PM Chris Hipkins and Local Government Minister Kieran McAnulty scrap a major part of the unpopular Three Waters reforms, ditching the four mega entities that would have delivered Three Waters services to households. Video / Mark Mitchell
The Government says it “nailed it” with its revised water reform for the country’s $180 billion fix to its long-neglected water infrastructure but the opposition promises to repeal the “dumb policy”.
National and Act say yesterday’s announcements, now dubbed “Affordable Water Reforms”, were simply a rebrand of the controversial Three Waters programme and still take too much ownership away from communities.
“It’s a dumb policy and we’re going to repeal it,” National Party leader Christopher Luxon said. “As my mum and dad would say, change the label on a Lada, it’s still a Lada.”
The Government yesterday unveiled its refresh of the reforms formerly known as Three Waters, announcing that 10 regionally owned and led public water entities would be established instead of the four previously proposed to take over stormwater, wastewater and drinking water infrastructure.
The entities would be owned by councils and run by a “professional board”, with “50-50 governance oversight between councils and mana whenua”, which would also appoint the board.
The increased council-level participation has so far appeared to placate the concerns of some mayors across the country, with South Wairarapa Mayor Martin Connelly calling it “very positive” and striking a balance between cost savings and ensuring a local voice.
The South Island’s largest iwi Ngāi Tahu, which backed the original Three Waters model, said it fears the compromise in terms of increasing the number of entities could see poorer and more expensive water services.
Prime Minister Chris Hipkins said the reforms were meant to help councils deal with the eyewatering cost of investment in water infrastructure - estimated to be about $130b-$185b over the next 30 years.
Modelling commissioned by the Government projected those costs would push up household water and rates bills to as much as $9000 a year by 2051.
National leader Christopher Luxon said the Government had simply rebranded Three Waters. Photo / Mike Scott
Local Government Minister Kieran McAnulty said his model would deliver savings to households of between $2770-$5400 a year by 2054.
McAnulty said alternative proposals were considered but didn’t stack-up.
“I think we’ve nailed it,” McAnulty said. “Honestly, there’s a balance to strike here.”
However, one contentious part of the reforms is unchanged. The entities will be owned by councils via a shareholding. They will report to a local representative group that is jointly comprised of council representatives - every council in the country will have representation - as well as mana whenua.
The representation on these groups will be split 50-50 between mana whenua and councils - meaning they would be co-governed like the previous model of Three Waters.
The Government claimed the model would achieve “balance sheet separation” meaning they would be sufficiently separate from councils to have their own borrowing capacity, allowing them to debt-fund billions of dollars of water investment.
Chris Hipkins unveils the new 3 waters policy rollback. Illustration / Rod Emmerson
The Government also withdrew the $1.5b for councils which had been promised to councils losing control of water assets in the reform.
Luxon said the Government had simply rebranded Three Waters by changing the name of the reforms and number of entities.
Luxon said National’s plan for water infrastructure included councils working together to fund debt. It would essentially allow councils to make the changes needed themselves, with a regulatory backstop if that failed.
“All this Government has done is essentially rebrand Three Waters with a different name. It’s gone from four entities to 10 with the same structure and hasn’t changed the divisive co-governance,” he said.
Act leader David Seymour said the system could be improved without “state-mandated centralisation”.
Act’s plan would allow councils to enter voluntary “shared services” agreements to get benefits of scale while retaining local ownership and control.
McAnulty yesterday said opponents needed to front up with the costs of alternative plans.
The minister said alternative proposals were analysed – including National’s – but didn’t work.
“The only way to make this work financially for ratepayers and local communities is to have a separate entity that’s still owned by the council but is run independently by an independent governing body.”
McAnulty said he had received “positive” feedback from mayors.
“I can almost guarantee that there will be more mayors that support this proposal than support the last one.”
Wellington Mayor Tory Whanau said the amendments ensure a local voice. Photo / Mark Mitchell
Wellington Mayor Tory Whanau said the city council has always supported the reform policy.
“We need a much bigger investment into the infrastructure and the entity because we cannot afford it as a council and we cannot afford to put it onto ratepayers,” she said.
Whanau said a good part of the new version is that mayors will be able to feed into the entity on behalf of ratepayers.
“It ensures that we have a local voice, which has been a great concern for the public.”
Wairoa Mayor Craig Little, who had been critical of Three Waters, said the policy reset is a step in the right direction.
“It has great merits and it’s not such a big beast with the four entities,” he said. “Hawke’s Bay was working on this way before the initial policy and it was great to see McNaulty acknowledge that.”
Malborough Mayor Nadine Taylor said the changes do not solve any of the key issues around the reform programme.
“Marlborough’s voice will be greater with a three-council Top of the South entity than it would have been with the mega-Entity C stretching all the way up the North Island’s East Coast,” she said.
“Marlborough ratepayers have invested heavily in our water infrastructure, particularly in recent years, and our communities feel a very strong sense of ownership of those assets.”
The Herald has contacted the Auckland mayors’ offices for comment.
Despite the changes, the Waimakariri and Timaru District Councils are going ahead with legal action launched against Three Waters. The two councils have filed an appeal with the Court of Appeal to seek a declaration on property ownership rights, following a High Court decision earlier this year.
Green Party water services spokeswoman Eugenie Sage said they were pleased to see more water entities to “ensure a closer connection with communities they serve”.
The party however wanted more focus on cleaning up the sources of pollution. They also wanted to see stormwater separated and stay with local councils, and better protections to ensure the water entities would not be able to be privatised.
Local Government New Zealand (LGNZ), the umbrella group representing all councils said more information was needed before councils could decide whether to back the changes.
The breakaway Communities 4 Local Democracy He hapori mō te Manapori group said it was unhappy there was not more “meaningful changes”.
Co-chairs, Mayors Helen Worboys and Dan Gordon said they believed New Zealanders would “see though” the reforms, which simply put a new name on an existing policy.
Connelly, the South Wairarapa mayor who was at the announcement, was more positive.
“What a small council like us needs is secure safe water. We need it to be affordable and we need it to be delivered in a way where we feel we’re having the influence on decision-making that we need.”
He said moving to 10 entities was a “good balance” in terms of still delivering cost savings, which would allow councils like his to pass them onto rates, while also retaining a level of local input.
Connelly said that mayors briefed on the new proposals via Zoom appeared to like what they were hearing.
“I can assure you that there was no animosity or no opposition at all.”
Co-chair of Ngāi Tahu’s freshwater group Kura Taka Pini, Professor Te Maire Tau, said the revised plan meant a previous singular entity covering their takiwā and 22 council areas would now be split into two.
“We see the Ngāi Tahu takiwā as an integrated whole of waterways and catchments, and so our preference remains a single takiwā entity involving all councils and greater fiscal sustainability.
“This view is shared by some councils.”
Tau said they would explore with councils whether they should retain one entity.
University of Auckland civil and environmental engineering senior lecturer Dr Lokesh P. Padhye said he was pleased the Government did not go back on the reforms as there was consensus for them among those who know the country’s water quality and infrastructure.
He cited a freshwater report released on Wednesday, that found nearly 50 per cent of New Zealand’s river length was unsuitable for swimming due to risk of bacterial infection, and more than 4000 wastewater overflows were reported annually.
“These findings highlight the risks of neglecting pollution from sources such as run-offs and wastewater overflows, and the need to manage all three waters holistically.”
