South Taranaki District Council (Cold Creek Rural Water Supply) Bill — Instruction to Committee In Committee 
Text is incorporated into the Bound Volume 
South Taranaki District Council (Cold Creek Rural Water Supply) Bill — Instruction to Committee In Committee 
[Sitting date: 20 February 2013. Volume:687;Page:8048. Text is incorporated into the Bound Volume.] 
South Taranaki District Council (Cold Creek Rural Water Supply) Bill 
Instruction to Committee 
LOUISE UPSTON (Senior Whip—National) 
: 
 I seek leave for this debate to be taken as one part and for the questions to be put separately at the debate’s conclusion. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Leave has been sought for that purpose—that the debate be taken as one question and then the votes be taken separately. Leave is sought for that purpose. Is there any objection? There is no objection. 
In Committee 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. It is traditional when we are in Committee for the member in charge of the bill or some other member— 
The CHAIRPERSON (Eric Roy) 
: Well we have not started yet and I was going to attend to that. We need a member to take the chair please. Mr Auchinvole? Thank you. 
Clauses 1 and 2 Parts 1 to 3 and schedules 1 and 2 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. I am just seeking an assurance from the member in the chair that he is there with the consent of the member in charge of the bill because that is required. It is not a case of Ministers being able to fill in for any other Minister. I think you do need the consent. 
LOUISE UPSTON (Senior Whip—National) 
: 
 I have an assurance that the member in charge of the bill has given permission for Mr Auchinvole to sit in the chair. 
The CHAIRPERSON (Eric Roy) 
: He did chair the select committee process. We will take the whip’s word for that. 
Hon TARIANA TURIA (Maori Party—Te Tai Hauauru) 
: 
 I rise to respond to the specific clause clause 5(2)(a) in Part 2 of the South Taranaki District Council (Cold Creek Rural Water Supply) Bill that deals with the process for obtaining authorisation to proceed with the transfer. This is an important part in that it states that the council will have complied with due process if it has “consulted on the proposed transfer with ... every iwi authority in relation to each iwi whose rohe comes wholly or in part within the scheme distribution area.” As the local member I am obliged to inform the Committee that the local iwi are absolutely opposed to this bill. 
There are two very strong statements of objection that I wish the Committee to consider before I even proceed with the range of arguments iwi have eloquently and consistently put before the Local Government and Environment Committee and therefore the wider Parliament. Nga Parinui Te Tumu Whakarae o Te Runanga o Ngati Ruanui Trust forcefully put the case saying “Water is a fundamental cornerstone for iwi and one that must be worked through together with iwi. There has been no meaningful engagement about this Bill with iwi and for that reason the Bill should be rejected.” 
This lack of meaningful engagement is a key theme that has been reiterated through other submissions including those from Nga Hapu o Nga Ruahine and the Taranaki Iwi Trust. A particular objection is the fact that Taranaki iwi were not consulted engaged or involved in the development of this bill The submissions describe the process as unacceptable that mana w’enua were not involved in the decision that led to the development of the bill or in the crafting of the bill itself. The offence taken is blatantly apparent. As a supposed Treaty partner—and we talk a great deal about Treaty partnerships here in this Chamber—they should have been informed and given an opportunity to fully understand the decision before the introduction of the bill to the Parliament given the significance that we understand of iwi in terms of their relationship with water. 
I want to expand on this point: how the Treaty applies to this bill which affects a rural water supply scheme. It is all about location. This scheme is located right within the Taranaki iwi area of interest. This is a consortium of eight iwi in Taranaki who exercise mana w’enua and mana moana within that rohe. These iwi have been kaitiaki of the w’enua and the moana for generations and with that comes inherent responsibilities to preserve and protect their w’enua moana and taonga. This is an inherited responsibility a relationship that will endure for generations to come. Notwithstanding the cultural and spiritual association with water that the iwi throughout this tribal territory carry we are also talking about iwi who are engaged right now in settlement negotiations and who therefore rightfully expect to be involved in the decision-making process around the transfer of Crown assets out of Crown ownership. I want to put before the Committee the unparalleled experience that Taranaki iwi have had with the Crown. The submission from Liana Poutu the General Manager of Taranaki Iwi Trust says it all. It states: “Taranaki Iwi suffered some of the most serious breaches of the Treaty of Waitangi at the hands of the Crown. It is unconscionable that while the Crown are engaging in a process to redress these serious grievances on the other hand they continue to perpetuate the unfair and unjust treatment of our people.” 
