Three Waters: Opt in or Out?

30 September 2021. By Rodney ward Councillor, Greg Sayers. Central Government is proposing significant changes in the ownership of, and control over, New Zealand’s’ drinking water, wastewater and stormwater systems.

The changes are significant and it’s being described as the Three Waters Reform Programme.

The proposal is that four new entities are set up covering the whole of the country, and these entities take over the management of the three waters infrastructures currently managed by Councils.

Auckland Council has Watercare set up as the business unit responsible for managing Auckland’s drinking and wastewater, while Auckland Council itself has an internal unit called Heathy Waters responsible for all the stormwater schemes.

Under the Government’s proposal Auckland’s water assets, and debt, would be taken over by a new “Water Services Entity” which would cover Auckland as well as all the northern regional Councils, Kaipara and Whangarei District Councils.

The Government believes there is historic underinvestment in the three waters across New Zealand and an investment of between $120 billion to $185 billion is required over the next 30 years.

Councils like Auckland have been investing heavily recently into projects like the central interceptor for wastewater and new plant for freshwater access from the Waikato River. This has driven up its debt. Other Councils have failing infrastructure such as Wellington and Havelock North as examples.

Everyone in New Zealand should be able to expect clean, safe drinking water, and a healthy environment and this is the Governments key driver for wanting change. However, does one size fit all?  

There are several concerns. The proposal would remove Watercares and Healthy Waters current ability to directly implement Auckland’s planned investments to fix our issues because the new water services entity could favour funding the funding of projects in poorer northern Councils ahead of Auckland’s needs.

What’s likely is Watercare will be rebranded and expanded to become the new water service entity with a new board of directors and a new ownership structure.

There is concern also being expressed that the overall ownership of the new water company would be fifty percent owned by Mana Whenua and fifty percent by ratepayers, of which Auckland ratepayers have only a 35 percent stake holding.

This risks creating a new water entity that is unresponsive to the communities it serves, removing Auckland Council’s ability to ensure that Aucklanders’ needs are put first. There is also the question of how well will the new entity be able to co-ordinate with Auckland Transport and other agencies around maintenance work and new project builds.

Will the centralisation of Watercare and Healthy Waters from Auckland Council into an even bigger entity result in the loss of local control, delivery, quality and priorities?

Then there is the potential hit to the pocket. The Government plans to allow the new water entity to be able to borrow significantly more money to fund the $120 billion to $185 billion of required investment. It is unclear if water rates would increase for Aucklanders to service this increased debt, or if water rates will be insulated from increases due to the debt being able to be paid off intergenerationally. The northern Councils who currently include their water rates within their general rates could well end up with split out water rates, like Auckland already does, without any decrease in the general rates, while incurring an additional water rates charge.

Rodney’s rural communities who are not on any metropolitan water or waste water systems should be less susceptible to any potential price increases.

However, there are murmurs that house supply water tanks may need compulsory filters added to them. If your property also has staff or customers drinking the tank water then you are likely to have to register this, have a water safety plan and file a report every year about your water tank’s water quality meeting standard. In other words, more cost and more bureaucracy. 

The Government gave all Councils the months of August and September to consider all of the information and implications of this proposal and to make any initial feedback.  

In its initial feedback, the Auckland Council has given the thumbs down to the Three Waters Reform programme, due to concerns that the changes will result in a lack of democratic accountability and control over council assets. In addition, ratepayers as the owner of all the water assets, should have a say.

Also to date, the government documents lack thorough information about how any change would affect Aucklanders water rates. A more robust breakdown of these details have been requested so the information can be shared widely with Aucklanders.

During October, the Government will consider its next steps, including process and the timing for decision-making, which should include the time required for public consultation, and any final Opt-in or Out date. New Zealanders, and Councils, are now waiting any announcements from central government – including if the government will even press-on with the programme?

The Government made it clear that councils could decide if they wished to ‘opt in’ or ‘opt out’ of these reforms. However, they could still make it mandatory.

Such an action would be totally unconstitutional. The water assets that they are talking about have been paid for by ratepayers, not by Government, and as such any change must be publicly consulted on and agreed to. I will certainly fiercely resist any move towards any compulsory takeover of Councils’ publicly owned assets.

My firm standpoint is communities must be given the right to decide whether they wish to ‘opt in’, ‘opt out’ or wish to call for a national referendum on the matter.

It is called democracy.

(What can I do: There is an opportunity to express your opinion about a number of aspects of the proposed Three Waters Reform via an online feedback survey, simply click to it here: (If you have difficulty opening this link, you can copy and paste it directly into your web browser).