Local Government Act 2002 Amendment Bill

PHIL TWYFORD Link to this

Again, the Minister of Local Government has brought a bill to the House that takes away the democratic rights of New Zealanders in local government and, again, it is being pushed through the House under urgency.

There is plenty to talk about in this bill, and I am looking forward to some detailed debate at the Committee stage on the provisions of the bill. I will start by explaining one of the reasons why Labour is voting against this bill in its entirety. This bill, through a number of its provisions, seeks to open up local government services, assets, resources, and systems to the private sector, and it does that in a number of ways. Principally, it removes the democratic safeguards that exist in the law currently that give citizens and communities all over New Zealand the chance to be informed and notified of changes in the way that assets are owned or managed and in the way that services are delivered. Citizens have the opportunity to consider that and to give input—to be consulted as part of the democratic process. This bill takes away those rights.

I will go through some of the clauses in more detail. Clause 11 repeals section 88 of the Local Government Act 2002. The effect of that repeal is to take away the right that citizens in this country currently have to be consulted thoroughly when a public service currently delivered by the council is corporatised, transferred over to a council-owned company, or contracted out to the private sector. There is a reason why section 88 is currently there, which is that, whether a service is delivered by the private sector or whether it is delivered in an open, transparent way managed in the interests of the public good by our local authorities, it is a matter of legitimate public interest.

I would have thought that after the last year and a half in Auckland, the Hon Rodney Hide would discern that the public actually care about this stuff. The public backlash that he faced in Auckland because of his corporatisation agenda for the new Auckland Council, where he has essentially consigned three-quarters of local government services into council-controlled organisations, caused a storm of public concern from the New Zealand Herald and right across the city, including all the elected mayors. There was massive public opposition, and the corporatisation agenda that he rammed through in Auckland is one of the reasons why not only his own personal stakes but also the Government’s standing took a real hit in Auckland over the super-city.

PHIL TWYFORD Link to this

That is right. Surely that is demonstration enough that people care about this issue. The reason people were concerned was that the council-controlled organisation model is deliberately designed to keep the business of local government away from the sunlight of transparency and democracy. It is designed to keep the public out.

The storm of public opposition to the Minister’s agenda in Auckland forced some real concessions that made the Auckland council-controlled organisations far more responsive and transparent than otherwise, but those concessions will not apply to the rest of the country. They do not. So under this bill, councils around the country can transfer services to a council-controlled organisation without consulting their ratepayers, without telling them what is going on. Once those services and assets are in council-controlled organisations, a whole lot of other democratic safeguards do not apply. They can dispose of assets more easily without having to consult the community, and their meetings are no longer open to the public. They do not have to publish agendas or minutes. All of the normal conventions of accountable government that we take for granted in local government do not apply under the council-controlled organisation model. That is why the current law says that communities should have the right to be consulted before the services, assets, and resources of local government are transferred across.

If we look at the transport council-controlled organisation in Auckland, we see that Mr Hide, against the advice of four Government departments, advised that the transport agency should be corporatised. Nowhere else in New Zealand is transport run as a council-controlled organisation—as a corporate entity. But there was a huge public outcry about that, because people do not necessarily want their local government services to be run by a corporate entity. People like to have access to the meetings and to hold their politicians to account.

This bill undermines those rights. Nothing in this bill would prevent a council from transferring its libraries to a council-controlled organisation, its parks to a council-controlled organisation, or its transport operation to a council-controlled organisation. A council could do those things—[Interruption] Members opposite ask why they would do that. Well, I ask them why the Minister in the chair, the Minister of Local Government, transferred three-quarters of Auckland local government services to a council-controlled organisation, against the wishes of Auckland—against the wishes of Auckland’s elected politicians and against the wishes of the public. That is a perfect example of a politician choosing to do that. He never gave the people of Auckland a say, and this bill reflects that exact same political style. The citizens of Auckland would not be given a say as to why their services would be corporatised. Why members opposite cannot get that into their heads, I just do not understand.

The Government claims that this bill will make local government more transparent and more accountable. Well, we will look at a whole series of examples as we go through the clauses of this bill, but clause 11, in particular, which repeals section 88 of the Local Government Act 2002, is a classic example of how this legislation will make local government less transparent, less responsive, and less accountable. It is all because of the ideological blinkers of this Government and this Minister of Local Government, who brazenly want to encourage the privatisation and corporatisation of our local government system. They are taking away the democratic safeguards that New Zealanders expect and rely on.

There is an important philosophical difference between National and ACT, on one hand, and Labour and the Greens, on the other. Members on this side of the Chamber believe in the importance of public ownership and public control as part of our democratic system of government. It is so that our communities, and their resources and assets, are managed for the public good, in the public interest, and in a transparent and accountable way. But what does this Minister of Local Government believe in? What do members opposite believe in? They are quite happy to shovel our resources and our assets, which generations of ratepayers have paid for through their rates, into corporate entities where business can be done behind closed doors, with no transparency and no accountability. Those members do not care, because they are totally happy for our cities and our communities to be run by an oligarchy of private interests. That is the system they are setting up. It is the system that Rodney Hide has been setting up in Auckland.

