Affordable Water Reform Replaces Three Waters Reform Programme

On 13 April 2023, the government announced changes to its Three Waters Reform Programme. Three Waters was introduced in 2022 to change the delivery of drinking water, wastewater and stormwater to ensure all New Zealanders have safe and reliable water infrastructure.

After a significant negative public response to the Three Waters proposal, the government has made key changes to what is now called Affordable Water Reform. These are:

•   Ten publicly owned specialised service entities rather than four

•   The entities will be based around the existing regions and will be connected to the communities that they serve

•   The entities will be owned by local councils and will be operationally and financially independent

•   Each entity will be governed by a professional board and local input will be enhanced through the regional representative group for each entity. There will be an equal number of mana whenua and council representatives on each entity’s regional representative group, and

•   The introduction of the entities will occur through a staged approach between early 2025 and 1 July 2026 at the latest.

The original Better-Off funding model was designed to support councils through the transition period and to manage the financial impacts of the reforms. The Crown will still provide Better-Off funding for the first phase ($500 million) but not for the second phase ($1.5 billion). The first phase of funding has been implemented to try to negate the financial implications that the councils face during the transition.

The latest amendments do not largely impact the Water Services Legislation Bill and the Water Services Economic Efficiency and Consumer Protection Bill currently before Parliament. The government intends to pass legislation to implement these new changes before the election in mid-October.

Reaction to the changes to the government’s revised water reform programme has, it is fair to say, been mixed. It will be interesting to see how these reforms progress over the next six months before the election.

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