Bill charter for privatising water

Bear with me while I consider the rather dry matter of water.

In fact, sit down and pour yourself a glass of it while you still can - without contributing to the coffers of a multinational corporation.

To all those for whom Local Government Minister Rodney Hide's promises to clean up profligate city council spending sound like manna from heaven, consider some of the fine print tucked way down below the preamble to his Local Government Amendment Bill.

This lofty opening states that the Bill's rationale is to improve transparency, accountability and financial management in local government.

Further, it is informed by the following principles: that local authorities should operate within a defined fiscal envelope; that local authorities should focus on core activities; that local authority decision-making should be transparent and accountable.

Laudable enough objectives, and consistent with Mr Hide's and the Act New Zealand party's oft-stated policy philosophy.

So why do the provisions relating to the contracting out of water services contradict almost every one of those aims and principles?In the promotion of the Bill, and its widely prefigured intent, the phrase "core services" has loomed large.

By that it has been understood that activities beyond roads and sewerage and, ahem, water - activities such as, for instance, building multipurpose stadiums, even running free-of-charge libraries - should be curtailed.

But are we now given to understand that water, its provision and management, is no longer a core local government activity? The clause in the old Act which allowed aspects of the operation of all or part of a water service to be contracted out was governed by a term of not more than 15 years.

That term has been lengthened to 35 years, consistent with the Government's "objective of removing unnecessary barriers to water infrastructure development".

Mr Hide stresses that water won't be privatised.

But is he toying with semantics?"Just like they [the council] can get a contractor in to mow the lawns, they can get a contract[or] in to help with the water," he told Radio New Zealand National last month.

There is quite some difference between mowing lawns and providing a community with water.

Others point out that providing "local authorities, and their communities, with greater flexibility in choosing methods for delivering water services and developing water infrastructure" for periods of up to 35 years plainly opens the door for de facto privatisation, whatever the stated intent.

Further, under the new Bill a previous requirement to consult the public over the contracting out of such services will no longer be mandatory.

And "arrangements" between councils and contracting companies - rates of return, that sort of thing - will almost certainly be enshrouded in "commercial sensitivity".

So let's see if we've got this right.

Accountability: under the new Bill, local government will be able to contract out public services without consulting the public.

Transparency: the arrangements inherent in such contracts will most likely remain secret.

Financial management: the price of water will rise, because financial management for a water corporation primarily means servicing the profit demands of its shareholders - rather than providing, as of right, a supply of clean, clear, fresh, pathogen-free water to citizens.

Contracting out water services is not just about making efficiencies at city hall.

It's also about privileging private enterprise.

I have no problem with that, except when it comes to taking an essential public asset - in effect confiscating it through legislation - minimising long-term investment, racheting up prices, and sending the resultant profits offshore.

It will do nothing to address long-term needs to conserve water, and we will be stuck with it.

Unhappy with the way council is dealing with water issues? Kick 'em out.

Unhappy with Water2Go and the prices they charge? Get over it.

They're here for the next 35 years, or until they've sucked enough profits out of the system and want to sell on, or hand the assets back to "the community".

Either way, by then, councils will have lost the expertise and infrastructure to oblige.

The Local Government Amendment Bill may contain much that makes sense; but it is also a charter for privatising water.

Simon Cunliffe is assistant editor at the Otago Daily Times.


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