South Taranaki District Council (Cold Creek Rural Water Supply) Bill — First Reading 
Text is incorporated into the Bound Volume 
South Taranaki District Council (Cold Creek Rural Water Supply) Bill — First Reading 
[Sitting date: 21 March 2012. Volume:678;Page:1182. Text is incorporated into the Bound Volume.] 
South Taranaki District Council (Cold Creek Rural Water Supply) Bill 
First Reading 
Hon CHESTER BORROWS (National—Whanganui) 
: 
 I move  
That the South Taranaki District Council (Cold Creek Rural Water Supply) Bill be now read a first time. 
 This scheme and this bill are about farmers and local residents doing for themselves drawing on New Zealand’s penchant for being self-sufficient and using what is available to them to make life better for them. 
Andrew Little 
: What about the taxpayer contribution? 
Hon CHESTER BORROWS 
: Well I am glad the member asked “What about the taxpayer?” because this scheme was built from local farmers recognising a need to up their productivity and also maintain water quality for their standards and for their residents. Back in the day there was a scheme where they could obtain a subsidy dollar for dollar. For every dollar they put in the taxpayer subsidised them so that they could build a water race scheme built on Cold Creek which runs off the side of Taranaki so that they could provide consistent high-quality clean fresh water for their stock for their farming practices and for their residences. There are about 350 households marae and entities that are drawing water from this scheme. 
What they had to do in those days was be able to guarantee that they could raise production by 10 percent so the farmers also had to put up the money themselves. All the householders were putting into it but it was the farmers mainly who were putting into it because they had the businesses that were going to support the scheme and they were going to gain the productivity bonuses from it. They had to put the money in up front. Remember this was a period of time when interest rates were incredibly high approaching 20 percent and penalty payments were over that. So young farmers who were purchasing farms buying herds etc. and who were contributing to this scheme were having to find money and a lot of money at a time when it was particularly difficult. A young farming partnership at that time that I am aware of the Ardern brothers who were farming in this location as part of this scheme had to find $13000 out of their new farming enterprise in order to be able to commit to this scheme and to be able to get the Government subsidy. So when Mr Little asks “What about the taxpayer?” I can tell him that the taxpayer contributed then but the productivity that has been gained since that time has been approaching probably 60 or 70 percent in terms of coming out of that particular area. 
Hon Trevor Mallard 
: They’re all paying their tax are they? 
Hon CHESTER BORROWS 
: And they are all paying their tax—that is right—especially in a good year. In a good year they pay more tax than probably anybody sitting in this room. In any event the reason for this bill then is that in order to obtain the subsidy the group wanting to build the water scheme had to vest legal title of that subsidy in an entity. A couple of members of the scheme were at that time serving as members of the Egmont County Council so the ownership of the scheme was vested in the county council. Later on with subsequent amalgamations of territorial local authorities the ownership went on to the South Taranaki District Council. Then moving on down the track the farmer owners of the scheme sought to run the scheme themselves in order to be able to administer maintain and keep the scheme. They do all the billing they do all the maintenance and they pay for everything. They have also been to the council on a number of occasions and four times over the last 12 years the South Taranaki District Council has voted to vest ownership back in the owners of this scheme—back into the farmer owners and the household owners who are running and maintaining this scheme. It has agreed to do that. It has voted to do that four times. Eventually we find ourselves here today. 
The question may well be asked as to why then we need to do this. The reason is that the legislation that was passed in the early 2000s meant that if there were more than about 250 consumers on a potable water scheme it had to be in community ownership. It could not be just simply divested from the council to those who were running owning and managing the scheme today—hence the need for a local bill because as I said earlier there are about 350 households that are connected to the scheme. 
There is another way round that and I understand that there are a number of questions that various parties may have. Support from across the House—which I am grateful for—is for the first reading only but there are ways round that. For instance if the scheme was deemed to be non-potable then there could be a filter at every house. In that way it could be divested in any event. There have been some concerns from the Inland Revenue Department and from the Ministry of Health. They will be addressed and answered through the select committee process I am quite sure. 
There are also concerns from local iwi. The reason why local iwi are upset about the process is that during the decisions to vest this back in the residents in the area the iwi had not been consulted as well as they should have been by the South Taranaki District Council. The farmer owners have sought to rectify that. Just last week we had a discussion with them albeit through the process there had been some public reporting of it and the two marae that are on the scheme had also been approached. However there was an expectation—maybe it was somewhat naive—that the marae themselves would keep their iwi informed as to what was happening in respect of the water scheme and we found fairly late in the day that that had not taken place. 
