Three Waters has been replaced with the Affordable Water Reforms.
Three Waters has been replaced with the Affordable Water Reforms.
Isn’t it amazing sometimes how a new set of eyes looking at the same information can result in a different outcome?
New Local Government Minister Kieran McAnulty demonstrated this in spades when he took over the portfolio from Nanaia Mahuta and embarked on a review of the Government’s Three Waters Reforms proposal.
As a result, last month the Government announced a bundle of changes to their reform proposals and will now move ahead with a modified version of water services delivery.
In parts, there was significant movement. The jumbo-like, four-entity model has been scrapped and replaced with a new 10-entity model, and the start date has been pushed out by two years to 2026.
The entities will be divided along typical regional boundaries, something many councils have been lobbying for from the beginning. Taranaki’s three territorial authorities have all submitted at various times in support of a structure along these lines.
Having 10 entities based more closely around existing regions will enable the entities to be better connected to the communities they serve.
Each entity will have the same functions, powers and accountabilities as already provided for in the Water Services Entities Act. The entities will be owned by local councils on behalf of the public; however, they remain operationally and financially independent from them.
Ironically, based on the assumption that if four entities under the old model provided the most efficient model and the maximum financial benefit for consumers, then logically, the move to 10 entities will come with a bigger price tag for ratepayers and be less efficient.
But as in any game of politics, everything comes with a trade-off and in this case, the change will mean individual councils will have a bigger say over the water service entities and new, much-improved representation arrangements through the regional representation groups.
There is also some contradictory amusement with the rebranding of the proposals from the Three Waters reforms to the Affordable Water reforms. To be fair, it does signify a refresh of the proposals, even if the water was more affordable under the old model, but it doesn’t make a scrap of difference in reality to the actual delivery of water services.
As before, the representative groups for the 10 entities will offer strategic oversight over a professional board that runs the entity, appointed based on competence and skill. Notably, the much debated and criticised ownership and co-governance arrangements remain unchanged.
Have no doubt, these two issues will continue to be hotly debated in the coming months as we lead into the general election. My observation is that critics are just as opposed now as they have ever been and will be further motivated by knowing the Government has shown its willingness to concede ground if the pressure warrants it.
While the minister has offered some concessions to local government, and he should be congratulated for listening, there are some downsides. The Government is also abandoning the “better-off” funding package which would have provided $1.5 billion to councils across the country.
While some $1b of the funding was to come out of the entities’ debt, which meant consumers were effectively taking the money from one pocket and putting it into another, there is still the remaining $500 million balance that the Government was going to fund, but that is no longer on the table.
But all is not lost. The good news is that the first $500m phase of the better off package will continue under current funding arrangements, as will the $500m “no worse off” package to ensure councils did not suffer financially because of the reforms.
In summary, we now have the two major political parties advocating for some form of a regional model, albeit with different governance and representation structures. It is a step in the right direction, but some thorny issues remain and the 2026 start date looks a long way off.