Local Government Act 2002 Amendment Bill — Third Reading 
Local Government Act 2002 Amendment Bill — Third Reading 
[Volume:660;Page:15601] 
Local Government Act 2002 Amendment Bill 
Third Reading 
Debate resumed. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 Some concluding remarks were made when we started on the third reading and I mentioned the contributions made by various members of the Opposition. I said that Shane Jones had given a good speech but perhaps I should say that his speech was quite good or perhaps goodish. When I listened to speakers on the other side of the House I wondered whether we were talking about the same bill. Goodness me! It was as if we were introducing apocalypse three—it is not as bad as that. 
I stand to speak in the third reading of the Local Government Act 2002 Amendment Bill. It is all good and I am excited that this bill is about to become law. I have not heard very many problems associated with it coming from councils or councillors. I must say that I wonder what sort of council and councillors the members on the Opposition side of the House have in their territories. I revere the good citizens of Tasman-Buller the great district in Westland who stand for their councils and do a thoroughly good job representing their people. They are quite capable of making choices; they are quite capable of making good decisions. Again I say this is a good bill. 
We heard a lot about the dangers of giving councils the option of having water services conducted by private partners—there is no compulsion for any council to do that. It is not a compulsory thing. If councils choose to they can. That is why the bill has been put forward as it is. It ain’t compulsory; it ain’t complicated. 
I am a bit surprised again that there has been scant reference from members opposite to smaller communities. Those members seem to have a huge preoccupation with Auckland but there are other places in the country. I live in the small community of Moana down in the West Coast and residents each have their own private water supply. There is no centrally reticulated water system so we have our own private water supplies. But after thinking about that further and having been in conversation with some members of the Local Government and Environment Committee it is astonishing that many small communities—and I am sure Mr Jones is aware of this in his part of the country—are dependent on privately provided infrastructure to keep themselves going. Those who visit our locality are amazed at the many local facilities that have been put in place by members of the community or working groups. 
I want to turn to how the bill achieves what it sets out to do. It makes councils more accountable to their ratepayers by providing ratepayers with better information through a provision of a financial strategy the pre-election report plain English financial reporting and the disclosure of infrastructure service information and performance measures. Standard performance measures will be in place for five key infrastructure activities: water supply sewage treatment and the disposal of sewage stormwater drainage flood protection and control works and the provision of roads and footpaths. This is a great package that will enable ratepayers to make comparisons of costs funding arrangements and service performance standards. Plain English financial reporting will mean that ratepayers can clearly understand the financial situation and dealings of councils without it in any way being obscured. 
The bill requires that councils have particular regard to the contribution that specified core services make to their communities. In the debate this morning and late last night some members could not come to a conclusion as to what those core services might be. Well members of the public do not seem to have any trouble determining what the core services for a council should be. The bill requires that the council has particular regard—it is a careful phrase: “particular regard”—to the contribution that specified core services make to their communities. Those who suggest that the list of core services is rigid and restrictive must bear in mind that just because a council is required to have particular regard to each of the core services it is not obliged to deliver those services and it is not obliged to do anything else. Again there is no great deal of compulsion. Local authorities will be able to decide that certain services are not a priority in their community or that those services are adequately provided for by other organisations. There is nothing preventing a local authority from deciding to provide a service that is not listed as a priority. 
The most contentious measure in this whole bill is probably the extended length of contracts for the operation and joint arrangements for the provision of water services from 15 to 35 years. Private partners will be allowed to provide and then own new infrastructure for a period of up to 35 years after which it will be transferred to the council. Opposition members have called this measure “privatisation by stealth” but nothing could be further from the truth because local government organisations will continue to be responsible for water quality and the provision and pricing of water services. Opposition members do themselves no credit by creating an alarming situation and scenario to describe their fears. Local government organisations will regain ownership of all infrastructure associated with water services on the expiry of the contract. 
In summary this Government has listened to the concerns of the local government sector has been well advised by it— 
Phil Twyford 
: Rubbish. 
CHRIS AUCHINVOLE 
: —oh yes it has—and has acted accordingly. We have increased flexibility. We have increased transparency and accountability which in turn improve engagement and consultation with communities. I feel sorry for those members on the other side of the House who wish this legislation did even more but I am delighted to be part of a Government that is making such huge improvements to local government in New Zealand. Thank you. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 The Local Government Act 2002 Amendment Bill represents blind ideology and outdated ideology at that which the rest of the world has in large part abandoned. It is based on an absolute belief that the market can and will get it right in privatising water supplies and with sinister intent this bill also removes public health oversight of the management of public water supplies. It is not the first such move. It has been accompanied by several other similar efforts by this Government and I note most particularly the Environment Canterbury bill that was passed under urgency in 30 hours in March of this year. It took away the role of councillors in the public oversight of the management of Canterbury’s water. There has been overwhelming public submission on this bill saying that New Zealanders do not want to see their councils putting water into private ownership by providing for a 35-year tenure effectively a generation. If it looks like privatisation if it smells like privatisation then indeed it is privatisation. 