It is important to note too that this is a bill that is about concrete and pipes. It is not a bill about water and it is not a bill about the mauri of the stream; this is about concrete and pipes. The water race scheme would continue to get its consents through the Taranaki Regional Council and I understand that iwi have an argument about whether that should be the case or whether they should be the kaitiaki of water in their area. The proponents of the bill would argue that that is not an argument for them but is an argument to be had at a higher level. 
There is another argument that has been voiced about the nature of the asset. In other words if this is a State asset—Taranaki being a rohe where there are no other real State assets that are owned and so nothing that is available for the yet to be negotiated Treaty settlement—then iwi obviously have an interest in the Cold Creek scheme. The point that the residents would make is to ask what actually is the value of what the council has at the moment because it is the operators the owners and the consumers on the scheme who are doing all the work and paying all the bills and the council’s quantifiable dollar interest is negligible. So there is an argument around that. 
In the end though I think another point to make is that this is community ownership at its lowest level. Whereas the thrust behind the Act that prevents vesting of a water scheme a potable scheme that would vest ownership in the owners negates that being able to be done because there are too many consumers on the scheme—so a scheme of that size should be in community ownership—the proponents of this bill would say that this is about as low a community ownership as you could possibly have. That is because those who are relying on the scheme those who are consuming from the scheme those who are running businesses from the scheme and those who built the scheme maintain the scheme and paid for the scheme are in fact the local owners. So there should be no real argument about the community aspect of it or community ownership because it will be owned by the community in the community that it serves. 
There is one other issue that has been raised and that is making water available to the township of Opunake which is in a slightly different catchment. In emergency situations pipes have been run from the tail of the scheme across to Opunake to provide clean water which it normally gets off the mountain but which after a heavy rain is unable to be done. That facility is still open and the owners of the scheme are quite happy for that to continue. 
I do commend this bill to the House. I am grateful for the indications of support that it has had from across the House at least for the first reading and I look forward to the select committee process through the Local Government and Environment Committee. Thank you. 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 Labour will be supporting this South Taranaki District Council (Cold Creek Rural Water Supply) Bill’s referral to the Local Government and Environment Committee and we support its first reading. But we do need to tell the local member Chester Borrows who is bringing this bill that we have some serious concerns with the bill not the least of which is that this bill overrides the Local Government Act 2002 when it comes to the ownership of water supply and the provision of water in New Zealand. We will be wanting to ask questions at the select committee as to why we should do that because on this side of the House we strongly support public ownership of water for New Zealanders. The most crucial element you can have in your diet is the water that you drink every day and it must be available affordable good-quality water. So we will be asking why we should allow the Local Government Act to be overridden by a local bill. 
The Local Government Act that we passed when we were in Government states in section 130(3)(b) that a local government organisation must “not divest its ownership or other interest in a water service except to another local government organisation:”. Furthermore section 130(3)(c) states that a local government organisation must “not lose control of sell or otherwise dispose of the significant infrastructure necessary for providing water services in its … district”. It does provide an out in that legislation. It is to do with the closure of a particular water service or transfer and it relates to the size of that water service. It has to be one that is delivered to fewer than 200 persons—persons who are ordinarily resident in the district. This bill covers many more people than 200 people; in fact it has 162 connections with 400 people across the area that it covers. So we will certainly be asking questions as to why this Parliament should override that very good provision to ensure public ownership of water supply. 
People need to know if they are listening to this debate what this bill actually does. I do not know whether they got the sense of that from the member who put a lot of the background into it but what it actually does is it gives a process—a process—for the transfer of the Cold Creek rural water supply scheme from the South Taranaki District Council over to the Cold Creek Community Water Supply Ltd the company that has been contracted by the council for some time to actually run this water scheme. So it provides the mechanism; it does not provide the transfer. 
There are a number of issues if the water supply was to be transferred that we would also raise. One of them would be this. From what I can see this water supply is going to require quite a lot of upgrading in the future and we will want to know whether the owners of this new water supply the new company that takes over will be coming cap in hand to the Government for there to be additional Government money to go into the maintenance of this small water supply. You see we have had experience of this in the past when under the previous National Government small hospitals were handed over to community trusts. 
Hon Parekura Horomia 
: That’s right. 
Hon ANNETTE KING 
: I am sure that the member my friend and colleague Parekura Horomia knows this very clearly because Te Puia Springs hospital was one of those that was handed over to the community trust out of public ownership. When it came to maintenance on that hospital there was no money to be had. So it is all very well transferring over but what about the maintenance what about the upgrading? And I gather from what I have read that there is going to be a lot of upgrading necessary in the future for this small water supply. I do not want to see if this goes through that we then have the farmers coming back to this House asking for taxpayers’ and ratepayers’ money for that upgrading and maintenance. 
