Govt gives go ahead to Three Waters reform

The Government’s contentious Three Waters reforms will go ahead with local councils taking nonfinancial shareholdings in four new public water entities.

Cabinet has agreed to the bulk of 47 working group recommendations for the planned overhaul of the country’s three waters – drinking, waste, and storm water systems – which it hopes to complete by July 2024. The proposed co-governance of regional groups, which will appoint the new entities’ governance boards and provide public accountability for the entities, is set to remain.

The proposed reforms of New Zealand’s varied, and often inadequate, water systems has raised alarm within local councils across the country. Some local politicians and community groups have loudly opposed a loss of the control and financial heft that owning local water services provides.

The prospect of co-governance with Māori has also been cast as a loss of ‘‘ownership’’ over public water services, including by Opposition politicians, a perception the Government has been at pains to combat. In October, it formed an independent working group to provide recommendations on governance questions, in an attempt to further ease the concerns raised.

‘‘It’s been an issue that’s languished for far too long. We’re not prepared to kick the can down the road . . . We are taking on a really significant, difficult challenge because, if we don’t, communities will pay more and they can ill afford to do that,’’ Local Government Minister Nanaia Mahuta said.

Mahuta and Infrastructure Minister Grant Robertson were visiting a wetland in Porirua yesterday to announce the Government would now push ahead with reforms by introducing legislation into Parliament in the coming months.

‘‘Underinvestment has led to unacceptable situations in a developed country like ours: pipes regularly bursting onto our major city streets, the sewage flowing into our waterways, and half a million New Zealanders each year forced to boil their water because of faecal contamination,’’ Robertson said.

He said the reforms would provide the entities the scale and access to finance needed to rebuild water infrastructure.

‘‘Without reform households are facing water costs of up to $9000 per year, or, the prospect of services that fail to meet the needs of their communities.’’

The Government had agreed to an adjusted ownership structure for the water entities that clarified that local councils were the direct, though non-financial, owners of public entities.

The shareholding of the new water entities would be distributed to local councils on the basis of one share per every 50,000 people within the council’s territory.

‘‘Many councils have said we will miss out in this aggregation of council interests. No you will not,’’ Mahuta said.

Though councils will, in effect, own the water entities, the entities would be governed by a ‘‘regional

representation group’’ of which members would be a 50-50 split between local council representatives and iwi group representatives.

The Government would also insist on urban, provincial, and rural councils being represented within these groups.

Mahuta said the regional representative groups were part of the ‘‘two layered’’ governance structure which ‘‘ensures local government and iwi-Māori participation and voice at the strategic level’’.

‘‘I know that iwi-Māori will participate at this level, and this is the best place for that kind of approach ... Māori have a long-term interest in the sustainability and mauri of water.’’

These representative groups would appoint a board, made of members deemed skilled and competent, that will manage the water entities directly. The representative groups will have a hand in setting the strategic direction and strategy for the entities, and will monitor performance on behalf of the community.

The water entities’ day-to-day operations will be managed by its own executives, with oversight of the appointed board. Mahuta said the Government had consistently ‘‘ruled out’’ the water entities’ boards being co-governed.

The working group had recommended the Government take cogovernance of the regional representative groups further, by requiring in law that the groups be co-chaired by one council and one iwi representative.

The Government has decided against mandating this, but instead will ‘‘enable’’ the groups to appoint co-chairpersons within the groups’ constitutions. The initial constitutions for the groups will be drawn up by the local government minister, Mahuta, in conjunction with local councils and iwi groups.

There would also be sub-regional groups, also co-governed, that would better allow for the views of smaller groups within the territory of a water entity to have a say in the decisions of the regional groups.

‘‘That will take a number of these strategic decisions closer back to community to enable the types of outcomes that communities want to see,’’ Mahuta said.

Auckland mayor Phil Goff, who has opposed the reforms, had produced a ‘‘minority report’’ contained with the working group’s recommendations in which he argued Auckland was ‘‘left as a minority voice’’ within the proposed northern water entity, despite providing 93% of the entity’s assets.

The Government has agreed that the northern entity, which will capture Auckland and Northland, will have a bespoke arrangement that more heavily weight its representative group towards both Auckland council and iwi representatives. It will retain the 50-50 split between council and iwi representatives.

The Government was expected to introduce legislation into the House in mid-2022, with the bill being subject to public consultation through the select committee process.

A second piece of legislation will be introduced into the House later in the year, to makes various technical changes to existing law and create new powers that will be needed to transfer assets, and create regulatory regimes.

‘‘We’re not prepared to kick the can down the road . . . We are taking on a really significant, difficult challenge because, if we don’t, communities will pay more and they can ill afford to do that.’’ Nanaia Mahuta

Local government minister

Govt places public ownership challenge at Opposition’s feet

A ‘‘bottom line’’ for the Government was that water assets would remain in public ownership. Mahuta has written to other political parties asking them to support the entrenching in law of a prohibition against the privatisation.

Robertson said it was time for Labour’s political opponents to ‘‘step up if you believe in public ownership’’.

But the National Party has continued to promise it will repeal the Government’s water reforms and the ‘‘divisive’’ co-governance structure, and has questioned the level of ownership councils will retain.

‘‘According to the Government, local councils will still be the ‘owners’ of their assets – but they won’t actually have any control over them. It’s like saying you own a house but don’t get to decide where to put the furniture,’’ said the party’s local government spokesperson Simon Watts.

‘‘We don’t support privatisation of local water assets, and we don’t support ThreeWaters.

‘‘We’ve always said these assets belong to councils and ratepayers. Any attempt by the minister to get National on board with their asset grab is futile.

‘‘Labour is the only party in Parliament talking about taking assets out of ratepayers’ hands.’’

ACT Party local government spokesman Simon Court said ACT would also join in repealing the reforms. ‘‘The worst aspect of the reforms is divisive co-governance. It’s totally inappropriate to give iwi a seat at the table just because of who their ancestors were. All New Zealanders want clean and safe water, not just iwi.’’