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Three Waters reform just part of re-shaping service delivery to communities in NZ

Linda O’Reilly, Special Counsel, Tompkins Wake (Auckland)

Regional New Zealand has whipped itself into a frenzy over the Government’s Three Waters reform, but massive changes are afoot that will reshape how nearly every other key service is delivered to New Zealand communities.

As billboards went up across the New Zealand countryside, the Government pushed on with introducing the new Water Services Entity Bill in June. The Bill is the first in a suite of legislation that will enact three waters reform.

It shifts the ownership of 67 council owned and operated water services to four new water service entities – imaginatively named Northern, Western-Central, Eastern-Central, and Southern for now. The 67 councils get a share in ownership of the entity covering their area, which is a body corporate co-owned by shareholders, but by definition, is neither a company nor a council-controlled organisation.  Each council gets one share for every 50,000 people.

Heated debate has ensued about loss of ownership and co-governance in relation to the oversight by regional representative groups, and three Councils have commenced High Court proceedings, arguing that the reforms impinge on their property rights. However, there is a much wider programme of reform quietly making its way from Wellington to a town near you.

There is no denying New Zealanders need safe, reliable drinking water, and wastewater and stormwater services for the health and wellbeing of our communities. According to the Ministry of Health, one in five New Zealanders receives drinking water that does not meet New Zealand standards and sewerage overflows are commonplace. But there is a massive amount of change on the way of which Three Waters is only one part.

Legislation to replace the Resource Management Act 1991 with three new Acts, health reforms, a new national waste strategy, and a complete review of the future for local government are all bubbling away in the background.

The Three Waters programme is itself restructuring of local government by default that will require councils to look at staffing and service delivery structures, and to consider in some cases whether the scale of the entity best meets the needs of its community. But when all these combined legislative changes are implemented, it will completely reshape how services are delivered to New Zealand communities. In the process Three Waters reform will relocate a massive amount of operational and capital funding and expenditure from councils and local entities to the more remote and unelected water services entities.

Here’s a whistle stop of the wider picture. The Resource Management Act (RMA) 1991 is being repealed and three new laws enacted.

The RMA will be replaced with a Natural and Built Environments Act for which an exposure draft is available and supported by a Spatial Planning Act, providing a strategic approach to planning for the use of land and the coastal marine area. The Climate Adaptation Act is the third piece of new legislation designed to support New Zealand’s response to climate change and address the complex legal and technical issues associated with managed retreat in the face of climate change.

Alongside this the Government has established a new national entity, Health New Zealand, for the planning and commissioning of hospital, primary and community health services. The former 20 District Health Boards have been dis-established. A Māori Health Authority will also work alongside Health New Zealand to improve services and achieve equitable health outcomes for Māori, and to directly commission tailored health services for Māori.

A new national waste strategy is also being developed to better regulate how we manage products and materials circulating in our economy. New legislation is also proposed to replace the Waste Minimisation Act and the Litter Act.

Coming in over the top of all this reform is The Future for Local Government Review, established by the Minister of Local Government, to consider how New Zealand’s system of local democracy and governance will need to evolve over the next 30 years in order to improve the wellbeing of New Zealanders, and actively embody the Treaty partnership. In its September 2021 Interim Report, the Review noted that the implementation of the three waters and resource management reforms would impose significant pressures on councils. It also identified five key shifts it believes local government will need to make:

  • Strengthened local democracy
  • Stronger focus on wellbeing
  • Authentic relationship with apu/iwi/Māori
  • Genuine partnership between central government and local government
  • More equitable funding

A report to the Minister of Local Government with draft findings and recommendations from the review is expected by September this year. This will be followed by public consultation on the draft report and recommendations, with the final report being due on 30 April 2023.

The fact is, by then local government and the communities it serves will already be enmeshed in a web of partially implemented reforms.

Linda O'Reilly; Tompkins Wake