This bill severely undermines the democratic processes of local government. Labour does not believe in it, we will not stand for it, and we will denounce it and call it what it is. This Government, with the help of this Minister, who is currently polling at about 2 percent in the polls, is undermining our public institutions and our system of government by taking away the right of people to be informed about their resources.

I would have thought that with the experience of the last couple of years, this Government would realise that people actually notice and care about issues of public ownership and public control. The fiasco that this Minister presided over in Auckland is a classic example of that. We could look back to when the forces of the right tried to privatise the Ports of Auckland and provoked massive opposition.

Hon RODNEY HIDE Link to this

Maybe. The part also repeals requirements for local authorities to carry out separate processes for identifying, monitoring, and reporting on community outcomes, under clause 12.

Part 1 repeals requirements for local authorities, firstly, to consider the views of interested or affected persons at four specified stages in the decision-making process.

Hon RODNEY HIDE Link to this

Four. It will be up to the council to decide how many times it will consult. Secondly, the part repeals requirements for local authorities to consult on proposals to change the mode of the service delivery of a significant activity from a local authority to a council-controlled organisation or other body, under clause 11. The council can still decide to do it; it is not a legal requirement. Thirdly, the part includes certain proposals, decisions, and long-term plans. These include proposals to construct, replace, or abandon a strategic asset, in clause 14, and proposals for the sale or exchange of endowment land, in clause 33. I have to say that these provisions have been overwhelmingly received by the local government sector. Part 1 removes most funding and financial policies from long-term plans, while requiring separate consultation on some of those policies. That is set out in clauses 18 to 26.

Regarding the provision of water services, Part 1 gives local authorities and their communities more options for providing and financing their water services, so that they can decide for themselves what is in their best interests. That will help to facilitate private sector investment in water infrastructure. The provisions in clauses 31 and 32 extend permitted time limits on water service contracts and joint arrangements with the private sector from 15 to 35 years, which makes those arrangements more workable. I do not understand the position of Labour members. They were happy for the term to be 15 years, but somehow 35 years is suddenly the end of Western democracy as we know it.

Hon RODNEY HIDE Link to this

Mr Twyford keeps yelling out. I think he should concentrate on finding somewhere in Auckland where the Labour Party would like him to stand; that would be a positive thing.

This part also enables councils to build, own, and operate transfer schemes, by allowing a private partner to open new infrastructure during the contract period. The public would have to be consulted on these proposals, and on any other kind of joint arrangement. The bill does not require any changes to be made, and does not privatise water services. For example, it does not enable permanent ownership by, or the transfer of council water services to, the private sector. Local government would remain legally responsible for providing water services, and for pricing and policy decisions. Customers would continue to have a direct relationship with the local government organisation, which would be accountable to those customers. The bill prohibits arrangements in which the private partner has the right to revenue from the water service, such as concessions or other franchise agreements. It also prohibits the sale or transfer of the ownership of existing infrastructure—

Hon RODNEY HIDE Link to this

I will say it again because I know Mr Auchinvole is interested.

Hon RODNEY HIDE Link to this

Yes, Part 1 prohibits the sale or transfer of ownership of existing infrastructure, unless that is incidental to, and desirable for, the success of the joint arrangement. Again, the public would be consulted.

Hon RODNEY HIDE Link to this

It is so interesting, is it not? We have Mr Darren Hughes, who I think lost his seat at the last election. We have Mr Twyford, who cannot—

Hon RODNEY HIDE Link to this

Actually, it is very good. Mr Twyford cannot even convince his own Labour Party to let him have a crack at a seat.

We will also have a Supplementary Order Paper to make minor drafting amendments to Part 1 of the bill—

Hon RODNEY HIDE Link to this

—and I know that Mr Hughes will be interested in that Supplementary Order Paper. Clause 16 is amended to clarify that the provision will relate to a local authority “referred to in subsection 1A”. Clauses 25 and 26 are amended to fix cross-reference errors. Clause 32(4) is amended to fix the amending terminology used in the provision. I am looking forward to the Labour Party actually addressing Part 1.

BRENDON BURNS Link to this

Yes, it is a very specific agenda for the privatisation of New Zealand’s water assets, and I will give the Committee two examples, one of which is relevant to those noisy members from Canterbury. I will quote from a Canterbury District Health Board document that warns about the consequences of this bill. I will also quote from another document that is not so public from the Minister of Health in respect of this privatisation agenda, because this bill raises very serious concerns about not only the loss of local New Zealand control of ownership of our water supplies but also very major risks to public health.

I specifically refer to clauses 28, 29, and 30, in Part 1. The Local Government and Environment Committee received commentary from the Canterbury District Health Board on those clauses. I have to say that in 25-plus years of being in and around public life I have never seen a submission so strongly made in such language explicit with warning to a Government as this submission, which was written by the Canterbury District Health Board’s manager of healthy physical environments. In it he warns that “Deletion of sections 125-129 of the LGA effectively removes the specific regulations pertaining to water and sanitary services overseen by an (independent) Medical Officer of Health.” The actions of the Government in taking away the Ministry of Health’s oversight of water schemes, as this bill does, are, as the Canterbury District Health Board states explicitly in its submission, precisely the type of action that played a significant part in the Walkerton tragedy.

