New warning sounded by Standard & Poor on local water infrastructure.
Back on October 5 I published an article titled, Start boiling your water, which asked: “Have you noticed the deafening silence on 3 Waters from HB political leaders lately?”
And noted the recent water quality travails of Auckland and Queenstown, the latter issuing ‘Boil Water’ warnings.
The point? Repeal of Labour’s 3 Waters scheme would be catastrophic for Hawke’s Bay’s local councils, demolishing their balance sheets for years to come given the extraordinary costs of providing us with First World water infrastructure.
Yet that’s exactly what the new National/ACT (NZ First?) Government plans to do enthusiastically in its first 100 days.
A great choice ahead: Go broke or get sick.
Standard & Poor Global, which credit rates the NZ government and 25 of our local councils, sounded this fiscal warning back in March. No one in Hawke’s Bay – certainly not Mayors Walker, Hazlehurst, Wise or Little – paid any attention. Or if they did, they deliberately buried their heads in the silt, since this financial reality confounds the absurd rhetoric they have spewed continuously since the 3 Waters scheme first took shape.
Now Standard & Poor has repeated its warning.
Here’s how Newsroom reports it (October 20):
“Contrary to popular belief, public debt is not a major constraint on the credit rating,” says S&P director Martin Foo. “In fact, net general government debt in NZ, by our measures, is comparable to Australia’s and well below most other advanced economies.
“The sovereign balance sheet is in decent shape. We would emphasise that local council balance sheets are under more strain. The former Labour Government’s Affordable Water reforms were unpopular, let’s face it. They were politically unpopular. But the reforms could have been an escape valve for some of this high debt.”
Foo says council credit ratings will come under pressure if they are forced to borrow more for water assets. “Now that National has threatened to repeal the laws, the question for us is, ‘what’s next?'”
If our new Hawke’s Bay MPs want to serve us well, I suggest they get a prompt tutorial in water infrastructure financing.
And then explain the local government fiscal realities to colleagues Luxon and Willis, who have chosen thus far to over-hype NZ’s national debt. Their focus on reducing the government debt – which the leading global credit agency considers reasonable – by $3.4 billion in the face of a crushing need for $185 billion investment in water infrastructure is as misguided as our local ‘leaders’ posturing on 3 Waters to date.
It would take some admirable guts on the part of tenderfoot MPs Wedd and Simon to deliver unwanted news to their party chiefs. Or will they simply ‘carry water’ for their party on 3 Waters?
Well said Tom! Thank you.
The chances of National backtracking on any of their “promises” in the first few months of their reign are vanishingly small. If they do they’ll be shown as having little or no ability to govern, and definitely no idea of the realities of the current infrastructure situation in this country. And ACT will back them all the way as they only have one outlook based on their manifesto – take down everything Labour! I have little faith that the new Government will demonstrate any realistic pragmatism to meet the problems we all face
if our new Mp’s and Mayors do not come out in support of 3 waters or something that will achieve the same result without increasing rates by margins never seen before in this country then they must show us how they plan to get the mahi done without such rates increases.
Whilst some will argue that regardless of who pays for the required investment in water services, be it central Government or local Government, it all comes from taxes as rates are a tax, but that is missing the fact that many ratepayers are on fixed incomes and will not be able to afford the massive rate increases that will follow and not just for the short term but for generations after, leaving no room to tackle new problems that may well arise due to global warming or other such events. Rate increases passed to the many landlords will be passed onto the tenants just like any other cost introduced to any service or product, it is always passed down to the end user/consumer.
Through using central Government funds, those who hold the purse strings can and should prioritize their spending to cover the costs envisioned by the 3 waters studies and many if not most taxpayers would not be adverse to a small increase in tax to cover the costs of this necessary work to be completed.
REPLY TO TOM BELFORD; Deafening Silence on 3 Waters in HB: Auckland and Queenstown are NOT our issues. Repeal Labours 3 Water quoted by TB as catastrophic—— a serious over the top dramatisation.
Hazlehurst and Council and HBDC are doing an excellent job in upgrading our water supply after a major body blow that manifested in HN some years ago and we are well ahead of the game against other Regional Councils.
Tom, please look at the big picture——NZers wanted change and they got it big time. Your serious left socialist leaning is not the direction most NZers want. You have a great product with Bay Buzz with many great contributing editorials. Open your mind and use your undoubted skills more effectively.
Also it is you who should show more guts (backbone) and give Wedd and Nimon a lot more credit. Maybe a good holiday would help you clear your mind and have a refresh.
Doug Henderson
Expecting Napier and Hastings to pay for 3 waters upgrade in Central Hawkes Bay and Wairoa rather than speading the cost over a wider revenue base is inexplicable to me . While National party representatives seem reasonably intelligent I can only assume they have simply followed ” don’t do what Labour initiated” rather than thinking through what is best. I am not optimistic that they will start thinking logically when they get in power. Very unfortunate.