Turning to Part 2 and clause 8(1)(e) there is another part of the bill in clause 8 that requires the company to “prepare a protocol that provides for appropriate consultation by the company with every iwi authority in relation to each iwi whose rohe wholly or in part comes within the scheme distribution area.” Under usual circumstances we would support any protocol that sets out to provide for consultation with iwi but as I have already explained these were not usual circumstances. On 13 March 2012 representatives of Taranaki iwi Nga Ruahine Rangi Ngati Ruanui and Nga Rauru met with the Hon Chester Borrows and the company to reinforce their concerns. The four South Taranaki iwi— 
Hon Trevor Mallard 
: He’s not that honourable on this one. 
Hon TARIANA TURIA 
: —told the company that they were opposed—sorry? 
Hon Trevor Mallard 
: He’s not that honourable in this case. 
Hon TARIANA TURIA 
: The four South Taranaki iwi told the company that they were opposed to the bill and that the transfer of land from the South Taranaki District Council—[ 
Bell rung 
] 
The CHAIRPERSON (Lindsay Tisch) 
: Order! If the member wishes to continue she needs to call. 
Hon TARIANA TURIA 
: Mr Chair. 
The CHAIRPERSON (Lindsay Tisch) 
: I call the Hon Tariana Turia. 
Hon TARIANA TURIA 
: —while the trust is in Treaty settlement negotiations with the Crown is unacceptable yet still the bill progressed to its first reading. 
For my own part I took up this issue with the district council and the local member some 6 months prior in September 2011. I urged the council to initiate adequate and comprehensive consultation and engagement with the affected w’anau hapu and iwi. I explained further that although the iwi would acknowledge particular impacts for Orimupiko Marae and Oeo Marae the wider iwi interests also would impact on the proposed infrastructural developments. I asked the question of whether these impacts result in the diminution of tangata w’enua rights. In February 2012 after sustained advocacy from the Maori Party and from iwi the bill was deferred. I was assured this was to allow the company time to resolve issues with the iwi yet still the bill came back to the Parliament in March last year. I said at that point that I was standing by the iwi and I was voting against this bill which works against our principles of rangatiratanga. Nothing has changed to give the Maori Party any confidence that the concerns iwi have raised regarding the lack of proper consultation the privatisation of water infrastructure or future impacts on land value and access to water have been taken into account. 
There is a word that begins with “r” that could describe the situation. It is at the very least institutionalised discrimination that seemingly means that Taranaki iwi have no say about what happens in their rohe. Ngati Ruanui outlined in their submission that there has been over 10 years of missed opportunity where meaningful discussion could have been had with the iwi of South Taranaki and the council failed in this duty to consult with the iwi. It is too easy to dismiss this bill as being about a single water scheme in a rural location affecting a few but I remind the Committee that in 1865 some 1.2 million acres of Taranaki land was proclaimed and confiscated under the New Zealand Settlements Act. The Crown redress to Ngati Ruanui accounts to a few cents in the dollar for each acre that has been taken. It was a gesture of enormous good faith that this sum was accepted by that iwi to move forward for the betterment of the nation as a whole. This bill in creating an opportunity to allow private ownership and remove the Treaty partnership between the Crown and iwi does not exist in a vacuum. 
For those who uphold the responsibilities of kaitiakitanga the water at the centre of this bill requires careful protection and guardianship. Lest we forget as in the Supreme Court case happening just across the road the management of water resources is fundamental to iwi. Parliament must not act today in a way that undermines the Treaty relationship and adversely impacts on the water legislative landscape before the collective tribal discussions can be held at Maunga Taranaki and the precious water resource that flows from it. The Maori Party wishes to register its objection to this bill and will continue to stand alongside the iwi of Taranaki in opposing this legislation. 
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) 
: 
 The South Taranaki District Council (Cold Creek Rural Water Supply) Bill like many things is about money. It is as simple as that. On one hand you have the South Taranaki District Council looking down the barrel of significant costs to its ratepayers to upgrade a water system and looking perhaps a little late at a comprehensive system of water delivery to its ratepayers through its district. I applaud the council for the planning but it has now discovered a deal that was made some time ago with the people who have controlled this Cold Creek rural water supply scheme a deal that was supposed to transfer ownership to them that is actually not the best solution for all ratepayers across the district. 
