3 Dec 2022

Questions remain over how Three Waters anti-privatisation clause got past ministers

6:15 am on 3 December 2022
Labour Party MP Nanaia Mahuta

Local Government Minister Nanaia Mahuta put forward the Greens' controversial 60 percent entrenchment provision. Photo: RNZ / Angus Dreaver

Labour's top brass somehow missed the memo at their caucus meeting last week that the Three Waters amendment they were backing was a constitutional bear trap.

The prime minister, the attorney-general and other senior ministers were present when Local Government Minister Nanaia Mahuta put forward the Greens' controversial 60 percent entrenchment provision.

The question remains whether they were inattentive, or the proposal put forward was either undersold, or simply unclear.

Jacinda Ardern has referred the matter to a cross party parliamentary committee seeking to "resolve the issue" after admitting there should be further discussion about whether entrenchment - requiring a higher majority than the usual 51 percent - should be used for legislation other than electoral law.

There was a storm of criticism after Labour and the Greens passed an amendment during the committee stages of the Water Services Entity Bill under urgency, entrenching an anti-privatisation clause at 60 percent; this means any future government would have to muster at least that level of support to repeal it.

The problem is that goes against legal advice the Three Waters legislation did not meet the constitutional bar for using entrenchment, which is reserved for matters of electoral law. The amendment could create a precedent, paving the way for this government, or those in the future, to entrench laws they felt strongly about.

There are still questions around whether or not Ardern and other senior ministers specifically knew Labour's vote would be cast in support of the Green MP Eugenie Sage's proposal for an achievable 60 percent entrenchment clause, given the fact the red flags had already been raised - including at Cabinet.

Leader of the House Chris Hipkins, in charge of running the parliamentary agenda and business of the House, said he "was not aware until after the fact".

When asked on Monday if she knew an amendment with a 60 percent threshold was going to the House, Ardern did not directly answer the question.

"I know there was discussion around 75 percent, the level of awareness, I could not tell you around the lower threshold."

When pressed further, Ardern said "the principle of entrenchment has generally attracted a 75 percent threshold... everyone in Labour was very aware of that".

"What would have been happening in real time is you had both an entrenchment position but a different threshold."

This was not a new issue. Labour had been keen on making sure the protections around selling off the water assets were as iron clad as possible. Ahead of the bill being introduced to Parliament, Labour approached all parties, including National and ACT, asking if they would back a 75 percent entrenchment. Their support would be needed to get it over the line, but both flatly refused.

In April this year Cabinet had agreed to try to get the entrenchment in place, but in May agreed to rescind that decision because they could not get the votes required.

There was also legal advice given to Attorney-General David Parker about the Three Waters legislation not reaching the constitutional threshold for entrenchment, which was presented to Cabinet.

Conservation Minister Eugenie Sage

Green MP Eugenie Sage put forward the proposal for an achievable 60 percent entrenchment clause. Photo: RNZ / Rachel Thomas

The Greens' Eugenie Sage told RNZ sometime after it was clear the opposition would not be playing ball, there were negotiations between her and Mahuta about how they could achieve entrenchment, but at a lower threshold. She would not give further details of the timing or substance of those discussions.

Mahuta's office has confirmed the matter was discussed at the caucus meeting the day before the amendment was passed, but - citing caucus confidentiality - would not say how detailed that discussion was, how aware other MPs and ministers were of the substance of the proposal and what the general consensus was after that discussion.

One possibility is, despite Mahuta raising it in caucus, the detail offered was not enough to alert MPs and senior ministers present the proposal was for 60 percent and therefore able to pass, as opposed to the original 75 percent.

In that case MPs may have thought it would go nowhere without opposition support, so posed no problem.

Ardern was asked about this again on Thursday in Hamilton. She confirmed she was at the caucus meeting, but added she had "already discussed and pointed out that entrenchment is generally understood to be a threshold of 75 percent".

When asked about the caucus's view on the proposal and whether there was any dissent, Ardern said "conversations in caucus are kept in caucus" but reiterated Labour's position of wanting to ensure a "public asset like water is absolutely protected from privatisation".

"Entrenchment is commonly understood to be a super majority, 75 percent, what came before Parliament was a more novel approach," she said.

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