Three Waters changes laid out to councils

Friday, 9 August 2024

The Government has announced the fine print of its water reforms on Thursday, including how new council-owned water providers will be created.

Porirua mayor Anita Baker says without the just-announced reform of Three Waters, she would not have been able to afford to live in the city in five years.

Local Government Minister Simeon Brown and Commerce Minister Andrew Bayly announced the fine print of the Government’s water reforms plans on Thursday, including how new council-owned water providers will be created, increased debt limits, and water standards tweaked to reduce compliance cost.

The new organisations will be able to borrow from the Local Government Funding Agency Limited (LGFA), of which 30 councils and the Government are shareholders, for water services, reducing the cost to councils.

The replacement for Labour’s scrapped Three Waters scheme was praised by Brown as a cheaper reform package that allowed councils to keep control of water assets. But it also came with a quiet threat: councils must amalgamate services to achieve scale and cost efficiency, or the Government will make them.

Following the Government’s just-announced reform of Three Waters, Porirua mayor Anita Baker says without it, she would not have been able to afford to live there in five years. (File photo)

“My message to councils is clear. Get on board with these changes quickly,” Brown said.

For Baker, that might mean she will last another term as mayor. She recently noted the current rate increase of 17.5% would put ratepayers under financial stress and she expected to be voted out of office at the next election.

The new entity would provide security for consumers around affordability and give councils and water entities a new tool to pay for infrastructure, Baker said.

“This announcement will make a real difference, and we should grab it with both hands.'

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

Wellington mayor Tory Whanau had a more muted response.

“We will need time to understand how the announcement will impact our current plans for a new regional water council owned organisation for Wellington.”

In principle, the ability to borrow more from LGFA would help spread the huge cost of new infrastructure over a longer period, she said.

“However, a lot now rests on the ratings agency’s assessment of the impact this will have on the LGFA. Any downgrade of the LGFA as a result will mean higher borrowing costs and higher rates for residents across the country.”

Labour immediately questioned Brown’s assertion the water reform package would be cheaper for taxpayers and ratepayers than its model, which would have created 10 public water entities.

Tonia Haskell, chief executive of Wellington Water, has resigned. Today will be her last day. (File photo)

The party’s local government spokesperson, Kieran McAnulty, said the Government’s plan would be pushing debt onto councils, with a “blind eye” to their credit ratings.

“They’re washing their hands of this issue and setting councils up to take all the blame on the inevitable increase in rates.”

Under the Government’s plan, councils are being asked to put forward plans for financially sustainable water providers, likely requiring they amalgamate with neighbours to achieve efficiencies and scale.

One of a series of laws to erect the new regime will be passed later this month, from which point councils have 12 months to deliver their plans.

Meanwhile, Wellington Water boss Tonia Haskell resigned, on the back of a series of blunders for the agency involving ongoing leaks, supply shortages, budget blowouts and questions about its culture.

A media release on Thursday said Friday would be her last day. Charles Barker, the acting GM Customer Operations Group, will be the interim boss.