Proposed Government Three Waters Reform

Consultation has concluded

Do you have any questions about the governments Water Reform Programme? Use the Questions tool at the bottom of the page and we'll get back to you with an answer.


In July 2020, the Government launched the Three Waters Reform programme – a three-year programme to reform local government three waters service delivery arrangements.

The programme is a major change to how New Zealand’s three waters (our drinking water, wastewater and stormwater) infrastructure and services are planned, maintained and delivered. The reforms are based around three pillars:

  1. Taumata Arowai – New Zealand’s drinking water regulator (expected to be established in late 2021).
  2. Expanding and strengthening New Zealand’s water regulatory system.
  3. Proposed transition from council-owned public water services to four multi-regional entities.

The process, 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, a new Water Services Regulator, to oversee and enforce a new drinking water regulatory framework, with additional oversight of wastewater and stormwater networks.

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. There is also a need for increased investment to meet improvements in freshwater standards and increase resilience to climate change and natural hazards. The government believes that this will offer cost savings to water users, while allowing for increased investment in the infrastructure required to ensure safe, resilient and sustainable water into the future.

Regional Water Authorities

The proposal from central government is to establish four water authorities, who would manage and operate New Zealand’s water services instead of local councils.

Currently the 67 local councils across the country own and operate the majority of New Zealand’s three waters services. In the Mackenzie District, these services are the responsibility of Mackenzie District Council (MDC) and are one of the core services we provide for our community.

One entity (currently named Entity D) is proposed to cover the Ngāi Tahu takiwa (all of the South Island excluding Nelson, Marlborough and Tasman). The Mackenzie District would fall under the proposed boundaries of Entity D.

The Department of Internal Affairs (DIA) has released a map (below) showing the proposed boundaries of the three entities. We would be included in entity D and our Council is in the process of giving the Government feedback on the map. It's important to note that we haven't firmed up a position on the overall proposal and boundaries yet.

You can find this map and more information here.


Proposed Regional Water Entities


Water standards 

Regardless of what happens with the proposed multi-regional entities, compliance with water standards is going to be more rigorously enforced by the new government water regulator, Taumata Arowai.

Under Taumata Arowai, drinking water standards must be complied with, and there will be potential criminal implications for water operators who don’t meet the standards required. This will apply to council owned water supplies as well as smaller private schemes, including rural water networks

The standards for wastewater and stormwater are also expected to increase to meet public health and environmental bottom lines.

Regardless of who runs the three waters networks in Mackenzie, public and private water services will have to meet public health and environmental legislation. The costs of compliance and being able to demonstrate compliance is going to go up and will need to be paid for by users.

Government Package

At the Local Government NZ (LGNZ) Conference in mid-July the Government announced a $2.5 billion package for councils as part of its three waters reform.

The package has three financial components:

  1. Support for local government to invest in communities’ wellbeing. This part of the investment totals $2 billion, with $500 million being available from 1 July 2022. It will be allocated between councils according to a nationally consistent formula, reflecting population (75 per cent), deprivation (20 per cent) and land area (5 per cent).
  2. Targeted support to ensure no councils are financially worse off as a result of transferring their three waters assets. This is designed to protect councils from any negative financial consequences of the asset transfer.
  3. Cover of reasonable transition costs. This is intended to make sure council service delivery (including of water services) during the transition isn’t compromised by the work needed to make the transition happen.
What does this mean for MDC? 

We fully support the government’s intention to ensure that all New Zealanders have access to safe, clean water and that our environment is protected and regenerated as a priority. But it’s also vital we have a clear understanding of whether the proposed approach is the right thing for our district.

The move to large water entities could potentially significantly change the way water infrastructure and services are delivered in our District and how MDC is funded, as three waters would no longer fall under MDC’s authority.

It is unclear whether Government will give councils the choice to opt in or out of the proposed water entities, or if it will mandate that all councils opt into the reform process.

Regardless of who runs the three waters network in Mackenzie, any water scheme will have to meet drinking water safety and environmental requirements. The costs of compliance and being able to demonstrate compliance are going to go up and need to be paid for users. This applies to Council provided networks and private water schemes.

As this involves a significant community owned asset (our entire water network), if we are given the opportunity to make a decision, we will be sure to consult with our community.

