The Mayors of Aotearoa New Zealand’s two biggest cities, Auckland and Christchurch, have put forward a joint proposal to make progress on the divisive “three waters” issue and achieve consensus.

Auckland’s Wayne Brown and Christchurch’s Phil Mauger are seeking support for their proposal to be considered and further developed by both central and local government as an alternative to the current plan, which has failed to achieve political consensus either within or between Parliament and local authorities.

Waimakariri Mayor Dan Gordon is already backing the new proposal after the three Mayors met in Tāmaki Makaurau. Other Mayors around the country are currently considering the proposal.

“It is time for the old divisive argument to end, and for a new constructive conversation to begin to achieve consensus across Aotearoa New Zealand,” the three Mayors said.

The new proposal would maintain crucial aspects of the central government’s existing plan, including the new water regulator, Taumata Arowai, while maintaining local ownership, control and accountability, and allowing for meaningful roles for mana whenua.

Regional Water Organisations (RWOs), which would be unable to be sold outside local authority ownership, would have access to investment capital through a new Water Infrastructure Fund (WIF), administered by the central government’s own Crown Infrastructure Partners (CIPs), best-known for its successful roll-out of ultra-fast broadband.

The degree of any formal co-governance over RWOs would be determined by each local community in consultation with mana whenua rather than by the central government.

The Mayors’ policy proposal can be found here to prompt discussion.

“Everyone agrees tens of billions of dollars need to be invested over several decades to upgrade New Zealand’s freshwater, storm-water and waste-water infrastructure – and that requires maximum political consensus to deliver policy stability,” the three Mayors said.

“As a nation, we need to find a way to move forward in a positive and consensus manner - and stop the ugly and angry Three Waters debate that is dividing our county.”

The three Mayors said recent local government elections had demonstrated that the central government’s current proposal could never secure the necessary wide public support to be sustainable policy.

Information about the proposal was supplied to the central government before it was made public this afternoon.

“If two Cantabrians and an Aucklander can agree on this new starting point, we think everyone else should at least be prepared to give it a decent look,” Christchurch’s Mayor Mauger said.

“Water assets are long-term community investments that deliver services for decades, and we can’t afford wild policy swings each central- or local-government election,” said Waimakariri’s Mayor Gordon, a long-term proponent of a better deal for local government on water assets.

“Not everything in central government’s current plan is wrong, and we have included all the aspects of it that we believe can meet the all-important consensus test,” Auckland’s Mayor Brown said.

“Further refinement and development will be needed as we all work together towards a national consensus, with clear benefits to every community identified, understood, and accepted.”

In the meantime, cooperation with central government officials would continue at all three councils, fully reimbursed by the central government.

QUESTIONS AND ANSWERS

Would rates be raised 7 percent as suggested by the Government?

There have been theoretical scenarios created which deliver projections based on Scottish models. Independent analysis including the Government’s own peer reviews has raised serious concerns about the validity, and applicability to NZ, of this work. In New Zealand, efficient water management will require strong local control and accountability, efficient finance, and good management. Good local knowledge of the water catchment is also important in knowing what can deliver the best results. In practice that will deliver better results.

Why Crown Infrastructure Partners?

This agency has become skilled at building infrastructure in a number of fields. It has been given the responsibility under the existing proposals to manage the water infrastructure projects funded by the government. Under this proposal, it would act as the lead facilitator of financing and investment in the sector. It can manage the balance sheet risk at the national level.

How would the Water Infrastructure Fund work?

The Fund will work to match the long-term nature of the asset finance required, with the large superannuation and liability funds that are looking for long-term investments. It can manage these relationships at a better level and improve asset finance arrangements in the sector.

How would Regional Water Organisations be formed?

Water distribution is limited by the local geography. We think that where it makes sense, Councils should band together to organise distribution at a level appropriate to their area.

The legislation would allow and encourage this to happen. RWOs would be expected to meet the applicable regulatory standards. That fact is likely to result in right-sizing of RWOs across NZ have a degree of scale and could then be part of the

Why not four big entities as proposed?

Four was always an arbitrary number based on unsound analysis. There are no meaningful economies of scale from large entities distant from the communities they serve. We believe the communities can decide what makes sense for their regions. 

How will RWOs differ from the four entities?

The RWOs will be owned and governed by the councils that built and own the assets. There will not be a representation committee getting between the Board of an RWO and local government oversight and governance. Local accountability will be immeasurably strengthened.

What would this mean for Watercare?

Watercare would be a large entity, controlled and owned by the Auckland Council. It would be able to operate as an RWO.  In practice, little would change at governance or operational level because Watercare is already a world-class water entity.

Wouldn’t it be great to get Watercare off the Auckland Council Balance Sheet?

No, it represents a major asset for Auckland Council. It is accountable to the people of Auckland through its Council. Under the proposed model it would have lost the connection with the people. Accountability would be lost.

Would it lead to dirty water or underinvestment?

No, the fundamentally most important part of the reform was better regulation of water. That has already been achieved with the creation of Taumata Arowai and heightened water quality standards that regional and unitary councils must achieve. 

What about remote and small schemes?

This plan is designed to focus on them rather than lump them in with the massive metro water schemes. They need to be closely monitored and managed from a risk perspective. Direct public health funding is a proven and effective model of lifting performance over time. Funding models to support investment in areas of greatest need have been proposed to the Select Committee considering the Water Services Entities Bill. These are similar to funding models for roading. It is incorrect and disingenuous for the Government to argue that no alternative models have been proposed.