“Disappointed” is how many mayors around the country are describing the government’s approach to water infrastructure reforms, with some saying it will lead to protest marches from ratepayers.

Radio NZ,

27 October, 2021

Local Government Minister Nanaia Mahuta today confirmed councils around New Zealand would be required to hand over their water assets under the government’s Three Waters reforms.

The reforms would go ahead largely as planned, although working groups would be set up to inform and guide the legislation, with a particular focus on oversight and accountability, rural supplies and resource management.

Protest marches expected in Hastings

Hastings Mayor Sandra Hazlehurst said the Havelock North water inquiry, which followed a deadly outbreak of campylobacter and was what prompted the government’s reforms, had led to big changes in the region.

“Hastings, we have been the leaders. And since we Havelock North water inquiry, the government inquiry, we have been the leaders in delivering safe drinking water in New Zealand.

“We’re unique compared to other councils in New Zealand. And so that’s why we wanted our own model for Hawke’s Bay, that we could manage our water. We’ve proven that we can do that.”

She did not hold back about today’s announcement, saying she was devastated, shocked and dismayed.

“Our community are really, really angry. Everywhere I go I hear people talking to me about the Three Waters, they’re talking about marching.”

“Our community made their views very, very clear to us that they didn’t want to be part of an entity that controls water assets for 21 councils, 23 iwi groups and around a million people.”

She said they knew the status quo was not an option and Hawke’s Bay had proposed a regional model to the government instead, but the government simply had not listened.

“No one has listened to our submission which identified what was really important to our community – that we still owned the assets and looked after the assets, that we hit on localism and a voice, and accountability; and that we manage the priorities of when infrastructure should be built around our growth, and managing our growth for houses, industry, infrastructure.

“The government has made it quite clear today that they will stick with a four entity model, which doesn’t include a regional model for Hawke’s Bay.”

Auckland hoping for governance changes through working group

Auckland mayor Phil Goff said the council was not opposed to reform, but did not agree with the governance model that had been proposed.

“This model that they are proposing means that 28 percent of council’s assets effectively go outside of its control to a new entity in which Aucklanders are offered a minority share in an oversight committee that has no power. That is not acceptable to us.

“They do not need to remove democratic accountability from the people of Auckland through their elected representatives in order to achieve those goals, and that’s what we’re opposing.”

The council had proposed a more democratic system of accountability over the water entities, which had been unanimously supported by the full council and its 21 local boards, he said.

“The model that we are proposing is a council controlled organization model where the council controlled organization – in this case for Auckland, Watercare – has operational independence, and it sets water prices. But we appoint the board.”

He said some of the government’s concerns simply did not apply to the supercity.

“We recognize that there are areas of New Zealand where the water quality is not up to standard and the wastewater treatment isn’t up to standard and they don’t have economies of scale but those things don’t apply to Auckland,” he said.

“Auckland already has the the highest rated quality of drinking water in the country. It already has the best wastewater treatment in the country, and it already has the scale well and above the size of any of the other entities that the government is proposing to reform. So we don’t benefit.”

He did not believe the proposed governance model would remain unchanged considering the working group that had been announced today.

“They’ve invited us to participate in a steering group to come up with a different model and I hope that we can do that and that the government takes our concerns on board so that they are winning the voluntary compliance of people, rather than simply imposing it.

‘It’s about the control of the assets’ – Whangārei mayor

Whangārei was the first council to come out in opposition to the reforms, and mayor Sheryl Mai said while the move was expected the council had hoped some of the feedback would have influenced the government’s final decision.

“We have managed her assets really well. The minister was talking about things like 64 percent of councils don’t have the income to meet the needs, well we’d probably top of the list of the 36 percent who do.”

“We have no sewage spills into our beautiful beaches. We’ve got water metering, we have reserves, we’ve built a new water treatment plant, we’ve planned for the asset renewals and maintenance for the next 10 years, with a huge investment without debt, so we are different from other councils.”

The council would work to find some common ground on the reforms but would also be regrouping with other councils in a similar situation, she said.

“Yes, there’s some offers of compensation – your ‘better off’ and ‘no worse off’ and financial sustainability pay packages and things like that – but money isn’t the object here. It’s about the control of the assets for the people that we serve.”

Questions over chlorine for Christchurch

Christchurch City mayor Lianne Dalziel said the council had acted in good faith throughout the process so it was “extremely disappointing that they’ve decided to push ahead with what we’ve looked at as a flawed model”.

She said the city wanted an exemption to the chlorination requirement already being implemented through the Water Services Bill, which set up Taumata Arowai to oversee, administer and enforce drinking water regulation.

“We want whoever is delivering our water in the future to be required to maintain that level of service, that exemption, so that we don’t have to hate chlorine in our water, but there is nothing and the current arrangements that allowed it to happen.

They accepted there were huge infrastructure and financial challenges, but the government’s approach was not what they had hoped for and the council would be making a strong submission to the select committee.

“There is a model where you can get scale through a council-controlled organisation – and it can be a multiple-council-controlled organisation – but what has become clear from the government’s announcement today is that the balance sheet separation is the be all and end all.”

She hoped the working group would be an opportunity to influence some of the detail of the reforms.

