Watts SimonSIMON WATTS (National—North Shore): Well after years and years of fumbling around and spending millions and millions of taxpayers' dollars Labour has at long last—along with the Prime Minister—found a way in which they can sell their three waters reform and they throw this line up wherever they can. They say that rates for Kiwis will skyrocket and that the only way to stop this is Labour's three waters reforms so over the next few minutes I'm going to give you a bit of an overview in terms of why this little bit of language is a cynical piece of political spin.The statement first assumes that the Government's three waters reforms—which include confiscation of community assets the introduction of co-governance and the mandatory centralisation into four mega-entities—is the only reform option on the table but we know there are many alternative models that exist. Communities 4 Local Democracy who represent 32 different councils have tabled an independently reviewed alternative model; the three mayors only a fortnight ago have tabled alternative models; a number of councils during the select committee process have tabled alternative models; and we also know that in Hawke's Bay the four councils are already operating a council-controlled organisation which is delivering the services but they are going to have to break that up. The model that they are operating allows them to spend the capital expenditure that this Government believe is required while keeping those assets in local hands and without raising water prices or council debt limits.Alongside this the National Party is working on developing a three waters alternative model which will achieve infrastructure outcomes without the costs and complexities of this Labour Government's three waters reform and yet the Government continues to ignore it. Alternative models don't exist" they say which is simply not true. If we pretend for a minute that Labour is right that there aren't any other options—which of course there are—will stopping three waters actually make rates increase? Well firstly it's important to understand the two bottom lines of this Government's reform process: co-governance and a mega-entity merger into four entities. Having fifty-fifty co-governance will bring more complexity to the governance models of these water entities slowing down decision making and increasing costs. It is more bureaucracy and is taking away the local voice. This is a bird's nest of governance complexity and this will only actually increase the costs so stopping co-governance will not increase rates. To further prove this we heard today that $2.1 million was spent on a swanky Freemans Bay office building in Auckland premium office space which will house consultants bureaucrats and advisers all trying to do three waters reform across this country before the second reading of this bill has even come back into the House.So will stopping centralisation of water entities into four mega-entities actually make rates increase? Well again the answer is no. The cost benefits on which this reform are based upon are based on the Scottish water model and that has been independently peer-reviewed to say that the assumptions that that model uses are materially misstated. Big is not always better and New Zealand is not Scotland. The reforms assume that the new mega-entities will be able to make a 62 percent saving in operational costs and a 50 percent saving in capital expenditure costs compared to the status quo. Independent assessment has said that the economies of scale from capital spend are not available as outlined in those assumptions in the New Zealand water services sector except for minor changes potentially in procurement. The benefits of centralisation assume no loss of headcount which is normally the way in which you make savings through this type of reform. This Government have a track record of doing reform that doesn't deliver benefits and increases bureaucracy and just look at the polytech reform that we've all seen. National will implement a model that will absolutely ensure that water assets stay in local ownership that will have no co-governance and that will leverage water quality and economic regulation. That will make the changes that will also support sustainable funding and financing. As we have outlined the words from the Prime Minister and others say that this is political theatre designed to scare Kiwis into supporting these reforms. A National-led Government will do the right thing alongside our water assets."