News & Events

Three waters reform

Palmerston North residents can be assured that we will continue to provide some of the country’s best water services while the government considers changes to the management and operation of water nationwide.

Photo shows Palmerston North's water reservoir in the Turitea Valley.

In June 2021, the government announced its proposal for how the three waters will operate moving forward. Three waters is the collective term for the three main types of water infrastructure currently managed by councils: stormwater, drinking water and wastewater.

The government's proposal is proposing four publicly owned water service entities. The entities will own and operate the infrastructure on behalf of councils. It’s proposing independent governance boards, and an economic regulatory régime to protect consumer interest. The government’s proposing the new entities would officially begin on 1 July 2024, with councils responsible for these services until then.

We have very large programmes of work in place for new infrastructure and upgrades to our current water assets, and that will not change as a result of the government’s proposal. This work includes our Nature Calls project, which requires us to lodge new consents for managing our wastewater in the future.

We are proud to deliver some of the best water services in New Zealand and we are committed to looking after our community and its assets until the time that any entity is established.

The government’s 2021 proposal

In 2020 the government announced it was looking at a move away from councils managing and operating the three water services, and having separate entities in charge of delivering this key lifeline.

A large amount of analysis about how things could be improved has been undertaken based on information provided by councils across the country. Modelling suggested that between one and four entities will provide the most efficiencies to deliver three water services. It says the reforms could result in an additional 5,800 to 9,300 jobs and GDP increasing by up to $23 billion dollars.

The reforms provide opportunities for a step change in the way iwi/Māori rights and interests are recognised. These are woven throughout the new system with statutory recognition of the Treaty of Waitangi and Te Mana o te Wai, and creating a mana whenua group in the governance of each entity with equal rights to local government.

The proposed changes are wide-ranging:

  • Establish four, publicly-owned water services entities to provide safe, reliable and efficient three waters services – with protections against future privatisation
  • The entities will own and operate three waters infrastructure on behalf of territorial authorities, including transferring ownership of three waters assets
  • Independent, competency-based boards to govern each entity
  • A suite of mechanisms to protect and promote iwi/Māori rights and interests
  • An economic regulatory regime to protect consumer interests and provide strong incentives for performance
  • Stewardship arrangements for the new system to ensure it adapts to shifts in national objectives and priorities and remains fit for purpose
  • The new entities would officially begin life on 1 July 2024. Local authorities would remain responsible for these services to that point.

These are high-level decisions about the number of entities, the boundaries, their organisation form and their governance. A lot of the more operational aspects are still being worked through and will be resolved as legislation is developed over the next year.

Palmy forms part of proposed ‘Entity C’

The government has agreed to ‘preferred options’ for the boundaries of these four entities. It considered shapes and sizes, sufficient asset and customer base to be financially sustainable, have economically efficient scale, and deliver services at an affordable price to operate effectively in relation to water catchments and achieve environmental outcomes to engage meaningfully with iwi/Māori.

This map shows the preferred entity locations; the areas numbered 1, 2 and 3 are still subject to continuing discussions with local government and iwi/Māori on which entity they should fall in. The monetary value next to each entity is what the household cost would be in 2051 with reforms, or without reforms.

It’s proposed that local authorities will own the entity on behalf of their communities and mana whenua will have a joint oversight role. Legislation will protect against future privatisation. Local authorities and mana whenua will appoint representatives to their Regional Representative Group via a nomination and voting process.

The entities will still be required to consult on strategic direction, investment plans, prices/charges etc.

The next steps

All councils were asked to provide feedback to the government about the proposals by the end of September.

In September 2021, a report was prepared by Council officers about the proposal.

The report can be read here: Agenda of Council - Wednesday, 1 September 2021 (infocouncil.biz)

The minutes of the public meeting on 1 September 2021 can be read here: Minutes of the Council Meeting Public, held via an Audio Visual Meeting on 01 September 2021 (infocouncil.biz)

Before the Council discussion, Local Government New Zealand (LGNZ) President Stuart Crosby and Chief Executive Susan Freeman-Greene spoke to Council about LGNZ’s stance on the reforms.

Bill Bayfield, the Chief Executive of the new water regulator Taumata Arowai also gave an update to Council.

Then Council discussed the report.

This Council meeting occurred virtually because Palmerston North, alongside most of the country, was in Covid-19 Alert Level 3.

We’ll keep you in the loop

There’s been some confusion about whether councils have been asked to opt in or opt out of these reforms. At this stage, the government has not asked councils this question.

Some councils have sought community feedback on the reforms to feed into their advice. LGNZ sought legal advice for all councils on whether to do that, and the advice was that councils do not have enough information at this stage to consult on the implications.

As more information becomes known about the government’s plans we will update this page, and our Facebook page. If the government chooses to complete a public consultation, we will let you know. Alternatively, if we are asked to consult our communities - you can rest assured we will be asking for your feedback.

We know how much you value the clean, safe and reliable services we provide you. You are at the forefront of all these discussions, and we are committed to acting in the best interests of our residents, ratepayers and our city.

The best place to get regular updates on the proposed changes is Three Waters Review - dia.govt.nz.