The latest announcement about three waters reform is out and is broadly in line with what was expected. There has been no backward step by the government.
The Minister has suggested that the national bill to meet future drinking water and wastewater standards could be between $3.3 billion and $4.8 billion, and that’s before we even talk about the pipes. With bills that large facing the country it is beholden on every council to consider ways to minimise the impact on their communities. So it is good to see that, alongside the news about a new water regulator being announced, the Government recognised the significant costs and complexity for councils of looking at any changes to the current service delivery models.
The reforms set out in the Cabinet Paper are far reaching, and if implemented will force change, real change and rapid change. New standards will be introduced, enforced by a newly minted and empowered regulator with only a five year timeframe to upgrade infrastructure to meet new standards. That means all councils that undertake three waters services will be pressed into action. Added to that will be the impacts on private suppliers, and perhaps hidden in the document the impacts on any individual who supplies any other person with drinking water - shared bores, the other cottage on the farm etc. The flow on impacts on both of these groups will inevitably fall on councils who undertake three waters services.
Government announced a $5 million fund to help councils to meet the costs of exploring options for voluntary reorganisation. There is up to $1 million each available on a 50/50 basis. This will provide an excellent opportunity for forward thinking councils to proactively address the potential cost pressures that will be facing their communities, and to demonstrate that they are industry leaders without having to shoulder the full cost of doing so.
Morrison Low are New Zealand’s leading advisors to councils and government on three waters reform. We are experts in the use of section 17A reviews and the Treasury Better Business Case (BBC) approach for analysing different models of service delivery, the planning and procurement of three water services and infrastructure, and establishment, operation and review of alternative delivery models.
Our capability is demonstrated by the company’s extensive track record in advising New Zealand and Australian councils as well as the Department of Internal Affairs. We have been working alongside the Hawkes Bay Councils for six months as they collectively determine the way forward.
Contact Dan Bonifant