Like tens of thousands of New Zealanders, the Taxpayers’ Union submitted to the Finance and Expenditure Select Committee on Three Waters (Water Services Entities Bill). With the Union’s submission was a bombshell legal opinion.

Ministers have repeated assurances that councils will continue to own water assets under the proposed ‘Three Waters’. But those claims are utterly false. Public law firm Franks Ogilvie, in an opinion reviewed by Gary Judd QC, lay out the extent to which these claims have been "calculated to deceive Parliamentarians, and when it becomes law, to deceive New Zealanders generally". The opinion is being released publicly today.

Taxpayers’ Union Executive Director Jordan Williams says, “It is clear the Government realised that they could not convince New Zealanders that handing over ownership of local assets was a good idea. So they’ve instead redefined 'ownership' to mean nothing, so they can promise continued community ‘ownership’ in an incredible display of contempt for the public, the truth and the law.”

The legal opinion is very detailed, but it is not hard to understand. It calls the claims of retention of local ownership “false, misleading and deceptive” as “councils are expressly denied the rights of possession, control, derivation of benefits, and disposition that are the defining attributes of ownership”. Gary Judd QC comments in his review of the legal opinion: “When all the lying statements are put together, as [the] opinion does, the government’s effrontery is breath-taking.”

The legal opinion concludes that despite the obvious dishonesties, ministers are immune to prosecution under the Financial Markets Conduct Act 2013 and the Fair Trading Act 1986 as they are not ‘in trade’.

Mr Williams continues, “But that defence does not apply to people assisting the Ministers in a professional capacity. That would include, for example, members of the Working Group on Three Waters governance that could be held liable as they operated ‘in trade’ as professionals providing a service and could be deemed complicit in making the untrue claims.”

“Additionally, legal experts found that Local Government New Zealand ‘could be found to be acting in trade in its provision of representation and advisory services', so their public statements promoting the lie that councils will ‘own’ water assets under Three Waters, could make them also liable to prosecution.”

The authors of the legal opinion do not mince words in their assessment of the situation stating: “Ministers appear to have cold-bloodedly decided to confuse Councils and ratepayers with false statements.”

Mr Williams says, “Ministers might dodge prosecution because they’re in politics, not ‘trade’, but the lawyers note the expectations in the Cabinet Manual and Standing Orders. They must not mislead the House and they must act to ‘the highest ethical standards'. However, the consequences for our elected members will not come from the courts, but at the ballot box.”

“It is difficult to see how the Government can proceed with such a discredited abuse of legislative process. The huge public opposition to the Bill came without knowing of such damning conclusions from respected legal experts. This is not a careless, technical, or understandable mistake in legislation. It is intentionally deceptive. The lies have been actively promoted by ministers, Working Group members, LGNZ, and various elected and non-elected officials."

“We’ll be seeing if anything effective can be done to restore customary honesty among those drawn into this ministerial cheating. If officials were forced to be complicit, they may need better support against ministerial pressure. We’ll be considering carefully whether authorities who punish and deter calculated dishonesty by business people, can do their job when the cheating comes from the top."

Access legal opinion at www.taxpayers.org.nz/calculated_to_deceive

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