Kieran McAnulty: It’s the right thing to do

Local government minister Kieran McAnulty’s defence of Māori Treaty rights and representation in his interview last Sunday with Jack Tame on TVNZ’s Q+A, was clear, frank and unapologetic — a rare thing in politics, especially in an election year.

The interview followed the government’s reshaping of its Three Waters reforms — now rebranded as Affordable Water Reform. Here’s a lightly-edited version of their kōrero.

 

Jack Tame: Let’s start with the co-governance issue. I know you’re not calling it co-governance — that’s what your predecessor called it for the longest time. Do all New Zealanders, Māori and non-Māori, have the same level of representation as a proportion of the population in those regional representative groups?

Kieran McAnulty: No, they don’t, because obviously we’re proposing that mana whenua have 50-50, alongside local government reps. But there’s a good reason for that. We signed a treaty. The Treaty recognises that Māori have special rights, in water in particular, and that is something that’s been tested in the courts and found to be part of New Zealand law.

When I was putting forward alternatives for cabinet to consider, I wasn’t willing to change on that, because I think it’s the right thing to do. If it was at a governance level, we might have got a different outcome — we probably would have. But it’s not — it’s a level down. It’s got a very specific role, and I think mana whenua should be represented.

Do you accept that in those regional representative groups this is not a one-person, one-vote model?

Well, it’s not really a vote model, but I do accept that mana whenua have a higher proportion than what they have [as a percentage of] the New Zealand population.

Do you accept that that’s not a strictly democratic model?

There are provisions in our laws around the Treaty that aren’t democratic — co-governance of the Wanganui and Waikato River, 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. And what we’re proposing here, we believe, recognises that and complies with what previous court rulings have been.

There’s also an economic argument for this as well. The advice that we’ve received from the credit agencies, particularly now that we have more entities, and some of them are quite small, is that the only way to make this affordable is to get what’s called balance-sheet separation.

And we’ve been advised that if we have mana whenua on those groups, that helps those smaller entities achieve balance-sheet separation.

So, however you look at it, if the objective of these reforms is to save ratepayers money, and this helps us do that, then I think ultimately New Zealanders will be comfortable with it.

It’s quite an extraordinary thing to hear a cabinet minister accept that reforms he is pushing through are not strictly democratic, if a one-person, one-vote measure is the test of a democracy.

Well, we’ve had iwi representatives on local government for a long, long time. We’ve had separate Māori seats for a long, long time. There is a history of recognising the particular rights of Māori in this country, but I don’t believe giving Māori something necessarily takes anything away from the rest of us.

The objective of this is to save ratepayers money, and New Zealanders have a very clear choice between [a model] that we can demonstrate will save the money and the opposition’s alternative . . . They haven’t produced any figures to back up their claims. Ours has mana whenua representation; theirs does not.

And I think if you go out and speak to the average New Zealander and say, what’s more important to them, saving rates or not, they’ll choose saving rates.

I’ll talk about those savings in just a moment. Do you think one-person, one-vote is an academic definition of democracy?

I think it fails to recognise that in each democratic system, there are specific factors that are unique to each country. This country was founded on the Treaty of Waitangi, and for generations, it was ignored, it was overlooked, there were breaches.

New Zealand takes that seriously now, over successive governments. Now, we might see, when some parties are in opposition, that they cause a bit of a scene about that sort of stuff. But when they then go into government, they take it seriously as well.

We’ve moved a long way as a country. It’s a journey that we’re still part-way through, but recognising that the democratic system of this country was based on a promise, on a contract, I think that it’s on the Crown to observe those obligations and commitments that it made.

The changes you’ve introduced are clearly designed to appease councils. Mayors have had a little bit of time to digest the new shape of the reforms. What sort of feedback are you getting?

It’s still mixed, but I never intended to get unanimous support from the local government sector. I would have been naive if that was my objective. All I wanted to do was find that balance, because there’s a scale here. If we were only interested in economic efficiency, we would have proposed one entity. If we were only interested in ensuring local voice, then we would have done what the National Party have proposed and stick with the status quo. That’s not sustainable.

I appreciate that your reforms represent change on a much greater scale, but to be clear, the National Party is not proposing to stick with the status quo.

I disagree. Everything that they’ve proposed can already happen. That is not a fundamental reform. If you talk to the local government sector, they say, we can’t do this by ourselves. We need to reform.