New Zealanders know the risks of that. This morning I received an email from a woman known to me who 20 years ago was working in the United Kingdom. One of her tasks involved the clean-up in a metaphorical sense of the aftermath of the biggest water-poisoning incident ever seen in the UK at a place called Camelford under an organisation called South West Water which was one of the first water boards privatised by the Thatcher Government. A contractor to that company accidentally dumped 20 tonnes of aluminium sulphate into the wrong tank. It led into the water supply of communities that fed off the supply from South West Water and hundreds of people were made sick. But the interesting thing about this case was the cover-up. It took more than 20 years and a coronial inquiry before people were told the facts of what had happened. The reason for that was the Thatcher Government did not want to have this made public. It did not want any taint attached to the privatisation project it had under way for the water boards and schemes of Britain. The eventual result was simply that South West Water was prosecuted for the total sum of £10000. It was fined £10000 for an incident that caused hundreds of people to become sick. Some people suffered permanent injuries due to aluminium poisoning. Although 148 people were able to bring a case and get some very modest compensation they had to fight through the courts to get compensation for their ongoing health problems. 
As the email this morning said: “Having seen that and remembering what a terrible mistake it was” that woman hopes “it never happens in New Zealand.” She said “I see that the Government is saying it is not about privatisation but about management.” Yes believe it if you will. This is about the privatisation of our water supply and it is part of a concerted effort by this Government not involving just this particular bill. It extends I believe for instance to a contract awarded 3 or 4 months ago by Tony Ryall as the Minister of Health. The contract for the oversight of our nation’s drinking water is worth $2.25 million and is a job that used to be one of the core functions of the Ministry of Health. It had a team of five or six water engineers and other such experts who were there as part of the core public function of ensuring our water was safe to drink. But they have gone; there is only one staff member. Instead we are paying $2.25 million worth of public money to a consortium that includes American engineering consortium Parsons Brinckerhoff who are involved in water privatisation schemes all over the world. 
This is all very much part of the same approach—that the market will deliver—although the experience around the world has been that when it goes wrong it goes absolutely horribly wrong. It is rampant ideology at work. It is contracting out to the private sector what should be a core function of government. We can argue across this Parliament about what the core functions of government should be and I would be happy to take part in that debate but if members opposite want to argue that oversight of our drinking water is not a core function of the State then I would like to know what the heck is a core function of the State. I believe that drinking water is a basic human right and it is essential infrastructure. It deserves to be in public ownership overseen by officials who do not have any concerns other than making sure that water is safe to drink that the supplies are up to scratch and that targets do not have to be met in respect of providing returns to a private consortium. Yet here we have a bill paving the way for our water supplies to be put into 35-year ownership contracts. Those contracts will be put into private hands for a generation a lifetime of private ownership. 
An example comes from Britain in respect of what happened under one of the first privatised contracts. Hundreds of people were poisoned by the misapplication of chemicals. It took people 20 years to get justice. I argue very strongly that if that incident had involved a publicly owned entity there would have been answerability on that issue one would hope in a parliamentary democracy. Hundreds of people were made sick very very quickly and I hope that answerability have would have come irrespective of which party was in power. 
But there are other examples outside of that example in Britain. The Local Government and Environment Committee which considered this bill heard a submission from the Canterbury District Health Board. It was the most explicit submission I think I have ever heard from public officials. They said to the Government that removing sections 125 to 129 from the Local Government Act 2002 effectively removes the regulations about water and sanitary services and the oversight provided independently by the medical officer of health. So we have it happening on two levels. In the Canterbury District Health Board the medical officer of health’s role in terms of the oversight of the water schemes is obliterated by this bill. The private sector will be running and will be responsible for the monitoring and testing of the quality of the water that they are making their living from. 
So at the local level the oversight is gone. Meanwhile at the head office of the Ministry of Health the team that oversaw that has been decimated and replaced by a private consortium with the profit motive at the heart of it. Our chances of having anybody in public office being able to stand up and blow the whistle on schemes that are not working are gone are obliterated by those double acts of the Government both by this bill and by the non-announced move by the Minister of Health. The  
Press 
 newspaper and I publicised recently that the contract had gone to Allen and Clarke in concert with eight other parties including the American conglomerate Parsons Brinckerhoff. Here we have at two levels nationally and locally the oversight of the safety of our water going into private hands for 35 years. There will be no oversight. 
I commend the Canterbury District Health Board officials for their bravery in putting forward their submission on which we have not had a response from the Minister. I wonder why that is. I still invite members opposite in the time remaining—Canterbury members in particular or those like the chair of the Local Government and Environment Committee whose electorate might be going into a district health board with Canterbury—to stand up and take a call to defend the Government’s overriding of the concerns of people with no agenda with no axe to grind. Public health officials said in their submission to the committee that the role they have played in providing an oversight of drinking-water schemes will go with the passage of this bill and that we are putting the oversight of water standards into private ownership. 
