Prime Minister Jacinda Ardern has announced a whopping $2.5 billion package to ensure local councils are not only "no worse off", but "better off" from the restructure of water assets.
Last month the Government proposed the establishment of four publicly-owned entities to take responsibility for drinking water, wastewater and stormwater infrastructure to stop average household bills reaching up to $9000 by 2051.
A report by the Water Industry Commission for Scotland estimated that New Zealand will need to invest between $120 billion to $185 billion on water infrastructure over the next 30 years to meet standards and provide for future population growth.
The package announced on Thursday consists of two components: $2 billion to ensure councils are "better off" from the restructure, and a $500 million "no worse off" element, to address the financial impact of transferring water assets to the new entities.
The $2 billion will comprise of $1 billion from the Government from future Budgets, and $1 billion from the new water service entities, which because of their size will be able to borrow to fund the significant investment.
Councils will be able to use that funding to support the Three Waters reforms, and focus on other local wellbeing outcomes associated with climate change and resilience, housing and urban design and planning, and community wellbeing.
The package comes on top of the $761 million committed to the reforms in 2020, and $296 million announced in Budget 2021 for the costs involved with the establishment and transition of the new water entities.
"New Zealand's water systems are facing a significant crisis and will continue to do so without major transformation. Overhauling our drinking, waste and stormwater services will benefit all New Zealand communities, no matter where they are in the country," Ardern said.
"The support package announced today will ensure that no council is worse off as a result of the reforms."
The Government has signed a commitment to work together with Local Government New Zealand to engage and consult with councils and other stakeholders over the next six to eight weeks and beyond.
Local Government Minister Nanaia Mahuta says the reforms are about "acting for the greater good", which she believes will benefit all communities.
The Government will develop legislation specifying that local authorities will be the owners of the entities and any future privatisation proposal must be put to the community through a referendum requiring at least 75 percent agreement for change.
The four water service entities are scheduled to begin operating in July 2024.
The reforms are expected to grow GDP by $14 billion to $23 billion over the next 30 years and create an estimated 6000 to 9000 jobs.
National leader Judith Collins was tipped off about the $2.5 billion package before it was announced, and described it as a "taxpayer bribe".
"This entire sham exudes desperation from a Government which has refused to listen to the feedback coming from councils in favour of pushing their own agenda."
Auckland Mayor Phil Goff has voiced concerns about the Three Waters proposal, and the Whangārei District Council voted to withdraw from the plan.
"These reforms are poorly conceived and will result in low accountability, bloated service entities, more bureaucracy, and messy cross-subsidising between neighbouring regions," Collins said. "The claimed scale benefits and cost-savings remain unconvincing."
How will the money be spread?
The billions of dollars has been split region by region, taking into account population, relative deprivation and land area.
The press release says: "This formula recognises the relative needs of local communities, the unique challenges facing local authorities in meeting those needs, and differences across the country in the ability to pay for those needs."
- Auckland - $508,567,550
- Ashburton - $16,759,091
- Buller - $14,009,497
- Carterton - $6,797,415
- Central Hawke's Bay - $11,339,488
- Central Otago - $12,835,059
- Chatham Islands - $8,821,612
- Christchurch - $122,422,394
- Clutha - $13,091,148
- Dunedin - $46,171,585
- Far North - $35,175,304
- Gisborne - $28,829,538
- Gore - $9,153,141
- Grey - $11,939,228
- Hamilton - $58,605,366
- Hasting - $34,885,508
- Hauraki - $15,124,992
- Horowhenua - $19,945,132
- Hurunui - $10,682,254
- Invercargill - $23,112,322
- Kaikoura - $6,210,668
- Kaipara - $16,141,395
- Kapiti Coast - $21,051,824
- Kawerau - $17,270,505
- Lower Hutt - $38,718,543
- Mackenzie - $6,195,404
- Manawatu - $15,054,610
- Marlborough - $23,038,482
- Masterton - $15,528,465
- Matamata-Piako - $17,271,819
- Napier - $25,823,785
- Nelson - $20,715,034
- New Plymouth - $31,586,541
- Opotiki - $18,715,493
- Otorohanga - $10,647,671
- Palmerston North - $32,630,589
- Porirua - $25,048,405
- Queenstown Lakes - $16,125,708
- Rangitikei - $13,317,834
- Rotorua Lakes - $32,193,519
- Ruapehu - $16,463,190
- Selwyn - $22,353,728
- South Taranaki - $18,196,605
- South Waikato - $18,564,602
- South Wairarapa - $7,501,228
- Southland - $19,212,526
- Stratford - $10,269,524
- Tararua - $15,185,454
- Tasman - $22,542,967
- Taupo - $19,736,070
- Tauranga - $48,405,014
- Thames-Coromandel - $16,196,086
- Timaru - $19,899,379
- Upper Hutt - $18,054,621
- Waikato - $31,531,126
- Waimakariri - $22,178,799
- Waimate - $9,680,575
- Waipa - $20,975,278
- Wairoa - $18,624,910
- Waitaki - $14,837,062
- Waitomo - $14,181,798
- Wellington - $66,820,722
- Western Bay of Plenty - $21,377,135
- Westland - $11,150,183
- Whakatane - $22,657,555
- Whanganui - $23,921,616
- Whangarei - $37,928,327