To read a summary Q&A document click here

Our bottom lines

We have provided the government with a range of bottom lines that we believe any reform must meet. These include:

  • Local representation: any water entity developed through the process must enable local representation and MDC must not lose its ability to promote its community’s needs and wishes.
  • There must be adequate controls on water pricing structures and pricing must ensure equity across the entire region of any future entity.
  • The transfer of assets and debt must not negatively impact on MDC’s ability to be a viable organisation.
  • Cost and management of any stranded assets must be considered.
  • That full compliance with drinking water standards, environmental consents and cultural values are non-negotiable and should be progressed with urgency no matter which organisational arrangement is adopted, including the status quo.

Questions MDC is looking to have answered

We have a number of issues that we are seeking clarity on so we can make an informed decision around water reform.

Mayor Graham Smith has sent a letter to the Department of Internal Affairs (DIA) and Local Government New Zealand (LGNZ) outlining MDC's bottom lines and a list of questions we need answered to ensure we can form an educated view on water reform. This letter can be viewed at the link below.

Mayoral Letter to DIA - MDC Questions for DIA on Water reform

Appendix 1: MDC Review of WICS data

What are the potential costs?

DIA have undertaken modelling that looks to understand the cost to households with or without reform. This was based in a Request For Information that every Council in New Zealand had to complete, detailing their water network. The information was then modelled at a national level and the estimate costs outlined for each Council, which is available on an online dashboard.

The Government modelling estimates that by 2051 the provision of three waters in Mackenzie will cost upward of $8,690 per household without reform, or $1,640 with reform. Mackenzie District is working to understand the modelling undertaken and the assumptions used to ensure are an accurate representation of the true potential impacts on our community.


DIA three waters dashboard


What are the next steps?

Government has given all councils until 1 October, to better understand the proposal and how it affects them and their communities. This period is also an opportunity to identify issues of local concern and suggest possible ways to address those.

After the eight-week period, the Government will consider next steps, including the process and revised timing for decision-making. No decisions on this have been made, or will be made, until after this engagement period.

Useful Links

We’ve pulled together some useful links for anyone keen to delve into the detail of what is being proposed: 

So, what do other councils think?

You can find out what other councils around New Zealand think of this reform here.


Do you have any questions about the governments Water Reform Programme? Use the Questions tool at the bottom of the page and we'll get back to you with an answer.


In July 2020, the Government launched the Three Waters Reform programme – a three-year programme to reform local government three waters service delivery arrangements.

The programme is a major change to how New Zealand’s three waters (our drinking water, wastewater and stormwater) infrastructure and services are planned, maintained and delivered. The reforms are based around three pillars:

  1. Taumata Arowai – New Zealand’s drinking water regulator (expected to be established in late 2021).
  2. Expanding and strengthening New Zealand’s water regulatory system.
  3. Proposed transition from council-owned public water services to four multi-regional entities.

The process, 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, a new Water Services Regulator, to oversee and enforce a new drinking water regulatory framework, with additional oversight of wastewater and stormwater networks.

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. There is also a need for increased investment to meet improvements in freshwater standards and increase resilience to climate change and natural hazards. The government believes that this will offer cost savings to water users, while allowing for increased investment in the infrastructure required to ensure safe, resilient and sustainable water into the future.

Regional Water Authorities

The proposal from central government is to establish four water authorities, who would manage and operate New Zealand’s water services instead of local councils.

Currently the 67 local councils across the country own and operate the majority of New Zealand’s three waters services. In the Mackenzie District, these services are the responsibility of Mackenzie District Council (MDC) and are one of the core services we provide for our community.

One entity (currently named Entity D) is proposed to cover the Ngāi Tahu takiwa (all of the South Island excluding Nelson, Marlborough and Tasman). The Mackenzie District would fall under the proposed boundaries of Entity D.

The Department of Internal Affairs (DIA) has released a map (below) showing the proposed boundaries of the three entities. We would be included in entity D and our Council is in the process of giving the Government feedback on the map. It's important to note that we haven't firmed up a position on the overall proposal and boundaries yet.

You can find this map and more information here.


Proposed Regional Water Entities


Water standards 

Regardless of what happens with the proposed multi-regional entities, compliance with water standards is going to be more rigorously enforced by the new government water regulator, Taumata Arowai.

Under Taumata Arowai, drinking water standards must be complied with, and there will be potential criminal implications for water operators who don’t meet the standards required. This will apply to council owned water supplies as well as smaller private schemes, including rural water networks

The standards for wastewater and stormwater are also expected to increase to meet public health and environmental bottom lines.

