Three Waters: Government dumps controversial entrenchment clause

A controversial entrenchment clause in the Three Waters legislation has been dumped by the Government after claims it was "constitutionally objectionable".

It comes after Newshub obtained a letter sent to Local Government Minister Nanaia Mahuta from the president of the Law Society earlier this week, raising "serious concerns" about the provision and urging it be removed.

House Leader Chris Hipkins said in a statement putting the clause in was a mistake and the issue would be fixed when Parliament resumed on Tuesday.

Green MP Eugenie Sage, who proposed the entrenchment clause, said keeping water assets in public ownership was of prime importance to New Zealanders and deserved such protection.

Labour and the Greens supported the proposal, which would mean water assets couldn't be privatised unless 60 percent of MPs agreed to repeal the clause.

Given entrenchment had only previously been used on electoral law, a group of academics subsequently wrote to the Government urging it to "think about the dangerous precedent that this legislative action may set". 

Prime Minister Jacinda Ardern and Hipkins both said they were aware of the previous attempt to get support for the 75 percent entrenchment but not of the 60 percent provision put forward by the Greens until after the fact. After backlash, the provision was referred back to Parliament's business committee.

Now, Hipkins has confirmed the provision would be removed.

"The Bill has just finished committee stages, so we can easily send it back and fix the issue before the final reading," he said on Sunday.

While the "intention to protect assets from being sold was right", Hipkins said entrenchment usually required "a super majority", or 75 percent of MPs, to vote for it.

"The approach in this amendment allowed an entrenchment provision to pass in a way that is not typical for parliament. That has wider ramifications that we are not comfortable with."

But Hipkins also took issue with the National and ACT parties' "previous track record of selling public assets".

Hipkins said the Government would be asking the right-bloc parties to completely rule out future privatisation.

"It is important to note the entrenchment clause only applied to maintaining public ownership of water assets," he said.

"In order to protect against privatisation of these assets we will also be seeking political assurances from the National and ACT parties via letters that ask them to commit to public ownership."