Woods Megan; Pham Lan; Boyack Rachel; Brown SimeonHon Dr MEGAN WOODS (Labour—Wigram): Thank you Mr Chairman and it's good to take a first call in what is the most substantive part of this legislation. As the Minister has identified this Part 2 is divided into three subparts—and by and large for the purposes of this committee stage debate the Labour Party intends to address this subpart by subpart in this Part 2 of the bill. So we have a number of questions in the first subpart of this which is clauses 8 to 15 of the bill and that is where the obligations for councils to prepare those plans is outlined and it lists the specific information that must be included in each plan plans that must cover a consecutive 10-year period. Now one of the questions that we have for the Minister here is around the time frames for preparation of these plans. One of the things we heard very clearly from a raft of submitters at committee was that 12 months was simply not enough time and a number of councils submitted that they needed longer—18 months or two years—in order to do this correctly. I would like to hear from the Minister what the rationale was for not including a longer time frame for the preparation of those plans. I think this came through consistently and members hearing those submissions certainly heard that very clearly. So that's the first of a range of questions that we'll be putting to the Minister.The other is around the part in this first subpart which makes the provision for two or more councils that can work together to submit plans that convey an intention to jointly deliver financially sustainable water services across the combined areas of the councils. Joint plans must explain how all councils will deliver water services and councils have discretion whether to provide some or all of the storm waters services jointly. This really is the opt-in part of this legislation which is contained within this first subpart of Part 2 and I think one of the things that we intimated in the debate around Part 1 of the bill that we'd like to raise more fully and have a fuller discussion about in this Part 2 is what happens to orphaned councils. We heard from a number of councils that with an opt-in arrangement they are going to be left on their own.I intimated that I wanted to talk more fully about Buller and the submission that we heard from Buller in the Finance and Expenditure Committee hearing. What we heard there from the mayor Jamie Cleine was that Buller was going to be left orphaned that they'd asked the councils around them including over in Canterbury and no one was really interested in submitting a joint plan for them. What this would mean for Buller—Mr Chairman I'm sure you have an interest in this—is that water charges would rise from $2300 to over $4000 in only the space of four years. So within four years people living in Westport would be facing $4000 worth of water charges because they didn't have that ability to join forces with another council. What I'd like to know from the Minister is what is going to happen for these councils where we are going to see such rapid increases like that that the optimum provision isn't going to work for them. What we heard very clearly from the mayor there was that the average household income in Buller is almost 30 percent lower than the national average that 30 percent of the population was aged over 65 and more were on fixed incomes—and the national average is 16 percent.But this bill that we have here this has no requirement when putting together these water services plans around affordability. So what are we going to do for communities like Buller which already we know has some of the lowest incomes in the country? We have a far greater proportion of people who are aged over 65 and are reliant on superannuation but are going to see some of the steepest increases. What are the provisions around affordability in this voluntary model that is outlined in this subpart one that the Minister is putting up? I'm sure colleagues will talk to other parts of the country that are going to have similar circumstances. We know that there's some very steep increases coming and being signalled by councils right around the country of what's going to happen to rates in order to finance this. But how when putting together water services plans are councils going to consider the affordability of their constituents and their ratepayers? And how are they going to consider those very core issues around that? One of the things that that Mr Cleine made very clear is that although you know there's all this encouragement to join forces it's just not forthcoming. So what is the Minister going to do in that case?The other question I'd like to put to the Minister is around how these orphaned councils draw up these water services delivery plans. Are they going to be considered under clause—you know my obsession with clause 3(2)(b)—about whether or not that is a difficulty the fact that they are not affordable? Will the Minister say that is in some ways difficult and will that be a red line? If we're seeing people who are facing an increase in their water bills from $2300 to $4000 over a space of only four years is that enough to trigger the Minister to think that it's difficult? And will that trigger locals' ability to have their own water services delivery plan? Indeed it will be the Minister's and central government's water delivery plan that will be delivered there.So there's a range of questions in there. There will be many more that come because this is the substantive part of the legislation but we look forward for the Minister addressing those questions.LAN PHAM (Green): Thank you Mr Chair. I want to follow my colleagues in sticking very specifically to Part 2 Subpart 1 and I want to pick up on an amendment that I've tabled which is specifically related to both clause 11 and clause 13 and it's Amendment Paper 68. Now the reason that I've tabled this is for two really key reasons. The first is around suggesting a