Three Waters Proceeds

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Three Waters Proceeds

Three Waters Proceeds

Tuesday 21 December, 2021

Seldom has a Minister for Local Government shown such resolve. The Hon. Nanaia Mahuta originally shrugged off wide-spread concern about the Government’s three waters reform proposals proposing to introduce legislation into Parliament in early December to support what she describes as a compelling case for reform. However, a recently announced ‘pause’ has allowed more time to take into account sector feedback and the legislation will be introduced after the end of February next year.

Government will proceed with Three Waters Reform

By now everyone will be familiar with the Government proposal, which involves the transfer of all council-owned water services to four water service entities to be owned, but not controlled, by the local authorities within their boundaries. The Three Waters Reform Programme is a response to what has been described as the mounting evidence of the challenges facing three waters service delivery nationally. The Programme has already resulted in the enactment of the Water Services Act 2021, the main purpose of which is to ensure that drinking water suppliers provide safe drinking water to consumers, and the establishment of Taumata Arowai as the dedicated regulator of drinking water, wastewater, and stormwater.

Not everyone is happy with the Minister’s proposals. After an eight-week consultation process in August and October involving local authorities, iwi/Maori, LGNZ and Taituara and others, 75% of the submissions stated they did not support the proposed model put forward by the Government. While many submitters acknowledged there was a case for change, a few Councils noted their overall opposition to the reform. The concerns expressed included:

The complexity of the proposed model
Loss of local decision-making
How the water services entities will interact with local government planning
The inclusion of stormwater
Doubts about accuracy and relevance of the modelling undertaken
Insufficient engagement and public consultation
The need for better alignment with resource management reforms and the Future for Local Government review.

The Minister is unmoved. In her announcement on 27 October confirming the creation of four publicly owned water entities she said:

“The case for change is too compelling to ignore. It is clear that without the establishment of these publicly owned entities we will continue to see a frail network and contaminated water in many communities. To delay will only push the problem on, increase future household costs and put livelihoods at risk.” 

What happens next?

Two separate Bills are proposed. The Water Services Entities Bill, now to be introduced after the end of February 2022, and the Economic and Consumer Protection Bill expected to be enacted at the end of 2023. Although the Select Committee process will provide an opportunity to get public feedback on the reforms, it seems unlikely that there will be any change to the broad structure proposed. It is worth noting that while still leader of the National Party Judith Collins stated that National would repeal the legislation if National was elected at the next election in 2023, which would appear possible as the new water service entities are not scheduled to become operational until mid-2024.

The following timetable has been set for progressing the reforms –

October to December 2021

Cabinet decisions on reform pathway. National Transition Unit Board Chairs and members appointed MBIE Economic Regulation and consumer protections public consultation begins. Technical working groups to refine reform details begins.

January to June 2022

Water Service Entities Bill and Select committee process – public submissions and hearings – until June 2022. Technical working groups to refine reform details. National Transition Unit consultation engagement with local authorities. Cabinet to consider economic regulation and consumer protection, and pricing/charging.

July – December 2022

First $500m of ‘better off’ funding available (July 2022). Water Service Entities (Implementation) Bill and Select committee process – public submissions and hearings – until June 2023.