The Government’s Working Group review of Three Waters has reported and has backed the Maori-Council co-governance model and decided not to increase the number of water entities.
In other words, it has pretty much backed the status quo.
And in doing that, it has provoked a dissenting Minority Report from Auckland’s Mayor, Phil Goff.
But it has proposed that Councils now be allocated shares in the water entities — called Water Services Entities — however, the shares will have little practical value beyond giving the Councils, and only the Councils, the power to privatise an entity if they want.
The shares will be allocated on the basis of population, and Group chair, Doug Martin, said they had looked at allocating them on the basis of Councils’ existing investment in three waters infrastructure but decided against that because it was too complex.
However, in what appears to be a concession to the widespread claims that the Three Waters’ proposals would lead to a loss of local control, the Review is proposing some minor changes to the original structures that were proposed.
The key political body will continue to be the so-called Regional Representative Groups made up of 50 per cent local Council representatives and 50% local iwi.
The Review is proposing their powers be strengthened by having them prepare an annual SOE-style Statement of Corporate Intent and a Statement of Strategic and Performance Expectations. Both documents will form the basis of their monitoring of the performance of the four Water Service Entities, which will actually run the freshwater, stormwater and wastewater in each region.
Western Bay of Plenty District Council Mayor Garry Webber was part of the Review.
He has clashed with three waters critics in his district.
In comments which typified much of the opposition to Three Waters, Katikati Kiwifruit grower Ted Meade told Webber at a meeting last August that he was “eating out of the hand of the red Government”.
“People are very, very important,” said Meade.
“Ratepayers are the ones to keep everything afloat – not the Government or Māori.
“By the way, very few Māori are ratepayers.”
Webber said at a briefing yesterday that the most significant concern was about the ownership of assets.
He, therefore, hoped the Government would adopt the Review’s proposal of shares being vested in the Councils in each entity’s region.
Shares would not be allocated to iwi.
But Webber had to admit that the shares brought very limited rights.
“The shares are really a tangible expression of the ownership of the assets by the councils of local communities,” he said.
“But the rights attached to those shares are very limited, and they don’t extend to the ordinary issues of governance.”
Answering further questions, he said that essentially the rights attached to the shares would apply only to divestment and sale.
Webber said ownership of water infrastructure assets was not an issue for iwi.
“Iwi Maori never sought ownership of the water service assets, and that is why iwi Maori wholeheartedly are endorsing this recommendation of councils owning the shares on behalf of their communities in the entities,” he said.
“One of the other things we’ve recommended on the back of that is that for a council to sell its shares it will need a 100 per cent resolution from either its Council or it may wish to go out to its full public for a poll.
“So that really entrenches these assets as private, enduring assets for the communities going forward.”
Maori concern about ownership rights relates not to infrastructure but to the water itself.
Tukuroirangi Morgan, a member of Martin’s review group, said that water rights were not an issue for the Three Waters debate.
“The issue of proprietary rights over water is an issue to be set aside and dealt with by iwi and the Crown under the auspices and the Korowai of the treaty settlement regime,” he said.
But Morgan was an enthusiastic advocate of the co-governance model, citing his own experience as co-chair with the late John Luxton of the Waikato River Authority.
“I’m an absolute fan of co-governance,” he said.
“It works. We had no problems at all.
“All of our decisions were never subject to a vote.
“Where we had to engage in long discussions, we did.
“But in the end, we got to where we needed to get to, which was a consensus decision.”
Though there was much emphasis at yesterday’s briefing put on water quality, Te Mana O Te Wai, ultimately the big justification for Three Waters is that it is estimated upgrading water systems in New Zealand to reach acceptable quality standards will cost $150 billion to be spent over 20 years.
“It’s going to take the collective borrowing power of New Zealand to bring New Zealand, whether that’s a big council or a little council, up to compliance,” said Webber.
“We’ve all signed off on these standards.”
Webber said that clean water was fundamental to the image of the country as “clean and green.”
But he conceded that some Councils had invested and maintained standards while others had not.
“There will be some equalisation across, sadly, those councils that have done really well up till now and are compliant,” he said.
“They may not get quite the benefit that some of those who are underinvested.
“But as everybody agrees, the status quo is not an option.
“So, so it’s really the collective strength that’s going to enable us to borrow that hundred and fifty billion dollars over, I think, 20 to 30 years.”
This is why the Government favours large entities so that they are large enough to undertake big borrowing.
The Government cannot undertake the borrowing itself because that would mean it would end up owning the water assets – which it does not want to do.
However, the question of whether the entities’ borrowing will be part of core Crown debt appears to be unresolved.
There were two issues left unresolved by the Review Committee. Both revolved around the size and dominance of Auckland.
The Kaipara District Council pointed out that because of the number of votes the Auckland Council would get on the RRG (four) along with seven Iwi votes, and each decision requiring 75 per cent support, Auckland Council could never be outvoted whereas the three Northland Councils could always be outvoted.
Instead, he proposed that all decisions should require 90 per cent support. Northland is to be joined with Auckland in Entity A. Auckland’s water services are supplied by a Council Controlled Organisation, Watercare, which was established under the Super City legislation in 2010.
In a dissenting view contained within the report, Auckland Mayor Phil Goff said Auckland was still left as a minority voice on governing and holding accountable those who delivered water services despite Auckland Council providing 93 per cent of the new Water Services Entity’s assets.
“Given the unique nature of Watercare, which serves over a million and a half customers and already has economies of scale and operates effectively, a one size fits all approach does not meet our needs,” he said.
“In fact, Auckland has already achieved most of the size, scale, and efficiency benefits the reforms are seeking to achieve for New Zealand.
“This leads to the question, what is the problem the Government is trying to solve in Auckland?”
Goff said that though Auckland was providing 93 per cent of the assets to Entity A, it would have only a minority voice on its RRG.
He said the Council was also opposed to co-governance.
“Democratic accountability, through elected representatives, to people who funded the water infrastructure in Auckland valued at many billions of dollars and who continue to pay for its operation is critical,” he said.
“It is not appropriate to cede control over this infrastructure to other councils and mana whenua and to remove existing accountability to Aucklanders through elected representatives.”
The Government must now consider the Review’s recommendations, but given the Auckland dissent, the politics are far from being taken out of Three Waters.