this Government has taken away that opportunity. It is offering nothing but the blandest reassurance that actually the council-controlled organisations will be able to achieve balance sheet separation and will then be able to borrow more and that is in my view a real shame. The second issue I wanted to touch on is the kind of investment that we need in our water infrastructure. My city—Auckland—is a case study of a city that simply hasn't invested in the water infrastructure that it has needed for several decades as it has grown and we saw that in the floods a year ago when an extreme weather event saw whole communities whole suburbs experiencing catastrophic flooding because Auckland Council has not invested in stormwater ever. It has been utterly negligent. Our waterways—our streams our creeks our harbours—are polluted with waste water with sewage and this summer every time there has been a significant rain event dozens of Auckland beaches have been off limits because they are polluted by raw sewage running into our waters as well as run-off with heavy metals and contaminants from our streets. This is not rocket science; it is simply because we have failed to invest in the infrastructure. The affordable water reforms—that our Government put in place and that are being swept away now—put in place a very real and sustainable solution to this problem. For the first time we would have had a legal framework that would have told the water entities "Your job is to manage stormwater in this city. It's your job and the law says it's your job and this is what you have to do. These are the kinds of plans you have to put in place and if you don't there is a powerfully tooled-up regulator looking over your shoulder." We have never had that before and on top of those two things we were giving those entities the power and the freedom to borrow up to three times as much money as they currently can to invest in the pipes in order to spread the cost of that infrastructure over future generations. I look at Te Wai o Pareira the creek that runs right through the middle of my electorate. It is so polluted that when kids go swimming in it they have to go to hospital afterwards frequently because they get so sick. Every time it rains raw sewage flows into that waterway and manholes pop up on the streets and in the parks and in people's front yards and sewage cascades over people's lawns. We had a solution to this. We had the institution we had the legal framework and we had the financing system in place to fix this problem—a generational problem that our country faces—and this bill sweeps that away and puts nothing in its place."