Regardless of who runs the three waters networks in Mackenzie, public and private water services will have to meet public health and environmental legislation. The costs of compliance and being able to demonstrate compliance is going to go up and will need to be paid for by users.

Government Package

At the Local Government NZ (LGNZ) Conference in mid-July the Government announced a $2.5 billion package for councils as part of its three waters reform.

The package has three financial components:

  1. Support for local government to invest in communities’ wellbeing. This part of the investment totals $2 billion, with $500 million being available from 1 July 2022. It will be allocated between councils according to a nationally consistent formula, reflecting population (75 per cent), deprivation (20 per cent) and land area (5 per cent).
  2. Targeted support to ensure no councils are financially worse off as a result of transferring their three waters assets. This is designed to protect councils from any negative financial consequences of the asset transfer.
  3. Cover of reasonable transition costs. This is intended to make sure council service delivery (including of water services) during the transition isn’t compromised by the work needed to make the transition happen.
What does this mean for MDC? 

We fully support the government’s intention to ensure that all New Zealanders have access to safe, clean water and that our environment is protected and regenerated as a priority. But it’s also vital we have a clear understanding of whether the proposed approach is the right thing for our district.

The move to large water entities could potentially significantly change the way water infrastructure and services are delivered in our District and how MDC is funded, as three waters would no longer fall under MDC’s authority.

It is unclear whether Government will give councils the choice to opt in or out of the proposed water entities, or if it will mandate that all councils opt into the reform process.

Regardless of who runs the three waters network in Mackenzie, any water scheme will have to meet drinking water safety and environmental requirements. The costs of compliance and being able to demonstrate compliance are going to go up and need to be paid for users. This applies to Council provided networks and private water schemes.

As this involves a significant community owned asset (our entire water network), if we are given the opportunity to make a decision, we will be sure to consult with our community.

To read a summary Q&A document click here

Our bottom lines

We have provided the government with a range of bottom lines that we believe any reform must meet. These include:

  • Local representation: any water entity developed through the process must enable local representation and MDC must not lose its ability to promote its community’s needs and wishes.
  • There must be adequate controls on water pricing structures and pricing must ensure equity across the entire region of any future entity.
  • The transfer of assets and debt must not negatively impact on MDC’s ability to be a viable organisation.
  • Cost and management of any stranded assets must be considered.
  • That full compliance with drinking water standards, environmental consents and cultural values are non-negotiable and should be progressed with urgency no matter which organisational arrangement is adopted, including the status quo.

Questions MDC is looking to have answered

We have a number of issues that we are seeking clarity on so we can make an informed decision around water reform.

Mayor Graham Smith has sent a letter to the Department of Internal Affairs (DIA) and Local Government New Zealand (LGNZ) outlining MDC's bottom lines and a list of questions we need answered to ensure we can form an educated view on water reform. This letter can be viewed at the link below.

Mayoral Letter to DIA - MDC Questions for DIA on Water reform

Appendix 1: MDC Review of WICS data

What are the potential costs?

DIA have undertaken modelling that looks to understand the cost to households with or without reform. This was based in a Request For Information that every Council in New Zealand had to complete, detailing their water network. The information was then modelled at a national level and the estimate costs outlined for each Council, which is available on an online dashboard.

The Government modelling estimates that by 2051 the provision of three waters in Mackenzie will cost upward of $8,690 per household without reform, or $1,640 with reform. Mackenzie District is working to understand the modelling undertaken and the assumptions used to ensure are an accurate representation of the true potential impacts on our community.


DIA three waters dashboard


What are the next steps?

Government has given all councils until 1 October, to better understand the proposal and how it affects them and their communities. This period is also an opportunity to identify issues of local concern and suggest possible ways to address those.

After the eight-week period, the Government will consider next steps, including the process and revised timing for decision-making. No decisions on this have been made, or will be made, until after this engagement period.

Useful Links

We’ve pulled together some useful links for anyone keen to delve into the detail of what is being proposed: 

So, what do other councils think?

You can find out what other councils around New Zealand think of this reform here.


Consultation has concluded

We realise that the Three Waters Reform Programme is a pretty complex thing to get your head around - we're still trying to figure it all out ourselves! If you have any questions you'd like answered please send them through using this tool and we'll do our best to answer them.

  • After a recent 3 waters meeting in Invercargill, locals came back saying those of us whose only water is rainwater, will have to pay for it based on the area of roof collection. Is this correct please?

