Point of Order: Co-governance isn’t mentioned in latest Three Waters statement......

.....but that doesn’t mean it has been flushed down the Beehive drain

Within 15 minutes of the Government emailing its overhauled water-service reforms to Point of Order, another email arrived, this time from National’s local government spokesman, Simon Watts. Hard on the heels of that came emails from the Act Party and the Taxpayers’ Union.

The Opposition parties and the Taxpayers’ Union, you won’t be surprised to learn, expressed their objections to the Government’s revised plans (but they won’t have winkled out all the flaws after a quick read of what was announced).

We have yet to hear from the Māori Party. Perhaps its staffers are searching for mentions of “co-governance” in the Government’s press statement.

They won’t find it because it’s not there, but McAnulty does say 10 new regionally owned and led public water entities will be established, each of them run by a professional board, with members appointed on competency and skill.

Strategic oversight and direction will be provided by local representative groups

“… with every local council in the country, as well as mana whenua, getting a seat at the table”.

Just one seat each? Or many seats?

The PM and his local government minister were still answering questions about the plan, when this Buzz was being written.

What we do know can be found in the statement from Local Government Minister Kieran McAnulty, one of these new posts on the Beehive website –

Major shakeup will see affordable water reforms led and delivered regionally

The Government has listened to feedback from local government and is announcing major changes to New Zealand’s affordable water reforms by agreeing to establish 10 new regionally led entities, which will still deliver big cost savings to New Zealand households says Local Government Minister Kieran McAnulty.

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Kieran McAnulty highlighted these points about Three Waters:

• 10 new regionally owned and led public water entities to be established
• New approach avoids a rates blow out and delivers savings to households between $2,770-$5,400 per year by 2054
• Entities will be owned by local councils on behalf of the public, and entity borders to be based on existing regional areas
• Each entity to be run by a professional board, with members appointed on competency and skill
• Strategic oversight and direction to be provided by local representative groups with every local council in the country, as well as mana whenua, getting a seat at the table

As noted above, he also said the Government has listened to feedback from local government.

But listening to them is one thing. Doing what they want is another – and this may well be Mission Impossible, because the councils have conflicting ideas about what is best for them.

“These reforms are absolutely essential. Leaving things as they are will mean unaffordable rate bills,” Kieran McAnulty said.

“Over the last few months I’ve been working closely with Local Government leaders and relevant stakeholders on how to progress New Zealand’s long overdue water infrastructure reforms.

“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.”

The cost of meeting the upgrades needed for our water systems is projected to be up to $185 billion over the next 30 years, according to McAnulty.

Local councils could not afford this on their own, and households in some areas could see rates rise up to $9,730 per year by 2054 if nothing was done.

“The projected costs have been peer reviewed by both Farrierswier Consulting (an expert Australian regulatory economic specialists) and Beca (a leading 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.

“Under our proposal to establish 10 entities New Zealand households will still make big savings, projected at $2,770 – $5,400 a year by 2054 on average within each region.”

What about highly contentious governance and management issues which accorded Māori special privileges under the Nanaia Mahuta Three Waters plan, although Prime Minister Chris Hipkins won’t accept they amounted to “co-governance“.

McAnulty’s statement says:

By extending the number of publicly owned water entities from four 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.

“Our reform proposals will respond to long-running problems that have resulted in rapidly rising rates, poor health and environmental outcomes for many communities, deteriorating infrastructure due to sustained underinvestment, and wide variation in service quality”.

McAnulty then injected the element of urgency into considerations:

“The need for investment is only getting greater. The recent flooding and cyclone is a taste of the extreme weather events to come, and our water infrastructure needs to be ready.

“I have seen first-hand the impact of the devastating floods and extreme weather events. These events have highlighted the criticality of waters services, especially stormwater, for community adaptation and resilience. They have also shown the fragility of critical water infrastructure in some areas,” Kieran McAnulty said.

The water services entities will start delivering water services from 1 July 2026 at the latest. Entities are able to proceed before this if ready.

“These are once in a generation reforms, and it’s important that we get it right, we landed on this by working with councils and will continue to do so to ensure a smooth transition,” Kieran McAnulty said.