change to the time frame of the period of time that the water service development plan actually needs to adhere to. So currently in the Act it says that they have to be a minimum of 10 years which does allow for longer-term planning—which is great—but it doesn't mandate it. That's a concern and I'm really interested to hear the Minister's views on this because it almost feels unnecessary to talk about how important climate impacts are when it comes to our nation's infrastructure. But time and time again when legislation like this is coming through it seems we're not quite grasping the absolute immediacy and necessity of actually providing for a more long-term view especially when it comes to investment in hard infrastructure. So we know that the replacement value of our local government infrastructure that is exposed to the impacts of climate change is in the billions and that's just the replacement value. That's not actually an improvement in infrastructure that means that we can actually face the climatic impacts and changes that we know are coming. So the first part of my amendment is to clause 11(1). After subclause (1) it's inserting a mandatory part that actually requires councils to put in their information regarding climate change adaptation and mitigation [as far] as they relate to the delivery of water services:". Now why that's really important is this and we heard it time and time again during submissions particularly from the likes of Taituarā which is the local government planning professionals. I want to quote from them because they summed it up so nicely by saying "We submit that a ten-year outlook is far too short a period to make informed judgements … Although long-term plans have a minimum planning horizon of ten years they are also subject to a test of financial prudent that applies across the useful life of assets" and that's what is absolutely key here. We know that the useful life of these assets is outside of that 10-year period. It's at least 30 if not 40 if not 50 years. Taituarā asked the committee—again I'm quoting—"to consider matters such as climate change." They want these things to be mandatory so that councils are not stuck in this under-investment spiral where they are actually making decisions that are not in the best interests for the long term for their community. They said that "Meeting future resource consent conditions is an issue in some local authorities now even more local authorities will face this towards the end of and just outside the ten-year period." So they're talking about how frustrating it is that we're making this legislation to purportedly address this very serious infrastructure deficit and yet we're not giving the very clear mandatory consideration when it comes to a longer-term time frame and also climate considerations. I did want to pick up as well on Wellington and Horowhenua's joint council submission because they are one of the regions which has actually come quite far in trying to wrestle with their own water service delivery challenges and have come up with some opportunities. Now they too—like all other councils might I add—had this very clear submission that they wanted their water services delivery plan to be a 30-year minimum. Now they said "These include network renewal regulatory requirements resilience climate change enabling growth and improving the health and quality of waterways. It is only over this longer-term period that these issues can be addressed" and I'd love to hear the Minister's view on hearing that from local government.RACHEL BOYACK (Labour—Nelson): Thank you Mr Chair. I appreciate the opportunity to take a call. It's the first opportunity I've had to take a call on this important piece of legislation that we are scrutinising tonight and seeking responses on from the Minister of Local Government. I will just note that I intend to keep my commentary to Part 2 Subpart 1 around water services delivery plans just quite succinctly so that we can focus on the first part of Part 2. So I am looking forward to hearing some responses from the Minister on the questions that have already been raised. I've got three matters that I do wish to speak to and I recognise I may not have time to cover all three of those matters noting that if need be I'll seek to make a further call.There have been submissions from councils but also just observations from colleagues around the development of the water services delivery plans and the resourcing in order to do that. An important matter that I'd like to get a response from the Minister on tonight if I may is that councils are under significant strain. As chair of the Governance and Administration Committee we hear regularly from Taituarā who are the representatives of the staff in local government organisations. We hear from Local Government New Zealand; we hear from the Department of Internal Affairs through the scrutiny process but also on other matters and while we didn't hear this legislation what we do hear from them is that local government is under significant strain. It has been for some time and the concern that councils and those involved in the delivery of water services raised is that we are asking over a 12-month time frame for councils to develop a water services delivery plan and this is off the back of a number of years of involvement in water reform.So you know councils have been working on this for a long time but we're asking them to do these plans again yet there's no resourcing being provided to councils to do that. We hear from councils that they're often struggling to retain some of their qualified staff. They're often competing with the Public Service; they're often competing with the private sector for people who actually have the capability to do this work. So the concern from councils and it's valid is: where is the money coming from from central government in order to provide that support? You know the Government during the election campaign was insinuating that there would be support for councils