Local Government Act 2002 Amendment Bill — In Committee Third Reading 
Local Government Act 2002 Amendment Bill — In Committee Third Reading 
[Volume:660;Page:15537] 
Tuesday 16 November 2010 
( 
continued on Thursday 18 November 2010 
) 
Local Government Act 2002 Amendment Bill 
In Committee 
Debate resumed. 
Part 1 Amendments to principal Act ( 
continued 
)  
PHIL TWYFORD (Labour) 
: 
 I say good morning to the Committee and good morning to New Zealanders who may be a little nonplussed that we are considering some fairly fundamental changes to our system of local government here at 9 o’clock on a Thursday morning under urgency. 
Hon Ruth Dyson 
: Again. 
PHIL TWYFORD 
: Again the Minister of Local Government has brought a bill to the House that takes away the democratic rights of New Zealanders in local government and again it is being pushed through the House under urgency. 
There is plenty to talk about in this bill and I am looking forward to some detailed debate at the Committee stage on the provisions of the bill. I will start by explaining one of the reasons why Labour is voting against this bill in its entirety. This bill through a number of its provisions seeks to open up local government services assets resources and systems to the private sector and it does that in a number of ways. Principally it removes the democratic safeguards that exist in the law currently that give citizens and communities all over New Zealand the chance to be informed and notified of changes in the way that assets are owned or managed and in the way that services are delivered. Citizens have the opportunity to consider that and to give input—to be consulted as part of the democratic process. This bill takes away those rights. 
I will go through some of the clauses in more detail. Clause 11 repeals section 88 of the Local Government Act 2002. The effect of that repeal is to take away the right that citizens in this country currently have to be consulted thoroughly when a public service currently delivered by the council is corporatised transferred over to a council-owned company or contracted out to the private sector. There is a reason why section 88 is currently there which is that whether a service is delivered by the private sector or whether it is delivered in an open transparent way managed in the interests of the public good by our local authorities it is a matter of legitimate public interest. 
I would have thought that after the last year and a half in Auckland the Hon Rodney Hide would discern that the public actually care about this stuff. The public backlash that he faced in Auckland because of his corporatisation agenda for the new Auckland Council where he has essentially consigned three-quarters of local government services into council-controlled organisations caused a storm of public concern from the  
New Zealand Herald 
 and right across the city including all the elected mayors. There was massive public opposition and the corporatisation agenda that he rammed through in Auckland is one of the reasons why not only his own personal stakes but also the Government’s standing took a real hit in Auckland over the super-city. 
Hon Member 
: And their mayoral candidate. 
PHIL TWYFORD 
: That is right. Surely that is demonstration enough that people care about this issue. The reason people were concerned was that the council-controlled organisation model is deliberately designed to keep the business of local government away from the sunlight of transparency and democracy. It is designed to keep the public out. 
The storm of public opposition to the Minister’s agenda in Auckland forced some real concessions that made the Auckland council-controlled organisations far more responsive and transparent than otherwise but those concessions will not apply to the rest of the country. They do not. So under this bill councils around the country can transfer services to a council-controlled organisation without consulting their ratepayers without telling them what is going on. Once those services and assets are in council-controlled organisations a whole lot of other democratic safeguards do not apply. They can dispose of assets more easily without having to consult the community and their meetings are no longer open to the public. They do not have to publish agendas or minutes. All of the normal conventions of accountable government that we take for granted in local government do not apply under the council-controlled organisation model. That is why the current law says that communities should have the right to be consulted before the services assets and resources of local government are transferred across. 
If we look at the transport council-controlled organisation in Auckland we see that Mr Hide against the advice of four Government departments advised that the transport agency should be corporatised. Nowhere else in New Zealand is transport run as a council-controlled organisation—as a corporate entity. But there was a huge public outcry about that because people do not necessarily want their local government services to be run by a corporate entity. People like to have access to the meetings and to hold their politicians to account. 
This bill undermines those rights. Nothing in this bill would prevent a council from transferring its libraries to a council-controlled organisation its parks to a council-controlled organisation or its transport operation to a council-controlled organisation. A council could do those things—[ 
Interruption 
] Members opposite ask why they would do that. Well I ask them why the Minister in the chair the Minister of Local Government transferred three-quarters of Auckland local government services to a council-controlled organisation against the wishes of Auckland—against the wishes of Auckland’s elected politicians and against the wishes of the public. That is a perfect example of a politician choosing to do that. He never gave the people of Auckland a say and this bill reflects that exact same political style. The citizens of Auckland would not be given a say as to why their services would be corporatised. Why members opposite cannot get that into their heads I just do not understand. 
The Government claims that this bill will make local government more transparent and more accountable. Well we will look at a whole series of examples as we go through the clauses of this bill but clause 11 in particular which repeals section 88 of the Local Government Act 2002 is a classic example of how this legislation will make local government less transparent less responsive and less accountable. It is all because of the ideological blinkers of this Government and this Minister of Local Government who brazenly want to encourage the privatisation and corporatisation of our local government system. They are taking away the democratic safeguards that New Zealanders expect and rely on. 
There is an important philosophical difference between National and ACT on one hand and Labour and the Greens on the other. Members on this side of the Chamber believe in the importance of public ownership and public control as part of our democratic system of government. It is so that our communities and their resources and assets are managed for the public good in the public interest and in a transparent and accountable way. But what does this Minister of Local Government believe in? What do members opposite believe in? They are quite happy to shovel our resources and our assets which generations of ratepayers have paid for through their rates into corporate entities where business can be done behind closed doors with no transparency and no accountability. Those members do not care because they are totally happy for our cities and our communities to be run by an oligarchy of private interests. That is the system they are setting up. It is the system that Rodney Hide has been setting up in Auckland. 
This bill severely undermines the democratic processes of local government. Labour does not believe in it we will not stand for it and we will denounce it and call it what it is. This Government with the help of this Minister who is currently polling at about 2 percent in the polls is undermining our public institutions and our system of government by taking away the right of people to be informed about their resources. 
I would have thought that with the experience of the last couple of years this Government would realise that people actually notice and care about issues of public ownership and public control. The fiasco that this Minister presided over in Auckland is a classic example of that. We could look back to when the forces of the right tried to privatise the Ports of Auckland and provoked massive opposition. 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 I thought I would do something novel and speak to Part 1 of the Local Government Act 2002 Amendment Bill. It is clear to me that Mr Phil Twyford is traumatised by the success of Auckland and cannot bring himself to talk on this bill. 
Part 1 inserts several new provisions so that local authorities will be required firstly to have particular regard to the contribution made by particular core services; secondly to assess the risks and returns of commercial investments which I thought would be a good thing; thirdly to develop a financial strategy and include this in the authority’s long-term plan—again I would have thought that that was a good thing—and in particular fourthly to publish a pre-election report. These provisions are under clause 16. The information that will be included in the pre-election report for members is set out in schedule 1. 
By the way I should say that Part 1 contains the bulk of the substance of this bill. Part 1 also provides for more consistent financial reporting and the disclosure of infrastructure service information. For example it enables regulations to be made that prescribe that forms for funding impact statements are included in long-term plans annual plans and annual reports in schedule 1. It also enables a Secretary for Local Government to make rules specifying standard performance measures for five groups of activities and sets out the purpose and criteria for doing so. These performance measures will be included in long-term plans and annual plans which are intended to take effect from 2014. The part amends the definition of “community outcomes” in clause 4 so that it is about the outcomes a local authority aims to achieve for its community. 
Chris Auchinvole 
: Is this the hidden evil bit? 
Hon RODNEY HIDE 
: Maybe. The part also repeals requirements for local authorities to carry out separate processes for identifying monitoring and reporting on community outcomes under clause 12. 
Part 1 repeals requirements for local authorities firstly to consider the views of interested or affected persons at four specified stages in the decision-making process. 
Dr Cam Calder 
: How many is that? 
Hon RODNEY HIDE 
: Four. It will be up to the council to decide how many times it will consult. Secondly the part repeals requirements for local authorities to consult on proposals to change the mode of the service delivery of a significant activity from a local authority to a council-controlled organisation or other body under clause 11. The council can still decide to do it; it is not a legal requirement. Thirdly the part includes certain proposals decisions and long-term plans. These include proposals to construct replace or abandon a strategic asset in clause 14 and proposals for the sale or exchange of endowment land in clause 33. I have to say that these provisions have been overwhelmingly received by the local government sector. Part 1 removes most funding and financial policies from long-term plans while requiring separate consultation on some of those policies. That is set out in clauses 18 to 26. 
Regarding the provision of water services Part 1 gives local authorities and their communities more options for providing and financing their water services so that they can decide for themselves what is in their best interests. That will help to facilitate private sector investment in water infrastructure. The provisions in clauses 31 and 32 extend permitted time limits on water service contracts and joint arrangements with the private sector from 15 to 35 years which makes those arrangements more workable. I do not understand the position of Labour members. They were happy for the term to be 15 years but somehow 35 years is suddenly the end of Western democracy as we know it. 
Phil Twyford 
: It’s private ownership. 
Hon RODNEY HIDE 
: Mr Twyford keeps yelling out. I think he should concentrate on finding somewhere in Auckland where the Labour Party would like him to stand; that would be a positive thing. 
This part also enables councils to build own and operate transfer schemes by allowing a private partner to open new infrastructure during the contract period. The public would have to be consulted on these proposals and on any other kind of joint arrangement. The bill does not require any changes to be made and does not privatise water services. For example it does not enable permanent ownership by or the transfer of council water services to the private sector. Local government would remain legally responsible for providing water services and for pricing and policy decisions. Customers would continue to have a direct relationship with the local government organisation which would be accountable to those customers. The bill prohibits arrangements in which the private partner has the right to revenue from the water service such as concessions or other franchise agreements. It also prohibits the sale or transfer of the ownership of existing infrastructure— 
Chris Auchinvole 
: Could you say that again—inhibits the sale? 
Hon RODNEY HIDE 
: I will say it again because I know Mr Auchinvole is interested. 
Chris Auchinvole 
: Did you say it prohibits the sale? 
Hon RODNEY HIDE 
: Yes Part 1 prohibits the sale or transfer of ownership of existing infrastructure unless that is incidental to and desirable for the success of the joint arrangement. Again the public would be consulted. 
Hon Darren Hughes 
: He was a celebrity once; now his fan base is Chris Auchinvole. 
Hon RODNEY HIDE 
: It is so interesting is it not? We have Mr Darren Hughes who I think lost his seat at the last election. We have Mr Twyford who cannot— 
Phil Twyford 
: How’s your polling in Epsom Rodney? 
Hon RODNEY HIDE 
: Actually it is very good. Mr Twyford cannot even convince his own Labour Party to let him have a crack at a seat. 
We will also have a Supplementary Order Paper to make minor drafting amendments to Part 1 of the bill— 
Hon Darren Hughes 
: Don’t show off about victories. 
Hon RODNEY HIDE 
: —and I know that Mr Hughes will be interested in that Supplementary Order Paper. Clause 16 is amended to clarify that the provision will relate to a local authority “referred to in subsection 1A”. Clauses 25 and 26 are amended to fix cross-reference errors. Clause 32(4) is amended to fix the amending terminology used in the provision. I am looking forward to the Labour Party actually addressing Part 1. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very please to speak in the Committee stage of the Local Government Act 2002 Amendment Bill. What is very clearly behind this bill is a very specific agenda— 
Hon Members 
: Ah! 
BRENDON BURNS 
: Yes it is a very specific agenda for the privatisation of New Zealand’s water assets and I will give the Committee two examples one of which is relevant to those noisy members from Canterbury. I will quote from a Canterbury District Health Board document that warns about the consequences of this bill. I will also quote from another document that is not so public from the Minister of Health in respect of this privatisation agenda because this bill raises very serious concerns about not only the loss of local New Zealand control of ownership of our water supplies but also very major risks to public health. 
I specifically refer to clauses 28 29 and 30 in Part 1. The Local Government and Environment Committee received commentary from the Canterbury District Health Board on those clauses. I have to say that in 25-plus years of being in and around public life I have never seen a submission so strongly made in such language explicit with warning to a Government as this submission which was written by the Canterbury District Health Board’s manager of healthy physical environments. In it he warns that “Deletion of sections 125-129 of the LGA effectively removes the specific regulations pertaining to water and sanitary services overseen by an (independent) Medical Officer of Health.” The actions of the Government in taking away the Ministry of Health’s oversight of water schemes as this bill does are as the Canterbury District Health Board states explicitly in its submission precisely the type of action that played a significant part in the Walkerton tragedy. 
Walkerton is a small dairy-farming area in the Ontario province of Canada. A new Government came in promising to sweep away the red tape and the horrendous regulations that were squeezing the lifeblood out of business. It did that. It took away the red tape. The consequence of its actions which included the removal of health department oversight of water schemes was a serious outbreak of E. coli in 2000 which saw seven people die and two and a half thousand people get sick and which cost an estimated $200 million in direct and indirect costs to that province of Canada. Seven people died— 
Hon Member 
: What? 
BRENDON BURNS 
: Seven people died and two and a half thousand people got sick because a Government came in and said it would sweep away the red tape the regulatory restraint which was strangling the lifeblood of business. The consequence of that was to take away health department oversight of the management of water supplies in that part of Canada. That is precisely what will happen here. 
I invite the Canterbury member opposite Nicky Wagner to stand up challenge her district health board—which she likes to snuggle up to sometimes—and tell it that it is wrong and to put it on the record today so that when this happens in Canterbury under this bill she can stand by her record and can tell the board that she was right. Here it is in black and white: the Canterbury District Health Board is telling this Parliament and telling this Government that this bill in removing Ministry of Health oversight of water schemes in a blatant attempt to privatise our water supplies—to put in the profit motive—will lead to a tragedy. It is saying that taking away regulatory oversight of water schemes will put this nation at extraordinary risk. They are not my words; they are the words of the medical officer of health of the Canterbury District Health Board and his team who currently have a role in the oversight of drinking water. My goodness that district health board already has a struggle going on in trying to make sure that our drinking water is safe. It has a Minister of Health—[ 
Interruption 
] Mr Chair! Mr Chair! Mr Chair! 
The CHAIRPERSON (Eric Roy) 
: I will give you the call but we are not going to have a barrage of calls. I am quite aware when people are seeking the call and I am not going to have any member yelling at me. If someone continues to do that that member is not likely to get a repeat call. 
BRENDON BURNS 
: Thank you Mr Chairperson; my apologies for the volume. This is an issue that deserves to excite the interests of members of the Committee because there are very very pronounced risks for New Zealanders under this bill in terms of the safety of their water. A submission from the Canterbury District Health Board to the committee explicitly states that there are very real risks in taking away the medical and health oversight of water schemes and handing it across in 35-year terms to the private sector. In doing so we will risk doing exactly what happened in Walkerton Ontario. We are risking the lives of New Zealanders by taking away that health oversight. 
Allied to that just a few weeks ago I was able to discover that the Minister of Health has taken an action that I think is involved in and linked to this issue. Until very recently the Ministry of Health had a team that was responsible for oversight of our drinking-water schemes. That has now virtually ended. From a team of five 2 years ago there is now one staffer left in the Ministry of Health providing oversight of drinking water. Instead the Government has awarded a $2.25 million contract—$2.25 million of our taxpayers’ money—to a consortium led by a company called Allen and Clarke which National members opposite were describing 5 years ago as cronies. They were saying that rampant cronyism was at work involving this company. But that has not stopped them from awarding a $2.25 million contract to a consortium led by Allen and Clarke to provide oversight of our core public health function the safety of our water. I see a very strong linkage between that and what we have seen in this bill in respect of taking away at a local level Ministry of Health oversight of drinking water. 