A question we will want answered is about the fact that the farmers have had water at a very low rate under this scheme. I read from the South Taranaki District Council that the cost of the water will have to go up and so I do not wish to see that there is going to be a demand made on this Parliament taxpayers and ratepayers for there to be some sort of subsidy to go in if they take over the ownership of it. You see under the local government reforms that were announced 2 days ago some of those who were very excited about the reforms were Federated Farmers because they said they wanted to curb local government activities. Well we will want to be assured that when—and if—this water supply is transferred over local government is not then going to be asked by Federated Farmers to put its hands in its pocket to support them because that would be hypocritical of Federated Farmers having said they would like to see fewer local government rates going into unnecessary activities. 
We would also want to know what pressure has been put on the South Taranaki District Council for this water supply to be transferred over to a company. Now I am not making any accusations but the chairperson of this company is Mr Ardern’s brother. Mr Ardern no doubt has a great interest in what happens and I understand he has advocated for the water supply to be transferred over to the company that his brother is the chairperson of. I will be questioning at the select committee what pressure has been applied not just as good local members of Parliament but as interested farmers interested family members on the local council to transfer this company over. I think they are legitimate questions because this is an important transfer—going back to the idea that we do have public ownership of water supply. 
I am also concerned about Opunake. We just heard from Chester Borrows who has brought this bill to the House that the new owners of this company would be quite happy to keep the emergency arrangements that are in place; those arrangements being that the people of Opunake can take water from this water supply when they run short. But there is a problem that I have read of and that is it is all very well when they are short in the winter but when the farmers are milking and they need a lot of water themselves the people of Opunake have been given bottles of water. I do not see that as being a good and constant water supply and I understand that the South Taranaki District Council was very keen to try to link the two water supplies up to give a very solid water supply to the people of Opunake. 
Shane Ardern 
: You were OK up to there. 
Hon ANNETTE KING 
: I might have it wrong Mr Ardern but I would want to be assured at the select committee about what is going to happen to those people. It is not good enough just to get some bottled water in an emergency because the farmers need most of it. 
I am sure my other colleagues will raise quite a number of other issues relating to this bill but we will support its referral to the select committee. A local member’s job is to bring such a bill. It does not necessarily mean that the local member supports all parts of the bill and I am sure knowing Chester Borrows as I do that he will be concerned for all his constituents not just a few who might be advantaged by a scheme like this. He will want to be assured that it is for the best benefit of the ratepayers and the taxpayers in his constituency. But he is bringing it here as a local member. That is his job and we will make sure it gets the scrutiny it deserves at the select committee. 
CHRIS AUCHINVOLE (National) 
: 
 It is with pleasure that I stand to speak on the South Taranaki District Council (Cold Creek Rural Water Supply) Bill and I reflect back having listened to the previous speaker the Hon Annette King on the serious concerns that she has expressed. I am quite sure from speaking to my colleagues about this bill and I am quite sure from my previous experience with the Local Government and Environment Committee that those concerns—probably very correctly raised—will be answered during the select committee deliberation which is why I am very pleased to think that there could be universal agreement to refer this bill to a select committee. 
 I may say that I appreciate the business of water supply in private from my experience especially with dealing with other members of the Opposition. There is almost a paranoia at times—not in this case but at times there is almost a paranoia from my friend over there over who should own water. I note one of the significant things about this particular proposal—and let us just look at the background to it. I have come into it without having been part of any previous discussion and I can sense that it is pretty much straight up and down. It is a real Taranaki job. 
Hon Chester Borrows 
: That’s right. 
CHRIS AUCHINVOLE 
: That’s right. I am told I am right and it is reassuring to hear that from the member. 
It is not a significant economic asset. It is not like the discussions we had over the Auckland water supply. The farmers who use it and who will be the shareholders are the only ones who benefit from the scheme; they are the only ones who are at any risk from the scheme not quite working out. It is about pipes and concrete—pipes and concrete I say to Andrew Little—not about the water. The bill enables ownership of an asset built by the local committee. And let us remember when this was done. This was done between 1984 and 1987. It was a good classic instance of a community putting shoulders to the wheel noses to the grindstone getting on— 
Andrew Little 
: Using taxpayers’ money. 
CHRIS AUCHINVOLE 
: No they did not actually use taxpayers’ money. Read your notes about it. It was a group of farmers and residents living near Opunake—sorry taxpayer possibly yes—and they built a water-race scheme in the Cold Creek catchment to supply the farms and the homes with water. 
