Auckland Council warns Three Waters reforms could undermine Government housing policy

Auckland Mayor Phil Goff outlined his council's criticisms of Three Waters. Photo / Michael Craig

Auckland Council is concerned the Government's Three Waters reforms could get in the way of its ability to get more houses built and could stop it from delivering on the Government's own legislation to increase house building.

Regulatory Committee Chair Linda Cooper warned the benefit of Auckland's amalgamation were threatened by the Government's Three Waters reform in a submission to Parliament's Finance and Expenditure Committee today. She submitted with Auckland Mayor Phil Goff and Deputy Mayor Bill Cashmore.

The Government's Three Waters reform programme will take water assets like pipes and reservoirs from 67 councils and amalgamate them into one of four massive water entities.

The councils will own these entities through a shareholding but will co-govern them with Māori.

The Government's plan is to roll freshwater, wastewater and stormwater services into the four entities, but Auckland council said that this would create a problem for its role in urban planning because stormwater is heavily integrated into the work it does planning around new developments, roads, and parks.

Auckland Council has already gone partway down the path to water reforms. Council-controlled organisation, Watercare already manages freshwater and wastewater services for Auckland, but the council kept control of stormwater.

Cooper warned that putting water services into the entities would mean less integrated decision-making because the entity that controlled where pipes went would not be tightly wedded to the council which planned where new developments would go.

"The benefits of regional integration envisaged for and delivered by Auckland's amalgamation are at risk of being undone by this reform," Cooper said.

"There has already been 12 years of work done on integration," she said.

Cooper said integration meant that infrastructure was treated as "a single system that services communities".

"Removing water infrastructure from long-term planning results in a broken and fragmented system [that] could clash with [a] split along functional lines," Cooper said.

Cooper warned the new water entity could "set its own agenda for housing and urban development, overriding the statutory land-use planning and long-term planning role of councils".

She said there was a risk the new water entities were not obliged to follow the decisions and strategies of the democratically-elected councils that nominally owned them. Cooper said there was a risk the new water entities could even override the planning strategies of councils.

"There's no requirement for the WSE [Water Services Entity] to align with councils' budgets infrastructure and policies," Cooper said.

She said that unlike councils, water entities would not have to align their activities and investment with the NPS-UD, the Government's main housing reform, which forces councils to allow thousands more homes to be built in main cities.

So while councils would be freeing up land for intensification and development there was no guarantee the water entities would follow their lead and invest in water infrastructure to support that development.

Green MP Eugenie Sage asked the council what advantages there would be in separating stormwater out from the three waters reforms, which is currently backed by the Greens, and LGNZ, the group representing local government.

Cooper said that stormwater was "incredibly local" and it was one of the things the council received the most complaints about. She said stormwater was tightly linked with AT [Auckland Transport] because of how closely it was linked to the city's road network.

Goff said the advantage of Auckland's amalgamation was to link up the planning of water infrastructure with planning for urban growth.

"Watercare doesn't go off and do it's own thing and put water over there when our growth plan says actually we want water over there where it makes much more sense to encourage growth," he said.

Goff said there was "enormous potential" for Auckland's new water entity, which would take in the area from Northland to the Waikato, to not link up with the urban planning needs of Auckland city.

Goff's other concern is that Auckland's share of the governance of its water entity will be diluted under the reforms.

Auckland currently owns Watercare outright and has a high degree of control over it.

The co-governance components of the reforms will mean that Auckland's share of the governing votes on the new water entity will drop to 28 per cent.

"We do not believe that the proposed governance structure allows for the scrutiny and accountability that is required over assets of such critical importance to Aucklanders.

"Nor does it ensure a necessary level of strategic direction and control over assets that Aucklanders have invested in and are now valued at more than $13 billion, with a further $11 billion allocated for three waters in our current 10-year budget," Goff said.

Goff added that while the council did not support the reform bill in its current form, he was supportive of reforming water.

"Twelve years ago when I was in Cabinet, we were talking about reform.

"Most of the reforms we could live with. We could even live with being in a Water Services Entity and not simply out on our own. What we can't live with is we effectively lose control over governance over assets that we predominantly own," Goff said.