NANAIA MAHUTA AND THE THREE WATERS

There isn’t much doubt that something needs to be done about water, drainage and sewerage in New Zealand. Its provision across the country is a mess. But, frankly, I’m terrified at the clumsy way this government, the most incompetent in my long life, plans to deal with the three waters.

First, the problem. There is abundant evidence that local authorities have been ignoring the deteriorating state of water, drainage and sewerage infrastructure, and that we are starting to face enormous costs, and some disruption, as we come to grips with delayed maintenance. The endless problems in Wellington, Hastings and elsewhere where sewer pipes burst or water supplies suffered from campylobacter tell us that for too long councils have been spending money on visible things rather than maintaining old, and out-of-sight services. Moreover, there is a hodgepodge of ways in which these have been charged for around the country. As late as 1989, only a few councils in the country had meters for fresh water; most just included costs of water, drainage and sewerage in their general rates demand. Since ratepayers rarely saw how much they paid for water they had little interest in it, and no incentive to save it. Builders of new houses tapped into existing sewers, often overloading them until something akin to the recent Wellington crises required drastic remedial action. Councils have always struggled whenever they contemplate user-pays charging. Yet, it is the fairest way.

Now, to this government’s “solution”. Nanaia Mahuta wants to compel all 67 local councils in the country to centralise their three waters into four new water authorities, establishing, it seems, a new tier of governance. From the meagre specifics available, the water authorities would be under the thumb of central government and would take over all the assets, but few of the liabilities relating to water, drainage and sewerage. What role there would be for democratic input still isn’t clear. While ministers are talking of $2.5 billion of sweeteners to councils to win their cooperation, it is not apparent how maintaining or replacing the huge underground complex of ageing pipes and sewers, many in a much-degraded state, will be paid for over the decades ahead. One assumes that central government doesn’t intend to fund the needed infrastructure upgrade, and that the new water authorities will be given the power to levy users.

It's the way the reforms are being handled that astonishes me. I was the Minister of Local Government who pushed through amalgamations in 1989, reducing 817 local authorities, boards and special purpose entities to 86. It had taken 113 years to reach that point, and there’d been endless consultation. In the final stages I ensured there was plenty of printed detail on what was proposed, and I did my level best to involve councils, bureaucrats and constituents in the reform process. But I kept well clear of day-to-day decisions on the new entities, believing they should emerge from discussions and negotiations between all the affected local authorities and the Local Government Commission which was led by the able, highly-respected Sir Brian Elwood.

There is no sign of any similar consultative process under this government. Instead, the current clumsy Minister of Local Government is trying to bullock through a series of changes about which she clearly has slender understanding, and can’t have discussed much with officials or local government leaders. Had she studied the matter carefully, she would know that the boundaries of the 13 regions drawn in 1989 took careful account of water catchment areas. Since then the Waikato/Auckland boundary has been altered, but others are still operating, and with a little tinkering, the number of regional councils could be reduced to seven or eight. There is no need for a whole new tier of local government: re-jigged regional councils could almost certainly manage the three waters. However, the whole country would need to move on to a user-pays model if such a scheme is likely to last. Some people, of course, will want to pass the costs of improving local infrastructure to central government; a desire to socialize costs is an old Kiwi disease. But costs should fall where the infrastructure is needed most urgently. A few local authorities crow that they have paid off their water costs, but almost certainly they have been deficient in maintenance over the years, and their problems will bubble to the surface, sooner rather than later….

I see from a recent news article that the government is trying to assure local authority staff that their jobs won’t in any way be endangered by their three waters policies. To give those assurances at this stage is a guarantee that the government’s proposals will only inflate costs and push up charges. The big lesson of 1989 was that amalgamations and new systems can restrain costs only so long as the reformed entities are careful about staff levels and fair with redundancy when it is warranted.

My advice, for what it is worth, is that local authorities would be wise to give this government’s current three waters proposal a wide berth. Much more work needs to be done by bureaucrats and ministers scoping and identifying the magnitude of the current problem. Assessing the likely long-term costs of remedying the most urgent needs should follow, while negotiations continue about a sensible structure for the long-term handling of the three waters. And more thought is needed about the best way to assist those in charge at the local level who will have to finance and charge for the work that will need to be done to improve our failing infrastructure. A sudden ill-considered lurch into centralization is not the best answer.