Kaipara District Council (Validation of Rates and Other Matters) Bill — In Committee Third ReadingText is incorporated into the Bound VolumeKaipara District Council (Validation of Rates and Other Matters) Bill — In Committee Third Reading[Sitting date: 04 December 2013. Volume:695;Page:15267. Text is incorporated into the Bound Volume.]Kaipara District Council (Validation of Rates and Other Matters) BillIn CommitteeJAMI-LEE ROSS (Junior Whip—National): I seek leave for all debatable questions on the Kaipara District Council (Validation of Rates and Other Matters) Bill to be taken as one question.The CHAIRPERSON (H V Ross Robertson): Is there any objection to that course of action being taken? There is none.Parts 1 and 2 Preamble and clauses 1 and 2MIKE SABIN (National—Northland): Mr Chair—Hon Annette King: This is your big moment.MIKE SABIN: I do not know about that. Firstly can I just acknowledge the members of the Local Government and Environment Committee in respect of what has been a very very challenging piece of legislation. It is something that no one takes any pleasure in and certainly no one wants to deal with it. I would just like to acknowledge the chairperson Nicky Wagner Mr Twyford and members from Labour and members from right across the select committee. They have done a very good job of getting their heads round something that is very complex.I also want to acknowledge the Minister of Local Government. Actually there have been three Ministers through the journey on this particular bill but the latest Minister is Chris Tremain who in the main has dealt with this matter and I want to acknowledge the support he has given. I also want to acknowledge the commissioners and the chief executive officer from the Kaipara District Council for the role they have played in preparing this particular piece of legislation and their objective of trying to return the Kaipara District Council to democracy and stability.I want to acknowledge some people from the local community—Mike Howard JohnDickie Larry N Mitchell Mark Farnsworth Greg Gent Peter and John Bull and a number of other people who have worked very hard. We did not always agree on things but we worked very hard to try to ensure that the light was indeed shining where it needed to be.I just want to set the scene for this bill so that members can traverse some of the ins and outs at this Committee stage. First and foremost I just want to say that no one takes any pleasure in being involved in a piece of legislation like this. This council found itself in trouble and it became something of a perfect storm of challenges that involved everyone—the councillors the chief executive officer JackMcKerchar and the Audit Office which includes Audit New Zealand and the Office of the Auditor-General. Yesterday the release of the report from the Office of the Auditor-General into the MangawhaiEcoCare Wastewater Treatment Scheme and the auditor shone a very very damning light on all of those parties and Audit New Zealand and the Office of the Auditor-General did not escape that.This bill deals with a number of matters not only related to the Kaipara District Council waste-water scheme. It goes a lot further than that. There are a number of other matters being dealt with such as theMaungatūroto water scheme other waste disposal schemes in Dargaville and the forest owners’ road impact rates. This bill actually incorporates a number of failings on behalf of this council over a significant period of time dating well back into the 1990s. Although the lightning rod certainly has been the waste-water scheme at Mangawhai this bill is remedying a number of other issues that absolutely need the attention of this House.If we turn now to what is the most substantive matter theEcoCare scheme we see that it goes back to the mid-1990s when a decision was made to investigate and ultimately plan for and build a reticulated waste-water scheme for the community of Mangawhai. Indeed it is well recognised that some form of a waste-water scheme was certainly needed. But I just note how the council went about it how out of its depth it got in the course of doing that the way in which it contracted out or sought the advice of others because it did not have that advice within the council and ultimately the way in which it lost complete control of this particular project seeing the debt blow out. The scheme was originally costed at around $11 million but ultimately ended up costing somewhere in the vicinity of $63.5 million.If we just go back to the history of that scheme in the mid-1990s a decision was made to progress the scheme and it was going to progress as a “BOOT” scheme—build-own-operate-transfer—over a 25-year period. The aim of this small council was to try to keep the debt off its balance sheet. Although that may have had some merit at the time it all unravelled in 2002 when a law change meant that the public-private partnership was no longer workable. The council then set about reinventing a process—a morphed “BOOT” scheme if you like—that was never going to be fit for purpose. So rather than having a 25-year period in which that scheme could be transferred and having the incentives in the right place in terms of the public-private partnership the aim was to immediately transfer that debt straight back on to the council within a very short period of time which changed the incentives and set this whole tailspin off.So the council found itself in a position where it was under-equipped it was under-qualified it was seeking advice outside interested parties within the council and it did not stop to think and reassess the implications of what it was doing with the change of law in 2002. It set itself on a path that ultimately has led to where we are now. At the end of 2004 and the beginning of 2005 this was not helped when the contractor for the plant its parent company went into receivership. Rather than going back to the market to build a new scheme under the new legislation the council persisted and carried on as if on a treadmill with only one direction to head in. It engaged another contractorEarthtech Contractors to take the project—one that was certainly more expensive than originally envisaged. But that continued to actually complicate the process thereafter.The council then found itself in a position where by the time it signed a contract for this scheme in late 2005 it had practically lost control of the project and I am not sure whether it really knew what it was getting itself into. At this stage the scheme was projected to be in the order of $35.6 million. But just to give one small example of how far the council got this wrong the disposal for the waste-water scheme had not been included as part of that consenting resolution and approval process. Something it had allowed $360000-odd for ended up costing $14 million. So when we start looking at the way in which this project got out of control that is one small example of some of the failed decision-making.I just want to cover off where things have got to in the last few days. As a result of the election in 2011 obviously I was elected and this was the No. 1 the first priority to actually try to make some sense of. Since that time a Government-appointed reviewteam got in around there and the damning report that was released as a result of that review team saw the resignation of councillors and we saw commissioners put in place. Obviously one of the issues that they needed to deal with was the fact that you had had a council for a number of years that had failed to set rates and failed to manage due process in accordance with its requirements—something that was obviously highly litigious and needed to be remedied.When we look at the opportunities to do this they are very limited. That is why no one wants to actually be in the position that I am in today having to be confronted with this particular legislation. It is an acknowledgment that a lot of people have got it wrong and blame needs to be sheeted home and it will be sheeted home. In very recent times I have made some very strong comments about the role I think the Auditor-General has played in this and also of course the councillors the contractors and JackMcKerchar the chief executive officer.Before I was willing to sponsor the Kaipara District Council (Validation of Rates and Other Matters) Bill I needed an assurance from the commissioners that there was no better way to actually achieve this. There clearly was not. Refunding the