Napier flooding, pre-cyclone. Photo: Corena Hodgson

Hawke’s Bay’s local elected officials spent most of the past three years wailing about the Labour Government’s ‘3 Waters’ plan to consolidate the planning and delivery of water services.

Labour’s intent was to spread the huge costs of modernising these services – totally unaffordable to smaller councils like our own CHB and Wairoa councils – across the entire taxpayer base to lower costs (new entities borrowing more, and more cheaply, than councils can, plus economies of scale) and provide upgraded services equitably to all areas.

The key financial aspect of the reform was to take these costs – estimated at $120 to $185 billion – off the balance sheets of local councils, enabling them to focus their borrowing on other community needs.

Well, Cyclone Gabrielle has indeed dramatised beyond mere speculation what the scale of those other needs will be! 

So now our local territorial authorities are sweating bullets as they prepare their next Long Term Plans, unable to imagine where they will find the resources to simultaneously deliver ‘normal’ services, recover from disaster, and get on with the overdue infrastructure upgrades sorely needed irrespective of the cyclone. Surely not from rate increases. 

And the costs are beyond their borrowing capacity. Furthermore, councils’ credit ratings are at risk, leading to higher borrowing costs, if these infrastructure costs are left on their balance sheets.

After three years of campaigning against the Labour plan, and cheering the new Government’s promise to repeal it, now our councils are aching to get water infrastructure costs off their books. Indeed imploring the new Government to do that for them. 

Auckland officials say their city’s ‘3 Waters’ costs will triple for users without Government intervention. Our local leaders haven’t yet come clean on the costs they are facing (that’s why they are ‘workshopping’ behind closed doors). We’ll get the ‘big reveal’ next year when draft LTPs finally emerge in public.

Meantime, the HB Recovery Agency’s BIM (i.e., pitch to Government) says:

“The cost of three waters services is rising for all ratepayers but the cost increases for Wairoa and Central Hawke’s Bay ratepayers will reach a level considered unaffordable when compared to international benchmarks. 

“Post Cyclone recovery, Hawke’s Bay Councils are reaching or are projected to reach their debt limits. A change to the rules for CCOs to provide for balance sheet separation for a regional model (and other similar CCOs) would be a significant benefit for the CCOs, the Councils and Government.”

Other than promising to repeal ‘3 Waters’ legislation in 100 days, the Government is scratching its head. It has made no provision at this point for bailing councils out from this expense, but is returning these assets – and liabilities – to their balance sheets.

This conundrum has led the head of Auckland’s Watercare to comment:

“Some councils who maybe objected to the reforms are now going, ‘oh shit, it’s back with us, what the hell are we going to do now?’”

Yeah, HB councils, what are you going to do now?!

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6 Comments

  1. There was an election Tom
    The government has a mandate.
    It’s called democracy
    Live with it

  2. Easily resolved,New Zealands /Aotearoa’s Three Wise Men and Nicola have told us all to just light up another ‘fag’!!.The cure all of our society?.

  3. Denying realities – for example, on Three Waters, coastal erosion, child impoverishment and Treaty responsiblities – was never going to help communities fix problems. Now the need for collective, broad cost-sharing has – through events – become all the more self-evident.

    Ian J., Napier, Fulda, Germany

  4. Planning beyond the term of a government should be mandatory. In the private sector engineers routinely plan for the next hundred years and beyond. It IS possible but complicated by climate change earthquakes demographics etc. Too bad the “responsible” government we have just elected has no interest in planning for the best interests of New Zealand in the future

  5. It was obvious that this would happen, the best scheme tossed down the drain. The coalition need to sort this now.

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