Three Waters Reform

Central Government is reviewing the regulation and supply of drinking water, wastewater and stormwater (the three waters) for all New Zealand. This is to give New Zealanders confidence that drinking water is safe to use, sources of drinking water are adequately protected, and wastewater and stormwater are managed in environmentally sustainable ways.

In July 2020, the Government launched the Three Waters Reform Programme – a three-year programme to reform local government three waters service delivery arrangements. In July 2021, the Government shared more detail on what the outcome of the reform will be.

What has been proposed?

Local councils currently own and operate the three waters infrastructure and provide the services for their districts. The Government believes this service delivery model needs to change.

They proposed to establish four large publicly owned water service delivery entities.

These entities would own and manage the drinking water, wastewater and stormwater infrastructure for local communities, instead of councils.

In June 2021 the Department of Internal Affairs (DIA) released a map showing the proposed boundaries of these entities.

Stratford District Council (SDC) is part of Entity B with 21 other councils in the wider Waikato, Bay of Plenty and Taranaki regions which would service approximately 800,000 people.

Along with transferring the water assets to Entity B, all of Council’s associated water services debt and reserves would also be passed to Entity B.

The government proposed that the new water entities will be operational from 1 July 2024, and it’s expected that councils will continue to deliver water services until then.

Water Services Entities Overview (PDF)

What does it mean for Stratford?

Change to the status quo

The Three Waters Reform Programme has the potential to significantly change the way critical water infrastructure and services are delivered in our district.

For example, Council would no longer be responsible for delivering drinking water supplies to households. It may also mean changes to how much our ratepayers pay for water and wastewater services, and who they pay for these services, in the future.

Financial support

As part of the reform proposal the Government is promising to deliver a financial support package to all councils. This is to ensure that no council is left worse off after the reforms.

If the reforms go ahead, SDC would receive $10 million in financial support as part of this package.

This is on top of $2.34 million which SDC accessed as part of stage one in 2020. All councils agreed to this stage, which didn’t commit us to the reform programme. This money is being used to provide an additional water trunk main for the Stratford water supply, a project which started earlier this year.

How did Council provide feedback on the reforms?

In 2021 the Government asked us to examine the facts and figures in front of us, to determine the impact the reforms would on service delivery and our community.

Staff and elected members reviewed the large volume of information provided to determine what is being proposed and why.

At that stage Council was yet to form a collective view on the reforms, but instead asked questions and raised concerns alongside fellow Entity B councils.

Some concerns and questions raised across Entity B included:

Effectiveness of governance representation
Loss of community influence
Will ratepayers actually be better off financially?
What will the impact be on the rest of Council services?

Council provided a letter of feedback to Central Government on 30 September 2021. Read the letter here.

At the time of Council's feedback in 2021 there was clear commitment from all stakeholders for the need to spend more time working through some issues that are important to all of us. These are:

Ensuring all communities have both a voice in the system and influence over local decisions. This means being sure the water entities understand and act on communities’ needs and wants.
Effective representation on the new water entities’ oversight boards so that there is strong accountability to the communities they serve. This includes effective assurance that entities remain in public ownership and cannot be privatised in future.
Making sure councils’ plans for growth are appropriately integrated with water services planning.

Feedback taken on board

As a result of widespread opposition to a number of elements of the reforms, three ministerial working groups have been set up to further investigate and recommend alternatives to specific aspects of the proposed reforms. The following working groups were tasked to address specific areas of concern:

Rural Supplies Technical Working Group
Planning Technical Working Group
Working Group on Representation, Governance and Accountability of new Water Services Entities

The Working Group on Representation, Governance and Accountability of new Water Services Entities made 47 recommendations in its working group report, 44 of which have been accepted by the government.

A summary of the recommendations and the government’s response to each of them can be found here.

Your only opportunity to have your say

The first of several pieces of legislation giving effect to the Government’s intention to establish a new model of three waters service delivery is being considered by Parliament.

The Water Services Entities Bill provides for the setting up of four Water Services Entities to manage the delivery of drinking water, stormwater and wastewater services currently managed by 67 local authorities throughout the country.

The Bill had its first reading on Thursday 9 June and was referred to the Finance and Expenditure Select Committee for the next stage of the legislative process. This stage is where the committee, made up of MPs will consider submissions and make recommendations back to Parliament.

The Select Committee process is the main opportunity for people to have their say on the Bill.

The Select Committee has called for submissions, closing on 22 July. You can make a submission on the parliament website.

You can view Council's submission on the bill here.

It's important that you use this opportunity to lend your voice to the conversation by directly making a submission on Parliaments website.

Read the Bill

You can read the Bill in full here.

The Government's decision

In October 2021, the Government announced it would introduce legislation to establish four new publicly owned Water Services Entities to manage the three waters infrastructure. These new entities are planned to be operational from 1 July 2024. If the Government proceeds with their decision to deliver three water services by the proposed new Water Services Entities, there is still a significant amount of work that would need to be completed prior to this becoming operational.

Three Waters Reform

What has been proposed?