Parliament’s passing of legislation setting out the Government’s Local Water Done Well preliminary arrangements for new water services is being welcomed by Local Government Minister Simeon Brown.  

“Councils and voters resoundingly rejected Labour’s expensive and bureaucratic Three Waters, which wasted $1.2 billion on stripping local communities’ control of water assets, while failing to deliver. Earlier this year, our Government repealed their divisive policies," says Brown.

“Enactment of the Local Government (Water Services Preliminary Arrangements) Bill in coming days will mark the beginning of the 12-month period councils have to develop Water Services Delivery Plans for their communities, which are the foundation for Local Water Done Well. 

“The legislation passed today [Tuesday] means councils can act sooner, with streamlined consultation and decision-making requirements to enable timely establishment of new water services council-controlled organisations (CCOs) to deliver the safe and reliable water infrastructure that Kiwis expect.

“It also includes the necessary provisions to finalise our Local Water Done Well deal for Watercare, which has already prevented a significant 25.8 per cent water rate hike for Aucklanders this year.”

The immediate access to improved finance for water CCOs confirmed recently by the Local Government Funding Agency (LGFA) enables councils to better manage debt and make essential infrastructure investments without drastic rate hikes.

“The LGFA is the lowest cost provider of financing available to councils, and this arrangement means that water organisations can borrow up to a level equivalent to 500 per cent of operating revenues – around twice that of existing councils – subject to water CCOs meeting prudent credit criteria.

“Given the scale and urgency of challenges facing water services for communities across the country, I expect councils to develop and implement plans for financially sustainable water services as soon as possible," says Brown.

“My clear expectation is that councils will work together on joint arrangements where that makes sense to support financially sustainability, ease upward pressure on rates and provide for new infrastructure to support housing growth.”

Economic regulation of water services, along with other recently announced enduring settings for New Zealand’s water services system will be implemented through the Local Government Water Services Bill, which will be introduced in December this year and passed by mid-2025.

Following enactment of the Local Government (Water Services Preliminary Arrangements) Bill in coming days, the Department of Internal Affairs will provide detailed guidance, information and technical support to councils to assist in the development of their Water Services Delivery Plans.

The Bill provides for a Crown monitor to be appointed to Watercare to provide interim oversight until full economic regulation of water services is established. The Minister of Local Government will be appointing the Commerce Commission to serve as Watercare’s Crown monitor.