Local Government Magazine
Three WatersTrending

Views on revamped three waters reform

Photo: The boundaries of the ten water services entities.

By Alan Titchall.
A wolf now dressed up as a lamb? Most councils and observers remain unimpressed with Government’s softened-up Three Waters reform, which features the same intrusion on community democracy, has the same co-governance structure, and then cuts the second tranche of their promised ‘better off’ funding for councils. 

The contentious four ‘mega entities’ with borders based largely on existing regional areas, have been increased to 10 regional water infrastructure entities with multiple council representation. Water service assets currently paid for, and owned, by ratepayers will still be transferred to these ten regional entities and councils will lose their traditional rights associated with ownership, water charges and investment.

Each entity is to be run by a professional board, with members appointed on ‘competency and skill’. However the 50/50 split of regional ‘Maori’, council and other representation under the Labour Government’s co-goverance/Treaty manifesto remains unchanged. The 75 percent majority clause for decisions where consensus cannot be reached, still applies. 

The original start date has been moved from July 2024 to July 2026 (or earlier if a new entity is ready), should Labour stay in power, although it is endeavouring to have legislation in place before this year’s election.

Initial council reaction

While most councils acknowledge the Government has listened and reacted to their concerns over ‘representation’ they have expressed general concern that a vital public service under their governance has turned into a ‘political football’.

Lower Hutt Mayor, Campbell Barry typically called for ‘certainty’ from all political parties and says while the shift to 10 entities instead of four is not his preferred long-term approach, the most important thing now is certainty and that we get on with it.

“Throughout this process I’ve been incredibly frustrated with how fixing our water infrastructure problems has become a political football …. another example of politics being put ahead of good long-term policy.” He also points out the delay to 2026 creates challenges for councils’ Long-Term Plans. 

“Unbolting water services from local government is not as simple as it sounds,” says Kapiti Coast District Mayor Janet Holborow. “Water services are intertwined with other council services such as stormwater systems in our parks and under our roads, and many of our people work across multiple delivery and supporting roles.”

Waimate District mayor Craig Rowley says the collateral damage from the reforms; “goes well beyond the expropriation of assets and loss of local democracy”. Rural and provincial councils are among the most important institutions in their district. We are accountable to, belong to, and anchored in our communities, nothing like what is proposed here.”

Communities 4 Local Democracy Co-Chairs, Mayors Helen Worboys and Dan Gordon, say mayors are generally disappointed the Government has again rejected a consensus approach to water reform, and version two still doesn’t answer concerns around community property rights. “It’s just the same old meal with the same old ‘like it or lump it’ approach.”

Water assets are multi-generational assets, they say, being treated as a political football by Wellington and causing a massive amount of disruption. 

“It now appears this matter will be once and for all settled at the upcoming General Election as there are clear choices for voters on this matter.”

$1.5b council funding scrapped 

The $1.5 billion funding promised to councils for losing their valuable water assets, which would have been the second tranche of a $2b package of a “better off” financial package, has been quietly ‘withdrawn’.

However, the first $500m phase of package will continue under current funding arrangements and another $500m of “no worse off” funding will be forked out to councils only after transition of assets to public water entities.

Some councils had already received allocations from the first tranche and spent it on projects on the promise of more funding. Media reports say Canterbury mayors and council chief executives reacted with “shock” at learning about the funding cut, which hadn’t been mentioned in recent meetings with the Government.

Councillor Sam MacDonald, Christchurch City Council’s finance chairperson, who learnt of the funding withdrawal from the media, says he was “blindsided” as his council has already received $30m which is earmarked, and now another promised $90m won’t be delivered. Selwyn and Waimakariri councils were each due to get around $22m and will now be $17m short.

The question of ‘affordable

The Government has already sunk $100 million into its wobbly reform process so far, and changing its name to ‘Affordable Water Reform’ has the tone of emotional-marketing that has only attracted reproach.

Is it possible to reform on such a scale and be ‘affordable’? Especially when the alternative is to single out regions of ‘troubled’ three waters services and spend the money directly on the problem, rather than add another layer of central bureaucracy over services which are currently ‘working’ for many councils.

As ACT Leader David Seymour says questions remain unanswered. “How much will six more entities cost? How many consultants bills will fill the extra two years the Government has given itself? How much will be spent trying to sell Three Waters 2.0 to the public? How much of the alleged savings will actually just be taxpayer subsidies?”

Three waters has been a consultant’s banquet, he claims. “Over $50 million has been spent on contractors and consultants and some agencies have been getting paid an average $3500 per day since the programme began in 2020. They’ll be jumping for joy to see the programme extended for another two years … Trying to sell this rebrand as ‘affordable’ to taxpayers is disingenuous.”

Behind the Government’s water service reforms is the ideology of ‘centralisation’ and ‘bigger is better’ and supposedly more efficient. On this note, the Taxpayers’ Union says it remains extremely sceptical of this political argument. 

“Not just with the experience with Auckland’s ‘super city’, but the advice the Government relied on was riddled with errors. Even the Government’s own analysis said that once you get past eight entities there are probably no efficiencies.”

The reforms will continue to prioritise unnecessary bureaucracy and gold plating over what is the most appropriate water infrastructure for your local area while meeting health and environmental standards, the Union claims.

Union Campaigns Manager, Callum Purves, adds that the Government could make a real difference to councils by giving them a share of GST on new developments or allowing water delivery bodies to issue revenue bonds. 

“All of which can be done with voluntary co-operation between councils and while retaining democratic accountability over investment and charging decisions.”

The co-governance debate 

The Labour Party manifesto on co-governance and its interpretation of the historic, 183-year-old Treaty of Waitangi, is still very much part of all its reforms, and has become an election battleground.

“There are real problems with drinking water quality in some communities, failing wastewater networks and sewage overflows into rivers and onto beaches,” says ACT Leader David Seymour.

“None of these problems are solved by expropriating ratepayer assets or with co-government. We can improve the current system, but we don’t need to do so through state-mandated centralisation and allowing some people to have more influence than others based on their ethnicity.”

National’s Local Government spokesman Simon Watts says; “Labour is being disingenuous with New Zealanders claiming their Three Waters 2.0 policy doesn’t include co-governance, will save households thousands of dollars, and will keep assets in local control and ownership.

“Nothing has changed. This is the same broken Three Waters policy which forces councils into co-governed entities.”

National says, should it get into power this year, it will restore council ownership and control, but with stronger central government oversight, including strict rules for water quality and for investment in infrastructure. It will also require councils to ring-fence money from water assets to be spent on water assets. LG

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