Headline: Three Waters repeal forces councils to hike rates by a third

Authored by: Jonathan Milne

Published on: 21 December 2023

Published by: Newsroom

Link:

https://newsroom.co.nz/2023/12/21/three-waters-repeal-forces-councils-to-hike-rates-by-a-third/

Archived Link:

https://web.archive.org/web/20231222021122/https://newsroom.co.nz/2023/12/21/three-waters-repeal-forces-councils-to-hike-rates-by-a-third/

Summary of key information in the article:

  • The Far North District Council has a proposed rates increase of 33% in 2024.
  • Hamilton has a proposed rate increase of 25.5% in 2024.
  • The mayor of Buller District Council has proposed a rates increase of 31.8%.
  • Newsroom claims to have a letter from Simeon Brown, the Local Government Minister “telling mayors he’ll relax consultation and audit requirements so they can lock in their long-term rates and spending plans”.
  • Central Government is reported to be proposing “a new class of financially separate council-owned organisation” to replace the previous Labour Government’s Three Waters reforms.
  • Councils had been drafting long-term plans and budgets that did not include the three waters (drinking, waste, and storm waters), due to Labour’s Three Waters legislation scheduling the removal of those assets from councils.
  • Water quality standards imposed by the new water regulator (Taumata Arowai) and the World Health Organisation, are mentioned as a cause of smaller councils needing to spend many millions of dollars on water supply upgrades.
  • Transferring a council’s water assets, plus associated revenue and debt, to new water entities (“financially separate council-owned organisation”) could have credit rating impacts.
  • Separate billing and higher changes for water services from these new entities can be expected.

“Subjecting water infrastructure to economic regulation might ensure that higher water tariffs can be charged, Foo adds. “This could be challenging given the political focus on cost of living. Prime Minister Luxon has previously commented that while he doesn’t want council rates to go up, he seems open to the possibility of higher water charges.”

Jonathan Milne of Newsroom reporting on comments from Martin Foo of S&P Global Ratings