Governments Three Waters Reform

You may be aware that the Government is proposing some significant changes to how Three Waters (drinking water, wastewater and stormwater) are managed in New Zealand.

The proposal is that four new entities are set up covering the whole country, and these entities take over the service delivery and management of the three waters infrastructure, currently done by councils. For us, this would mean that our three waters assets (as well as the debt attached to the assets) would be taken over by a new entity that would include councils across the Waikato (including Hamilton), Bay of Plenty (including Tauranga and Whakatāne) and Taranaki Regions and the Ruapehu, Whanganui and Rangatīkei Districts.

A comprehensive financial support package is also being offered alongside the reform proposal, which (if we ‘opt in’) is calculated at just over $18 million for South Taranaki. The Government believes it has established a compelling ‘case for change’ based on the financial requirements needed over the next thirty years to upgrade and manage the nation’s three waters infrastructure to meet increasing health and environmental standards as well as community expectations. They say the amount of investment needed would be almost impossible for councils to fund on their own, so some kind of change is needed.

The Government believes that by moving these services from individual councils to new entities they will be able to create a large enough scale that will enable those entities to borrow more (to fund the investment needed), develop better capability and capacity in the water services industry, as well as creating operating efficiencies and cost savings.

The Government's modelling suggests that South Taranaki will be better off financially under the proposal.

We all support the need for clean, safe, affordable drinking water and a healthy environment. This is the approach that our Council has always taken when investing in our assets and it will continue to be the key driver of future investment decisions, as has been outlined in our Long Term Plan. I also appreciate the need for Taumata Arowai, the new government regulator of the 3 Waters (Taumata Arowai is completely separate from the 3 waters service providers and will set the standards and ensure that everyone is complying with the standards).

However, we still have many unanswered questions about the Government’s modelling and the reform proposal, such as:

1. How will the governance of the new entities be set up to ensure that South Taranaki District retains its voice over its assets, and that local priorities and development patterns are provided for across the large areas?

2. Will our ratepayers really be better off financially as a result of this proposal?

3. What will the impact of the change be on the Council organisation that remains after the change and what will local government look like in the future?

4. Is bigger actually better and are the efficiency assumptions made by Government realistic?

5. How can the three waters assets be separated from our other assets?

The Government has given our Council August and September to consider all the information and implications of its proposal. This is not a lot of time to digest the huge amount of information we’ve been provided so we’re working with experts from Local Government New Zealand to help analyse this information and (hopefully) get answers to our questions.

To date the Government has said that when the time comes, councils could decide if they wished to ‘opt in’ or ‘opt out’ of these reforms. It’s important to know that the Government has not actually asked us this question yet. However more recently I have heard suggestions about the Government making it mandatory. I would see that as totally undemocratic and unacceptable. The assets we are talking about have been paid for by our communities, not by Government, and as such the Government must give councils the ability to effectively consult with our communities before we make any decision on whether we support these reforms and ‘opt in’, or not.

The issues involved are complex and it’s crucial that we should not be rushed (or forced) into making a decision of this magnitude without having time to fully understand the proposal or consult with our community.

For more information about the Government’s Three Waters Reform Proposal, including the Governments support package, you can go to the Department of Internal Affairs website www.dia.govt.nz Three Waters Reform or Local Government New Zealand’s website www.lgnz.co.nz

Phil Nixon, Mayor of South Taranaki