Sage Eugenie; Mahuta NanaiaHon EUGENIE SAGE (Green): Thank you Mr Chair. So on this Part 3 the Minister noted that the Finance and Expenditure Committee had made several improvements to it and one of the other improvements to it was to ensure that in clause 115 Safeguarding independence of water services entities" there was also no attempt at safeguarding the ability of territorial authorities to carry out their normal regulatory functions so I'm making that very clear. But one of the key changes is around this contracting out because there was quite a lot of comment in submissions particularly from local communities and from the local contractors who might already provide some services to councils around the importance of their businesses locally. And going back to the original provision in the Local Government Act as the recommendation of the select committee was to a 15-year term does provide some protection against contracting out to big overseas companies like Veolia. There is a strong opposition amongst the public to having our water services managed and operated by overseas corporates which are more interested in dividends going back offshore wanting them to be managed locally. So that 15-year term which is totally consistent with the Local Government Act before the National Party changed it and extended it up to 35 years is something the Green Party strongly supports. There is also Supplementary Order Paper (SOP) 285 in my name which really reinforces the obligation on the water services entities to continue to maintain and provide water services because there was again from the Aotearoa water organisation and many individual submitters a strong concern about privatisation and a desire for provisions which protected against that and for these to be entrenched particularly in submissions also from the local government sector. As a departmental report noted and I quote "Many submitters noted that while there was no current appetite in Parliament for water assets to be privatised this could change in future as we saw under a former National Government with the privatisation of electricity assets." So the Green Party supports—and the Government did explore and we explored in select committee—entrenching provisions in the bill. So my SOP seeks to entrench clause 116 and Schedule 4 which relates to divestment through a tabled amendment to the SOP so that there is an obligation to maintain ownership and control of water services and significant assets. This SOP would mean that this reserve provision clause 116 and Schedule 4 couldn't be repealed or amended unless a 60 percent majority of all members of the House supported that and that it had been carried by a majority of the ballot votes cast at a poll of electors of the general and Māori electorates. This SOP responds to that public concern that we avoid privatisation of water services and we maintain them and public ownership—with the public interest in ensuring that all New Zealanders have access to affordable water services of high quality. And that the significant revenue involved in operating these services significant investment involved—we don't want overseas companies taking the services and operating them primarily for profit. So while there was certainly advice to the select committee that normally entrenched provisions relate to constitutional matters water is essential to life so it is of sufficient importance that these services are maintained in public ownership. I hope that National will reconsider its opposition to entrenchment to signal that it does support maintaining public ownership and investment and support this SOP 285.Hon NANAIA MAHUTA (Minister of Local Government): Mr Chair on the matter of joint contracting I really want to clarify statements that have been made in this House to try and position the Government but wrongly so. On the issue of joint contracting the justification for bringing the contracts down from 35 years to 15 years—which was considered by the Finance and Expenditure Committee—I think had sound consideration. That was to open up the opportunity for local procurement to take place. Now I have met with peak bodies of the water sector stakeholders every year since I have been a Minister of Local Government and I'm really encouraged because that organisation is growing. I'm encouraged because even though there is international participation in that body they understand the importance in the water sector to contract locally. Why? Because residents ratepayers need the ability to pick up the phone and know that someone who knows their community is on their way to actually fix the pipes. It's that simple. So there is no conspiracy here about limiting big offshore providers but there is every opportunity under these water reforms to ensure that local procurement takes place. And those are the interests that members on this side of the House that support the bill want to ensure. We heard the views of communities they were pretty sceptical about whether or not local contracting will continue under reform and a model that looks to create these four large entities. It will continue. On the matter of privatisation and prior to expressing a view on Supplementary Order Paper (SOP) 285 that Eugenie Sage has tabled in this House there are a range of protections in the legislation on this instance. Seventy-five percent of the regional representative group need to agree on a matter of that significance and if they agree 100 percent of territorial authorities need to agree on that particular issue of privatisation and if they agree 75 percent of electors will need to participate. So we have worked as best we can to bake in protections against privatisation because members of this Government do not want to see that happen in the water sector as we've seen elsewhere—such as in the electricity sector. On that basis and it's important to be able to respond in a way that puts into context why then we didn't have an entrenchment clause a stronger provision in the legislation. We accepted the advice of the Attorney-General which says that there is a high constitutional threshold. And that came from the Crown Law Office—select committee members will be well aware of that advice. There is a high constitutional threshold to be reached in order to put such a threshold within legislation and often it's on constitutional matters—of which this bill is not—and it would be a novel approach to include an entrenchment clause. However in saying that I think that the member for the Green Party who has put up still and tested the will of the House in relation to having an entrenchment cause is a worthy matter to be considered because at least the Government and the Greens are very clear about our position on privatisation: we don't want to see it. Again we wrote a letter to every party in the House. They did not agree. But if people who are listening to this debate are concerned about having maximum protections at every level then it would make sense to have a novel approach of an entrenchment clause if it were able to be achieved. We know that while this particular SOP may not pass the constitutional threshold there is a moral obligation of people who believe that privatisation should not occur to support that particular SOP. Just in terms of ensuring for completeness's sake we're addressing the issues that were raised in the House the member brought up concerns in relation to—forgive me—I think it was clause 127 of the bill. When I look back at the report of the committee there were no actual submissions on that particular clause but I may take the opportunity further on in the debate to actually come back on those particular issues. There were no submitters that submitted on the concerns that he's raised so I take it at face value that he read the bill and it raised concerns in his own mind."