9. Question No. 9—Local GovernmentCHRISTOPHER LUXON (National—Botany) to the Minister of Local GovernmentQuestion No. 9—Local Government9. CHRISTOPHER LUXON (National—Botany) to the Minister of Local Government: Does she stand by all of her statements and actions in relation to the Three Waters Reform Programme?Hon NANAIA MAHUTA (Minister of Local Government): Yes. In particular I stand by my statement The case for change is compelling." The member might want to take that line! The evidence is clear that all communities will benefit from the Government's proposed three waters reforms. Without this change communities are going to either face very large bills for water services or infrastructure will continue to degrade with ongoing health and environmental consequences. Both of these outcomes are unacceptable. And as I said wider benefits will also include greater borrowing capability strengthened governance capabilities procurement efficiencies operational proficiencies smarter asset management a more predictable pipeline of investment.Christopher Luxon: Can she explain how there will be any efficiency or scale benefits in merging water assets on either side of the Cook Strait other than creating a larger more bureaucratic organisation?Hon NANAIA MAHUTA: As I say the benefit of scale is not determined by whether or not the water entity coverage or network is split between two islands. The modelling has been based on catchment population council boundaries communities of interest and iwi. There are benefits in scale efficiencies. The modelling shows that.Christopher Luxon: What is her response to Waimate Mayor Craig Rowley who called the three waters ad campaign "appalling sensationalising and showing a lack of respect and understanding from central government"?Hon NANAIA MAHUTA: I understand that councils may have their own views about the communications campaign. The audience is very clear: we need to demonstrate to ratepayers that the benefit of reform will extend to their household bill and it does. The counterfactual is that the status quo situation of 67 territorial authorities delivering water that is inefficient where we have pipes breaking down we have intermittent water-boiling notices in various communities cannot continue. That's why we're pursuing these reforms.Christopher Luxon: Are her Government's reforms predicated on strong relationships and scale benefits and are they at risk if councils continue to opt out as Whangarei District Council has?Hon NANAIA MAHUTA: There are a couple of questions in there. Let me go to the second part which is the issue of opt-out. The member has already heard me say in a previous response that local authorities that opt out pose a risk to achieving the intended reform outcomes. If a large number of councils choose to opt out of the reform process the impact on scale benefits could include a reduction in the potential to achieve operating capital and financial efficiencies; compromised economic viability of the reforms; some communities missing out on the benefits of reforms especially those with a lower ratepaying base; and the creation of a patchwork quilt of three waters owners and managers within a catchment. This is in fact the status quo. Given that local government and councils have already accepted that there is a compelling case for change now that we have the data analysis and evidence to support that view it would be useful for councils to understand the information that is being released today in order to help them make their decision. I find it difficult to understand why they would pull away from this proposal.Christopher Luxon: Can she therefore guarantee that the three waters reforms will remain voluntary and that central government will not force or mandate councils to participate in amalgamation?Hon NANAIA MAHUTA: I can guarantee that the benefits of this reform approach are intended to reach every household in every community across the country. It is a compelling case for change and those councils who have made premature decisions in the absence of having the information may want to pause and think again because at the end of the day if households are faced with the prospect of paying a tripling doubling or even ten times the cost for their water services going forward into the future that is not an acceptable position to be in.SPEAKER: The member can have another one if he wants. You know looking at me like that doesn't get him a question; he has to stand up.Christopher Luxon: Does she agree with Auckland Mayor Phil Goff that the reforms are "complex confused on governance and lack accountability"?Hon NANAIA MAHUTA: No. And I can reiterate in terms of Auckland that we do appreciate that under their current model greater financial flexibility is needed in the Watercare situation to unlock greater borrowing and opportunity for secured investment rather than a continual putting off of renewals which they are currently in under their Auckland Watercare model."