The tension I guess has meant that the only way of resolution is through the passage of this piece of legislation. I am not sure that it is the right solution to what is a big issue. The control and the cost of water is an issue at the forefront of many many rural districts and indeed the whole agricultural sector. I guess it comes down to a fear of farmers on the one hand about relinquishing ownership of this scheme—a scheme that was built up with a taxpayers’ money subsidy and the farmers’ contribution to be fair to them; it was built up to deliver them water in the South Taranaki District at a relatively low cost and they want to keep that cost low. That is a fair expectation. They sat down with the council and negotiated the transfer. But in fact the Labour Government stepped in—and I think we are very proud of that—to say that we will not allow the transfer into private hands of water schemes that are basically there for ratepayers for public reticulation. That is a core part not only of the New Zealand lifestyle but of the expectations of anyone living anywhere in the world. The fact that we have got water and have often taken it for granted in rural areas does not mean to say that we should not move—and the previous Labour Government recognised this—to secure supply and ensure we have a standard of water that is safe for drinking in the long term and not just in the short term. 
 So a number of changes happened when Labour came in that prevented what was in principle an agreement here to transfer this water supply from the council basically into the hands of the farmers. And I think that was fair enough. I think we have to give the councils an opportunity to make sure that a tool like this scheme does not go from their tool box when they have a legal obligation to ensure supply across the district to all ratepayers. I think they have about 13 different components of their water supply system delivering to all the ratepayers and they want to consolidate them so that the higher standards of water supply—that is the treatment required and the security required now under law—can be delivered in a more efficient way. 
So it is a bit of a dilemma here. We have indicated that we would support this but the more we look into it I have to say the more I have sympathy for the council. The council has astutely as I say done some planning which identifies this scheme here as a core component particularly for Opunake of a reliable water supply. The farmers also need reliable water. There are peaks and there are troughs in terms of demand and they have invested in a scheme that stores some of the water that gives them the supply when they need it and that at off-peak times can then supply Opunake with reliable water when needed.  
So it is a complex dilemma and we here in Parliament a long way from reality are trying to sort out a problem. I am not convinced in my reading of this that actually we have got it right. I am not sure what will happen if the ownership is in fact transferred over to the company. I am not sure what will happen when the council has to meet its obligation to provide high-quality water to all its ratepayers which is what we expect of our own councils.  
There are a number of issues tied up in here. As I say the complex one is the cost of water the value of water and whether those who had the benefit of previous schemes of subsidies from central government—these are the farmers who had the wisdom to take up those subsidies—have the right to have full ownership and control of the scheme. I would suggest not. There is still an element of obligation back to the taxpayers or ratepayers in whatever solution is finally arrived at. There are requirements regardless of whether it be for the farmers or the council. There are requirements to upgrade to spend some capital and upgrade the system. I am told it is about $8 million which is quite a lot of money for a relatively small number of farmers perhaps if they were to bring it up to speed but maybe a lesser cost if spread out across all the ratepayers of the South Taranaki District Council.  
I am not wanting to labour this other than to I guess work with the local member and say that I am sure he is trying to do his best here but the issue of water and the transfer into private hands is something that Labour finds very very sensitive. We do not believe that we have the right to transfer supply to ratepayers or residents or New Zealanders. The supply should not be in the hands of private companies—end of story. End of story. It is one of those things that I think the pioneers of this country fought for battled for invested in and designed so that we can enjoy the benefits of what is a very generous amount of rainfall in most parts of the country—a great supply of water one that we have probably abused over many years and taken for granted and that we are just now starting to appreciate which is why both the council and the farmers who want ownership of the scheme realise that it is important to sort this out.  
We are not in any way wanting to undermine the farmers’ viability or just lump a whole lot more cost on to their farming operations but we do want to make sure that we do not through precedent or through individual circumstances for this district do something that we do not intend. The unintended consequences of the passage of this bill I guess are one of the things I am concerned about and I am sure my colleague Andrew Little as the local representative will have more to say on that.  
I will not go on for too much longer other than to say that this is important. There are some precedents. The member in the chair Chester Borrows knows that. We are not trying to be disruptive or awkward but I do think we need to make sure that we are doing the right thing here and maybe he could get up and give us some guarantees on that. Thank you. 
Hon CHESTER BORROWS (National—Whanganui) 
: 
 I appreciate the opportunity to address a couple of remarks in respect of the last two speakers. I guess in response to comments made by the Hon Tariana Turia I would like to clarify the situation around discussions and consultation with iwi. It is accepted that the consultation process with iwi was incumbent on the South Taranaki District Council and the council and the company accept that that consultation did not happen in the way it would if the process started now. So the process of this bill the South Taranaki District Council (Cold Creek Rural Water Supply) Bill was paused at the request of iwi and at the request of the Maori Party in order for me to go and have a further discussion with them to explain the situation of what the local people in the area of the Cold Creek catchment wanted to achieve. 
