Government water reforms aim to improve infrastructure but may lead to significant price increases for users.
The Local Water Done Well programme doesn’t address affordability, risking backlash from ratepayers.
Smaller communities, like Ruapehu, struggle with costs due to tourism impact and limited local funding.
Call me an optimist, but when done well, government reforms can deliver real benefits and positives for generations to come. Water reform is no exception.
It’s hard to find a political party or a local council who doesn’t think we need to do better when it comes to water infrastructure and delivery.
Everyone knows that good infrastructure and safe water is fundamental to a modern society. It’s a basic need that communities rightly expect politicians to sort out.
We take our eye off the ball at our peril. The Government’s solution is the Local Water Done Well programme. But because it fails to answer a key question, things are about to get difficult.
The Local Water Done Well programme doesn't address affordability, risking backlash from ratepayers, Ruapehu Mayor Weston Kirton says Photo / Alex Burton
Very soon, ratepayers and water users throughout the country will revolt against an inevitable price spike of future drinking water, wastewater and stormwater. The rate demand for each of these “waters” could double once the new water entities take over and start to carry out their mandate.
It doesn’t take the Nobel Prize in Economics to work out that scale matters. The more users within an entity, the cheaper their water will (or should) be.
Scale also creates efficiencies in service delivery, operational costs, and borrowing capacity to fund upgrades. While water reform stays largely out of the headlines these days, the question of affordability for users and ratepayers remains curiously unresolved.
Smaller communities will struggle to afford future necessary infrastructure because of their lower economic capacity and population base, Weston Kirton says.
I would argue that water users are not the only beneficiaries to Government’s reform – and therefore shouldn’t bear all of the costs.
The current legislation overlooks the public good benefits. Access to clean drinking water and effective wastewater are fundamental to public health.
Havelock North’s example, where almost half the town’s population fell ill, is all the proof we need of the consequences of getting it wrong. Smaller communities such as those in the Ruapehu district will struggle to afford the future necessary infrastructure – because of their lower economic capacity and population base.
As a tourist destination, we have 1.5 million visitors coming into the Ruapehu district each year. This seriously impacts our water infrastructure, which is funded by just 5600 local users. The unfairness is stark.
Those 5600 users paying for the infrastructure of 1.5 million visitors who come to ski, hike, fish, golf, cycle, mountain bike and visit our many attractions.
Waiaroah – the Heretaunga Water Discovery Centre. Photo / Alex McVinnie
Don’t get me wrong, we love tourists! The problem is arithmetic. The burden on local ratepayers is too great. I would argue that central government funding is needed to help to bridge this gap.
This is not new or unique. We already do this right now for flood management and river control. These infrastructure costs are spread between the “local good” and the “national good”.
Local ratepayers contribute their portion (typically 80%) through a targeted rate, and the taxpayer picks up the other 20%. This model acknowledges the wider social and environmental benefits to infrastructure.
It recognises that we don’t spend our entire lives constrained to our own community like Hobbits. We travel, we move around. And when we do, we use infrastructure paid for by other ratepayers.
The current Local Water Done Well proposal fails to account for this. Locals will pay for 100% of their cost, regardless of the national good. Until it does, perhaps it should be known instead as “Local Water Under-Done”.