rates where some would have an enormous windfall of rate refund and where others would suddenly be burdened with a massive rates bill that they in no way shape or form deserved would be wrong. Then to go about resetting rates by working through each individual rate through each individual resolution and through each individual process again over that period would take probably a year to 18 months and would be almost impossible and unworkable. So we find ourselves where we are here today. I said that I would not sponsor this bill if it absolved anyone of responsibility—members will cover that—and if it was seeking to validate stuff that the council could not otherwise do in law. In other words it had to be stuff that could be done inside the law in the first place. I said that I would not support anything that validated behaviour that was ultimately criminal and the decision to expand the scheme the $30 million decision was not part of that.Su’a WILLIAM SIO (Labour—Māngere): Talofa lava Mr Chairman. Thank you very much for the opportunity. On 6 September 2012 commissioners were appointed following the completion of work by the review team that was put together by the Minister of Local Government in June 2012. That review team was asked to assess the financial management and governance challenges facing the Kaipara District Council. The review team concluded that the challenges were beyond the ability of the mayor and councillors to manage. Elected councillors then agreed that the Minister of Local Government would appoint commissioners. It is the commissioners’ work that has led to the Kaipara District Council (Validation of Rates and Other Matters) Bill being tabled in the House as sponsored by Mike Sabin.Tonight there is a need for this Committee to help the people of the Kaipara District the people of its many small towns and villages people who work hard day in and day out to carve out a life for themselves in Kaipara. There is a need for this Committee to help them and a need for the Committee to help the council the commissioners and the wider community of people who live in that area and need to draw a line somewhere somehow under this deeply sad and woeful affair. I would ask this Committee just to be careful with speeches as the decisions that we are making tonight will have painful ramifications for some ratepayers in the Kaipara District. I do not believe that politicising this affair is going to be helpful in any way.The Labour Party will support this bill. We have no choice but to do so in order to assist in drawing a line so the Kaipara District can move forward and look ahead. If we do not pass this bill Kaipara District will continue to carry about $17 million of rates plus the level of rates that are currently being withheld as a burden on all the ratepayers there. In addition the council currently has $77.5 million of external debt of which$52.5 million relates to the waste-water scheme. This debt is currently due to expire in July 2014 and carries the favourable interest rate margin of 55 points. Not passing this bill puts that debt at risk with the local government financial authority. It puts at risk the services the people of Kaipara continue to receive today from their council. In addition there are other costs that continue to add up the longer this bill is delayed such as the loss of the New Zealand Transport Agency funding of about $450000 per month the increased debt-renewal cost of about $50000 per month the working capital cost of about $30000 per month and a $400000 one-off cost to amend the long-term plan if this bill is not passed. It would irresponsible for us to delay this bill any further as we would then impose this cost upon all Kaipara District Council ratepayers.The Labour Party has deliberated on this bill on a number of occasions before arriving at its final decision. It has been difficult because of relationships we have with ratepayers who oppose this bill and the need for us to do the right thing for everyone in the Kaipara District. We considered our position a few times as information was made available to us from Government advisers commissioners individual ratepayers the leaders of the Mangawhai Residents and Ratepayers Association and its legal counsel. We found ourselves upset and angry with the way the previous councillors mayors and management failed on so many grounds to meet their legal and managerial responsibility towards the people of the Kaipara District. We sympathise immensely with the Mangawhai Residents and Ratepayers Association the way it felt about the whole process that was undertaken and its need to pursue the legal avenues available to it. We met and received submissions directly from some of its members including Mr Bruce Rogan its chair. We also met with its legal counsel. Some of the communications we received from the Mangawhai ratepayers group were very thoughtful deliberate and considered. Other communications I received reflected I believe the tremendous stress those people were under. They have every right to feel the way they do.The Labour Party sought from the Government and its commissioners relief for ratepayers by way of an amnesty of the penalties for rates withheld. We are pleased that the commissioners have agreed to provide this rates relief on penalties and extend this rates relief to ratepayers in relation to the Mangawhai community waste-water scheme to 1 January 2014. A line has to be drawn under this relief to allow all Kaipara ratepayers to move forward. This relief will cost approximately $1 million which will be borne by all Kaipara District Council ratepayers.It would be wrong for this House given the information we received from commissioners and Government officials to entertain a scenario where the rates were not validated and where the council would be required to refund about $17 million of rates affected by the irregularities to the 4812 properties that have paid them. Under this scenario the council would still be required to recover this income in the 2014-15 year in addition to the administration costs plus the estimated interest costs over the period between refund and full payment.The net effect of that scenario on sample properties would see the residential and commercial properties in Mangawhai that had paid the full capital contribution to the waste-water scheme get a refund on average of about $5065. But their 2014 rates would on average be $5400 higher. Where the ratepayer entitled to the refund remained the ratepayer for that property they would be $343 worse off. Where the property had changed hands the original ratepayer would receive a windfall of $5065 while the new ratepayer would have to pay an extra $5408. Those ratepayers who paid a first instalment of $676 of a capital contribution to the waste-water scheme in 2013-14 would get a refund on average of $1853. But their 2014 rates would on average be $2151 higher—a difference of $298.We acknowledge the whistleblowers who brought attention to this woeful saga. We heard strong submissions from submitters absolutely opposed to this bill. There were strong allegations made of corruption collusion and conspiracy to commit fraud. I accept that it was easy to make those allegations given the way the council behaved with backroom deals and workshops a lack of proper systems in place a lack of in-house staff expertise substandard work by the auditors a reliance on outside contractors and consultants and a lack of best practice. There are so many people we can blame for this but we all end up having to pay especially the people of Kaipara. Kaipara has the waste-water scheme that it needed and it works though through bad decisions mismanagement and incompetence it has cost the people of Kaipara more than it should.I agree that someone or all those people should be taken to court. We therefore at that time sought a commitment from the commissioners that the right to bring proceedings be unaffected by this bill. We are pleased that the amended clause 14 extends this right to include not just the council; any other person can “bring proceedings against any person arising out of or in connection with any actions or omissions associated with matters validated by this Act.”As I said at the beginning of my speech we need this House to help the people of Kaipara draw a line under this woeful saga. I know that there are people listening in Kaipara who will not be happy with the statements I have just made on behalf of the Labour