The officials are extraordinarily explicit in saying that what this is doing is parallel to what happened in the community of Walkerton Ontario in 2000 after a Government came in with a big agenda to sweep away the red tape and regulations that were strangling the Ontario economy. And what happened? Walkerton went into a scheme without any oversight from public health officials and seven people died and about 100 people were made seriously sick. The cost to that community and to Ontario was estimated at $200 million. In fact in total 2500 people got sick from the outbreak of E. coli that happened in that community. That is a forerunner of the risks this Government is taking not only with putting our water supply into private ownership for 35 years with the potential for councils to pick that up which they will but also with the fact that we are taking away health oversight. I say that this Government is taking an extraordinary risk with public health for reasons of blind ideology. It does not make sense. New Zealand will end up paying a very high price for the pernicious legislation that this Government has put in front of us today. 
SUE KEDGLEY (Green) 
: 
 Roger Kerr of the Business Roundtable will be listening with enormous satisfaction to this debate today. For 20 years he and the Business Roundtable have been lobbying to privatise our water supplies and the Local Government Act 2002 Amendment Bill is the prize the culmination of 20 years of intensive lobbying. In fact with this bill Mr Kerr and the Business Roundtable have achieved their wildest dreams. This bill once it is passed will allow foreign-owned multinational corporations to own our water assets for 35 years. The bill also lets them get their hands on any other strategic assets without having to consult local people because the bill takes away the requirement for councils to consult before they sell strategic assets. 
Best of all for the bill’s supporters is a little clause that was sneaked in after Local Government New Zealand and others had made their submissions. I am referring to a provision whereby councils can sell any water infrastructure if they believe that the sale is desirable for the success of the joint arrangement. Members of National and ACT have been trying desperately to deny that this bill will allow water privatisation but that clause which was sneaked in at the last minute says unequivocally that any council will be able to sell any water service if it believes that the sale is desirable for the success of the joint arrangement. That is water privatisation by any other name. 
One can only speculate on the intense lobbying that must have gone on in secret by the powerful vested interests—the major water companies Roger Kerr and the Business Roundtable—to get this bill passed. I think it would be very much in the public interest if the public were to have an answer to the question of whether the Business Roundtable and global water corporations made large financial contributions to the ACT Party and the National Party. Perhaps one of the next speakers from National could answer that question. 
There has been a big debate recently in New Zealand about our opposition to foreign ownership of land but what will New Zealanders think when they realise that once this bill is passed in an hour or so our water supplies which have been built up over generations by ratepayers can now be sold to any of the huge private multinational corporations which I might add are literally scouring the world looking for water supplies to take over? They have worked out that as water is becoming increasingly scarce they want to take advantage of water shortages—it is of course a natural monopoly—by buying up water supplies around the planet. 
Once a water corporation takes over a water supply as corporations will now be able to do in New Zealand its goal will not be to protect the public interest or to ensure that everyone has access to safe and clean water. Its goal will be very explicit—to maximise the profits for its shareholders. It does this in three ways. It is almost a formula; these corporations do it all around the world. The first thing they do is sack most of the staff that run the water services. Secondly they charge more for water so the price of water soars and becomes unaffordable for many people who then have their water cut off because they cannot pay their water bill. The third thing they do is run the water infrastructure down. They do not bother to fix the leaks or to invest in the infrastructure. Instead they siphon off the profits to shareholders. 
I will use England as a bit of a case study although I could give examples from all around the world. When the water industry there was privatised the corporations immediately fired 25 percent of the workforce increased the price of water by 50 percent in the first 4 years and slashed their investment programmes. They used the savings to increase the dividend and pay huge salaries to the management and directors of the water companies. While customers faced continual price hikes and the number of people having their water supply cut off tripled company profits soared by 142 percent in the first 8 years. That is what will happen in New Zealand if any local community has its local water supply taken over by a private water company. I was about to say “if the local community allows it to happen” but of course it will not be up to the local community any more because under this legislation the local council will be able to flog off a water supply without having to consult the locals. The locals need not even know about it. 
One of the problems is that once these corporations own or manage a water supply for 35 years or if they sell it under the provisions I was just reading out locals and their representatives will have virtually no say over water supplies for the next generation. The contracts that the local council will enter into will be secret. They will be commercial-in-confidence so ratepayers will be completely in the dark about what the provisions are and about any deal that has been struck between the council and the water company. Many contracts have guaranteed rates of return for the water company regardless of its performance. Chile for example had to guarantee a profit margin of 33 percent to Suez as a condition. 
Another thing is that once these contracts have been signed one is locked into them. It is very difficult to get out of them even if over 35 years circumstances change radically or if a company happens to go bankrupt. What happens then? It is hardly surprising to learn that water privatisation has a terrible track record around the world. There is a huge and growing backlash against water privatisation. Literally all around the world communities are fighting back against the water privatisation of the 1990s. It happened in many parts of the world particularly in Latin America aided and abetted by the World Bank. 
More and more councils and Governments are trying to get out of contracts they entered into with private corporations. France used to be known as the home of water privatisation but more than 40 towns and cities have taken their water services back into public hands. Paris took back its water service amidst huge controversy earlier this year and other countries in Latin America are doing the same. It will be ironic if it happens here just as around the world water companies are being thrown out by grassroots opposition because communities have woken up and understood what happens when they allow water a precious resource one of the life support systems of the planet to be handed over to private corporations who will decide whether to turn off the tap if someone cannot afford it. And of course it is not in the companies’ interests to worry about water quality and so forth. 
