Local Government Minister Nanaia Mahuta cut a sad figure in Parliament on Tuesday afternoon as her Three Waters bill was referred back to the committee of the whole house stage to have its immensely controversial entrenchment clause removed.
Sitting in the centre of the chamber, as ministers do during committee stage, Mahuta was isolated from all parties in Parliament - including her own.
Hours earlier she’d thrown her caucus under the bus, noting they could have been aware of a Green Party amendment to entrench part of the legislation if they’d bothered to read a publicly available select committee report explicitly outlining it - she took no responsibility for proactively making her colleagues aware of the move, despite the fact she was the minister responsible for the bill.
Mahuta turned on her caucus, even as they closed ranks to defend her, describing the vote to entrench the clause as a “mistake”.
It was a mistake by some MPs perhaps, but Mahuta’s remarks make clear she knew what Labour was voting for, and she knew about the constitutional objections too (confusingly, Mahuta now also says the vote was a “mistake”).
It was a symbolic moment, and it said a lot about these beleaguered reforms.
Mahuta is likely to leave Cabinet soon and possibly by involuntary means. On Wednesday, Mahuta confirmed she was enjoying her portfolio and had no intention to stand down at the next election. Next year’s election will not be a referendum of Three Waters - more retail issues like recession and inflation will dominate.
However, the election will seal Three Waters’ fate, one way or the other.
If National wins, as polls suggest they will, the reforms will be gone.
People who know Jacinda Ardern will say her theory of change is to build consensus for reform. Traumatised by John Key’s government gutting the Emissions Trading Scheme, one of the Helen Clark government’s key climate change initiatives, Ardern has cautiously, conscientiously built consensus for two of her own legacy policies: child poverty reduction, and the Zero Carbon Act.
Those reforms will endure no matter the result of the next election.
But Three waters’ only chance of survival is for Labour to win next year and to use its third and possibly final term to embed the reforms so deeply it’s not worth National’s effort to unwind - if the polls turn and Labour does win, Three Waters’ odds of sticking around are quite high.
It’s worth remembering how the reforms came unstuck so quickly and how a Government possessed of such extraordinary rhetorical ability that it was able to sell literal lockdowns, found itself unable to curry popularity for reforms that promised to deliver cheap, clean water to a country still reeling from a deadly waterborne disease outbreak.
The problem that has dogged these reforms - a problem that followed her all the way into caucus this week - has been a lack of transparency and trustworthiness.
In 2021, the most contentious part of the reforms was whether councils would be forced into whatever amalgamated water entities Mahuata created. Despite Mahuta telling the media she could not “rule out” forcing all councils into the reforms, many councils to this day insist they were under the impression they would be able to “opt out” of the reforms and stick with the status quo.
In October 2021, the Government announced the opposite of what many councils had been led to believe: the reforms would be mandatory. Councils would have their water assets taken from their control and put into an entity they would have some ownership over (under pressure, the Government later clarified ownership into an explicit shareholding).
Councils felt betrayed.
Nearly half of councils affected by the reforms would eventually join the Communities 4 Local Democracy group opposed to Three Waters reforms. Councils like Auckland, the country’s most populous and important council, did not join, but its mayor Phil Goff opposed the reforms.
Councils’ sense of being misled was fed by the revelation that the Government had already made up its mind about compulsory amalgamation, months before it was announced and while councils were still being spoken to.
Cabinet papers, discovered by RNZ, showed Cabinet had decided to force councils into the reforms in June, months before announcing they would be mandatory in October.
Councils had wasted their time speaking to a Government that had already made up its mind.
Co-governance ruled out ... but not really
Mahuta’s second questionable judgment was made in April this year, when she announced the Government would be taking up some recommendations from a working group on Three Waters. The group was formed to tackle some of the unpopular aspects of the reforms with joint input from councils and mana whenua.
A press release announcing the outcome of the reforms made a startling announcement - co-governance had been “ruled out”... kind of.
“Co-governance on the board of the four water entities ruled out by Local Government Minister with board membership to be based on skill,” the release said.
This was picked up as the Government ruling out co-governance.
Only it very much had not.
The co-governance proposal that had councils irked was not co-governance on the boards themselves, but the part of the structure that sat above them: the regional representative group.
These groups were co-governed to begin with and remain co-governed in every subsequent iteration of the Three Waters proposals. Their co-governance was never in doubt and remains in the legislation to this day.
Again, there was a sense of being misled.
The working group Mahuta had commissioned to make these recommendations had iwi-local government co-membership and the terms of reference effectively excluded any recommendations that were not some form of co-governance. It was clear that despite the outcry over co-governance, the Government never really looked for another solution.
The final straw was the constitutional kerfuffle, when Labour entrenched part of the Three Waters legislation in what it now calls an “accident”. Ardern says she was unaware of the fresh proposal to entrench the legislation, but Mahuta has confirmed that part of the proposal was discussed at caucus.
It’s still not clear who knew what and what individual MPs’ motivations were. On Monday, Ardern offered Mahuta a way out, saying the mistake had been made by Labour’s “team” and that as a team they would fix if.
Ardern tried to dissolve any sense of individual culpability into a sense of collective responsibility. It might have ended there, but Mahuta openly diverged from the Prime Minister, treating the press gallery to a spectacle more reminiscent of the National Party circa 2020-21 than the modern Labour Party.
For whatever reason, Ardern’s “team” culpability was not enough for Mahuta, who said that Labour’s MPs could have briefed themselves on what the Greens were getting them to vote on, had they bothered to read the Finance and Expenditure Committee’s (FEC) 200-page report on the bill. The excuse was striking. Mahuta herself has almost certainly not read the full select committee report of every bill she has voted on.
She did not suggest that as minister responsible for the legislation that she might have a responsibility to inform her colleagues of what the Greens planned to do - or the significant objections officials had made against it.
But Mahuta is the senior MP. She’s been in Parliament more than a decade longer than the MPs on that committee, if responsibility rested with anyone - it rested with her.
She then dunked the first-term MPs on FEC, noting they would have known what the Greens were doing too. The excuse-making was embarrassing for Mahuta, for her party, and for the Government.
No one really knows why Ardern has burned through so much political capital defending her. It could be that Mahuta’s standing within the Māori caucus makes her too powerful to sack, or it could be an example of Ardern’s mercy and kindness, giving Mahuta a chance to get her yearned-for reforms through Parliament before retiring gracefully from Cabinet next year, and from Parliament at the next election.
Just 29 per cent of voters backed the reforms in a November Taxyapers’ Union-Curia Poll. Ardern is lucky voters will have more important things on their minds than Three Waters next election. If 2023 were a referendum on Three Waters, it wouldn’t just be Mahuta out of a job, but the whole Cabinet.