O'Connor Greg; Mahuta NanaiaPart 2 Water services entitiesCHAIRPERSON (Greg O'Connor): Members we now come to Part 2. This is the debate on clauses 10 to 114 and Schedule 2 Water services entities". The question is that Part 2 stand part.Hon NANAIA MAHUTA (Minister of Local Government): I welcome the debate on Part 2. It is a substantial part of the bill which seeks to establish the four water service entities; outline their role their purpose their functions the ownership structure and allocation of shares but also the Minister's role; and the establishment of the regional representative group the regional advisory panels. This is important because we want to ensure that local decision-making is reflected through this particular system.It also includes clauses in relation to constitutions which will guide the way in which each entity will operate and it provides sufficient flex in order for bespoke aspects of each entity region to reflect itself in its establishment. It also sets out matters in relation to the board that is consistent with the Crown Entities Act and also relevant disclosure requirements therein.I want to just turn briefly to some of the matters that have been raised and use this also as an opportunity to clarify the nature of the ownership interest. Firstly can I say that clauses 15 to 16 establish the council shareholding arrangement under the bill. There was a concern from councils that the term "share" was misleading and I should say that's because councils were concerned that the public would think that they had more influence over the entities than is provided in the bill.Indeed entities will own the assets. However councils will own the entities—and through the governance role that we've provided they will direct the entities to conduct their ability to operate water service delivery.There was also a concern from smaller councils and those kinds of councils where their populations spill over holiday periods. I'm thinking of my own area of the Thames-Coromandel District Council. In terms of the shareholding population—and I would welcome the input of select committee members—in terms of these types of councils they were concerned that a shareholding based on the usual resident population might have a perverse effect on the benefits that they may get. But can I say this: the whole point of scale and aggregation is to assure small communities—such as the Thames-Coromandel district—that they will reap the benefits of an aggregated approach to the way in which procured services to invest in infrastructure can take place.The shareholding model—and I'd just like to make a point—was a matter that came out of the governance working group. They decided that because the shareholding was based on population—so 50000 people and less—those council areas would receive at least one share. They would not be able to take a dividend that the benefits of this reform would continue to reinvest back into the service delivery infrastructure investment component. So there was quite a thorough consideration of these matters within that particular working group. Let me come briefly to an issue which has occupied much of the time by members of that side of the House and it is in relation to the regional representative group. Many of the councils in the early stages of problem identification—when we thought about what a solution could look like—made the point that they have existing relationships with iwi mana whenua as a result of Treaty settlement arrangements that any reform going forward shouldn't lose sight of the positive working relationships that they have with iwi mana whenua.So at its core on the regional representative group you have a joint decision-making opportunity by having councils and mana whenua across an entity sitting side by side talking about the way in which they can make decisions for the betterment of their communities to assure themselves of safe drinking water better environmental outcomes place making and offering the ability to look for the very first time about common interests working cooperatively and collaboratively—joint decision-making.So I reject strongly views that have come out from one part of this House that propose that having joint decision-making at a strategic level in the way that we're proposing for water service delivery will not benefit communities. It will; we've already seen it in practice. For those many councils who cherish the relationship that they have with their iwi mana whenua this bill affirms that."