Four times the South Taranaki District Council which really does know what it is talking about has voted to vest the scheme back to the Cold Creek Community Water Supply Ltd—four times. Each time it has come across the problem associated with the Local Government Act 2002. The scheme was as Andrew Little has correctly said financed by a Government subsidy dollar for dollar contributions— 
Grant Robertson 
: Oh there we go! 
CHRIS AUCHINVOLE 
: That is right. So we are saying that under a Labour Government the contributions were made dollar for dollar. It was not free. At the time the Government insisted that legal title of the scheme be vested in a local entity. So it was; it was vested in the Egmont Plains Community Board. With local authority amalgamations in 1989 the South Taranaki District Council became the title-holders. The question would be: have the ratepayers contributed to the cost of this operation? Have they? They have not. They have never paid towards the purchase the maintenance or otherwise of the scheme or any other part. It is totally operated by the residents and the beneficiaries of the scheme. Therefore they want ownership vested in them under the Cold Creek Community Water Supply company. That is perfectly reasonable. The company has managed the scheme including finances operations and maintenance of the water reticulation work since 2001. 
To reassure the previous speaker the cost of the water the price of the water is not perceived as a problem. The company has large financial reserves. It is not afraid of maintaining the costs itself. But I appreciate the points that have been raised and I have every confidence—every confidence—that every question will be answered to the satisfaction and reassurance of the Opposition. Thank you. 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 It is reassuring to hear that from Chris Auchinvole the chair of the Local Government and Environment Committee— 
Chris Auchinvole 
: Previous chair. 
GRANT ROBERTSON 
: The previous chair sorry. As the Hon Annette King suggested although Labour is supporting this bill’s referral to the select committee we do have a number of concerns that we think the committee needs to work its way through. I can see Mr Ardern nodding there. 
It has not been an easy process reaching this point. I think that makes it all the more important that the select committee deal with this thoroughly. It is a convention in this House that local bills will be referred to a select committee. The member who brings the bill here is bringing it on behalf of the local community. As previous speakers have said a member in charge of a local bill does not necessarily agree with every element of the bill. His or her job is to bring that bill here; I believe our job in Parliament is to take that bill to a select committee. But in doing so we have to recognise that sometimes local authorities do not always agree unanimously on things. 
I know that on one of the four occasions on which this matter was before the South Taranaki District Council in 2010 the vote was 6 to 4 for the bill to be a local bill. But it also recognises a division within the council. It recognises that there were concerns in the local community about these matters. Therefore we do need to concentrate very very closely on what those concerns were. This is not an open-and-shut case of something that everybody in the community wants to have happen and wants to have happen right away so we should just put it through. This is actually a matter of some considerable debate within the community and it does need to have significant scrutiny. 
It has been mentioned by Chester Borrows at the start that the Inland Revenue Department and the Ministry of Health have issues. The issues around the Opunake water supply are very important both as a question of public health and as a question around the ownership of these assets. This does look a little bit like an asset sale bill in some ways and that raises great big red flags on this side of the House. If there are going to be— 
Hon Tau Henare 
: Red flag! Red flag! 
GRANT ROBERTSON 
: We could have a blue flag if you want Mr Henare. Whatever flag you have it will be raised in response to what looks like the divestment of an asset—that is a fancy word for the sale of an asset—or getting rid of— 
Shane Ardern 
: There is no sale. 
GRANT ROBERTSON 
: There is no sale; that is true. It relates to getting rid of the asset from the council to a private company that was set up to do only this to actually take control of this particular asset. So we do have concerns about that. 
The Hon Annette King has outlined in some detail the importance of looking closely at the overriding of the Local Government Act 2002. We think that is a serious issue. Public ownership of water is vital. Water is a commodity that everybody needs in our communities and any sense of it moving into private hands is something we regard as needing to be looked at very very closely and in fact goes against the principles that we have. 
But I do want to raise some questions about just exactly how the last decision of the South Taranaki District Council was made to take this matter to be a local bill. It came about at a meeting of the South Taranaki District Council on 15 August 2011. At that meeting in the open forum section Mr Borrows and Shane Ardern attended that meeting and spoke strongly in support of this process. I am somewhat alarmed—and I have great respect for Mr Ardern—by the minutes of that meeting which say under a comment that Mr Shane Ardern made that: “If Cold Creek community failed in their divestment request then there would be some legislative programme through Parliament that would bring about the kind of ownership it desired.” 
That is not the kind of statement I think we would like to see in this situation. Mr Ardern has not taken a call and I suspect he possibly will not because of the relationship he has with his brother. But I think that that kind of statement could be interpreted by people who have an interest in this as saying: “Well we’re just going to do this. It’s just going to happen so you better agree to a local bill.” 