It is important to note too that when we talk about a company and a private company here we are talking about a local group of farmers who in the mid to late 1980s built a water scheme under a Government-funded scheme that was operating at that time. We are talking about a cooperative of local people. They are consumers—most of them are farmers; some of them are not—who draw from this scheme. There is not some other business entity that can be pictured in another way. 
I convened a meeting with the iwi concerned and Ngati Ruanui who are outside the rohe—this does not fall within their rohe—and we had a discussion at Te Kuri where all matters were addressed. Albeit the meeting was held in good humour in good faith and in everyone’s best interests we got to the end of it and there had not been an agreement made.  
The point that iwi made was this: they have tino rangatiratanga and they with their partners the Crown should have jurisdiction over the allocation of water which is at a different level from where this is. Their argument is that they should be in the room with the Taranaki Regional Council which is representing the Crown deciding on water allocation. Their concern around the Cold Creek scheme is that it is currently on paper an asset owned by the South Taranaki District Council or by the Crown by virtue of the South Taranaki District Council and so there should have been consultation in respect of that.  
They did accept that this is about infrastructure—about pipes concrete and pumps. It is not about water because the allocation of water is not under the jurisdiction of Cold Creek Community Water Supply. In actual fact that comes under the jurisdiction of the Taranaki Regional Council.  
So there is a little bit of divergence there between the facts as have been related by the Hon Tariana Turia and those from someone who was sitting in the room as it happened in reality. She made a very polite allegation of institutional racism. I think to be fair it was probably institutional ignorance bearing in mind that this procedure started back in the late 1990s. We all know as individuals and collectively a heck of a lot more now about the aspirations of Maori views of the Treaty of Waitangi and how that impacts on our day-to-day business as agents of the Crown than we did then.  
And as I said earlier if this process had been starting now there would have been a heck of a lot more consultation I am sure. It is difficult then to either go back and undermine the complete process or stop the whole process and do it again from the start. So positions have been drawn and parties have been listened to—albeit we ended up at a divergent place.  
I would now like to address comments made by the Hon Damien O’Connor in respect of the history of the scheme. He outlined that the farmers built the scheme with their contribution on a dollar for dollar subsidy from the State via central government not local government. It was taxpayers as opposed to ratepayers who were subsidising this scheme. The criteria for gaining approval for the scheme was that production had to be enhanced. It has and it has been enhanced many times over. As a result of that the South Taranaki District Council—and its previous iterations as Egmont Plains and Waimate Plains and the rest of it—has received a substantial increase in rate take as have the citizens of New Zealand who have received a substantial increase in tax take as a result of the building of that scheme. 
I do want to make the point again though that this is about pipes and concrete. It is about infrastructure; it is not about stream beds or creek beds and it is not about water. It is about a water supply conduit. 
Another point that the honourable member made was that people can take water for granted. I can assure him that the farmers who took out huge loans to make their contribution to the construction of this water scheme in the first place—bearing in mind that mid-1980s was a time when people were paying huge interest rates of about 18 percent a year and punitive rates for late payment etc. of well over 20 percent—were not taking their contribution to this lightly. Having gone through the pain of that and then administering this scheme for about 15 years now—running the whole scheme with absolutely no cost to the ratepayer or to the local council—those farmers and the people who are drawing from this scheme do not take their ability to obtain this water cheaply or lightly or take it for granted in any way whatsoever. 
The reason why this scheme falls under the legislation that was introduced by the Labour Party which would normally prevent it from being vested in the people who built it the local community—in fact the lowest-level community ownership you could possibly have—is the quality of the water; it is potable water. There is an adjacent scheme at Awanui that is not potable water and there was absolutely no difficulty in floating that off to the people who had done exactly what the Cold Creek people had done in building their own scheme. It is important to make that particularly clear. 
I will just address the point made by the Hon Damien O’Connor in respect of security of supply to the people of Opunake. That was previously a concern and is not a concern now. The reason for that is that Opunake’s water scheme has been upgraded. It became a problem prior to that upgrading because when there was high rainfall on the mountain the Opunake water supply was tainted and they needed to draw water off in another supply. The people from Cold Creek allowed for a branch to be taken off their line for a clean water supply to the people of Opunake. That is not required any more but if it was required then this bill and the agreement between Cold Creek’s water company and the South Taranaki District Council was that they will always make that water available. How that is done is that there is about a 2-metre gap between the two schemes and a pipe fit for purpose is bolted between the two schemes and the water supply is flowed through to Opunake in that way.  