Around the world even across the Tasman private water companies are being booted out. Adelaide has decided not to renew the 15-year contract that Veolia Water had to run their water services. Now Veolia Water and all the other private multinational corporations can pack up their bags and come to New Zealand because they have achieved their wildest objectives with the Local Government Act 2002 Amendment Bill. Councils can now not only contract out water for 35 years but they do not need to alert or consult the public and the sinister little clause that National members have failed to mention enables any council to sell its local water supplies to any private water company if the council considers that to be desirable for the success of a joint arrangement. 
We have opened our doors to water privatisation. We have gutted consultation not just for the sale of water but for the sale of any strategic asset. This bill is the implementation of Rogernomics part 2 which is the corporatisation and privatisation of local government in New Zealand. 
Dr CAM CALDER (National) 
: 
 I am amazed at the alarmism extremism and scaremongering that we have heard in the House today. The Local Government Act 2002 Amendment Bill is a simple bill to improve transparency accountability and financial management. It is a bill on behalf of ratepayers the length and breadth of this country. 
Its provisions are intended to operate on two levels. First at a strategic level the bill aims to change the way that local authorities set their direction and the way this direction can be influenced and assessed by the community. It is directed at communities having more knowledge of what is going on. How does the bill aim to achieve this? It reinforces the need for local authorities to focus on core services. We have already heard that the Wellington City Council approves of this. It is a guideline; it is not didactic. Effectively local councils can focus on core services and they will learn what those core services are from their communities. 
The bill talks about introducing a pre-election report. Why does it do this? It is to encourage an informed election debate. People can elect the officials who will represent them on the basis of being informed and knowing well what each person stands for how they perform and how the council has performed in the preceding 3 years. 
The bill introduces a financial strategy to the long-term plan in order to help local authorities and their communities debate and resolve the key financial and service delivery trade-offs that local authorities must make. It integrates community outcomes and long-term planning processes to encourage better prioritisation of community aspirations. Once again it is all to do with what the community wants. 
The legislation focuses community outcomes on the role that a local authority intends to play in its district or region. Of course it improves the financial and non-financial information in long-term plans by making it more accessible more useful and more comprehensible to most of us. Most of us do not have an accounting degree; we want to make this information easy to understand. 
At an operational level the bill aims to simplify decision-making processes. We want to do this because we heard from many councils that they were required to consult at so many steps that they were getting consultation fatigue. The bill removes unnecessary auditing by taking a number of operational policies out of the long-term plan. It removes unnecessary consultation as we have said and levels the playing field to better enable the private sector to deliver local authority services where that is required by the local authority. 
People have had a few concerns about consultation. I will address some of these concerns. The Local Government Act 2002 contains many provisions to ensure and enable community engagement and consultation in local authority decision-making. This bill proposes amendments to remove some of the more prescriptive ones and we have heard from the other side of the House that that proposal has had a certain amount of acceptance from the Opposition. I am pleased to hear that. 
The bill proposes to remove some of the more prescriptive consultation requirements but we acknowledge and underline the fact that consultation is still required. Where is this consultation required? Section 78 of the Local Government Act 2002 requires a local authority to give consideration to the views of interested or affected parties when making a decision. Section 97 requires that any decision that would significantly alter the level of service provided for a significant activity or that would transfer ownership or control of a strategic asset be included in the long-term council community plan which itself requires an involved community consultation. So we can put that concern to one side. 
Core services are another area that we have had a lot of debate about. Clause 5 of the bill introduces a list of core services. It says that local authorities must have a particular regard to the contribution of these services to their communities. Many submitters noted that the list is unduly rigid or restrictive and pointed out that what is considered a core service in one area is not considered a core service in another. We understand that. Clause 5 does not prevent a local authority from providing services not listed if it deems them a priority for its local community. The ability of the local authority to decide which services to provide for the community is preserved. The clause may be seen as providing a reference point and focus for community debate. I commend this bill to the House. Thank you very much. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 The Local Government Act 2002 Amendment Bill is really a piece of ACT ideology that the National Government has decided to go along with. I do not even know whether the National Government really understands or has contemplated what is in this bill and how it will play out in the years to come. We have known that for many many years Rodney Hide has talked about the need to reform local government so that corporate and private interests have a much bigger say. That is what this legislation does and the National Government is going along with it probably because of some agreement for supply whereby the National Government needs the ACT Party’s support in order to progress its other agendas. 
This bill has gone through under urgency. Almost every piece of legislation that Rodney Hide has brought to the House has gone through under urgency. Members sat in the House until midnight last night for the second reading of this bill and we have been debating it all day today. Two of the three bills amending Auckland’s local government structure also went through urgency. The first famously had Opposition members sitting almost right through the weekend in order to oppose it. 
Many of my colleagues on the other side of the House have said that this is really about listening to the people out there and giving ratepayers a better say and that in fact that is one of the intentions of the bill. But when one looks at the public response one finds that there were 414 submissions to the Local Government and Environment Committee. In Auckland on one occasion that I attended many of the Auckland councils came and presented their evidence to the select committee. There 360 submissions against the legislation and of those 36 were from councils. This is not simply a case of mums and dads sitting down and talking to the select committee—although those people are also welcome—it was councils that have been elected by ratepayers saying that this legislation is a backward step. On the water privatisation part of this legislation we had 414 submissions. There were 360 submissions against it—360 submissions—and 17 submissions in favour. Members can do the maths. About 5 percent spoke in favour and an overwhelming number spoke out against it. 
