3. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does he stand by his statement that "water assets will not be privatised as a result of the restructuring" of local government; if so, how does he reconcile it with Cabinet's decision to allow "ownership" of water infrastructure by the private sector?
Hon BILL ENGLISH (Minister of Finance) : I can confirm that water assets will not be privatised as a result of local government restructuring. The Government is proposing some changes to the maximum permitted concession period, from 15 years to 35 years.
Dr Russel Norman: Can the Minister confirm that Cabinet's decision to allow private sector interests to own and operate water infrastructure for 35 years at a time means that water infrastructure can be in private ownership for the rest of his lifetime; if that is not privatisation, what is it?
Hon BILL ENGLISH: The Greens were party to a policy change by the previous Government that allowed all of those things to occur for 15 years. If that was not privatisation supported by the Greens, then what was it?
Dr Russel Norman: Can the Minister confirm that the reforms to water management announced yesterday are very similar to those that preceded the massive failed water privatisation under the Thatcher Government in the United Kingdom?
Hon BILL ENGLISH: No, I cannot confirm that. The principal change that was announced yesterday was that the kind of arrangement that the member seems to object to now, but that the Greens agreed to under the previous Government—that it could last for 15 years—can now last for 35 years. Thirty-five years makes a good deal more sense, because the lifespan of water assets is much longer than 15 years. Local government faces up to $10 billion of expenditure on water assets over the next couple of decades. It is the Government's view that local government needs to have available all of the tools that it can to make sure that ratepayers can get good value for money out of a very large investment.
Hon Shane Jones: Is the Minister satisfied that Auckland ratepayers want the new council to lose control of the management of water services and want the privatisation of that infrastructure, given that a poll earlier this year found that 85 percent of Aucklanders oppose the privatisation of water assets?
Hon BILL ENGLISH: That member was another member of the previous Government, which permitted exactly these arrangements, but only for the impractical period of 15 years. The arrangements are no different in principle; it is just that they can apply for a more sensible period of time.
Mr SPEAKER: Just before we continue, I say the member's question was about the polled attitude of Aucklanders, not about legislation that the member himself might have supported. I wonder whether it is possible for the Minister to respond to the part of the question that was about the attitude of Aucklanders, which was the substance of the question.
Hon BILL ENGLISH: Polls about the privatisation of water are irrelevant, because these changes are not about privatisation.
Sue Kedgley: Is he aware that the 5 years following the Thatcher Government's privatisation of water in the UK saw 18,000 households have their water supply cut off, and what, if anything, will his Government do to prevent the same thing from happening in New Zealand?
Hon BILL ENGLISH: In answer to the first part of the question, no, and in answer to the second part, water services will be provided by the Auckland Council in exactly the same way as they are provided by Auckland councils now.
Jeanette Fitzsimons: Can the Minister clarify whether he is telling the House today that the only change the Government intends to make to the water provisions of the Local Government Act 2002 is to change the number "15" to the number "35"; if that is not the only change, then what else, exactly, is the Government planning to do?
Hon BILL ENGLISH: It is not the only change, but it is certainly the main change. I am happy to provide the member with whatever information is publicly available about the details, but by and large the same regime that exists currently is to stay in place. The reflex criticism that anything that the Government does is privatisation does not seem to be working to scare the public in the way that the member might have hoped it would work.
Metiria Turei: Is the Minister aware that the 8 years following the Thatcher Government's privatisation of water in the UK saw privatised water companies prosecuted 260 times for pollution of the water source, and what, if anything, will his Government do to make sure that that does not happen under his changes to the Local Government Act?
Hon BILL ENGLISH: It is probably indicative of the state of the current Opposition that its members are relying for most of their policy analysis on policy that was put in place 30 years ago, in a country on the other side of the world.
Mr SPEAKER: The question asked whether the Minister was aware of a certain outcome of a policy that, I accept, was implemented a long time ago, but that does not necessarily mean that abuse of the member who asked the question is a fair answer. I think the Minister should, when answering, make some reference to the particular situation in the UK that the member asked about, if the Minister has any information on it.
Hon BILL ENGLISH: No.
Dr Russel Norman: In light of these examples from 30 years ago, does he accept that water privatisation was an abject failure in the United Kingdom; if so, why is he initiating New Zealand's heading down that path, when he himself acknowledges it is old policy that does not work?
Hon BILL ENGLISH: No; and we are not doing so.
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