The members of the scheme have said to the council that if it wanted to build reservoirs in Opunake to draw water off the scheme—say at night when it is not being used for stock and not being used for domestic use—then providing it could get a water right from the Taranaki Regional Council to do that the farmers were only too happy for that to be done. There is a question then about whether the capacity to take to that level was available but in the end the council has decided that the assurances it has been given in this bill and the assurances it has been given from the members are that it does not need to do that and it is happy with the bill as it is.  
This bill is promoted by the South Taranaki District Council. I anticipate the speech to be given by Andrew Little shortly who is not the local member or even a local member; I will just reassure the Hon Damien O’Connor of that. He will get up and talk about a meeting we had with the South Taranaki District Council that was reported back to him—because he was not present—as bullying on behalf of the honourable member Shane Ardern and me also an honourable member. I can tell him and reassure those listening or anybody interested that I was in the room and that situation did not occur. There was the situation where a member of the Labour Party—and a staunch supporter of the Labour Party locally who happens to be a member of the council—was not happy with some of the words that were said. But having known Mr Ballantyne for many many years I can assure Mr Little that he was never bullied. Thank you. 
ANDREW LITTLE (Labour) 
: 
 I appreciate the opportunity to take a call on the South Taranaki District Council (Cold Creek Rural Water Supply) Bill. I think that with all due respect to the Hon Chester Borrows his account is a somewhat sweetened account—a sugar-coated account—of what happened and notwithstanding the Labour Party’s support for this bill I think it is important for the record to show how we got here and that the residual concerns for the Labour Party are questions of process. If there is one thing that has come to define and mark this Government it is its lack of respect for due process. 
We know from the previous speakers and indeed from Mr Borrows himself that the background to this scheme is that it was funded through a scheme in place at the time. There was a dollar for dollar or 50 percent public subsidy for the scheme. During the process of the local authority amalgamations and changes in the late 1980s it became the responsibility and the property of the South Taranaki District Council inherited from the old Egmont County Council. The fact that there was a 50 percent subsidy from the Government of the day reflected the two sets of interests: that the farmers who were part of the scheme would get value from having a water supply to supply their farms and the troughs and the people who live there and also that there was a community benefit in having good viable farms at a time when frankly it was the beginning of the renaissance of dairy farming. Taranaki has been a stronghold in dairy farming for many years even before this time so it occupied a very important place but the scheme remained in public hands notwithstanding the fact that the Government provided 50 percent of the cost because it reflected the sets of interests. 
The other public contribution was of course that in the early life of the scheme much of the maintenance was undertaken by the local council at its expense with no pass-on of costs to the farmers who were subscribers to it. The council looked after the operation the treatment plant and the head works so over a period of time that was a considerable expense. Then there was a move on to effectively privatising—for the local authority to divest its interest in it. It is interesting that at that meeting—and I have the minutes of that meeting and although Mr Borrows says there was no bullying the minutes are pretty clear about what was said and who said it and when—the chief executive of the South Taranaki District Council is quoted as saying when there was some resistance to the idea of privatising it and he himself was expressing some reservations: “The council has not changed tack. The decision on the books”—which was about divestment—“is still to investigate divestment via a local bill but there is now a stronger view that it is a strategic asset.” and therefore the council should retain it. 
Mr Borrows was at the crucial meeting on 15 August 2011 as was another member of this House Shane Ardern. Both are good members but they were at a meeting to push through and influence the council to bring about this divestment. Here is the point: they said that if the council did not agree then it would come to Parliament. Mr Shane Ardern is quoted as saying: “If Cold Creek community failed in their divestment request then there would be some legislative programme through Parliament that would bring about the kind of ownership it desired.” He went on to say that if the council did not proceed with divestment then the members of the scheme would take legal action which would cost a lot of money and headache for both parties. So the threat was there and that is what the concern is. 
That has led to an issue. One of the things that the bill provides for is that there is to be a referendum on divestment of the scheme and the question is whether it should be just for those who are subscribers to the scheme or for the wider community. Andrew Williams of New Zealand First has Supplementary Order Paper 179 calling for a broader referendum base and we support that referendum. We support the bill but we support that referendum because we think that that is what is needed to repair the due process or the process that has not been followed. Thank you. 
ANDREW WILLIAMS (NZ First) 
: 
 I will take a call on the South Taranaki District Council (Cold Creek Rural Water Supply) Bill. New Zealand First has looked at this long and hard and we sympathise with the situation of those in the Cold Creek rural water supply area. We know that this has a very long history. We are aware of the concerns of the district there in terms of ensuring that this ongoing resource is maintained for particularly the farming people in the area while at the same time making sure that the resource does not reduce in terms of its longevity and the status of it and in terms of maintaining the asset. Therefore there were some difficulties for the South Taranaki District Council in terms of that and on behalf of the ratepayers in ensuring that it was able to continue to cover the funding for and the funding requirements for the ongoing maintenance and upgrades of this particular resource. 