National’s Simon Watts’ press statement was headed

Name change doesn’t fix Labour’s Three Waters

Labour’s desperate attempt to rebrand their toxic Three Waters reforms won’t fool Kiwis and won’t fix New Zealand’s water infrastructure, Watts says.

He isn’t accepting that co-governance has gone just because it isn’t mentioned in the press statement:

“The message from Kiwis is very clear – they want local water assets in local hands, and with no divisive co-governance structures imposed on them.

“Today’s rebrand from the tired and incompetent Labour Government shows they just don’t get it. These are the same broken reforms, just with a new coat of paint.”

Watts insists that “only National has a plan to fix water infrastructure”, which is very much a matter of opinion, because Labour is telling us it has a plan, a revision of the previous plan which generated widespread political controversy.

But he makes a good point when he recalls former Local Government Minister Nanaia Mahuta banging on about the economic gains from setting up for new entities to deliver Three Waters:

“Adopting ten new entities rather than four makes a mockery of Labour’s repeated claims that four entities was the only way to go and would provide huge economic benefits.”

Then he zeroes in on the governance issue:

“But the number of entities isn’t what New Zealanders care about – they care about ownership and control, and Labour’s rejigged proposal still locks local communities out of decision making.

“Labour has also kept the divisive co-governance structure, which is undemocratic and will not lead to better water services.”

With tongue in cheek, surely, he urged:

“Labour should adopt National’s comprehensive Local Water Done Well plan that will deliver clean water and get councils on a stable financial footing.

“National will restore council ownership and control, but with stronger central government oversight, including strict rules for water quality and for investment in infrastructure, so Kiwis don’t have to worry about sewage on their streets, un-swimmable beaches, or having to boil their drinking water.

“National will require councils to ring-fence money for water infrastructure, instead of spending it on other services, and ensure water services are financially sustainable so that future generations don’t inherit outdated or failing infrastructure.”

Act leader David Seymour, focusing on the unspecified weight of tribal leaders’ influence on decision-making in the new entities, headed his statement:

Māori Caucus: 1, Chris Hipkins: 0

Seymour insists co-government remains part of Three Waters

“… because the Prime Minister was either too scared to stare down the powerful Māori Caucus, or he did and he lost.

“This shows how powerful the Māori Caucus is and that Chris Hipkins has no control over them. If Hipkins had control over of them, he would have at least dropped the unpopular and divisive co-government element of Three Waters. Instead, Māori MPs are riding roughshod over him.”

“If the Prime Minister is going to continue down the path of co-government, he needs to make his case for it, and it needs to be stronger than just that the Māori Caucus want it. The problem is, this is the only argument he has.”

Seymour pointed out that co-government also remains part of the Government’s Resource Management Act.

He acknowledged there are real problems with drinking water quality in some communities, failing wastewater networks and sewage overflows into rivers and onto beaches.

“None of these problems are solved by expropriating ratepayer assets or with co-government.”

He referenced ACT’s Water Infrastructure Plan, released in August 2021,which would:

• Repeal Three Waters legislation and return assets to councils
• Provide for councils to enter voluntary “shared services” agreements, gaining the benefits of scale while retaining local ownership and control, if councils choose to
• Share GST revenue with councils to deliver $1 billion every year to support local development-enabling infrastructure
• Establish long term 30-year Central Government-Local Government Partnership agreements to plan water infrastructure upgrades tailored to specific regions
• Establish Public-Private Partnerships to attract investment from financial entities such as KiwiSaver funds, ACC, iwi investment funds, etc.
• Expand the exemption from domestic supply for a single dwelling to also include all small water suppliers sup plying fewer than 30 endpoint users.

“We can improve the current system, but we don’t need to do so through state-mandated centralisation and allowing some people to have more influence than others based on their ethnicity,” Seymour said.

And:

“All New Zealanders are born equally and everyone should have equal rights.”

Taxpayers’ Union Campaigns Manager Callum Purves said a rebrand of Three Waters and setting up more management entities fail to hide the fact that the Government’s water reforms remain an asset and power grab.

Water reform is necessary, but the primary problem that must be addressed is around financing, he said.

Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton