Smith Stuart; McAnulty KieranTUESDAY 22 AUGUST 2023(continued on Wednesday 23 August 2023)WATER SERVICES LEGISLATION BILLIn CommitteePart 1 Amendments to Water Services Entities Act 2022 (continued)CHAIRPERSON (Hon Jacqui Dean): Members good morning. The House is resumed in committee. We are considering Part 1 of the Water Services Legislation Bill.STUART SMITH (National—Kaikōura): Thank you Madam Chair. It's great to be in the Chamber at 9 o'clock in the morning and to everyone out there who's watching Parliament TV this morning good morning—what a fantastic day it is.Matt Doocey: This is what happens when the Government can't get their stuff together.STUART SMITH: That's right. I was just reading what we're speaking about the Water Services Legislation Bill. I was saying to the Minister in the chair on the way in that I did thank him very much for the answers he gave us yesterday and I'm looking forward to those sorts of fulsome answers again today.But I would like to as the Minister suggested get local on it and I'm actually going to get personal on it. I'm in a small water scheme a private water scheme and I note under clause 5(4)(a) and (b) where it talks about the board and whether it's one or more people and that the water scheme would have to have a board. My first question is around those people on that board. Are they considered directors as in a directors under the Companies Act and are they subject to those sorts of rights and obligations that would be required under the Companies Act? That's quite an important thing to know.I think in many cases those small schemes would have a variety of different people thrown into those roles who aren't necessarily experienced in the world of governance and may well not even be au fait with the rights and obligations under the Companies Act for a director which are quite serious if things aren't handled correctly.So I'd be grateful if the Minister could give us a bit of an idea of what those boards would look like because there'd be quite a difference between one of those entities and one which is running a council's water assets particularly with these other governance structures. So that would be really helpful.The second part I would like to understand about those entities is whether they have to have a corporatised structure underneath them to operate those assets and all the reporting requirements that are outlined in this bill. And are those reporting requirements under this legislation in any way staged for different sizes of entities if it is one or more individuals who are users of the service? So does that mean that a farm property with a cottage on it two houses on it serviced off one bore—or a creek or whatever that's treated—is considered to be one of these entities under this bill?Hon KIERAN McANULTY (Minister of Local Government): Thank you very much for the question. To some degree we covered this off last night when I was answering the questions from Barbara Kuriger but I'll run through it again. So we have I guess three scenarios. One which is an entirely private rural scheme that doesn't currently have a relationship with a council—they're not impacted by these reforms and this bill.Then you've got a rural scheme which does currently have a relationship with the council. In most instances they have a committee that is made up of people on council and the users. What is proposed is that that relationship would remain; it would just be with the entities not with the council. So any operational decisions and input that users have should be able to be maintained—that was one thing that came out of the process that we went through with the Department of Internal Affairs; went through with talking with the rural users down there.Keeping in mind that rural users will also have in those circumstances the option of pulling out altogether and not being covered by this. In some instances that may be best for them. But that does come with the risk of them incurring all costs of maintenance and upgrading into the future. What we found from the engagement with water users in the Clutha area was that once that was spelt out—that their level of input would be maintained but the cost and future liability of maintaining an upgrading would be shared across the entity therefore significantly reducing the cost to those users—the feedback we got was that on the whole they would be willing to continue with what's being proposed.The other aspect of it which isn't covered but I think would be of use to the member is those mixed-use rural schemes—that it might be a situation where one landowner supplies water to surrounding neighbours. That could be used for the purposes of stock or it could be used for the purposes of drinking water. Again that's not covered in this but we want to be as practical as possible in that. So essentially what happens is that it comes down to the regulations that are set by Taumata Arowai because of course we want to make sure that all drinking water is safe—but as practical as possible.So in most instances all that will be required is that at the point of delivery on the side of the house they have a UV filter rather than full treatment at the source. In doing that it would allow that that water that's being used for stock won't have to be unnecessarily treated. In some instances though it might be that the vast majority of the water being delivered is for drinking water with some for stock. It might be more cost-effective of them to treat at source but that's up to them—whatever is the most practical.Certainly where it's mixed-use and the majority of the water is going to be used for stock purposes and not drinking it would just make sense to have a UV filter. So there's a few scenarios there but in terms of relevancy to the bill and the example that the member gave nothing should change. It's just that they're dealing with the entities rather than the council.