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What's changing and why?He aha te mea e panonitia ana, ā, he aha ai?

Why is Government reforming three waters?

Everyone has the right to safe drinking water no matter where they live, and we should also expect strong and resilient stormwater and sewage services that protect the environment and enable communities to prosper and grow. 

The Government’s three waters reforms were initiated in response to the challenges facing three waters service delivery across the country.

Challenges include ageing infrastructure, historical under-investment, a bow-wave of wastewater plants to be reconsented, source water contamination, higher public expectations, resilience needed for impacts of climate change and natural hazards, changes in population and huge looming costs.

Government estimates New Zealand will need to invest $120 billion to $185 billion in three waters infrastructure over the next 30 years to for three waters investment.

The Government’s view is that current arrangements and the council delivery model will not be able to address these challenges and transformational change is needed.

What’s changing?

Four multi region water services entities

Source: Department of Internal Affairs

That’s why Government is introducing a package of reforms:

The new responsibilities for drinking water suppliers are already in law under the Waters Services Act 2021, and Taumata Arowai, the regulator is up and running.

In 2021 Government announced proposals to change how three waters services and infrastructure are owned and delivered.

The changes mean that in future, your local council would no longer be responsible for these services – known as three waters.

Instead, from July 2024 they would be owned and delivered by one of four new multi-region entities across Aotearoa New Zealand. Hawke’s Bay would be part of “Entity C”.

What would be different?

The new three waters system would mean the following changes.

THREE WATERS SERVICE DELIVERY
  Now From July 2024
Responsibility for three waters services

67 local councils across New Zealand.

Here in Hawke’s Bay, your local council.

Four new water services entities across New Zealand.

Hawke’s Bay would be part of ‘Entity C’, comprising an area made up of 21 councils.

Ownership of three waters services, including assets (pipes and infrastructure) and liabilities (borrowings) Community ownership of its own assets, via each council.

Public ownership via each Council having a shareholding in their area’s water services entity (one share per 50,000 people with a minimum of one share per council).

Legal safeguards against privatisation.

Ownership of three waters assets (pipes and infrastructure) and debts Each council. The Water Services Entity.
Community/consumer voice in three waters decisions

Via Councils, elected by their communities.

Council’s community consultation processes such as long-term planning.

The Water Services Entity would elect a Regional Representative Group (RRG) who may appoint a Regional Advisory Panel (RAP).

The Water Services Entity must engage in relation to Te Mana o te Wai statements, asset management plans, funding and pricing plans and infrastructure strategies.

The Water Services Entity must establish Consumer Forums.

Community/consumer voice in three waters decisions

Via Councils, elected by their communities.

Council’s community consultation processes such as long-term planning.

The Water Services Entity's Regional Representative Group (RRG) of between 12 to 14 people comprising 50/50 representation from councils and mana whenua.

For the Water Services 'Entity C' RRG, there would be 6 to 7 council representatives representing the 21 councils in the entity service area and 6 to 7 mana whenua representatives representing all iwi across the East Coast of the North Island, the top of the South Island and the Chatham Islands.

Regional Advisory Panels (RAP) may be established comprising 50/50 representation from councils and mana whenua for the RRG to the entity's service area. The role of a RAP is to provide advice to the Regional Representative Group (RRG) about how to perform or exercise its duties, functions, and powers.

Governance responsibility Your council has total responsibility for all aspects of decision-making related to investment in and delivery of three waters services and infrastructure.

The water services entity Regional Representative Group (RRG) would be responsible for:

  • Representing the views of councils and their communities, and mana whenua
  • Approving the strategic direction of the water services entity.
  • Commenting on (but not making) operational decisions, including asset management, funding and pricing, and infrastructure strategy.
  • Appointing an independent panel to appoint the entity's board.
  • Appointing Regional Advisory Panels (RAP) or committees to feed more localised input to the RRG.

All decisions made by the RRG and RAP must be made by consensus.

The Minister, a council, a regional representative, RRG or RAP cannot direct a water services entity in its performance, duties and functions or powers or to require a particular act or result.

