Watercare has a $13 billion capital works programme over the next 10 years. Photo / Watercare
Watercare has a $13 billion capital works programme over the next 10 years. Photo / Watercare
Auckland’s mayor is calling on National to make a simple policy change to prevent water bills rising by $50 a fortnight for the average family.
Wayne Brown says if National’s water policy goes ahead, water bills will either double over the next four years or the city will have to stop fixing the pipes.
That is because Nationl’s policy to repeal the Government’s water reforms will leave Watercare’s debt on the council’s books with insufficient headroom to fund Watercare’s $13 billion capital investment programme.
The simple fix, said Brown, is a Crown guarantee for new debt by Watercare.
The average family currently pays about $1360 a year for water services. If prices doubled over four years, the cost would rise to $1720, or about $50 a fortnight, and reduce the benefits of National’s planned tax cuts.
The mayor said the council does not support Labour’s reform package, but it cannot be repealed without having a plan to deal with the consequences.
Auckland mayor Wayne Brown wants a "simple fix" by National to avoid big hikes in water prices. Photo / Alex Burton
“You’ve got to deal with the fundamental problem, which is that councils need borrowing capacity to affordably invest in water infrastructure,” he said.
Neither doubling water bills nor stopping fixing pipes are acceptable, says Brown, as Aucklanders are already doing it tough and investment is needed in infrastructure.
He gave the example of last week’s brick-lined sinkhole in Parnell as something that should have been fixed decades years ago.
Brown has also signalled problems with National’s plans to scrap the 11.5 cents a litre Regional Fuel Tax as part of its 100-day programme before “time-of-use” charging is brought in to replace it.
This could leave a $2 billion gap in the council’s transport budget from lost income from the tax and government subsidies, he said.
National’s local government spokesman Simon Watts said under its “Local Water Done Well” policy councils will own water assets and have to come up with a financially sustainable model within a year to deliver water services and invest in infrastructure.
Wayne Brown said the collapsed pipe that caused a sinkhole in Parnell should have been fixed decades ago. Photo / Supplied by Watercare
“It will be up to all councils, including Auckland, to propose the funding and financing arrangements for their circumstances,” said Watts, adding all options would have to be looked at before the Government would consider a Crown guarantee.
He said councils would have a range of funding options beyond a Crown guarantee, saying the party planned a National Infrastructure Agency to solve problems in infrastructure finance, and a “Going for Housing Growth” policy with tools for councils to finance water infrastructure.
Asked if National would consider a Crown guarantee for Watercare to take its debt off the council books, Watts said: “It’s far too soon to speculate on ‘what-ifs’.”
Local Government Minister Kevin McAnulty said water bills would rise under National because it had not allocated any money to step in and financially support councils that could not cover the cost of water infrastructure upgrades.
He said Labour‘s water reforms would take Watercare’s debt off Auckland Council’s balance sheet and avoid the projected doubling of water bills.
“National’s ideological opposition to affordable water reform means ratepayers could face the worst of all worlds – increased rates, crumbling pipes, unsafe water and no long-term plan to fix things,” McAnulty said.
The only financial assistance National has in its policy is using $1b set aside by the Government for councils as part of the Three Waters reforms as “limited one-off funding to bridge the gap” when councils cannot gain long-term debt.
National local government spokesman Simon Watts. Photo / Supplied
Aucklanders have endured big price hikes for water since 2020 when Watercare decided to more than double water prices over 10 years to help fund a big investment programme of $8 billion.
The plan involved raising water prices by 7 per cent over the first two years, 9.5 per cent over the following six years and 3.5 per cent in the remaining two years.
A board paper said under this scenario, Watercare would have no capacity to manage unforeseen events without increasing debt or raising prices and would lead to the postponement of several projects, including reducing sewage overflows into the Waitematā Harbour and the new Huia water treatment plant.
The board put forward a preferred case for a $9b capital programme with higher price increases in 2010, but this was rebuffed by the council.
“It is a balance of the need for investment versus affordability,” board chairwoman Margaret Devlin said at the time.
This year, the council-owned water company revised its capital investment programme to $13b over the next 10 years, including over $1b this year on projects to cater for growth, replace ageing assets and deliver better environmental outcomes.
