Three Waters: Government to give councils $44m to help set up Three Waters reforms

As the Government continues to face heat over its controversial Three Water reforms, it has announced it will give at least $350,000 to each of the 67 councils in the country, saying it was to help councils bed in the reforms.

The $44 million package is on top of an earlier $2.5 billion funding package intended to compensate councils for the reforms, of which $500 million was to ensure they were no worse off through the transition period. The remainder was to allow them to pay for other infrastructure and "wellbeing investments" - but has been criticised as a "bribe" by those opposed to it.

The announcement comes on the eve of the Local Government NZ conference in Palmerston North, where a raft of ministers are set to speak and Three Waters is on the agenda. The $2.5 billion package was announced by the Prime Minister at last year's conference.

The water reforms have split councils – about half have joined the Communities 4 Local Democracy coalition opposed to the reforms as they are currently proposed. Auckland Council is not in that coalition, but is also opposed to fundamental elements of the reforms.

Associate Local Government Minister Kieran McAnulty said in his visits to councils, they had raised the demand on their staff time and resources from the reforms.

"The Three Waters reform is the largest change local government have faced in a long time, and is creating additional work for councils who are already under strain from staff shortages, winter illness, and Covid.

"This funding will allow local authorities to draw in expertise to support Councils through the Three Waters transition period, and continue business as usual."

He said every council, regardless of size would get $350,000 over 12 months. Top-ups would be based on the funding method being used for the Better Off fund – the $2 billion fund councils can use for "wellbeing" measures, such as pools, parks and gardens.

The reforms will move the management and assets of drinking, waste and stormwater management into four regional entities. While councils will own those entities, they would have minimal control over the assets. The legislation to create the entities is currently going through Parliament – earlier this week, the Labour Party put out a call for its supporters to put in submissions in support of it.

The National Party and Act have both said they will repeal the reforms. Local Government spokesman Simon Watts said the latest $44 million funding announcement was "a desperate attempt to buy the support of local government, who are strongly opposed to this reform."

He said the Government had already thrown $2.5 billion in a "bribe fund" at councils. "This is another example of trying to buy the councils' support. The conversations I've had around the country is that this money is not going to do it, these guys have not been listening."

"This is not going to change many, if any, of these local councils' views around the underlying issues that they have with these reforms. Those are lack of local ownership, private property rights."

Act's spokesman Simon Court said throwing more money at councils of top of the funding already spent was little more than bribery.

"This cost comes on top of advertising campaigns and consulting costs that are costing Kiwis' millions. And for what?

"It doesn't even have to be used for water infrastructure either, it's like Labour aren't even trying to pretend it's anything less than a good old-fashioned sweetener."

McAnulty defended the need for the reforms, saying he had heard a range of views on Three Waters, but most councils had told him they understood the need to reform the current system.

"While we always knew there would be cost in the transition, that cost is dwarfed by the $185 billion bill ratepayers would face to maintain and upgrade infrastructure over the next 30 years.

"Without reform, a household would face water costs of up to $9,000 per year, or the prospect of services that fail to meet their needs."

The Groundswell group – which opposes Three Waters and a range of other reforms affecting the rural sector – is protesting in Palmerston North during the LGNZ conference this week.