This measure is not wanted by New Zealand. It is not wanted by the councils that represent the local people around New Zealand. In the local body elections people spoke out and said that they do not want this. In Auckland people voted overwhelmingly for a mayor and councillors who would be in opposition to this sort of legislation. We are lucky that we have them. We are lucky that those people are there to stand up to what amounts to ideological claptrap that this Government is bringing into the House. Not only is this legislation ideological but also a lot of it is actually unnecessary. 
Cam Calder talked about the pre-election report that this legislation wants to have. We had varying degrees of submissions on this but overwhelmingly submitters were against it. Some of them said that they could go along with it. But what do they really say? Well most of the big councils said that they could do this as they are already reporting back in a number of other ways to people. They make themselves accountable in a number of other ways but they say they can also do this. The smaller councils said that they can do this pre-election report but it will cost them because they will have to employ more people to write it. In fact this requirement will increase the administrative burden on many of the small councils. A number of the larger councils came along and showed us the reports that they already give. The local authority in the Waikato area puts out a report that is very easy to read. It is already doing what this legislation is asking for. 
This legislation is unnecessary. It is taking the “local” out of local government and it is making sure that the Government is standardising pushing from the top down and making local government authorities which are already representative of their local populations more subject to central control. That goes for core services. This bill stipulates the core services. In fact many of the local bodies that came before us said that this is not appropriate for them because they do a lot of other different things. They want to be a lot more flexible towards their ratepayers. This bill makes them more straitjacketed than they will have been before. This bill also says that it wants to increase transparency. It says that it wants to simplify many of the consultative procedures. That is code for removing some of the safeguards that are already in place in the Local Government Act 2002 as it stands at the moment. There is a need to do some streamlining and a number of the people who came to us said that. This bill removes the obligation to consult on key projects. These include the possible privatisation of water. Some of the core services—for example transport—could be moved into an agency which would change their whole accountability back to the council. That can happen. 
The part that I think is most odious in this legislation is the privatisation of water—or the “privatisation” of water because the bill basically pushes out the contracts from 15 years to 35 years which could be half the lifetime of anybody in New Zealand—on the basis of no evidence that it will make water quality better increase water availability or make water pricing any cheaper. There is no evidence for that at all. We have heard copious amounts of evidence today in this House from my colleague Brendon Burns and from Sue Kedgley to show that water privatisation which is in this part of the legislation has been shambolic around the world—shambolic. It has cost more the water is of poorer quality it has led to disease and public health risks and water is less available for the people who need it. 
What does that add up to? If we take away the requirement for consultation on key projects such as water and water quality and if we up the ability for the contracts to be put in place from 15 years to 35 years then we have a recipe for the non-transparent non-consultative non-accountable privatisation of the core assets that the people out there demand and need. 
One of the key aspects of this legislation as reported by the Government—or certainly by the ACT Party; it is by Rodney Hide the Minister of Local Government—is that somehow this measure will save on costs. But the really interesting thing about costs is that if we look at the costs and at the way that rates have in theory been going up over time we see that rates have actually been staying pretty much level with the level of GDP. As GDP has gone up the expenditure in local government has kept track at about 3 percent of GDP. It is not actually true that these prices have been going up. But the Minister is making the case wrongly that somehow these cost rises are a function of all the non-core services—as he calls them—in this bill. Well the fact is that the biggest amount of money spent by any council or local body is spent on the core services. Of all the money spent by local government 97 percent of it is spent on the core services that are in this bill yet this legislation aims to remove cost increases on non-core services. 
There is a lack of analysis and a lack of a plan. It is unnecessary legislation. It is ideological legislation which has been brought into this House to further the ideological pathway of the ACT Party inside the National Government. It is a complete travesty of a bill. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 I will be relatively brief. The Local Government Act 2002 Amendment Bill is in essence a relatively simple bill. If one reads the bill one finds it is clear that the Opposition—particularly the Greens but also the Labour Party—is making a mountain out of a molehill. 
The attitude of the Labour Party and the Greens to water is simply crazy or mad if you like. They have no interest in the question of the quality of water. Water quality is not at the heart of their opposition; at the heart of their opposition is the question of ownership. They say that it must be owned by the public. Public ownership is of the essence irrespective of water quality. The goal for the Greens and the Labour Party is for water to be provided only by public institutions when the goal should be to provide quality water at a reasonable price. Frankly provided that the goal is reached of having high-quality water at a reasonable price then we should not be too concerned about whether the water is provided under public ownership community ownership or private ownership. 
