National’s three waters policy

Written By: - Date published: 1:21 pm, February 26th, 2023 - 44 comments
Categories: infrastructure, national, same old national, water - Tags:

Yesterday National announced its alternative to Labour’s Three Waters policy.

The policy is a deep analysis of a complex problem and provides a free market alternative to an issue that will challenge policy makers for the next few decades.


What is interesting is what detail was released.

If National wins the next election it will restore council ownership and control of water assets, set strict rules for water quality and investment in infrastructure, and ensure water services are financially sustainable.  From National’s press release:

Under National, councils will be required 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.

“While water quality regulator Taumata Arowai will set strict standards for water quality, National will establish a Water Infrastructure Regulator within the Commerce Commission to set and enforce standards for long-term water infrastructure investment.

“Councils will be required to ringfence money for water infrastructure and not spend it on other services instead.

“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 policy looks suspiciously like Three Waters.  There will be regional groupings but these will be voluntary.  Councils will be required to adhere to centrally set infrastructure plans.  National will facilitate long term borrowing.

This will mean that the cost will appear on local council’s balance sheets.  Some councils have been really risk adverse to borrowing.  For instance Auckland Council has persuaded itself that it’s debt cannot be more than 270% of income as the sky will otherwise fall down.  Conceivably it will have to invest $60 billion in water infrastructure over the next thirty years.  This will increase dramatically its current debt of $11 billion and blow the borrowing cap.

Instead of water entities handling long term investment decisions these will be determined by the Minister. Local control over long term strategy will be diminished under National’s plan.

The proposal feels similar to Three Waters but with increased central control and no idea how the borrowing will work or the infrastructure plans will be formulated.

The policy is a grudging acknowledgement that the status quo, which has seen faeces flow into Wellington Harbour, people poisoned and killed and pipes fall apart from old age and lack of maintenance, is no longer an option.

National is claiming that co governance will no longer be an issue which is an interesting claim given that co governance in local councils is becoming more and more common.  And interestingly National’s policy document states that “Iwi have rights and interests in water”.  This is not what National used to say.

National is claiming that its proposal is cheaper.  Of course it would say this.  The policy document provides sufficient detail for a two minute discussion with your average elector.  But there is very little detail.

If this is the extent of National’s policy formulation then we can expect a year of no detail.  Which is a shame, electors deserve better than this.

44 comments on “National’s three waters policy ”

  1. roblogic 1

    I suspect the Nats want central control so they can implement a corporate SOE model and create a “market” which fails, thus opening the door to the “dynamic” private sector to “invest” via PPP’s (public private partnerships) then listing on the stock market…

    And a few years later we wake up with the same broken water infrastructure but it’s owned by foreign corporations

    The utterly amoral and irresponsible UK Tory model

    • Mike the Lefty 1.1

      Having a water infrastructure regulator within the Commerce Commission is a bit like asking a toothless old sheep to stand up to hungry circling wolves.

      • Ghostwhowalksnz 1.1.1

        ROFL . So so true.

        These regulatory bodies them become subject to yearly 'efficiency' Treasury cuts of 2% on their administrative budgets , so that even major cases arent prosecuted or investigated.

        As a point even the 3 waters large entities were still council owned 100%

        'Councils will collectively own the water services entities providing services for their district, on behalf of their communities.


        Aucklands sewer network for instance has been through a series of 'owners' , starting with Auckland and Suburbs Drainage Board around 1912, the later regional Council swallowed that up but not the North Shore Drainage Board .

        The super city combined everything – except Papakura who had a long term contract with United Water which is Veolia Water Services Pty ltd. An Australian subsidiary of a French multinational

        Thats the modern way , a sort of lease almost in perpetuity of community assets to get around the ‘no selloff’ claims

    • gsays 1.2

      Not only is it utterly amoral it appears to be amaori too.

  2. Ad 2

    So now we can take the last month's cyclone and flooding disasters and show National water policy in action. National requires no required cooperation, councils no matter how small are on their own with their own Asset Management Plans, councils are required to go into debt by themselves, no specific government coordination of anything, no pan-regional coordination:

    – Tararua Council

    – Carterton Council

    – South Wairarapa Council

    – Central Hawkes Bay Council

    – Hastings Council

    – Napier Council

    – Wairoa Council

    – Gisborne Council

    – Opotiki Council

    – Whakatane Council

    – Western Bay of Plenty Council

    – Thames-Coromandel Council

    – Hauraki Council

    – Auckland Council

    – Kaipara Council

    – Far North Council

    – Plus the regional councils of Northland, Bay of Plenty, Hawkes Bay, Manuwatu, and Wellington

    Which of those entities have the rating base to rebuild from this scale of disaster? None, not even Auckland.

