9. Question No. 9—Local GovernmentSIMON WATTS (National—North Shore) to the Minister of Local GovernmentQuestion No. 9—Local Government9. SIMON WATTS (National—North Shore) to the Minister of Local Government: Does she agree with the Office of the Auditor-General that Three Waters legislation risks creating a fragmented approach to the planning and delivery of services" and "less opportunity for communities to be effectively engaged"?Hon KIERAN McANULTY (Acting Minister of Local Government): On behalf of the Minister—SPEAKER: Can I just do a check again—I did this last week. Is the member not the Acting Minister?Hon KIERAN McANULTY: Yeah no you're right; I am. We always take seriously comments that the Auditor-General makes on legislation and we are prepared to consider all constructive suggestions for improvements. This is exactly what the select committee process is for. The Auditor-General in his submission noted the need for water services reform and I agree with him. He has also provided constructive suggestions on how the arrangements for reporting and transparency can be improved and the select committee is considering these.Simon Watts: Does she agree—SPEAKER: No—"does he agree."Simon Watts: Does he agree with the Office of the Auditor-General that "as currently drafted in the Bill the accountability arrangements and potential governance weaknesses combined with the diminution in independent assurance noted earlier could have an adverse effect on public accountability transparency and organisational performance." and if so what will he be doing to remedy these concerns?Hon KIERAN McANULTY: As we've already said we appreciate the constructive feedback that the Auditor-General has provided. I also note comments that were included in the submission that said New Zealand faces a significant infrastructure challenge with the drinking-water waste-water and stormwater services that are currently delivered by local authorities. The bill intends to pave the way for improved effective and efficient management of the three waters service delivery and infrastructure by establishing four stand-alone water service entities.Simon Watts: Who is correct: the Prime Minister who said the ownership of these entities sits with local bodies and government so it's not changing the ownership structures or the Office of the Auditor-General who said "The Bill alone does not provide enough information for us to form a view" on the control of water entities?Hon KIERAN McANULTY: I note that in the submission the Auditor-General recognises that they are looking at it through a very specific lens and any other view on the submission would be expanding that lens. It is a matter of fact that ownership of the water entities remains with local councils and any suggestion otherwise I think is mischief making.Simon Court: Does the Minister agree with the Office of the Auditor-General that water service entities cannot be held accountable by either ratepayers or the Government under the Minister's regulatory model and in that case who are these entities accountable to?Hon KIERAN McANULTY: There are a number of proposed mechanisms by which the entities would remain accountable to the communities that retain the ownership over them. The point of the reforms and the point of the structure that is being proposed is very simple but it appears to be a point that is either misunderstood or deliberately overlooked. We are facing a $185 billion problem and at the moment the status quo it is the ratepayers of this country who will face that bill. If we do not reform as every single council in the country is calling for and as the Auditor-General is calling for in their submission if we stay with the status quo like the National Party and the ACT Party are proposing a $185 billion cost will be borne by ratepayers and ratepayers alone.Simon Court: How does the Minister define "ownership" and does the Minister think it's misleading to tell local authorities they will retain ownership of three waters entities while at the same time forcing them to surrender all control to these new unaccountable water service entities?Hon KIERAN McANULTY: I would define "ownership" much more accurately than the description the member has just given about the three waters reforms. This is a situation where without reform the ratepayers of this country will bear the full cost of $185 billion. That is $185 billion that individually they simply cannot find the resources to pay for it because of the debt caps that are imposed on councils. The restructure proposes a particular and deliberate structure that removes that potential that future liability from both the balance sheets of councils and of central government and whilst doing so retains ownership in the entities.Simon Court: Point of order. I don't believe the Minister addressed the question which is how—SPEAKER: No; I heard the question and I heard him address it in about the first six words. I was hoping that he might come back to it but he didn't.Simon Watts: Why did he not listen when these exact problems about public accountability and transparency were raised to him by local communities right at the start of this process and will he now apologise for dismissing these concerns?Hon KIERAN McANULTY: I would consider apologising if after four years of considering reforms of water services we didn't have a single alternative proposal to put to the country. That's the situation the National Party are in and that's the situation the ACT Party are in. We—after four years of looking into this issue this $185 billion problem facing local councils in this country—have a way forward. Throughout that process we have listened to the concerns of stakeholders and local councils. The establishment of the working group which was made up of local government representatives many of them who have expressed concerns about the proposals up to that point made recommendations. Those recommendations were included in the bill that was brought to this House and that is an indication I think to the country that this Government is open to constructive ideas and feedback—just like those put forward by the Auditor-General—and this Government will consider those in good faith.Simon Watts: Will he now accept in light of the Office of the Auditor-General's submission and four years of planning that he's got it wrong on the three waters and that communities against the reforms were right to call them out as un-transparent and unaccountable?Hon KIERAN McANULTY: If the member spent time as I have travelling around and visiting councils—22 councils so far in the last three weeks—every single one of them has said that the status quo is unsustainable even those that have publicly expressed concerns about three waters. So no I cannot stand here and listen to the member criticise a process that looks to reform a problem when that member and his party have offered no alternative solution in four years of whingeing."