Central Government's Three Waters proposals

Central Government is reviewing how to improve the regulation and supply of drinking water, wastewater and stormwater (the three waters(external link)) in New Zealand.

What's proposed?

The review, which began in 2017 and was sparked by the campylobacteriosis outbreak in Havelock North in 2016, and has already delivered new legislation and the creation of Taumata Arowai(external link), a new water services regulator, to oversee and enforce a new drinking water regulatory framework, with additional oversight of wastewater and stormwater networks.

Most three waters assets and services in New Zealand are owned and delivered by local councils.

While addressing the regulatory issues, both central and local government have identified under-investment in three waters infrastructure in parts of the country and persistent affordability issues for ratepayers, as well as the need for additional investment to meet improvements in freshwater outcomes and increase resilience to climate change and natural hazards.

The proposal as it currently stands hands water services from the 67 councils who currently manage services into four big regional water authorities. The Chatham Islands Council has been included in area C which includes the lower North Island.

Area D which is the South Island based on the Ngāi Tahu takiwa is another option being considered by the Council. This currently excludes Tasman, Nelson, Marlborough and the Chatham Islands being areas outside of the takiwa.

Ownership would remain 50% with Councils (mandated by legislation) and 50% with imi/iwi. There would be protection to ensure the water entities do not become privatised without a public referendum with a 75 percent threshold.

The Chatham Islands

The water supplies in Waitangi and Kaingaroa and the wastewater system in Waitangi will be captured by the Government’s proposals.

Taumata Arowai will regulate the water quality that is to be delivered by these public schemes. It will also have influence over any privately operated schemes serving more than one residence.

Financial Implications

All Councils have received a stimulus payment from the Government which is being applied to the water and wastewater networks. The Chatham Islands Council share of this is $680,000.

There has been extensive research by the Government into the financial effect of the proposals on each Council. Indications are that the Chatham Islands consumers (those connected to the services) will be about $20.00 per annum better off immediately, rising to being about $8,000.00 per annum by year 2050.

These numbers are based on comparisons with the current water rates and the forecasted charges that will be applied by the new entity C.

Councils are currently working through the financial implications and will be asked to opt into or opt out of the proposal by October 2021.

As most of the capital costs associated with the Chatham Islands schemes comes from Government grants it is unlikely that the Council can continue on its own without these.

As an incentive towards making an opt in decision the Chatham Islands Council has been offered $8.6M. This will be available to be spent at the Council’s discretion in consultation with imi and iwi.

With the exception of the influences imposed by Taumata Arowai all of these proposals will fail if Councils choose to opt out.

The Minister will be offering consultation guidelines sometime soon. Until then this information should be regarded as being preliminary.