I end by saying that over the last weekend I spent some time reading Tony Blair’s book. I recommend it to the Labour members. In the first 100 pages he raises the trials and tribulations he had in bringing a lot of his party members into the 20th century. Some of the things he describes remind me of the New Zealand Labour Party today. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 It gives me no pleasure at all to rise to speak on the Local Government Act 2002 Amendment Bill today. In fact it literally gives me a pain. This bill if it is simple as the previous speaker the Hon Sir Roger Douglas described it must have been conceived by a very simple person. The Minister who brought it to the House has a simple philosophy and it is one of no representation no consultation and no tangata whenua involvement. 
The Maori Party put our minority view into the report of the Local Government and Environment Committee on the bill and when my colleague Te Ururoa Flavell spoke in the previous reading last night he talked about my report. It points out that some key areas in regard to the Act that this bill amends must be addressed but none more so than that of tangata whenua participation at the local government level. It is well established that at the local government level tangata whenua have been unfairly inequitably and disproportionately under-represented across elected councils and boards and this bill makes that worse. 
In fact when I stood to speak on another bill earlier this week—the Aquaculture Legislation Amendment Bill (No 3)—I alluded to the fact that the provisions in the aquaculture settlement were unable to be carried out because of under-resourcing and other things that local authorities could not do. As a result of that speech I received an email from a local councillor in the Bay of Plenty who said the work had already been done on the aquaculture settlement in terms of the allocations there and who pointed out that this may have been because there are so many Maori on the local council. We can see from this that when Maori are on the local council things actually work. Things happen; things move along. If we do not have tangata whenua there and if we do not consult tangata whenua then things will slow down very much. This is a very bad bill in that it takes away even more from the need to consult tangata whenua. In fact this Government does not want tangata whenua to be dealt with at all. As I say this is a simple philosophy from a very simple Minister. 
It is of real note that in the annual review of race relations issued by the Human Rights Commission in March 2010 the need for Maori representation in local government and an effective voice for Maori in the decisions of the new Auckland Council are identified as one of the top 10 race relations priorities. I think this is something that is not given enough air time. By taking away representation and consultation with tangata whenua we are actually creating a rod for our own backs in the area of race relations. This House needs to take the lead in creating good race relations here in this country and this bill does not go in the right way. It definitely goes in the wrong way. It is something that everybody is concerned about except unfortunately for the National Government which is led by the ACT Party and this simple Minister. 
Hon Trevor Mallard 
: Led by the nose by the ACT Party. 
RAHUI KATENE 
: The member has got that right. 
We have real concerns about the provisions for water. It is really a problem that things are sneaked in by stealth as they were. Throughout our select committee deliberations the National and ACT members tried to make it clear that things would not change and that this legislation was not about water privatisation but then suddenly here it is. The evidence is right there in front of us that this legislation is about privatisation. 
Chris Auchinvole 
: Oh Rahui I’m shocked. This is so unlike you. 
RAHUI KATENE 
: I am sorry that the chair of the select committee is not able to see that that is what this legislation is about but that is the fact of the matter. It is about privatisation. Given the fact that the privatisation of water has not worked anywhere else in the world why on earth are we taking that route? Why is New Zealand not taking the route of seeing what is going on and picking up the best of what is happening in the world instead of picking up the worst of what is happening in the rest of the world? We do not want to be a leader in the water privatisation area so let us hold back and learn the lessons that have been learnt elsewhere. 
We have real problems with this bill. We will be voting against it and I really hope that this simple Minister will stop now with his simple philosophy of trying to get rid of tangata whenua. 
LOUISE UPSTON (National—Taupo) 
: 
 It is a delight to be able to speak in the final reading of the Local Government Act 2002 Amendment Bill. Despite the discussions that have taken place in the House today our Local Government and Environment Committee has worked together very well on this bill. Obviously we do not agree on everything but I do want to correct some of the misleading statements that have been made in the course of this debate. Chris Auchinvole always chairs this select committee in a fine sound way and this is yet another example of a Government bill that we are pleased and proud to bring to a conclusion. 
I want to come back to a couple of points and remind the House that this bill is about increasing transparency and allowing local government to be more accountable. However I stress that this is about keeping local decisions in local government because that is what builds strong communities. I wanted to touch on a couple of key areas as a way of summarising. The first is around core services. I was fairly staggered to hear a previous Labour speaker talk about the fact that 97 percent of council spending is on core services. That is not the message I have had from the three district councils in the Taupo electorate at all. Local councils like the ability that they will have to respond to their constituents to the people who live in their communities and to make decisions based on priorities that suit them. That is obviously once they have taken into account core services—obviously sewerage and roading as a couple of examples. Councils are not restricted just to these core activities but they will create a sense of priority in relation to the activities defined in the bill as core. 
I will now move to financial management. There was general agreement from submitters in relation to the fact that it makes sense that a local council should be able to be more transparent in terms of how the council is funded and to have some more consistency around financial management. We have heard about the defined fiscal envelope. That allows a council to make a decision about what its own constraints are. From some of the speeches we have heard people listening might think that this is a central government imposition of constraint but it is not at all. It is a set of boundaries that each council puts around its own spending. This is really important to the constituents of the Taupo electorate. I am sure there are councils up and down the country that are concerned about further increases in their rates when their incomes are not growing accordingly. 
