Three waters anti-privatisation entrenchment rejected by opposition parties

Opposition parties should commit to protecting against privatising water assets, and front up with alternatives if they don't like the three waters reform, the government says.

Ministers Nanaia Mahuta and Grant Robertson this morning gave their response to a working group of mayors and Māori representatives, accepting nearly all of the 47 recommendations made.

The reforms would move responsibility for the management of drinking, waste and stormwater from 67 local councils to four large, specialised water management organisations.

Speaking to media after the announcement, Robertson laid down a challenge to the reforms' opponents.

"The mandate we have is from New Zealanders and that's to make sure that they have clean drinking water, and that their sewerage and stormwaters systems work properly and the status quo, as the ministry has indicated, is not providing that," he said.

"Everybody agrees something must be done but then can't quite agree on exactly what that is, [that] is not a reason to stand still. We have consulted thoroughly, we have listened, we have made changes, but New Zealanders deserve us to get on with it."

Some of the big changes made include giving councils non-financial shares in the new entities, which would guarantee ownership and bring in further protections against privatisation - one of councils' big points of contention about the reforms.

Another protection against privatisation is entrenchment - a requirement for at least 75 percent of MPs in Parliament to support any proposal to merge or sell any of the entities' assets.

Getting this measure into the law would, however, also require the support of 75 percent of MPs. Mahuta said she had written to all political parties to seek their support.

Robertson suggested the ball was no longer in Labour's court.

"To some of our political opponents, here's the time to step up if you believe in public ownership. And we've heard certainly from the National Party that they've been throughout this process concerned about the loss of ownership in communities, well we've dealt with that today thanks to the working group's recommendations.

"Now they can step up and say 'we will agree that these assets won't be sold'."

He also called for them to explain what their alternative would be.

"I invite our political opponents to firstly say what they would actually do instead of this to make sure New Zealanders have clean drinking water and that our waste and stormwater systems work properly."

Mahuta also accused National of playing politics.

"I think National's made politics in this and we don't want to. We know that a public ownership model is important to all New Zealanders, it will give them assurance, and we aqlso know that there is opportunity to leverage from scale through aggregation for the long-term investment in water infrastructure."

'National won't be supporting any part of this Bill'

National leader Christopher Luxon said Labour was just doubling down, and the call for protection against privatisation was just politicking.

"These are tweaks, they're not resulting in meaningful change, and they certainly don't address the concerns of local ratepayers and councils.

"National's totally opposed to and we will never privatise three waters assets and that's because we want them to remain as assets owned by local councils and ratepayers. That's why we don't support the reforms, we will repeal them, and frankly the privatisation letter is just Labour playing politics."

Asked multiple times if National would support the entrenchment measure if it came to a vote however, he would not directly answer.

"We're never going to privatise three waters assets becasue we don't support the reforms. We won't be supporting the reforms."

He said National's solution was to give councils the power to decide.

"Despite Labour's very expensive advertising campaign, the issues on water management are different by sub-regions of New Zealand. Some assets have been managed well, others less well.

"Councils have the solutions, and the councils engaged with the government in good faith over a year, they came together, they worked together, they put their proposals forward and the government completely disregarded them."

He used the example of Hawke's Bay which proposed a sub-regional council controlled organisation. Mahuta this afternoon said that proposal had been looked at and rejected as insufficient.

Luxon also said the non-financial shareholding model would give councils absolutely no ownership rights.

Overall, National remained opposed and would repeal the reforms, he said.

"The scale benefts and the costs are unrealistic, the cross-subsidisation model doesn't work. There's massive convoluted management and governance structures and at the end of the day, yes there's a challenge with water, two yes they shold be nationally regulated, but three the solution is actually best coming from the councils."

The party's Local Goverment Spokesperson Simon Watts also said National would not be supporting any part of the bill but remained totally opposed to privatisation.

"National will not privatise water assets. We've always said that these assets belong to councils and ratepayers. The only party talking about taking these assets out of ratepayers' hands is Labour," he said.

"We're totally opposed to taking assets from councils and that's why we won't be supporting any part of this Bill. It's just basically Labour playing politics."

'Smokescreen' - ACT

ACT leader David Seymour said his party also would not be supporting the move - calling it a smokescreen and distraction.

"It's a total distraction and it doesn't solve any problem because nobody's proposing privatisation. So no, we won't, we're not going to buy into this.

"We're not going to buy into their smokescreen games about privatisation that nobody is calling for."

ACT's policy on the matter proposes public-private partnerships "to attract investment from financial entities such as KiwiSaver funds and ACC".

Seymour said there had been "blanket opposition" to the reforms up and down the country.

"Their response is this meaningless. One share per 50,000 ratepayers - in practice that gives absolutely no control or accountability, it is a triumph of marketing over practicality."

"That's why this three waters reform and these new entities need to go - and if and when the government changes, under ACT, they will go."

