The Government's proposed changes to ensure New Zealanders are provided with safe, affordable and reliable drinking water, wastewater and stormwater network services will benefit Aucklanders to the tune of $1 billion a year over the next 30 years, while also helping neighbouring regions.
I have always said that this reform agenda is for the benefit of all households no matter where they live. There is nothing worse than being let down because you can't swim in your local beaches or rivers – worse still poor infrastructure slowing down much needed social infrastructure like public housing.
Auckland's water infrastructure needs significant investment to ensure the safety and security of drinking water, to clean up beaches and urban waterways and to improve resilience in the face of climate change.
Under Auckland Council's new 2021-31 Long Term Plan, the average household water bill will roughly double over the next decade.
Even with these hikes in water bills, significant investment in renewals of pipelines, treatment plant upgrades and additional capacity to support housing growth has been delayed.
Stormwater networks also require additional funding to renew infrastructure and to provide for housing growth and climate change.
Delayed investment means increased risk of leaks, pipe ruptures and sewage overflows, with the associated roadworks, contamination of popular swimming beaches and general disruption.
As part of the Auckland Council family, Watercare simply cannot borrow the amount needed to adequately maintain its infrastructure, meet future growth and improve resilience to drought and other risks. Being tied to Auckland Council's balance sheet does not help Watercare or the council to make secure long-term investments to improve the quality of life expectations of ratepayers – so I encourage the council to support the waters reform approach.
Under the proposed reforms, Watercare would be able to lift its level of capital expenditure by about 50 per cent, delivering significant improvements in network performance, resilience and service reliability while keeping price increases for households to a more affordable level.
Such benefits are only possible by making significant changes to Watercare's governance arrangements, the separation of water assets and debt from Auckland Council, bringing together all three waters and introducing economic regulation.
Of course, the proposals are not without their challenges but we need to consider the widespread benefits not just to Auckland but to Northland also, which is a favourite holiday destination for city dwellers.
Aucklanders have benefited from significant upgrades to the Watercare network, improved service standards and lower charges than projected under Auckland's eight former councils.
More of these benefits can be expected under the proposed three waters reforms.
As to the issue of cross-subsidisation, the proposed entity boundaries take account of a bigger picture of interregional linkages to places like Northland. Alongside being a favoured holiday destination, Auckland and Northland regions share responsibility for the Kaipara moana catchment. And we should not forget that Aucklanders benefit directly from water supply drawn from the Waikato River.
Freeing Auckland Council from the requirement to borrow to fund water infrastructure would also mean it has more funding available for investment in other community assets like libraries, community centres and playgrounds.
While decisions on the reforms are yet to be finalised, the Government's proposal is to create a publicly-owned water services entity for Auckland and Northland that is financially independent of Auckland Council.
The proposed entity would have increased capacity to borrow and invest to meet Auckland's current and future needs, including better support for new housing. It would continue to be owned by and accountable to its community, with Auckland Council playing an active part in its governance.
At the same time, it would be subject to economic regulation to ensure it invests appropriately, operates efficiently and does not overcharge customers.
Auckland Council would continue to influence investment priorities, including where and how urban growth is provided for. Crucially, our proposals are designed to prevent future privatisation, which is a bottom line for this Government.
I remain open to discussing the proposals with the Mayor and Auckland Council to ensure
the citizens and ratepayers of Auckland do not miss out on the benefits the proposed reforms will bring.
• Nanaia Mahuta is the Local Government Minister.