Vaughan Gunson: Nanaia Mahuta and Labour's Three Waters mandate decision necessary

One of the district's two main water storage reservoirs, the Whau Valley Dam, in the western hills of Whangārei. Photo / NZME

LIFE AND POLITICS

OPINION

You had to see the Government's decision to impose the Three Waters Reform on councils coming. The impressive and steely Nanaia Mahuta had been paddling the waka in one direction for some time.

Despite rough seas and blow-back from some councils, particularly here in the North, she had a landing site she was determined to reach.

The more Mahuta and the rest of Labour's ministers in Cabinet understood the state of the country's water infrastructure, the solution - greater centralisation - was seen as an absolute necessity.

Beginning the process by saying councils could opt out was their mistake.

That option is long gone, and there may not be much negotiation with councils either, or only over the finer points.

Whatever outrage exists, Mahuta will take it on her moko emblazoned chin.

The determination of Labour goes back to the Three Waters Review commissioned in 2017, which was contributed to by a whole swag of government ministries. That review scared the bejesus out of people in Wellington. Their urgency was passed on to Labour.

It's estimated between $120 billion and $185 billion needs to be invested in fixing, maintaining and building new water infrastructure over the next 30 years.

Local Government Minister Nanaia Mahuta. Labour saw that the country's water infrastructure needed urgent attention and the solution - greater centralisation - was an absolute necessity. Photo / NZME

There's some catch-up spending in those figures, as many councils were responsible for years of neglect.

This is where Whangārei Mayor Sheryl Mai interjects and says our record on water infrastructure is excellent. Don't punish us by taking away control of our assets.

You can understand how this might feel unfair. It's like you participated in a group project at school where you worked really hard doing your bit, but others in your group were slackers.

The Government has given the country's councils an overall D for how they've looked after and future-proofed the nation's water infrastructure. The Whangārei District Council quite rightly doesn't feel it deserves a D. In fact, as Mai would have it, we ought to receive an A.

Maybe, but even in Whangārei, there will need to be major spending on water infrastructure in the years ahead.

With some justification, the Government doesn't think local councils will be able to raise the necessary money and spend it where it needs to be spent.

One of the trends evident in council spending is attributable to councils throughout the country being in competition for people (otherwise known as ratepayers).

Local businesses and their spokespeople are vocal in demanding that councils fund projects that attract visitors and new residents. People and new money grow the economy.

So councils spend money beautifying the urban environment: building art galleries, public spaces on waterfronts, entertainment complexes, and even mountain bike trails close to city centres.

Whangārei's waste-water treatment plant, one of the 'three waters' assets paid for by ratepayers. Photo / NZME

These kinds of visible, fun and community-enhancing projects are sexier than wastewater infrastructure and sewage.

And let's be fair, how many of us, when visiting or deciding to move to a place, make that decision based on the condition of the pipes?

The other problem councils have is persistent opposition to rates rises. Some councils simply haven't had the income to build expensive attractions and maintain necessary but boring infrastructure.

Now, there could be other paths that allowed councils to stay in charge of the water. Like allowing councils to raise money from local taxes or keeping some of the GST collected in their district (the GST on rates for a start).

But options like this were never on the table.

In the Government's mind - and they're probably correct - the cost savings from pooling resources in four regional water entities will be significant.

And a centralised structure, backed by Government assets and tax revenue, reduces the cost of borrowing to finance the massive new spending. This is surely the decisive factor.

The four water entities will be able to negotiate better loan terms with bankers compared to a debt-constrained regional or city council, especially the smaller ones.

You could argue we shouldn't be bound to what international creditors want, but it's the reality. And one the Government, councils, or voters aren't about to challenge.

As for the opposition to the reforms, some have lost the plot talking about theft of our assets.

This is nonsense. The assets are still going to be under public control.

We're still "the public" whether we have our ratepayer or taxpayer hat on. And councils will still be involved in managing the new water entities.

There's no privatisation on the agenda, which most in New Zealand would resist strongly.
The National Party, trying to tap into anti-government sentiment due to Covid restrictions (dictatorships and all that), has criticised the reforms.

This is odd, given that big business, right-leaning economic commentators, and undoubtedly international investors, who watch such things, are behind what the Government's doing. These are National's traditional allies.

As for councillors, they can complain, but it won't change anything.

Meanwhile, most of us will only become invested if things continue to go wrong at the street level - broken pipes, sewage overflows, water contamination and reduced water availability during a drought.

It's the new water entities and whoever's in government who will face our wrath.

So there'll be plenty of pressure from the public, the media and non-governing political parties to get things right.

• Northern Advocate columnist Vaughan Gunson writes about life and politics.