Cross Subsidisation: A positive viewpoint

Chairman of the local branch of the Labour Party, Mark Humphrey, hands local MP Russell Marshall a petition of 6000 to 7000 signatures that was organised by Bill Derby in the late 1970s. Mayor Doug Turney looks on. The petition was presented to Parliament by Russell Marshall.

OPINION:

As an attendee of two of the meet the candidates forums held recently to introduce prospective councillors to the voting public, it was apparent to me that candidates were unanimous in their opposition to the Government's Water Services Entities Bill (Three Waters).

Principle among their concerns was the belief that those councils whose funds have made proper provision for water services should not, through a process of cross subsidisation, have to support those councils that have not.

That view was reflected in the council submission to the Parliamentary Finance and Expenditure Select Committee on the Water Services Bill. I was shocked by the then mayor's brazen use of the term "moral hazard" in the verbal representation he made in support of that submission.

The use of the term implied that those councils who have not adequately managed their Three Water obligations should be allowed to fail. In my opinion, the unfortunate use of the term "moral hazard" reflects a holier-than-thou attitude that is abroad in the community.

The proper provision of water services and the environmental implications of climate change are of national concern. The notion that we in Whanganui are unaffected by Three Waters systemic failures in other parts of the country does not seem to take account of a variety of factors that seem obvious to me: and any assertion that we in the Whanganui district have a proud history of prudent management of our water systems is one which I also challenge.

For much of my life raw sewage was piped directly into the river and the ongoing saga of the establishment of Whanganui's subsequent sewage schemes with its ratepayer complaints, councillor squabbles and council management failures is one which many Whanganui citizens would have witnessed; and throughout much of that time there had been a call for government assistance.

Whanganui citizens have petitioned the government begging for a financial contribution and a candidate for the Whanganui parliamentary seat once ran a campaign based on that issue.

Eventually, some Government aid was provided and in recent years, government financial assistance has also mitigated the burden to Whanganui's ratepayers for many of the council's recent large scale projects — according to the former mayor, Hamish McDouall, by over $100 million during the term of his tenure. Is that not a form of cross subsidy provided by the taxpayers of New Zealand for the benefit of the local community?

Most of the candidates I witnessed at the candidates' selection meetings had indicated that they have, during the course of their lives, lived in places other than Whanganui; and at any given time Whanganui residents will be visiting other locations.

Additionally, many long-term residents will now have children who live elsewhere. In each of those situations the water they drink would be provided by their new local body. Even from a purely parochial perspective that would be reason enough to support a fully integrated and coherent Three Waters system throughout New Zealand; one that provides for a consistent standard of water for which we all pay.

But views expressed at the candidates' meeting see that concept as an iniquitous example of cross subsidisation. I suppose it could be considered a form of cross subsidisation in the same way as hospital and public education services are. Cross subsidisation it maybe, iniquitous it is not.

There are, of course, other issues associated with the Three Waters concept that I would argue in support of, one of which is the question of local control. Suffice to say, I believe a fully funded dedicated Three Water entity of the type reminiscent of the Ministry of Works is more likely to resource and facilitate proper responses to future events and, I contend, more enabling of local input than what its opponents assert.

It is my view that the strident call by some of the successful council candidates for the retention of local control on all matters concerning water service and environmental control should be tempered with a more humble appreciation of what has happened in the past and, more importantly, what could happen in the future.

Stewart Gray, now retired, is a champion of the working classes and a life-long student of politics, local and national.