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Yeah. So in both— and I don't know enough about the Building Heritage and Resilience Fund, sorry— but the external staff recruitment and the external leadership training, we have certainly stripped those costs in there right back, you know. And so I think really reflecting for external staff recruitment, there are some specialist roles across the organisation that we do require specialist, you know, recruitment agency support to actually fill. Although, you know, we have managed the budget right down given the current environment that we are operating in. So we probably couldn't find that kind of saving from those. But as I read this REC, it's not specific to those areas. Those are ideas, and we could certainly look to find the $29,000 elsewhere at our discretion through our budgets.

But the Built Heritage and Centre Fund, you can just take money?

Yeah, so perhaps my question has been answered. I actually couldn't remember whether we even still had a Building Heritage and Resilience Fund or whether it changed to an Earthquake Resilience Fund. But yeah, I think being specific like that is too narrow, so I'd be happier if it was just ad hoc. Discretion. Thank you. And it does raise for me also issues around some of our caregivers that we let in for free, up to 2 I think.

We have been using the inflation assumptions as per our draft annual plan outer years, so we map that through. We will come to later in the presentation a section that will outline what those inflation assumptions are and the potential movements in those assumptions. Cool, thank you. So, through— so what does the overall council budget look like? So I'll move through this slide fairly quickly, but the key here is that we've updated the capital program expenditure to the $515 million, which is resulting in that bottom line, the change from what the draft annual plan is sort of suggesting. At the moment. So there's around a $65 million reduction in year 1. So when we come over to the rates requirement, so it's worth noting that rates and budget are not the same thing. We do not rate for everything that we budget for, and we rate for some items that we do not budget for. So capital is an excellent example in that— I'll go back a slide— $515 million of capital expenditure in year 1 only results in rates of $13.4 million, and that's because we don't rate for the capital programme directly. We rate for the debt repayment and interest expense that we incur upon it. And likewise, we have some items that we don't budget for, such as rating for renewals. You would not find a line on our budget called rating for renewals. It just forms part of the rates number. However, it has a rates impact. So the key here is the funding requirement in year 1 has dropped by $65 million, $145 million in 2022, so on. However, the rates reduction is quite minor from that. So the $65 million only results in a $3.1 million reduction in rates. However, you'll notice that number grows over time, and that's the cumulative effect of not having to borrow for the capital programme, resulting in cumulatively lower interest and debt repayment to Council. So what does that look like in terms of rates percentages? So the draft annual plan had year 1 of the LTP sitting at 8.64% down to 6.6%, 6.36%. Adjusting that capital program has reduced that rates requirement slightly. So that reduction in rates is a 0.34% decrease, 1.69 year 2, 1.62 the year following. So it takes 2 years to see the full impact of capital. So capital, that reduction has a very minor effect on year 1's, of the LTP's rates number. So it's worth at this point looking at Waters versus the rest of council in this context. So Waters rates represent around 30% each year of council's total rates requirement, with 70% for all the other council's activities. However, once we start looking at percentages, you'll notice here that the water rates— so overall council rates 8.3%, 4.91%, 4.73%— the water rates sit slightly higher than that. And that's for two key factors, being that water represents a smaller portion of the overall rates collected for council. However, it also gets a around 50% of the total rating for renewals. And as we are increasing our rating for renewals up to our target of being fully funded by 2032, that means it's getting around half the increases on those rating for renewals on a smaller base, which results in a larger percentage increase. That also results in the reduction in rates over time for Waters compared to the rest of Council, and that it sees a greater share of the benefit of the reduction in interest expense and debt repayment due to the lower amount of borrowing that has to take place as a result of those higher rating for renewals proportionally. So they, the all of council, the water rates and the other council all have their own rates increases because they all have their own bases. So like a percentage, you change the base, you change the percentage. So you can't just add the water rates to the other council rate and come up with the overall council rates increase. They each have their own path that will be applicable to them. This slide shows that— so the blue at the bottom is what we rate for in opex, and the items above are what we rate for, for our capital programme. So you can see there that around half of what council rates for actually relates to its capital programme. So while We talk about $112 million being 1% on CAPEX and $8.3 million of OPEX being 1% rates increase. In a proportionality way, CAPEX still represents half of our overall rates. So while it doesn't result in big rates increase movements, it's a bit like a rising tide in that it just increases the minimum base of rates that Council has to collect to keep paying for that debt repayment. Payment and interest expense. So we've been talking a lot about rates here and what it's made up of, but there's another part to rates, which is what can council control reasonably and what does it take time to change overall. So when we're talking about controllable versus non-controllable here, we're talking about what does council have material control over in the short to medium term? In a long enough period of time, almost all of council's budgets become controllable. So the example being potentially rates on our own properties. In the short term, it's very difficult to reduce rates on our own properties. However, in the long term, council could change the way it delivers things that would reduce that requirement. The inverse also exists as there will be items not on this list that have a non-controllable aspects. So the example I like to go to is software. We have an overall council software budget. It's not tagged there as non-controllable. However, there will be things like Microsoft Office or something that will be a requirement regardless to some degree. So it's about how much overall control in that sort of material view of control. So everyone will probably have some other items they would like to add to that list of non-controllable. We've tried to take a fairly prudent, high-level view on what that non-controllable is. So just those items on the list, what we're considering non-controllable moving forward. So you can see there in that graph, the non-controllable portion is the grey section. So