    Mark asked almost 2 years ago

    Hi Mark, we don't believe this to be correct, there is a lot of speculation, not all of it correct.

    However the yet to be formed 'Entity D' will be managing water provision for most of the South Island and will be responsible for setting user charges. After the transition it won't be run by local councils - so we will all need to see how this unfolds.

  • What is the staus of bore water?

    Carharina asked over 2 years ago

    Bore water is simply another source of drinking water, so the same considerations are required in terms of risk assessment.

    Note that if the bore water is for a single residence, then the property is classed as a self-supply and is not currently captured by the forthcoming requirements.

    If the bore supply is used by more than one residence, then the property owner (where the bore is located) is classed as a small supplier and the supplier must ensure that water is safe to drink – this typically means some form of treatment (commensurate with the scale of the supply).

    It is not an option to terminate an existing drinking water supply to other properties.

  • I would like to know why are there six appointed iwi persons to sit at the head of the board publicly unelected ? Is this racism or favouritism ? And is the government indicating to the the general rate paying public of NZ that iwi alone have been favoured over all others to be given fifty percent of governance over this amount of rate payers assets? I say no thank you. I can only see division and hatred from this process . Feels like a communist China influenced , socialist lead government about to come to a major conflict with its democratically thinking citizens and rate payers. Free NZ water for China and water meters for NZ citizens ? This is not win /win.

    Timothy asked over 2 years ago

    Council's have not been involved in the preparation of the government's proposal, and so this would be a matter for them to answer.

    There is a link below to some FAQ's provided by the Department of Internal Affairs, which contains a section on the role of Iwi/Maori in the reformed system.

    https://www.dia.govt.nz/three-waters-reform-programme-frequently-asked-questions#other-features-of-the-reform-proposals

  • What are the implications council would face if they refuse to sell? Is this even an option? And if it is not, should the council not let the community know that fact? What percentage of MDC ratepayers do not have access to clean safe water? Has the Three Waters Reform been accounted for in the councils Long Term Plan? And if so, doesn't this make it a decision already made if council adopts? Why are council not receiving response from central government about the bottom lines the council believe need to be included in the review? Have central government given any forecasts into how the charging of treated water to high users will effect the Primary Industry and how much it will end up costing the high users, and in turn the local and national economy?

    Leanne asked over 2 years ago

    What are the implications council would face if they refuse to sell?  It is currently unclear weather or not Council will have any option to opt in or opt out.  Central Government has yet to set the rules.  If Council is allowed to opt out and it chooses to do so it would obviously be subject to all regulation including the economic regulation thus subject to a lot more control.

    Is this even an option? We do not know at this stage.

    And if it is not, should the council not let the community know that fact? MDC are using all avenues open to them to keep ratepayers abreast of information as we become aware of it.  It’s a minefield that keeps changing so it is challenging

    What percentage of MDC ratepayers do not have access to clean safe water? None of Councils water supplies meet the Drinking water standards and Council has a programme to address this.  In saying that the risk is very very low.  Some non-compliance relates to the lack of treatment, others to the lack of data which takes time to gather.  Council are about to let a contract that to rewrite our Water Safety Plans.  These will clearly define the risks, will be completed by April 2022 and will be public documents.  

    With regard to ratepayers who are on private supplies or self-serve supplies Council has little information regarding details or quality.  Generally however we would assume these supplies probably have greater water quality and risk  issues than Council supplied water


    Has the Three Waters Reform been accounted for in the councils Long Term Plan? No the LTP has assumed business as usual but with increased regulation.  The reason for this is outcomes with regard to water reform are still highly uncertain.  This fact is made clear in the LTP and in our consultation document


    And if so, doesn't this make it a decision already made if council adopts? As mentioned above LTP is prepared on a status quo bases plus regulation.

     

    Why are council not receiving response from central government about the bottom lines the council believe need to be included in the review? While Council can not speak on behalf of Central Government it appears that Central Government has been overwhelmed with concerns, questions and suggestions.  While we have not had a reply our correspondence, we believe, contributed, along with those from other councils, to central government having a rethink about a number of aspects of their proposal.

     

    Have central government given any forecasts into how the charging of treated water to high users will effect the Primary Industry and how much it will end up costing the high users, and in turn the local and national economy? No, probably too detailed for central government at this stage.  It may get covered in the economic regulatory package or it maybe a decision for the water supply authorities or Councils depending on the new model.