NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business

Kate MacNamara: Three Waters and Jacinda Ardern's contention that ownership matters, not control

By Kate MacNamara
NZ Herald·
12 Aug, 2022 05:25 AM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
129Comments
Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

If the Prime Minister thinks control is immaterial she should try giving it up, writes Kate MacNamara. Photo / Warren Buckland, Hawke's Bay Today

If the Prime Minister thinks control is immaterial she should try giving it up, writes Kate MacNamara. Photo / Warren Buckland, Hawke's Bay Today

Opinion

OPINION:

The control of assets is just as important as ownership, and control and ownership don't always amount to the same thing. Most Kiwis understand this. Strangely enough, though, Prime Minister Jacinda Ardern sat down with TVNZ's Jack Tame this month and argued just the opposite.

The subject was the Government's contentious Three Waters Reform Programme, which will transfer tens of billions of dollars' worth of water assets – treatment plants, pipes, and drains – off the books of 67 local councils to four newly created water services entities.

Shareholding of the new entities will remain with councils, though individual councils will no longer control the assets in their region because their interest will be changed from direct ownership to shares in an agglomerated entity.

But that's not the only way in which local control of water assets will be up-ended.

Make it your business to know

Start your day with the latest business headlines straight to your inbox.
Please email me competitions, offers and other updates. You can stop these at any time.
By signing up for this newsletter, you agree to NZME’s Terms of Use and Privacy Policy.
Advertisement
Advertise with NZME.

Under the new scheme, councils will choose just 50 per cent of representatives in a group that will in turn appoint the board of directors to govern their new water entity. The other half of the representatives will be chosen by iwi.

To choose these representatives is to control the water entity. Tame was driving at these details when he asked the Prime Minister: "if you and I as Pākehā people have the same level of representation [on water entities] guaranteed as Māori people?"

The PM took a few twists and turns in her response. Tame was being "overly simplistic" she said: "... I'm arguing it's simplistic because the ownership of these entities sits with local bodies and government. So it is not changing the ownership structures."

Advertisement
Advertise with NZME.

Tame countered: "It's not changing ownership but it is changing the representation, that's an important distinction."

Ardern insisted: "Well actually, local government maintain the ownership. They're the ones with the public share … and with these regional representative boards, yes we have mana whenua represented and local government represented. But the ownership rights continue to sit with local government and with those local councils."

Her final word on the matter was: "The reason I am coming back to ownership is because for most people power sits with ownership. And that ownership sits with local government."

That's simplistic. The Taxpayers' Union recently released a legal opinion from law firm Franks Ogilvie of the Water Services Entities Bill now before Parliament, which concluded that ministers' insistence that under its provisions councils will continue to own water assets is deceptive. The hobbled and legally circumscribed ownership that is provided for in the bill, it suggests, would be unrecognisable to ordinary New Zealanders.

"The councils will have none of the bundle of rights that define and are conferred by ownership in any sense familiar to lawyers, or understood as the common significance of ownership. Councils are expressly denied the rights of possession, control, derivation of benefits, and disposition that are the defining attributes of ownership," the opinion states.

Read More

  • Auditor-General urges accountability changes for Three ...
  • Councils propose Three Waters fix without co-governance ...
  • Three Waters: Government to give councils $44m to help ...
  • John MacDonald: The Government is just like the All ...

Auditor-General John Ryan's submission on the legislation is a litany of misgivings that centre on the likelihood of "adverse effect" on "public accountability, transparency, and organisational performance".

He concluded that the Water Services Entities Bill provides insufficient information to determine where control of the new water entities will lie.

But ordinary people trying to sift through the importance of ownership and control of assets have another gauge, supplied by the New Zealand government itself.

Advertisement
Advertise with NZME.

Tame talked about "governance", perhaps because that's how the Department of Internal Affairs has cast the matter of who gets to appoint water entity boards, and because he was driving at democratic principle. But elsewhere in the government, officials refer to the issue as "control".

Control of the country's water assets is a key concern for critics of Three Waters. Photo / NZME
Control of the country's water assets is a key concern for critics of Three Waters. Photo / NZME

For example, when foreigners want to buy sensitive New Zealand assets like land or significant businesses, the Overseas Investment Office takes a keen interest not only in the ownership those foreigners would gain, but just as importantly, in what control they would achieve.

Land Information NZ explains on its website that the New Zealand government deems foreign control of an entity to be achieved when an overseas actor or actors acquires "the power to appoint 50 per cent of the directors".

After all, the Overseas Investment Act is interested not just in thresholds of ownership, but equally in thresholds for control.

The act spells out that "control of 50% or more" of a "governing body" constitutes an important threshold for determining control (section 7 [3][A]). Sometimes, the act acknowledges, control is established at much lower thresholds.

Similar thinking is spelled out by the Anti-Money Laundering and Countering Financing of Terrorism Act. As a consequence, the Financial Markets Authority's test of beneficial ownership has three parts, only one of which reflects Ardern's conflation of shareholding and the power of ownership.

An equally important test of beneficial ownership is "who has effective control" of an entity. (The third test gauges what parties benefit from a particular transaction.)

The FMA deems that beneficial owner(s) are those who satisfy "any one element", or more, of its test.

Control matters: controlling parties will set the prices charged for the use of water assets (possibly subject to a regulated cap); they will decide how those charges are levied - by volume/use perhaps, or maybe by property value if that's how they judge fairness; and they will almost undoubtedly decide that the cost of improving water assets in some regions will be met by ratepayers in other areas, so those who have already paid for adequate infrastructure will pay again for assets in areas which have underinvested.

If the Prime Minister thinks control is immaterial, she should try giving it up.

Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

129

Comments

Latest from Business

Premium
Healthcare

Healthcare turf war: The tussle for public funds in the business of general practice

31 May 01:00 AM
New Zealand

Dargaville water crisis: Businesses face losses and residents raise health concerns

31 May 12:09 AM
Premium
Opinion

Steven Joyce: AI is key to unlocking New Zealand's economic potential

30 May 11:00 PM

Deposit scheme reduces risk, boosts trust – General Finance

sponsored
Advertisement
Advertise with NZME.

Latest from Business

Premium
Healthcare turf war: The tussle for public funds in the business of general practice

Healthcare turf war: The tussle for public funds in the business of general practice

31 May 01:00 AM

Family practice funding feud: a fight for public money.

Dargaville water crisis: Businesses face losses and residents raise health concerns

Dargaville water crisis: Businesses face losses and residents raise health concerns

31 May 12:09 AM
Premium
Steven Joyce: AI is key to unlocking New Zealand's economic potential

Steven Joyce: AI is key to unlocking New Zealand's economic potential

30 May 11:00 PM
Premium
Fran O’Sullivan: It’s time NZ had a serious debate about making KiwiSaver compulsory

Fran O’Sullivan: It’s time NZ had a serious debate about making KiwiSaver compulsory

30 May 09:00 PM
Gold demand soars amid global turmoil
sponsored

Gold demand soars amid global turmoil

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • What the Actual
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven CarGuide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP
search by queryly Advanced Search