If we put those two things together where are we going? We are going into a system where contracts will be handed over to the private sector for 35 years without at a local level health input and oversight of drinking-water schemes. At a national level as a result of the Minister of Health’s intervention and the awarding of a $2.25 million contract to a consortium led by Allen and Clarke we now have a contracted-out responsibility for what is a very clear public health function. If there is one thing that we as a First World nation should be able to do it is to have some belief that water is safe to drink and currently fewer than one in five New Zealanders are able to be given that assurance. Fewer than one in five New Zealanders are able to be told explicitly that water is safe to drink. That is the statistic in the latest Ministry of Health report— 
Nicky Wagner 
: That is not— 
BRENDON BURNS 
: Yes it is. The 2008-09 Ministry of Health annual survey shows that 80 percent of New Zealanders are drinking water that is assured to be safe—down from 83 percent in the previous year—but one in five or 20 percent of New Zealanders are not given that assurance and do not know that their water is safe because their water either is not tested or when it is tested is found not to be safe. That is the result. 
Nicky Wagner 
: That’s scaremongering. 
BRENDON BURNS 
: No it is not scaremongering. We saw what happened in Walkerton Ontario under precisely the sort of regime that this bill is leading to—precisely. They are not my words. There is the member from Rangitata. You stand up and take a call— 
The CHAIRPERSON (Eric Roy) 
: Order! 
BRENDON BURNS 
: —and deny what your local district health board is saying. It was an explicit warning. You go on the record and say this is a nonsense— 
The CHAIRPERSON (Eric Roy) 
: Order! 
BRENDON BURNS 
: My apologies Mr Chairperson. The member for Rangitata not the Chairperson should take a call to make sure that the constituents she is currently the member for—somebody else might be their member shortly—hear her put on the record that what the Canterbury District Health Board is saying is a nonsense. She should then put on the record—and I would like to hear the Minister of Health say this as well—that it is her view that it is appropriate to take away the Ministry of Health’s role and hand it to a consortium at a cost of $2.25 million of taxpayers’ funds. 
This consortium includes an outfit called Parsons Brinckerhoff which is an American engineering conglomerate. My supposition is that it is here not just to play a role in the oversight of water through that contract but to line itself up for some nice juicy contracts that will emanate from this bill as we see the creation of 35-year contracts. A generation of ownership is provided for under this bill for our water schemes for our basic right to enjoy safe drinking-water which should be a core public health function. 
LOUISE UPSTON (National—Taupo) 
: 
 I will take us back to the focus and intent of the Local Government Act 2002 Amendment Bill because we have not heard very much about that unfortunately in this debate so far. We have heard from the members opposite a lot of alarmist talk and scaremongering and emotive extremism that has actually bordered on histrionics at times. But I want to talk about the bill because that is what this debate is about. I say it is about the bill in case some members have forgotten that. I actually do not think many members opposite know what the bill is all about so I will take members through the background— 
Jonathan Young 
: They weren’t on the committee anyway. 
LOUISE UPSTON 
: That is right and those who were did not show up all the time. 
This bill is actually about sharpening up the local government debate and making sure that we achieve in local government. It is very important to have effective local government because we know that builds strong communities. Strong communities are empowered by local government and they have influence they have a say and they have access to transparent information so that they are in a better position to influence the decisions of those who represent them. That is why I want to spend a bit of time talking about what the council is involved with and the transparency around that and about actually being able to provide good information back from a council on how it has been doing with some consistent performance measures. Also what most people would expect is a financial strategy as to how ratepayers’ money will be spent and then a report back as to whether that was done. 
One of the issues that came up from time to time in the submissions comes up a lot for me as an electorate MP. I am not sure how many members opposite are electorate MPs but a lot of constituents who come through my door talk about the fact that their greatest concern is the ever-increasing burden of rates increases on their fixed income. Measures in this bill will provide those people with the ability to look at and have a say on what local government is doing. 
Let us have a look at a couple of those measures—for example core services. We have heard a diatribe from members opposite about core services and I want to set the record straight on the intention behind the statement of core services. That statement actually enables councils to have a focus on core services but nowhere is it stated—and it never has been stated—that a council is restricted to those core services. Instead the statement is about creating a priority for those activities and then allowing debate by the people who live within a council boundary to decide which other activities should occur. 
For example economic development was mentioned several times and that is an important activity to touch on. If I look at the Taupo electorate I see that economic development occurs quite differently in Waipa from south Waikato and from Taupo. Not one of those councils is stopped from doing economic development but the priority is different based on the needs of those communities. This bill provides the flexibility for each council to work towards meeting the needs and demands of its communities. If a particular community wants to invest significantly in economic development then local ratepayers get to make that call which is exactly how it should be. 
In terms of core services though we would not want to have a situation where some non-core activities took priority over the building of roads for example. Every ratepayer has a certain expectation about roads to drive on and water to drink. That is exactly what we have in terms of core services. 
Despite some random comments from members opposite this bill is about communities making decisions around the activities in their communities. More important in activities like the pre-election report the community gets to see how the council has been going with regard to the decisions that the community has had input into. At local body elections—and we have just had one—voters will be able to rely on solid information rather than just electioneering material. The previous speaker talked about democracy. I am not sure why members opposite cannot understand that pre-election reports allow for more information to be provided to enable voters to make informed decisions about whom they will vote for. Yet members opposite say this bill takes away democracy. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 One has to hand it to the National Party and the ACT Party. At the last election they promised New Zealanders that they would not privatise any public services in their first term and of course they did not mention anything about local government services. Local government services are what this bill is all about. It is about privatising local government services and contrary to the previous speaker’s comments the bill is all about removing the ability of local communities to determine what shape of local government they want. Under current law it is up to local communities to decide what type of local government they want and what sorts of services they want their local councils to provide. Communities have the ultimate say but this bill is all about watering down their ability to determine what they want their local councils to provide. 
I particularly want to talk about core services and that is what the previous speaker Louise Upston—a single-term MP for Taupo—was talking about. I will talk about how councils will define a core activity because a core activity in one area will not necessarily be a core activity in another area. A core activity now might not be a core activity in the future. If I had been writing the Canterbury council’s list of core activities 6 months ago I am not sure that I would have put “earthquake recovery” on that list of core activities though I imagine that Canterbury local authorities are quite actively involved in that at the moment. These things change. The needs of communities change and councils need to be able to respond. Not a single submitter to the Local Government and Environment Committee thought that defining core services was a good idea. Can any members opposite name a single local authority that said that was a good idea? 
Dr Cam Calder 
: Yes I can and I have the piece of paper. Would you like me to table it Mr Chair? 
The CHAIRPERSON (Eric Roy) 
: Order! 
CHRIS HIPKINS 
: Give me the name. 
Dr Cam Calder 
: Wellington City Council; I have the document in front of me. 
CHRIS HIPKINS 
: Rubbish! The Wellington City Council did not argue that way. I sat through that council’s submission and it opposed the definition of core services. Not a single local authority thought that defining core services was a good idea. I sat through the hearings and none of the councils argued that it was a good idea to define core services. In fact the Government’s vision of what core services should be and Rodney Hide’s definition of what core services should be cut out a whole lot of stuff that local authorities currently work on. For example employment creation job creation and economic development are not part of this Government’s vision for the role of local government. I think that local government could play a larger role in these types of activities. The Mayors Task Force for Jobs for example was very successful but there is no accommodation for something like that within the definition of established core services. 
One of the reasons they say we have to shrink the size of local government is rates increases yet the Department of Internal Affairs advice to the select committee was that 97 percent of council expenditure was on the things that they list as being core services for local authorities. There is absolutely no need to define core services in legislation. All that will do is unnecessarily tie the hands of local authorities and make them less responsive to their local communities. They want to take the “local” out of local government. Local government should be about local communities saying that “These are the services that we want you to provide.” They need to be able to change. They need to be able to adapt to different situations. I am very concerned about this idea of local authorities having their hands tied. 
I want to talk also about the financial strategy that councils will need to put in place because potentially that will also constrain councils’ abilities to respond to local community needs. I support having a financial strategy but I am concerned that it will require councils effectively to cap the level of rates they will be able to charge. It is very popular to promise lower rate increases and therefore defer to future generations the costs of very necessary infrastructure upgrades and very necessary expenditure. In 10 years’ time or 20 years’ time when the plumbing stops working the water stops coming out of the taps and the roads are full of potholes the councils of 10 or 20 years ago will not be the ones that have to deal with the problems. Those problems will be faced by councils in the future. So 20 years ago those councils may have kept their rates low but future generations are the ones who will end up having to deal with the legacy that that will create; they will have to worry about that legacy. 
Overall the idea of a financial strategy for local authorities is a good one. We have a financial strategy for central government finances so having a similar mechanism for local government is perfectly acceptable. But I am concerned about putting an arbitrary cap on the level of rates. We do not do that for central government taxation. We do not say we will cap at a certain rate the amount of revenue that central government can earn and thereby everything else has to fall within that cap. Central government has the ability to raise taxes as it requires in order to fund the activities that it deems necessary and on which it goes out and campaigns for a mandate. Why should local authorities be subject to a different standard? Why should they be prevented from delivering the things they promised to their local communities in an election because there is an arbitrary cap on the amount of revenue they can create? 
If local communities want local authorities to provide certain services and they vote for local authorities to provide certain services then the local authorities need to be able to raise the revenue in order to deliver them. If the local people do not like it and are unhappy with the level of rates being charged then there is a mechanism they can adopt in order to deal with that—they can elect a different council. It is the same with central government. If people are not happy about the level of tax they pay they can elect a different Government. If they are not happy with the services provided by central government they can elect a different Government. Why should local authorities be any different? Why should central government be tying the hands of local authorities and preventing them from delivering on the services that local communities are demanding of them? They are effectively short-circuiting the local democratic process by saying that the local communities might say that that is what they want but that we in this Parliament know better. Actually we do not; the local communities should be able to determine what they want to have delivered. 
As I mentioned before putting an arbitrary cap on the revenue that local authorities can raise also constrains a council’s ability to deal with unforeseen issues that may arise from time to time and again I come back to natural disasters for example Canterbury’s earthquake. Why would we want to constrain the ability of local authorities to adapt to things that are unforeseen? The Canterbury earthquake is at the extreme end of the scale; I am talking about smaller-scale natural disasters. The Hutt Valley where I come from is prone to regular flooding. In the last 10 years or so there have been three or four reasonably significant floods. They are not the types of floods where every home in the Hutt Valley is flooded but ones where significant numbers of homes and businesses end up being flooded. Local authorities need to have the flexibility to respond to those disasters and to raise the revenue that they need in order to respond to those disasters without this idea of an arbitrary cap on them. If we put an arbitrary cap on the level of rates that councils can charge again what we are doing is encouraging local authorities to defer the burden of providing adequate infrastructure on to future generations. I think some of our local authorities already have an infrastructure deficit whereby the replacement of core pipelines and so on has not taken place because those local authorities have been striving to keep their rates down. As a result at some point a future generation will end up having to front up and pay an awful lot more in order just to keep the basics operating. 
Why should we place this constraint on councils? Why should we place this overriding objective on councils that keeping rates low is the ultimate objective no matter what the consequences? Ultimately we will get what we pay for. If we pay for a cheap shoddy water system and a cheap shoddy sewerage system that is what we will get. But if we are willing to invest in it now then we will be catering properly for future generations. I am concerned about that desire to cut down the role of councils by restricting them to what Rodney Hide thinks local authorities should be providing rather than what the local communities think they should be providing and by putting this arbitrary cap on the level of rates thereby restricting the ability of local authorities to raise the revenue for the services that local people want their local authorities to provide. 
Those are two things that I am particularly concerned about in this legislation. I know that the Minister has indicated that he will take the next call so I am quite looking forward to hearing his response to those two particular issues. 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 I want to correct some of the statements that have been made by Labour members. 
Chris Hipkins 
: They’re factual. 
Hon RODNEY HIDE 
: No I am sorry they are false. First of all Mr Twyford said that no council supported the clause on core services. This is simply untrue. For example Rangitikei District Council officials advised me that the council thinks it is helpful to highlight in legislation those core services that councils must have particular regard for. I am sorry but the Labour members must have been asleep during discussion on that one. Indeed Wellington— 
Phil Twyford 
: How many supported it? 
Hon RODNEY HIDE 
: Mr Twyford now changes the debate. He said none earlier and he misled Parliament. When we come to Wellington City Council I am advised that the council supported the clause in its current form. I think it would be helpful for this debate on the important area of local government if Labour actually concentrated on some accuracy. 
Dr CAM CALDER (National) 
: 
 I thank the Minister in the chair Rodney Hide for what he pointed out because I think the previous Opposition contribution showcased the problem we face in this debate: there is a lot of extremism there is a lot of alarmism there is scaremongering and a lot of it boils down to the presentation of positions on behalf of other bodies which are fundamentally wrong. As another example which I think the Minister briefly touched on may I please read what the Wellington City Council said? One of the pleasures of being on the Local Government and Environment Committee was receiving the high quality of feedback from local government and from members of the public on this bill. 
Chris Auchinvole 
: What did they say? 
Dr CAM CALDER 
: They said a number of things and we listened very closely. I have to acknowledge at this stage the inclusive chairmanship of chairman Auchinvole and the contribution of people from all sides of the House—all sides of the House—which may not be apparent in this debate when we hear some of the comments being made. 
As well as being on the select committee I had the pleasure of visiting a number of local and regional councils in the south in the last couple of weeks. It has to be said that there were few if any concerns about this legislation—few if any concerns. Let me address the previous query as to whether we could possibly mention any councils that support the core services provision. Yes we can. 
Chris Auchinvole 
: Can we do that? 
Dr CAM CALDER 
: Yes we can. New section 11A inserted by clause 5 introduces a list of core services and the requirement that local authorities have particular regard to the contribution of those services to communities. 
It has to be said that many communities expressed some concerns about this. They said they were small rural communities and they would obviously have things that they wanted to do that were different from large urban communities. We understand that. The select committee took that on board and the Minister has alluded to the fact that we understand that. The list of core services does not prevent a local authority from carrying out anything that it sees necessary in its community. As we know there are numerous clauses in this bill that require consultation with the community by the council and for the community to be able to make its views heard despite what we have heard from Opposition members. I will very briefly speak further to this and answer the member Chris Hipkins’ earlier interjection to name a council. I would like to name Wellington City Council in addition to Rangitikei District Council which I believe the Minister mentioned. The council wrote: “In our view the clause is intended to ensure that councils have duly considered how the listed services contribute to the well-being of their communities. Wellington City Council considers it will be able to demonstrate that the council has had particular regard to the contribution that specified core services have made to our community. Wellington City Council supports this clause in its current form.” Thank you. 
SUE KEDGLEY (Green) 
: 
 George Orwell coined a language that he called doublespeak. It is a language that makes the bad seem good and the inappropriate seem appropriate. But I have never—or seldom—heard so much doublespeak coming from Government and ACT members as in this Local Government Act 2002 Amendment Bill. We have a bill that they say is all about increasing openness and transparency. Then we read the fine print and we discover that the bill is about gutting the consultation procedures in the local government legislation so that openness and transparency will be reduced or taken away. The bill will remove the requirement that councils have to make the decisions that will significantly affect the capacity of local government. It will remove the requirement to consult the public if councils want to contract out their water or other services. It will remove the requirement to consult the community when councils construct abandon or replace strategic assets. Can members believe it? Government members are saying that this will increase the openness and transparency of local government; the only word to describe it is Orwellian. 