However there are always these sorts of situations all around New Zealand. We hear so often particularly in small provincial rural communities of the difficulties of both water and waste water and of the provision of good quality services in both those areas of water and waste water and this one is no different. However one area of concern that we have had in the backs of our minds for some considerable time is the fact that over a number of decades there has been taxpayer funding going into this scheme a subsidy support to the users. There has also been support from the former Egmont County Council which subsequently became the South Taranaki District Council in terms of public ratepayer money too to provide a level of maintenance and also administrative support for the officers and the staff of the council to oversee the scheme and provide some technical and other support for it. So it has been very much a joint venture situation with public input and with private landowner input into the whole scheme. 
With the suggestion of transferring it completely into a private company it does raise the question of whether the ratepayers and the taxpayers in the area have been adequately consulted with to ensure that they are actually comfortable with the situation—and they might be. What we are saying and what my Supplementary Order Paper 179 is suggesting is that it would perhaps be prudent and wise that rather than do something like this and get the backs up of an area of the community—and the Hon Tariana Turia said that perhaps the council could work through the issues with consultation with iwi and Maori and other interest groups—perhaps if there was a consultation process through some sort of a referendum process which our Supplementary Order Paper suggests the whole thing could actually be put to rest in a far better manner and in the interests of the whole community. Those who are affected in particular by this scheme we are confident could probably put up a good case to the rest of the district to say that they wish to do this—they wish to take over this particular asset—and they wish therefore to provide the ongoing maintenance to perhaps provide some relief to the ratepayers of the South Taranaki District. If they put up a sufficiently good argument and can convince the wider district that this was in the district’s best interests and if they had the majority support of the locals then it would be fair sailing and would not receive perhaps a level of resentment from some parts of the community. 
We do not want to step in the way of some good local people who have tried to do well by their farms and well by their local people and community there but we feel that if the wider district is not given the opportunity to at least be part of the transfer process and agree to the transfer process then we are taking away its legitimate right to have a say on an important local asset. It is a little bit like the previous bill that we had here in the House with the land down in Oamaru. Again it is along similar lines. If land is going to change if a public asset is going to change or if anything of significance is going to change in an area these are the sorts of things that there needs to be much wider consultation on rather than it being done just by a council in-house or by this Parliament. It does need to have more public input and the approval of the people. 
So reluctantly we will not be able to support this bill. We hope that the member Chester Borrows and the National Party might concede to the Supplementary Order Paper to allow a wider referendum because if that was the case and we were able to secure a wider referendum in the bill then we would be able to support the bill in total. 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 Labour does support this bill the South Taranaki District Council (Cold Creek Rural Water Supply) Bill although we are going to support Supplementary Order Paper 179 put forward by Andrew Williams. We have thought long and hard about supporting the Supplementary Order Paper but we believe that it will probably help to resolve some of the anxiety that local people may well have over this bill. His Supplementary Order Paper does require a referendum on the Cold Creek rural water supply to be open to all eligible residents and ratepayers on the South Taranaki District electoral roll. The reason why we will support that Mr Williams is the impact that this scheme has on the people of Opunake. Although they are not regular users of this scheme because this scheme is for the purpose of about 162 connections covering 7620 hectares in South Taranaki it is also used in emergency situations for water supply into Opunake. I know that they—[ 
Interruption 
] No we were assured at the Local Government and Environment Committee that in terms of an emergency they would still have access to it. Am I taking it from the Minister for Courts who is shaking his head and saying “Not any more.”—I mean because the question was asked Minister at the select committee “Would they continue to have access to the water supply for Opunake in emergency situations?” and the answer was “Yes.” Is that the Minister’s understanding? 
Hon Chester Borrows 
: Yes. 
Hon ANNETTE KING 
: Fine. I thought the Minister was disputing my comments then. That is why Minister—and I think you would see the sense of that—you would enable the people of South Taranaki on the electoral roll to participate in a referendum. That seems fair to us and I cannot see why that would be objected to. 
You see this bill is trying to resolve an issue. I think the key word in this bill is that it establishes a “process”—“a process by which the council may obtain the authority to transfer the Cold Creek Rural Water Supply Scheme to Cold Creek Community Water Supply Limited.” The purpose as we have heard is primarily for farming. It has been managed by the company since 2001. It has been an informal arrangement and that informal arrangement has been deemed unsatisfactory. So I can see why the council wants to tidy it up and put in place a process over which it would be able to transfer this to those who use the scheme. 
