Pugh Maureen; Russell DeborahLOCAL GOVERNMENT (WATER SERVICES PRELIMINARY ARRANGEMENTS) BILL Debate resumed from 8 August.Part 2 Water services delivery plans and foundational information disclosure requirements (continued)CHAIRPERSON (Maureen Pugh): Members we start with the Local Government (Water Services Preliminary Arrangements) Bill. When we were last considering the bill we were debating Part 2. This is the debate on clauses 8 to 46B Water services delivery plans and foundational information disclosure requirements". Once again the question is that Part 2 stand part. Hon Dr DEBORAH RUSSELL (Labour): Thank you Madam Chair. It's been 10 or 12 days since we were last looking at this bill so I just want to remind the Chair and also other members in the Chamber of the process we were working through with respect to Part 2 of the bill.CHAIRPERSON (Maureen Pugh): I have that information in front of me.Hon Dr DEBORAH RUSSELL: Thank you. Part 2 of the bill of course has three subparts and we'd worked through subpart by subpart. We were just transitioning from Subpart 2 to Subpart 3. So we've really just begun the debate on Subpart 3 and there is a number of questions that I want to dig into on Subpart 3 some of which I think are just around drafting— where I think that some things are a little confusing because of it—and some of which are substantive questions where I'm hoping for some information from the Minister. So looking at Subpart 3 it is about the "information disclosure requirements". Now the drafters have the word "Foundational" in there. I can't quite work out why. I guess they thought it was pretty but it is just the basic information that needs to be disclosed on requirement.Now as I understand it the way it's going to work out is that the Commerce Commission is in effect going to be the regulator here and it is going to be regulating water services entities in various ways. And this particular part of the bill is setting out the sorts of information that can be required from water services entities. But sitting within that then are some rather interesting questions not just on what sorts of information. But by requesting or specifying that sort of information it betrays something about the nature of the bill overall and the nature of these water services reforms. So I want to draw the committee's attention to Subpart 3 clause 32 subclause (2)(c)—So clause 32(2)(c). What it's trying to do—well there's a couple of sets of words in here that I want to sort of dig into. The first one is saying if we look at that subclause (2)(c) the first thing is that water services entities or providers of water services "are limited in their ability to extract excessive profits." It's kind of interesting just in itself because it implies that water services entities will have a profit motive. Now that's quite interesting because up to now water services have been provided in this country by local authorities by regional authorities in some cases—in Auckland it's provided by Watercare. We do have some very localised little schemes around the place which are pretty interesting but they're not profit-making entities. So this phrase "ability to extract excessive profits" is quite a telling phrase because the implication is that the whole purpose of this scheme the whole purpose of this legislation is not just to ensure that New Zealanders have access to good drinking water that the waste water is appropriately treated and that stormwater systems are set up so that people aren't affected by stormwater but it implies that there is a profit motive. Now I think the Government needs to justify this quite singular shift.So it's not just the words "excessive profits" but it's that they can extract profits at all. Now I guess there'd be some reassurance around this if we could be sure that any profits that were generated by a water services entity were going to continue to be held within that particular water services entity and used only for the purpose of ensuring the future of that water services entity and ensuring it would continue to supply the water services that were required. But I think we need some reassurance perhaps from the officials that in fact that is going to be the case. I'd like to know for sure that a future Government wasn't going to be able to somehow change these rules around and suddenly start extracting profits from water. After all if we look overseas to the United Kingdom—[time expired]."