National wants to hide huge potential rates rises caused by canning of Three Waters

Written By: - Date published: 9:23 am, December 24th, 2023 - 20 comments
Categories: Environment, infrastructure, national, Politics, racism, same old national, simeon brown, water - Tags:

Someone should tell the Taxpayer’s Union.

Some Local Councils are planning to put rates up by double digit figures next year.  And the Government is planning on exempting them from discussing this with ratepayers.

Local Government Simeon Brown is to blame.  He has written to Local Councils and told them that he will relax consultation and audit requirements so they basically do not have to talk about how much they may have to put rates up if National fails to find an alternative for Labour’s Three Waters reforms.

From Jonathan Milne at Newsroom:

Newsroom has obtained a letter from Local Government Minister Simeon Brown, telling mayors he’ll relax consultation and audit requirements so they can lock in their long-term rates and spending plans.

He says the Government will retain the strong emphasis on complying with water quality rules and investment in infrastructure – but delivering that will be councils’ responsibility, rather than the role of the 10 big council-owned regional water corporations proposed by the previous government.

For the first time, he’s revealed the structure through which the Government hopes to finance water and wastewater infrastructure: by developing “a new class of financially separate council-owned organisation”.

That implies a legislated structure to separate the debts of the new council-owned organisation from council balance sheets, so it won’t constrain the ability of councils to borrow to finance other core infrastructure like roads and libraries.

He’s told mayors that a key principle will be ensuring water services are financially sustainable. “Financial sustainability means revenue sufficiency, balance sheet separation, ring-fencing and funding for growth.”

The background is that much of the country’s water infrastructure is shot.  Water supplies that poison residents, sewerage spills and leaky pipes are far too prevalent.

National understood this.  That is why in 2017 it set up the Three Waters review and started the work that would result in the formation of Taumata Arowai, the water services regulator.  Taumata Arowai’s role was to regulate water quality but the more complex aspect of the job which was resourcing the repairing and upgrading infrastructure that was not fit for purpose was to be addressed another day.

Labour realised that Local Government could not and would not afford to pay for the necessary changes.  Its proposal, five water entities to own construction and fund infrastructure would mean that the work could be performed by borrowing and more cheaply because of scale.  But National and its supporters ran a full court press opposition to the proposal mainly on the basis that Maori were given some say in the appointment of boards and the setting of general direction and the dog whistle worked.

But National has a big problem on its hands.

Basically after Three Waters was ditched by the Government there was a rather gaping hole in future plans.  A number of Councils are facing significant investment requirements to make sure that the water they supply does not poison any locals.

And they are now being policed heavily by Taumata Arowai.  A perusal of its recent press releases indicate that over the past few months it has issued a compliance order on the Clutha District Council to take steps to improve water quality, written to 13 Councils and two Government Departments requiring the installation of a bacteria barrier or residual disinfection of water by the end of 2024, released a list of 27 councils that operate 84 drinking water supplies lacking a treatment barrier preventing protozoa from contaminating the water requiring a confirmed and funded plan by mid 2024, and issued a compliance order on Queenstown Lakes District Council requiring it to maintain a boil water notice until treatment for protozoa are in place or a safe source of drinking water can be confirmed.

The Queenstown Lakes District Council provides an example of what will be required.  The estimated cost of the membrane barrier required is $30 million.   And there are other treatment plants that also require upgrades.  Given Council’s annual income is $171 million I think you can see the problem.

All Councils were formulating their future funding plans presuming that having to fund water infrastructure would be taken off their balance sheets and vested in the new entities which would then be able to borrow at levels that Councils tend to shy away from.  And they had already started to spend the money that the Government had made available.  Auckland Council for instance has already spent the $127 million of Better Off Funding that it received.  Under National’s plans will it have to pay the money back?

This is all hitting the proverbial because Councils are right now finalising draft plans for consultation with their communities and are wondering how to include plans to drastically increase rates and water charges so that the work that was going to be funded by borrowing now has to be funded up front.

And double digit rates increases during a cost of living crisis is not a good look.

So it seems that Brown thinks he has a neat and elegant solution, exempt Councils from having to consult on proposals involving water.

National’s election promise was to set strict rules for water quality and investment in infrastructure and to require Councils to “demonstrate a clear plan to deliver ongoing investment in water infrastructure. Those plans will need to be approved by the Minister of Local Government.”

The strict rules for water quality are already being enforced by Taumata Arowai.  About funding National said:

National’s plan supports greater access for councils to long-term borrowing, which is an appropriate way to fund long-life water infrastructure. One way to improve access to borrowing would be for neighbouring councils to form Regional Council Controlled Organisations. Ultimately, it is up to the councils but we would envisage it is likely a number of regional groups will emerge to deliver better water services.

The plan is wishful thinking.  For a Council that is managing its water infrastructure adequately why would it team up with a Council that is a cot case?

This is a problem of National’s making and its solution will not work.

Stand by for double digit rates rises in many parts of the Country.  And you can blame National and its supporters for this.