We looked carefully at the bill. We listened carefully to the submissions and we know that there was concern particularly from the iwi of the area around consultation but at the end of the day it seemed to be a logical conclusion to what has been a long-running issue. But Mr Borrows we would suggest and recommend to you that you accept the Supplementary Order Paper from Andrew Williams. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
EUGENIE SAGE (Green) 
: 
 I am pleased to take a short call on the South Taranaki District Council (Cold Creek Rural Water Supply) Bill. 
At the first reading the Green Party supported the bill’s referral to select committee but when we did that we signalled our view about the importance of safeguarding water in public ownership and our concern about any erosion of that. We also signalled that we had quite significant concerns about the very low level of consultation with tangata whenua undertaken by the South Taranaki District Council and we looked forward to those concerns being allayed by further information from the bill’s sponsor the Hon Chester Borrows or by submissions to the select committee. But what we heard at the Local Government and Environment Committee from submitters exacerbated rather than allayed those concerns. That is why the Green Party is opposing the bill because it enables the privatisation of significant water infrastructure and because it potentially continues more than a century of injustice to Taranaki iwi. 
As the Hon Annette King noted the bill itself does not privatise the infrastructure but it provides the mechanism to do that. I think it is worth noting that the scheme itself does not supply water; it is nature that does that. It is thanks to the water cycle to the rain to the seepage and then to the slope of Mount Taranaki and the evaporation that we get the water cycle and that we get the water that the scheme is then able to deliver. It is very generously provided by nature. 
We do not support the bill’s divestment of the Cold Creek water supply because on principle we believe that significant community assets should stay in public ownership and be managed to deliver benefits to the wider community and not just the users of the scheme. It was never very clear to me through the submission process nor listening carefully to the bill’s sponsor what the rationale was for privatisation. Certainly the council had given some commitments some time ago that the scheme could be divested but the actual rationale for that is still unclear to me. The Hon Annette King talked about tidying up but just what is it in the way that the scheme has been operated to date that is so problematic? 
Labour members in particular will be very aware of the Local Government Act 2002 and the quite explicit provisions in that Act in section 130 that create a strong barrier to privatisation of water infrastructure. Those provisions were inserted for a reason: to protect these assets in public ownership. 
Nor was it clear from submissions as to just what is the exchange of value that would occur if the scheme was privatised. Would Cold Creek Community Water Supply Ltd be paying for the scheme or would it be privatised for a peppercorn the scheme shareholders getting the substantial benefits of the construction of the scheme which was made possible as we know by quite a substantial Crown grant through the Ministry of Works of $1.28 million? That Crown grant paid for half the construction costs. The scheme would not have gone ahead if it had not been for that. Certainly there has been a sizable investment by users of the scheme both financially and in work to operate the scheme but it seems to me that it has been very much a partnership between those using it and the council. 
As the Department of Internal Affairs noted in its report there were quite significant amounts of staff time and council resources that were devoted to the scheme in the 1980s. That support was in terms of providing meeting administration support organising the levies and the contributions and doing the financial reporting and it was the county engineer and other staff who managed and supervised the scheme’s construction when it was first built. It was only in 2001 that the water supply company took over the day-to-day operations but even then it has been the council that has continued to treat the water and has charged out its services for doing that at what the department says were very friendly rates and lower than market rates. So it has been one of partnership. 
Mr O’Connor talked about an $8 million cost for doing more works to upgrade the scheme but it is unclear to me as to why the company would be wanting to take over that potential cost if there were not substantial private benefits from owning the scheme. It is not being run as an irrigation scheme at the moment but we know that water is the new gold and that there is the potential to do that in a drying climate and then deliver quite substantial benefits to private users. 
That is one reason we are opposing it: the privatisation. The other is the concerns that iwi have raised. The scheme’s privatisation potentially reduces the rental return to Maori land holders who have leases in perpetuity over their land in the scheme area. It is the leaseholders who would own the scheme not the landowners. So that whole privatisation process may in fact reduce the value of the land for those Maori owners and we have heard concerns from a number of iwi and the Taranaki iwi group about the inadequate consultation and that their interests have not been adequately recognised. 
We will be supporting Supplementary Order Paper 179 which is in Andrew Williams’ name because that would ensure that the referendum was open to all of the residents of South Taranaki. That in our view is a much more democratic option and it would help recognise that there was significant public funding involved in the construction of the scheme. Also it is important because when the council talked about the divestment in its long-term plan it did not do that in enough detail for people to be really aware of what was going on so the referendum is an option to make sure that the whole of the district community can have their say. That would be a slight improvement to the bill but because of those concerns about iwi interests and the fact that it would set in train the mechanism to privatise the scheme the Green Party will be voting against the bill. 