around half of what Council rates for is non-controllable. It has limited control over its ability to increase or decrease. And that split becomes more stark once we start comparing water to the rest of Council. And that Waters is only around 30% controllable in any given year. And that's primarily due to it having a high amount of insurance costs associated with it, rates on the assets and networks that it owns, and a larger portion of the rating for renewals comparable to the rest of council. Conversely, council, the rest of council is slightly more controllable However, it's still sitting at an average of 60% compared to being controllable, with 40% being non-controllable. So there's a narrowing here in the sense of we know capex represents— ah, opex represents around half of what we can rate for, and that it's movements in capex take time to see a rates increase, and then further on to there, only around 30%— sorry, 70% is in the non-water space where it's more controllable, and then from there, only 60% is controllable. So it's a narrowing of where we can make material movements to achieve savings. So what does all that mean in the context of the letter of expectation? So the letter of expectation was clear that Council wanted a 6.54% rates trajectory moving towards the rates capping period. So what does that look like? So the first scenario here is if other Council is capped at 6.54% with water sitting— and when we say water, water supply and wastewater— sitting outside of that. Cap, which would be roughly in line with what a potential rates cap would look like in the future. So you can see there, at an overall level, if that was applied, the rates in year 1 would be 6.9%. That's because Waters has a higher— that 9.84% rates increase, down to 5.03%, 3.96%, and then below 4% thereafter. However, to achieve that, we need to achieve savings in the budget. So in year 1, savings of $12.8 million would have to be found. It's worth noting these savings are cumulative and that if you achieve it in year 1, you don't have to then achieve it again in year 2. So if the $12.8 million were achieved, only $8 million of savings would need to be found in year 3. The LTP. So those savings represent around 3.8% of the total council controllable— other council, sorry, controllable rates. It's worth noting also that there's two periods of savings that need to be found to achieve this trajectory and cap, being in year 1 and year 3. So we're not just looking at one batch of savings having to be found to achieve the rates cap trajectory. So what does that look like graphically? So black line there is the revised position, so that's that post Deliverability Review, and the red line is what we would achieve if we got the 6.54% for other council and Waters did its piece. You can see in the back end of the LTP period, the rates increases are higher. That is because the base has shrunk by that point. So because savings have been achieved earlier in that piece, it's a smaller— the increase represents a larger percentage. Another model that we've looked at is if the overall council rates increase was 6.54%. So, this one is more— it wouldn't potentially be possible to achieve a 6.54 in Waters and a 6.54 in other council. As we saw, Waters is largely non-controllable. It's difficult to pull back. So, the additional savings to achieve the overall 6.54 would likely have to be found in the rest of councils. Budgets. You can also see there that it represents a larger number to achieve that overall 6.54%. So previously it was $12.8 million in year 1 having to be found. It's now closer to $21 million having to be found, which conversely also represents a larger percentage of the controllable rates having to be found in terms of savings. Which was 3.8 versus the 6.2 there. So we've talked about percentages, rates increases, and as part of that, we've been talking about bases and the impact of changes in that base to the percentage. So for the Long Term Plan, our base is the '26-'27 Annual Plan. So changes in that annual plan will have an impact on the numbers that flow through into the LTP and the level of savings that need to be identified. So we've done a scenario here to sort of show what that sensitivity is. So we've got the draft annual plan along the top. This is the 654 waters excluded scenario we've used for both examples here. So there's our $12.8 million of savings we saw earlier. If, for example, the final annual plan for '26-'27 was at 6% and that was achieved through temporary savings, instead of having to find $12.8 million of savings, we would need to find $30 million in savings. And you can see that becomes a permanent increase throughout. So a temporary reduction in rates in a rates capping scenario results in permanent savings having to be found. To avoid a future increase. So bottom line along there, you can see this is a fairly substantial increase in the level of savings permanently that gets baked in. Also worth noting, the percentage of controllable rates goes up from around 3.8% to closer to 9% needing to be found in savings. So the other big movement we've got going on at the moment, which we've all been reading the news, is the risk to our inflation assumptions. So when we set the draft annual plan, we had inflation advice which was generally set back in October with a long-run view, but not sure anyone expected what has occurred to occur back then. So top section is our current inflation assumptions. So for OpEx sitting around 2.5%, sort of moving towards the RBNZ neutral position of 2%. We're still working through what inflation will look like through the LTP period. However, we've done two scenarios here, a medium and a high, to sort of show what the impact of that may be. So a 5% inflation would require $27 million of savings rather than the $12.8, or 4%, an additional $21 million. So we're looking at around a 1.5% increase in inflation resulting in potentially another $8 to $9 million of savings having to be found. So there's some other considerations that we need to put to our FS and modelling as we're working through this process, that being on the list there. So as I said, our inflation assumptions were set back in October. That represents a risk to our annual plan. We may not necessarily address it through the annual plan, and we may address it through other means. However, there will be a flow-on of that into the LTP. The capital programme is still potentially moving around as decisions made on that. The insurance risk there represents if the cost of construction in New Zealand goes up due to higher inflation, that will likely result in higher insurance being required. We've got heritage. We have two new major facilities which have been opened, so we are still seeing how the actuals compare to our original predictions and modeling. Changes in the rating renewals. We need to be balancing our balanced budget with these decisions, ensuring we're maintaining sufficient debt headroom for adverse events, and ensuring our debt affordability is maintained. So we'll be coming back to you with more guidance and requests for information around the financial strategy, as Peter alluded to, over the coming period, coming few weeks, months. But that was really our— an update of our starting position, the view from 10,000 feet, if you like.