Walkerton is a small dairy-farming area in the Ontario province of Canada. A new Government came in promising to sweep away the red tape and the horrendous regulations that were squeezing the lifeblood out of business. It did that. It took away the red tape. The consequence of its actions, which included the removal of health department oversight of water schemes, was a serious outbreak of E. coli in 2000, which saw seven people die and two and a half thousand people get sick, and which cost an estimated $200 million in direct and indirect costs to that province of Canada. Seven people died—

BRENDON BURNS Link to this

Seven people died, and two and a half thousand people got sick because a Government came in and said it would sweep away the red tape, the regulatory restraint, which was strangling the lifeblood of business. The consequence of that was to take away health department oversight of the management of water supplies in that part of Canada. That is precisely what will happen here.

I invite the Canterbury member opposite Nicky Wagner to stand up, challenge her district health board—which she likes to snuggle up to sometimes—and tell it that it is wrong, and to put it on the record today, so that when this happens in Canterbury, under this bill, she can stand by her record and can tell the board that she was right. Here it is, in black and white: the Canterbury District Health Board is telling this Parliament and telling this Government that this bill, in removing Ministry of Health oversight of water schemes, in a blatant attempt to privatise our water supplies—to put in the profit motive—will lead to a tragedy. It is saying that taking away regulatory oversight of water schemes will put this nation at extraordinary risk. They are not my words; they are the words of the medical officer of health of the Canterbury District Health Board, and his team, who currently have a role in the oversight of drinking water. My goodness, that district health board already has a struggle going on in trying to make sure that our drinking water is safe. It has a Minister of Health—[Interruption] Mr Chair! Mr Chair! Mr Chair!

BRENDON BURNS Link to this

Thank you, Mr Chairperson; my apologies for the volume. This is an issue that deserves to excite the interests of members of the Committee, because there are very, very pronounced risks for New Zealanders under this bill in terms of the safety of their water. A submission from the Canterbury District Health Board to the committee explicitly states that there are very real risks in taking away the medical and health oversight of water schemes and handing it across, in 35-year terms, to the private sector. In doing so we will risk doing exactly what happened in Walkerton, Ontario. We are risking the lives of New Zealanders by taking away that health oversight.

Allied to that, just a few weeks ago I was able to discover that the Minister of Health has taken an action that I think is involved in, and linked to, this issue. Until very recently the Ministry of Health had a team that was responsible for oversight of our drinking-water schemes. That has now virtually ended. From a team of five 2 years ago, there is now one staffer left in the Ministry of Health providing oversight of drinking water. Instead, the Government has awarded a $2.25 million contract—$2.25 million of our taxpayers’ money—to a consortium led by a company called Allen and Clarke, which National members opposite were describing 5 years ago as cronies. They were saying that rampant cronyism was at work involving this company. But that has not stopped them from awarding a $2.25 million contract to a consortium led by Allen and Clarke to provide oversight of our core public health function, the safety of our water. I see a very strong linkage between that and what we have seen in this bill in respect of taking away, at a local level, Ministry of Health oversight of drinking water.

If we put those two things together, where are we going? We are going into a system where contracts will be handed over to the private sector for 35 years, without, at a local level, health input and oversight of drinking-water schemes. At a national level, as a result of the Minister of Health’s intervention and the awarding of a $2.25 million contract to a consortium led by Allen and Clarke, we now have a contracted-out responsibility for what is a very clear public health function. If there is one thing that we as a First World nation should be able to do, it is to have some belief that water is safe to drink, and currently fewer than one in five New Zealanders are able to be given that assurance. Fewer than one in five New Zealanders are able to be told explicitly that water is safe to drink. That is the statistic in the latest Ministry of Health report—

BRENDON BURNS Link to this

Yes, it is. The 2008-09 Ministry of Health annual survey shows that 80 percent of New Zealanders are drinking water that is assured to be safe—down from 83 percent in the previous year—but one in five, or 20 percent of New Zealanders, are not given that assurance and do not know that their water is safe, because their water either is not tested or, when it is tested, is found not to be safe. That is the result.

BRENDON BURNS Link to this

No, it is not scaremongering. We saw what happened in Walkerton, Ontario under precisely the sort of regime that this bill is leading to—precisely. They are not my words. There is the member from Rangitata. You stand up and take a call—

BRENDON BURNS Link to this

—and deny what your local district health board is saying. It was an explicit warning. You go on the record and say this is a nonsense—

BRENDON BURNS Link to this

My apologies, Mr Chairperson. The member for Rangitata, not the Chairperson, should take a call to make sure that the constituents she is currently the member for—somebody else might be their member shortly—hear her put on the record that what the Canterbury District Health Board is saying is a nonsense. She should then put on the record—and I would like to hear the Minister of Health say this, as well—that it is her view that it is appropriate to take away the Ministry of Health’s role and hand it to a consortium, at a cost of $2.25 million of taxpayers’ funds.

