Kieran McAnulty says having a co-governance component in its Three Waters reforms helps the Government give effect to the principles of the Treaty of Waitangi and makes it easier for new water entities to borrow money.
The Local Government Minister told Q+A it is "the right thing" that there is 50/50 representation of mana whenua and councils on each strategic oversight group created as part of the reforms.
Earlier this week, Prime Minister Chris Hipkins announced a "major shake-up" of the Government's controversial water reform programme, which saw the amalgamation of water services into four mega-entities scrapped.
As part of the announcement, Hipkins disputed that representation on the regional representative groups was ever truly "co-governance" — by a techincal definition — and later said the term had become confused.
McAnulty said that the shake-up retained a co-governance component, a highly divisive subject for some, partly due to the Crown's Treaty obligations.
The Local Government Minister joined Q+A to discuss the new shape of Three Waters reforms, including the retention of co-governance principles in the regional representative boards. (Source: 1News)
"There's a good reason for that — we signed a Treaty. The Treaty recognises Māori have special rights in water in particular. That is something that's been tested in the courts and found to be part of New Zealand law," McAnulty said.
"When I was putting forward alternatives for Cabinet to consider, I wasn't willing to change that because I think it's the right thing to do."
Strategic oversight groups — called regional representation groups — assign an independent selection panel to appoint a professional board.
These boards, in turn, look after the operations of the amalgamated water entities that will manage water infrastructure.
McAnulty said Māori, in terms of the overall population, make up a disproportionately large part of each regional representation group.
When asked if that meant the representation groups didn't follow a 'one person, one vote' model, the minister said: "There are provisions in our laws around the Treaty that aren't democratic. The co-governance of the Whanganui and Waikato rivers, for example.
"There are provisions that we have in this country that wouldn't stand up to a purely academic democratic framework.
"But that's not how we work in New Zealand. We recognise that this country was founded on a Treaty that gives Māori particular rights and interests in certain things."
Having mana whenua representation can also help water entities achieve what's known as balance sheet separation, he said.
The approach allows larger, combined water entities to effectively borrow more money than councils currently can since they will no longer share the same balance sheet. A key part of the plan also includes amalgamated entities cross-subsidising water infrastructure costs across cities, towns, and rural areas.
But it has enraged criticism from some local government representatives who have called it an "asset grab".
McAnulty said credit agencies advised increasing the number of entities from four — the Government's original plan — to 10 meant some had ended up "quite small".
It includes a promise of greater council input and no rates blowout. (Source: 1News)
"We have been advised that, if we have mana whenua on those groups, that helps those smaller entities achieve balance sheet separation," he said.
Broadly speaking, councils need to convince credit rating agencies they have limited influence in the governing and running of water assets within larger-scale water entities, even if those entities continue to be what the Government characterises as "regionally owned and led".
That will allow the entities to put distance between themselves and debt-constrained councils.
The Government also argues that distance will give investors more confidence that decisions to invest in water infrastructure are kept at arm's length from political pressures to keep rates and council debt low.
In theory, these factors could strengthen the water entities' credit rating and allow them to borrow more to fund improvements.
It's unknown if the newly announced changes are enough to silence the critics. (Source: 1News)
McAnulty said the Government was determined to get the reforms underway before the election.
"We're a few months away from the general election. If we don't get this across the line, [the public] are going to be stuck with the status quo," he said.
"We could have [continued with the four entity model]. But, let's be honest… this was hugely controversial. It was misunderstood. There were people that were opposing this vehemently."
Political critics of the Three Waters reforms remain strident in their opposition, while some push to become hot-button issues amid an election year.
National's local government spokesperson Simon Watts said co-governance remained "divisive".
"Adopting 10 new entities rather than four makes a mockery of Labour's repeated claims that four entities was the only way to go and would provide huge economic benefits."
National's alternative water reform policy promises to "repeal Three Waters, restore council ownership and control; set strict rules for water quality and investment in infrastructure; and ensure water services are financially sustainable".
ACT leader David Seymour accused the Government of "trying to sell an unpopular idea by branding it differently".
"The 'new' Three Waters will still expropriate ratepayer assets and it will still divide New Zealanders by ancestry through co-government."
Q+A is Public Interest Journalism funded through NZ On Air
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