In Parliament today, the Green Party’s Questions for Oral Answer (number 3) is from Russel Norman to the Minister of Finance, Bill English:
Does he stand by his statement that “water assets will not be privatised as a result of the restructuring” of local government; and if so, how does he reconcile it with Cabinet’s decision to allow “ownership” of water infrastructure by the private sector?
Yesterday, Rodney Hide announced Cabinet’s decisions on local government reform. Hidden among them were changes that will effectively privatise local government water services, by allowing PPPs and repealing public ownership protection provisions in the Local Government Act.
The following legislative changes will be made:
- extend the 15-year limit on water services contracts and joint arrangements with the private sector to 35 years, which makes these arrangements more workable
- allow water services arrangements to include BOOT schemes by allowing ownership of infrastructure by the private sector during the contract period
- repeal the provisions that require councils entering into a contract or joint arrangement with the private sector to retain control over the management of water services (control over pricing and policy to be retained by councils).
Yet, back in May, the beleagured Bill English, as Acting Prime Minister, categorically said “water assets will not be privatised as a result of the restructuring”. Here’s the relevant Hansard from the May question exchange:
Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Will he guarantee that sections 130(3) and 136(2) of the Local Government Act 2002, which prohibit the privatisation of council water services, will remain in force as long as he is Prime Minister?
Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Privatisation of council water services is not being considered by the Government, in Auckland or anywhere else. I cannot give a guarantee on the sections of the Act, because they do not do exactly what the member describes. Officials will be considering those sections, along with many other legislative provisions, in the light of whether they assist or inhibit investment in infrastructure.
Dr Russel Norman: Can the Prime Minister therefore confirm that his promise not to privatise publicly owned assets during this term of Parliament is going to be broken, or is it going to be kept—that is, will he ensure, in respect of the restructuring of Auckland local governance, that water assets cannot be privatised as a result of that restructuring?
Hon BILL ENGLISH: I can confirm the Government’s view that those assets will not be privatised as a result of the restructuring.
Dr Russel Norman: Can the Prime Minister give the same commitment that he has given in relation to New Zealand Superannuation, that if there are any changes—any privatisation of water assets—he will resign as Prime Minister; that is, a complete promise from the Prime Minister that water assets in Auckland will not be privatised while he is Prime Minister?
Hon BILL ENGLISH: I can only confirm what I said in answer to an earlier question. Water assets will not be privatised as a result of the restructuring. In the end, as with every other local body in New Zealand, the decisions about local body assets are made by the elected representatives of the people who live in that local body area.
Dr Russel Norman: How can the Prime Minister say that it is up to Aucklanders to decide whether the privatisation of water services will proceed, when it would be possible for such privatisation to proceed only if his Government were to change the law around the Local Government Act, removing the protection that currently exists in the Act to stop the privatisation of water services; that is, it is not up to just the people of Auckland; it is up to this Parliament and his Government?
Hon BILL ENGLISH: I am not exactly sure what the member means by the privatisation of water services, or of the way the section of the Act to which he is referring protects it. Some councils already have water services delivered under concession. The section he is referring to simply puts a limit on the length of the concession at 15 years. So it is not saying that councils should not have concessions; it is just saying that they cannot be longer than 15 years. If that is the way the law is, then Auckland local bodies will have to work with it unless it changes.
Jeanette Fitzsimons: I raise a point of order, Mr Speaker. It is difficult to raise this, and I certainly do not want to accuse the Minister in any way of misleading the House, but I think he may have misread the Act in terms of what those—
Mr SPEAKER: That is not a point of order. Whether a Minister’s answer is to the member’s satisfaction is not a point of order. She can ask further supplementary questions to elucidate that matter, but she cannot use the point of order process in that way.
Dr Russel Norman: Will the Minister implement the royal commission’s recommendations for block tariffs for water, which guarantee that even large families have enough truly cheap water to live on, while making sure that those who waste water—with very large swimming pools, for example—pay for the privilege; that is, we guarantee water to those who need it, while having a steep price tariff for those who waste it, so there is an incentive to use water wisely?
Hon BILL ENGLISH: It is not the Government’s intention to become involved with the pricing of water. That will be carried out by whatever entity is in charge of water in Auckland, and that entity will be accountable to the elected representatives of the Auckland people.
Jeanette Fitzsimons: Has the Minister received any advice as to whether section 133 of the Local Government Act requires councils to retain their water services and not sell them, and any advice as to whether section 136(2) limits the matters that can be contracted out, to purely operational engineering matters?
Hon BILL ENGLISH: The Prime Minister has not received any detailed advice on that matter. The relevant sections do not prevent the use of concession agreements. They simply set out some of the limitations on what those agreements might be.
Join us at 2pm as Russel and the Green Team fight to keep our public drinking water clean, affordable, and ours.