This consortium includes an outfit called Parsons Brinckerhoff, which is an American engineering conglomerate. My supposition is that it is here not just to play a role in the oversight of water through that contract but to line itself up for some nice, juicy contracts that will emanate from this bill as we see the creation of 35-year contracts. A generation of ownership is provided for under this bill for our water schemes, for our basic right to enjoy safe drinking-water, which should be a core public health function.

LOUISE UPSTON Link to this

That is right, and those who were did not show up all the time.

This bill is actually about sharpening up the local government debate and making sure that we achieve in local government. It is very important to have effective local government, because we know that builds strong communities. Strong communities are empowered by local government, and they have influence, they have a say, and they have access to transparent information so that they are in a better position to influence the decisions of those who represent them. That is why I want to spend a bit of time talking about what the council is involved with, and the transparency around that, and about actually being able to provide good information back from a council on how it has been doing, with some consistent performance measures. Also, what most people would expect is a financial strategy as to how ratepayers’ money will be spent, and then a report back as to whether that was done.

One of the issues that came up from time to time in the submissions comes up a lot for me as an electorate MP. I am not sure how many members opposite are electorate MPs, but a lot of constituents who come through my door talk about the fact that their greatest concern is the ever-increasing burden of rates increases on their fixed income. Measures in this bill will provide those people with the ability to look at, and have a say on, what local government is doing.

Let us have a look at a couple of those measures—for example, core services. We have heard a diatribe from members opposite about core services, and I want to set the record straight on the intention behind the statement of core services. That statement actually enables councils to have a focus on core services, but nowhere is it stated—and it never has been stated—that a council is restricted to those core services. Instead, the statement is about creating a priority for those activities, and then allowing debate by the people who live within a council boundary to decide which other activities should occur.

For example, economic development was mentioned several times, and that is an important activity to touch on. If I look at the Taupō electorate, I see that economic development occurs quite differently in Waipā from south Waikato and from Taupō. Not one of those councils is stopped from doing economic development, but the priority is different, based on the needs of those communities. This bill provides the flexibility for each council to work towards meeting the needs and demands of its communities. If a particular community wants to invest significantly in economic development, then local ratepayers get to make that call, which is exactly how it should be.

In terms of core services though, we would not want to have a situation where some non-core activities took priority over the building of roads, for example. Every ratepayer has a certain expectation about roads to drive on and water to drink. That is exactly what we have in terms of core services.

Despite some random comments from members opposite, this bill is about communities making decisions around the activities in their communities. More important, in activities like the pre-election report the community gets to see how the council has been going with regard to the decisions that the community has had input into. At local body elections—and we have just had one—voters will be able to rely on solid information rather than just electioneering material. The previous speaker talked about democracy. I am not sure why members opposite cannot understand that pre-election reports allow for more information to be provided, to enable voters to make informed decisions about whom they will vote for. Yet, members opposite say this bill takes away democracy.

CHRIS HIPKINS Link to this

Give me the name.

CHRIS HIPKINS Link to this

Rubbish! The Wellington City Council did not argue that way. I sat through that council’s submission, and it opposed the definition of core services. Not a single local authority thought that defining core services was a good idea. I sat through the hearings, and none of the councils argued that it was a good idea to define core services. In fact, the Government’s vision of what core services should be and Rodney Hide’s definition of what core services should be cut out a whole lot of stuff that local authorities currently work on. For example, employment creation, job creation, and economic development are not part of this Government’s vision for the role of local government. I think that local government could play a larger role in these types of activities. The Mayors Task Force for Jobs, for example, was very successful but there is no accommodation for something like that within the definition of established core services.

One of the reasons they say we have to shrink the size of local government is rates increases, yet the Department of Internal Affairs advice to the select committee was that 97 percent of council expenditure was on the things that they list as being core services for local authorities. There is absolutely no need to define core services in legislation. All that will do is unnecessarily tie the hands of local authorities and make them less responsive to their local communities. They want to take the “local” out of local government. Local government should be about local communities saying that “These are the services that we want you to provide.” They need to be able to change. They need to be able to adapt to different situations. I am very concerned about this idea of local authorities having their hands tied.

I want to talk also about the financial strategy that councils will need to put in place, because potentially that will also constrain councils’ abilities to respond to local community needs. I support having a financial strategy, but I am concerned that it will require councils effectively to cap the level of rates they will be able to charge. It is very popular to promise lower rate increases and therefore defer to future generations the costs of very necessary infrastructure upgrades and very necessary expenditure. In 10 years’ time, or 20 years’ time, when the plumbing stops working, the water stops coming out of the taps, and the roads are full of potholes, the councils of 10 or 20 years ago will not be the ones that have to deal with the problems. Those problems will be faced by councils in the future. So 20 years ago those councils may have kept their rates low, but future generations are the ones who will end up having to deal with the legacy that that will create; they will have to worry about that legacy.

