National’s belief that fixing water infrastructure can be left to local councils is a feeble cop-out. It shows no understanding of the magnitude of the problem and the enormous sums of money ($185 billion over the next 30 years) that will have to be spent to address historic under-investment. Councils have been telling the Government that they cannot do it alone, and it is implausible that National’s MPs haven’t heard the same message when in their electorates.
As Chris Hipkins said in his PM’s Statement in Parliament on February 21, abandoning local authorities and leaving them to deal with the scale of this challenge by themselves “is not leadership”. But in order to progress Three Waters, the name will need to be jettisoned. It is noticeable that the PM and Kieran McAnulty, now stewarding the reforms, no longer use the name. It has become toxic, having taken on all sorts of negative connotations that blunt Government efforts to explain what the policy is about.
Language, especially in politics, is powerful, and can evoke emotional responses, both good and bad. When the response is hostile, the language has to change.
Helen Clark’s Government found this out with Closing the Gaps, an important policy aimed at addressing growing inequities between Māori and Pacific peoples, and other New Zealanders. It was a worthy programme in the name of social order and cohesion, and even had its own Cabinet committee.
But over time, Closing the Gaps came to be seen as preferential treatment for Māori. It wasn’t, but perceptions matter. The name became a political risk and there were mounting calls for the focus to be on hardship generally, not just Māori-Pasifika deprivation. So the slogan was dropped and the Cabinet committee disbanded. Clark and her ministers changed the narrative to one of greater support for all have-nots.
Three Waters is a similarly unhelpful label.
Not only does it have to go, but the phrase “co-governance” probably has to be ditched too. As Chris Finlayson says, the word “governance” is too close to the word “government”, and that causes anxiety. That sees those of a reactionary bent believing that Māori are being handed control — in this case, of water services. Which they’re not, of course.
What’s being proposed is that Māori have an equal voice on water infrastructure via a 50:50 split — between councils and mana whenua — of positions on water entities. This is particularly important for remote, rural Māori communities that have been ill-served by councils over the provision of reliable drinking water, and waste and stormwater services.
So calling it just that, 50:50 power sharing, might help de-escalate the racially-charged nonsense from some councils, fuelled by others such as National and Act.
There will almost certainly be other changes aimed at addressing the objections of councils — objections that have centred on representation and ownership, including the risk of privatisation.
The Government may well consider increasing the number of entities. The current plan is to move responsibility for drinking, waste and stormwater from 67 councils to four specialised, properly funded water organisations. But four could become as many as the Government thinks are necessary to satisfy local councils’ demands for a bigger say over water services in their patch.
One way to do this might be to have a water entity covering the territories of each of the 16 regional and unitary councils, which would address concerns that four large entities for the entire country will create a sense of towns and districts being too remote from decision-making on their water services. There would be a more tangible connection between local communities and the entities.
But it is difficult to see what else the Government can do to calm privatisation fears, other than to keep repeating ad nauseam that the entities will be publicly owned by councils as the sole shareholders, on behalf of communities.
Notwithstanding the shambles before Christmas over the now-abandoned entrenchment provision, safeguards have been written into water services legislation against any future privatisation. So it’s fanciful to think that our water infrastructure is going to end up in the hands of offshore equity funds at some future point.
Then there is the disquiet about the new entities’ ability to borrow on a financially sustainable basis, and what happens if they overreach themselves. It is a bit silly because even without the changes being proposed, huge sums would still have to be raised to upgrade water infrastructure.
In actual fact, a key motivation for the reforms has been a need to avoid a spike in rates, a point that National’s policy, released last weekend, ignores. Independent research commissioned by the Government suggests the water component of household rates would rise to $9000 a year if councils were to try to fund catch-up investment themselves.
With balance sheet separation and appropriate creditworthiness, the water entities will be able to achieve higher leverage ratios than councils, with projections showing this would create extra debt capacity of up to $8b.
Besides, Grant Robertson has agreed to a liquidity facility of at least half a billion dollars that the entities could call upon if they got into extreme trouble.
The reality is that it’s inconceivable the Government would let businesses as essential as these go belly-up. Drinking water, and waste and stormwater services, are just too important.
So it’s time to face down the naysayers and push on with the reforms — and call them whatever you like, just not Three Waters.
- Mike Munro is a former chief of staff for Jacinda Ardern and was chief press secretary for Helen Clark.
