Three Waters Reform
Over the next 30 years, New Zealand’s water service infrastructure will need substantial investment. At the moment, the responsibility to make that happen sits largely with local councils, who own and operate 85% of New Zealand’s three water services.
To ensure our water remains healthy for all our people and our environment, change is needed. Without change, the services we rely on every day will be at risk. The potential impact on our people, our business, our environment, and our reputation will be irreversible.
The Government’s proposals for Three Waters Reform aims to address these challenges by shifting the management and delivery of these services to four larger public entities.
Before any decisions can be made, New Zealand’s 67 councils are all working with Government to understand the potential impacts. We’re focussed on ensuring the long-term outcomes are best for both Hutt City and New Zealand in general. Once we have sufficient information on the details of the Government’s proposal, widespread community and mana whenua engagement will take place. This is expected to be later this year.
There’s still a lot of work to do and decisions to be made., Whatever the outcome, no changes will happen before 2024. Until then, your water will continue to be delivered by Wellington Water, our regions’s joint Council-controlled organisation.
The Three Waters reform proposal was prompted by the tragic deaths of four people in 2016. The deaths were a result of water contamination in Havelock North. Thirty five people were hospitalised and many of the local community fell ill.
- The Government launched an inquiry, then introduced new legislation to strengthen regulation and provide clearer oversight of the three water networks. A new water services regulator, Taumata Arowai was established to support these reforms.
- The Government also looked at how the three water services are currently delivered. They acknowledged the challenges faced by councils, including the need for affordability.
- This led to the Three Waters Reform programme and an agreement for Central and local government to partner in moving the reform forward.
- Significant investment is needed to bring New Zealand infrastructure up to the standard needed to meet health and environmental needs, and the demands of future growth. Analysis from Water Industry Commission from Scotland (WICS) shows our country will face an estimated investment requirement of $120 billion to $185 billion over next 30+ years.
- Here in Hutt City, we’re looking at a bill of $1.6 billion to address our ageing infrastructure, historic underinvestment and continued growth. According to WICS, this would see our local rates rise to almost triple what they are now by 2051. This compares with an increase of approximately 50% with reform.
What’s being proposed
Earlier this year, the Government announced plans to consolidate the stormwater, wastewater and freshwater services currently provided by 67 councils into four new publicly-owned water service entities (WSE).
- Under this proposal, the four entities would be responsible for the three waters infrastructure, owning and operating the infrastructure on behalf of local authorities.
- Hutt City would become part of Entity C, along with 22 other councils from Gisborne down the east coast to Wellington, plus the top of the South Island. The proposed boundaries are based on scale, water catchments, rohe/takiwā, communities and workforce.
- Each of the four entities would establish independent boards. Ownership of existing assets, which are currently managed through Wellington Water, would be transferred to the new entity.
- Mana whenua would have joint oversight of the entities, to promote and protect Māori/iwi rights and interests, protect consumer interests and provide ongoing stewardship arrangements.
- Costs for these services would no longer be covered by rates. The WSE would bill people for these services directly, much like a power or phone provider. The entities would be expected to deliver services at an affordable cost.
- The decision to join one of the proposed entities is voluntary. Each council needs to make a decision based on local context.
- Government announced an investment package of $2.5 billion to ensure no council will be worse of as a result of the reforms and providing financial support for the transition.The ‘Better Off’ funding allocation for Hutt City is $38.4M.
Where we’re at
Hutt City Council is currently reviewing all the data and information we’ve received from the Department of Internal Affairs (DIA). We have until the end of September to complete our review, before providing feedback to Government.
- The situation is complex and each option has its own issues and risks. We’re working to understand the financial, workforce and sustainability impacts for HCC, and wider economic, social and cultural implications.
- Affordability is top of mind and we’re looking carefully at how we could soften the impact of the investment for our people.
- Our challenge now is to identify which option will provide the best path forward for New Zealand and our local community.
- At the same time, we’re continuing to engage with other councils, and working with DIA, Government and mana whenua on key aspects of the reform.
It’s too early to make any decisions about the proposed Three Waters service deliver model and whether councils should choose to opt in.
- Should the reforms go ahead, it’s anticipated there will be a long transition period and councils will continue to deliver until mid-2024.
- We’re expecting Government to begin making decisions after the 8-week review process ends on 30 September 2021. We’ll look to fully engage with the community, as will all Councils across the country , in a coordinated consultation process, supported by Government, once further announcements have been made.
You can find all the information that has been released to councils to date at the Department of Internal Affairs and LGNZ websites.