There’s a range of views as to what needs to happen, but what we’ve heard is that councils could do shared services. Well, that’s happening already, and it hasn’t worked. Councils could form a CCO — that’s happening already, and it hasn’t worked.

The only way to remove the debt from councils’ balance sheets is to do what’s called balance-sheet separation — have entities that are owned by councils, but run independently. National can’t square that circle. They’ve promised a lot, but what they are landing on, without backing it up with numbers, does not stack up.

So under the previous model, when people questioned that entity that included the lower part of the North Island and the top part of the South Island, the justification around that model was that it couldn’t achieve balance-sheet separation unless those two areas were combined. Now, that’s exactly what you’ve put through. How does that work?

Well, we went and got further advice. If we were advised that what we’re proposing now didn’t achieve balance-sheet separation, we wouldn’t have done it. I’ll give you an example.

The easiest way to achieve both some form of savings and local voice would have been just simply to say: “Right, we’re going to have 16 entities along the regional council boundaries.”

But that didn’t work, because we’ve got unitary authorities in Gisborne and at the top of the South Island. We’ve got communities in Northland and the west coast of the South Island that are impoverished and, in many instances, very low income, with low capacity to account for any increased rates.

That’s why we’ve landed on 10 . . . We wouldn’t have landed there if we weren’t confident and weren’t advised that it would stack up.

At this stage, how many councils do you think are likely to change their position from opposing the reforms to supporting them?

I’m not going to be able to give you a number right now, but I can guarantee there’ll be more in favour of this than they were in favour of four. Some of those councils have indicated publicly their support for this.

Keeping disgruntled regional mayors happy is costing everyday Kiwis, and the irony of the affordable water reforms is that they are less affordable from a ratepayers perspective than the previous model. Why is that good for New Zealanders?

Well, we’ve got to look at it in the entire context. The alternative is that, in my view, we will be stuck with the status quo — we’ll be stuck with a system that simply won’t deliver any cost savings to ratepayers.

You could have gone with the four-entity model.

We could have. But let’s be honest. You’ve said so yourself, that this was hugely controversial, it was misunderstood. There were people that were opposing this vehemently. We’re not getting that with 10.

Your changes might result in a few more mayors coming on board. You might get a majority of mayors, but you’re certainly not going to get all mayors around the country. And the cost of getting a few more mayors on board is potentially going to be thousands of dollars a year for ratepayers in the future. That’s a terrible deal for New Zealanders.

Well, not really, when you consider that, compared to what the alternative is, at the worst case scenario, there’s still a 50 percent saving. That’s a regional average.

But the alternative is the four-entity model that you’ve been pushing for the last 18 months.

It’s not, because we’re a few months away from a general election. If we don’t get this across the line, ratepayers are going to be stuck with the status quo.

Let’s not beat around the bush. The National Party have a policy. If they win the election, they will be removing the entities — they’ve said so themselves. They’ll be putting ratepayers back to square one, and they’ll be facing those massive bills.

And I think of my family, from Eketāhuna, in the Tararua District, the fourth largest roading network in the country. They’ve got to find $600 million over the next 30 years, and they’ve got 12,000 people. They simply cannot do it. And if you do what the National Party’s proposed, and have a voluntary CCO model, who the hell is going to voluntarily join up with the Tararua District?

And I can give you examples of councils like that all across the country, and it’s not their fault. They’ve inherited this situation.

So, as a minister that’s been asked by the prime minister to come in and find a compromise here to get this across the line, because we believe in it, it has to happen — the sector says so itself — I’m going to find a compromise.

The argument you’re putting forward, we could have said the same thing with four. Yeah, okay, you’re going to save some money, but nowhere near as much as one. Why don’t you just do one? There’s a scale, and we’ve got to land it somewhere, and I’m comfortable with 10.

What’s to stop the entities from getting into unsustainable debt?

Well, there’s one thing that we’ve brought in that wasn’t there before, and that’s a mechanism by which entities can merge.

If 75 percent of one regional representative group is in favour and 75 percent of another group is in favour, it’ll just happen. The government’s not going to get in the way. We will set this up with 10, and then step back and leave it to the sector. If regions want to merge, they can.

And I reckon, as they start to look at the efficiencies that come with scale, we will see some mergers relatively quickly.

The key thing for us as a government is to get buy-in broadly in the public that reform is required and that this is the only way forward. Once we’ve done that, then it’s up to regions what they decide is best for them.

This interview, lightly edited for clarity, was aired on TVNZ’s Q + A programme, on April 16. It can be viewed in full here.