Overall, the idea of a financial strategy for local authorities is a good one. We have a financial strategy for central government finances, so having a similar mechanism for local government is perfectly acceptable. But I am concerned about putting an arbitrary cap on the level of rates. We do not do that for central government taxation. We do not say we will cap at a certain rate the amount of revenue that central government can earn, and thereby everything else has to fall within that cap. Central government has the ability to raise taxes as it requires, in order to fund the activities that it deems necessary and on which it goes out and campaigns for a mandate. Why should local authorities be subject to a different standard? Why should they be prevented from delivering the things they promised to their local communities in an election, because there is an arbitrary cap on the amount of revenue they can create?

If local communities want local authorities to provide certain services and they vote for local authorities to provide certain services, then the local authorities need to be able to raise the revenue in order to deliver them. If the local people do not like it and are unhappy with the level of rates being charged, then there is a mechanism they can adopt in order to deal with that—they can elect a different council. It is the same with central government. If people are not happy about the level of tax they pay, they can elect a different Government. If they are not happy with the services provided by central government, they can elect a different Government. Why should local authorities be any different? Why should central government be tying the hands of local authorities and preventing them from delivering on the services that local communities are demanding of them? They are effectively short-circuiting the local democratic process by saying that the local communities might say that that is what they want, but that we in this Parliament know better. Actually, we do not; the local communities should be able to determine what they want to have delivered.

As I mentioned before, putting an arbitrary cap on the revenue that local authorities can raise also constrains a council’s ability to deal with unforeseen issues that may arise from time to time, and again I come back to natural disasters, for example, Canterbury’s earthquake. Why would we want to constrain the ability of local authorities to adapt to things that are unforeseen? The Canterbury earthquake is at the extreme end of the scale; I am talking about smaller-scale natural disasters. The Hutt Valley, where I come from, is prone to regular flooding. In the last 10 years or so there have been three or four reasonably significant floods. They are not the types of floods where every home in the Hutt Valley is flooded, but ones where significant numbers of homes and businesses end up being flooded. Local authorities need to have the flexibility to respond to those disasters and to raise the revenue that they need in order to respond to those disasters, without this idea of an arbitrary cap on them. If we put an arbitrary cap on the level of rates that councils can charge, again what we are doing is encouraging local authorities to defer the burden of providing adequate infrastructure on to future generations. I think some of our local authorities already have an infrastructure deficit, whereby the replacement of core pipelines and so on has not taken place because those local authorities have been striving to keep their rates down. As a result, at some point a future generation will end up having to front up and pay an awful lot more in order just to keep the basics operating.

Why should we place this constraint on councils? Why should we place this overriding objective on councils that keeping rates low is the ultimate objective, no matter what the consequences? Ultimately we will get what we pay for. If we pay for a cheap, shoddy water system and a cheap, shoddy sewerage system, that is what we will get. But if we are willing to invest in it now, then we will be catering properly for future generations. I am concerned about that desire to cut down the role of councils by restricting them to what Rodney Hide thinks local authorities should be providing, rather than what the local communities think they should be providing and, by putting this arbitrary cap on the level of rates, thereby restricting the ability of local authorities to raise the revenue for the services that local people want their local authorities to provide.

Those are two things that I am particularly concerned about in this legislation. I know that the Minister has indicated that he will take the next call, so I am quite looking forward to hearing his response to those two particular issues.

Hon RODNEY HIDE Link to this

No, I am sorry, they are false. First of all, Mr Twyford said that no council supported the clause on core services. This is simply untrue. For example, Rangitīkei District Council officials advised me that the council thinks it is helpful to highlight in legislation those core services that councils must have particular regard for. I am sorry, but the Labour members must have been asleep during discussion on that one. Indeed, Wellington—

Hon RODNEY HIDE Link to this

Mr Twyford now changes the debate. He said none earlier, and he misled Parliament. When we come to Wellington City Council I am advised that the council supported the clause in its current form. I think it would be helpful for this debate on the important area of local government if Labour actually concentrated on some accuracy.

Dr CAM CALDER Link to this

They said a number of things, and we listened very closely. I have to acknowledge at this stage the inclusive chairmanship of chairman Auchinvole and the contribution of people from all sides of the House—all sides of the House—which may not be apparent in this debate when we hear some of the comments being made.

As well as being on the select committee I had the pleasure of visiting a number of local and regional councils in the south in the last couple of weeks. It has to be said that there were few, if any, concerns about this legislation—few, if any, concerns. Let me address the previous query as to whether we could possibly mention any councils that support the core services provision. Yes, we can.

Dr CAM CALDER Link to this

Yes, we can. New section 11A, inserted by clause 5, introduces a list of core services and the requirement that local authorities have particular regard to the contribution of those services to communities.