I think that the pre-election report is a really important and valuable addition to local government. We were fortunate to have some examples of some of the reporting that local government provides. One example was from the South Waikato District Council in the Taupo electorate. It presents plain English information about how the council is doing and in a format that the majority of voters are able to understand. I think that is a really important part of it. Yes there are annual plans; yes there is the long-term council plan; yes there is the annual report. Some of the information currently in those is pretty highbrow. I do not think one should have to have an accounting degree to understand the books of the community in which one lives and pays rates. 
One of the important changes that we made in the select committee process recognised that councils come in different sizes and shapes and therefore have different abilities. We removed some of the requirements for councils with populations of fewer than 20000 people to do it. Performance measures are one area in particular that I am very proud of having worked in a city council when performance measures were put in place. This basically allows for councils up and down the country to have the same measures so that ratepayers can compare how their council is doing. There was a bit of a hue and cry and one would have thought that the sky was falling in based on the Opposition’s comments in terms of how hard this will be. But if we look at some of the Department of Internal Affairs existing reports we see that some of this information is available and the focus really will be on indicators that are relevant to the public and that they can see are of value in assessing how their own council is doing. They pay rates so I think it is fair enough that they have the ability to see how their council is performing and how that money is being spent. 
The final point that I bring to the House’s attention is the issue around water assets. This issue comes back to the point I made about the fact that we on this side of the House recognise that local authorities come in different shapes and sizes—so do their demographics and so do their geographics. Therefore the decisions around infrastructure for things like water are very very different from one district council to the next. We recognise that and in this bill we have allowed the flexibility so that if a council chooses—and I say the word “chooses” again—to contract out water services it now has the ability to do that for 35 years. The focus again is on a council managing its infrastructure planning managing its asset plans managing the debt that might go on to ratepayers and having the flexibility to deal with its infrastructure commitments in a way that suits it. 
This is not privatisation—it is not privatisation. On this side of the House we do not think that the private sector is a big bad ugly monster. We actually think it does some things well and through this legislation we are allowing it to do a bit more if the council chooses—if the council chooses. Local government is a democracy; it is only if the council chooses. It is not privatisation. Contracting out provides better and more flexible ways for councils to manage assets if they want to. Councils being able to choose 35 years will allow them to better plan over the longer term for capital projects and is in line with the Land Transport Act. So there is some consistency in what we are doing with this bill. 
I am very proud to support the final reading of this fantastic legislation by our very able Minister of Local Government Rodney Hide. I am very excited about supporting this bill. Thank you. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 As the last speaker for the Opposition on the Local Government Act 2002 Amendment Bill— 
Hon Darren Hughes 
: But the best. 
SU’A WILLIAM SIO 
: I thank the member. I will use up my full time unlike the Government member Louise Upston who did not use up her full time. I will tell members why. I acknowledge the members of the Opposition both Labour and Green. They have fought tooth and nail to hold the line for democracy for New Zealand right through to midnight last night and early this morning including taking a bit of democracy out to the Mana electorate where Kris Fa’afoi is campaigning on our behalf. 
The Government has argued that this bill is about keeping local decisions local. That is what the Government has argued. It has also— 
Mr DEPUTY SPEAKER 
: The member is in full flight here. I would like to hear what he has to say. 
SU’A WILLIAM SIO 
: I was in full flight; my wings were about to expand. The Government has argued that this bill is about keeping local decisions local. That actually means keeping local government decisions away from the ratepayers. That is what it is about. The Government argues that it is about keeping local decisions local but we are saying that as we understand this bill it is actually about keeping local government decision-making away from the ratepayers who pay for local government. 
The Government has also argued throughout this debate that the bill is about transparency and accountability. I will reflect to members and repeat perhaps what many other speakers have said in this House. In so far as the Opposition is concerned this bill does not provide one iota of transparency or accountability. The bill ushers in a sad day for local democracy—a sad day for local democracy. 
The public who have been observing these debates will no doubt be asking why such important legislation as this bill is being rammed through the House in urgency as the Government is now doing. Organisations such as Grey Power and the ratepayers and residents associations right throughout this country are asking that question. I suspect that many will come to the conclusion that it is by Government design. It is deliberate. It is intentional to undermine not only the Opposition’s ability to respond but also more important the ability of the wider New Zealand public to react and respond defiantly. That is why it is important that I acknowledge all my Opposition colleagues for holding the line of democracy throughout this debate and for fighting tooth and nail to hold this lot here accountable. 
I have a feeling that many who are listening to these debates will come to the same conclusion that my colleagues and I 
have reached: that despite the eloquent rhetoric of Government members despite their use of certain key words such as “accountability” and “transparency” this bill does exactly the opposite. The behaviour and language of this Government has been designed to lull the New Zealand public into accepting something they would normally not accept in the same way that a snake uses hypnotism to lull its prey before making the final and fatal strike. That is what this Government has done. 
