Genter Julie Anne; Brown SimeonHon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe Mr Chair. Very happy to be able to raise some questions and make a short contribution in Part 1 of this bill. I specifically want to raise an issue of a very unique part of my constituency the Rongotai electorate which is the Chatham Islands. The Chatham Islands is New Zealand's smallest and most isolated council and faces a number of unique challenges when it comes to the provision of water services. The council is as I'm sure the Minister is aware—I mean the population of the Chatham Islands is around 700 people they provide three water services to some residents not all residents the majority being drinking water and wastewater; very little need for stormwater. However the council has significant funding challenges to be financially sustainable. Now my question is different to the reference to the tabled amendment of my colleague and the questions around financially sustainable". But I do have a question around the definition of "financially sustainable" in clause 5 because as the Chatham Islands Council raised in its submission at the Finance and Expenditure Committee there is not sufficient clarity on how that will be judged in practice. Is the Minister able to enlighten us perhaps with reference to the specific circumstances of the rural population on the Chatham Islands whether the council—how their financial sustainability will be judged? Because the council has had a practice for many decades and I'm sure this is not unique because many councils have faced this of deferring capital investment in order to make their services affordable. But that is not sustainable. Council cannot borrow as it has no ability to service the debt. It would probably need central government to be able to borrow. They said in their submission that there were many years potentially decades of deferred investment. So they've deferred critical renewals all capital works in order for services to be affordable and financial sustainable. However you can only do that for so long Mr Chair obviously; we all know that. We can only defer capital investment and critical upgrades for a certain amount of time before that becomes untenable. So the capital infrastructure in the Chatham Islands is at or near the end of its useful life and there's a really high risk of existing infrastructure failing and causing significant negative health outcomes for the people of the Chatham Islands. So I'm just really interested as to whether when we look at the definition of financial sustainability and how that's going to be judged obviously they need revenue applied to the delivery of the services it has to be sufficient to ensure the authorities long term investment and it's got to be financially sustainable but currently they cannot rely on rates to cover the cost of that. So rates are already contributing to about 40 percent of the operating budget but that can't service debt. It's not going to enable them to invest in capital infrastructure that is absolutely necessary. And you know 60 percent of the cost is covered by the Crown grant to the Chatham Islands for operating those services. So how will they be judged as financially sustainable? Is the Government going to have a mechanism or some commitment to funding capital works for communities like the Chatham Islands who have unique rural populations and who face significant challenges in funding these critical upgrades? Does the Minister have a specific answer to that? Hon SIMEON BROWN (Minister of Local Government): Mr Chair I thank the member for her question. The question is in relation to the definition of "financially sustainable". It's a definition which is a broad definition to encompass a wide range of councils in New Zealand and this legislation requires all councils put forward their water service delivery plans which of course includes the Chatham Islands which will be required under the legislation to also be putting forward a plan."