Three waters reforms: Auckland, Northland first to form new water service entities in July 2024

Local Government Minister Kieran McAnulty. Photo / RNZ, Angus Dreaver

Auckland and Northland will be the guinea pigs in a revised three waters model, becoming the first to form one of 10 water entities in July next year, with the remaining staggered out to mid-2026.

Local Government Minister Kieran McAnulty confirmed the timeline today while introducing new legislation into the House for its first reading to cover recent changes to the water reforms, including expanding the initial four water service entities to 10.

The boundaries will be established roughly along the lines of New Zealand’s 16 regional councils. The 10 entities will be owned by councils via a shareholding and allow more direct engagement with the water entities that will manage water services on their behalf.

The expanded number of proposed entities came after strong opposition from some councils and organisations about losing local control over water assets, and after the Government consulted up and down the country.

McAnulty said it was a compromise in terms of ensuring there was a level of representation while still delivering economies of scale to ensure cost savings.

The new timeline confirms the Auckland and Northland entity will be in place by July next year. The remaining will be “staggered” out until July 2026.

Other changes included providing for every territorial authority to be represented on the regional representative group, together with an equal number of mana whenua representatives - a co-governance arrangement retained despite opposition from National and Act - as well as community priority statements.

These groups would provide oversight of the entities, which have no co-government requirement and would be run professionally.

The new legislation also allowed for entities to merge if they wished, while laying out financing backstop arrangements - such as a dedicated Water Services Entities Funding Agency, collaboration and funding obligations over the establishment periods.

The Three Waters reforms were meant to help local councils deal with the cost of investment in water infrastructure - estimated to be about $130 billion-$185 billion over the next 30 years.

Modelling commissioned by the Government reckoned those costs would push up household water and rates bills to as much as $9000 a year by 2051.

McAnulty previously said his model would deliver savings to households of $2770-$5400 per year by 2054.

McAnulty said they would be speeding up the process to have the bill reported back to the House at the end of July, effectively shortening the submissions process, and giving more long-term certainty to councils going through long-term plans.

He said the need for reform was highlighted by recent cyclone damage.

“The damage we have seen from severe weather events is a stark reminder that the resilience of our water system will continue to be tested.

“It is our responsibility to address these challenges head-on and provide a robust a framework that will ensure safe, affordable, and reliable drinking-water services for generations to come.”

National has vowed to repeal the legislation.

In February it put forward a proposal to scrap Labour’s four co-governed mega-entities and returning water assets to direct council ownership and allow them to link up if they wished,

The big difference is the establishment of a new water infrastructure investment regulator, which would ensure that councils are investing adequately in water infrastructure - something that has been a problem in the past.

However, the plan has drawn criticism for failing to account for the main reason for reform in the first place: cost.

National’s local government spokesman Simon Watts criticised the fact an amendment bill already had to be introduced before the reforms were in place, and the shortened timeframe.

He said the “huge changes”, including the establishment of a new funding body, had been made up “on the fly”.

The bill passed its first reading, supported by Labour and the Greens, and will be shortly referred to Select Committee, giving councils and other interested parties the chance to provide feedback.