That is the reason why we think this bill needs thorough scrutiny by the select committee—to be absolutely sure that this is something that is in the best interest of the local community and that it has not just come here because of pressure being applied by people in this process. We want a thorough examination of this bill. We have significant concerns about it around health issues around the ownership of water and around the decision as to how this bill came to be here. Our continued support for the bill is not guaranteed beyond the select committee until we go through that process. 
HOLLY WALKER (Green) 
: 
 I am pleased to take a call on the South Taranaki District Council (Cold Creek Rural Water Supply) Bill on behalf of my colleague Eugenie Sage who is the Green Party spokesperson on local government and water. Like our colleagues in Labour the Green Party will be supporting this bill to go to the Local Government and Environment Committee but we do have serious concerns as well about this bill. I want it to be clearly noted that our support at this stage is conditional on those concerns being addressed at the select committee. I do want to thank Chester Borrows for the additional information he has provided about our concerns so far but it is fair to say they have not been completely allayed so I will be outlining those concerns and we think they are significant. First of all though I will just outline what we understand of the bill and what it does and why we are supporting it—at least to the select committee. 
 As we have heard the bill would allow the South Taranaki District Council to transfer ownership of a small-scale water supply scheme to the rural community that uses it. This is about 400 people and approximately 160 households. We understand that the scheme was built by local farmers and residents in the 1980s and it is currently operated and maintained by those residents. It was funded by a 50 percent subsidy from the Ministry of Works and Development partly by users and partly by bridging finance and loans from the former Egmont County Council. This financial support was conditional on the scheme being vested in the local authority. So following amalgamation it is now vested in the South Taranaki District Council. We understand that it has been mooted since the late 1990s to vest the scheme in its users and that this bill finally advances that. So we are prepared to conditionally support this bill’s referral to the select committee because we do see some logic. However we do have significant areas of concern which I will now outline. 
Fundamentally and first and foremost as we have heard from some of our colleagues water is vital and public ownership of water is crucial and moves that erode that concept are very concerning. I think it is a little bit flippant of my colleague Mr Auchinvole to dismiss concerns about ownership of water as paranoia. It is actually something that is fundamental to the concerns of many people and should be taken seriously. We are also concerned that the Local Government Act 2002 explicitly prevents local councils from disposing of water infrastructure and we think that there is a good reason for that. It may be on balance that this case is a worthy exception but we think the bar should be set very high for that and we will be concerned and interested to see during the select committee deliberation that significant scrutiny is put on the exact reasons why an exception needs to be made to that important principle in this case. We do see a risk of the bill creating a precedent for other water infrastructure to be sold or transferred into private ownership and that is a significant area of concern for the Green Party. We do not want this bill to create precedent for more privatisation or vesting of water infrastructure. We are interested in the extent to which the scheme’s operation has been subsidised by general rates because we think that if this is the case it raises issues as to whether there are arguments that it should stay in public ownership. 
Finally I think it is really important that the House addresses the significant concerns about the level of consultation with tangata whenua about this bill and the preservation of mauri and the life-supporting capacity of water. We understand that the local iwi Nga Ruahine Rangi believe that consultation over a number of years from the South Taranaki District Council has been less than satisfactory and that they feel that the member Chester Borrows who is in charge of this bill brought it to their attention quite late. We think that is very concerning. We think that proper consultation with iwi is vital. We do understand that the advice of two marae who are actually on the scheme is that they agree that ownership should be vested in the company but if this is not supported by the wider iwi and if it creates a significant new grievance then the Green Party will be unable to support this bill beyond the select committee’s consideration. We hope that these tangata whenua concerns will also be explored at the select committee because if it does transpire that a significant new grievance is created we will withdraw our support for this bill at future stages. So at this stage the Green Party supports this bill’s referral to the select committee. We thank the member for his work but we want our significant concerns to be noted. 
ANDREW WILLIAMS (NZ First) 
: 
 I rise on behalf of New Zealand First to speak on the South Taranaki District Council (Cold Creek Rural Water Supply) Bill. New Zealand First is prepared to recommend that this bill goes to the Local Government and Environment Committee for further consideration but we do equally have some concerns about some aspects of this bill. Water is a basic human right and here in New Zealand it is something that we all know is abundant but on the other hand it is a precious resource and something that we must all be very mindful of taking good care of. In this respect it is very very clear that over many many years the people in this district have tried to provide for themselves with a subsidised scheme through the Government and their own means and through the former Egmont County Council to provide this reticulated water scheme to service the farming community but also something like 540 consumers as well as two marae in the area. 
