Rt Hon Helen Clark
Prime Minister of New Zealand
Hon Pete Hodgson
Associate Minister of Health

Media Statement

Higher sewage treatment subsidies for small, rural communities with high levels of deprivation

The government announced today that it is raising the subsidy levels for projects to upgrade sewage treatment and disposal systems in small, rural communities with high levels of deprivation to up to ninety per cent of the costs of the project.

Prime Minister Helen Clark and Associate Health Minister Pete Hodgson said more than eighty such communities with a total population of about 30,000 would be able to benefit from the increased rates of subsidy.

“The government will pay a greater share of this vital work because we are strongly committed to improving public health services and environmental standards,” Helen Clark said.

“The Sanitary Works Subsidy Scheme (Sewerage) currently provides a subsidy of up to fifty per cent of the capital cost of providing a sewerage system in a community with a population of 2000 or less. The rate of subsidy declines in a straight line to ten per cent for communities of 10,000 people.

“The subsidy scheme was began on 1 July 2003, with $150 million being made available in Vote Health at the rate of $15 million a year over 10 years.

“Even with a fifty per cent government subsidy, however, there are small communities with a high deprivation index which can’t afford to establish reticulated sewerage schemes.

“Under the new rules being announced today, the maximum subsidy level under the scheme will rise to ninety per cent. The high rates of subsidy will be related to the level of deprivation in communities with deprivation indices averaging over seven out of a maximum of ten.”

Associate Health Minister Pete Hodgson said the public health benefits of proper sewage treatment and disposal would include a reduction in the incidence of water-borne diseases and contamination, which are a significant source of preventable illness.

“The correlation between a good sewerage system and a healthy community has led the government to prioritise funding support for communities whose sewage treatment and disposal needs upgrading.

“While the subsidy scheme was initially heavily subscribed, applications have more recently tapered off. Forty-four applications, involving $73.9 million worth of subsidies, have been given provisional approval.

“To determine the reasons for the slowing down in applications, a survey of communities experiencing unsanitary conditions was carried out on behalf of the Ministry of Health.

“It showed that the most deprived communities cannot afford the local share of funding and were therefore reluctant to adopt reticulated sewerage.

“Increasing the level of subsidy will enable us to target hard-pressed communities with high health risks,” Pete Hodgson said.

ENDS

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