Cabinet explicitly agreed the Three Waters legislation "should not entrench" privitisation provisions.
As Labour then went on to support an entrenchment clause from the Green Party, National leader Christopher Luxon says Prime Minister Jacinda Ardern must sack Local Government Minister Nanaia Mahuta, who is responsible for the Bill.
"Local Government Minister Nanaia Mahuta openly defied the Prime Minister and forcefully backed the entrenchment clause in the House two weeks ago," says Luxon.
But Ardern says Mahuta hasn't defied her and she has upheld the Cabinet decision, pointing to the fact the amending Supplementary Order Paper (SOP) was proposed by the Green Party, not the Government.
"The minister has not defied Cabinet. The minister has not broken the Cabinet Manual. I accept [Luxon] hasn't been here very long, but it was a SOP from another party."
Ardern said Labour has taken leadership by reversing the entrenchment provision and has called on National to state its position on the privatisation of water assets. Luxon has said National wouldn't privatise the infrastructure.
A Cabinet Minute shows on May 30 ministers made a number of decisions regarding the Water Services Entities Bill, one of the Three Waters Bills.
On a recommendation from a working group, Cabinet had previously agreed to amend the Bill to add an entrenchment provision. Local Government Minister Nanaia Mahuta wrote to other political parties seeking their support for a 75 percent entrenchment threshold.
However, ministers on May 30 noted "cross-party support for entrenchment of these provisions has not emerged" and consequently "agreed the Bill should not entrench the privatisation provisions in the Bill".
Despite that, all Labour MPs, including ministers, went on to vote for a Green Party amendment to the Bill and agreed to entrench a provision to keep water assets in public ownership - therefore meaning any attempt to privatise the infrastructure would require a supermajority in the House.
The difference is the Green Party's SOP contained a 60 percent entrenchment threshold, rather than the 75 percent threshold discussed. A 75 percent threshold wouldn't have passed in the House as it would have required National's support.
No entrenchment clause was proposed by the Government.
Both the Prime Minister and Mahuta have called the Green Party's proposal a "novel approach".
Crown Law had advised entrenchment required a "high constitutional threshold". It's normally only used for constitutional matters, like electoral law.
"Cabinet opposed any form or threshold of entrenchment, not just one requiring 75 percent support," Luxon said.
"Therefore, the Minister's claim that her efforts to entrench aspects of the Bill with a 60 percent threshold is somehow different, is nonsense.
"The Cabinet Manual is clear. It says, 'once Cabinet makes a decision, Ministers must support it, regardless of their personal views'.
"Yet despite breaching the Cabinet Manual and openly defying her colleagues and the Prime Minister, Ms Mahuta remains a Minister."
The Government sent the legislation back to the Committee of the Whole House for that amendment to be overturned after admitting its support for it was a "mistake".
In the House on Tuesday, Mahuta said she first raised the matter of entrenchment with Cabinet colleagues in April and that she had written to other parties seeking their support for the provision to "protect against privatisation of water services infrastructure".
She noted Parliament's Standing Orders require any entrenchment provision to be passed by the same "majority it would require for the amendment or repeal of the provision to be entrenched".
That means it would have required National's support to hit the 75 percent threshold.
"I raised it again on 30 May 2022, prior to the introduction of the Water Services Entities Bill, when I noted that cross-party support for entrenchment of these provisions had not emerged and that the Government would not entrench privatisation provisions of that nature in the Bill."
Entrenchment was later discussed by the Labour Party caucus, but Newshub understands Mahuta didn't raise the Greens were wanting to introduce a 60 percent threshold.
The Greens had already signalled in a Select Committee report they wanted a 60 percent entrenchment provision. Mahuta on Tuesday noted the report was public and Labour MPs on the Select Committee were aware of it.
The specific Green Party SOP wasn't tabled until later, the day before it was passed.
Prime Minister Ardern has said entrenchment is commonly understood to be 75 percent and she hadn't seen the individual SOP before it was passed.
Senior minister David Parker told Newshub he wasn't aware his party would support a 60 percent entrenchment clause.
