Rattling the Chains - annual report spells urgency to new government

Mayor Alex Walker and Central Hawke’s Bay district councillors at the Waipawa wastewater plant in April.

OPINION

The new National-led government is yet to be formed as parties await the final counts of special votes.

In Central Hawke’s Bay we welcome three brand-new MPs to represent us in Parliament – Cushla Tangaere-Manuel for Ikaroa-Rāwhiti, Mike Butterick for Wairarapa, and Catherine Wedd for Tukituki.

It’s clear that there is going to be a period of change and uncertainty as the new government forms and gets to work. This is particularly relevant for local councils. Major pieces of reform previously under way – Affordable Water Reform and Resource Management in particular – are now signalled to be repealed.

All three parties most likely to make up the new coalition government campaigned on repealing these pieces of reform within their first 100 days in office. The National Party was clear in its ‘repeal and replace’ position. For us in Central Hawke’s Bay, it is imperative that the ‘replace’ piece is treated with as much urgency as the ‘repeal’ step.

The system and funding tools to support the council in providing local infrastructure are broken. I spelt that out clearly in briefings to all the candidates who stood for election in our local electorates a few weeks ago. This situation is also clearly identified in a recent independent review into the Future for Local Government in NZ. To continue to build the relevance and importance of localism to serve community, we are going to need brave leadership both centrally and locally.

The urgency was never more evident than when council adopted our Annual Report last week. Results show a very strong performance for 2022/23, with an unqualified audit opinion and a huge amount delivered in the year, but there are some very important messages for us to consider carefully.

The first is that our focused investment in three waters (drinking, storm and wastewater) infrastructure has seen our external debt grow to $42 million at the end of June. This was intended, as we discussed three years ago with the community when we built the last Long Term Plan, and has seen huge delivery of pipes, pumps, treatment plants, consents and all manner of things in between that were desperately needed. Almost all this external debt, 84 per cent of the $42m, is related to three waters infrastructure.

The second key piece of information in the Annual Report is the extraordinary damage to our roading network, for which the total cost of repair is estimated at up to $150m. The good news is the $46m that has been committed from Waka Kotahi and Crown funding support. But it is not enough. The remaining $100m repair bill will need to be resolved over the next few years with some strong advocacy to the government.

Depending on how future governments decide to approach this recovery work, we could need as much as $40m of that to be sourced locally – through rates and debt – and that is unsustainable for our ratepayers. We currently have $20m of remaining debt head-room that we need to leverage very astutely. And with the scale of roading damage due to natural disasters extending right across the country, it is a major issue for central government taxes and funding too.

As well as measuring the finances, the Annual Report summarises other metrics that speak to council performance. These tell a stark story of the pressures of Cyclone Gabrielle on our community. The confidence in land transport and stormwater services has understandably fallen dramatically amongst community members, and the growing financial burden on households in the current economic situation is really starting to dig in. Interest rates and inflation are deeply affecting households and councils alike.

I have described this all in some detail as it deserves transparency and discussion. I’ll conclude with two important messages:

The first is that while I have spelt out some significant challenges, we are not without options. A major consideration is the work we have done with the other councils of the Hawke’s Bay region for the transformation of three waters services. This puts us in a strong position to lead the right change for our communities with our Hawke’s Bay Model, providing very clear inputs to government on what needs to be done to replace the Affordable Water Reform legislation.

And secondly, that this ‘replace’ step is urgent. Check out our Annual Report at www.chbdc.govt.nz.