Cabinet Minister Nanaia Mahuta is accused of having secret meetings to push through the entrenchment of Three Waters reforms. Photo / Mark Mitchell
Documents going back to November 2021 show Local Government Minister Nanaia Mahuta was repeatedly warned by officials against entrenching parts of the Three Waters reforms.
The documents, released to the Herald under the Official Information Act, show Mahuta began considering the second (and initially successful) bid to entrench part of the bill as early as September 29, more than a month before a select committee report revealed to the public and Labour’s wider caucus that the Greens were likely to try to entrench part of the legislation.
An email shows Mahuta’s officials provided feedback on the Green Party SOP (proposed amendment) that ultimately entrenched part of the bill.
The documents also reveal a meeting with Green MP Eugenie Sage about the entrenchment provision that Mahuta did not disclose in her ministerial diary. National says Mahuta needs to front up about why the meeting was not published in the diary and the Government needs to come clean about what led to Labour’s decision to vote for entrenchment in the first place.
A spokesperson for Mahuta said she had “already noted that a mistake was made, and the Government has now fixed it”.
“The Government remains determined to ensure water assets remain in public ownership and remains committed to addressing the rising costs of water on households,” they said.
Last year, Parliament passed the Water Services Entities Bill, which created four massive water entities that will run water services for the country, taking over from local councils which currently do the job in most places.
That bill includes a provision to make it difficult for those four water entities to privatise their operations and assets. Earlier in the year, the Government said it wanted to entrench this provision at 75 per cent. This meant that to repeal that provision would require a 75 per cent majority in Parliament.
However, entrenching that provision at a 75 per cent threshold in the first place would need the votes of at least the National Party. National refused to oblige, and the measure was scrapped by the Cabinet.
Following a select committee report on the bill, the Eugenie Sage put up a Green Party SOP to entrench that provision at the lower threshold of 60 per cent, something Labour and the Greens could do without National votes.
This form of entrenchment passed, but was later extracted from the bill after outcry from many including law academics who warned it would set a dangerous precedent for entrenching party political policy choices.
Historically, entrenchment has only been used for four crucial provisions that relate to the way the country holds elections.
First advice
Mahuta received the earliest advice on entrenchment on November 1, 2021. This related to the original proposal of entrenchment at a 75 per cent threshold.
The briefing said that “to be effective” the minimum level of entrenchment required in Standing Order 270 is support from 75% of MPs represented in Parliament”, referencing the Parliamentary rule that governs entrenchment.
That standing order, as the paper later clarifies, says that you can entrench provisions at any threshold. You simply need to have the votes in Parliament equivalent to the level of entrenchment sought. Parliament could entrench something at 90 per cent, for example, so long as at least 90 per cent of MPs voted for it.
The briefing often obfuscates this fact, saying repeatedly that “Standing Order 270 requires support from 75% of MPs represented in Parliament to enact the entrenched provision”.
This suggests the only entrenchment threshold is 75 per cent, which is not the case.
The briefing warned that there was a chance that entrenching policy settings like Three Waters would not be enforced by the courts.
“Some may therefore argue it is questionable whether entrenchment of these provisions is effective,” the briefing warned.
All the same, the Government decided to pursue a 75 per cent entrenchment and wrote to party leaders, seeking their support.
Warnings from the Clerk
On May 13, 2022, Mahuta received another briefing paper on the legislation. The heavily redacted paper that the entrenchment of public policy was “seen as unprincipled and setting an undesirable precedent”.
It also warned that Parliament’s Clerk was expected to make a submission opposing the bill in select committee, a highly unusual occurrence.
The paper said that officials understood the Clerk had raised his concerns with then Leader of the House, Chris Hipkins.
It appears this understanding was incorrect. When contacted by the Herald, Hipkins’ office could not find that any such meeting ever took place.
The Clerk was opposed to entrenching the provision, but this was only raised with Hipkins in November when it was clear the Greens would put up an SOP.
Other papers also warned Mahuta to expect a submission from the Clerk if entrenchment went to select committee.
As it happens, in May, the Cabinet resolved not to pursue entrenchment, which would have failed if the 75 per cent entrenchment were voted on.
