Four multi-region water providers could be formed to control New Zealand’s wastewater, stormwater, and drinking water systems, taking on the role filled by nearly 70 councils now.
The Government says the proposal is the only way to pay for changes to infrastructure needed to provide safe drinking water for all New Zealanders and to stop sewage and stormwater polluting the environment.
Local Government Minister Nanaia Mahuta released council-specific analysis yesterday that promised thousands of dollars in savings for annual household water bills by 2051.
Small councils especially could not keep pace with spending of up to $185billion urgently needed to bring the country’s water infrastructure up to an appropriate standard, she said.
"We have seen the effects of a system in crisis: fatalities from bacteria in drinking water, broken sewer pipes, poorly treated wastewater running into streams and rivers, no-swim notices at the beaches, regular boil-water notices, and lead contamination," Ms Mahuta said.
Much of the discussion yesterday was around whether councils would opt in or out of the reforms.
Southern mayors greeted the proposed reform programme cautiously.
Concerns included how it would affect the ability to plan for growth, and whether the Government’s financial analysis was accurate.
Most councils said they needed to know more before deciding to opt in or out of the new set-up.
More information from Government would be made available by the middle of this month.
More than $60million was accepted by southern councils in a first round of funding to be used to improve water infrastructure as the reforms began last year.
Clutha Mayor Bryan Cadogan, chairman of a group representing Otago and Southland’s 10 city, district and regional councils, said before the end of the year, councils would be offered a second round of funding, but this time councils could only take it if they were opting into the proposed centralisation.
"Whether you are in or out, you have to get up to the new water standards. The only difference is if you’re out, you get up there on your own, you don’t get any help.
"That would be a financial impediment to our ratepayers."
Every council’s desire was to find a way to get into a better bargaining position as their decision to opt in or out approached, Mr Cadogan said.
While pundits were debating whether Christchurch would opt out of the reform package, Mr Cadogan believed the Christchurch City Council was in the strongest bargaining position in the South Island for a share of the next round of pre-centralisation funding.
"The ramifications for all of us if Christchurch is ‘out’ far outweighs the ramifications if Clutha was out.
"Let’s say she’s [Ms Mahuta’s] got $1billion [pre-reform funding] to sort the South Island with, if she doesn’t get Christchurch, she doesn’t sort us out."
Christchurch Mayor Lianne Dalziel said it was "difficult to yet see a compelling case for change".
A Department of Internal Affairs three waters reform programme spokesman said the department was working with Local Government New Zealand on a support package for councils and would make further announcements, including next steps in the reforms, next month.
Councils’ water assets, and debt, would be transferred to the new providers.
The DIA spokesman said the vast majority of councils that opted into the reform programme would increase their borrowing capacity, which they could invest in other community assets without a need to increase rates. For councils with little or no debt this might not be the case, he said.
The Government was working with LGNZ on a support package to address this.
Further, he said, councils would no longer be charging households for water services, which should be reflected in their rates.
Ms Mahuta said with the overhaul, on average, households in the South would spend $1640 a year on water bills by 2051.
Without it they would pay an average of $4970 a year.
In some districts, including Clutha, Waitaki, and Queenstown, the household water bill could reach $9000 or more a year in 30 years’ time without the reforms.
Otakou kaumatua Edward Ellison said mana whenua were pleased with the progress on the reforms.
The historic lack of investment and the poor condition of a lot of stormwater and wastewater infrastructure was a concern for local Maori
Outfalls were often located in traditional hunting and gathering places and mana whenua wanted a step change in the protection of waterways and habitat.
"We’re aligned with the reform, we think it’s overdue, it is necessary, and without it I think the situation will compound," he said.
Related Stories
Comments
This is creeping socialism.
It's not even creeping anymore, it's a bulldozer.
Presumably Christchurch has no need for reform as they’ve had a massive infrastructure spend post earthquake. Question is, who paid for that? If taxpayers from all of New Zealand funded their infrastructure ( via central government) it’s unreasonable for them to be able to opt out of a system that is designed to spread costs and save all ratepayers money. Why would they be given this option if it ruins the economic benefits for the rest of the South Island?
Very good point.
Couple of questions that need answers are:
Where did the Government get their figures from?
Who/What are these private entities comprised of?
How much has He Paupau influenced the Government on this?
I also heard if councils opt out, Labour will pass a law that enables them to proceed anyway.
I think I can answer a couple of these questions.
My understanding is that while the new entities own the assets, it is the various councils within the entity boundaries that have representation on the governance of the entities. It was mentioned in an article earlier this week, for example, that a 75% majority of councils would need to agree to privatise the assets held by the new entity.
I believe if councils opt out, any infrastructure capital expenditure will need to be done, and paid for, by the councils themselves without any funding from the government/new entities. Councils will be required to maintain standards of service performance laid down by the government for their infrastructure assets, which will in effect force capital expenditure to happen (ratepayer funded) whether of not the council deems that expenditure necessary.
Opting out is no guarantee that councils will have total control over decisions about infrastructure capital expenditure.
As to how the Government came up with their figures - this is something all the councils want to know as well as they believe the so-called "savings" and council costs are overstated.