It has to be said that many communities expressed some concerns about this. They said they were small rural communities and they would obviously have things that they wanted to do that were different from large urban communities. We understand that. The select committee took that on board, and the Minister has alluded to the fact that we understand that. The list of core services does not prevent a local authority from carrying out anything that it sees necessary in its community. As we know, there are numerous clauses in this bill that require consultation with the community by the council and for the community to be able to make its views heard, despite what we have heard from Opposition members. I will very briefly speak further to this, and answer the member Chris Hipkins’ earlier interjection to name a council. I would like to name Wellington City Council, in addition to Rangitīkei District Council, which I believe the Minister mentioned. The council wrote: “In our view the clause is intended to ensure that councils have duly considered how the listed services contribute to the well-being of their communities. Wellington City Council considers it will be able to demonstrate that the council has had particular regard to the contribution that specified core services have made to our community. Wellington City Council supports this clause in its current form.” Thank you.

SUE KEDGLEY Link to this

Someone mentioned the word “gutting”; it is a gutting of the consultation requirements.

Hon JOHN CARTER Link to this

I will just explain to the member, if the member will listen. I will put a very cogent argument and point of view as to what is happening.

The fact is that for many, many years local government has had the opportunity, if they wish, to have their water supplies managed by the private sector for 15 years. They have come to us and said that they think there is a very good reason why it may be prudent to extend that beyond 15 years. So in this legislation we have said OK. The system has worked well for many, many years, and we have allowed the management—not the ownership and not the privatisation, but the management—of water by the private sector for 15 years. Local government is saying to us that it would not mind if it was extended a bit more, so we will allow them—the local authorities, which are democratically elected by their community to represent their community—to decide whether they might want to have their water supplies managed by the private sector for up to 35 years, if they decide that is prudent. It is up to local government to make that decision.

I just say to the Committee that I am not certain of the number, but I suspect that 30, 40, or even more private water supplies managed by the private sector already exist in this country. I dare the Opposition and Sue Kedgley to go to one of those people who are the recipients of water supplied by the private sector and ask why they do not stop doing that, and hand the supplying of water back to the local authority. I can tell members what the answer would be, and there would be a quick march out the door. I have asked many of those water suppliers. The member Kelvin Davis knows of one just up in Taipā, for example, up on the East Coast. There is a privately managed water supply there. I ask that member to ask those people whether they think it would be a good idea if Wayne Brown and the Far North District Council took over the supply of water. I know what the member’s response would be if he asked that question. I have asked that question, and I have to tell him—

Hon JOHN CARTER Link to this

Well, it was not a very good response, I have to say. It was commented that if I even suggested that happen, that I might lose some local support. So I did not even make that comment. The point is that those people are very happy with the way their water is supplied. They can turn on their taps, they get the water, they pay the bill, there are no extra huge charges, they are very happy with the rate at which water is charged, so it works. The point is that it has been working for years and years, and it will continue to work, because that is what that community wants.

The other thing that might be useful is for the member George Hawkins to take a call to tell us what happened when he was Mayor of Papakura. I tell members that this might come as a surprise to the left, but one of their members, who was a former mayor, instigated allowing the private sector to run the Papakura water supply. What happened? Well, the local people kept turning on the taps and getting water out of the taps—it did not stop—and it ended up that they had the cheapest water supply in the Auckland area. Goodness, we should not let that happen, should we? No, maybe we should change this bill and not allow that to happen! But I dare anyone to ask the people of Papakura whether they think this Government should stop allowing that to happen.

All we are doing is applying what one might call a modicum of common sense to a practice that has been happening in New Zealand for a long time. It allows locally elected, democratically elected councils to make a decision as to whether they think it is in the best interests of their community.

Hon JOHN CARTER Link to this

Yes, they have to consult the community—that is a lot of hogwash. Councils have to put it in their long-term council community plan. Councils have to tell the people that they think it is not a bad idea to extend the provision out, and give them the reasons why. Councils will get feedback from their people. What will happen is that in 3 years’ time, if the public do not like it—because it is going through the long-term council community plan and all the consultation procedures—they will not vote for the council, will they? Is it not that simple? I cannot understand this objection to our extending something that is already working so well in New Zealand. We have plenty of examples where the supply of water is cheaper. I know that is a dreadful thing that the Opposition might not like to think about.

Hon JOHN CARTER Link to this

That is true. It is unfortunately sad. But in this case there is a very good reason why this should happen. There is a very good reason why we want to give local communities the opportunity to make the decision. Parliament is not making the decision; all we are doing is providing the opportunity. It is up to each community to make the decision. To suggest that this Government is privatising the supply of water is silly. What we are doing is allowing for prudent management, if that is what the community decides. There are many good examples across—

Hon JOHN CARTER Link to this

I say to Mr Twyford that there are many good examples across New Zealand where it happens well. As I said, if that member suggested to those communities that it should not do this, I tell him that we might go out and say that Labour is suggesting to the private sector suppliers that it wants them to come back into local government control. That might not be a bad policy, actually.

Hon JOHN CARTER Link to this

Well, that is true. I say to Mr Twyford that if he thinks it is so bad, why are the Labour Opposition and the Greens not going around saying that it should be taken back into local government control? I will tell him why. It is because he knows that they would not get support for that policy. If they tried to unstitch what is happening now, they would get a negative view, and it would not help them in their endeavours to become the next Government, which of course will fail.

