Three Waters Reform

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Following the serious campylobacter outbreak in 2016 and the Government’s Inquiry into Havelock North drinking water, central and local government have been considering the issues and opportunities facing the system for regulating and managing the three waters (drinking water, wastewater, and stormwater).

The focus has been on how to ensure safe drinking water, improve the environmental performance and transparency of wastewater and stormwater network, and deal with funding and affordability challenges, particularly for communities with small rating bases or high-growth areas that have reached their prudential borrowing limits.

Today, on behalf of their communities, 67 different councils including Upper Hutt own, maintain, and run most of the country’s water services. However, councils face several challenges to deliver these in an affordable way into the future, including ageing infrastructure, growth, and the impacts of climate change.

Everyone agrees that more investment is needed in water infrastructure—it was reflected in our recent Long Term Plan. But ultimately each council will need to decide what service delivery arrangements are most appropriate, based on the interests of their communities and the community’s wellbeing (now and into the future).

What's happened so far?

July 2020 - along with announcing the Three Waters Reform, the Government also announced an initial funding package of $761 million to provide a post COVID-19 stimulus to maintain and improve water three waters infrastructure, support a three-year programme of reform of local government water service delivery arrangements (reform programme), and support the establishment of Taumata Arowai, the new Waters Services Regulator.

The initial stage (Tranche 1 – Memorandum of Understanding (MOU), Funding Agreement, Delivery Plan and Request for Information (RFI) process, was an opt-in, non-binding approach. It did not require councils to commit to future phases of the reform programme.

We completed the RFI process over Christmas and New Year 2020/21 and the Government has used this information, evidence, and modelling to make preliminary decisions on the next stages of reform and has concluded that the case for change has been made. Here is the full report on the case for change.

September 2021 - Council submitted its feedback to Government on the Three Waters Reform(PDF, 297KB)

October 2021 - the Government announced they would be progressing the Three Waters Reform. You can watch the announcement and read a summary of local Government feedback on the proposal on the DIA website

November 2021 - we launched a residents survey to seek feedback from our community on the Government’s decision to go ahead with the Three Waters Reform, despite concern and opposition raised by councils from across the country.  The survey closed on 28 November and a report on the results went to Council on 15 December. The Government also named the Three Waters working group and released the terms of reference

Initially the Government said there would be a community engagement process, where local communities would be given the opportunity to express their views and provide feedback about the Three Waters Reform.  

In the most recent announcement, the Minister for Local Government indicated there will not be a local community consultation process. Instead, communities/public will have an opportunity to provide feedback through the select committee process. 

December 2021 - the Government announced the Three Waters Entities Bill will be delayed to give the working group time to recommend changes to governance and accountability. Draft legislation has been prepared and will be made public, giving the working group until 28 February to report back and recommend any changes. The bill would be introduced to Parliament shortly after.

What's being proposed?

The Government is proposing four new, large water service delivery entities. Their scale means they would be able to borrow enough to fund the investment needed in water services and infrastructure over the next 30 years.

Upper Hutt City Council would be in entity C with 22 other councils from the east coast of the North Island, the Wellington region, and the top of the South Island.

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All councils have been given until end of September 2021 to review the information on the Government’s current proposals, including their $2.5billon support package, and to provide feedback. Details on this financial support package can be found here Financial support package.

The Government announced on October 2021 they would be progressing the Three Waters Reform.

What could it mean for Upper Hutt City?

The proposed “better off” funding allocated to Upper Hutt City Council from central government is $18m. However, the Wellington Water shareholder Councils are required to share this funding with Greater Wellington Regional Council, which means that it is anticipated that the net funding allocation for Upper Hutt City Council will be $16.7m. There is likely to be “no worse off” funding available to Upper Hutt City Council. 

The Department of Internal Affairs (DIA) has prepared some dashboards containing information regarding various territorial authority areas, to help councils and their communities understand how elements of the three waters system are performing and the potential impact of the reform for councils. The FAQs put together by DIA are here Council Dashboard FAQs. The link to the dashboards is here Council Dashboards.

Our dashboard looks like this: 


How can I find out more information?

You can visit the Department of Internal Affairs Three Waters webpage.

Taumata Arowai became a new Crown entity in March 2021 and will become the dedicated water services regulator when the Water Services Bill passes, expected to be in the second half of 2021. Obligations of water suppliers can be found here

Water NZ has put together water supply performance information of various Councils. This can be found here WaterNZ dashboard.

Council is considering a report on the Three Waters reform at its meeting on 22 September 2021. The report can be found here Council report(PDF, 17MB).

Local Government New Zealand (LGNZ) has compiled a FAQ about the Three Waters Reform.