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Three Waters Reality Check

Nanaia Mahuta• 2ndMinister for Foreign Affairs, Local Government and Associate Māori Development18h • Edited • 18 hours ago

The Three Waters Reform Programme will make a significant difference to the way in which asset management and waters infrastructure investment can be undertaken - these are some of the benefits of scale and aggregation.

The challenge facing Councils will be to ensure that ratepayers truly understand the level of investment required to ensure a high performing network. Sadly, on the whole long-term underinvestment has led to an inefficient, poor performing network.

The status quo is not acceptable. In several areas throughout the country Councils have reached their debt ceiling limit constantly making trade-offs between broader wellbeing’s and three waters.

I’ve indicated to the sector that there is space to work through concerns regarding transparency and accountability of governance arrangements, consumer benefits, and several other areas. But there is a single underlying premise to the reforms, for every household to benefit, every Council must see the nationwide opportunity for reform.

There will be health, environmental, economic efficiency and consumer benefits derived from scale and aggregation. That’s why the Three Waters Reform is an important set of challenges to be understood. #workingtogether #keeptalking

The above was copied from Linked In on Sunday 26th September 2021.

This post on the site says to me that the Minister is talking about compulsory acquisition of the three waters assets currently under the control of local councils and paid for by the ratepayers of those council districts/regions.

Three Waters is a proposal developed by Jacinda Ardern’s Labour Government that will effectively ‘confiscate’ billions of dollars’ worth of local authority water infrastructure and assets from ratepayers - without fair compensation - and transfer them to four mega water authorities over which councils will have little or no control.

The Government claims the assets will remain in council ‘ownership’, but that is misleading, since ownership confers a right of control and local councils would have no such right.

In return for their assets, councils would receive no shareholding in the new water authority, only shared representation in half of a 12-member governance group. With only six members representing the councils that provide the assets and the other six members representing local iwi, the influence of small councils will be virtually non-existent. As if that’s not bad enough, a requirement for a 75 percent majority to pass any board resolution will essentially result in Maori gaining control of water services in New Zealand.

So let’s have a look at the stated benefits that she claims will be derived from scale and aggregation.

Well it would be nice if we were actually to be provided with some figures that could be analysed to decide if there are really benefits to be had by all, or if as has been suggested by the information provided so far, only for Maori.

The council assets are to be put into the four water authorities which will be managed by boards appointed with the governance structure proposed as 50% from councils who have put in 100% of the assets and 50% Iwi, an unusual situation to say the least.

By curtailing the consultation process, Jacinda Ardern’s Government, which claims to be governing in the best interests of all New Zealanders, is denying local government democracy – just as they did when they abolished the right of communities to hold a binding referendum over the establishment of Maori wards.

Cabinet papers provide more detail of the proposed governance arrangements for the new water services. There will be the four Regional Representative Groups, each with 10 to 12-members: half from local councils in proportion to their relative asset contribution and the remaining half representing iwi in the area.

Each of these Groups will appoint and monitor an Independent Selection Panel of four members, to select the 10-member board that will run that region’s water services.

According to the Minister these appointments must “ensure that the Board is adequately competent both as a Treaty partner, and with expertise in accessing matauranga Maori, tikanga Maori and Te Ao Maori knowledge to inform the water entities activities.”

In other words, in line with He Puapua, a Maori World View will underpin the future running of the country’s Three Water services.

In other words, while the new water authorities will provide services that are vital for all New Zealanders, they have been designed to prioritise Maori rights and deliver on Labour’s He Puapua goal of Maori control of water.

But deeper concerns are now emerging that while the Government intends removing existing ownership rights of councils over freshwater, wastewater, and stormwater assets, they are planning to create new ‘ownership’ rights for iwi.

Labour’s Three Waters proposals represent a partial privatisation in light of the fact that iwi are private economic corporations that aim to secure financial advantage for ‘their people’, rather than public entities looking out for the common good?

The government has made huge efforts to convince Local Councils that they have “Proved the case for change” but in fact from the only figures that have been made available so far (by Westland Council) the case for change has not only not been proved the figures make a very good case for retaining the current ownership and management structures.

“At present in Westland a household pays $527.40 pa water rates.

A commercial business pays $927.12 pa water rates.

If the proposal is mandated households will pay $1,640 to the water supplier for their water.

We have not been told what a commercial user will be charged by the water supplier.

Households need to know if the $1,640 is plus GST or inclusive of GST as 99% are not registered for GST.

Another question that ratepayers will need answered is will the $1,640 dollars account they received from the water supplier come off my current rates bill?

