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Government's Three Waters revamp

Government's Three Waters revamp

The government's Three Waters project is moving from four entities to 10 with its start date pushed out by two years.

The entities will be divided along typical regional lines, avoiding the difficulties of having one organisation spanning both the lower North Island and upper South Island.

Ironically, its move to rebrand the project as the "Affordable Water Reforms" comes with a bigger pricetag for ratepayers than under the old model.

The government says the change will mean individual councils will have a bigger say over the water service entities.

Statements provided to explain the shift also do not address whether it will include any changes to the 50-50 co-governance policy, which would see mana whenua given half the membership of the strategic oversight groups which appoint the board.

In a statement, Local Government Minister Kieran McAnulty said the entities would also start delivering water services from 1 July 2026 at the latest, two years after the 2024 start date promised by his predecessor.

Hipkins had tasked McAnulty - who took over the portfolio from Nanaia Mahuta after Hipkins became prime minister - with taking the reform programme back to the drawing board after fierce backlash from councils and political opponents.

The reforms are aimed at helping curb the costs of upgrading water infrastructure across New Zealand, which was reviewed by the previous National government after the 2016 Havelock North campylobacter outbreak.

The review found annual water rates bills would need to increase by up to $9000 by 2051 to pay the up to $185 billion bill for the necessary upgrades and maintenance, as well as preparing for climate change. Today's announcement has an update to that figure, suggesting increases of up to $9730 by 2054.

The government now says its 10-entity solution will cut on average up to $5400 off that bill, but that compares to the up to $8200 in estimated savings by 2051 claimed by Nanaia Mahuta under the four-entity model in June 2021.

This means the new model would be delivering what appears to be up to $2800 less in savings to households, but the comparison may not be direct.

Some districts would see much greater savings than the $5400 figure - such as Waitomo, expected to see what would be a $21,500 water bill cut by $18,730 under the reforms, an 87 percent cut.

McAnulty talked up the benefits of moving to a 10-entity plan.

"Under our proposal to establish 10 entities, New Zealand households will still make big savings," he said.

"The feedback has been overwhelmingly clear that our water infrastructure deficit needs to be addressed now if we're to save households from ballooning bills that will make water unaffordable, but also that the reform programme must be led at a regional level - we have listened closely and absolutely agree.

"By extending the number of publicly owned water entities to 10, every district council in the country will have a say and representation over their local water services entities through regional representative groups."

He said these representative groups would include "a partnership between council representatives and iwi/Māori that will provide strategic oversight and direction to the entities", but the initial statements did not clarify whether there would be changes to the contentious 50-50 co-governance aspect.

Under the old model, this would see mana whenua granted half the seats on the regional representative groups, the other seats reserved for council representatives.

As before, the representative groups for the 10 entities will offer strategic oversight over a professional board which runs the entity, appointed based on competence and skill.

Concerns about ownership rights also go unanswered, with the old model which sees councils owning the entities - which in turn own the assets like pipes and reservoirs - through a shareholding structure, apparently unchanged.

McAnulty said he had listened to the feedback from councils and had been working closely with local government leaders ahead of the decision.

"These reforms are absolutely essential. Leaving things as they are will mean an unaffordable rate bill," he said.

Some councils still opposed

About 30 councils banded together under the Communities 4 Local Democracy (C4LD) group to oppose the government's proposals, and in a statement said they were disappointed the government had refused to make meaningful changes.

They said it had been turned into an election issue, rather than seeking consensus.

C4LD co-chairs Helen Worboys and Dan Gordon said New Zealanders would see it was the same plan with a different name.

"Simply adding more entities and changing the name is a desperate attempt to save this plan and attempt to show they've done something with the $100 million they've sunk into this process so far," they said.

"Unfortunately, instead of listening to what communities are asking for, the government once again thinks it knows better and is serving up a reheated version of the same unpalatable, unpopular plan."