Bayly AndrewANDREW BAYLY (National—Port Waikato): Yeah thank you Madam Chair. I appreciate that. Look I just want to respond to the Minister of Local Government. This issue around dividends—I am not debating whether in fact the water services company should be paying a dividend. That's not the debate. The Minister wanted to introduce that as the reason that it was precluded under clause 166. That's not my issue. My issue is: if you take a technical definition of what a share" means—and I'm talking about the 67 councils—then by definition if they aren't entitled to a dividend—and clearly the bill doesn't provide for it—if you're not entitled to participate in capital then you do not have a share. You cannot have legal ownership. I would suggest to the Minister that for all 67 councils they will not place any value and could not place any value in their balance sheet for what their interests may mean for the water companies.I'd put it to the Minister—and I'd ask the officials as well whether they've ever gone and actually sought a proper legal definition and whether in fact my assertion is correct that for all these councils—67—because they cannot meet the definition of owning a share they will note this as a thing in their notes for the account but they will not ascribe any value to it because they cannot because it will not meet the definition of "a share". I would imagine the Auditor-General who is also required to do this will come to a view that they cannot place a value on these shares. That's the first point.The second point going back to Watercare—again the Minister talks about future liabilities: what will happen on the day that the assets and liabilities are transferred? Twelve billion dollars of assets will come into the water services northern region and there will be presumably if they can get agreement about $7 billion or $8 billion of debt that comes across. That will mean fine in the water services company they will have $4 billion of equity. But what will that mean—what will that mean—in the councils' books? If you're going to put a $4 billion increase in a water services company you've got to do the reverse. That will mean the council's balance sheet will be $4 billion worse off immediately following the transfer of those assets and liabilities.For the Minister to stand there and say that the council will be better-off is an absurd assertion because right now Watercare manages its business in a way that it takes all the rates it receives from its water activities and applies them to running Watercare and also to the investment in infrastructure. That would be the same for all councils across New Zealand. So those councils will have a hole in their balance sheets—in the case of Auckland Council $4 billion; Tauranga tell us that their water assets are worth about a billion dollars and there will be some debt they'll probably have a hole in their balance sheet by about $400 million to $500 million. These are big chunks of money. To say that the councils will be better-off because they're not incurring future liabilities is a spurious argument. They will simply have this gaping wound in their balance sheet on the day that it is transferred.I don't think any official or the Minister has ever fronted up with a proper financial conversation. Rather than talk about the philosophical stuff what does it mean when you come to do the hard numbers in the profit and loss statement in a balance sheet? I don't think any one of the officials or the Minister actually understands this issue. I think it's a huge sleeping issue and we're going to hear more about it from the Auditor-General.I want to go back to clause 151—this context of the funding and pricing plan. I'm very keen to understand a little bit more about this because this funding and pricing plan presumably will be put in place by the new CEO subject to oversight by the department and then will go through the process of being approved by the establishment board and then going into the next stage. My question is: what are the parameters? Councils rate differently—some do it on toilet bowl they used to do it in North Shore; some do it on value of the property. What is the basis to make sure that everyone gets a fair pricing? Is there going to be differential pricing? How do we know that it's going to be fair across everyone?"