McAnulty KieranWATER SERVICES ENTITIES AMENDMENT BILLFirst ReadingHon KIERAN McANULTY (Minister of Local Government): I present a legislative statement on the Water Services Entities Amendment Bill.DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon KIERAN McANULTY: I move That the Water Services Entities Amendment Bill be now read a first time. I nominate the Governance and Administration Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 27 July 2023 and that the committee have authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 193 195 and 196.I'm pleased to bring the Water Services Entities Amendment Bill to the House. The bill addresses and incorporates this Government's decisions to refocus the water services reforms. It makes important changes to the Water Services Entities Act 2022 that reflect the feedback and concerns I have heard from communities and throughout my engagement with the local government sector.New Zealand is facing a bill of up to $185 billion that councils themselves have said they can't deal with alone. Water is a fundamental resource that sustains life supports economic growth and contributes to the overall quality of life for all New Zealanders. However we cannot continue to overlook the significant issues our water services are faced with including ageing infrastructure and the need for greater investment. The damage we have seen from severe weather events is a stark reminder that the resilience of our water system will continue to be tested. It is our responsibility to address these challenges head on and provide a robust framework that will ensure safe affordable and reliable drinking-water services for generations to come.The Water Services Entities Amendment Bill aims to achieve these outcomes. Firstly it will strengthen local voice in the delivery of water services by establishing 10 entities based on regional boundaries allowing each entity to be able to address and respond to localised issues. This ensures guaranteed territorial authority representation from each council in the entity's regional representative group. This will continue to be met with an equal number of mana whenua representatives. The bill also introduces a new mechanism for communities to express their views on the priorities for water services in the area. Local persons who have an interest in a water body in their entity will be able to present unique community priority statements to the entity's regional representative group. Priority statements will be a valuable source of income for entities when setting their strategic direction in addition to making decisions about infrastructure investment.Secondly the bill provides flexibility for the entities to take advantage of economies of scale by setting out a process for entities to merge voluntarily and proposes shared services arrangements. The 10-entity model of reform does see a reduction in scale efficiencies compared with a four-entity model. However the cost per household will still remain lower than under the status quo system. A voluntary locally led process will enable entities to merge if the regional representative group determines it is the right decision for the communities within the service area. This recognises that in time councils and communities in higher-cost regions may wish to see the benefits of further amalgamation in terms of greater investment increased efficiencies and service standards and lower charges. Similarly enabling shared service arrangements between water services entities allows for a reduction in duplications of core services provides for consistency of service provision and brings down the overall cost of the arrangements. Efficiency gains are needed to keep water services affordable to consumers as entities take on more debt to upgrade and better provide these services. If scale efficiencies cannot be realised the geographic communities most at risk of cost increases will be those in rural and provincial areas with relatively small and geographically dispersed populations.Thirdly the bill has entity-financing backstop arrangements and enables the establishment of a dedicated Water Services Entities Funding Agency which if required would operate on a similar basis to the Local Government Funding Agency by pooling risk and achieving scale and market access benefits for entities. We want to ensure that all water services entities large and small have a range of funding opportunities and mechanisms needed to support the upgrade and maintenance of our water systems.To action all these changes the bill provides for a longer window for establishment of the entities staggered between 1 July 2024 and 1 July 2026. The Northland and Auckland Water Services Entity entity A will be established first on 1 July 2024. The configuration of entity A's boundaries do not change as a result of this bill and it's readiness to go live next year reflects that there is a significant amount of preparatory work to support establishment already completed and under way. Entity A will provide a useful model for the rest of the entities as well as learning opportunities for continuous improvement as other entities are established. Councils will continue to have responsibility for water service delivery in their service areas until the establishment of the entity.I also want to acknowledge the recent period of uncertainty for many councils who are in the process of preparing their 2024-34 long-term plans. I understand the process for local government planning cycles is extensive and requires a long lead-in time. The decision to provide flexibility for establishment dates will mean that councils will have to include the provision of water services for up to a further two years in their long-term plans. This bill provides certainty for councils for the process of doing this.In the process of considering changes to the water reforms we considered many options including alternatives put forward by Opposition parties. We considered those in good faith but they did not stack up. There is a clear case for reform when we compare the financial aspects with the status quo. Councils will struggle to meet the costs required under the current 60:40 arrangement for Crown financial support following a disaster and many will require ongoing support. This highlights the importance of having water service entities with the balance sheet capacity to better absorb these sorts of shocks as well as entities that diversify natural risk hazards across multiple territorial authorities.The Water Services Legislation Bill and Water Services Economic Efficiency and Consumer Protection Bill have been reported back to the House with constructive amendments to improve the legislation. Together with this final amendment bill the legislative framework for the reforms will be complete. I'm proud to be part of a Government that is committed to ensuring the provision of safe and reliable drinking water at a price ratepayers can afford. I believe the reforms will improve our communities by tackling the ongoing threats to housing health and climate change. Every community should have access to safe clean and affordable water. I commend this bill to the House.DEPUTY SPEAKER: The question is that motion be agreed to.