Party but notwithstanding that I accept they have every right to feel the way they do. I was one alongside other members on the Local Government and Environment Committee who was actually waiting for the Auditor-General’s report to identify and provide evidence that would enable us to take somebody to task over this whole sad affair.There are many to be blamed and they include the residents of Kaipara who had the democratic ability to challenge their councillors and who did put up new councillors. The chief executive officer of the time according to the feedback I have received was not a member of any professional organisations and therefore did not have access to best practice. The fact was that the council did not have in-house staff and although it lauded the fact that it had reduced rates for many many years it was able to achieve that by the sacking of skilled staff and by the reduction in the number of skilled staff. Therefore it did not have in-house expertise that it could rely on and it ended up being captured by consultants and contractors.Kaipara has a population of about 20000 people living in numerous towns and villages. It is a community that has a strong spirit with numerous local clubs volunteer organisations a Rotary club an art festival beautification groups and a strong Dalmatian club. Kaipara District deserves to move forward and it is my hope on behalf of the Labour Party that by passing this bill we are able to give it that opportunity.ANDREW WILLIAMS (NZ First): I take a call on the Kaipara District Council (Validation of Rates and Other Matters) Bill on behalf of New Zealand First. New Zealand First cannot support this legislation. We believe that retrospective legislation is absolutely the worst way to deal with this because it exonerates the guilty. In so doing I would like to give a corrected history of how this sorry saga came about. In about 2000 the Kaipara District Council awarded the role of head consultant for the Mangawhai sewage project toBeca Group. Reading fromBeca Group’s own website it states: “Beca is one of the largest employee-owned engineering and related consultancy services companies in the Asia-Pacific. As well as numerous engineering consultancy services [Beca offers] architecture planning project and cost management land information valuations and software services.Beca supplies engineering and related consultancy services to many markets including industrial buildings governmentwater transport and power.” At the time—and this is back in around 2000—Beca Group evaluated tenders for the project and awarded the tender to itself providing $675000 of ratepayers’ money to manage the bid process.Beca Group then in cohort with the Kaipara District Council’s Chief Executive Officer JackMcKerchar very quickly settled on an Australian outfit called Simon Engineering as the preferred bidder. This outfit was represented by one Mr Peter Elliott who was shepherded everywhere by theBeca Group project leader Brent Johnston. Mr Elliott made a sales pitch to the full Kaipara District Council. He said that his firm Simon Engineering had dozens of projects in Australia like the Mangawhai one. They were a dime a dozen for the firm he said. In fact the biggest scheme the firm had ever done was a trailer park equivalent to a single subdivision in Mangawhai. At the time Councillor Bruce Rogan who is now the chair of the Mangawhai Residents and Ratepayers Association said that what this council would really appreciate is a referral from one—just one—happy customer from among Simon Engineering’s stated hundreds throughout Australia and the Pacific so that Mr Elliott’s claims could be verified independently. Councillor Rogan was savagely attacked by both Mr Johnston and the mayor for being so rude and discourteous to a guest. The information requested by that councillor was not forthcoming.In 2002—some months after—the new Local Government Act 2002 came into effect. The Government changed the law relating to infrastructure projects. The whole MangawhaiEcoCare project had been conceived as a 25-year build-own-operate-transfer project. These were banned under the law change. NeitherBeca Group nor the chief executive officer MrMcKerchar wanted to revisit anything because the deal had already been secretly committed to. They refused a request from Councillor Rogan to reopen the tenders. He argued that because the project could no longer legally proceed as planned and because the project builder was now no longer required to finance the construction many much smaller local organisations would possibly be able to bid for the job. This was refused because that was the last thing that they wanted.Just before Simon Engineering was publicly awarded the contract—and it had already had it for months in secret—Councillor Rogan sought and got a resolution from council to advise Simon Engineering that if it exceeded its budget the entire district would have to be consulted about its willingness to pay the overrun because it was not going to fall on the hapless community saddled with the overpriced white elephant. If the district as a whole declined to wear that then Simon Engineering needed to understand that it would not get paid. The chief executive officer JackMcKerchar was instructed to write to Simon Engineering to that effect. However the chief executive officer JackMcKerchar did not write as instructed by the Kaipara District Council. This was discovered at the next council meeting where Councillor Rogan requested that that letter be tabled for perusal. MrMcKerchar stated that he had not done so because it might have frightened the horses.After the meeting Councillor Rogan himself wrote to Simon Engineering informing it of the earlier council decision. This did have an effect because it bolted and subsequently the company went belly up. Still there was no appetite to change anything so moves were made to find a replacement for the contractor Simon Engineering and leave everything else intact.Earthtech Contractors were ushered in but in parallel and possibly under separate coversBeca Group acquired the skeletal remains of Simon Engineering and created an enterprise calledBeca-Simon which promoted itself as a multinational infrastructure builder. So now we have the project manager building projects using the resources of the company that it awarded theEcocare contract to. It is not easy to ascertain what happened toBeca-Simon but it may have morphed into Tyco Wastewater or been absorbed by it. Tyco Wastewater through a subsidiary called WaterInfrastructure Group ended up running the entire wastewater system project and it still does.During this whole period other Kaipara District councillors became increasingly alarmed by the Mangawhai scheme. Requests for full financials were declined. Quarterly reviews—and we heard this at the Local Government and Environment Committee—which are usually provided by all local authorities to elected members were not given to Kaipara councillors. Councillors who stood up to the chief executive officer JackMcKerchar and to the mayor faced legal threats. But questions need to be asked about the relationship between JackMcKerchar andBeca Group over an extended period of time. How was it that MrMcKerchar was in a live-in romantic relationship with one of his council staff employees who was involved with the planning for the Mangawhai sewerage scheme? When the sexual liaison was uncovered that particular council employee transferred out of the council and guess where she turned up? AtBeca Group. She turned up atBeca Group which then contracted her back to provide services to the Kaipara District Council. What a convenient relationship this was betweenBeca Group this woman and the chief executive officer JackMcKerchar.Why was it also that another $7 million - plus sewerage scheme being planned on the west coast of the Kaipara District got awarded to the same contractors as those for the Mangawhai scheme despite the known financial blowout problems with the Mangawhai scheme? I am informed that another major contractor assessed the scheme at some $2 million less but was warned off tendering for the project because that would jeopardise it receiving roading contracts in the Kaipara District the following season. This is disgraceful. This is corruption.Where are these glaring commonly known disclosures in the Auditor-General’s report that was released yesterday? They are not there. Yet today at the Finance and Expenditure Committee the