Mahuta said she hoped the legislation would not be repealed.

"We hope not, in fact we're doing everything we can to progress this type of reform because it's been an issue that's languished for far too long. We're not prepared to kick the can down the road ... we are taking on a really significant, difficult challenge because if we don't communities will pay more."

Co-governance

One of the other criticisms of the government's proposals has been over its moves to implement co-governance arrangements.

The co-governance provisions proposed - to have mana whenua and councils given equal number of seats on a regional representation group (RRG) which sets the entites' strategic direction but has no say in operational matters - would remain.

The only changes around co-governance would be to allow co-chairs on the RRG - one representing council and one tangata whenua. Going against the working group's proposal, the government decided this would be optional rather than mandated, set down by each entity's constitution, which would be regularly reviewed and updated.

Iwi would also be able to contribute on smaller regional governance groups, another proposal of the working group.

Mahuta said councils and iwi representatives on the working group had been supportive of that approach.

"The strongest role that iwi mana whenua can play is at the strategic level through the regional representative group, and then dropping down under that, the subregional groups because that will take a number of these strategic decisions closer back to community to enable the types of outcomes that communities want to see."

Te Rūnanga o Toa Rangatira chief executive Helmut Karewa Modlik, who was at the announcement today, welcomed it.

"The pattern for that structure was set on February 6th, 1840 ... I'm not vexed about the direct hands on the till in terms of the operational tasks because infrastructure management is essentailly a technical role.

"There's no guarantees anywhere for anything, the longevity of our participation will depend on the quality of the outcomes. So if our people bring it, are informed and valuable contributors to this journey together, that's what will determine its longevity."

In a statement, Ngāi Tahu welcomed the government's commitment to the reforms.

"The ministers have agreed that regional sub-committees will feed into the water service entities' regional representative oversight groups, ensuring local councils and iwi/hapū have their voices heard on the matters that most affect them."

"The new water services entities will have Te Mana o Te Wai at the centre of their governance, ensuring the health of local waterways is not compromised," Kaiwhakahaere Lisa Tumahai said.

Council reaction

Auckland Mayor Phil Goff is not satisfied with changes to the reform proposal saying the model still does not stack up for Aucklanders.

Auckland currently has a water services entity delivering for over 1.6 million people, Goff said.

Auckland contributes most of the assets and population in the northern area but will only have a minority position in governance of the new entity, Goff said.

He said he supported reform, but argued the proposal did not reflect the unique position of Auckland.

"We welcome the changes that the government has made ... we are also as a council very strongly in favour of reform, but we still believe that the model that is being put forward doesn't serve the needs of Aucklanders.

"Auckland has already amalgamated, it already has a water services entity delivering for over 1.6 million people, we have the economies of scale, we have the competency, we have the professionalism."

He said Auckland was contributing 93 percent of the assets to Entity A, and would be retaining majority ownership through its shareholding, but would losing majority control.

The reforms were not popular with Aucklanders either, he said.

"We took the time to consult with Aucklanders about the nature of the reform and overwhelmingly Aucklanders believe that since Auckland is putting in the vast majority of the assets ... Aucklanders should have the majority control over the governance of those assets and they should exercise that control through their elected representatives on council."

Whanganui mayor Hamish McDouall, who unlike Goff was not on the working group, also had reservations but broadly supported the changes.

"I'm really glad the government's listened to the working group, there were some augmentations that had to happen ... that's great that they are listening to local government concerns about all of this.

"I may not entirely agree with the calculus around the shareholding but the shareholding by councils is good."

There were very specific issues relating to Whanganui which would still need to be worked out too, he said.

"Whilst this has addressed some of my broader concerns those Whanganui issues still remain there.

"I'll be communicating very clearly that until these things ... including the legislated status of the river, are dealt with - we have to be very very cautious of the three water reforms."

Hutt City mayor Campbell Barry was on the group, and said it was really good news the government had stepped up.

"It was pretty clear that unnanimous view of all the councils who submitted to us and shared their views that change was necessary. Of course there were different views on what that change looked like but I'm hopeful this is a bit of a reset for us to be able to get on with what is such a huge challnege for all of New Zealand.

He said having sub-regional groups to advise the entities on the needs of the different regions they would cover would help retain local voice.

"For example in proposed Entity C you could have the Wellington region as a group that is able to put forward ideas and hold these entities to account.

"That does give those more local communitites a voice in these entities, which we all acknowledge are large and that there are always potentially some challenges in getting that localised voice through."

With local body elections coming up in October, Barry said the government would be responsible for winning over electorates, not councils.

"These are government reforms. We are out there engaging our community to get their views to be able to submit through the select committee process, and we'll be doing that.

"And I will certainly be encouraging ratepayers and residents in Lower Hutt to do exactly that, to share their thoughts whether that be good, bad or indifferent so we can as best as we possibly can get a good result locally and of course across New Zealand."