The other thing is that Government members are trying to pretend that allowing a private water company to own water infrastructure and to manage it for 35 years is not water privatisation. What a joke! That is using all the best Orwellian language in the world because the truth is that this bill is all about allowing private water companies to come in and take over our water supplies for 35 years: to own them to manage them and to control them. Water privatisation as I was saying yesterday has a terrible record right around the world. The reason for that is that once private water companies take over a local water supply the whole goal is to maximise profits for the water companies not to protect the public interest. 
How do such companies maximise their profits? They do three things. Immediately they shed the workforce—about 25 percent to 50 percent of the workforce in most cases is immediately shed—and they reduce working conditions. The second thing companies do to increase their profits is increase the price of water and I will refer to what they did in the United Kingdom. The third thing they do is under-invest in the asset; they do not bother to fix the leaks. They do what Fay and Richwhite did to our railway network: they just run it down. Instead of investing in upgrading water infrastructure they siphon off all of that money into the profits of the shareholders. That is what has happened all around the world wherever Governments have allowed the privatisation of water. When the United Kingdom fired 25 percent of staff the price of water increased by 50 percent in the first 4 years and the number of people having their water supply cut off tripled because those people could not afford the price of water. In the meantime the huge bonuses and salaries paid to the management and directors of the water companies and the profits of the water companies soared by 142 percent in the first 8 years. 
Let us be under no illusions: that is what this bill is about. I think the private water corporations must be popping champagne as this bill goes through the House. They must be rubbing their hands together with excitement. They are being booted out of countries all around the world because of water privatisation’s terrible track record. Forty cities and towns in France are booting out private water companies. Paris has just booted out a private water company and put back the city’s water supply into public ownership. In Uruguay in Latin America and all around the world people are so outraged at what has happened to their water supplies under privatisation that they are booting out the water companies. Just across the Tasman in Adelaide the biggest water company in the world Veolia Water—which by the way owns the Wellington and Papakura water supplies—has not had its 15-year contract to run the city’s water supply extended. The water supply is going back into public ownership. 
All around the world the opportunities to take over water supplies are being reduced; private water companies are being booted out of countries around the world because people have seen what has happened under water privatisation. Yet water companies must be rubbing their hands together with glee: just as they are being booted out from everywhere else we are passing legislation yet again under urgency to tell them to come to New Zealand as we are now open for water privatisation. Here we are! 
I just wonder what water companies have had to do to get this water legislation through. Their wildest dreams are being fulfilled by this legislation. I know that when we were discussing alcohol legislation Mr Anderton asked whether liquor companies contributed money to the National Party. It would be interesting to know for the public record—and eventually we will find out—whether water companies have contributed any money to the National Party. The beauty for the water companies is not only that they can get 35-year contracts to own our water supplies but that they will no longer have to consult the public. That will all be able to be sneaked through from now on. Councils will be able to contract out their water supplies for 35 years or give their water infrastructure to a private corporation to own for 35 years and they will not have to bother to tell the public. They will be able to sneak provisions through in the dark of night just as we are doing under urgency here today because with this bill we have removed all of the consultation requirements. 
The ACT Party will also be popping champagne after this bill goes through because today we are seeing the implementation of what I call Rogernomics part 2: the corporatisation and the privatisation of as much of local government as possible. It is all set out in the ACT Party’s local government policy which I have here. The whole idea is that local government will shed its ownership of commercial activities; it will be confined to core activities. Piped water will be supplied on a fully commercial basis and the contracting out of services will be encouraged. That is ACT’s local government policy and it is being implemented today in this bill. The ACT Party as well as all the private water companies around the world will be popping champagne; they will be rubbing their hands together will glee. They will be asking how they could have pulled off this one. Not only will they now be able to take ownership of all the water supplies in New Zealand but they will be able to do it secretly in the dead of night. They will not have to go through messy consultation. They know how New Zealanders feel about water privatisation and they know there might be a lot of opposition so they have managed to do it without allowing for public consultation. 
The Business Roundtable has been lobbying for just that for years. I have all of the papers here by Roger Kerr going back over many years about privatising water supplies. In one he says: “Private companies that build own and operate water systems around the world now have annual revenues of around US$300 billion excluding revenues for the sale of bottled water.” He goes on and talks about how the World Bank is pushing privatisation initiatives. He has been lobbying for 20 years to have happen what is happening today—to allow water privatisation to take place in New Zealand. That is what the Government is doing. It is implementing the objectives of the Business Roundtable of ACT and of the Rogernomics part 2 agenda—and Roger is sitting there. That is what he came back to Parliament to do—to oversee Rogernomics part 2 the gutting and the commercialisation of local government. 
Chris Auchinvole 
: Gutting? 
SUE KEDGLEY 
: Someone mentioned the word “gutting”; it is a gutting of the consultation requirements. 
Hon JOHN CARTER (Associate Minister of Local Government) 
: 
 Let us get one thing very very clear: this Government is not privatising water. Let us get that really clear on the floor of the House. This Government is not privatising water. What we are allowing is what has been happening for many years. 
Dr Rajen Prasad 
: It’s a monopoly. Why do it? 
Hon JOHN CARTER 
: I will just explain to the member if the member will listen. I will put a very cogent argument and point of view as to what is happening. 
The fact is that for many many years local government has had the opportunity if they wish to have their water supplies managed by the private sector for 15 years. They have come to us and said that they think there is a very good reason why it may be prudent to extend that beyond 15 years. So in this legislation we have said OK. The system has worked well for many many years and we have allowed the management—not the ownership and not the privatisation but the management—of water by the private sector for 15 years. Local government is saying to us that it would not mind if it was extended a bit more so we will allow them—the local authorities which are democratically elected by their community to represent their community—to decide whether they might want to have their water supplies managed by the private sector for up to 35 years if they decide that is prudent. It is up to local government to make that decision. 
I just say to the Committee that I am not certain of the number but I suspect that 30 40 or even more private water supplies managed by the private sector already exist in this country. I dare the Opposition and Sue Kedgley to go to one of those people who are the recipients of water supplied by the private sector and ask why they do not stop doing that and hand the supplying of water back to the local authority. I can tell members what the answer would be and there would be a quick march out the door. I have asked many of those water suppliers. The member Kelvin Davis knows of one just up in Taipa for example up on the East Coast. There is a privately managed water supply there. I ask that member to ask those people whether they think it would be a good idea if Wayne Brown and the Far North District Council took over the supply of water. I know what the member’s response would be if he asked that question. I have asked that question and I have to tell him— 
Dr Cam Calder 
: What was it? 
Hon JOHN CARTER 
: Well it was not a very good response I have to say. It was commented that if I even suggested that happen that I might lose some local support. So I did not even make that comment. The point is that those people are very happy with the way their water is supplied. They can turn on their taps they get the water they pay the bill there are no extra huge charges they are very happy with the rate at which water is charged so it works. The point is that it has been working for years and years and it will continue to work because that is what that community wants. 
The other thing that might be useful is for the member George Hawkins to take a call to tell us what happened when he was Mayor of Papakura. I tell members that this might come as a surprise to the left but one of their members who was a former mayor instigated allowing the private sector to run the Papakura water supply. What happened? Well the local people kept turning on the taps and getting water out of the taps—it did not stop—and it ended up that they had the cheapest water supply in the Auckland area. Goodness we should not let that happen should we? No maybe we should change this bill and not allow that to happen! But I dare anyone to ask the people of Papakura whether they think this Government should stop allowing that to happen. 
All we are doing is applying what one might call a modicum of common sense to a practice that has been happening in New Zealand for a long time. It allows locally elected democratically elected councils to make a decision as to whether they think it is in the best interests of their community. 
Phil Twyford 
: But they don’t have to consult the community. 
Hon JOHN CARTER 
: Yes they have to consult the community—that is a lot of hogwash. Councils have to put it in their long-term council community plan. Councils have to tell the people that they think it is not a bad idea to extend the provision out and give them the reasons why. Councils will get feedback from their people. What will happen is that in 3 years’ time if the public do not like it—because it is going through the long-term council community plan and all the consultation procedures—they will not vote for the council will they? Is it not that simple? I cannot understand this objection to our extending something that is already working so well in New Zealand. We have plenty of examples where the supply of water is cheaper. I know that is a dreadful thing that the Opposition might not like to think about. 
Dr Cam Calder 
: They do not think about money. 
Hon JOHN CARTER 
: That is true. It is unfortunately sad. But in this case there is a very good reason why this should happen. There is a very good reason why we want to give local communities the opportunity to make the decision. Parliament is not making the decision; all we are doing is providing the opportunity. It is up to each community to make the decision. To suggest that this Government is privatising the supply of water is silly. What we are doing is allowing for prudent management if that is what the community decides. There are many good examples across— 
Phil Twyford 
: Ownership of assets. 
Hon JOHN CARTER 
: I say to Mr Twyford that there are many good examples across New Zealand where it happens well. As I said if that member suggested to those communities that it should not do this I tell him that we might go out and say that Labour is suggesting to the private sector suppliers that it wants them to come back into local government control. That might not be a bad policy actually. 
Phil Twyford 
: But you wouldn’t be telling the truth would you? 
Hon JOHN CARTER 
: Well that is true. I say to Mr Twyford that if he thinks it is so bad why are the Labour Opposition and the Greens not going around saying that it should be taken back into local government control? I will tell him why. It is because he knows that they would not get support for that policy. If they tried to unstitch what is happening now they would get a negative view and it would not help them in their endeavours to become the next Government which of course will fail. 
The fact is that this system works; it works well across the community. We are putting the responsibility and the opportunity back to local communities to make decisions about their own destiny and why would we not do that? We should allow local communities to have that opportunity. Thank you. 
KELVIN DAVIS (Labour) 
: 
 He timatanga korero maku Mr Chair ka mihi atu ahau ki tera kura katahi ano ka tau mai ki raro o te tuanui o tenei Whare i te ra nei Te Kura Kaupapa Maori o Taumarere. Kua puta ke ratou i te Whare nei engari e mihi kau ana ki a ratou. Katahi ratou ka tau ki Te Whanga-nui-a-Tara. Na reira mihi kau ana ki a ratou. 
[ 
Mr Chair I would like to begin by welcoming that Maori medium school of Taumarere today. It is their first time under the roof of this House. They have left this House now but I really acknowledge their presence. The visit to Wellington is a first for them as well. To them I say well done 
.] 
Firstly I acknowledge the school that was up in the gallery a few minutes ago Te Kura Kaupapa Maori o Taumarere. They have come down from the very far north; some of those kids have flown in an aeroplane for the first time. They are here to see democracy in action. Unfortunately for them they saw democracy being bulldozed through under the cloak of urgency. I acknowledge them. The mother of one of the children up there in the gallery was a pupil in a class I taught back in the early 1990s. 
I return to the bill. I will talk about new section 11A in clause 5 which describes the core services that local authorities will perform. The list consists of “(a) network infrastructure: (b) public transport services: (c) solid waste collection and disposal: (d) the avoidance or mitigation of natural hazards: (e) libraries museums reserves recreational facilities and other community infrastructure.” My concern speaking as Labour’s tourism spokesperson is that tourism is not considered to be a core activity. I want to know where the Prime Minister—who is also the Minister of Tourism—is right now and why he allowed this bill to go through with his blessing even though tourism has been omitted as a core service. 
Many people will say that it is more important to build roads and to build pipes to take drinking water here there and everywhere but let me read to the Chamber what the Tourism Industry Association thinks about this bill. The Tourism Industry Association is the collective that is basically the go-to group for the Prime Minister. Its news release states: “Local authorities play a critical role in the tourism industry through their investment in public amenities used by both residents and visitors like water sewerage toilets and roads. … Tourism is a core activity for most communities around the country and councils can help provide the best possible experiences to visitors. By helping attract visitors to the region and encouraging them to stay for longer councils are boosting the economic contribution from the tourism sector.” 
This bill reinforces what the tourism sector believes of local government and that is that local government just does not get tourism—it just does not understand the economic contribution that tourism makes to local communities. The association went on to state: “most tourism businesses are small and operate on low margins”. This Government says it is there for businesses but it is neglecting small to medium sized enterprises by not investing in them or making sure that tourism is one of the core services in this bill. 
Councils earn a good return on their investment in tourism as visitors spend millions of dollars in the regions. Let me give members an idea of the sort of return we get when we invest in tourism. If we invest just a single dollar in the United Kingdom marketing New Zealand to the United Kingdom we get an $11 return. From investing $1 in the United States we get a $16 return. If we invest $1 in Australia we get $26 back. Why would local government not want to invest in tourism and get that sort of return? 
The benefits of tourism go beyond the accommodation hospitality and attraction sectors. The benefits of tourism provide employment and business activity indirectly to many sectors of the community including shops supermarkets cafes taxis and food producers. What is it that this Government does not get about the contribution tourism makes to local economies? Why would local government not want to invest in it? 
Nicky Wagner 
: There’s nothing stopping them. 
KELVIN DAVIS 
: As the member correctly says there is nothing in the bill to stop local government from investing in tourism. But because tourism is not mentioned as a core service there is a legal basis or a legal foundation that tells local bodies that they do not have to invest in tourism—they do not have to. The bill concentrates the core services in an arbitrary list designed by the Government. If Government members could look just a bit wider than the shoebox they reside in they would see that there are massive benefits to be made by local government investing in tourism. 
KEVIN HAGUE (Green) 
: 
 I take a call to talk about some other aspects of Part 1 of the Local Government Act 2002 Amendment Bill that have not received much discussion so far. I draw on the Canterbury District Health Board’s submission on the bill in which it talked about some of the inadvertent consequences of exactly this type of approach to water in the town of Walkerton in Ontario Canada. 
In the town of Walkerton in 2000 an outbreak of gastrointestinal disease occurred through contamination of the water supply. In that outbreak seven people died and half the town of 5000 people became ill. The committee of inquiry into the Walkerton outbreak of disease found that “the Government of Ontario had made commitments to cut Government barriers to job creation investment and economic growth.”—it sounds familiar does it not? The committee’s report went on to state: “It had also made a commitment to reduce the size of Government and to provide the people of Ontario with better for less. In carrying out these commitments the new Government elected in 1985 promised to eliminate red tape and to reduce the regulatory burden for businesses and institutions.” 
The Canterbury District Health Board has made the point that that is precisely the justification that this Government has given for this bill in which the objectives are to remove unnecessary barriers to water infrastructure development and to provide councils with an increased range of options for the provision and management of water services. The district health board has pointed out that under new section 136 of the principal Act which is inserted by clause 31 the bill will remove some of the important safeguards in relation to water contracts from the existing legislation in terms of the requirements that currently pertain to local bodies and will introduce some unnecessary lack of clarity. The district health board has said we need to ensure that elements such as public consultation quality control reporting auditing performance review and evaluation are included. It has made the point that the bill is unclear about who will have the legal responsibility for that because the term “water supplier” that is used is unclear. 