financial support in these matters but yet when it comes to the very first piece of work we're asking councils to do there is nothing forthcoming. So that's my first question to the Minister.The second matter I just wish to bring to the attention of the Minister if we look at clause 11(1) (da)(i) and (ii)—and so this is on page 15 of the bill for those reading along—I have submitted an amendment which is now on the Table tonight to add to this clause clause 11(1)(da)(iii) and to insert the time frame for how the anticipated or proposed model or arrangements provided under paragraph (j) will be made compliant. My reading of this clause—and I recognise that there are other references in other parts of the bill to time frames for the delivery of the whole water services plan but this particular clause speaks to water services that don't comply with current regulatory requirements or will not comply with any anticipated future regulatory requirements. It asks that the water services plan includes the "description of the non-compliance; and—(ii) a description of how the anticipated or proposed model or arrangements provided under paragraph (j) will assist to ensure water services will comply".My addition is the time frame for that because I think that ratepayers and consumers need clarity of time frame. If there is a water service in a territorial authority that is non-compliant I think the water services delivery plan needs to be explicit that this particular model is going to be made compliant within six months or within five years or within whatever time frame is needed to ensure that that water is made safe and compliant. I think that that would be a useful addition to have in the bill and I hope that the Minister will take that under some serious consideration.I just note before I finish that I will have some further questions to ask particularly around joint arrangements of council which is quite relevant into my area of Te Tau Ihu in the top of the South. Thank you Mr. Chair.Hon SIMEON BROWN (Minister of Local Government): Thank you Mr Chair. A number of questions here in relation to Part 2. The Hon Megan Woods asked the question around why one year rather than two years in order to do these plans. Councils should be able to prepare plans in 12 months as they will use long-term plan (LTP) data. Of course they've just recently gone through the process of setting their LTPs and many councils want to get on with these new arrangements. If councils are struggling with their plans they can ask for support from—Hon Dr Megan Woods: Sorry point of order Mr Chairman. I'm really loath to interrupt the Minister but it's actually incredibly hard to hear him. If he could pull the microphone closer thank you.Hon SIMEON BROWN: Sorry—is that better?Hon Dr Megan Woods: It is—we're able to hear every word.CHAIRPERSON (Greg O'Connor): Very legitimate point of order I might say actually.Hon SIMEON BROWN: I'll speak up as well.Hon Dr Duncan Webb: Imagine it's question time.Hon SIMEON BROWN: I'll imagine it's question time Duncan.Hon Members: No no no—that's OK. That's all right.Hon SIMEON BROWN: He asked me to.CHAIRPERSON (Greg O'Connor): That's Dr Webb you're speaking about.Hon SIMEON BROWN: Dr?CHAIRPERSON (Greg O'Connor): Duncan.Hon SIMEON BROWN: Honourable?CHAIRPERSON (Greg O'Connor): Webb.Hon SIMEON BROWN: Is it "honourable" first?CHAIRPERSON (Greg O'Connor): Carry on.Hon SIMEON BROWN: Hon Dr Duncan Webb.CHAIRPERSON (Greg O'Connor): And just refrain in future from using first names.Hon SIMEON BROWN: I apologise Mr Chair—I appreciate your guidance. If councils are struggling with their plans they can ask for support from the department or ask for support from a Crown facilitator which of course is outlined in this part as well.In relation to the issue of Crown facilitators Crown facilitators could be used to help councils define solutions such as coordinating or negotiating a joint arrangement and joint plan which of course is also envisaged in this part.In relation to land farms—questions in relation to the 10-year view versus the 30-year view—this issue has actually been addressed in terms of the report back from the Finance and Expenditure Committee in relation to clause 13. Councils may include information that covers an additional 20 consecutive years if the information identifies investment requirements for water services infrastructure or to support future housing growth and urban development. And so that issue was addressed following submissions.In relation to other elements of Lan Pham's Amendment Paper 68 the issue in regards to climate change adaptation and mitigation as they relate to water services—these are covered in clause 11(1)(d) in terms of regulatory requirements and also paragraph (i) of clause 11(1): "a description of any issues constraints and risks that impact on delivering water services:" So again those issues have been have been considered and addressed in terms of the bill so we won't be supporting that Amendment Paper because we believe those issues have been addressed and responded to in terms of the legislation.In terms of Rachel Boyack's questions around financial support this is requiring councils to put forward these financial these water service delivery plans. The department will be available to support and provide advice. Ultimately councils hold the information. We'll be requiring them to put forward those plans. And I would note that the department has been working with councils around some of the so-called Better Off funding that was allocated by the previous Government which I would have thought would have been used to fund water infrastructure but was used—a very small percentage was going to water infrastructure a lot of it was going to a whole range of other things. We have asked the department to work with councils to reallocate that funding towards water infrastructure or towards supporting councils with setting up these new arrangements which is a critically important part of Local Water Done Well."