Kedgley Sue: Local Government Act 2002 Amendment Bill — First Reading 
Kedgley Sue: Local Government Act 2002 Amendment Bill — First Reading 
[Volume:662;Page:10702] 
SUE KEDGLEY (Green) 
: 
 This is a terrible bill a dreadful bill that the Green Party will not be supporting. I sincerely hope that people in New Zealand will not be fooled by the soothing words of Mr John Carter and Mr Hide that the bill is all about reducing rates taking the cost out of local government and focusing on core services. Actually this bill is all about further implementation of ACT’s agenda to reduce spending in local government by as much as possible to corporatise and privatise as much of local government as possible and to shrink democracy. 
As Roger Kerr and others have revealed and I think Mr Hide has also referred to it the underlying premise of the bill is based on what happened in a grand experiment in Colorado. A tax and expenditure limit was set in Colorado the aim of which was to reduce spending and of course make us all resent paying rates or taxes. It also has the effect of driving down the resources of local government to the point where it becomes effectively bankrupt. What happened? This year as a result of this grand experiment in Colorado which this bill is trying to implement the Colorado budget will have a shortfall of US$28 million or 10 percent of its whole budget brought about by the strangulating effects of these tax and expenditure limits. One-third of Colorado Springs’ 24000 street lights were turned off earlier this year to save around US$1 million of expenditure. Residents can adopt a street light if they pay US$100 a year. The taxi drivers are trying to do the work of the police force because it is so overstretched by cuts. Park budgets have been slashed by 25 percent. Grass is mown monthly not weekly. Buses were sold and services no longer operate on evenings and in the weekends and the fire and police budgets lost US$5.5 million. 
Is this what we want in New Zealand? Do we want millions of street lights around New Zealand turned off? Do we want there to be no buses at the weekends or in the evenings? Do we want our taxi drivers acting as our police force? This I tell members is what will happen if we continue to be fooled by Rodney Hide and the ACT agenda. There is no question that local government is the new battleground for the agenda of the Government and Rodney Hide to corporatise and privatise as many assets as possible. There are many other concerns about this bill such as its definition of core services. I notice that the environment is not considered a core service. So what about issues like using toxic substances such as methyl bromide? I notice recreational facilities are a core service but what about parks and reserves? What about the Waitakere Ranges etc? 
The other issue I would like to focus on and there are many in this bill that I could focus on is water privatisation. This bill transfers management and decision-making control over water to private corporations and in so doing it transforms the provision of water services from a public good to a source of private profit. It promotes water as a commodity to be traded rather than as something that is essential to human life to health and well-being. 
Once a council has entered into one of these public-private partnerships for 35 years the bottom line the driving influence on all decisions will be the return to the shareholder not the public’s best interests. The water privatisation industry is a trillion-dollar industry aided and abetted by the World Bank and the IMF. Basically they are going around the world seeking new markets for their water privatisation agenda and of course they are turning their eyes to New Zealand and the Minister of Local Government and to the National Government which of course will come to the party. Water privatisation gives multinational corporations control over the necessities of life and of course they are focused on returning money to their shareholders and running the assets into the ground. Why would they not? They are focused on profits. Many of them of course are run by private equity companies. 
I will give an example from the United Kingdom where Margaret Thatcher was one of the first to introduce widespread water privatisation and these kinds of long-term arrangements. The result was excessive pricing. There was a sharp increase in the cost of water over 50 percent in the first 4 years; soaring profits for the shareholders the water companies—142 percent in the first 8 years—while the customers were having continual price rises; and huge underinvestment. The companies cut their investment programmes and used the savings to maintain and increase their dividends just like what happened to our railways under Michael Fay and Mr Richwhite. Huge salaries bonuses and fees were paid to the directors of the water companies. People felt so resentful of the companies which were perceived as greedy and they were not prepared to make the sacrifices to conserve water. 
Following privatisation there was a sharp rise in the number of households having their water supply disconnected or cut off which of course endangered their health. Continuous access to water is an absolute basis of health and well-being. In fact one of the criticisms was that water companies were failing to notify all these cut-offs to local authorities. There were no incentives under the privatisation to improve efficiency or to reduce leakages. Far from conserving water the people in England were so resentful of the companies they did not bother to conserve water nor did the companies. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
SUE KEDGLEY 
: I was explaining what an unmitigated disaster water privatisation had been in England and I was describing the 35-year privatisation contracts such as the one we will have here in New Zealand. The  
Daily Mail 
 a staunch supporter of the Conservative Party had a commentary with the headline “The Great Water Robbery”. It stated: “In recent weeks the penny has been dropping that something has gone horrendously wrong with the privatisation of Britain’s water industry … the water industry has become the biggest rip-off in Britain. Water bills both to households and industry have soared. And the directors and shareholders of Britain’s top ten water companies have been able to use their position as monopoly suppliers to pull off the greatest act of licensed robbery in our history.” That was from the  
Daily Mail 
 and that is what we are opening ourselves up to in New Zealand with this Local Government Act 2002 Amendment Bill. 
Another point I make is that the 35-year contracts entered into are completely secret. The contracts are commercially sensitive and are in confidence so people do not know what is in them. Some of the contracts have a guaranteed rate of return. In Latin America one of the big companies said that it would withdraw from its investments unless the return on capital was 13 percent. It withdrew from most of Latin America because it could not get its guaranteed return. There have been huge revolts against the high prices charged by private operators right throughout Latin America. Domestic water prices went up by 150 percent in Bolivia following privatisation. That led to huge demonstrations and so on and so forth. What happens when these companies go bankrupt in the course of their 35-year contract? Something that we should all be thinking about is the number of bankruptcies. Who takes over then? Is it the bank? I ask what happens. 
In Wellington there is I think a 25-year contract with regard to the wastewater sewage. This contract has changed three times in the past decade. It has gone from one company it has passed to another subsidiary and then it has passed to another. What are the implications for all this? Over 35 years circumstances can change but we are locked into these contracts. Everyone knows that water will be the oil of the 21st century. We will have water wars. That is why all these corporate water companies are scouring the world trying to get hold of publicly owned water companies such as those that we have built up over generations in New Zealand.