Auditor-General was asked these exact questions. The Auditor-General said she was aware of these rumours but had not made inquiries into them. She did not feel they were relevant. They are relevant. There is an insidious incestuous relationship here betweenBeca Group the Kaipara District Council the chief executive officer and others involved there. Council executives and councillors who stood up to this MrMcKerchar were knocked back very swiftly. Staff lived in fear for their positions if they questioned his decisions. Some chose to leave because the situation was intolerable. MrMcKerchar in the end was taken out when they appointed commissioners and he was given a $240000 golden handshake.New Zealand First as a result of extensive investigation discussions and analysis is of the view that this Parliament cannot confirm this legislation and cannot pass this legislation. The illegalities in entering into loans are not mere technicalities or formalities. They go to the heart of local government’s obligation to consult ratepayers before entering into large financial commitments and where the rates can be set to cover illegal loans. In this case the community consultation stopped at $34 million but the scheme ended up being double that in price.Through all this contractors have taken large margins. ANZ now we are told has taken the loans over from the former National Bank Lloyds Bank the Royal Bank of Scotland and ABN AMRO Bank at a 40 percent markdown on the loan value. The banks should have done due diligence on the whole scheme. Now ANZ should step up and write down these loans to a level that will reduce the burden on the ratepayers of Kaipara. Likewise I thinkBeca Group should be stepping up to the mark. It has been there since 2000 advising on this whole scheme and it allowed this to double in costs in the end.Beca Group should come forward and also take a haircut on this as well. At the same time the Audit Office should be taking a haircut as well. It allowed 5 years ofclean audits to go through on the Kaipara District Council. That is unbelievable. Again the Auditor-General needs to front up and this Government should front up.As a result I am challenging Mike Sabin and I am challenging this Government to step forward and ensure that all these parties come forward and pay their dues in terms of returning some of the funds that are rightfully due back to the ratepayers of Kaipara so that they do not suffer and they do not carry on paying rates for the next decade after decade for mistakes and corruption that occurred within this Kaipara District Council. New Zealand First is here to stand up for these ratepayers. We know that this legislation is going to be passed tonight but we think it is wrong. I have also got Supplementary Order Paper 406 in here for later but I do honestly believe and New Zealand First honestly believes that this has got to be investigated. The Auditor-General’s report is insufficient. There needs to be proper police investigations into this matter. There needs to be investigations carried out at the highest level and the people responsible for this should be held to account.NICKY WAGNER (National—Christchurch Central): The Local Government and Environment Committee unanimously supported the Kaipara District Council (Validation of Rates and Other Matters) Bill. We supported it not because we liked the bill not because we are keen on validation legislation but simply because this bill is the best possible solution to a very difficult very messy and very unpleasant situation.This is not a time to play politics. It is a time to make good decisions for the people of Kaipara. There is no satisfaction and no pleasure in dealing with this type of bill. I want to thank the select committee and the officials for their goodwill for their hard work and for their willingness to work together to come up with the best possible compromise.We unanimously agreed to recognise the input of the ratepayers who have raised concerns asked questions and challenged the council over the years. We did that by making sure that late penalties on rates were rebated. However all the rates that could have been struck legally need to be paid so that those who have so diligently kept paying their rates are not disadvantaged.A very comprehensive and independent Auditor-General’s report covering the period of 1996 to 2012 and covering the planning and the construction of the Mangawhai waste-water scheme was presented to Parliament yesterday. It records long-term mismanagement and poor governance from the council and its management team. It records a lack of records improper decision-making and poor auditing oversight. It identifies negligence and a lack of prudence but it does not—does not—identify corruption or any criminal wrongdoing.The select committee is very keen to receive this report and we wanted to receive it before we passed the bill but the Office of the Auditor-General assured us that it would not affect this validation legislation and it was right. We were very aware of the increased cost to ratepayers every month while this legislation was outstanding. So we made the commitment to pass this bill before Christmas rather than prolong the agony and the mounting costs to ratepayers.There is no doubt that the Kaipara District Council has had a tough time over the last few years trying to manage the waste-water project. It has tested the community emotionally and physically and it has challenged ratepayers financially and socially. The worry the uncertainty the frustration and the anxiety have taken their toll.This bill is designed firstly to stop the bleeding—to stop the bleeding of costs and disruption—arising from the present situation. It then looks to address the wounds to work through the errors and irregularity of rates. The select committee went through this meticulously. We have validated only rates or decisions that could have been made correctly if the council had been more pedantic about its systems or its wording. Inother words we validated only decisions and rates that were technically invalid rather than illegal or inappropriate.Finally the bill looks to heal—to provide the certainty the consistency and the finality that will allow this community to move on. Without this bill the district and the ratepayers could have been bogged down in misery and uncertainty for another decade and that is expensive and unhealthy for any community.The CHAIRPERSON (H V Ross Robertson): I call the honourable member Philip Twyford.PHIL TWYFORD (Labour—TeAtatū): Thank you Mr Chairman—it is only you and my mother who call me that.I am not going to rehearse the history of this issue. I think we probably recounted enough of the details in the various debates so far. I want to say that if it was up to me—and I do not mean any disrespect to the member Mike Sabin who is sponsoring this Kaipara District Council (Validation of Rates and Other Matters) Bill—I would not have brought this bill to the House. I think in my view the Government should have shown some political leadership earlier on and first instituted a thorough and independent inquiry into the goings-on at Kaipara District Council. It should have established who was to blame and held them accountable and then negotiated a burden-sharing agreement. However it is clear that there is not the support in this Parliament for that approach.Most people have supported this bill—in fact it was supported unanimously at the Local Government and Environment Committee—as a way to move forward. The bill is bluntly a validation of unlawful actions by the Kaipara District Council in the setting of the rates struck to fund the debt incurred by the Mangawhai waste-water scheme. The Government-appointed commissioners asked the member Mike Sabin to bring this bill to the House because they wanted to validate the unlawful rates demands thus opening the way for the council to bring an end to the rates strike and to return to the Kaipara District Council a measure of solvency. This is a bitter pill for the rates strikers of Mangawhai to swallow. Their rates strike was designed to force the authorities to properly investigate and hold accountable those found responsible for the financial mess that the Kaipara District Council finds itself in.We debated at the select committee whether or not this bill should be progressed before the Auditor-General’s report was released. After all in a matter as complex and vexing as this how often does this Parliament have