The fact is that this system works; it works well across the community. We are putting the responsibility and the opportunity back to local communities to make decisions about their own destiny, and why would we not do that? We should allow local communities to have that opportunity. Thank you.

KELVIN DAVIS Link to this

As the member correctly says, there is nothing in the bill to stop local government from investing in tourism. But because tourism is not mentioned as a core service, there is a legal basis, or a legal foundation, that tells local bodies that they do not have to invest in tourism—they do not have to. The bill concentrates the core services in an arbitrary list designed by the Government. If Government members could look just a bit wider than the shoebox they reside in, they would see that there are massive benefits to be made by local government investing in tourism.

MOANA MACKEY Link to this

Well, I am talking about the bill now, I tell Miss Goodhew; I thank her very much.

The first clause I will talk about is clause 24, “Policy on remission and postponement of rates on Māori freehold land”. I was flicking through the bill and this caught my eye, because I remember the debate on the Local Government Act in 2002. I alert the Minister in the chair, the Associate Minister of Local Government, to comments made by his colleague the Hon Dr Nick Smith, who is a Cabinet Minister in the current National Government and was a Cabinet Minister in the previous National Government. He said about this policy—and I would like to know whether this is still National’s position—“Then we come to [this clause]. This is nothing less than apartheid.” That clause has been carried over into the current bill with some minor changes.

Section 102(4) of the Local Government Act 2002 states: “A local authority must adopt— … (f) a policy on the remission and postponement of rates on Māori freehold land.” Nick Smith stated: “I ask the Minister to tell me why councils must have a policy on remitting rates on Māori land, but may remit rates on other land. I want some member in this Chamber—maybe Parekura Horomia—to provide me with an explanation. Why must a council develop rates remission policies for your cuzzy bros and not for mine? It is a fair and reasonable question.” He then went on to state: “This damn law that we are being required to pass is nothing less than apartheid, and I cannot believe that members opposite want to impose this sort of obscene provision. It offends against National’s principle of one standard of citizenship.”

I would genuinely like to hear from the Minister in the chair about whether the Hon Dr Nick Smith’s stated position on the provision put by Labour in the Local Government Act 2002 that local authorities have a policy on the remission and postponement of rates on Māori freehold land—a provision that has been carried over into this legislation—still stands. I would very much like to hear from the Minister in the chair on that.

The second clause I will address is clause 22, regarding the policy on development contributions. As Labour’s spokesperson on housing, obviously I have a great deal of interest in this issue. I note that under clause 8 of this legislation, the community is losing the right to consultation. The community that elects the council is having consultation processes stripped from it. But I ask why developers are suddenly having extra consultation procedures put in for them so that they can continue to oppose and challenge councils that have applied development contributions to ensure that there is some public and community benefit from those developments.

We have a housing crisis in New Zealand. It would be useful if new developments could contain, for example, a proportion of affordable or social housing, given the length that councils often have to go to in order to provide amenities to those communities. Why not say that something should come back in return? That is what happens everywhere else in the world. This Government repealed Labour’s legislation that made it legally clear that councils were entitled to do that, given the legal problems that councils like Queenstown Lakes District Council have had in putting a policy in place for the inclusion of social and affordable housing in private developments and then being dragged through the courts by developers who say they do not have the right to do that. Labour put that into law; National repealed it.

But here we are again, and I ask the Minister again why communities are having consultation procedures taken away from them under this law but developers are getting extra ones. I ask how that is fair to those ratepayers and councils.

When I look at clause 8 on community consultation, I think of Environment Bay of Plenty, which is also known as the Bay of Plenty Regional Council, and of how a number of years ago, in 2004, it resolved that it would shift its headquarters from Whakatāne to Tauranga. That came completely out of the blue for the Eastern Bay of Plenty. Consultation procedures were not followed. I tell members that a community that has gone through an experience like that one understands the importance of having strict community consultation procedures—robust and genuine community consultation procedures. That decision was devastating for the Eastern Bay of Plenty. It was completely ridiculous, and it made no sense. Whakatāne is in the centre of the Bay of Plenty.

CLARE CURRAN Link to this

It is, I say to members opposite. Last night I said that the Government was screwing our workforce by trading away a precious week’s holiday. I said it was like being in a horror film, and today the horror continues.

CLARE CURRAN Link to this

Members opposite might laugh and think it is funny, but the horror is really for the people of New Zealand in the watering down of their ability to have a say in how their ratepayers’ money is spent, and that gets to the heart of what our democracy is all about.

Today the horror is continuing under urgency and we are rushing through the final stages of this bill. At least the public did get to have a say on this bill, even though the Government is taking no notice of the vast majority of the submissions. Instead we are seeing further attacks on our democracy through this bill, under the guise of more code words used by this Government to mask its real intentions, such as “transparency” and “accountability”. Sue Kedgley from the Greens got it completely right when she talked about Orwellian language, and I will talk about that, too. The use of the words “transparency” and “accountability” is rubbish. The Hon John Carter said that this bill is not about privatisation of water, when it clearly is. It is about the privatisation of local government services, allowing them to be run on a commercial basis, and removing—and this is what I want to talk about—the requirement for local authorities to consult with the community if it wishes to contract out services to the private sector, or corporatise them by transferring them to a council-controlled organisation. All those things run counter to transparency and accountability.