“Essentially, the announcement today takes the decision out of councils hands, but we are going to continue to strongly encourage our communities to express their views.”

Nelson to ‘wait and see’ on governance changes

Nelson mayor Rachel Reese said it was a change that had been decades in the making. While the mandated approach would disappoint the local government sector, it was not a surprise, she said.

“We’ve seen the signals from the government that an all-in approach was one that they were going to pursue … the test will really be now through the establishment of the working group that the minister signalled today.”

“I know the announcement today will be, you know, challenging for councils … but ultimately, this is a nationwide affordability challenge and as I look out over the next 10, 20, 30 years I can see some real financial challenges.

She said there were concerns about governance, representation and accountability, and while the working group was a good step she would wait and see how feedback was taken on board.

“We want to have opportunities to, for instance, appoint directors. So we need to see what’s going to come out of that working group and of course, it was critical to us that entities are protected through the system from privatization, so I’ll wait and see what happens through the working group process.”

There had been strong opposition in the community, she said, but there had also been misinformation so it was key that the government communicate the legislation effectively.

She would be advocating for a regional office to be based in the top of the South Island, and it would be valuable to take a unified approach with other mayors in the region, she said.

“Plenty to work on from here over the next coming months as we prepare for the Bill being introduced into the house.”

“I think this is legislation designed to set up New Zealand for the decades to come and while I think Nelson’s gains in the short term may not be as great as other councils, I think in that longer term picture if the reforms are structured appropriately, on the issues that still need to be resolved then Nelson will be a beneficiary of these reforms.”

‘Ownership in name only’ – Timaru mayor

Timaru District mayor Nigel Bowen said he was “really disappointed” for two main reasons.

“Accountability through local democracy is really key around this and, you know, this is a significant change to local democracy.

“Then, you know, confiscation of – for us, over half a billion dollars worth – of assets … government is saying ownership remains with council, but it doesn’t give you the same rights of traditional ownership.

“If it was ownership in its traditional sense then we would be able to borrow off that asset, we would have the benefits of traditional ownership. But we don’t have those benefits so it’s just ownership in name only.”

Mahuta said 30 models had been rejected in favour of the one that had been proposed, but Bowen suggested other options could be better.

“There’s lots of other options such as just increase the government investment into the areas that have the issues … but they’ve had a predetermined view from the get go, that they need that balance sheet separation, and that’s crafted the model that is in front of us now.”

“It’s quite well known where some of the issues are, so let’s put direct investment, as a nation, into those areas … is the only way to deal with that situation a large four entity model? I don’t believe it is, and I don’t believe the government or DIA have probably thought it through. Or they probably thought it through, they just have a predetermined outcome.”

He said the council had consulted with the community, and 97 percent of the 1500 residents surveyed said they did not want the reforms as proposed.

“That’s a fair indication that this isn’t a popular reform process and, look, it’ll be fascinating over the next few days to see residents get up in arms, because I’m sure they will.”

“We’ll take a couple of days just to have a look at what are our options.”

It would be the start of changes to local democracy in New Zealand, and questions remained over how it would fit in with RMA reforms and other changes, he said.

“We’re changing that without having any consultation with the people and that’s the alarming element to it … I think there’s a model out there that can work but I just don’t think this government has been, you know, keen to look at that.”

Hamilton banking on public consultation

Hamilton mayor Paula Southgate said she was pleased the government would bring in a working group to shape the detail but she knew many Hamiltonians would be disappointed with the decision to mandate.

She accepted that some change was necessary and there was a strong economic case for it, but was frustrated with the approach that had been taken.

“It is disappointing that this has been fought through in this way,” she said.

However, the council had unanimously decided to work with the government, and would continue to work towards what was right for the community.

“I heard Minister Mahuta say quite clearly that she wanted public consultation to be genuine in this next phase of the process. I’ll be looking for that. I imagine in a select committee process they’ll come around the country gathering up local submissions.

“We did unanimously agree that we wanted further community engagement, and we’ll continue to work in that way.”

She said councils needed to retain some control over how the new entities would operate.

‘It’s been a done deal right from the start’ – Matamata-Piako mayor

Matamata-Piako mayor Ash Tanner said it had always been a done deal.

“I don’t believe they’ve listened to us at all … very disappointed and I think it’s been a waste of a lot of money. Wasted $761 million on this so far, that money could have actually done some real things and gone a long way to fixing some of the areas and councils that needed it the most to fix their water infrastructure.

He said he wanted to know if the government’s approach was even legal.

“I’m not a lawyer, I don’t know if we can, but it staggers me beyond belief that they can just be taken out of our control, just like that …. I think there’s gonna be interesting times coming up and I know that they will lose a lot of respect from this.”

He was not persuaded that the working group would change anything either.

“We’ve seen how working groups and consultation or the lack of it has gone over the last year and a bit so yeah, I don’t personally hold up much hope in that or find anything credible about that statement. I think we’re just being strung along again.

He suggested studies around the world had found New Zealand’s drinking water was some of the highest quality in the world, so he did not buy into the case for change.

“All the councils around New Zealand have stepped up in their spend if you look at the long term plan figures which is over 10 years and the assets in that respect will improve over time.”