A public shareholding structure has been recommended for Three Waters to ease concerns raised by local councils about losing ownership of assets.
Three Waters is the Government's plan to establish four publicly-owned entities to take responsibility for drinking water, wastewater and stormwater from local councils.
The reforms stem from Havelock North's outbreak of gastroenteritis in 2016 when four people died and 5000 became ill, as well as drought in Auckland and old pipes bursting in Wellington.
Under the Three Waters model, local councils will remain the owners of their water assets but they will not have control over them. Their influence will be via regional representative groups (RRGs) - 50 percent council members and 50 percent iwi.
But the Government has struggled to appease councils who last year expressed concerns about losing control of their water assets and potential privatisation.
It hasn't been the smoothest ride. Local Government Minister Nanaia Mahuta in October announced that the Government would force Three Waters reforms on local councils, despite initially pitching it as voluntary.
Before then, Whangārei District Council had voted to withdraw from the plan, while big players like Christchurch and Auckland expressed dissenting views.
The Government then confirmed in December that the reforms would be delayed until 2022 to hear the concerns and wait until its new working group had finished consultation and completed work to introduce the revamped legislation.
The working group released its advice overnight and the main recommendation is a public shareholding structure to maintain public ownership of water assets.
"A major concern we heard from our communities, iwi and hapū, was about the privatisation of New Zealand's water services. The public shareholding model will strengthen protections against privatisation requiring unanimous shareholder approval for any such proposal," said chair Doug Martin.
It would mean that no privatisation could occur unless every shareholder council agreed, and councils would be required to consult with their communities.
As shareholding owners of the water service entities, each territorial authority would be required to vote on any proposal for an entity to be sold or involved in a merger. The proposal would only proceed if there was unanimous shareholder approval.
The working group also recommended entrenching a majority 75 percent vote in Parliament to repeal or amend the legislation in terms of privatisation.
While the working group agreed with the RRG composition of 50/50 council and iwi/hapū, it recommended additional regional advisory groups (sub-RRGs) be responsible for "agreeing regional strategic priorities".
Auckland Mayor Phil Goff has made no secret of his concerns about Three Waters, because under the plans, Auckland would contribute 92 percent of the proposed entity but could have less than 40 percent representation.
The working group acknowledged the "dissenting view from Mayor Phil Goff with respect to Auckland's position", and proposed a "bespoke" arrangement for Water Service Entity A, which includes Auckland.
The working group suggested four Auckland Council representatives, four Tāmaki Makaurau iwi representatives, one representative each from Northland councils and three iwi representatives from Te Tai Tokerau.
Mahuta said the Government will consider the proposals before finalising reform plans and introducing legislation.
"We know it is important to get this reform right for every New Zealander," Mahuta said.
"We are committed to ensuring local councils continue to have a vital Three Waters role by representing the interests of their communities at the highest level of each new water services entity alongside mana whenua, and by owning these entities on behalf of their communities."
The Government is under pressure to get it right. A Newshub-Reid Research Poll in November found that about 48 percent - almost half the country - didn't support the reforms.
But the working group said it "received an overwhelming message from the sector that the status quo isn't working, and reform is needed".
A report by the Water Industry Commission for Scotland estimated that New Zealand needs to invest $120 billion-$185 billion in water infrastructure over the next 30 years to meet standards and provide for future population growth.
The Government has tried to make the reforms easier for councils by announcing a whopping $2.5 billion package in July to ensure they were not only "no worse off", but "better off" from the restructure of water assets.
The four water service entities are expected to begin operating in July 2024. It's expected to grow GDP by $14 billion to $23 billion over the next 30 years and create an estimated 6000 to 9000 jobs.
