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Three Waters Decision To Mandate Disappointing But Way Forward Responds To Councils’ Critical Concerns

LGNZ says the Government’s announcement that it will refine its three waters proposal in response to the sector’s loud and clear concerns is a good sign. But it is disappointing that the government has mandated the reforms.

LGNZ President Stuart Crosby agrees with the need to address the systemic issues in our current three waters system and said local government’s feedback on the proposal clearly supports the need to find better ways of delivering drinking, waste, and stormwater in New Zealand.

However, councils were equally clear that the proposed governance structure of the reform model would dilute accountability to communities, did not allow for local voice, and wasn’t well connected to the planning system.

“The sector has said loud and clear that the model needs significant work.

“The Government has accepted this feedback and committed to developing workable solutions to these issues with the sector, which has only happened because we’re at the table,” he says.

As part of the reform announcement, the Government agreed to set up a working group of council and iwi representatives who will work on developing solutions to the very real sticking points around governance, representation, and accountability. The other critical issues for councils, including rural water schemes and integration with the planning system, will also be worked on with the sector.

“What the decision does do is give councils and communities some certainty about the path of reform ahead. And despite being disappointed that the choice is now out of councils’ hands, LGNZ will lend our efforts to improving these challenging aspects of the model so that what’s finally put in front of New Zealanders is a fit for purpose ‘Aotearoa Water Model’ that meets the diverse needs of our communities. We will encourage our members to do the same.

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“While the announcement stings for councils who have been good stewards of their infrastructure, ultimately the nation-wide affordability challenge in the water space needed to be answered.

“As a country we’ve known for decades that many of our councils are enormously challenged by the cost to deliver water services and this is only going to get worse with competing pressures for growth, climate change and compliance with water regulations. As a country, we’ve all turned a blind eye for too long. The Havelock North contamination incident changed that, and the regulatory response since then will put real cost pressures on communities, particularly those in the rural and provincial areas.

“While we know the option on the table has not been accepted by the sector, it has created a foundation to move forward.”


Critical areas needing addressing


  • The current proposal removes democratic accountability over the entity. While councils remain owners of the assets on behalf of their communities, under the current proposal they don’t have any direct control over them.
  • We know the Government has a bottom line of balance sheet separation, so that the new entities have sufficient borrowing capacity.
  • The key question is whether balance sheet separation can be achieved without so dramatically reducing control and accountability to communities and mana whenua.
  • We want to see changes to the governance model that support councils’ role as the entities’ owners.

Local voice

  • Councils are concerned that the voices and priorities of unique communities won’t be heard or influence decision-making.
  • Each council needs a clear voice into the entity that carries sufficient weight and protects councils’ placemaking role.
  • Communities need simple and easy mechanisms to have their say. The importance of the local voice needs to be very clear.
  • We want to see changes to the governance model that strengthen local democracy, with more links from the entity back to councils and better protection for consumers.

Integration with the planning system

  • Water shapes how communities grow and develop – councils must influence water infrastructure/services provision.
  • There needs to be alignment between entities and communities’ aspirations for future growth, including where growth happens and when.
  • How do we ensure local investment priorities are taken into account and entities give effect to local plans?
  • The connection between spatial planning and water planning needs to be strong and seamless. Spatial planning needs to sit with councils while WSEs focus on the nuts and bolts of delivering water services.

Rural water schemes

  • One size doesn’t fit all – rural schemes are hugely variable and complex and look different around the country.
  • Rural schemes need more tailored and flexible solutions/treatment.

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