The Government will repeal Labour’s Three Waters scheme later this month, as it promises to pass its own legislation to reform water management by mid-2025.
A bill will be passed by February 23 to repeal the previous government’s reforms, as part of the coalition’s 100-day plan, PM Christopher Luxon confirmed this afternoon.
Local Government Minister Simeon Brown said a technical advisory group would soon be appointed to provide expert advice on the implementation of the coalition government’s water reform plans — originally promised before the election.
“This will restore continued local council ownership and control of water services, and responsibility for service delivery,” he said.
Water services across the country are currently managed by 67 local councils.
The previous government’s plans, originally dubbed the Three Waters Reforms, would’ve created several large regional entities to manage water infrastructure. Repealing Three Waters was a pre-election promise given by the National Party.
Considered unpopular by a significant grouping of councils, former prime minster Chris Hipkins last year pushed out the start date and moved from four to 10 large entities.
Now the plans will be ditched entirely, while the new Government’s plans will be implemented by progressing two further bills through Parliament, Brown said.
Labour spokesperson and former local government minister Kieran McAnulty said the repeal would mean ratepayers would have to “pay more” going into the future.
Three Waters out — Local Water Done Well in
All legislation to support the implementation of the new set of changes, dubbed “Local Water Done Well”, is expected to be passed by mid-2025.
Brown said today: “The first bill will be passed by the middle of 2024 and will set out provisions relating to council service delivery plans and transitional economic regulation.
“It will also provide streamlined requirements for establishing council-controlled organisations under the Local Government Act 2002, enabling councils to start shifting the delivery of water services into more financially sustainable configurations should they wish to do so.
“A second bill to provide for the long-term replacement regime will be introduced in December 2024 and passed by the middle of 2025.
“This will set out provisions relating to long-term requirements for financial sustainability, provide for a complete economic regulation regime, and a new range of structural and financing tools, including a new type of financially independent council-controlled organisation.
Backstop powers ‘to ensure safe water services’
“The second bill will also establish regulatory backstop powers, to be used when required to ensure effective delivery of financially sustainable or safe water services.
“In addition, it will also make necessary amendments to the water regulator’s legislation to ensure the regulatory framework is fit for purpose and workable for drinking water suppliers.
Brown continued: “Local Water Done Well recognises the importance of local decision making and flexibility for communities and councils to determine how their water services will be delivered in the future.
“We will do this while ensuring a strong emphasis on meeting rules for water quality and investment in infrastructure.
“I have also established a Technical Advisory Group (TAG) to contribute specialist and technical expertise to myself and the Department of Internal Affairs as we develop policy and legislation to implement Local Water Done Well.
“Leading experts in finance, infrastructure and local government will take on key roles as members of the TAG, marking an important step in the implementation of Local Water Done Well.
“The TAG will be focused on providing advice and assurance on policy and legislative settings that will enable local councils to appropriately recover costs and access the long-term debt needed to fund the required investment in water infrastructure.”
‘Kick in the guts’ to ratepayers, Labour says
Labour’s local government spokesperson Kieran McAnulty said it was “irresponsible” to repeal the Three Waters legislation — more recently renamed the “Affordable Water Reforms” — that he helped shepherd through Parliament last year.
“The cost of fixing our broken water infrastructure is estimated at $185 billion over just three decades. It is simply irresponsible of National to ignore the problem,” he said.
The Labour spokesperson repeated that balance sheet separation was “essential” for reform. The approach, fundamental to the previous Three Waters plans, allows the larger, combined entities to effectively borrow more money than councils currently could.
“Councils can’t do this by themselves, but this is exactly where the Government has left them – without any support.
“The current law would save households thousands each year, and National have yet again shown they don’t have any plan at all to ensure Kiwis have safe and affordable water in the long term.
“At a time where families are already feeling a lot of pressure with the cost of living, this is going to be a kick in the guts.”
ACT: ‘Co-governed regime never the answer’
Government coalition partner ACT has welcomed today’s move.
The party’s local government spokesperson Cameron Luxton said it was “symbolic of a broader change in direction.”
“The announcement of legislation to repeal Three Waters is symbolic of a broader change in direction, away from the centralising instincts of Labour and back toward empowering local communities,” he said.
“We all know status quo isn’t up to scratch, but Labour’s bureaucratic, co-governed regime was never the answer. Three Waters would have been great for middle-managers but a disaster for water users, with layers and layers of bureaucracy separating decision-makers from the people.”