Three Waters mark two has been announced. Instead of there being four mega entities in charge of the country’s water systems there will be more localised entities based generally on Regional Council boundaries, apart from in Auckland where the originally proposed entity will continue.
And Kieran McAnulty has given a text book example of clarity in political speak when making the announcement.
From Te Ao Maori News:
“These reforms are absolutely essential. Leaving things as they are will mean unaffordable rate bills,” McAnulty said.
“The feedback has been overwhelmingly clear that our water infrastructure deficit needs to be addressed now if we’re to save households from ballooning bills that will make water unaffordable. But also that the reform programme must be led at a regional level – we have listened closely and absolutely agree.”
He says the costs involved in meeting the upgrades needed for water systems are projected to be up to $185 billion over the next 30 years, which local councils cannot afford on their own, and households in some areas could see rates rise up to $9,730 per year by 2054 if nothing is as done.
“The projected costs have been peer-reviewed by both Farrierswier Consulting (an Australian regulatory economic specialist) and Beca (an international engineering firm) and make for pretty grim reading. Leaving councils to deal with this themselves will lead to unaffordable rate rises. It would be setting councils up to fail and I can’t in good conscience do that,” he says.
McAnulty says establishing 10 entities is projected to save households between $2,770 and $5,400 a year by 2054 on average within each region.
“By extending the number of publicly owned water entities to 10, every district council in the country will have a say and representation over their local water services entities through regional representative groups, forming a partnership between council representatives and iwi/Māori that will provide strategic oversight and direction to the entities.
“These groups will continue to sit below the governance board, in which each member will be appointed on merit and qualification but, by increasing the number of entities we will be able to ensure the needs of every community, especially small rural towns, are heard and met.
Tory mayors throughout the country continue to be unimpressed, colour me surprised. You can tell they are tories through the use of overblown rhetoric, by their insistence that their locally produced figures are correct and the Government’s figures are wrong, and by their complete indifference to the plight of neighbouring local authorities which may be struggling.
And National and Act are, surprise surprise, also unimpressed with the changes.
Simon Watts was on Radio New Zealand this morning and kept claiming that the program was untested. Which is weird because it relies heavily on the Scottish Water model which has been in place for 20 years and has been shown to work. And the concept is relatively simple, set up entities that can borrow at prime rates and have sufficient scale to operate economically, give it guidance through regional representative groups, and let the entities get on with it.
And National’s alternative proposal contains scant detail. As I said previously:
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.
Interestingly Labour’s change to regional groupings makes the policies closer. And National’s alternative is strong on central control and weak on detail.
The debate is one big wall of noise. The problem is clear as is the solution.
It is good to see McAnulty front footing this. He has the twin virtues of being very clear in the way that he expresses himself and he has that rustic charm which tends to dispel angry responses, unless they are feigned.
How this debate shakes down will have a major effect on the election. But the starting point should be clear. The status quo when it comes to water is unsustainable.
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