Twyford Phil: Kaipara District Council (Validation of Rates and Other Matters) Bill — In Committee Third ReadingText is subject to correctionTwyford Phil: Kaipara District Council (Validation of Rates and Other Matters) Bill — In Committee Third Reading[Sitting date: 04 December 2013. Volume:695;Page:15275. Text is subject to correction.]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.