This Government is all about saying one thing and doing another. As Sue Kedgley pointed out, that describes Orwellian language, and she gave a definition, but I want to give the definition from Wikipedia, which describes it as “an attitude and a policy of control by propaganda … misinformation, denial of truth, and manipulation of the past,”. Orwellian language can also be defined as saying one thing and doing the opposite, or rhetoric versus reality.

There were 414 submissions on this bill: 360 were expressly against water privatisation, 17 were in favour, 36 submissions were made by councils against the bill, and countless submissions were made by community boards and other organisations. The Government is essentially ignoring the mood of the people, which has been shown recently across this country in the local government elections, particularly with the election of Len Brown in Auckland—an outcome that was not in the plan of Rodney Hide or John Key—and the outcomes of the elections in Wellington and Dunedin.

I will talk about clauses 11 and 8. Currently, under section 88 of the Local Government Act, any proposal to contract out or corporatise council activities requires consultation. Clause 11 repeals that section so that local authorities can transfer core activities to council-controlled organisations or the private sector, as I have said, without having to consult the community. I tell members that this Government will rue the day it introduces that clause. Right across New Zealand, except perhaps in Christchurch, people voted in local government elections with an express desire to have more consultation and to be more of a part of the process. In Dunedin we have a new mayor, Dave Cull, who is a very good bloke, and I am really looking forward to working with him. The last mayor, Peter Chin, was also a good bloke.

Dr RAJEN PRASAD Link to this

I want to address clauses 8, 9, and 10 of the Local Government Act 2002 Amendment Bill. If the member Mr Auchinvole would like to listen, I shall address those clauses, and I hope the member will keep on listening.

Essentially, the way in which the Government has constructed clauses 8, 9, and 10 shows that it thinks that councils know best, and that the community does not need to be involved. Actually, that attitude is endemic through all of the local government legislation that the ACT-National Government has imposed on New Zealand since it came into power. It has used the particular style of the Hon John Carter. The Hon John Carter has become the salesperson for this way of thinking throughout the local government reform legislation. He is the placater, and he does that with some style, I will give him that. But he couches the Government’s ideology, which is privatisation and no community involvement, in a particular form. The particular phrase John Carter used today was “What’s the harm in that?”. Well, I can apply that phrase to a whole series of changes in the social area over the last 25 years that went past that particular Minister.

Community consultation is the hallmark of best practice in the 21st century. Many, many methods are being designed internationally now to make it possible for communities to participate in the systems that organise their own lives. That is the hallmark of best practice. International models have been developed. Let us look at the Canadian example. They are world-beaters when it comes to community engagement and community consultation. Australia is a country that this Government wants to catch up to. Well, we will be far behind when it comes to community consultation and community engagement, to involving people in those things that matter. Somehow, this Government thinks business can do it better, can do everything better, and that is it. In this particular bill, the community is taken out of far too many things.

Dr RAJEN PRASAD Link to this

There is growing demand, I say to Mr Auchinvole, from our communities to be involved, but Mr Auchinvole and his Government turn a deaf ear to that. They are not interested, yet many jurisdictions are addressing it in very, very powerful ways.

In this bill there really is a general desire to limit community participation and consultation. Clause 8 repeals section 78(2) of the principal Act. Section 78(2) is a very powerful section. This amendment makes it possible for local authorities to undertake perfunctory community consultation. It enables a tick-the-box approach. Councils can virtually do what they like, call it community consultation, and that is what it will be. Labour members agree that section 78(2) could be streamlined, and an amendment on Supplementary Order Paper 180, which we have put forward, does just that. But repealing section 78(2) enables local authorities to engage in perfunctory community consultation. Maybe that is what the ACT Party wants and maybe that is what National wants, but it certainly is not what this side of the Chamber wants. It brands us quite differently. Those who have been listening to this debate over the last 2 days ought to know very clearly that there is a fundamental difference between what this side of the Chamber does, which is take the community seriously and consult it, and what that side of the Chamber is doing. Members opposite cannot deny that repealing section 78(2) is a major change.

Dr RAJEN PRASAD Link to this

Yes, it is. The member does not realise what it means. There is far too much perfunctory community consultation, and that is what this change will do. And it runs contrary to public expectation. The expectation is for meaningful consultation. The member has not read the original provision. I invite the member to read the original provision. That is precisely what it does, and repealing it runs contrary to the expectations of the community. Members on this side of the Chamber take the community very, very seriously. That side of the House is used to doing the opposite and no doubt will continue to do so.

PHIL TWYFORD Link to this

Yes—or what one of their funders, donors, mates, fellow board directors, or whoever said to them. Councils could basically make it up and set the community outcomes in a way that would be undemocratic and would shut people out of the democratic process.