Three Waters boss Jon Lamonte received a payout of more than half a million dollars to leave his post when the National-led Government ditched Labour's contentious water reforms.
Three Waters boss Jon Lamonte received a payout of more than half a million dollars to leave his post when the National-led Government ditched Labour's contentious water reforms.
Jon Lamonte was paid an extraordinary $532,500 to leave his newly created water services job in late 2023, making him the best-paid of a group of high profile public sector heads which rolled through policy changes triggered by the last election.
Lamonte left his job aschief executive of the Auckland-Northland water services entity in December 2023 with both a redundancy payment of $355,000, worth six months’ salary, and a $177,500 payment in lieu of notice.
He took up the job earlier the same year, on February 8; he left the post on December 15, just 10 months later. The departure payments were in addition to his $710,000 per year salary.
In fiscal year 2024/25, in which he worked just five-and-a-half months, Lamonte was the best-paid public sector boss, outside the ranks of State Owned Enterprises (such as KiwiRail and Transpower), which are expected to operate as efficiently and profitably as private businesses. His total remuneration in the year was $924,000.
The Department of Internal Affairs (DIA) was responsible for negotiating Lamonte’s employment contract. A spokesman said that both the severance payment and the payment in lieu of notice arose from the contract’s terms.
DIA chief executive Paul James signed off on the contract.
Paul James, the chief executive of Internal Affairs, signed off Lamonte's employment contract.
The termination was triggered on December 14, when the then new Cabinet formally agreed to cancel the previous Government’s water reforms and repeal the underlying legislation.
By comparison, the handful of other public sector bosses who lost their jobs through the National-led Government’s changes left their offices with either a much lower payout or nothing at all. To be clear, public sector bosses are not political appointees, they change when governments do only insofar as policy changes trigger an end to their roles.
Peter Winder, head of the Labour-era mega polytechnic Te Pūkenga, which the current Government undertook to disestablish (though has not yet done so) received redundancy pay of $163,383 in early 2024, the equivalent of three months’ worth of his $640,000 salary.
The new Government’s formal notification that it intended to disestablish Te Pūkenga triggered his redundancy pay out.
Auckland Light Rail Ltd was also shuttered by the Government upon its election (the corporate shell remains with just one part-time contractor, CFO Helen Steed). Chief executive Tommy Parker received neither severance nor redundancy pay, Steed confirmed.
The Māori Health Authority’s chief executive Riana Manuel received a severance payment, confirmed Health New Zealand Te Whatu Ora manager government services Danielle Coe.
And similarly, Productivity Commissioner Ganesh Nana received no payment in departing the Productivity Commission, which was closed in early 2024.
Water services bosses were vulnerable to policy change
A DIA spokesman told the Herald that Lamonte’s salary was determined by DIA chief executive James, who took independent advice from Strategic Pay.
He has not yet clarified whether Strategic Pay also provided advice on Lamonte’s severance provisions.
The spokesman said the scale of the job was considered in setting the salaries of the water bosses and was in line with such organisations as Transpower, NZ Post, the Accident Compensation Corporation, Kāinga Ora, Watercare, NZ Transport Agency Waka Kotahi and KiwiRail.
Lamonte was one of four executives hired by the DIA in early 2023 to run the four huge new Water Services Entities into which the Labour Government anticipated consolidating local council-owned “Three Waters” assets (stormwater, wastewater and drinking water).
The water executives stood a good chance of facing job change, if not elimination, which may explain why they were able to negotiate unusually generous provisions for departure payments.
The Three Waters reforms were highly controversial and Labour changed the plans just weeks after the new executives were hired. Those changes scrapped three of the four planned new water entities; the Auckland-Northland entity was the only one of the original four to survive the revisions.
Water chief executive Colin Crampton took redundancy as a result of Labour’s altered plans; it was worth $355,000. In his case there was no payment in lieu of notice.
Lamonte was previously chief executive of Auckland Council-owned Watercare, and Crampton was previously CE of Wellington Water, owned by the region’s councils. Both men faced the prospect of losing those jobs through the 2023 water reforms.
Additional $177,000 payment kept quiet
In November 2023, following the election, the Herald asked the DIA, under the Official Information Act, what severance payment obligations Lamonte’s contract could give rise to in the event of an altered water reform plan.
In response, the department disclosed only a provision for redundancy pay of up to six months’ base salary ($355,000).
In addition, in early 2024 the Herald asked Auckland-Northland water services entity’s chairman Murray Bain if Lamonte was due to receive “a redundancy payment (or similar)”. Bain disclosed only the redundancy payment, and was silent on the matter of the payment in lieu.
Lamonte didn’t respond to the Herald’s request for comment.