The district health board has also drawn attention to the amendment to section 125 in clause 28 of the bill and the repeal of sections 126 to 129 in clause 29. It has made the point that those sections repeal the prescribed process for undertaking assessments of water and sanitary services. That provision removes the requirement to consult and consider the comments of the medical officer of health. That will compromise the ability of the medical officer of health an independent statutory officer to effectively assess and review local authority activities in regard to water and sanitary services. The district health board has said that is precisely what occurred in Walkerton. In Walkerton the Government of Ontario set out to create a looser regulatory regime to ease the costs of business to cut out red tape and to do all of the things that National and ACT in this debate over this bill have been saying are precisely the kinds of things that local government requires. But the district health board has made the point that some of this red tape is in place exactly to ensure public safety and to ensure that when we consume drinking water we are consuming a product that we know to be of high quality and to be safe. 
The role of the medical officer of health is crucial in that area. The district health board has said that role is particularly important for protecting public health when a local authority may be driven solely or in part by fiscal or political concerns which is precisely the case that we believe will be in place if this bill goes ahead unamended. The district health board has made the point that the medical officer of health can be utilised as an independent expert and trusted source of information with proven value in communicating issues associated with public health risks to communities. But that requirement is being removed by this bill by the repeal of those sections. In the Government’s headlong rush to free up the regulations that apply to local government in relation to water to facilitate this process— 
NICKY WAGNER (National) 
: 
 I move  
That the question be now put 
. 
MOANA MACKEY (Labour) 
: 
 I cannot believe that National is trying to move a closure motion already. I wish to speak to four clauses three of which have not really been discussed at all so far and one of which is— 
Jo Goodhew 
: That’s because a whole lot on your side haven’t talked about the bill. 
MOANA MACKEY 
: Well I am talking about the bill now I tell Miss Goodhew; I thank her very much. 
The first clause I will talk about is clause 24 “Policy on remission and postponement of rates on Maori freehold land”. I was flicking through the bill and this caught my eye because I remember the debate on the Local Government Act in 2002. I alert the Minister in the chair the Associate Minister of Local Government to comments made by his colleague the Hon Dr Nick Smith who is a Cabinet Minister in the current National Government and was a Cabinet Minister in the previous National Government. He said about this policy—and I would like to know whether this is still National’s position—“Then we come to [this clause]. This is nothing less than apartheid.” That clause has been carried over into the current bill with some minor changes. 
Section 102(4) of the Local Government Act 2002 states: “A local authority must adopt— … (f) a policy on the remission and postponement of rates on Maori freehold land.” Nick Smith stated: “I ask the Minister to tell me why councils must have a policy on remitting rates on Maori land but may remit rates on other land. I want some member in this Chamber—maybe Parekura Horomia—to provide me with an explanation. Why must a council develop rates remission policies for your cuzzy bros and not for mine? It is a fair and reasonable question.” He then went on to state: “This damn law that we are being required to pass is nothing less than apartheid and I cannot believe that members opposite want to impose this sort of obscene provision. It offends against National’s principle of one standard of citizenship.” 
I would genuinely like to hear from the Minister in the chair about whether the Hon Dr Nick Smith’s stated position on the provision put by Labour in the Local Government Act 2002 that local authorities have a policy on the remission and postponement of rates on Maori freehold land—a provision that has been carried over into this legislation—still stands. I would very much like to hear from the Minister in the chair on that. 
The second clause I will address is clause 22 regarding the policy on development contributions. As Labour’s spokesperson on housing obviously I have a great deal of interest in this issue. I note that under clause 8 of this legislation the community is losing the right to consultation. The community that elects the council is having consultation processes stripped from it. But I ask why developers are suddenly having extra consultation procedures put in for them so that they can continue to oppose and challenge councils that have applied development contributions to ensure that there is some public and community benefit from those developments. 
We have a housing crisis in New Zealand. It would be useful if new developments could contain for example a proportion of affordable or social housing given the length that councils often have to go to in order to provide amenities to those communities. Why not say that something should come back in return? That is what happens everywhere else in the world. This Government repealed Labour’s legislation that made it legally clear that councils were entitled to do that given the legal problems that councils like Queenstown Lakes District Council have had in putting a policy in place for the inclusion of social and affordable housing in private developments and then being dragged through the courts by developers who say they do not have the right to do that. Labour put that into law; National repealed it. 
But here we are again and I ask the Minister again why communities are having consultation procedures taken away from them under this law but developers are getting extra ones. I ask how that is fair to those ratepayers and councils. 
When I look at clause 8 on community consultation I think of Environment Bay of Plenty which is also known as the Bay of Plenty Regional Council and of how a number of years ago in 2004 it resolved that it would shift its headquarters from Whakatane to Tauranga. That came completely out of the blue for the Eastern Bay of Plenty. Consultation procedures were not followed. I tell members that a community that has gone through an experience like that one understands the importance of having strict community consultation procedures—robust and genuine community consultation procedures. That decision was devastating for the Eastern Bay of Plenty. It was completely ridiculous and it made no sense. Whakatane is in the centre of the Bay of Plenty. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 My colleague Moana Mackey has got right to the nub of one of the most important things I see in the Local Government Act 2002 Amendment Bill and that is the issue of community consultation which I want to talk about today. The bill is truly sorry and scary legislation. 
Hon Members 
: Oh! 
CLARE CURRAN 
: It is I say to members opposite. Last night I said that the Government was screwing our workforce by trading away a precious week’s holiday. I said it was like being in a horror film and today the horror continues. 
Dr Cam Calder 
: Ha ha! 
CLARE CURRAN 
: Members opposite might laugh and think it is funny but the horror is really for the people of New Zealand in the watering down of their ability to have a say in how their ratepayers’ money is spent and that gets to the heart of what our democracy is all about. 
Today the horror is continuing under urgency and we are rushing through the final stages of this bill. At least the public did get to have a say on this bill even though the Government is taking no notice of the vast majority of the submissions. Instead we are seeing further attacks on our democracy through this bill under the guise of more code words used by this Government to mask its real intentions such as “transparency” and “accountability”. Sue Kedgley from the Greens got it completely right when she talked about Orwellian language and I will talk about that too. The use of the words “transparency” and “accountability” is rubbish. The Hon John Carter said that this bill is not about privatisation of water when it clearly is. It is about the privatisation of local government services allowing them to be run on a commercial basis and removing—and this is what I want to talk about—the requirement for local authorities to consult with the community if it wishes to contract out services to the private sector or corporatise them by transferring them to a council-controlled organisation. All those things run counter to transparency and accountability. 
This Government is all about saying one thing and doing another. As Sue Kedgley pointed out that describes Orwellian language and she gave a definition but I want to give the definition from Wikipedia which describes it as “an attitude and a policy of control by propaganda … misinformation denial of truth and manipulation of the past”. Orwellian language can also be defined as saying one thing and doing the opposite or rhetoric versus reality. 
There were 414 submissions on this bill: 360 were expressly against water privatisation 17 were in favour 36 submissions were made by councils against the bill and countless submissions were made by community boards and other organisations. The Government is essentially ignoring the mood of the people which has been shown recently across this country in the local government elections particularly with the election of Len Brown in Auckland—an outcome that was not in the plan of Rodney Hide or John Key—and the outcomes of the elections in Wellington and Dunedin. 
I will talk about clauses 11 and 8. Currently under section 88 of the Local Government Act any proposal to contract out or corporatise council activities requires consultation. Clause 11 repeals that section so that local authorities can transfer core activities to council-controlled organisations or the private sector as I have said without having to consult the community. I tell members that this Government will rue the day it introduces that clause. Right across New Zealand except perhaps in Christchurch people voted in local government elections with an express desire to have more consultation and to be more of a part of the process. In Dunedin we have a new mayor Dave Cull who is a very good bloke and I am really looking forward to working with him. The last mayor Peter Chin was also a good bloke. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Hon Rick Barker) 
: I will just say that most members have been focused on the bill and this is the most substantial part of it. I am prepared to let this debate go on a little longer but Part 2 which follows is much more narrow and there will be a narrower debate. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 You are absolutely right Mr Chairperson: Part 1 is the most substantial part and I want to focus my remarks on clauses 4 5 and 8. Just before getting into those clauses I reflect to the Minister in the chair the Associate Minister of Local Government some thoughts about his comments earlier. He was absolutely correct in what he said about George Hawkins when he was Mayor of Papakura but if the Minister were to talk to the Hon George Hawkins today George might well say that he has had second thoughts and that he has learnt from his bad mistakes. I tell the Minister that because George would also say that his actions were based on community consultation. There was a protest in Papakura early this morning by the community which has itself changed its mind. People of that community now realise the truth; they realise that they have been fooled all these years by this right-wing ideology and they now recognise that they should have never sold their water asset. 
I also say to the Minister that I totally disagree with him when he says that things are getting cheaper. Things are not getting cheaper. If he were to spend time talking to a mother or a father who is on the minimum wage earning about $400 or $500 a week and spending $300 on rent he would find that those people are saying that things are not getting cheaper but are getting more and more expensive under this Government. 
I turn to clause 4 which unfortunately changes the whole community perception in terms of how communities use their local governments to achieve outcomes. That clause changes the definition of community outcomes. I would say that the public will not be happy about that particular clause. Today the public are able to define for themselves by engaging with their local councils what community outcomes they seek. Those outcomes can differ from community to community. This clause proposes that local governments dictate to the community what outcomes the community should receive. In many ways it is as though this Government is saying: “We know better and we will tell the people what they need and deserve.” That is such arrogance. [ 
Interruption 
] I agree with my friend here Dr Ashraf Choudhary that “arrogant Tory” is probably the catchcry that will go from north to south when this Government forces this bill through despite the protest happening in Papakura at this very moment. 
I turn to clause 5 which covers core services. The Government is saying in this particular clause that there are only certain activities that local governments should focus on. Again this is the old catchcry that local government should focus only on roads rats rates and rubbish. That is the ideology of old local governments. But that is no longer the case. It has not been the case since 2000 and it is now 2010. In that period communities themselves have determined what core services are. I say to members that one core service that is prevalent in many of our communities in Manukau is events. Events bring communities together. Events help to liven up a place. They help to bring vibrancy to communities. Events rely on local government for support—not only financial support but also manpower and a range of other things required to make those events happen. This Government now says that clause 5 will define for the community what core services are and it gives a list of those things. Again that emphasises the arrogance of this particular Government. 
Dr RAJEN PRASAD (Labour) 
: 
 It is very clear that the views on this side of the Chamber and those on that side are quite different. 
Chris Auchinvole 
: We’ve read the bill. 
Dr RAJEN PRASAD 
: I want to address clauses 8 9 and 10 of the Local Government Act 2002 Amendment Bill. If the member Mr Auchinvole would like to listen I shall address those clauses and I hope the member will keep on listening. 
Essentially the way in which the Government has constructed clauses 8 9 and 10 shows that it thinks that councils know best and that the community does not need to be involved. Actually that attitude is endemic through all of the local government legislation that the ACT-National Government has imposed on New Zealand since it came into power. It has used the particular style of the Hon John Carter. The Hon John Carter has become the salesperson for this way of thinking throughout the local government reform legislation. He is the placater and he does that with some style I will give him that. But he couches the Government’s ideology which is privatisation and no community involvement in a particular form. The particular phrase John Carter used today was “What’s the harm in that?”. Well I can apply that phrase to a whole series of changes in the social area over the last 25 years that went past that particular Minister. 
Community consultation is the hallmark of best practice in the 21st century. Many many methods are being designed internationally now to make it possible for communities to participate in the systems that organise their own lives. That is the hallmark of best practice. International models have been developed. Let us look at the Canadian example. They are world-beaters when it comes to community engagement and community consultation. Australia is a country that this Government wants to catch up to. Well we will be far behind when it comes to community consultation and community engagement to involving people in those things that matter. Somehow this Government thinks business can do it better can do everything better and that is it. In this particular bill the community is taken out of far too many things. 
Chris Auchinvole 
: Here we go again! He was all right until he went off sideways. 
Dr RAJEN PRASAD 
: There is growing demand I say to Mr Auchinvole from our communities to be involved but Mr Auchinvole and his Government turn a deaf ear to that. They are not interested yet many jurisdictions are addressing it in very very powerful ways. 
In this bill there really is a general desire to limit community participation and consultation. Clause 8 repeals section 78(2) of the principal Act. Section 78(2) is a very powerful section. This amendment makes it possible for local authorities to undertake perfunctory community consultation. It enables a tick-the-box approach. Councils can virtually do what they like call it community consultation and that is what it will be. Labour members agree that section 78(2) could be streamlined and an amendment on Supplementary Order Paper 180 which we have put forward does just that. But repealing section 78(2) enables local authorities to engage in perfunctory community consultation. Maybe that is what the ACT Party wants and maybe that is what National wants but it certainly is not what this side of the Chamber wants. It brands us quite differently. Those who have been listening to this debate over the last 2 days ought to know very clearly that there is a fundamental difference between what this side of the Chamber does which is take the community seriously and consult it and what that side of the Chamber is doing. Members opposite cannot deny that repealing section 78(2) is a major change. 
Nicky Wagner 
: No it’s not major. 
Dr RAJEN PRASAD 
: Yes it is. The member does not realise what it means. There is far too much perfunctory community consultation and that is what this change will do. And it runs contrary to public expectation. The expectation is for meaningful consultation. The member has not read the original provision. I invite the member to read the original provision. That is precisely what it does and repealing it runs contrary to the expectations of the community. Members on this side of the Chamber take the community very very seriously. That side of the House is used to doing the opposite and no doubt will continue to do so. 
PHIL TWYFORD (Labour) 
: 
 I thank my colleagues Su’a William Sio and others who have raised the issue of community outcomes. I will make some comments about clauses 4 and 12 of the Local Government Act 2002 Amendment Bill. 
Clause 4 restricts the definition of “community outcomes” the high-level goals that are set in the long-term plans of local authorities. It restricts them to things that only the council itself can deliver. The Government justifies this move by saying it is part of its streamlining efforts. The problem is that it is important to many of our communities to be able to call on their councils and their local authorities to take leadership in tackling some of the most important issues in their communities even if the council itself cannot deliver the whole solution. In many cases—and I will give a few examples—councils can through leadership advocacy and coordination help the community respond to community demand to tackle some of these big problems. 
One example I can think of is the failure of infrastructure. In Auckland we have had an ongoing series of problems with infrastructure failure in the electricity network. Most recently in the summer of 2008 we had a problem with the Otahuhu substation. The cable went down and the city was without electricity for some time. This is a major issue that affects the economic viability of our city. The people of Auckland expect their local authorities to help to sort that problem out. It is not a problem just for central government; people expect councils to take a leadership role on questions of infrastructure which is so important to the success of the city and those communities. People expect councils to ensure there is a timely and adequate response to that problem. 
One of the other issues that many councils take up is the issue of community safety. I think there is a real mood of concern at the moment about things like binge drinking crime on our streets and the social impacts of gambling and boy racers. These are all matters of concern to our communities. Councils do not necessarily have the ability to solve the problem and deliver the solutions but people expect their elected representatives to provide leadership respond to their concerns and take up those matters. 
There is no reason that the community cannot require that those pressing problems be identified as the high-level goals or community outcomes in the long-term plan. That is an entirely reasonable part of our democratic process but unfortunately this bill will take that part away and apply an unduly narrow approach by saying that community outcomes must be things that only the council itself can deliver. That is a real shame and a real problem with this bill. Labour has tabled a Supplementary Order Paper in my name to omit that provision and continue to allow communities to identify their high-level goals and not be restricted in this way. 
The other thing that I want to say about the community outcomes relates to clause 12. We acknowledge that the current process in the legislation is a little too prescriptive in setting out the process by which councils identify their community outcomes. We agree that the process is too heavy and it could be lightened up. But the effect of clause 12 is to completely remove any principle-based approach to saying how councils should identify their community outcomes. 