20 comments on “National wants to hide huge potential rates rises caused by canning of Three Waters ”

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  1. bwaghorn 1
    24 December 2023 at 9:47 am

    Or other a cunning ploy to keep those at the bottom owning houses so landlords can get more properties, who's rents are subsidized by the same poor barstards through there taxs, that can't afford a house,

  2. UncookedSelachimorpha 2
    24 December 2023 at 10:27 am

    NAct probably think this is all a good reason to scrap Taumata Arowai…….and it has one of those awful foreign names to boot!

    • mickysavage 3.2
      24 December 2023 at 11:52 am

      Thanks not sure what I did there …

    • SPC 3.3
      24 December 2023 at 9:24 pm

      The Beehive Civilian reports that the Taxpayers Union successful campaign to block Three Waters, fronted by Peter Mac Williams, is expected to realise the largest rates increase in New Zealand history.

      Asked to comment, Jordan Mac Williams (no relation) said he led the Free Speech Union and never defended Chloe Swarbrick when she came under attack for her comments on the her support for a Palestinian state.

      Asked to explain, he said cryptically, astroturf organisations, are not always what they purport to be.

      A leaked report Diversifying Investment Opportunities states that after the election success the TU would now move to advise councils to either hand over water assets to government so they could issue shares to the public to raise funds for investment, or they retain a shareholding and do this themselves. The report says resistance to international water bodies buying up a partner stakeholding with government or council would fade as rates bills rose, and the media informed the public of the need for international investment and expertise. A PR company, MacGrant and OFarrar, advised a campaign saying that those ratepayers who noted the combined cost of power and water as becoming extortionate, was griping from people who were expecting something for nothing – whereas hardworking Kiwis who paid for their rent – would not be complaining about the improvement in service, which would come from having assets owned by professionals.

  4. Belladonna 4
    24 December 2023 at 11:26 am

    This is going to hit Wellington particularly hard (other cities as well, Auckland has its own issues) – but Wellington seems to have been drastically underfunding their water infrastructure for decades – if not generations.

    Wellington Water issued a recent estimate (and we all know that estimates are subject to significant inflation) of 1 billion a year for the next 10 years.

    https://www.rnz.co.nz/news/national/501800/wellington-s-water-woes-could-cost-1-billion-a-year-to-fix

    I could see the government coming to the party in supporting smaller, regional councils – especially ones with a tourism factor (small permanent population, large seasonal one) – perhaps under the provincial growth fund umbrella. But I really don't see them coming to the aid of the bigger cities – and especially not Wellington.

    I did find it interesting that Queenstown came up with a different (cheaper, quicker and arguably more effective) solution (UV treatment) than the one proposed by the regulator (membrane barrier). Sometimes local knowledge is better – with the motivation provided by the regulator to get on and do the job.

    • bwaghorn 4.1
      24 December 2023 at 7:16 pm

      The land owners that have been under taxed to keep rates low for the last 50 years while collecting huge capital gains should be paying ,not the poor barstards buying into the market today.

  5. tc 5
    24 December 2023 at 11:43 am

    "Someone should tell the Taxpayer’s Union" very funny mickey.

    This is classic wasteful spending as a solution was in place but rather then leverage it, bend it to ones will via appointments and legislation etc they blow it up leaving nothing in it's place.

    Facilitating alot of highly paid people to get paid out in the process rather than leverage them to deliver the result they want then dis-establish it.

    Simeon Brown's a useful tool here for sure.

  6. Ad 6
    24 December 2023 at 1:11 pm

    Great post.

    Would have written the same.

    Looking forward to those rural councils getting a real slapping when rates are set.

    • mac1 6.1
      24 December 2023 at 3:32 pm

      I read from the protozoa barrier notice cited above, ( confirmed and funded plan by mid 2024,) that my electorate has an estimated 7,731 people who are at risk from no protozoa barriers in 13 locations; as well, two schools and seven DoC camping sites are on notice.

      One electorate, three councils, huge land area, small population, negative financial rating on largest council here. Even so, this council opposed Three Waters.

  7. adam 7
    24 December 2023 at 6:17 pm

    Basically more tax.

    Without saying more tax.

    Because they can't say more tax.

    Tory bullshit on display once again.

  8. Michael P 8
    24 December 2023 at 8:42 pm

    $30 million for a water filter.

    You'd have to think there was something pretty high tech about it, unless it's really really massive?

    How high tech can a filter be though? Obviously I have extremely limited knowledge of the process but assuming a membrane is a filter of some kind wouldn't it (at a very simple level) just involve forcing water through a filter?

  9. roblogic 9
    24 December 2023 at 11:14 pm

    Of course they need to fuck up the water, to sell it off to Veolia and get those tasty backhanders

  10. Tiger Mountain 10
    25 December 2023 at 7:41 pm

    Tories grabbed the narrative on this well and truly, a lesson for sure, given the reality of infrastructure upgrades needed. Hope Natzo voters enjoy their higher rates.

    In Far North I am on rainwater tanks with a new filter system, never had probs in 3 decades healthwise anyway. More people should use rainwater collection…but…water companies and local authorities can be anti.

  11. georgecom 11
    26 December 2023 at 3:39 pm

    developing “a new class of financially separate council-owned organisation”

    so the various councils who wanted to retain direct control of water resources are now going to be made to set up a separate organisation, potentially out of their direct management. I guess we will see how much of their 'local democracy' pleadings and howlings were genuine and how much political.