Rodney Hide confirmed in question time today that Cabinet’s decision to allow Auckland’s super city council to privatise its $5 billion water company from 2015 stands despite earlier suggestions to the contrary.
Two weeks ago in the Herald it appeared Hide was saying this decision had been superceded by a later decision. But the Cabinet minutes don’t bear it out.
I’ll link to the transcript here as soon as it appears on line. See my earlier post for background.
This is strange. Did Hide mean to confirm that privatisation decision stands? He has been under a lot of pressure lately.
Here are the facts:
- On October 19 Cabinet supported Rodney Hide and decided to allow the new Auckland Council to move to privatise its water assets after 2015.
- A week later, Cabinet took a completely contradictory position and refused to support Rodney Hide’s proposed change to the Local Government Act (LGA) which would enable full privatisation of local government water assets nationwide. Instead they made a series of changes to loosen the controls on public-private partnerships in the water sector.
- On November 9, following an interview with Rodney Hide, the Herald reported that while Cabinet approved the privatisation of $5 billion worth of Auckland’s water assets, it was over-turned by the subsequent LGA decision.
Mr Hide or the Prime Minister need to clarify exactly what is going on.
Update: Late this afternoon the Minister’s office released a statement saying that Councils’ responsibilities for providing water supplies will not be changed by recent Cabinet decisions including the one on October 19 to “allow the new Auckland Council to determine from 2015 the governance arrangements and asset ownership for the delivery of water services”. Mr Hide says now there is no intention to over ride the provisions of the Local Government Act that prohibit privatisation of water assets. That’s a relief.
But strange then, that after talking with Mr Hide two weeks ago the NZ Herald was clearly left with the impression that the intention of the October 19 Cabinet decision was to allow for privatisation from 2015. The Herald reported as such and the Minister of Local Government has taken two weeks to issue a clarification. Odd.
It is also strange that the Cabinet Minute of October 19 purports to allow the Auckland Council to determine the asset ownership and structure of the water company from 2015. Why, if it didn’t intend to override the Local Government Act and allow privatisation, did Cabinet need to spell out what the Auckland Council would be able to do anyway, that is change the structure of one of its own organisations?
That’s scary.
Phil .. I just watched Q time and I heard him say they were not .. he spoke of Labour agreeing to a 15 year PP scheme of some sort and they were extending it to 35 years .. same thing with a different time frame .. did I not hear correctly?
jabba – That is what Hide said. You can read it at http://ourhouse.parliament.nz/en-NZ/PB/Business/QOA/4/1/c/49HansQ_20091117_00000008-8-Local-Government-Minister-Statements.htm
That is separate from the Oct 19 decision re the future of the Auckland water company. And it is a misrepresentation. Not only have they pushed the maximum for PPPs out to 35 years, they are also allowing outright private ownership of water infrastructure (which is prohibited under current law).
This pi**es me off greatly.
I’m assuming Labour will amend this if the Party wins in 2011 or 2014..?
Phil, do you think the state should pay peoples’ grocery bills?
sean14 – No.
So why then Phil shouldn’t people pay for water?
I wish bananas were all you could eat for 50c. That would control supply wouldn’t it.
Sean14.
They do pay for water… in their rates.
Who Kenny? Some homeowners do, some don’t.
So why then Phil shouldn’t people pay for water?
Doesnt the argument go something like ‘one monopoly provider on one network of pipes is a bit different to several providers distributing via a large network of sites’? Clumsily put perhaps but you surely know it’s a little more complicated than you say.
Who are these lucky home owners who don’t pay rates?
I mean for water in their rates.
Spud – Aucklanders. We get a bill. Maybe others too.
kenny – so paying for water isn’t the problem, but we might as well chuck around the evil privatisation word to scare some people?
Whether or not the rating system is a good way of charging people is another debate, given that households with the same rates bill may use very different amounts of water.
StephenR – Can’t say I can see anything complicated about paying for what you use. Seems like the ultimate in fairness as well.
sean14, this is not about whether people pay for water or not. Everyone in Auckland pays for their water, through their water rates. The debate about privatisation is about whether it is a good or a bad thing for our water infrastructure and services to be profit-driven. Most Aucklanders – 85% in the last poll – want their water system to remain in public hands. The water system is a natural monopoly. If you privatise it then you are inviting monopoly rent-seeking behaviour – price gouging and the like. Better that the system remains in public hands, run on a non-profit basis. I think most people believe that because water is so essential to human life it should not be run on a for-profit basis.
Whats ‘paying for water’ got to do with it? This all ready happens , with different formulae in different areas.
The point is a public monopoly which provides , water sewerage should still be publicly owned and provide the services at the lowest possible cost. As well the water & sewerage provider acts a regulator in some matters relating to stormwater disposal as well.
I thought making a profit was what capitalist countries did.
Companies/people make money from me when I .. buy food, drink, water, houses, cars, clothes, power, telecoms/Internet services, petrol, oil etc .. without any of those things, I would struggle and in some cases die.
As long as the service and quality is ok, then .. ok
Phil, I’m pretty sure food is essential to human life too and we run the supply of that on a for-profit basis (in a non-socialised duopoly).
Based on the recent rate increases where I live I’m feeling pretty rent-seeked and price-gouged.
sean14 – Food is not a monopoly. Water is.
Based on the recent rate increases where I live I’m feeling pretty rent-seeked and price-gouged.
Nearly there. Now apply to ‘water’.
StephenR – so socialised monopolies are okay?