Under this bill a council could just sit down around a table themselves and pull community outcomes out of the air and say that the high-level goals for the long-term plan will be whatever pops into their head on the day. There is no requirement in here that councils have a consultation process with their community or that they give their citizens the right to be part of a transparent and open discussion in identifying community outcomes. Although we acknowledge that the current law is too prescriptive we believe that there should be some principle-based requirement that citizens be involved in the development of the process of community outcomes. Otherwise there are plenty of councils who could just say what they think or what someone said to a member in the supermarket the other day or in a dairy— 
Moana Mackey 
: Or one of their funders. 
PHIL TWYFORD 
: Yes—or what one of their funders donors mates fellow board directors or whoever said to them. Councils could basically make it up and set the community outcomes in a way that would be undemocratic and would shut people out of the democratic process. 
Dr CAM CALDER (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Motion agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to clause 4 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to omit clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 181 in the name of Gareth Hughes to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 182 in the name of Sue Kedgley to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 182 in the name of Sue Kedgley to clause 6 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to clause 8 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 182 in the name of Sue Kedgley to omit clause 8 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to omit clause 11 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to omit clause 12 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to omit clause 14 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to clause 17 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to omit clause 23 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 182 in the name of Sue Kedgley to clause 23 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 182 in the name of Sue Kedgley to omit clause 29 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to omit clause 31 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; United Future 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 182 in the name of Sue Kedgley to clause 31 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to.  
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to omit clause 32 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 180 in the name of Phil Twyford to omit clause 33 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to.  
Ayes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 175 in the name of the Hon Rodney Hide to clauses 16 25 26 and 32 and the following amendment in his name to clause 41 be agreed to: 
to omit “may” and substitute “must”. 
A party vote was called for on the question  
That the amendments be agreed to.  
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to.  
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Part 1 as amended agreed to. 
Part 2 Consequential amendments and transitional provisions 
PHIL TWYFORD (Labour) 
: 
 Much of what is contained in schedule 1 pertains to what goes into the long-term plan and I think that that is something worth discussing. It brings us back to the question of community outcomes which we can see in Part 1 of new schedule 10 substituted in schedule 1. Community outcomes are the key thing that should be contained in a long-term plan and in fact are the high-level goals. I just reiterate the concern that we have already expressed this morning about what this bill does to the whole process around community outcomes. The bill takes away the requirement that councils must consult citizens in the development of those high-level goals and it undermines the very democratic basis of the whole structure of having long-term plans. I think that that is a real shame. 
As well as taking away the requirement for councils to consult their citizens this legislation also restricts the definition of community outcomes far too narrowly I think. It says that the community outcomes as the high-level goals of the long-term plan can be the things that only the council itself can deliver. Setting aside any number of important issues that communities feel strongly about—they could be boy racers alcohol or the effect of gambling in the community—none of those things will be completely controlled by local councils themselves; it requires leadership advocacy and coordination. It is perfectly legitimate for communities to ask their councils and their elected representatives in local government to take up these matters and it is perfectly reasonable that these issues could be identified as community outcomes. 
The other thing I wanted to say about the long-term plan in relation to schedule 1 is that the kinds of things that go into the long-term plan are any substantial changes in the level of service that is being provided or the sale construction or replacement of an asset. Those things are typically the kinds of things that go into a long-term plan. Yet this bill removes the obligation of councils to consult the people in their communities on these kinds of issues. 
I will give one example that happened recently in Auckland. The council well-meaning and wanting to promote public transport and bus patronage proposed a four-lane highway to run down Dominion Road which is one of the main arterial routes on the Auckland isthmus. Basically it was to provide faster bus passage through and in and out of the central city. The impact of that proposal when the council started to consult the community was that the local community was horrified. Dominion Road is home to a couple of wonderful urban villages with really vibrant shopping communities a lot of pedestrian traffic and fantastic local restaurants. A lot of new migrant communities particularly Chinese communities have made Dominion Road their home. It is a really great part of Auckland. The effect of the council’s proposal to put a four-lane highway in and no parking down either side of Dominion Road for several kilometres would have been a disaster for these vibrant urban villages but only the requirement on the council to consult on this matter would have gone into the long-term plan. Only the requirement to consult the community thoroughly allowed what was a well-meaning but misconceived transport plan to be debated and discussed; ultimately it was thrown out. That is a vindication of the kind of community consultation processes that this bill is weakening and undermining. As a result of the long-term plan set out in schedule 1 those processes will be greatly weakened. 
SUE KEDGLEY (Green) 
: 
 First I would like to record my disappointment that the debate on a bill as significant as the Local Government Act 2002 Amendment Bill has been so truncated that I did not have time to put forward any of my amendments to the last part we debated Part 1. This bill is about a major change in New Zealand. It allows the privatisation of our water supplies. It allows ownership of our water supplies by private multinational corporations for 35 years yet we are having a very truncated debate. This bill is being rammed through under urgency. The public has a right to expect that members of Parliament will at least have a say about this far-reaching bill and be able to introduce amendments. So I would like to record my disappointment at the truncated nature of the debate on this hugely significant bill before us. 
I am quite certain that Roger Kerr from the Business Roundtable is listening with mounting satisfaction as we debate all the parts of this bill. Roger Kerr the Business Roundtable and the New Zealand Council for Infrastructure Development have been lobbying since the 1990s for the Government to allow the privatisation of our water supplies. I have here a number of policy statements and articles that Roger Kerr has written. They point out that private water companies have annual revenue of $300 billion and they beg us to allow private corporations to take over our water supplies. Roger Kerr has achieved his wildest dreams. For 30 years he has been lobbying for this day and he and others will be listening to this debate with huge satisfaction. Finally their lobbying efforts have paid off and from now on multinational corporations will be able to take over our water supplies for 35 years. They will be able to own them control them and manage them for 35 years. What a coup! I know Roger will be listening and he must be enormously satisfied. 
The provisions we are dealing with now are about long-term plans and financial strategy. The key thing is that the consultation requirements in the long-term plans and in other parts of local government have been absolutely gutted by this legislation. Now when councils consult on the long-term plan they will not even have to mention that they have an intention to privatise their water supplies for 35 years or that they have an intention to hand those supplies over to a private corporation to own for 35 years. They will not have to mention this. 
There will be no need any longer to bother to consult communities about such a significant thing. That is the real coup of this bill and that is why Roger Kerr the Business Roundtable and the water infrastructure companies will be rubbing their hands with glee. I predict that there will be parties all weekend for the water companies that have been booted out of communities and countries all round the world because now when they close down their operations in Latin America and even in Adelaide in Australia—they have just been kicked out of Adelaide—they can pick up the pieces come across to New Zealand and seek to privatise our water supply. There will be parties all weekend. One of the main things the private water companies will be celebrating is the fact that they will be able to sneak privatisation in. Councils will not have to consult citizens because there is no longer a requirement to mention in a long-term plan that the water supply is about to be privatised. 
This bill also deals with the financial strategy. One of the many clever little things Rodney Hide has managed to get into this bill is an innocuous-sounding clause that basically requires a cap on rates. It is based on finance and expenditure limits we have seen in America in places like Colorado where they set a cap on spending. In Colorado under legislation similar to this they are not allowed to increase their budget. The aim of course is to reduce spending make us all resent paying our rates and drive down the resources of local government to the point where it becomes bankrupt. 
What happened in Colorado when they implemented the sorts of rate-capping provisions that are in this bill? Well as a result of the grand experiment which this bill is trying to implement the Colorado budget will have a shortfall of $28 million this year which is 10 percent of its budget. It has been brought about by the strangulating effects of this sort of cap. One-third of Colorado Springs’ 24000 streetlights were turned off earlier this year to save about $1 million in expenditure. Residents can adopt a streetlight—they are encouraged to pay $100 a year if they want a light in their street. In the meantime taxi drivers are trying to do the work of police because the police are so overstretched by cuts. Park budgets have been slashed by 25 percent. Grass is now mown monthly not weekly. Buses have been sold and bus services no longer operate in the evenings and weekends. The fire and police budgets lost $5.5 million. 
Is that what we want here in New Zealand? I am sure the people of New Zealand do not want that but that is what is being sneaked through under urgency along with all the other sinister provisions in this bill which is of course all about seeking to implement Rogernomics Part 2. The battleground for the agenda of the Government and Rodney Hide to corporatise and privatise as many assets as possible has shifted to local government in this term of office because the Government has had to rule out national privatisations. This bill is a triumph for them. It is the culmination of years of lobbying and it allows local government to corporatise most of its assets to contract out and to privatise water supplies. 
The Government is hoping that by sneaking this bill in under urgency the people of New Zealand will not notice. It is also hoping we will think that allowing a private multinational corporation to own water supplies for 35 years does not amount to water privatisation—that is what the National Government in its Orwellian double-speak is claiming. Members should not believe that New Zealanders will be fooled. New Zealanders need to be aware of what the rate-capping provision in the financial strategy section is intended to do. It is intended to reduce spending in local government to the point where local government is more and more short of money it eventually goes bankrupt and then—as has happened in Colorado and other places—it is required to contract out and to privatise not just the water supplies for 35 years but all of the other services. 
This is the agenda of this part of the bill and other parts and that is why private water companies will be rubbing their hands with glee. Twenty years of lobbying by Roger Kerr has finally paid off. He and the water companies finally have their goal—allowing them to get their hands on our water supplies and deregulation of the whole water supply industry in New Zealand. It is way beyond their wildest dreams. Already two of the major global water companies Veolia Water and Suez Environment have 39 contracts between them in Australia and New Zealand including ownership of United Water in Auckland and the privatisation of the water programme here in New Zealand. Its name has changed about three times because the ownership of that company has changed over three times in the last decade or so. But Veolia Water this private water corporation owns the water in Wellington and in Auckland already and now under this bill it will be able to get its hands on the rest of the water supplies in New Zealand and it will not even have to consult people in its long-term community plans. That is the beauty of this bill for the private water companies. 
CARMEL SEPULONI (Labour) 
: 
 Looking at schedule 2 of the Local Government Act 2002 Amendment Bill the thing that stands out to me that I am concerned about—I know members on this side of the Chamber are concerned about it and I know the Greens are concerned about it—is the way in which the term “council community” is omitted the whole way through schedule 2. That highlights the point of difference between this side of the Committee and that side of the Committee. To us community should be the focus—a sense of community and ensuring that the community has a say in what happens in any council—whereas on that side of the Committee it is all about ensuring that the democratic ability to have a voice is shut out. 
A good example of this difference is the recent local body election that we had in Auckland. There were two very different main mayoral candidates: one was all about the corporates—and he was supported by the Government side of the Committee—and one was all about the community. That was Len Brown who went on to win and he was supported by this side of the Committee. I can imagine that a mayor who is all about community will struggle with legislation like this which excludes the community and undermines its ability to have a say in what is happening. 
Every community has the right to hold its council to account and expect transparency in decision making so any ratepayer and any person who is part of the city should be up in arms about this bill because it will undermine their ability to hold their council to account and expect that transparency. I know that the Minister of Local Government Mr Hide is one of those people who do not think communities should have a voice which is why we see this legislation coming through this Parliament. That is unfortunate given that most Aucklanders recently voted for a mayor who promised them an inclusive city—a mayor who promised them that community would be at the centre of everything for that city the biggest city in New Zealand Auckland City. Yet here a National Government is voting for a bill that undermines communities’ ability in that respect. 
I say it again: Auckland City voted for a mayor who was all about community not for the mayor who was all about the corporate. Yet the Government does not listen to that the National Party does not listen to that and the ACT Party does not listen to that because they think they know better even though the overwhelming majority of people who voted about a month back decided that the most important thing for them was community. 
I point out again that the Government is attempting through schedule 2 to omit the requirement that the council consult its community—the requirement that the community have a voice in council decision-making. We are very concerned about what that will mean. When we look at the aspects of the bill in relation to that provision we can see very clearly with regard to the corporate agenda versus the community agenda what the Government is trying to do. This bill puts into place the ability for the private sector to own water infrastructure for up to 35 years which is effectively privatisation. Again that fits into that corporate model that the Government side of the Committee is ideologically in support of. It goes against everything that we believe to be right with regard to the community having a say in what is happening. 
Although we support the move of this bill to increase financial accountability and transparency we oppose the imposition of arbitrary core services and cuts to the requirements for councils to consult their communities. At the end of the day how can we guarantee accountability and transparency when we are legislating so that the council no longer has to consult the community about its views? 
With regard to community I just point out that we have seen the merger of a number of cities in Auckland some of which were very community-focused. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I will carry on from my colleague Carmel Sepuloni on the theme of this legislation especially in respect of schedule 1 “Long-term plans annual plans and annual reports” of reducing the requirement on a local authority to consult its community. I raise a couple of practical examples from down my way in Christchurch. I note in passing that the author of this bill the Hon Rodney Hide—the man who preaches openness transparency and accountability except when it comes to his own wallet his own air tickets and a few other things that he has been less than open and transparent about—brings a bill in here that is couched as though it will make councils more accountable and more transparent to their communities. Buried in this of course is a reduced requirement on those local authorities to consult on things like goals and community outcomes. 
Well if we are to give councils the ability to arbitrarily set goals for community outcomes and basically make it up as they go along the question I have asks how a council can be in touch with its community and know what it wants what the goals and the outcomes are if it is not prepared—and it should be compelled by this House and this legislation—to consult those communities. I will give the Committee a “for instance’; a real one. In the Christchurch City Council there was a move—before the election—to put market rents on early childhood education centres. I say this for the benefit of Kate Wilkinson who says that in my electorate the Government’s cuts to early childhood education funding will be only— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! 
Hon CLAYTON COSGROVE 
: I come back to the bill Mr Chair but I am sure you are interested in that. If it were the case as it was with the local authority in Christchurch that did not impose cuts on an early childhood education centre of $29500 but put forward a measure for those centres that were on council-owned land to require them—after 20 30 or 40 years—to pay market rents it would have put those early childhood education centres out of business. I know that Ms Wilkinson is quite supportive of change even though Swannanoa Preschool an early childhood education centre in Waimakariri District has said publicly that it will have a $100000 cut this year. I tell colleagues that the centre happens to be a few hundred metres down the road from where Ms Wilkinson lives. She would have known that if she had knocked on its door. The Minister asks where I get my facts from. I tell her to try visiting an early childhood education centre a couple of hundred metres down the road from where she lives. 
If it were the case as it was at the Christchurch City Council that a local authority wanted to put early childhood education centres that were on council land on to market rents as it proposed then under this legislation there would be very limited if any opportunity formally to consult that community. What happened in the Christchurch case was that the community was up in arms and said: “No way.” There were meetings there were protests and the council backed down. 
That is called democracy. That is called listening. This bill should be about transparency and accountability. There should be a requirement in this legislation that councils are compelled—I repeat compelled—to consult their community. There should be no option; they should consult. We know of course that this Government is not in favour of consultation because the community might say that it does not like it. The community hey presto may say: “We’re not going to allow the local authority to steamroll over our public opinion and do whatever the hell it likes.” There is no reference to Mr Finlayson in that quote. 
I say that this bill is a sham and these schedules are a sham. The bill purports to be holding councils to account bringing councils closer to their community and aiding democracy. What it really does in these schedules and in other parts of the legislation is reduce the absolute requirement on councils to consult their community. Some members of Parliament in this Chamber are so out of touch with their community. One sits on the opposite side of the Chamber—Ms Wilkinson. She cannot even understand how an early childhood education centre is funded either by local government in terms of its property management or the fact that 34 out of 54 of them will be subject to a cut of $700000 to $800000 a year thanks to her Government. 