Operational Accountability Council management are responsible for operational management, and accountable to the elected Council.

The Water Services Entity Board would be responsible for operational management, including:

  • Overseeing decisions around maintenance and renewal of infrastructure.
  • Providing a funding and pricing plan to the RRP at least once every three years.
  • Holding management to account for delivery of three waters services.
Management responsibility Your council has responsibility for all aspects of day-to-day service delivery, infrastructure maintenance and renewal. The water services entity management would be responsible for all aspects of day-to-day service delivery, infrastructure maintenance and renewal.
Recognition of Iwi/Māori interests Iwi/Māori rights and interests are recognised through Council commitments to Te Tiriti o Waitangi.

Rights & interests of Iwi/Māori would be recognised and provided for in service-delivery arrangements for the new three waters system.

Mana whenua may provide the entity with a Te Mana o te Wai statement for water services. The entity must respond to these statements with a plan that sets out how the water services entity intends to give effect to Te Mana o te Wai.

Pricing and charging Your council charges you for three waters services through rates.

The water services entity would set the price for your three waters services and charge you directly.

Consumer protection mechanisms and an economic regulation regime would be in place.

 

Here's more detail

The future of three waters services is changing regardless of the Government’s reforms. These services are expensive to provide, and combating future challenges will see the costs for delivering three waters services increasing across New Zealand:

Entities Map with reform data

Source: Department of Internal Affairs

Maintaining and upgrading ageing infrastructure.

  • Adapting to climate change and building resilience to natural hazards
  • Lifting the standard of service to meet health, environmental and cultural bottom lines
  • Responding to growth, housing and urban development needs

To fix these problems, Government has introduced the Water Services Act 2021 and proposed new drinking water standards, and is introducing new rules for the management of waste and storm water. A new water regulator has also been established.

For local councils to meet these new standards and rules, there would need to be large increases in household water costs across New Zealand which, without reform, would be shared unevenly among New Zealand households.

Government estimates that over the next 30 years, the costs could be up to 13 times higher for rural users, eight times higher for provincial areas and seven times higher for many metropolitan households.

Transferring ownership and responsibility of three waters services and infrastructure to four multi-region water services entities is Government’s proposal to address that affordability challenge. Government estimates that over the next 30 years, the per-household costs with and without reform would be as follows.

You can find out more about Government’s case for change here.

In short, just about everything.

There are new responsibilities, rules and standards for drinking water suppliers under the Water Services Act 2021, overseen by the new three waters regulator Taumata Arowai.

Government is also proposing that in future, local councils would no longer be involved in the delivery of three waters services.

Instead, your three waters would be owned and delivered by four new multi-region entities that would:

There’s more detail on How would the new system work?

There would be a range of new legislative protections, co-governance arrangements and mechanisms to give effect to the principles of te Tiriti o Waitangi/the Treaty of Waitangi; and Te Mana o te Wai. 

Oversight: Mana whenua would participate in the governance of the new entities. Representative interests would need to be determined by Māori for Māori through a Kaupapa Māori process.

New entity operation: The water services entities would be required to have significant cultural and local expertise.

Te Mana o Te Wai: The reform will provide for local expression of Te Mana o Te Wai that would enable development of Mauri frameworks, application of mātauranga Māori measurement or any other expression that iwi decide is relevant to them. 

A number of alternatives were considered, ranging from Government funding the infrastructure deficit, sector-led shared service delivery, a national centralised fund to support the status quo, regulatory reform, and aggregation into fewer or more entities.

You can read a short analysis on each of the options here.

Hawke’s Bay councils also proposed a regional three waters model to Government.

The changes in the Water Services Entities Bill are aimed at council-owned services only. 

However, you may be impacted as a private drinking water supplier because of the new responsibilities for drinking water suppliers under the Water Services Act 2021 and the new rules and standards for drinking water

You can find out more here.

As part of the reform process, Government has appointed a Rural Supplies Technical Working Group to consider, whether council-owned, mixed use rural supply schemes should transfer to the new water services entities.

The Working Group has reported to Government, but no further decisions have been made yet.

You can find out more about the evidence Government has used to make the changes here.

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