There is a third option for NZ public water reforms
The public has a number of expectations of government. These include that new policy is wellreasoned, principle-based and has a clear and achievable mission.
The worst policy is that made on the hoof by politicians without departmental advice. Kiwi-Build was an example of this. Problem identified but solution ill-conceived.
In play now is water reform. Cabinet has decided to reform the way public water services are delivered, serviced and funded in our communities.
The problems the reforms are meant to address include drinking water quality issues (Havelock
North), challenges by councils to meet increased water quality standards imposed by central government, a backlog of maintenance by councils on underground pipe networks; and design, construction and a management expertise shortfall in smaller councils (for example, the Mangawhai Wastewater Scheme in Kaipara District).
The Government has taken its reform proposals to councils for consultation. It then expects councils to take these proposals to their communities for consultation.
The Government has put just two options on the table. Option one is to maintain the status quo. Option two is for councils to hand over their water assets to a few yet-to-be-established large-water organisations.
The Government is pushing hard for option two.
But the option-two proposal has not yet been fully explained. Ministers have failed to advise a key principle. Are water charges struck by these new water organisations to be on the basis of the costs of water services in each community, or is crosssubsidisation to take place to equalise prices being paid by households regionally or even nationally?
This basic question needs answering.
The fact is that households in rural towns such as our towns and villages in the Waitomo District currently pay much more for water services than households in big cities such as Auckland. Rural households might like crosssubsidisation; urban households might not.
There are other unanswered questions. The Government has not disclosed how the monopoly water organisations are to be kept efficient and their prices controlled. Neither has it disclosed how they will account to the communities they serve. Will small communities have a say on investment priorities, and if so, how?
There is no doubt that reform of some kind is needed. I saw the issues first-hand when Kaipara District Council bungled the Mangawhai Wastewater Scheme.
Councils of all sizes struggle with such infrastructure challenges but I am not convinced that just two options should be on the table.
A third option worth considering is for the Crown to establish a “Three Waters” advisory and capital works funding agency, the expertise and resources of which could be called upon by councils when considering new investment options or upgrades.
Under such a model, the Crown could contribute funding to capital works, along the lines that the Transport Agency does for council roads.
This would bring improved consistency across the sector, insight for small councils into the latest technology available (small scheme wastewater processing, for example), advice on the best solutions for upgrades to meet increasing standards, and assistance with infrastructure funding solutions.
It would leave decisions on investment in the three waters to local communities to make thorough democratic processes, something the proposed water organisations will not achieve.
Rural and growth councils do need guidance and support in the three waters space.
But simply removing these assets and service responsibilities from them and putting them in the hands of monopolies may not be the right solution.