The early childhood centre down the road from where that member resides has a cut this year of $100000 but she goes to the media and says: “I’ve been told that 22 of them will have $29500 total in cuts.” That shows how out of touch that member is and she has been caned in the media today. That is quite good because it shows how out of touch she is. I tell the Minister to walk a hundred metres down Tram Road although it might be too far for her knock on the door of the Swannanoa early childhood education centre and ask them about it. She should have done that before she wandered into print told mistruths and was very slack with the facts. 
MOANA MACKEY (Labour) 
: 
 I will talk about the definition of “development contribution policy” as laid out in Part 2 of schedule 2 of the Local Government Act 2002 Amendment Bill. The schedule amends that definition and is an interesting move away given the context of the bill that we are debating. This legislation now says a review period can be requested for development contribution policy decisions. That means that developers can put a lot of pressure on councils where they are paying a development contribution levy—where a council has decided for example that if a development is going ahead in their area if land is going to be put aside for it if the council is going to chip in for amenities then the developer can provide something back to that community in the way of a contribution. For example it could go towards the provision of affordable housing or social housing in that district— 
Chris Hipkins 
: Or early childhood centres. 
MOANA MACKEY 
: —or early childhood centres as my colleague Clayton Cosgrove has pointed out. 
This legislation says that the review needs to take place. It goes through this special consultative procedure which is a very in-depth procedure in the Local Government Act. I recently sat through this procedure both the judicial review and the Court of Appeal case that the Whakatane District Council took to clarify what is required under the special consultative procedure. I am very pleased to say that the Whakatane District Council ended up being successful in the Court of Appeal. 
A very in-depth procedure is required for the review of these development levies. It has a number of steps along the way and is intended to be robust. It is intended to be genuine and that is a good thing. It is a shame though that the community is losing that right themselves through various other portions of this bill—in particular clause 8 in Part 1. 
Under Part 2 of schedule 2 we have discussion of a process for the review of development levies where a developer could put pressure on a council because the developer does not want to keep having to pay it to go back and review it. Yet the community has lost all these provisions for consultation. So the community loses consultation and the developer gets more consultation. That to me does not seem to be a particularly fair or just move under schedule 2 of this bill. 
These contributions are particularly important. It is commonplace everywhere in the world. It is not unusual to require developers to provide a contribution. I refer in particular to where a council may require a portion of a development to be set aside for affordable or social housing. In lieu of a developer being prepared to do that a financial contribution may be offered which could then go towards the provision of affordable or social housing. 
As we know we have a housing crisis in this country. It seems an incredible shame that where these brand new developments are going up there is no leadership from this Government to make sure that part of that development ensures that young families are able to get into their first home. We know the benefits of homeownership; we know them very very well. We know how difficult it is for young people to get into homeownership. So here is an opportunity when we have a new development for a council to put in place a policy or a levy that goes towards assisting people into homes and goes towards housing people who find it very difficult to house themselves. They may be on a very low income because the cost of living has risen so highly under this Government. Here is an opportunity to address that crisis. 
The Labour Government put in place legislation to specifically allow for that contribution and to make it clear that councils are legally able to require it of developers. We did that off the back of a council in New Zealand that was being dragged through the courts by developers who challenged the council’s right to do that. The National Government repealed that legislation and I would have hoped that in both Part 2 and the schedules of this bill we would see something to replace it or more of an effort to say that the council is there for the community nor just for developers. There is nothing wrong with the council saying that all the community should benefit from a development not just the private companies that are involved in it. Of course the Government does not like that but it needs to look at the local body vote in Auckland to see what the community was saying. They do not want corporatisation of these services. They believe they should be for community benefit. 
LOUISE UPSTON (National—Taupo) 
: 
 I move  
That the question be now put 
. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 I totally agree with Moana Mackey about what should be important in the bill. Unfortunately those things are not in the bill. I also agree with Sue Kedgley when she says that this bill is designed to gut local government to gut local democracy and to make it easier for this Government to sell off our water assets. The Hon Clayton Cosgrove gave a wonderful speech that described the way this Government is going about couching this under “transparency” and “accountability” when in reality the bill removes transparency and accountability. 
I ask members to look at clause 47 “Other amendments to principal Act”. This clause should be of concern to the public and I have no doubt that it will be of concern once they get wind of what this Government is attempting to do. 
Hon Member 
: They submitted on it for months. 
SU’A WILLIAM SIO 
: Some of them submitted; not all submitted. Members of the community of Papakura are protesting right at this very moment because they are outraged by what this Government is attempting to do. Clause 47 refers us to schedule 2 which principally changes the way that we now have to look at how councils conduct their business when it comes to community council planning. Schedule 2 changes the definition of “long-term council community plan” and removes from the Act two critical words: “council community”. It removes the participation of community in consulting with councils to identify outcomes. 
Let me give members some examples why a lot of people including supporters of this Government and no doubt members of the National Party will be outraged by this measure. Currently ordinary ratepayers are able to be involved in the entire long-term council community plan from genesis right until the fruition of a particular outcome. One example is housing for the elderly which resonates very strongly with elderly people in Manukau in various parts of Auckland City and no doubt throughout the country. Whenever a council is determined to remove housing for the elderly many National Party members and supporters will turn up. It does not matter how old they are or whether they are using a walking stick or a wheelchair; they turn up from the beginning of the consultative process right until the very end. But this schedule removes their ability to participate. This legislation gives the power to the local council to determine whether consultation should take place and whether people are involved only at the beginning or not involved at all. 
This bill also gives the right to the local authority to determine outcomes for ratepayers. In other words what Sue Kedgley said about gutting local government is precisely outlined in this very schedule. Every section outlined in schedule 2 removes community participation. It removes the ability of ordinary people—ratepayers and senior citizens—to front up to their local government and to say that they are not happy with a particular course of action that that local authority may want to take place. 
Hon SHANE JONES (Labour) 
: 
 Tena koe Mr Chairperson. Kia ora ano tatou. I would like to direct our attention to Part 2 because unfortunately after I left the Local Government and Administration Committee the quality of input from Government members in terms of vigilance and adherence to principles diminished greatly. But that reflects the electoral fortunes that lie in their very near future. 
I want to direct our attention to clause 46 “New Schedule 10 substituted”. New schedule 10 is set out in schedule 1. I have a great deal of sympathy for what proved to be a well-written minority report put forward by the Maori Party members. Naturally we support the attack that they are delivering. We are only sorry that they did not think they could join us and collaboratively oppose— 
The CHAIRPERSON (Lindsay Tisch) 
: Schedule 1 has already been debated. 
Hon SHANE JONES 
: I said schedule 10. 
The CHAIRPERSON (Lindsay Tisch) 
: Schedules 2 and 3 are the schedules not schedule 1. 
Hon SHANE JONES 
: I am directing my attention to the provisions that relate to the Maori parts of this bill which unfortunately for our people as reflective of the broader local government reforms of the last 18 months are very slender. But there is an important part in Part 2 that relates to dealing with rates and in particular Maori rates and this was picked up by the Maori Party that reflects a complete absence in terms of what might be the Maori expectations of this bill. I direct our attention along with that of our colleagues here to the issue that once we define the community that local government would serve in a narrow monetary sense one is writing out their interests and stakes in local government. Why should people in local government communities be reduced to elements to be defined only by money or wealth? Unless one has money or wealth one will not be able to influence local government decision-making in the absence of broad community consultation provisions. 
That in actual fact is what has happened in this bill. We accept that red tape ought to be rooted out where it is found. But it was Local Government New Zealand not the Local Government Forum that told every member on the Local Government and Administration Committee that this bill will have the effect of worsening the level of red tape. I do not understand why Government members have backed so enthusiastically Nick Smith’s attempt to improve resource management. Unfortunately that small glimmer of hope has long been wiped out by more recent attempts that he has made to improve resource management through local government but that is another matter. 
The tragedy of the situation is that although this part was designed to improve the prospects of simplifying local government and reducing costs it has had the opposite impact. 
Hon John Carter 
: I raise a point of order Mr Chairperson. I raise the point of relevance. We are actually debating Part 2 which refers to schedules 2 and 3. The part that the member is talking about is contained in Part 1 and we have already dealt with that. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson.  
The CHAIRPERSON (Lindsay Tisch) 
: I do not need any help here. This is very clear because I brought the member’s attention to this earlier on. We are on Part 2 and that includes schedules 2 and 3. I ask the member to come back to those points. This is a very narrow debate. [ 
Interruption 
] No this is a very narrow debate and that is what we are on at the moment. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. The theme that has come out of the speeches in the last hour has been around consultation or lack of it. I accept your ruling absolutely but I put to you that 90 percent of the member’s speech has been around that theme. If that theme was relevant and valid for other members then I would argue— 
The CHAIRPERSON (Lindsay Tisch) 
: I have been presiding on Part 2 since the start and the debate has been within the realms of Part 2 and schedules 2 and 3. I ask the member to come back to that part of the debate. 
Hon SHANE JONES 
: I raise a point of order Mr Chairperson. I was unfortunately interrupted earlier in that speech. I direct your attention to clause 24 which clearly talks about a local authority’s policy on the remission of rates on Maori freehold land. The key point is that if we disenfranchise that segment of the community through participation and consultation we make it very difficult for local government to make informed decisions. I would gladly accept a direction either from parliamentary staff or from you if I have misconstrued the clause. 
The CHAIRPERSON (Lindsay Tisch) 
: Yes the member is correct. Please continue. 
Hon SHANE JONES 
: How much longer do I have given that we have wasted enough time— 
The CHAIRPERSON (Lindsay Tisch) 
: No. When there are points of order the clock stops so no time has been deducted. You have 1 minute and 13 seconds remaining. 
Hon SHANE JONES 
: I am possibly doing the job that my relation from the far north Hone Harawira should be doing. Having said that I actually want to enjoy a small measure of celebration on his behalf that I have enabled the Committee to exhaust a little of its attention on the postponement of rates on Maori freehold land. Although it might be said that it is a small and potentially irrelevant segment of this bill it reflects the Government’s approach to these seemingly insignificant things. Small seemingly modest Maori issues can loom large and they can even cause Ministers of the Government to invoke the spectre of hell and start to recite Dante’s version of politics. The underlying problem is that where one is to have a transitional provision for review one cannot engage in the exercise of review unless one has access to information. That is not unreasonable. 
Dr CAM CALDER (National) 
: 
 I move  
That the question be now put 
. 
SUE KEDGLEY (Green) 
: 
 In schedule 10 there is a whole section on long-term plans and what sorts of things long-term plans must clearly identify. It talks about all the assumptions of a local authority concerning the useful life of significant assets the replacement of significant assets etc. But the extraordinary thing is that although the long-term plan will have to do the sorts of things that are spelled out in clause 18 it will no longer have to spell out to the community whether a council intends to divest itself of strategic assets including divesting itself— 
Hon John Carter 
: I raise a point of order Mr Chairperson. I listened to the member and I assumed she was going to bring clause 18 into the relevance of the part we are debating which is Part 2 and schedules 2 and 3. Actually the clause 18 that she keeps referring to is in Part 1 of new schedule 10 substituted in schedule 1 so it is not part of the debate. We are talking about transitional issues relating to our long-term plans so I think that clause is outside the scope of the debate. 
The CHAIRPERSON (Lindsay Tisch) 
: I thank the member. I say to the member that we are debating as I indicated earlier Part 2 and schedules 2 and 3. 
SUE KEDGLEY 
: In this section we are talking about long-term plans and we are talking about transitional provisions for long-term plans. I was making the point that long-term plans will be required to do all sorts of things but they will not any more be required to inform a community about when a council intends to divest itself of key strategic assets. Until now there has been a requirement for councils to alert people in their long-term plans that they intend to divest themselves of key strategic assets such as the ownership of water. But now under this section they will not have to inform New Zealanders in those plans. 
Most New Zealanders will not believe that as a result of this part of the bill there is no longer a requirement for councils to inform or consult communities about when they intend to do something as fundamental as getting rid of the ownership of water supplies which have been built up by generations of New Zealanders and which will now be able to be handed over to—in fact owned by—multinational corporations for a period of 35 years. That will not have to be mentioned in a long-term community plan. I honestly do not believe that New Zealanders will believe that the Government could do that—could think it was acceptable to sell off water assets or any other assets—to a private corporation without requiring that to be mentioned in a long-term community plan or any other plan. The real thing this bill does is that it guts the consultation requirements of local government agencies so that they will not now have all the nuisance and irritation of having to consult communities when they intend to divest themselves of key infrastructures such as water. 
I notice a bit more squawking from the Government members; they say that the Government is not selling water. But I am afraid to say that allowing a private corporation to own a water supply for 35 years is water privatisation by any other name. I do not know why National members keep on trying to object— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! 
SUE KEDGLEY 
: But I am only responding to the interruptions that I am receiving from National members Mr Chair. 
The CHAIRPERSON (Lindsay Tisch) 
: I bring the member back. The long-term plans are in Part 1. We are on Part 2 and schedules 2 and 3. Please confine your comments to that. 
SUE KEDGLEY 
: The consequential amendments and transitional provisions outlined in Part 2 also refer to transitional provisions for the long-term plan and that is what I am addressing. It is there in clause 49. As I was responding to my colleagues in National I tell them that they have some idea that the public is going to be deluded into thinking that handing over the control and the ownership of a water supply for 35 years is not water privatisation. But New Zealanders will not be fooled. They know that handing over for 35 long years—11½ electoral cycles—the ownership of a water supply that has been built up over generations amounts to privatisation. Those members are wringing their hands and shaking their heads but that is the truth. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Lindsay Tisch) 
: The question is that the question be now put. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I raise a point of order Mr Chairperson. With respect I want to raise two matters with you. There has been a lot of to-ing and fro-ing over the schedules and you have made a number of rulings. You ruled against Mr Jones in his first call only to reverse that. Mr Jones sought a second call. He has had only one call in— 
The CHAIRPERSON (Lindsay Tisch) 
: No. I thank the member for his comments. I am the sole judge of the relevance of the debate. On many occasions as is well known I have asked members to come back to Part 2 and schedules 2 and 3. This debate has been going for nearly 50 minutes. It is a very narrow debate on a very small number of provisions. Determining the relevance of the debate is at my sole discretion and I have accepted the closure motion. 
Hon Clayton Cosgrove 
: Mr Chairperson— 
The CHAIRPERSON (Lindsay Tisch) 
: I do not intend to debate this matter further. I have accepted the closure motion and I will put it to the vote. That is where it stands. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I raise a point of order Mr Chairperson. I wish to raise a matter with you. You are right that you have ruled in respect of relevancy. I point out that in doing that in respect of Mr Jones you reversed your ruling. He was dealing with a very narrow point as I understand it in respect of the rating of Maori land. You called him out for that. You subsequently reversed that and the words you used were: “You are correct.” It is a very narrow point which has not been examined by other speakers but you denied him a second call. 
The CHAIRPERSON (Lindsay Tisch) 
: I did not deduct any time from the member. He carried on and was actually talking about the provision of race— 
Hon Clayton Cosgrove 
: Rates. 
The CHAIRPERSON (Lindsay Tisch) 
: —rates in terms of Maori land. I said he had 1 minute and 13 seconds remaining and in that 1 minute and 13 seconds he did not actually mention anything that he had said he intended to mention. I have judged that the scope of this debate is a very narrow one. Under Speakers’ ruling 65/3 I am the sole judge of relevance. I have ruled that I will accept the closure motion and that is where it stands. 
