Govt considering 'working group' to wrangle rising water costs

Monday, 13 October 2025

The Government is forming a “working group” to investigate bringing down the cost of water services, as central government reforms have councils significantly increasing water bills.

The Department of Internal Affairs (DIA) is currently scrutinising councils’ water service delivery plans, required by the Government’s Local Water Done Well reforms, and has so far accepted seven plans for more than 40 water providers to be created under the new regime.

Many of the plans show that water bills will significantly increase, and in some cases double, in the coming decade, as councils grapple with water infrastructure requirements. The high cost of water bills has been particularly concerning in rural centres.

Behind the scenes, Local Government Minister Simon Watts has been seeking advice from DIA officials about how the costs of water infrastructure might be lowered.

An August 28 briefing received by Watts, a week before councils were due to hand in their water plans, shows he sought advice on forming a “working group” of sector experts to advise the Government on obtaining efficiencies and cost reductions in water service delivery.

Watts’ office confirmed on Monday the working group would proceed, but the membership has not yet been finalised.

The working group will be focused on “legacy issues”, according to the briefing, such as workforce capability and “uncoordinated approaches to infrastructure pipeline management and procurement”.

Because of the “large amount of work” already done over the years of reform, the group would be excluded from considering legislation, funding and debt arrangements, and much of regulatory settings.

“Working groups” are commonly used by Governments to advise on policy, but the phrase itself has mostly been excised from political language in recent years, after the National Party heavily criticised the 2017 Labour Government for creating many such groups.

Watts, in a statement, said the Department of Internal Affairs was drawing up draft terms of reference for the working group.

“The advice was sought as part of the Government’s commitment to continue exploring opportunities to fully realise the efficiencies enabled by Local Water Done Well.”

Also referenced briefly in the paper was prior advice received by Watts about potentially involving Crown Infrastructure Delivery to assist with project management, the National Infrastructure Funding and Financing Company for special debt-funding arrangements, and the Infrastructure Commission to map projects across the country.

Sector-group Water NZ chief executive Gillian Blythe said such work to find efficiencies should be “encouraged” as, according to the DIA, there would be $47.9 billion in water investments taking place in the coming decade.

“Some of it's about economies of scale. Some of it's about continuing to find standardised modular solutions,” she said.

Blythe’s organisation recently held a conference attended by more than 2000 people from across the sector.

She said at the conference there was a feeling that, after two tough years, “we’re close to suddenly beginning to really invest to fix the water infrastructure”.