The CHAIRPERSON (Lindsay Tisch) 
: Members we move to the vote. The question is that Part 1 stand part. Those of that opinion will say Aye to the contrary No. The Ayes have it. The Ayes have it? The Ayes have it. If you want a party vote you must ask for a party vote. Just voting No does not mean there will be a party vote. Does the member wish to have a party vote? 
Eugenie Sage 
: Yes please. 
The CHAIRPERSON (Lindsay Tisch) 
: I will ask the Clerk for a party vote. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 95 
New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1. 
Noes 24 
Green Party 14; New Zealand First 7; Maori Party 2; Mana 1. 
Part 1 agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 179 in the name of Andrew Williams to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 56 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1. 
Noes 63 
New Zealand National 59; Maori Party 2; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
ANDREW WILLIAMS (NZ First) 
: 
 I raise a point of order Mr Chairperson. Could we have clarification that the National Party has confirmation from the Maori Party that that is the correct way it wishes to vote? 
JAMI-LEE ROSS (Junior Whip—National) 
: 
 We have general proxies I understand for any Supplementary Order Papers that it has not otherwise advised the National Party about. 
ANDREW WILLIAMS (NZ First) 
: 
 Point of order Mr Chairman. 
The CHAIRPERSON (Lindsay Tisch) 
: I will hear from Andrew Williams. 
ANDREW WILLIAMS (NZ First) 
: 
 You heard the tone of the debate. The Maori Party certainly was not in support of this. If the National Party has not had proper confirmation it would be wrong that it would vote in that manner without having that proper confirmation. 
The CHAIRPERSON (Lindsay Tisch) 
: Yes well I hear what the member says. I was certainly here for the whole of this debate so I understand the point the member is making. I have to take the word of the whip. If the whip wants to confer as to the correct position then I will ask the Government whip to recast his vote. So does the—no all right— 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 I raise a point of order Mr Chairperson. I just happen to have had arrive on my email a release by the Maori Party saying it has opposed the South Taranaki District Council (Cold Creek Rural Water Supply) Bill in Parliament today. 
The CHAIRPERSON (Lindsay Tisch) 
: I thank the member. I know and as I was—[ 
Interruption 
] Order! At this stage we are talking about Supplementary Order Paper 179. We are not talking about Part 2—[ 
Interruption 
] Hang on. We have done Part 1. We are talking about Supplementary Order Paper 179 in the name of Andrew Williams. That is what the vote is about. I have heard the arguments. I was here during the whole debate so I know what the point is that the member in his first point of order is making. However I am in the hands of the whips and the whips have the authority to cast the vote. If it is wrong the record can be corrected at a later date but at this stage it is not for me to determine the parties’ votes; it is up to the whips of the parties. So at this stage we have— 
ANDREW WILLIAMS (NZ First) 
: 
 I raise a point of order Mr Chairperson. You did raise the fact that you had heard from the whip but I do not think you have heard from the senior whip. Could the senior whip confirm? 
The CHAIRPERSON (Lindsay Tisch) 
: No. Look within parties the authority between whips is up to them and it does not matter who casts that vote. So I am going to declare the vote on the amendment: the Ayes are 56 the Noes are 63; the amendment is not agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 95 
New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1. 
Noes 24 
Green Party 14; New Zealand First 7; Maori Party 2; Mana 1. 
Part 2 agreed to. 
A party vote was called for on the question  
That Part 3 be agreed to. 
Ayes 95 
New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1. 
Noes 24 
Green Party 14; New Zealand First 7; Maori Party 2; Mana 1. 
Part 3 agreed to. 
A party vote was called for on the question  
That schedule 1 be agreed to. 
Ayes 95 
New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1. 
Noes 24 
Green Party 14; New Zealand First 7; Maori Party 2; Mana 1. 
Schedule 1 agreed to. 
A party vote was called for on the question  
That schedule 2 be agreed to. 
Ayes 95 
New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1. 
Noes 24 
Green Party 14; New Zealand First 7; Maori Party 2; Mana 1. 
Schedule 2 agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 95 
New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1. 
Noes 24 
Green Party 14; New Zealand First 7; Maori Party 2; Mana 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 95 
New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1. 
Noes 24 
Green Party 14; New Zealand First 7; Maori Party 2; Mana 1. 
Clause 2 agreed to. 
Bill reported without amendment. 
Report adopted.