A party vote was called for on the question  
That the question be now put. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Part 2 agreed to. 
A party vote was called for on the question  
That schedule 1 be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Schedule 1 agreed to. 
A party vote was called for on the question  
That schedule 2 be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Schedule 2 agreed to. 
A party vote was called for on the question  
That schedule 3 be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Schedule 3 agreed to. 
Clauses 1 to 3 
PHIL TWYFORD (Labour) 
: 
 We were discussing just a few weeks ago what came to be known as the “Warner Bros Bill”. I propose that we rename this bill the “United Water Bill” in honour of the economic interests that stand to benefit very significantly. We could call it the “Veolia Bill” because under this bill the public of New Zealand should be very clear that councils will be able to enter into contracts for period of up to 35 years for the private management and control of our water assets including ownership—including ownership. 
The Associate Minister of Local Government who is currently the Minister in the chair was candid enough finally in question time a few months ago to acknowledge that the bill allows private ownership of water assets. I think the Government has been a little bit unclear in its own mind about whether it would allow the private ownership of pre-existing water assets. We are talking about pipelines dams and wastewater treatment plants. Let us be clear: this bill makes explicit provision that it will allow the private ownership of pre-existing water assets if that is deemed to be incidental to the project and important to the success of the contract. 
Nicky Wagner 
: That’s prohibited unless. 
PHIL TWYFORD 
: Well one could drive a bus through that. Not only does this bill allow private ownership of new water infrastructure that is constructed in the course of a build-own-operate-transfer scheme—also known as a BOOT scheme or a public-private partnership—but also if it is deemed to be important to the success of a contract existing—existing—water infrastructure can be sold to the private sector. We have had the bizarre spectacle over the last few months where members on the Government benches have repeatedly denied that that is privatisation. I do not know how they can deny that when it allows 35-year contracts for private control including the private ownership of our water assets. On any common-sense reading of that it is privatisation. The member opposite Nicky Wagner is parroting the line that it has to be sold back to the council at the end of the 35 years. Well you know it could be sold back but equally that contract could be rolled over to create a 70-year period of private ownership of our water infrastructure. 
I think the public of New Zealand see through the fiction that the National Government is pedalling in this case. There is no way around it; this bill amounts to opening the door to the effective privatisation of water infrastructure. The member opposite may not like it but it explicitly allows the sale to private interests of our existing municipal water infrastructure if that is deemed to be incidental to the contract and important to the success of it. It is there in black and white. How members opposite can continue to deny that that amounts to privatisation I simply do not understand. 
This bill could be renamed the “United Water Bill” in honour of United Water’s role in this bill. The Associate Minister made a great play of saying that a few local rural councils would like the ability and flexibility to work with the private sector. But this bill allows Auckland’s new billion-dollar water monopoly to have the whole kit and caboodle contracted out to United Water overnight without consulting the public. 
We are not talking about a little wastewater treatment plan in the back of beyond I say to Mr John Carter; this bill applies just as much to Auckland’s billion-dollar water monopoly which has been paid for by generations of ratepayers. That can be handed over to United Water and under the cuts to the consultation requirements in this bill which are in clause 11 ratepayers would not know a damn thing about it. It could be done without any sort of consultation or advanced notification to the community. I believe New Zealanders do not want that. 
CARMEL SEPULONI (Labour) 
: 
 Mr Chair you always get a very good equity balance in the calls that you give out and I think that is admirable. 
I have a number of ideas with regard to the title. To start with rather than the Local Government Act 2002 Amendment Bill I think it is appropriate that we call it the “Local Government (We Couldn’t Win Auckland in the Local Body Election So We’ll Privatise Auckland’s Assets in This Way) Bill”. That name comes from something that has been discussed quite widely in this debate. It has been about the Government’s agenda with regard to privatising assets and privatising Auckland’s assets in particular. It has been about the ideological views of members on the other side of the Chamber who want our local government bodies to act in a corporate way rather than in a community-focused way. That title really is appropriate given that this bill allows the private sector to own water infrastructure for up to 35 years which effectively is privatisation as my Labour colleagues and Sue Kedgley have pointed out. So that title is appropriate. 
Although as we have said before we support what the bill states it intends to do which is to increase financial accountability and transparency we know that in all actuality that is not the case because the bill is about privatisation and it is about removing the rights of the community to have a say in what is happening so that corporates can move in and the communities cannot object to what is going on around them. So that is one idea with regard to what the title of this bill could be and I will repeat it: the “Local Government (We Couldn’t Win Auckland in the Local Body Election So We’ll Privatise Auckland’s Assets in This Way) Bill”. It is a long title and the one thing I am concerned about is that it is a little bit long. Other than that it captures the agenda of the National Government and what it intends to do with this legislation. 
Another idea I have with regard to an appropriate title for this bill is along the same lines but a little bit shorter. Rather than call it the Local Government Act 2002 Amendment Bill 2010 we could call it the “Government Wants to Sell Off Your Water and Now We Can Bill”. That would also be appropriate. I will not go into too much detail about why because I think it was covered in the explanation of my previous recommendation of a good title for this bill. 
On a different note going back to the concerns that have been raised about the Government’s desire to erase the community’s ability to have a say in what is going on in local government and to hold their representatives to account I think another appropriate title would be the “Local Government Doesn’t Have to Ask You What You Want or Think Bill”. That would be appropriate given that this bill removes the need for local government to actually consult with communities on long-term strategic goals on the long-term outcomes that are strategically put into place for the particular cities that will be covered. That is of concern because one would think that with local government and with central government as well actually constituents ratepayers and taxpayers should be able to have a voice in decision making. They should be able to go to their elected representatives and say that they believe that their representatives should be focusing on this this and this outcome and then they should be able to push for their representatives to do that. Unfortunately this bill removes the right for that to occur. Again that recommendation for an appropriate title for this bill is “Local Government Doesn’t Have to Ask You What You Want or Think Bill”. I am pretty sure that that would give New Zealanders a good indication of what the National Government is trying to do if they do not already know what it has been trying to do for the past 2 years it has been in Government or for the entire history of National’s existence. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 I said earlier that the Minister driving the Local Government Act 2002 Amendment Bill is a Minister who has lost a lot of credibility in the eyes of the community particularly in the eyes of the Grey Power community. It is the people in the Grey Power community who spend considerable time being part of their communities and considerable time participating and engaging with their local government. Many of the Grey Power community members who are supporters of the National Government will now be saying that this bill should be called the “It is Time to Change the Candidate in Epsom Bill”; that is the name the bill should be given. 
I also say that this bill—and many of my colleagues have said so—is really designed to enable the privatisation of water assets. If the Minister is so keen to promote transparency and accountability why can this Government not be transparent and just name the bill the “It is Time to Sell Our Water Assets Bill”. Heck it is time to sell all of our assets and while we are at it why do we not just sell New Zealand as well? We have done that recently with the  
Hobbit 
 film so why do we not go all the way? Those are the names that come to mind because of the way this bill has been rushed through in this Parliament and because of the way the clauses of this bill are designed to gut local government. 
While I am at it I tell members that we should also give this bill a name such as the “Removing Community Outcomes From Our Communities Bill”. Let us be open and transparent: that is what this bill is designed to do. It removes the right of ratepayers to identify and determine their own outcomes and the bill will give the power to the local authority to decide those outcomes for the community. That is not right—that is not right but that is what this bill will do. I have a suspicion that ratepayers and Grey Power members in particular up and down this country will be listening with interest to hear whether the Government takes a step back and takes their word seriously about transparency and accountability. This bill does nothing for transparency and accountability. It closes shop for the few who are now being given power to make decisions on behalf of the community. 
Another thing is that the bill also removes the right of ratepayers to be engaged in the consultation process from the beginning to the end. Let us be open and transparent for all New Zealanders and name this bill the “Removal of Community Participation in the Consultative Process Bill”. Let us just be open about that and declare that once and for all. 
Phil Twyford 
: It’s a bit long. 
SU’A WILLIAM SIO 
: Well it is a bit long. Nevertheless it is being open and transparent; is that not what this Minister has been talking about? The bill is removing the right of ratepayers to participate in the consultative process. 
Another thing is that simply handing over to local authorities the right to determine outcomes and to determine when ratepayers can participate in the consultative process does not make that right and it does not make a local authority the community. The community are the ratepayers. Councils are elected representatives and can be part of the community but they are not solely the community. The community are Grey Power; the community are ratepayer associations; and the community are Manukau Auckland region Waitakere and Porirua where my friend Kris Fa’afoi is fighting tooth and nail to keep this Government out there come this Saturday. I would say they are the real communities. They are the real communities but this bill this Minister and this Government have no desire to allow the participation of the wider community. That is why Kris Fa’afoi would not agree with this bill. Kris Fa’afoi would say that we should be open and transparent and simply call this bill what it is; it is the “For Sale of Assets Bill”; it is the “For Sale of New Zealand Bill”. 
TIM MACINDOE (National—Hamilton West) 
: 
 I move  
That the question be now put 
. 
SUE KEDGLEY (Green) 
: 
 I have two particular names I would like to suggest for this bill. The first one is the “Rogernomics Part 2 Bill” and the second one is the “Business Roundtable Implementation Bill” or the “Roger Kerr Implementation Bill”. 
It is the “Rogernomics Part 2 Bill” because it implements the agenda of ACT and the Business Roundtable of corporatising as much of local government as possible and allowing the councils to sell off their strategic assets without having to go through the inconvenience of informing their residents or even bothering to consult them. That is what this bill does. Mr Hide and the Business Roundtable are having to sit on their hands for 3 frustrating years because the privatisation of State-owned assets has been ruled out by this Government this term. That is for what it hopes will be its next term of Government. While they have to sit on their hands in frustration unable to sell off State-owned assets they have bided their time by focusing on local government. Nobody is surprised that Mr Hide got his prize of being the Minister of Local Government and immediately set about making radical far-reaching changes to local government. He has not just got rid of Environment Canterbury and obliterated eight democratically elected councils in Auckland; he has worked on the prize of this bill which through a series of provisions will encourage the councils to corporatise as many of their assets as possible. It will allow them to sell off their assets without having to consult—even their water assets. 
The second possible title for this bill is the “Business Roundtable Implementation Bill” or the “Roger Kerr Implementation Bill” because Roger Kerr has been lobbying for the provisions of this bill for two decades. I have here a series of his papers and I will read from them. This bill is what he has been lobbying for through two decades. It is the prize of opening up local government to the multinational corporations that he represents. He will be listening with mounting satisfaction to this debate. 
Hon Dr Nick Smith 
: That’s just awful—just outrageous. 
SUE KEDGLEY 
: I say to Dr Smith that this is exactly what is happening. He may pretend otherwise but this bill will allow Veolia Water the largest multinational water corporation in the world to own our water assets for up to 35 years and if Dr Smith thinks that is not water privatisation I say dream on. 
Roger Kerr has been lobbying for this outcome and one can only imagine the amount of behind-the-scenes lobbying by Veolia Water the Business Roundtable Roger Kerr and Suez to get this bill. Vested interests have been lobbying in secret to get this prize which is what this bill is for them. Mr Kerr has been pointing out since the 1990s that owning water is a $300 billion business and he asks why we cannot open up our water supplies in New Zealand to water privatisation and water companies. He acknowledges in this series of papers that it is controversial but he says water is not a human right not a precious resource not one of the life-support systems of our planet; he says it is an economic commodity it should be treated as an economic commodity and it should be run by the market run by multinational corporations. Then he talks about the opposition to water privatisation which he is increasingly frustrated by. His strategy is to say we should go for partial water privatisation not complete outright privatisation. We should pretend that the councils will still retain ownership of water supplies. We should come up with what he calls partial privatisation which is allow the councils to hand over the water supplies for 35 years to private corporations. 
Dr CAM CALDER (National) 
: 
 I move  
That the question be now put 
. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 In addressing clause 1 on the title of the Local Government Act 2002 Amendment Bill I say that one could call it the “ Rodney Hide Special Bill”. I for one am not at all surprised that Mr Hide has brought in this bill. He has talked about transparency. What is his tag line when he is in the political mire as he has been day after day? It is to say he has to go out and do the best job that he can for the people of Epsom. I say to Mr Hide that this bill reeks of hypocrisy. Mr Hide has a long long track record of talking about transparency and accountability. He talked about it when the issue was about perks and we all know he came a gutser on that. He talked about transparency and accountability in respect of law and order and we know he came a gutser on that too when he covered up for David Garrett. 
Now Mr Hide has brought into Parliament this bill which could be titled the “Biggest Act of Hypocrisy That We Have Seen Come in Here Bill”. 
Hon Dr Nick Smith 
: Calm down. 
Hon CLAYTON COSGROVE 
: At least I have not had a couple of crates of V this morning as that member has. If any member in this Chamber should calm down it is “Old Psycho” over there. He should not tell me or any other member to calm down because Nick Smith does not want councils to be accountable not even his own council in his own patch. The old windbag over there the old hayseed does not want his council to be accountable to the community or to consult it. Oh the pills must have kicked in! He is a bit silent now. 
I say to Mr Hide— 
Hon Dr Nick Smith 
: I raise a point of order Mr Speaker. I take offence at the coarse allegations that are being made by Clayton Cosgrove. They are both untrue and unparliamentary. I ask him to withdraw and apologise. 
Hon CLAYTON COSGROVE 
: I withdraw and apologise. 
The CHAIRPERSON (Eric Roy) 
: I am on my feet. The debate has been quite passionate but on a reasonably respectful plane. We are nearing the end of it and I would not like us to lose that. 
Hon CLAYTON COSGROVE 
: I come back to the point that Rodney Hide and other members of the Government have gone around the country saying this bill is about transparency and accountability. Mr Hide has made great play of the fact that the people should have their say. He has said the people should be involved in local government and the politicians in local government should be accountable to them. It is a pity he does not apply that to his own personal affairs but putting that aside he states that politicians should be accountable to the community. 
Hon Dr Nick Smith 
: Always in the gutter. 
Hon CLAYTON COSGROVE 
: You are no example I say to Dr Smith. Then we come to this bill which reduces the requirement on local authorities to consult and be accountable to their communities. I come back to the suggestion that a good title for this bill would be the “Yet Again a Rodney Hide Special Bill”. It is a case of Mr Hide talking about transparency accountability the good people of Epsom and how every day he has to try to be the best MP that he can be regardless of his track record in this place then pushing through a bill under urgency. Every bill on local authority matters that the Minister has introduced has been handled under urgency— 
Phil Twyford 
: Bar one. 
Hon CLAYTON COSGROVE 
: —bar one—because he does not want his legislation to be scrutinised and does not want the people to hold him to account. 
I challenge the Minister to get up and explain how reducing the requirement on a local authority to actively consult with its community on community goals and outcomes in any way engenders and enhances political accountability to those people. I ask the Minister that question. That is what he said he founded ACT on. It is what he says he lives by apart from in his own personal and political affairs in Parliament yet although he preaches that he does not walk the talk. How will a local authority know which goals and outcomes a community wants to have if it is not required to consult that community? Even Nick Smith’s council will not be required to consult on those community goals and outcomes. Yet again Mr Hide preaches accountability and transparency for everybody else. He takes the moral high ground desperately trying to rekindle a political future that is in tatters. 