the luxury of a comprehensive inquiry like that done by the Office of the Auditor-General and released in the last couple of days? I want to make a few comments about that report. I have great respect for the institution of the Office of the Auditor-General. It provides an indispensable accountability role for this Parliament and is an important part of our democratic institutions. The report is especially important because in part the Office of the Auditor-General is investigating its own work. Audit New Zealand is a business unit that reports to the Auditor-General. It is one business unit of the Auditor-General that is investigating and reporting on another business unit of the Auditor-General. Indeed the reputation and the integrity of the Auditor-General’s office are at stake on this issue.I want to say that I think it is a good report. It is thorough it is systematic and it is clear. It does not shy away from holding Audit New Zealand accountable. In fact when you read the report it is an indictment of the failure of the auditors to do their job properly. I want to read into the record some quotes from the report of the Auditor-General: “This review acknowledges that many of the concerns that correspondents raised”—that is the aggrieved ratepayers of Mangawhai—“have proved to be well founded.” The Auditor-General acknowledges that “with the benefit of hindsight it would have been appropriate to reconsider the situation”—in relation to the waste-waterscheme—“more fully in late 2011. … If we had done so this inquiry might have begun a few months earlier. … There were problems with the way some of the audit work of [Kaipara District Council] was carried out. … in the years 2006 to 2009 the auditor did not reassess the status of the wastewater project despite it undergoing significant changes during these years and did not identify it as an audit risk. Nor did the auditor identify problems with [Kaipara District Council’s] rates.” I find that mind-boggling and it is indeed an indictment on the work of Audit New Zealand.I want to call on the Government now with the passage of this bill to do the right thing. First I believe that the Minister responsible for the Auditor-General should note the findings of the Office of the Auditor-General in respect of the failures by Audit New Zealand and should then negotiate an appropriate financial settlement with Kaipara District Council that recognises the critical role of Audit New Zealand’s failures in the ill-fated decisions in relation to the waste-water scheme. The member Mike Sabin has talked publicly about a figure of $30 million and I think that would be a pretty good starting point. Second the Serious Fraud Office should take all possible steps to hold to account the councillors and officials who broke the law. They too should be pursued to the fullest extent possible.Labour will not be supporting Andrew Williams’ Supplementary Order Paper 406. We considered it seriously and the arguments put up by Dr Matthew Palmer the legal counsel for the Mangawhai ratepayers that the effect of the bill will be to extinguish much of the claim taken by the association and its legal action currently before the High Court. He argued that denying the members their day in court runs against the rule of law. We took the view however that this matter needs to be resolved in the interests of not only the few hundred rates strikers of Mangawhai but the 10000-odd other ratepayers of Kaipara District Council and that legal action that could result in several years of rates being struck down altogether is simply not tenable. It would not be a sustainable outcome.But—and there is a big caveat here—if the Auditor-General’s office does not contribute substantially financially for the inadequacy of Audit New Zealand’s actions and if the elected members and council staff who made this appalling sequence of decisions are not made to pay as well then an injustice will have been done. This bill does not deliver a solution to the Kaipara problem. It has a very narrow scope. It simply validates unlawful actions taken by the council in the setting of the rates and its long-term plan. A fair and enduring solution now relies on the Government doing its bit to ensure that the wrongdoers in this case are held to account and forced to share the financial burden.EUGENIE SAGE (Green):Tēnā koe Mr Chair. Like others in this Chamber I am not pleased to be speaking on retrospective legislation but I am pleased to take a call on the Kaipara District Council (Validation of Rates and Other Matters) Bill to explain the Green Party’s position and why we are supporting the bill. I would like to congratulate the Office of the Auditor-General on its very thorough report and inquiry into what happened with theMangawhaiEcoCare Wastewater Treatment Scheme. It tells the story of what happened over the 15 years of the project’s life and sets out the facts as the Auditor-General understands them in what she describes as a “woeful saga”. It is written in a very clear and accessible way and it is very easy to read.What the Auditor-General said was that she was shocked by the state of the Kaipara District Council’s records and its loose approach to decision making given that it has involved a huge amount of investigation and effort to actually analyse piece together and describe what happened. Certainly many submitters told the Local Government and Environment Committee that the Kaipara District Council had failed to meet its fundamental obligations both legally and in terms of its accountability to thecommunity. The Auditor-General has confirmed that the council did not have a grasp at all really of the very complex contractual financial and borrowing arrangements that it was involved inin relation to the waste-water scheme and it effectively lost control of that scheme and the cost of it blew out. So it has been a saga of poor governance of poor management of poor record-keeping and of a council that was completely out of its depth in terms of decision making.One of the other reasons why I would like to comment on the report is the way in which the Auditor-General and her staff have done a very thorough review and made a full and frank disclosure of the significant inadequacies in the way in which one of the office’s business units Audit New Zealand did its work particularly between 2006 and 2009. As the Auditor-General admits “some of the audit work has fallen disappointingly short of the [expected] standards”. Some of the problems there were just the whole quality of the documentation supporting the audit judgments—as Phil Twyford noted—the failure by the auditors to reassess the status of the waste-water scheme despite the significant changes to it—and the over-reliance of Audit New Zealand on the information that council management was providing.So there are a number of lessons that can be learnt from reading this report. Other councils throughout New Zealand particularly councillors and staff would do well to read the report and to look at whether they have the capacity to effectively control what is being done on their behalf when work is contracted out.But this is little consolation to the people of Kaipara and particularly to the people of Mangawhai because it has been their rates that have increased significantly in order to repay the cost of the blowout in the scheme. They are paying for the incompetence and poor governance of the council. It is there that we share with Labour the need for Government to take action because the chair of the commissioners John Robertson said in a media release in February: “At some point council may wish to take action against the decision-makers involved in issues at Mangawhai. We don’t want to prejudice our legal position by including this in the Bill. [The commissioners] want to keep their options for seeking redress on behalf of ratepayers open.”In the commissioners’ terms of reference two of their key tasks are to engage with the community and iwi to rebuild trust and confidence in the council and to “ensure financial resilience and equitable and sustainable funding”. The commissioners have applied a huge amount of effort to getting the council’s finances on a clear footing going forward. Now they need to apply that same energy to seeking redress for ratepayers to reduce the debt burden on the council and to restore the community’s trust in the council by putting it on a sustainable footing.It was the Minister of Local Government who appointed