However I echo the comments of some of the other members earlier in this debate. There are some concerns about perhaps some of the ways that this bill got to this House today. When I look at some of the literature that has been placed before me—which refers to such things as the battle for Cold Creek water going back several years how this has been somewhat controversial in the local community the pros and cons of leaving it with the South Taranaki District Council or moving it into the private company the Cold Creek Community Water Supply—there certainly are some issues around perhaps the methodology by which it has got to this point today. 
I am equally concerned that the minutes of the South Taranaki District Council meeting of Monday 15 August 2011 do refer to some discussions with the mayor and council there and the executive of the South Taranaki District Council which in a sense indicated that if they were not happy to go along with this and divest of this water reticulation scheme to this company then steps would be made to have it put through Parliament anyway. I equally am a little bit aghast to see comments like that in the minutes of a local authority. I was witness to bovver boy tactics myself as the mayor of the fourth-largest city in this country where similar stand-over tactics were taken to muscle us out of local government in Auckland. It is very concerning to see similar tactics in a sense being used to basically put the pressure on and say: “If you don’t comply with us the local authority then we will simply ride roughshod over you and do it anyway.” That is a worry in this country. I have witnessed it only too many times from my own local government perspective and it is a worry in this country if that is the way central government is going to work with local government. 
We have seen this week again that local government is being chopped off at the knees by the Minister of Local Government—or as of today the former Minister of Local Government. We all have concerns about the cost to local government of infrastructure for our communities for the provision of amenities and services. However I think as I said in my speech on the previous bill regarding Stewart Island central government must work with local government for the betterment of this country. I certainly do not appreciate seeing situations arising where representatives of this House could be construed as providing pressure on local government to comply or be walked over. 
So we will support this bill going through to the select committee for consideration but we will be asking some of those very same questions to ensure that this measure is in the best public interest that public funds are being well utilised in terms of how this is divested and moved across to the private company scheme and that if any public money has gone into the scheme over the years it should be repaid to the source it came from rather than this particular private company or company as it stands getting a benefit from public funds. So we will support this bill’s referral to the select committee but we do raise some alarm bells around some of the issues. 
JACQUI DEAN (National—Waitaki) 
: 
 An interesting question is raised for us and the Local Government and Environment Committee in the South Taranaki District Council (Cold Creek Rural Water Supply) Bill. It is a little unusual for a water company to use a local bill to gain ownership of a scheme. I think that there are some concerns raised around the House this afternoon which we will address very carefully in the select committee. It seems to me from hearing the debate and having looked briefly at the bill obviously we will be having a much closer look as it goes through the select committee process. I thank and acknowledge other members for supporting this bill’s referral to the select committee even though they may some misgivings. 
 I think looking at the background and history of this scheme it is like a number of rural water schemes all throughout New Zealand. This scheme was built in the mid-1980s by the farmers of the day and gosh groups of farmers have been constructing rural water schemes for over 100 years in New Zealand. So a group of farmers got together and identified a source of water. In this case they constructed a water-race which services 162 connections. So it is a relatively small rural water scheme used for stock water and for drinking purposes. Although it is true that this rural water scheme had the benefit of a dollar-for-dollar grant from the central government of the day it has effectively been owned if you like and managed by the local management committee. Now they seek to have that ownership confirmed in a company that they have formed for the management of their rural water scheme. 
In thinking about it my first thoughts on it are that it is not dissimilar to a number of irrigation companies and a number of irrigation schemes that I am surrounded by in the Waitaki electorate particularly on the Waitaki River catchment. I think there are similarities for the following reasons. We are talking about water infrastructure. The consent to take and use water is done by—is it the Taranaki district council— 
Jonathan Young 
: Regional council. 
JACQUI DEAN 
: —well regional council—and that is the same for an irrigation scheme. So we are talking about an intake system—it might be out of a riverbed; I do not know—and in this case a water-race. The connections go into stock water and go into home supply. In this case it is gravity fed I am assuming so it does not have the expense of having to pump water. 
To me there are a lot of similarities to what is quite normal practice in New Zealand with water infrastructure. We need to remind ourselves that we are talking about water infrastructure. We are talking about pipes pumps water-races and other equipment that is used to maintain and develop that system. We are not talking about water as such. So to me I think we need to be very careful that we do not allow ourselves to get sidetracked into the issue of privatisation of water which does not rightly belong in the context of the argument of this bill. 
Andrew Little 
: We need to make sure the ratepayers aren’t ripped off though. 
JACQUI DEAN 
: The member across the House mentions ratepayers and I think we also need to remember that the owners of this water scheme are also ratepayers. Instead of being rated for the maintenance of this infrastructure they will in fact pay for it by direct means because they are the beneficiaries and they are the users. So I do not actually accept the argument as advanced by the Opposition. 