I will point out why I believe this and why I think so. The first thing is the water assets. These are important assets right throughout this country. The reference to water assets was hidden in the bill. This Government did not want the public to see what was in its design. Rodney Hide is allowing private companies to own the water infrastructure of councils for up to 35 years. It is privatisation in spite of Government denials—it is privatisation. By giving over a valuable asset that generates an income stream that the ratepayers pay for we are giving this valuable source of income to the private sector no doubt to a select few—perhaps friends of Tau Henare the millionaire from Te Atatu as some might say—simply so that they can have that ongoing source of income. Who pays for that? It will be the ratepayers. What happens to the asset at the end of 35 years? No one knows. It has been my experience that the private sector generally squeezes every profit out of an asset and leaves it to rot. There is no maintenance. Who will have to pick up the maintenance of that particular asset after 35 years with no one looking after its ongoing welfare? It will be the ratepayers. It will be the ratepayers right through this country. 
The Government denies that it is privatisation but that is nonsense. How many years would a dam have to be in private ownership before the Government called it privatisation? Fifty years? One hundred years? This bill allows private business to own water infrastructure for 35 years. That is a step too far for an activity that is by the Minister’s own admission a core service of local government. Rodney Hide has already admitted to the  
New Zealand Herald  
that he favoured the privatisation of council services. Changes brought about in the bill clearly show that that is in fact the Government’s agenda. 
ACT’s policy is clear: it wants to see local government services including roads and pipe water run on a fully commercial basis. But National does not have the courage to be up front with New Zealanders. National MPs have spent the last few months arguing at the Local Government and Environment Committee that the bill’s long-term contracts for water are not privatisation and that shifting services to a council-owned company is not corporatisation. When the public sees the goings-on by this Government they view it as being deceptive politics to say one thing when doing something else and to also believe in doing something but handing it over to that “1 Percent Party” to conduct affairs on its behalf. 
Community consultation is a significant part that now changes. Instead of the wider community the ratepayers and citizens of this country being able to participate in the ongoing discussion of issues from the beginning to the end outcome of whatever the issue maybe this bill now says that the local authority has the right to determine whether a citizen can participate in that process. At one point in time I used to be the chair of the council’s annual plan committee throughout Manukau City. As somebody who values community participation I took that committee to every corner of that electorate. I witnessed with my own eyes many National Party members and supporters in Botany and Pakuranga who took the time and valued being able to participate in the consultative community process. I say to every ratepayer and resident who is a member of the National Party that they will no longer have the right to participate in that consultation process. That right has been taken away from them by this bill and given to a select few on the local authority—it could be the chief executive officer. That is significant in terms of the gutting of local democracy and that is what this bill does. 
Finally community outcomes have now been removed from the residents ratepayers and citizens of this country. It has now been given to the local authority to determine what outcomes the community ought to receive. That is arrogance and it is extreme and that has been displayed by this Government throughout this debate. I say again: this bill overwhelmingly is about keeping decision making away from ratepayers. 
TODD McCLAY (National—Rotorua) 
: 
 The previous speaker Su’a William Sio wasted his time towards the end of his speech by offering advice to members of the National Party who are residents or ratepayers about what is or is not happening to them. If he had suggested that advice to them at the beginning of his speech the four people listening may have been able to hear him but I fear they were fast asleep when he got to the end of his 10 minutes. 
It is a pleasure to rise and speak on the Local Government Act 2002 Amendment Bill. It is a pleasure because good local government is essential for our communities our economy and our environment. I say clearly that the National Government values having an honest and open working relationship with local government and the local government sector and we on this side of the House recognise that a one-size-fits-all approach to local government does not work. 
The previous speaker made mention of democracy. He linked democracy in local government and local communities to this bill. Indeed he mentioned the electorate of Mana and said the people of Mana would feel that they did not have democracy when it came to this bill passing through the House. I say to members opposite that I have heard rumours that some of the members of this House who sit opposite have spent the last 5 weeks of the Mana campaign on the telephone berating members of the Pacific Island community in Mana and telling them how to vote. Why is it that members opposite are saying that this bill will be bad for democracy but when they get on the phone and call hard-working people from Pacific Island churches in Mana and tell them how to vote—I am not saying that they threatened them; I am sure members opposite would not stoop as low as that—it is good for democracy? I will not even say in this House what some members of the Labour campaign team have said about Pacific Islanders in Mana. I would not repeat that; I think it is wrong. It is a horrible thing for them to say. 
When it comes to local government this bill will encourage local authorities to operate within a defined fiscal envelope. The people of Mana want their local authority to work within that envelope. The people of Mana want this Government to work within the tight fiscal envelope that has been set for us because of the recession that we face. They are happy with what the Government is doing. That certainly will be helpful to them come the election. 
I say to Mr Hughes opposite that a year ago when Hekia Parata was working in Mana she had mana. Last week when she was in that electorate she had mana. Today in that electorate she has mana. It does not matter what happens on Saturday in that electorate on Monday she will still have mana. That is more than I can say for most of the members on the other side of the House. 
I think the people of New Zealand want this bill to move forward. I think the people of New Zealand and their local government are looking forward to transparency looking forward to accountability and looking forward to a level playing field to better enable the private sector to help deliver services. I will not take up any more time in this House. I will let members opposite get up and ring a few more of those Pacific Island ministers in Mana and tell them what they should do on Saturday. Thank you. 
A party vote was called for on the question  
That the Local Government Act 2002 Amendment Bill be now read a third time. 
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. 
Bill read a third time.