- The Water Services Entities Bill guarantees, in Nanaia Mahuta’s words, that ‘At a strategic level, the regional representative group will be made up of 50:50 council and iwi representation’. This is not democratic. New Zealand is a representative democracy. However, having a 50:50 council and iwi representation is a false impression of a democracy. It is not representative. It, rather, implies that a quota is being adhered to and that management of the WSEs will not be appointed purely on merit, but on alternative grounds.
- Additionally, in Mahuta’s words, ‘Mana whenua whose rohe or takiwā includes a freshwater body can make a te mana o te wai statement for water services which the board must give effect to.’ From my understanding, this entails that Mana whenua have effective veto power over the management Board running water services. Again, I reiterate that this is neither democratic, nor is it representative of the New Zealand population as a whole.
- The project has been stated to be, by Mahuta, an ‘ambitious programme’ and ‘up to $185 billion worth of investment is required in New Zealand's three waters infrastructure over the next 30 years.’ I do not believe that a project of such great importance can risk creating extra complication via ‘extensive consultation with local government, iwi Māori, and the water industry’ when such large funding is required and no independent or experienced financial body is overseeing it.
- As Simon Court (ACT) quite rightly highlights, ‘This bill says nothing about who will pay for the infrastructure and how it will be funded.’ When we look at the S&P report, the WSE are stated to be ‘high risk’ financially, the financing is said to be ‘aggressive’ and the WSEs have a low ‘Stand Alone Credit Profile’ of ‘bbb’, which is described by S&P as ‘adequate capacity to meet its financial commitments but is somewhat susceptible to the adverse effect of changes in circumstances and economic conditions than Issuers in higher-rated categories'. Economic conditions such as inflation and a recession have not been accounted for.
- Debt is measured by the leverage ratio. Leverage starts at 2x, which is described as being minimal, the second highest level of leverage is 5-6x, which is described as being ‘aggressive’ and the highest level of leverage is greater than 6x, which is described as being ‘highly leveraged’. The S&P Rating Report dated 7th April states that the opening leverage for the proposed financing is 7x and this increases to 8.6x over 5 years. Under an alternative scenario it states that the leverage could start at 7x and increase to 9.6x.
- Furthermore, the S&P Report states on p5 that the likelihood of support from the Crown is ‘high’. This makes me question why the WSEs are even being created. Balance sheet separation is evidently enabling the government to take on more debt than it can repay without support from the Crown, and I do believe that this will be a huge burden to future generations of taxpayers if The Water Services Entities Bill is passed.
Natasha Poole is an Oxford Graduate, small business owner, linguist, writer, author and contributor to The Spectator Australia.