At the moment 67 different councils, including Porirua, own and operate the majority of the country’s water services. However, councils face a number of challenges to deliver these in an affordable way into the future, including ageing infrastructure, growth and the impacts of climate change.
The Government’s plan proposes putting all water services into 10 new publicly-owned Water Services Entities (WSEs). Porirua would be in Entity G with seven other councils from the Wellington region.
Water Services Legislation
The Government is implementing reform of water services through a suite of legislation, including:
- The Water Services Entities Act: establishes the new water services entities so they are ready to provide services from 1 July 2024.
- The Water Services Legislation Bill: is before Parliament's Finance and Expenditure Committee which is due to report back to the House by 8 June 2023.
- The Water Services Economic Efficiency and Consumer Protection Bill: implement's Cabinet's agreement to establish an economic regulation and consumer protection regime as part of water services reform.
Changes to the Reform
The Government made changes to the water services reform programme (Three Waters Reform) in April '23. These changes included increasing the number of new water services entities from four to 10, the establishment date of the entities (with the new entities going live sequentially from early 2025) by 1 July 2026.
Legislation to implement these changes and associated matters is intended to take place before the 2023 general election.
The Water Services Legislation Bill and The Water Services Economic Efficiency and Consumer Protection Bill are largely unaffected by the changes. These bills will continue their progress through Parliament on their current timetable.
Our submissions
- We submitted on the Water Services Entities Amendment Bill in July 2023. This submission is linked below.
- We submitted on the Water Services Economic Efficiency and Consumer Protection Bill and the Water Services Legislation Bill in February 2023. These two submissions can be found linked below.
- We submitted on the WSE Bill in July 2022. At the time, the Bill set out the ownership, governance, accountability arrangements relating to these entities and includes essential provisions for ongoing public ownership and engagement, and safeguards against future privatisation. Our submission is linked below.
This is a big issue for all Councils and one we are taking very seriously to ensure a good outcome for Porirua. It is clear things cannot continue as they are, but the way forward has not been decided yet.
Until changes are completed, we will continue to deliver water services through Wellington Water, the region’s joint Council controlled organisation. Porirua, Wellington, Hutt, Upper Hutt, Greater Wellington and South Wairarapa Councils are all owners in Wellington Water.
Background
Why reform is being considered?
- In 2016, Havelock North's water became contaminated and many people in the township fell ill, with a number of deaths. This sparked the Government to examine the regulatory and delivery environment for "three waters" services (drinking water, wastewater and stormwater).
- The government subsequently established Taumata Arowai, a new water services regulator, to administer and enforce a new drinking water regulatory system. Once Taumata Arowai is fully functional, it will oversee and administer an expanded and strengthened drinking water regulatory system and oversee the environmental performance of wastewater and stormwater networks.
- The Government has also looked at the way water services are delivered across the country (around 85% of the country has drinking water delivered by Councils. The rest are on private supplies).
- Through this process, the Government commissioned a analysis from Water Industry Commission for Scotland (WICS) which estimates New Zealand would need to invest between $120 billion to $185 billion in its three waters infrastructure over the next 30 years to meet drinking water and environmental standards and provide for future population growth.
What’s happened so far?
- In April 2023, Government decided to make changes to the water services reform programme, including increasing the number of services entities from four to 10 and establishing the entities (sequentially from early 2025) by 1 July 2026.
- In April 2022, Government confirmed they will be progressing with water reform and that Councils will maintain ownership of the Water Entities.
- Since the latest round of announcements (in July 2021), the Government gave Councils until the end of September 2021 to analyse the WICS data and information provided by the DIA and consider the implications for the Council, the city and the people who live and work here.
- Porirua City Council (along with every other Council in the country) signed a Memorandum of Understanding (MOU), agreeing to work with the Government on water reform. That didn’t require Porirua city to agree to opt into the reform. In exchange, we received what the Government has called fiscal stimulus money. In our case this was $59m for our region. This money went into our water services (mainly renewals of our pipes).
- In October 2021, the Government proposed Porirua would be part of "Entity C" along with 21 other councils from the top of the South Island, the Wellington region and the east coast of the North Island. The proposal indicated the entities would have an independent board which would deliver the needs of Councils through a governance structure. Councils would hold a financial shareholding interest in those new entities. Councils would own one share per 50,000 residents. The assets (including pipes, pump stations and the wastewater treatment plant) would be transferred to the new entity who would be the new owner of these assets. The costs of water services that are currently paid by everyone in their rates would be removed and billed separately by the water entity - just as you receive a bill for electricity supply. It was intended that the entities have the scale, capacity and capability to improve delivery at an affordable cost. The proposals also mentioned a suite of mechanisms to protect Māori/iwi rights and interests and prevent privatisation, and an economic regulator would have been appointed to protect consumer interests and provide strong incentives for performance.
Updates and reports