The answer is a firm NO.

If your WDC household rates are say $3,000, the $527.40 for water you pay at present will come off your rates from Council.

Your rates will drop to $2,472.60 and at the same time you will receive an account from the water supplier for $1,640.

Your cost today is $3,000 which includes water.

Your total cost if the proposal is mandated will be $4,112.60 and that’s an increase of 37%.”

So in the Westland case the ratepayers who have over many generations paid for their water assets will have them stolen from them and overall have to deal with an increase of 37% over their current rates bill under the proposed reform program.

There does not look to be any economic efficiencies or consumer benefits in this proposal for the ratepayers of Westland District Council, the only ones to gain any benefit from this proposal are the Iwi economic corporations that aim to secure financial advantage for ‘their people’.

Cabinet papers reveal: “It was agreed that the water services entity would fund and support capability and capacity of mana whenua within an entity’s boundary to participate in relation to three waters service delivery. It should be understood that getting a return from an asset is a right attributable to an owner. Therefore, the proposal would confer on iwi, but no one else, a direct attribute of ownership.”

If indeed the reforms are designed to grant ownership rights to iwi, will royalties follow? After all, that’s another He Puapua goal: “Maori receive royalties for the use of resources such as water…”

In their search for a new model for water management, New Zealand focussed only on jurisdictions with centralised control of water and the Scottish Water Services Company was commissioned to advise on a reform plan.

While our two countries have similar sized populations of just over 5 million, many important differences raise concerns about the appropriateness of adopting the Scottish model.

The Australian business consultants Farrierswier was invited to peer review the Scottish analysis and warned, “the analysis is high-level and directional and should not be relied on to project actual expenditure, revenue and pricing outcomes.”

The engineering consultancy group Beca was also asked to assess the Scottish analysis and expressed concerns that it may underestimate the cost of reforms: “New Zealand is facing a period of major changes in land, air and water environmental legislation, and for regional and local government responsibilities. It is very difficult at this time to predict impacts on the New Zealand three waters segment and on the timeframe and total costs of subsequent changes in standards which apply.”

The economic advisors Castalia, commissioned last year by Local Government New Zealand to evaluate the reform process, warned, “The Government’s policy process appears flawed and is focusing on high-risk options that may not deliver benefits.”

Not only are the assumptions, costs and timing of the Scottish Water model being challenged, but questions are also being asked if Scotland should be used as a “standard” at all.

A recent BBC report revealed that sewage spills in Scotland had increased by 40 percent over the last five years. While Scottish Water runs the country’s wastewater system, it turns out they only monitor 3 percent of the 3,697 overflow pipes that discharge sewerage into rivers and the sea after heavy rainfall.

As a result of Scottish Water’s sewerage management, which sees minimally treated sewage being regularly discharged into coastal waters, a monitoring system has been set up to assess whether Scotland’s designated bathing beaches are ‘swimmable’.

Does our Prime Minister really believe that a system that doesn’t monitor 97 percent of sewerage spills and can only ensure that 34 percent of swimmable beaches have ‘excellent’ water quality is a suitable model for New Zealand?

Why are we aspiring to a Scottish model at all, when it seems most local councils are doing a fine job? Isn’t it far better to be able to contact a local councillor and make them democratically accountable for fixing the problem?

Local councils are no longer able to turn to their association for independent advice and support.

Without consulting its members, Local Government New Zealand signed a Heads of Agreement with the Government in July, to promote Three Waters in return for funding: “The Crown is proposing to provide ongoing support to LGNZ, by way of separate funding agreements… in the short term (to mid-September 2021) to enable LGNZ to build support within the local government sector for the Three Waters Reform Programme; and subsequently through the transition and implementation phases of the Three Waters Reform Programme (approximately two and half years).”

While the amount they are being paid to “assist” the Government is not known, the agreement means that instead of representing local authority members, LGNZ’s focus is on helping to orchestrate the “successful implementation” of the reforms.

As a result, they are required to endorse the Government's misleading claims such as, “there is a sufficient and evidence-based national case for change”; “the current approach to three waters service delivery is not capable of delivering the outcomes required in an affordable and sustainable way into the future”; and “the proposed model design and approach to reform is sound, appropriate and beneficial.”

As it stands the Three Waters proposal is irrational from every perspective, but one.

The only rational reason for this deeply flawed upheaval is to use it as a smokescreen to pass ownership and control of water to Maori tribal interests. The Government has no mandate for that course of action – it is completely unacceptable.

A. J. Loader

Co-Chairman P.L.U.G.

Primary Land Users Group

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