    Which of these territories does the actual weather respect? None.

    Now we can do the response as Labour government policy, and who brings the entire water response together: Entity A which is the expanded Watercare, Entity B which is Coromandel and Bay of Plenty through to Wanganui, and Entity C Wellington through East Cape.

    As Minister Roberston has shown today with his funding announcement on the rebuild, short term and long term funding direction decisions are still necessary.

    But what you have with Labour's plan as opposed to National's, is that repair and rebuild of stormwater, wastewater, and fresh water are all as one. Which is how nature respects it.

    Cyclone Gabrielle is the clearest test yet of the difference in water policy. Only Labour's plan reflects the climate reality we are now in.

    • ianmac 2.1

      Hidden somewhere in National's notes online was just a mention of waste water and how it should be under control. Swimming in rivers beaches must be safe. Ha ha. They must mean 3Waters must be safe but mostly just write about drinking water.

      But don't mention the war, I mean don't mention 3Waters.

      Having had 3+ years to come up with a significant alternative to Labour's 3 Waters you would think this pale version would be robust and compelling. Limp stuff.

  3. Ad 3

    From the policy:

    "…step-in powers for the Government if any council or group of councils are unable to deliver a viable plan that can deliver on outcomes for water quality, infrastructure investment and financial sustainability."

    Because Gabrielle has stripped so much infrastructure away, every new storm is now a 'step-in' requirement.

    Nature is proving National wrong from the get-go.

    • Ghostwhowalksnz 3.1

      A step in like they did with Canterbury Region, where locals are replaced with more business or farmer friendly appointees for a long term.

    • Obtrectator 3.2

      "…step-in powers for the Government if any council or group of councils are unable to deliver a viable plan that can deliver on outcomes for water quality, infrastructure investment and financial sustainability."

      How many of those bodies listed in Ad's post above are going to have the expertise necessary for drawing up such a plan (especially a financial sustainability option that's going to be acceptable to a Nat-led government)? They’d have to get in even further over their heads and call in some expensive consultants to do the job.
      And even once it’s done, how many will have the resources then to implement it? All sounds like an imposition of centralised control by stealth to me.

  4. lprent 4

    Looks like the concils will have even less influence over their assets than they would have under 3 waters. The crucial part isvthat some government department or quango tells them what they must do.

    Under 3 waters someone competent and responsible gets told by councils

  5. Paul Campbell 5

    Their plan says that it will involve "user fees" which means water meters, and a whole new bureaucracy to come and read those meters

    • Incognito 5.1

      smart meters?

    • Graeme 5.2

      There will be a bureaucracy involved in water metering, but it will be to deal with the muppets that dispute their bill, and that will initially be a good proportion of water users. Once users get used to turning the tap on incurring a cost water use will most likely drop and revenue will be proportional to use / operating expenses.

      The data collection will be wireless, from a vehicle that drives down the street regularly, probably the rubbish truck, or through cell network, and the invoices will go out automatically.

      Water meters are best viewed as an argument in a box. Also essential management tools for water infrastructure.

      • Ghostwhowalksnz 5.2.1

        Smart water meters work like smart power meters, Its a daily update of stored data by the hour ( or less) over the SMS cell phone network

      • Shanreagh 5.2.2

        Water meters without an allowance for regular users fail the equity test in my view. There are some users who cannot limit their usage, ie get in on the saving water feel good factor as their family and health needs prevent this.

        There is truth in the maxim treating unequal people equally is unfair.

        KCDC has no allowance. Water is charged for at current volumetric rate of $1.14 per cubic metre

        KCDC has no lower overall rates it is a cost plus regime high rates plus water charges. As a leak reporter from way back I have seen no appreciable improvement in speed of leak fixing.

        Christchurch City has an allowance

        'The targeted rate applies to any single household with a water meter that uses, on average, more than 700 litres a day – roughly equivalent to 100 toilet flushes.

        Property owners in Christchurch and Banks Peninsula pay a fixed rate of $1.35 for every 1000 litres they use over the average limit.

        Most households are average water users and don’t use enough to receive an invoice.'

        I know which one I would prefer and that is the one that is fair and equitable. The idea of the changes should not be a way to rort the current users

        • Graeme

          Christchurch City has a Targeted Rate for water supply (0.077659 cents/$) with an excess charge for usage over 700 litres / day. So for an average house of $678,000 the annual water charge would be $526 and no further charge if you use under 700 litres / day (not hard to do)

          In Kapiti there's a fixed annual charge of $222 plus water at $1.14 /m3. So 700 litres / day would cost someone in Kapiti $513.27

          They are different approaches that come out about the same for an average property using a prudent amount of water.