the commissioners and to whom the commissioners report so he has the very real responsibility here of ensuring that there is that sustainable solution. Reducing the debt burden on ratepayers is essential and central to ensuring that the council is financially resilient and is sustainable in the longer term. Although the Auditor-General did not find any illegality in what happened in Kaipara the factual situation that this report outlines is a very strong platform for the Kaipara commissioners and others to consider taking legal action against a range of parties to share the burden of those cost blowouts.We agree here with New Zealand First that the commissioners should consider pursuing companies such asBeca Group Bell Gully the directors of the now defunct EPS ConsultantsEarthtech Contractors and also Audit New Zealand and their insurers given their admission of inadequacies in undertaking the audit role. It should not be ratepayers who are lumbered with the whole bill for the council’s incompetence and mismanagement of the contracts involved in constructing the waste-water scheme. The scheme started out as a public-private partnership initially a build-own-operate-transferwhich morphed into a design-build-finance-operate model—a very different type of contracting arrangement with quite substantial increased risks to council.A public-private partnership is about shared responsibility. It is not about the public in the form of the Kaipara community and ratepayers picking up the tab for everything that went wrong with the scheme and then having private sector engineering consulting construction companies law firms and the banks all just collecting their fees their interest on the loans the profits and then just wandering off into the sunset. The private companies involved to preserve their reputation must step up and must bear some of the responsibility and contribute to the burden of reducing the cost of the blowout. Otherwise the public cannot have any confidence in public-private partnerships being used to construct major new infrastructure such as waste-water schemes and public transport in the form of light rail if citizens and ratepayers are going to be left to carry the can and private companies and the banks can simply profit by taking their fees.The Auditor-General has been very frank in investigating and outlining the shortcomings of Audit New Zealand and certainly Mr Sabin in his public statements has focused on Audit New Zealand contributing to reducing the burden on ratepayers and the need for a financial settlement. But the net must be cast much wider and the commissioners must look at the professional and contractual responsibilities of all of those involved in the eco-care scheme. It is not fair to put it just on Audit New Zealand because it has owned up. The net has got to go a lot wider. We think that some of the work that the Auditor-General has done in reconstituting the records of the Kaipara District Council and actually finding out what did happen may help in pursuing that legal action because it is fundamentally unfair if it rests just on ratepayers.I would like to finish by just commenting briefly on Supplementary Order Paper 406 in Andrew Williams’ name. Like Labour we considered very carefully the issues involved in this we met with Dr Palmer legal counsel for the Mangawhai Residents and Ratepayers Association and we looked at and recognised the important constitutional principles about Parliament not overriding existing court action—in this case the Mangawhai residents’ and ratepayers’ judicial review proceedings in the High Court. This bill does not explicitly prevent that legal case from proceeding but in validating the mistakes in the rating resolutions it will of course remove some of the legal grounds for the association’s actions.But we will not be voting for the Supplementary Order Paper because we believe that Parliament is sovereign and although Mangawhai residents have been unjustly treated by council supporting the Supplementary Order Paper would do a greater injustice to the wider Kaipara community. The bigger Kaipara community needs financial stability. It needs the council to have a clear plan for the future. That means the council must have the certainty that it can levy rates and collect rates to fund council services from roading to stormwater to waste collection and libraries. We do not see any benefit in the council—MAGGIE BARRY (National—North Shore): I would like to echo the sentiments that have been expressed by others today but I am not going to go over the history and track that through. I think that this weight of material here which in fact weighs more than my son did when he was born—and it is just a small proportion of the material that we have on the Kaipara debacle—really is living weighty proof of the extent of the engagement and intellectual rigour that the Local Government and Environment Committee and the people who have submitted the ratepayers and everyone else have put into this woeful saga.Lyn Provost the Auditor-General spoke today at the Finance and Expenditure Committee. I questioned her closely—not about the red herrings that preoccupiedWinston Peters; those are distractions. The essence of what went wrong at Kaipara has been acknowledged in the report of 400-odd pages from the Auditor-General. Blame does need to be sheeted home. I think that the Auditor-General did front up yesterday to people in Mangawhai andMaungatūroto and spoke to them about the problems. She acknowledged the responsibility of the Auditor-General’s office up to a point and there is certainly more to be said around some of the issues and the motivations of the individuals who were involved in the Kaipara District Council.But as others have said before me the point of this legislation the Kaipara District Council (Validation of Rates and Other Matters) Bill—even though we are all vastly uncomfortable with validating rates in this way—is that it must protect the people of the district who are paying these rates. There is no end in sight. It will be a very difficult situation unless this piece of legislation goes through.I will certainly not be supporting the Supplementary Order Paper 406 in the name of Winston Peters. I think it is just a piece of mischief-making and political machination—typical of that member—and it is coming in at the eleventh hour as well. As Nicky Wagner did point out it was unanimous up until one point.But one thing I would just say is that I echo absolutely what the Auditor-General’s office has said. There is a lot to be answered for but I commend what the member Mike Sabin has done here. This is an issue that has also touched me on the North Shore very much and many of my constituents have been touched by it. It is a very difficult situation. This is the best possible alternative and that is why we must carry this out tonight and pass it. I will not delay the Committee any further but I do urge us all to concentrate and focus on what is necessary tonight.Hon MARYAN STREET (Labour): The only thing that is good about passing this legislation the Kaipara District Council (Validation of Rates and Other Matters) Bill this evening is that it might bring at least part of this episode in the life of Kaipara District to some kind of closure.I want to refer in the first instance to the report of the Auditor-General Lyn Provost. I must say with the reports being tabled only yesterday I have not read the 450-page one but I have read the shorter version. I want to refer to it in some detail because it seems to me that in the course of traversing the history of what the Auditor-General herself has called a woeful saga—and that term is one that members have picked up on this evening—she has done a very good job in highlighting many of the shortcomings.Before I get on to quoting her summary report I must say that if ever there was an advertisement for amalgamating small local authorities then this is it. I look forward to Northland uniting its five local authorities and territorial authorities in due course in accordance with the recommendation of the Local Government Commission recently. There are questions of capability of competence and of capacity. Sometimes there were not enough people across this issue sometimes there were the wrong people across the issue and sometimes there were people across the issue who were not competent to deal with it. It is patently obvious from the observations of one who sat on the Local Government