A second attempt
However, the issue resurfaced on September 29, when Mahuta once again requested advice on entrenchment despite the fact the Cabinet had already agreed the Government would not pursue the issues.
She received a briefing in response to that request on October 18, 2022.
The briefing noted that the bill was currently at select committee and might return from that committee with a recommendation or a minority opinion in favour of entrenchment.
The briefing sought options on what to do if that happened and noted that another Cabinet decision would be needed if the Government were to pick up entrenchment again.
“[I]t will require a Cabinet decision to draft the relevant provisions. At this stage, further consultation with the Ministry of Justice would be necessary, and the Parliamentary Counsel Office and the Clerk of the House would need to be informed,” the briefing said.
Officials advised it might be better to wait until the next round of Three Waters legislation that was introduced later in the year.
Officials suggested that an option could be entrenched at 62 per cent, " which is the current House majority held by the Labour and Green parties”. This was close to the 60 per cent threshold eventually adopted by the Greens. The officials noted that this threshold had been suggested by a member of the Finance and Expenditure Committee, presumably Sage.
“There is, however, a risk this option will be criticised as establishing a precedent where future Parliaments may increasingly entrench law using a government majority,” officials warned.
Sage and Mahuta meet
A week later, on October 25, Mahuta received advice for a meeting with Sage to be held on October 27.
This meeting took place, but was not included in Mahuta’s published dairy.
Mahuta’s office explained the meeting was not included because it was subject to a disclaimer around ministers’ published diaries that they did not include meetings “that relate to the Minister’s personal, party political, or parliamentary/constituency roles”.
National’s local government spokesman, Simon Watts, said this did not wash, as ministerial officials briefed Mahuta ahead of the meeting, indicating it was clearly a ministerial meeting and subject to public disclosure.
He learned of the meeting when it was revealed in the answer to a written question he had filed.
“In my view, it is a serious breach of public trust and Mahuta needs to front up immediately to explain it as well as any other meeting she has had off the books on Three Waters,” Watts said.
Mahuta’s office said the advice related to an earlier letter written to the minister by Eugenie Sage and that it was a political meeting with a support partner that was not attended by departmental officials.
The advice for the meeting rehearsed previously aired concerns about entrenchment.
It raised the “possibility the Green Party will seek to include this in the Bill, via a supplementary order paper, at the committee of the whole House stage”.
This was slightly less than a month before the entrenchment vote actually took place.
What actually caused Labour to vote in favour of the provision is still unclear.
The idea of entrenchment was floated at Labour’s caucus meeting on November 22, but it is not clear whether MPs believed they would be voting on a 75 per cent entrenchment clause that would fail, or a 60 per cent clause that would pass.
Labour MPs, including some senior MPs, appeared to be completely blindsided by what they had voted on including the now-prime minister, Hipkins, who only became aware of exactly what had been passed after the fact.
Watts said that the timeline showed Mahuta should have been more explicit about her intentions to caucus far earlier, given the idea of trying to entrench the provision was raised by September 25, two months before the vote, and was clear by October 25, one month before the vote. But this did not happen.
The select committee published its report on November 11, making clear the Greens’ intention to pursue entrenchment.
On November 22, an email between officials at DIA and Mahuta’s office shows officials were providing feedback on the Green Party’s SOP.
Comments suggest there was an openness on the part of officials and the Government for some back and forth with the Greens to get the SOP right.
“[I]f this doesn’t achieve what the Green party want, welcome to come back to us,” the email said.
The decision to vote for entrenchment was made so late it did not even make it into Mahuta’s speaking notes for the committee stage, where it was voted on.
“OFFICE TO UPDATE ACCORDING TO CABINET/MINISTERIAL DECISIONS PRIOR TO COMMITTEE STAGE”
The notes were drawn up on November 11, well below the caucus decision (if there was one) to vote on entrenchment.
The vote took place on November 23, but the entrenchment was undone in the next sitting block.
Mahuta has been tipped to be reshuffled out of her local government portfolio next week. Hipkins has said he is open to relooking at aspects of Three Waters reforms.
It's unclear where he will be.