The Local Government and Environment Committee will give this local bill its due consideration. I want to thank the Hon Chester Borrows for bringing this bill to the House on behalf of the South Taranaki District Council. We look forward to some good and useful debate on this issue. Thank you. 
ANDREW LITTLE (Labour) 
: 
 It is a great pleasure to stand and speak on the South Taranaki District Council (Cold Creek Rural Water Supply) Bill. You would have thought that after the last couple of days this Government would be very alert to promoting things on the basis of sleaze of dodge and of more graft because that is what sits behind this local government bill. Our position is clear: we will support this bill to go to the Local Government and Environment Committee because if there is one piece of local government legislation that needs scrutiny then this surely is it. We have to get past the purple phrases and the great story about the noble struggling farmers of the slopes of Mount Taranaki / Egmont and what they did. 
This was a scheme that was funded at least in half by the taxpayers of New Zealand. It is a community scheme and it was not all about the farmers running it because that is not correct. At the beginning of the life of the scheme the scheme was administered looked after and maintained by the local council the Egmont County Council. Then later—later—the day-to-day administration was transferred to the company that had been set up by the farmers but the council retained responsibility for the treatment plant and the headworks. This was not some noble gesture by the local farming community to take complete responsibility for the scheme. It was always a community scheme. It was 50 percent funded by the Government. 
Now what we have is the 160-odd farmers seeking to control it and to own it. And who heads that company? A chap by the name of Neville Ardern. We have heard that surname before. We have a Jacinda Ardern and we have a Shane Ardern. Guess which one Neville Ardern is related to? Let me give you a clue: it is not Jacinda. It is Shane Ardern. When the South Taranaki District Council had a meeting on this in August 2011 who turned up to speak on it? Three people did. The three musketeers Shane Ardern Chester Borrows and Neville Ardern turned up hand-in-hand hand-in-glove to prevail upon the South Taranaki District Council to hand this scheme over. 
As my colleague Grant Robertson has said and as Andrew Williams has said the representations made at that meeting do not make for very salutary reading. Now these minutes are put together and are polite and pleasant and it was not just the threat that came from Shane Ardern—according to the minutes—that if the Cold Creek community failed in their divestment request then there would be some legislative programme through Parliament that would bring about the kind of ownership they desired. There is the first threat. That was followed by “the brother”. The brother came along and he then said if the council did not proceed with the divestment then the company would take legal action which would cost a lot of money and headache for both parties. Well we are going to make a headache because we are going to quiz the proponents of this legislation. 
Then Mr Borrows the great liberal champion of the Government turned up at this meeting. He was hand-in-glove with them the black hand of the union movement. He turned up and said he noted that this was about community ownership. He said if the council could show where the money had come from other sources then they would be happy to refund the council and the ratepayers those funds. Well there has been a public contribution to this scheme and it needs to be recognised in relation to any new scheme that governs it. It will not just be the nominal value of the contribution made; it will be the real value of that scheme—the capital value—and the share of it owed to the public. 
This is an important local government bill that needs good scrutiny so the select committee will need to have a close look at the reasons for this legislation and the people who are behind it. They will need to talk to not just the Ardern brothers and Chester Borrows but the South Taranaki District Council mayor the councillors and all of them. There needs to be independent scrutiny of this proposal in this legislation and I look forward to seeing that happen. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am sure that when members or representatives of the South Taranaki District Council come to the Local Government and Environment Committee the committee will be very impressed with their acumen their understanding and their professionalism as they present this situation and this case. I do think that a number of issues need to be clarified that have been raised by the members on the other side of the House in their speeches. One of them is around this whole issue of water ownership. The South Taranaki District Council (Cold Creek Rural Water Supply) Bill is not about water ownership; we understand that it is about infrastructure about pipes about concrete and about infrastructure in the ground that takes a supply of water from Cold Creek which is given under resource consent by the Taranaki Regional Council. My understanding is that the amount of water it takes is a small percentage. So obviously huge quantities of water are available to the residents of Taranaki but there are times obviously as Chester Borrows has mentioned when Opunake does rely upon some assistance due to the silting of its water supply. 
But we must understand that back in the mid-1980s when the farming community came together to put in place a water supply system for their farming necessities those farmers paid considerable amounts of money in personal contributions. This project was instituted by them for them and they paid considerable amounts of money and probably an amount equivalent to what it would cost to buy a house in Auckland at that time. So the contribution the investment and the commitment of this community to this scheme from the very outset have been tremendously high. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
JONATHAN YOUNG 
: It is my pleasure to stand in support of this bill and no doubt hopefully tonight members of the Pihama and Te Kiri communities will be watching the progress of this bill through the House of Parliament. My own family roots go back to Pihama. My mother and her family are from there and their forebears. So I know the people of Pihama and Te Kiri very very well. They are industrious and hard-working New Zealanders who work on the farms of that particular area where irrigation is incredibly important. As we know by what the Hon Chester Borrows said in his speech back in the mid-80s there was tremendous commitment by the farming community to invest in the Cold Creek reticulation and water supply. 