and Environment Committee and who listened to the submissions not just to the Auditor-General’s report that there are plenty of people to whom blame should be apportioned. We are not in want of those.But I just want to highlight some of the things from the Auditor-General’s overview report because I think they do go to the heart of the matter. She says that the Kaipara District Council had poor governance poor management and poor records. Her staff were not able to establish exactly what happened at certain points in the development of this waste-water scheme because the records were inadequate who made the decisions was not clearly spelt out and who was responsible for enacting decisions was not clearly spelt out either.She went on to say that the Kaipara District Council was “out of its depth”—to use her words—with thepublic-private partnership decision. She goes on to say that the district council followed all the right basic steps when it initially engaged with the scheme but as it became more complicated it became very clear that catering for risk and accounting for risk were not dealt with in a way that was either competent or careful.She also said that there were poor contracting practices that went on that the district council negotiated directly with one of the tenderers and that the approach to the funding of the project was inadequate. The contract was signed in 2005 without the scheme being completed by having an identified disposal site for the effluent. She said that all of this was “unwise”.She also said that although again there was consultation that went on in the early stages with the communities in the district council’s jurisdiction this fell to bits in the later stages of the scheme.But the thing I want to focus on most from the Auditor-General’s overview is the very robust way in which she dealt with the criticisms of staff in her own office. Right from the outset when we were hearing submissions on this bill we heard from people—and Mike Sabin mentioned this in his introductory speech on this bill—that there were inadequacies in the Audit Office’s work. She does not shy away from that.She made the point that although some people suggested that it was inappropriate for her to review the work of her own business unit she disagreed. It is absolutely appropriate for heads of organisations to do that critical analysis when it is necessary internally inside their organisation. She did commission an independent person to carry out the review and provide a report and the process surrounding her own examination of part of her business unit was totally transparent.She said that yes there were some problems with the way that some of the audit work of the Kaipara District Council was carried out. The audit quality varied over a long period of time she said although there was notable improvement in later years. The review done by the expert independent reviewer criticised the quality of documentation in some audit files particularly documentation that should explain why particular audit judgments were reached.She goes on to say that between 2006 and 2009 the auditor did not reassess the status of the waste-water project despite it changing quite substantially during that period of time. She admits being deeply disappointed by the findings of the reviewer. But at least she says the general systems and the methodology of the Auditor-General’s office were not in question. Although there was some question about the quality of work performed neither the methodology nor the process within the Auditor-General’s office was found to be at fault. This has got to be one of those moments when a chief executive says: “Well what can we do better? What do we need to do to ensure that the quality of work is up to standard?”.This bill will not please anybody. Any other outcome would not have pleased everybody either. Whichever way the select committee came down there would have been somebody in the Kaipara District who was not happy with the outcome.The chairperson of the select committee Nicky Wagner has done an extremely good thing not only in the way she ran the select committee but also in the fact that she made the committee become very activist in trying to arrive at a solution. I commend her for that. This bill is not the sort of thing that we like to see in this House but it has to pass.Dr JIAN YANG (National): I moveThat the question be now put.HONE HARAWIRA (Leader—Mana): I would actually like to start with a little bit of a history lesson here. The Native Land Purchase and Acquisition Act is an Act that was passed in 1893. It was called “An Act to authorise the Acquisition of Landowned by Natives for the purpose of Land-settlement.” On 6 October 1893 “whereas at least seven million acres of land principally situated”—I am not going to read the whole Act of course—“in the North Island of the colony owned by Natives are lying waste and unproductive and in the interests of the Natives and of Her Majesty’s other subjects in the colony and more especially for the extension of settlement it is necessary that such land should be made available for disposal under the land laws of the colony: And whereas the existing law for extinguishing by purchase the Native title over a large proportion of such land fails to afford adequate means for supplying the rapidly increasing demand for land for settlement purposes and great injury is thereby occasioned and the progress of colonisation is retarded and it is therefore necessary to provide further and other means by which lands owned by Natives may be acquired for the purpose of disposal under the land laws of the colony:”. Then it goes on over pages and pages in a legal language that I would struggle to cope with today. I doubt that any of mytūpunawould have understood it back in 1893. This Act later became known as the Validation of Invalid Land Sales Act.I refer to that because it seems that what we are doing here is the same sort of thing. This bill is called the Kaipara District Council (Validation of Rates and Other Matters) Bill but in fact it is the “Kaipara District Council (Validation of Crooked Activities by the Council its Senior Officers and Other Independent Contractors and Consultants) Bill”. This bill is not just about validating rates; this is about far more than that. I think that we need to see it in that light. This issue has been the subject of much concern and comment from across Kaipara and indeed Northland. And here we are looking to retrospectively address the significant failures of the council to follow proper process and meet the requirements of the Local Government Act.Since 2006 the council has continually and consistently breached the Local Government Act and the Local Government (Rating) Act in a whole range of areas such as the setting of rates in a series of failures to comply with various provisions of the Local Government Act. If you do not mind I would like to read some of these because they are ongoing. The council in relation to the water supply rate forMaungatūroto Station Village did not comply with section 19 of the Local Government (Rating) Act of 2002. In relation to the waste-water disposal rate the council did not comply with section 18 of the Local Government (Rating) Act of 2002. These two I have just mentioned came from the 2006-07 financial year.It goes on to point out the failure to comply with section 23 of the Local Government (Rating) Act also in that year of 2006-07. It then points out again that in the 2007-08 financial year the council did not comply with further sections of the Local Government (Rating) Act. It did not comply with sections 18 and 23 of the Local Government (Rating) Act. It failed to comply with section 45 of the Local Government (Rating) Act. If you do not mind me pointing this out I then turn to 2008-09. We see that again the council failed to comply with section 19—I can shorten this—with sections 18 and 23 with section 17 and again with section 23.I am pointing this out because these are ongoing failures. They are ongoing not just up until this became an issue. It continued in the 2009-10 financial year. The council did not comply with sections 19 18 and 23 etc. It simply continues into the 2010-11 financial year. The council failed to comply—[Bell rung] Mr Chairman I have got quite a bit that I would like to get on the record here and this is the only time that I have spoken on this. If you do not mind I would like to continue to debate this please.The