          Christchurch's method is actually harder on the heavy users, generally the heaviest use will be in the more affluent areas (entitled prats have to have their lush lawns in summer) so pay more in targeted rate (charged on CV) and get hit with a higher volumetric charge for excess. Kapiti's is a lot easier on the big users, but you probably find it easier to run a lawn there than Christchurch.

          • Shanreagh

            Not sure what you are getting at here.

            My point is that Chch has an allowance that is unpaid for if a household keeps within the allowance where as Kapiti does not have any sort of allowance.

            I have never had an allowance. I pay for every drop of water that comes from the tap plus the lines charge.

            From KCDC

            "All invoices are calculated on the number of days in each invoice period, and water used is charged for at a:

            • volumetric rate (per cubic metre (1000 litres))
            • fixed annual charge per separately used or inhabited part of a rating unit.

            See Water and wastewater charges for information about what the current rates are, and Explaining rates for more about our rating system.

            There is no 'free' allowance of water in the annual fixed charge, and it applies to each separately used part of a rating unit (ie, a home and a granny flat)."

            My understanding is that Chch residents have a reasonable allowance and every drop is charged for after that.

            Running a lawn is the least of my worries, users focussing on lawns should be paying for this.

            My beef is that I pay for all washing dishes, flushing toilets, showering. With this sort of regime 'no way Jose' am I going to water lawns as well. I pay around $56.00 every quarter for the equivalent of a lines charge and then actual water used is on top of this.

            A couple stayed there last year for the better part of 6 months, very moderate users, This couple acknowledged they swam most days and used the gym where they were studying for showering most week days as well.

            Charges were

            $85.90 for part quarter

            $125.90 for full quarter.

            Includes the 'lines charge' of $113.00

            No babies, no elderly folk, no families with children with lots of washing.

            There is the ability to avoid using piped water for lawns by using tank water plus pump, if you want to install this. I think heavy users such as those wanting green sward on sandy soil should pay for this on top of a free allowance. This protects and rewards those who cannot afford to pay for water and so who are frugal.

            • Graeme

              I'm saying that you are actually getting a slightly better deal than someone in Christchurch. And if you use less than 700 litres/day, a considerably better deal.

              What you seem to be missing is that Christchurch has an annual water rate of around $5-600 for an average home. Kapiti has a much smaller fixed charge of $222, with volumetric charging on the full usage. If you are careful with water usage you can be much better of in Kapiti than Christchurch.

              • Shanreagh

                My point is about the charging for use, whether it is Chch or KCDC it does not much matter. I had not realised that there was still another water charge in Chch. I am not running a comparison per se, I am trying to work out an equitable way of charging for water.

                My point has always been about the allowance before charging for daily use commences. My view has always been that the aim should be to charge no more than currently.

                If you move to water rates where there is a charge of $200 and there is a water allowance to cater for prudent users and those like the elderly/babies then you give people, low income people especially, the chance to make sure they pay no extra than what is being paid now.

                If you couple this increase with the fact that many of these higher users because of youth or medical needs may also be on lower incomes then it becomes inequitable in my view. I don't find it inequitable to charge for items that are not connected with daily living, such as irrigation systems, pool filling, even car washing. Prudent users may be able to lessen these discretionary uses also.

                So often when costs are increased to follow some purist, charging unequal people equally regime, this extra cost pops up in the books of another Govt dept, perhaps MSD. Or perhaps it just makes life all round so much harder that the latest equivalent of pay day loans are resorted to.

    • Ghostwhowalksnz 6.1

      Dont forget the Westland Council whos treatment plant was wrecked by river flooding and they awarded a rebuild contract to an Auckland cake decorator

      Whanganui new treatment plant was so badly designed the smell wafted across the river to some suburbs. It was effectively unusable despite being 'new'

      twice as much was spent to rebuilt and work properly

      Wellington is a moving disaster zone for its existing network

  6. Thinker 7

    No privatisation…

    But what about leasing the entity for s significant amount of time? That can be privatisation by stealth.

    So is that off the cards?

    Another comment is if the new entities can borrow money it's no different to allowing the councils to borrow more. Assets on the left, liabilities on the right and it is the net figure that's important, not the individual components.

    • Graeme 7.1

      Emma Cook's cartoon on Stuff this morning.

      He used to run an airline you know….

      • Graeme 7.1.1

        Oops, that was meant to be a stand alone comment Thinker.

        In response to your points, contracting will still be an aspect of any 3 Waters model, council controlled or centralised, the current 'on the ground' service provision arrangements probably won't change much, they are pretty refined now.

        The long term contract / lease has been tried, QLDC had a go. The arrangement is very complex and doesn't work well for either party because unforeseen things happen that can disadvantage both sides.

        Council 'assets' are very complex beasts with very different values / liabilities. Separating 3 waters assets is proposed as it optimises borrowing potential.

