$91m for HB water re-structure

Politics is often about ‘carrots and sticks’, and the Government has just announced a whopper $91 million carrot for Hawke’s Bay (out of $2 billion nationwide) to ease the transition to regional consolidation of water services delivery.

BayBuzz has previously reported on the Government’s plan to create four new pan-regional entities to plan, fund and manage delivery of ‘3 Waters’ services – drinking water, stormwater and wastewater.

HB’s new funding is allocated as follows:

CHB:               $11,339,488

Hastings:      $34,885,508

Napier:           $25,823,785

Wairoa:           $18,624,910

To date, our mayors have been fairly coy as to their ‘buy-in’ for these reforms, with mayor Craig Little being the most outspoken. He characterises the re-structuring as the “end of local democracy”. But $18m might inspire even him to re-consider!

BayBuzz will report further on our local councils’ response.

Prime Minister Ardern described the funding as follows:

“The support package announced today will ensure that no council is worse off as a result of the reforms. $500 million is set aside to provide certainty for local authorities that they will be supported through the transition process, and to ensure the financial impacts of reform will be managed.

“We also want to acknowledge the significant change that the shift in these assets means for Council balance sheets. So the remainder of the package seeks to ensure Councils are better off despite this change to their asset base. 

“To do this we have set aside $2 billion for councils to invest in the future for local government, urban development, and the wellbeing of their communities.”

According to Local Government Minister Mahuta: “The $500 million ‘no worse off’ component of the support package seeks to address the costs and financial impacts that councils would incur such as the transfer of water assets, liabilities, revenue and staff to a new water services entity. The funding also ensures councils will be able to continue to sustainably perform their non-water related roles and functions.”

Our councils would seem to have a fairly open slate on how they can use this funding. From Minister Mahuta: “Councils will be able to use this funding to support the three waters service reform, and focus on other local wellbeing outcomes associated with climate change and resilience, housing and urban design and planning, and community wellbeing.”

The Government is still trying to persuade all local councils to participate in the reorganisation. They are letting this $2b carrot dangle in front of local government over the next 6-8 weeks, and then will make the final decision on how to proceed. Realistically, this reorg is happening. The only remaining question is whether Government will require participation by all councils, backing off its current position that participation will be optional.

Stay tuned!