CHAIRPERSON (H V Ross Robertson): I call the honourable member Hone Harawira.HONE HARAWIRA: Thank you very much. I point this out because this failure to comply continued on in the 2009-10 the 2010-11 the 2011-12 and the 2012-13financial years. This is not what you would call just a one-off case of somebody making a mistake. This bill covers years of criminally poor governance a massive debt blowout allegations of fraud and a very public and acrimonious rates strike. This bill seeks to validate a series of what are clearly unlawful actions. I say “unlawful” because if they were wrong in the first year you can excuse it. In the second year they get a smack on the hand. In the third year you have to say that something is wrong. In the fourth year you have to say: “You are going to jail mate.” and in the fifth year the sixth year and seventh year this continues. The bill seeks to validate a series of what are clearly unlawful actions by the council in setting rates to legalise illegal rates demands and to end the rates strike. Rates strikers rightly oppose this bill because once their strike ends they will no longer have the leverage to negotiate a solution that they deem to be fair.There are outstanding issues about the role of Audit New Zealand in failing to identify financial issues. There is a case to be considered against the bank for failing to do due diligence in its lending to the council. The case was made to the Government to provide assistance to Kaipara ratepayers to pay back their debt but that was rejected because the Government did not want to set a precedent for other local authorities. The commissioners tell us that not supporting the bill would significantly increase the cost to the Kaipara community because the council’s deficit would increase and services would be cut if the council did not get its hands on the withheld rates. It rankles that the burden of debt repayment will fall on the Kaipara community which was not responsible for incurring the debt but the bill seems the only way forward.People councillors senior managers advisers and independent consultants and contractors seem to have all acted in an appalling manner. There would seem to be in my view a clear case of continual and consistent fraud in respect of the multiple and ongoing breaches of local government legislation. The bill supposedly does not validate the overspend associated with the Mangawhai sewage treatment plant but I wonder whether this bill is in fact the first step to another bill coming before the House for exactly such a bailout.I am told that this is the best solution in a difficult and challenging situation but I challenge that. I challenge that on the grounds that the iwi have not been consulted on this. I spoke to the chairman of TeRōroa who are the local iwi in and around Dargaville who was most upset that this bill had actually got to the House. The iwi sit on the mana whenua committee of the Kaipara District Council and have not been engaged in this process at all. I would like to also point out the fact that although TeRūnanga oNgātiWhātua seem to have given their support for this bill there is another member of the mana whenua committee who has also been ignored.Accordingly I think we should not be just passing this bill without taking some serious action against some of these senior leaders. I know for example Donna Awatere who was a member of this House ended up in jail over a bill of about $200000. I know that Doug Graham who was a member of this House got off a case for about $170 million. I know that here we have got a council all of whose councillors are looking to not go to jail over this and this is going to be a $50 million to $60 million blowout. I think that at some point—and I understand there is another bill coming up the Tasman validation bill—sooner or later this House has to say: “If you continue to do this sort of activity you’re going to end up going to jail.” because unless this House sends that kind of a signal then I think we are going to find ourselves in dire straits as we continue to move forward on these issues. These bills are coming thick and fast and yet nobody is being made to pay. I think it is entirely within the rights and expectations of all of the members of this House—TIM MACINDOE (Junior Whip—National): I moveThat the question be now put.The CHAIRPERSON (H V Ross Robertson): The question is that the question be now put. As many—Andrew Williams: I raise a point of order Mr Chairperson. I have Supplementary Order Paper 406 on the Table here and I have had not had an opportunity to speak to it as yet. I think it is important that I have an opportunity to speak to it.The CHAIRPERSON (H V Ross Robertson): Well I can only say to the member that we have had about 17 calls and everyone has been given a fair go. The situation is now that the question has been put. All business is deferred until the question is determined.Hone Harawira: I raise a point of order Mr Chairperson. The gentleman was on his feet and calling for a point of order before you made your ruling. He called on numerous occasions—The CHAIRPERSON (H V Ross Robertson): No no. The member will be seated. Not true. I want to refer the member to Speaker’s ruling 10/4. Whenever a question is being put—and that was being done to the Committee—the interpretation of business is deferred until the question is determined. Now I will put the vote. The question is all those in favour please say Aye—Hone Harawira: I raise a point of order Mr Chairperson. Is it not parliamentary procedure that a Supplementary Order Paper on a bill should be heard? That Supplementary Order Paper was tabled in accordance with parliamentary procedure. Mr Andrew Williams is here and as the author of that Supplementary Order Paper he was willing to stand up and speak to it as part of the debate on this piece of legislation. He may not have been successful with that Supplementary Order Paper but surely he had the right to have that Supplementary Order Paper properly heard. I again make the point apart from that that he was actually on his feet and calling for a point of order to have that Supplementary Order Paper heard before you ruled that the Committee would vote on this piece of legislation. So I think that for those reasons the Supplementary Order Paper should in all fairness be heard.The CHAIRPERSON (H V Ross Robertson): All I can say is that a point of order cannot be raised until I have actually taken the closure motion because no member would know whether I was going to accept it or not. I have already put the question. All those in favour please say Aye to the contrary No. The Ayes have it.Andrew Williams: I raise a point of order Mr Chairperson. I actually was standing to take the call and I got to my feet before the honourable Tim Macindoe. I was actually on my feet. Your view might have been obscured by the honourable Hone Harawira in front of me but I had stood to speak to my Supplementary Order Paper and I was advised earlier—and we checked with the Clerk—that I would have an opportunity to speak to my Supplementary Order Paper. I am—The CHAIRPERSON (H V Ross Robertson): The member is just relitigating the issue. I have made a ruling and it stands.Barbara Stewart: I raise a point of order Mr Chairperson. New Zealand First called for a party vote. Obviously you cannot hear us down there.A party vote was called for on the questionThat the question be now put.Ayes112New Zealand National 59; New Zealand Labour 33; Green Party 14; Māori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan.Noes8New Zealand First 7; Mana 1.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 406 in the name of Andrew Williams to Part 2 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes8New Zealand First 7; United Future 1.Noes112New Zealand National 59; New Zealand Labour 33; Green Party 14; Māori Party 3; ACT New Zealand 1; Mana 1; Independent: Horan.Amendment not agreed to.A party vote was called for on the questionThat Parts 1 and 2 the preamble and clauses 1 and 2 be agreed to.Ayes112New Zealand National 59; New Zealand Labour 33; Green Party 14; Māori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan.Noes8New Zealand First 7; Mana 1.Preamble Parts 1 and 2 and clauses 1 and 2 agreed to.Bill reported without amendment.Report adopted.Third ReadingMIKE SABIN (National—Northland): I moveThat the Kaipara District Council (Validation of Rates and Other Matters) Bill be now read a third time.Bill read a third time.