        As an aside, from my experience as the rather cynical manager of a couple of small water schemes anyone who thinks a water pipe should be called an asset needs their head read, water infrastructure has an amorphous existence across balance sheet, sometimes it's in with the assets bringing a chargeable return, sometimes it's firmly in the liabilities and you've got an expensive problem. I've given up having any certainty which side the pipe will be on tomorrow.

        • Thinker

          I've been rather Cynical since they privatised the AEPB.

          Seems half the inspectors were flushed down the toilet and inspections went from annually to two-yearly. With the stroke of a pen, value was added by increasing the book-value life of componentry, creating value by adding risk.

          Then they patted themselves on the back for their business acumen.

          But, somehow, when what was deemed to be a private commodity failed, it was deemed to be a public calamity and as far as I know a public sector solution that fixed it.

          Since then, my own acid test about whether something could/should be privatised is, if it fails, will it be deemed to be a public crisis.

          • Ghostwhowalksnz

            AEPB became Vector , which unlike most power boards lines division wanst sold off – indeed they later bought out what used to be the former north and west WEPB Waitemata Electric Power Board which was sold as the consumers were given $2000 each worth of shares. ( which they cashed out)

            Vector is still 75% community owned

            The power supply side became known as Mercury but consumers can buy power from any of many companies

            • Shanreagh

              In the Horowhenua Kapiti region we have the Electra Lines company which is owned by a community trust and which owns the lines and rents them to the power company.


              They have regular elections to select the Trustees and each year have a discount system that pays an amount into user's electricity accounts from March each year. This works well from my point of view as the people involved are known locally and their separation from big business electrical suppliers is welcome.

              • Ghostwhowalksnz

                "Electra owns and operates the electricity lines and assets in the Kāpiti and Horowhenua districts"


                The power companies who the customer chooses for the kWhr usage pass on the lines company charges in their bill.

                • woodart

                  Ive just been emailed details of my annual electra rebate since I live in the horowhenua. it works out to around one months free power. as you say, electra passes this straight on to my supplier. it means that every march I dont have an electricity bill.

  7. Patricia Bremner 8

    Before the storms some may have bought into this rubbishdevil

  8. Powerman 9

    So another bureaucracy to supervise the councils? Big brother National style. It looks like a badly thought-out scheme to get local authorities into debt so that a National Government could take control. Nats have experience with taking over—Environment Canterbury is an outstanding example.

  9. SPC 10

    Some are left wondering about how councils can finance what they are expected to do and in what time frame – as to debt limits, or any government help to ensure cheaper debt. And whether larger councils would voluntarily support the financing of the wider regions infrastructure.

  10. pat 11

    It appears National suffer the same affliction as labour when it comes to honesty….

    The sooner the political class are up front that if we desire improved water supply/discharge/management then we will have to pay significantly more for it (and some hard numbers would help)….the implication being many will have to forgo something else in order to fund it.

    Thats where the difficulty lays.

  11. SPC 12


    They and the Taxpayer Union and want any public servant who criticises their policy to be required to resign.

    And meanwhile their ideological brethren insist on a tolerance of difference of thought on GW.

    • Ghostwhowalksnz 12.1

      Clearly the Taxpayers Turnip doesnt know the difference between a public servant and a government appointee to a board.

      Nice to see Turnips playing national/act attack dog so that Luxon doesnt have to bite back

    • Muttonbird 12.2

      Streisand effect in action there. NACT beltway whining only drawing more public attention to their crap policy.

  12. Ad 13

    Outstanding to see Rob Campbell not back down in his direct criticism of National's "policy" overnight.

    Desperately need more respected voices in this public sphere.

    I remember when this was simply expected from business leaders

  13. Ghostwhowalksnz 14

    ' For instance Auckland Council has persuaded itself that it’s debt cannot be more than 270% of income as the sky will otherwise fall down. '

    this isnt correct.

    The LGFA or local government funding agency has set those 'limits'

    All councils that borrow from LGFA will:

    • Provide debenture security in relation to their borrowing from LGFA and related obligations, and (if relevant), equity commitment liabilities to LGFA and (if relevant) guarantee liabilities to a security trustee approved for LGFA’s creditors.
    • If the principal amount of a council's borrowings, or LGFA's commitment under a facility agreement with a council, is at any greater than NZD 20 million, be required to become a party to a deed of guarantee and an equity commitment deed (in each case, in a form set by LGFA).
    • Issue securities (bonds/floating rate notes/commercial paper) to LGFA and/or enter into facility arrangements with LGFA.
    • Comply with their own internal borrowing policies.
    • Comply with the financial covenants outlined in the following tables:

    nett debt total revenue to be less than 280%

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