Power Play: Three Waters anti-privatisation blunder adds to storm of controversy

6:43 pm on 29 November 2022
Prime Minister Jacinda Ardern

Prime Minister Jacinda Ardern (File picture) Photo: RNZ / Angus Dreaver

The contentious Three Waters legislation just got messier.

Already under intense scrutiny, a controversial change made during urgency last week has done nothing to consolidate public trust around the significant, but politically troublesome, policy.

Apparently without the knowledge of the prime minister, or the man who runs the business of the House, Chris Hipkins, a 60 percent entrenchment clause preventing the privatisation of water assets was voted into the legislation - with Labour's support.

Many New Zealanders would applaud the move to avoid privatisation, but the policy intent is not the issue.

The constitutional crux of the problem is the use of entrenchment for anything other than electoral law; the idea being that for something so substantial a super majority of Parliament would be needed to make any changes. According to public law experts and the government's own legal advice, Three Waters by no means fits the bill.

It was an amendment put up by the Greens' Eugenie Sage, supported by Labour, and one that went unnoticed by the opposition MPs in the chamber at the time.

Green Party MP Eugenie Sage, Minister of Conservation

Greens' Eugenie Sage Photo: VNP / Phil Smith

It's been kicked back to Parliament's Business Committee to "resolve the issue" - the prime minister's words - with Jacinda Ardern agreeing politicians need to be "cautious" around the use of entrenchment and how "we make sure we preserve that".

At no point did Ardern say she knew that provision was being put up - in a way that would enable it to pass - and when questioned, talked about "everyone in Labour" being aware of the 75 percent proposal, but "what would have been happening in real time is you had both an entrenchment position and a different threshold".

In other words - the amendment was changed on the floor of the House by the Greens and Labour didn't quite realise what it was voting on. But that was not the case.

Chris Hipkins

Leader of the House Chris Hipkins Photo: RNZ / Samuel Rillstone

Hipkins was more blunt saying the "last he heard" the proposal was for 75 percent, "which would have failed with only Labour and the Greens supporting it".

"I wasn't aware until after the fact that that had been lowered to 60 percent; I wasn't in the House at the time that it happened."

Nanaia Mahuta as the responsible minister, however, knew exactly what was going on.

Nanaia Mahuta

Local Government Minister Nanaia Mahuta Photo: RNZ / Samuel Rillstone

"We know that while this particular SOP [supplementary order paper] may not pass the constitutional threshold, there is a moral obligation of people who believe that privatisation should not occur to support that particular SOP," she told the House at the time.

The Attorney-General and Crown Law had advised the government there is a "high constitutional threshold to be reached in order to put such a threshold within legislation, and often it's on constitutional matters - of which this bill is not - and it would be a novel approach to include an entrenchment clause".

Public law academics went further, describing it as a potentially "dangerous precedent", which "extends the use of entrenchment protection from a very limited range of matters fundamental to our constitutional system to a matter of contested social policy".

The political conversation around protecting water assets against privatisation and using entrenchment is not new, and had been tested with various parties earlier this year. Labour approached them earlier in the year, seeking support for a 75 percent entrenchment provision, which National and ACT refused to sign up to.

At some point after that, the discussion between the Greens and Labour turned to a 60 percent threshold instead, something they could get over the line without needing any others.

Sage told RNZ there had been "negotiations" with the minister, but wouldn't put a date on it. She defended putting up the amendment without proactively flagging it publicly, saying anyone who had read the select committee report would know the Greens' position.

The problem sits with Labour: why did the most senior ministers in the government not know this particular provision was going to be put to the House (and pass), but also why was the case not made to the public before steaming ahead, and the rationale laid out?

The precedent it sets is any government that can muster 60 percent on any given policy could entrench it - and that cuts both ways, a fact not lost on Labour.

The dilemma it now faces is trying to undo a pending law change it wholly believes in, guarding against privatisation, and having to seek the co-operation of National and ACT in the process.

Three Waters has attracted a storm of controversy, in part because of the rhetoric being whipped up around co-governance, but also a failure on the part of the government to get the messaging right and sell its merits.

This latest blunder plays straight into the hands of the policy's staunchest opponents, handing them yet more ammunition in their claims of secret agendas and political mismanagement.

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