I will give Mr Hide this: he has guts. Even though he is trying to rekindle his political future and reinvent himself yet again with or without the spray-on tan he still has the fortitude to bring into Parliament a bill that does exactly the opposite of what he preaches that everybody else should do. Everybody else should be accountable; everybody else should consult their electorates. He says he consults the people in Epsom but he brings a bill into the Chamber that reduces the requirement of a local authority to consult its community its constituency. I ask my colleagues how that shows accountability and how that will hold local politicians’ feet to the fire when they propose to do bad things—and we have seen that occur. 
When it comes to water I challenge Nikki Wagner. We have a major water issue in Canterbury—a major water issue. This bill of course allows the privatisation of water assets in the future. So I look forward to future debates with that member over there Nick Smith and with Nikki Wagner as well. 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
MOANA MACKEY (Labour) 
: 
 I have been present for the entire Committee stage of this debate and have participated in it. In reflecting on the Committee stage I believe that the current title the Local Government Act 2002 Amendment Bill is not appropriate and needs to be amended to better reflect the debate in the Committee stage and the amendments made to the bill. 
The first change that I would suggest— 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. Mr Cosgrove whose call has ended is continuing to shout abuse across the Chamber when I am trying to listen to the contribution from his colleague. He has finished his time and he should be asked to desist. 
The CHAIRPERSON (Eric Roy) 
: I did not hear the member but a member has taken offence. As I said we are nearing the end of this debate so let us just conclude it in the best spirit that we possibly can. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. I think it is a tradition in this Chamber that one responds when provoked. 
The CHAIRPERSON (Eric Roy) 
: Look I have just said that we are getting near the end of the debate—very near the end of it I think. 
MOANA MACKEY 
: Thank you Mr Chair; I say that members on this side of the Chamber have a lot more to contribute in this very important part of the debate. I am very pleased that the Hon Dr Nick Smith is listening to my contribution. 
I think a better name for this piece of legislation perhaps would be the “Local Government (That was Then; This is Now) Amendment Bill” because when I look at the issue of remitting rates on Maori land I am reminded of the comments made by the Hon Dr Nick Smith on this very issue when he was in Opposition and when Labour passed the Local Government Act in 2002. The clause is being carried over into this bill—a review period is being put into it. I think the bill should be called the “Local Government (That was Then; This is Now) Amendment Bill” because of the comments made by the Hon Nick Smith when he was in Opposition on this very issue of remittance of rates on Maori land. He said: “This is nothing less than apartheid.” The clause states “that a local authority must adopt ‘a policy on the remission and postponement of rates on Maori freehold land.’ It must do that.” He then went on to say: “I ask the Minister to tell me why councils must have a policy on remitting rates on Maori land … I want some member in this Chamber—maybe Parekura Horomia—to provide me with an explanation. Why must a council develop rates remission policies for your cuzzie-bros and not for mine?”. The Hon Dr Nick Smith then went on to say: “This damn law that we are being required to pass is nothing less than apartheid and I cannot believe that members opposite want to impose this sort of obscene provision. It offends against National’s principle of one standard of citizenship.” 
Well that is quite a departure from the bill we have in front of us now. I ask the Hon Dr Nick Smith—who said he was listening to my contribution and I thank him for that—to take a call and tell us whether that is still his position and if it is whether he will be voting against this part of the bill. Indeed maybe he will vote for my suggestion of a new title which is the “Local Government (That Was Then; This Is Now) Amendment Bill” because that is quite a U-turn even for the Hon Dr Nick Smith. 
The other title that I think would suit this bill is the “Local Government (Sale of Council Housing) Amendment Bill” because housing does not appear in the list of core functions in this legislation. Councils around the country have already said quite openly that they are looking at selling off their pensioner housing because clearly central government does not think that it is an area councils should be involved in. That was backed up by the fact that the Minister of Housing has stopped local government from having access to the Housing Innovation Fund to maintain those properties. That is sometimes the sticking point; properties get to a point where they have to be maintained and the council wonders whether it should sell them or keep them. 
If central government is prepared to take the issue of housing seriously in partnership with local government and to respect the role that local government plays in housing then local government should be allowed to have access to the Housing Innovation Fund as Labour allowed. I was in Kaipara earlier this year and I was told that the Housing Innovation Fund allowed the council to maintain its properties and that was part of the reason the council kept them and reversed its policy to sell them. Yet the National Government has said to local government that it does not have a role in housing and that housing is not a core function which has already seen the sale of some pensioner housing in districts like Whakatane. The Whakatane District Council has said that the Government did not want it to be involved in housing anymore. So we could call this bill the “Local Government (Sale of Council Housing) Amendment Bill. 
It could also be called the “Local Government (Consultation is Important for Corporates but Not for the Community) Amendment Bill. Under this legislation—and we heard this earlier in debate on the Committee stage—communities’ consultation rights are being slashed back to the bone. But new procedures for corporates are being introduced—for example developers can put pressure on a council to review its developer levy and development policies. Corporates will get the right to the special consultative procedure while communities are having the right taken away from them. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 51 
New Zealand Labour 41; Green Party 9; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Clause 3 agreed to. 
Bill reported with amendment. 
The CHAIRPERSON (Eric Roy) 
: I move  
That the report be adopted. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 41; Green Party 9; Maori Party 5; Progressive 1. 
Report adopted. 
Third Reading 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 I move  
That the Local Government Act 2002 Amendment Bill be now read a third time 
. The purpose of this bill is to improve transparency accountability and financial management in local government. Before the development of this bill the Local Government Act 2002 contained few mechanisms to apply the principles of transparency and accountability which it seeks to promote. Although it resulted in a lot of information being made available by councils it was not always easily accessible to ratepayers or easily understood. 
The accountability mechanisms are retrospective so do not provide ratepayers with any effective ways to control their councils. With this bill I hope to change all that. It includes a number of new measures to improve transparency and accountability. Having a financial strategy for example makes transparent the overall effect of council proposals on rates debt investments and services. It sets limits on rates and borrowing which creates an accountability mechanism. Further transparency and accountability are then provided through the pre-election report. This will compare actual rates rates increases and borrowing and returns on investments with the limits and targets set out in the financial strategy. Voters will receive this and other information about their council’s finances and proposed projects at the time they are best able to hold members to account—the local election. 
There is more focus on financial information and management. A basic understanding of council finances is crucial if people are to ask better questions or indeed any questions of their council. Not everyone is an accountant which is why having plain English financial information and standardised reporting is so important. Standardised information is particularly useful for infrastructure services. The ability to fund investment in infrastructure is the biggest factor affecting councils’ financial sustainability and is where the most money is spent. 
Providing ratepayers with comparative data on the levels of service for things like roads water and waste water helps to inform them about what they are getting for their money. It also helps them to ask questions about their council’s performance and the issues they are facing relating to these services. The Government takes seriously infrastructure and its important links with economic growth. Ensuring councils provide good information about their infrastructure assets and services is essential so that neglect does not hinder economic performance. 
The proposals in this bill can go only so far in making a difference though. What happens next is up to councils individuals and communities. The bill provides for better quality information so there are more transparent processes for making decisions about strategic issues. Councils will be left to establish and run these processes for themselves. However no one can force ratepayers to take advantage of this new information or to be more actively engaged in local debates and decision making. It is up to them to choose to participate. On that note I do not think fears that there will be a lack of consultation in the future are warranted. 
Community engagement is not just about making a submission as part of a formal consultation process. People should be encouraged and enabled to make their views known whenever they like. Having better information about a council’s finances and proposed projects about how much services will cost to deliver and about what they are getting for their money—and being able to compare this with information from other councils—will put ratepayers in a better position to put their views across to their council more clearly and more comprehensively. It should mean that when consultation does occur the public will be in a stronger position to participate. It should mean that when councils are required to make themselves aware of and have regard to the views of communities as the Act requires they can generally give effect to this principle. 
During the course of developing and enacting this bill much has been made of the concern that it encourages the privatisation of water and other council services. The bill does not privatise anything. The councils and their ratepayers will make their own decisions. If at some point in the future they decide that some private involvement in their services is the right thing for them that it is the best way for them to pay for these services and keep them affordable for local people then that is up to them. If the bill makes it a bit easier for them to make these decisions then I say it is great. If they do not make any change at all then that is their choice too. 
Likewise if councils want only to provide so-called core services and their communities are happy with that then that is up to them. If councils want to provide more and they have community and ratepayer support that is their choice as well. But ratepayers have a right to challenge the council if it wants to spend their money on something that is not a core responsibility particularly if it might take priority over other more essential local services. Having the core service provisions in the Act will help to guide councils and communities when they are debating these issues. That along with the financial strategy and other new information will empower ratepayers to question council decisions and to discuss trade-offs on a more equal footing. 
As I have mentioned throughout my speech this bill is about choice. It is about giving councils and communities more flexibility to choose to deliver local services in ways that are right for them. It is about giving ratepayers better information about their councils so they can choose what kinds of services they want and how they want to pay for them to choose how and when to be involved in decisions and how and when they need to hold councils to account for those decisions. 
Councils will start developing their first long-term plans using the provisions of this bill early next year. I hope councils and ratepayers will choose to take advantage of the new opportunities the bill introduces. I thank the House for its support. 
PHIL TWYFORD (Labour) 
: 
 Labour members oppose the Local Government Act 2002 Amendment Bill with every bone in our bodies. The bill claims that it will increase the transparency and accountability of local government. In fact it will do the opposite. Like all of the local government bills the Minister of Local Government has brought to the House in the last 2 years it will undermine our public institutions and undermine our democratic process. 
We have talked about water privatisation a lot and no matter how much screeching we hear from the Government backbenchers about whether this bill allows in fact water privatisation New Zealanders will not be fooled by the blatant lack of transparency that the Minister of Local Government has displayed in bringing the bill to the House. The bill will allow long-term contracts of up to 35 years for private sector operations to control our water supply. Section 137(4)(d) in clause 32 explicitly allows the sale of pre-existing water infrastructure as part of those long-term contracts. It is not as the Associate Minister tried to argue this morning simply something that will give more options to cash-strapped small rural councils. This bill will allow the billion-dollar water monopoly set up under Rodney Hide’s super-city in Auckland to be contracted out to United Water for periods of up to 35 years including the private ownership of pre-existing water infrastructure. 
The ratepayers and the citizens of Auckland could be given no say under this bill. At the same time as it allows water infrastructure to be sold to private sector interests it also does away with the provisions in our local government law that would guarantee citizens the right to be consulted before their assets and their services are either corporatised or contracted out. The combination of those two things will imperil our public ownership or ratepayer-owned assets and resources. We are talking about water specifically but the same principle applies to all sorts of other strategic assets. Does anybody other than the deluded members opposite— 
The ASSISTANT SPEAKER (Eric Roy) 
: Order! 
PHIL TWYFORD 
: —believe seriously that the privatisation of our water supply will not result in the inevitable price hikes that people have seen that have accompanied other botched privatisation initiatives that we have seen over the last few years? We know that if we hand over to the private sector a natural monopoly like water supply it will almost inevitably end up in foreign hands. The guaranteed profits that will flow from private ownership of a natural monopoly will flow overseas. That money will go out of the pockets of New Zealand ratepayers and householders and straight into the pockets of overseas-owned companies. Does anybody believe that if we hand over resources of this scale—a billion-dollar water monopoly in Auckland—to the private sector it will not result in huge corporate salaries further gouging the pockets of the ratepayer? This is not a good idea. 
I remind members opposite that the most recent independent opinion polls on this issue have shown that 80 percent of New Zealanders are opposed to any privatisation of our water system. It is a matter of choice as the Minister pointed out. When New Zealanders go to the polls next year they will be mindful of what the Minister did to Auckland local government they will be mindful of what the Hon Nick Smith did to democracy in Canterbury and they will be mindful of this bill opening up their municipal water supply to privatisation and they will make a choice at the polls. This Government is gutting our local government public institutions and the democratic process and those two things go hand in hand. They are taking the voice away from ordinary people and they are opening the door to private control and ownership of assets and resources that New Zealanders have built up over generations through their rates. New Zealanders will not forget that. 
There are other obnoxious aspects to this bill that Labour members have opposed steadfastly throughout this whole process. One of them is the idea of core services that this Minister whose party currently commands about 2 percent in the polls is able to impose— 
Hon Clayton Cosgrove 
: Not that much. 
PHIL TWYFORD 
: Is it not 2 percent? He is able to impose an ideological and arbitrary list of core services that he defines as core services. Nobody else does. Hardly a soul turned up at the Local Government and Environment Committee to say that it is a good idea; 98 percent of the submitters who came along said it is a lousy idea. They said that we should either put their issues and services in the list or not have it at all. The implications of what that list could mean is that a rural community for example that wants to provide free premises for a general practitioner service so that it can have a doctor in its rural community could be vulnerable to claims through either the annual planning process or normal political debate that it is not a core service— 
Moana Mackey 
: Or a legal challenge. 
PHIL TWYFORD 
: —or in fact a legal challenge—and therefore it should not be engaging in it. This idea tilts the playing field away from the democratic process that allows citizens to decide in conjunction with their elected representatives what constitutes a core service. 
This bill also makes a number of cuts to the obligations currently on the councils to consult their citizens. It allows the councils to contract out public services to the private sector. It allows them to corporatise their assets and operations by shifting them to council-owned companies without consulting their citizens. That is a breach of people’s fundamental democratic rights. It constrains the whole process of setting community outcomes setting the high-level goals that go into our councils’ long-term plans. Under Rodney Hide’s bill a council could make up the community outcomes out of thin air or out of the last thing someone said to one of its members on the street or in the supermarket. The councils are not required to consult the community in setting those outcomes. 
The bill also restricts the community outcomes unduly by requiring that they can only be things that the council itself can deliver on. Many of the most pressing issues for local communities such as crime safety alcohol and pokies—any number of those issues—cannot be made a community outcome because the councils do not have access to all the levers to solve those problems. That is yet another example of this Government and this Minister taking democratic rights away from New Zealanders. 
They have gutted the consultation process for decision making about many of the important things that go into the annual plan. Currently there is a four-stage process that we have admitted was overdue for streamlining and could have easily been reduced down but this Government has thrown the baby out with the bathwater. Now there is no principle-based mechanism that requires consultation on these important decisions. I predict that many of the Government’s natural supporters and voters in leafy suburbs up and down this country who are the people who are most demanding of their local authorities will blame the National Government for taking away their democratic rights. 
We have seen three bits of legislation that imposed an unpopular Rodney Hide - inspired super-city on our country’s biggest city. Most of that legislation was pushed through this House under urgency. We saw the sacking of Environment Canterbury by the Hon Nick Smith which was again done under urgency. This bill is the third leg of the treble. It guts our local government legislation and it hands over our resources to privatisation and corporatisation. That is the legacy of the Minister of Local Government who set out with such grand aspirations to be the “Minister of Ratepayers”. This is what he has done: he has weakened and undermined our public institutions and taken away the voice of New Zealanders over things that they justifiably have a right to a say on and to be consulted on. He comes to this House trumpeting transparency and accountability but everything about the way that he has implemented this legislation and implemented his policies speaks of the opposite. It is not transparency and accountability; it is the opposite. The public of New Zealand will hold him and this Government accountable for it. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 I am a little saddened to hear the desultory speech from the previous speaker Phil Twyford who has been at least involved in the full process of the Local Government Act 2002 Amendment Bill. I think he could have done better than he did. However it was comforting to hear Shane Jones speaking at an earlier stage. He is a loquacious speaker. 
Debate interrupted. 
Sitting suspended from 1 p.m. to 2 p.m.