Robertson GrantHon GRANT ROBERTSON (Labour): Thank you very much Madam Chair and thanks for the opportunity to make my first contribution in this debate. I've been following the debate closely in my office and I wanted to come down and make a contribution around the Purposes" clause—clause 3(a) (b) and (c) in fact—because I had heard colleagues and Madam Chair I know the importance of ensuring that we keep new material coming into the debate. However if a Minister does not answer questions that are raised that puts Opposition members in a very difficult position. I want to offer the Minister of Local Government the opportunity to answer the questions around balance sheet separation because by repealing the Acts in clause 3(a) by disestablishing the entity in clause 3(b) and particularly the transitional arrangements for the long-term plans that is placing councils in a position where they will be responsible in one form or another for what happens next in terms of water service entities.I had the privilege of being in a role where I worked on the Acts that are being repealed under clause 3 and one of the most important conversations that we had during that time were conversations with ratings agencies and to be specific with Standard & Poor's. Standard & Poor's were extremely clear that balance sheet separation was critical to enabling the reforms that we were proposing. My question the first of two or three questions depending on how we go on time that I have for the Minister is: what conversations has he had with Standard & Poor's about whether—and he just mentioned it in his answer just now; the new model that he proposes to replace the Acts being repealed in clause 3(a)—or not Standard & Poor's are satisfied that there will be sufficient balance sheet separation from councils for the entities that will manage their water?Now for colleagues in the committee the reason that this matters is that if there is not sufficient balance sheet separation then it will be incumbent upon the councils—and certainly Standard & Poor's will believe that the councils are responsible and the councils in the event of something going wrong will have to bail the entities out. As most people in this House will know most local authorities in New Zealand are up against their debt ceilings. So this is a very important question for the Minister to answer because the repeal puts those councils front and centre again if it is a council-controlled organisation (CCO) model or some other model in which an agency like Standard & Poor's would look at that and say "Prima facie the councils are responsible." Therefore when we're deciding how this will work two things will happen: one they will decide the councils are responsible and two it will then be looked at in the context of the councils' broader debt position. That will be very dangerous for some councils whose debt position is not good at the moment and also fails the test as I say that Standard & Poor's have set. So that is my first question for the Minister. He has been asked it Madam Chair I do acknowledge that but he has not answered that question.My second question for the member in terms of his disestablishment of this is to ask him to clarify for us whether or not he has spoken to councils about the way they view CCOs in this context and whether or not the CCO-type model that he is proposing actually will be able to deliver this across different jurisdictions. Because there are in fact quite different rules around CCOs between different councils; while they are mandated under law they operate in very different ways. So I would like the Minister to tell us what conversations he has had with Standard & Poor's about balance sheet separation and what conversations he's had about CCOs and indeed with councils in that context of balance sheet separation because we are here under urgency without having had a select committee process without having had an opportunity to actually explore whether or not the repeal of these Acts under clause 3 is actually not only going to make it more expensive for ratepayers but actually imperil councils in terms of their debt levels. Balance sheet separation is vital to making any new system work. The Minister needs to answer that question."