The decision by the new Mayor of Auckland, Wayne Brown, to demand that Watercare cease all work on Three Waters puts a major block in the road to the government’s reform programme.
As such, it directly challenges the Prime Minister. The Beehive is highly unlikely to be happy with Brown’s actions.
He is scheduled to meet her on Thursday, and the Watercare decision will top the agenda.
A spokesperson for him said last night he was looking forward to meeting her and working together with her and senior Ministers to “fix Auckland.”
But by threatening to pull Watercare out of Three Waters, Brown is threatening the whole three waters structure for Northland.
It would leave the Far North District Council, the Kaipara District Council, and the Whangarei District Council potentially separated from the next entity (centred on Hamilton) by Auckland City.
That is why his threat is a challenge not just to the prime Minister but, eventually, to the whole Three Waters proposal.
A clue to his reasoning comes in the letter he sent Watercare chair Margaret Devlin.
“In more than 300 campaign events, I detected no support for it at all among Aucklanders,” he wrote.
“I promised in the election campaign to stop it.”
Brown has intervened just three weeks before Parliament’s Finance and Expenditure Committee is due to deliver its report on the Water Services Entities Bill, which creates the new water entities.
At the same time, the High Court is considering its decision in a case brought by Timaru, Waimakariri and Whangarei District Councils are asking the Court for declarations on the rights and interests that property ownership in the Three Waters case entails.
The declarations seek confirmation that local government is an important part of our overall democratic society, that local authorities have orthodox property rights in their assets (but would have none under the restructuring proposals), and that the restructuring would remove the current democratic accountability for the management of Three Waters assets.
Mayor Brown’s move will come at a price for the Auckland Council; it has already incorporated into its 2022/23 Budget $127 million of central government so-called “better off” funding as part of the Three Waters programme.
Notes to the Council’s annual Budget say: “This funding is intended to support a wide range of objectives and local well-being outcomes and can be used to meet either operating or capital expenditure requirements. We will use Better Off funding to help address the cost and revenue pressures for 2022/2023 by using it to fund previously planned operating expenditure projects.”
In other words, the funding will go into the Council’s overall $2.3 billion revenue pot.
But Brown, in his letter to Devlin, cited financial concerns as one of the reasons why he wants the work on Three Waters to stop.
“Auckland households are heading into an economic and fiscal storm over the next 12 months,’ HE WROTE.
“Family budgets will be tighter than ever.
“It is essential Auckland Council and its Council-Controlled Organisations (CCOs) do everything they can to trim costs while maintaining service levels.”
He said it was not in Watercare’s interests “its shareholder or its customers for it to spend any more money on those reforms.”
“As Mayor, I expect that you will not be unnecessarily spending your resources on assisting or preparing for Three Waters reforms that are unlikely to happen,” he wrote.
“That is also true of Auckland Council, to which I have given the same advice.
“Any money that might have been spent on Three Waters can be better spent or be returned to Auckland households in the form of lower water charges.”
There are, however, likely to be questions about whether Brown alone has the power to demand that Watercare stop working on Three Waters.
The Auckland Council legislation says: “An Auckland water organisation must act consistently with the relevant aspects of any other plan (including a local board plan) or strategy of the Council to the extent specified in writing by the governing body of the Council.”
It would seem from the Act that Brown might need the approval of his Council to make the demands he is making.
However, that may not be a problem.
Brown’s predecessor, Phil Goff, and his Council also opposed Three Waters.
They were backed by Aucklanders.
More than 80 per cent of those who submitted to a Council consultation process agreed Auckland Council should have majority control in any new water entity, and more than 75 per cent backed the Council’s view that a new entity should be kept accountable to the public through their elected council representatives.
Mayor Phil Goff, when he appeared before the Finance and Expenditure Committee in August, was clear that Auckland Council did not oppose the reforms overall.
The country cannot continue to have 67 separate water authorities that don’t get the economies of scale or the professional ability to manage water in the way that they need to,” he said.
He wanted Auckland to be carved out and said one size did not fit all, and he quoted from a Cabinet paper supporting his claim.
“ I consider that it will be possible to exclude Watercare from the reforms on the basis that it already has many of the desired features of reforms; now, that was in the Cabinet paper in June last year by Nanaia Mahuta,” he said.
(Mahuta is the Minister in charge of the Three Waters programme.)
Goff said Auckland was already committed to $11 billion of investment in Watercare over the next ten years.
“All of the things that might be the reason why you say the rest of the country needs reform don’t absolutely apply to Auckland at all,” he said.
“They hardly apply to Auckland at all; in fact, we will get very little benefit because we’re already ahead of the game, as Minister Mahuta put it.”
All of that may be true but what will worry Ardern on Thursday is that Auckland is carved out, then the rest of the bricks in the Three Waters wall are likely to topple to the ground.