It needs to be reiterated again that the farmers who contributed to that scheme raised their own personal capital to the vicinity of around about $45000 back in 1984 which we know would buy a sizable house in any part of New Zealand particularly in Auckland where we know that those properties now would most likely sell for a quarter of a million dollars plus. So it was a substantial investment that they made at that particular time. We also know that the Government subsidised dollar for dollar for that investment but it came on a condition that this project was going to enhance production for the farmers. I talked to farmers who still farm in that area today but who can remember back to that time in the mid-80s and the 1990s and they did see a significant production lift. 
The previous speaker from the other side made comments about the taxpayers and whether they were going to have their interests looked after in this divestment into the local community. But the increased production of those farms no doubt contributed hundreds of thousands of dollars worth of increased revenue to the people of New Zealand. I guess that is something that the other side do not realise—that private enterprise hard work and investment of this kind is what makes this country work. We need to recognise that. We need to recognise the contribution they have made in the ownership and management that has been invested in them already over this last decade and we need to support this bill that will recognise that. We also need to recognise that the future of this scheme is going to continue to enhance the profitability of these farming communities. It is a very important thing and I am very happy to support this bill as it goes through to the select committee consideration. Thank you. 
Hon CHESTER BORROWS (National—Whanganui) 
: 
 Thank you for the opportunity. I would like to just reiterate a number of points quite quickly that have been raised in the course of the first reading of the South Taranaki District Council (Cold Creek Rural Water Supply) Bill. The first is to make quite plainly the statement that this is about alkathene pipes and concrete. It is not about water. It is not about the mauri of the stream from which the water is taken. In the same way that the residents and shareholders of the company that administers maintains and pays for the Cold Creek scheme at the moment apply for a water right from Taranaki Regional Council they would need to continue to do that. 
I understand that the bill has to go to the select committee at least support from across the House apart from the Maori Party who will be voting against it on a basis of philosophy around the consultation in respect of South Taranaki District Council and I can respect the stance that it takes. However it is important to note that this is not about the Treaty claims process. The fact that the South Taranaki District Council now holds the legal title for this claim is really about where the scheme was vested at the time that it was constructed by the hands of the farmers with the dollar of the farmers with the dollar for dollar taxpayer subsidy scheme. In fact questions were raised by for instance the Hon Annette King in respect of further calls for maintenance money and replacement money from the taxpayer or the ratepayer. That is actually in the history of the scheme itself in that it was constructed by the farmers who were building it and who wanted it at the time. The reason of course that it was done was for productivity and the taxpayers’ contribution at the time—as previously mentioned dollar for dollar—has been paid back manyfold by that increase in productivity and the taxation that has been paid on that. 
As I also said in my initiating speech the South Taranaki District Council cannot find a single cent of ratepayer money that was paid in the construction maintenance repair or administration of this scheme. Every dollar that has been paid has come from money generated by the administration and the running of the fees and the charges charged. 
The point was made about the low cost of water per cubic metre from this scheme. It is about 35c. It is not the lowest in the South Taranaki region but it is lower than other schemes. The fact is that the South Taranaki District Council having said that that cost would have to go up was speaking in respect of costs of other schemes and the maintenance and administration of other schemes if the South Taranaki District Council maintained administration rights which of course it does not have. 
So we end up in a situation where the farmers of a particular area in South Taranaki built themselves a scheme using a Government subsidy that was constructed for the purpose funnily enough under a Labour Government. Now what they want to do is to actually own the legal title of that scheme in its entirety albeit that they do have property rights and they do hold legal ownership of part of that scheme. Because it came at considerable cost to them—it was not only with their money but also with their sweat and their energy that they constructed the scheme—they would like to have complete ownership of it. South Taranaki District Council has voted four times over the last 12 years to effect exactly that. We find ourselves now in a situation in need of a local bill because of the course of history and the introduction of the Local Government Act 2002. I look forward to the support of the House and the debate through the select committee process. Thank you. 
A party vote was called for on the question  
That the South Taranaki District Council (Cold Creek Rural Water Supply) Bill be now read a first time. 
Ayes 117 
New Zealand National 59; New Zealand Labour 34; Green Party 14; New Zealand First 8; ACT New Zealand 1; United Future 1. 
Noes 3 
Maori Party 2; Mana 1. 
Bill read a first time. 
Bill referred to the Local Government and Environment Committee.