This is what will replace Three Waters: Government unveils the new water plan

Thursday, 8 August 2024

The small township of Tokomaru near Palmerston North has had elevated level of lead found in there water supply. The township has being told not to drink tap water

The Government has detailed its plans for new council-owned water services, debt financing arrangements, and changes to water standards to reduce compliance cost.

Local Government Minister Simeon Brown and Commerce Minister Andrew Bayly announced a suite of changes planned for water services across the country at a press conference in the Beehive on Thursday morning.

The plan, a replacement for the public water entities proposed by the Labour Government under the prior Three Waters scheme, included new ways councils would be able to amalgamate their water services through new council-owned organisations and “community trust” models.

Debt financing for these water providers would be provided by the Local Government Funding Agency, allowing for a greater debt-to-revenue ratio, at 500%, for the water providers, compared to the more limited debt allowed under current council-controlled organisations.

Local Government Minister Simeon Brown has announced a suite of changes for water services.

Water standards will also adjusted to be “proportionate” to the scale and risk posed, in a bid to ease the cost to improving water services and infrastructure.

Reform of water services has long been in the pipeline. A waterborne outbreak of campylobacter that hospitalised 45 people and possibly contributed to four deaths in Hawke’s Bay in 2016 sparked the ongoing Government reforms. The need for change was again underlined this week, when residents of the Manawatū town of Tokomaru were asked not to drink tap water after concerns of lead in the water supply.

Thursday’s announcment was the Government’s answer to Labour’s Three Waters scheme, which was scrapped after the election in 2023.

Brown had committed to a new reform package, called “Local Water Done Well”, which asked councils to amalgamate water services with their neighbours to create cost efficiencies for ratepayers, while also creating water providers with the scale to fix ageing and unsafe drinking, waste and stormwater systems to new standards.

But how the Government would set up such a system for councils had carried uncertainties.

Auckland was deemed a special case, considering its size. The Government agreed with Auckland Council in May to financially separate council-controlled Watercare from the council, in order to allow it to raise further debt without weighing down the council’s credit rating and increase its borrowing costs.

More soon