By John McDonald (CityWatch NZ Editor and 2024 Hamilton East Ward By-election Candidate)
The vast majority of a city’s people will want drinkable water delivered to their homes and have sewage reliably taken away for treatment. Most people also value not having their homes and businesses flooded during heavy rains.
Functional water infrastructure is a unifying interest for most people in an urban area and a common good provided by their council. Most people agree these are essential services for an urban area and are willing to pay for them.
Water services tend to be over 30% of a council’s business in financial terms. For example, “water management” is the first and largest item that Hamilton City Council claims that it is collecting rates revenue for. If water services are removed from council and transferred to another entity with separate billing, then the council is going to be left collecting rates and spending a large portion of that revenue on cultural activities.
In a multicultural society, everyone (or even the majority) is not going to share the same culture. Cultural spending is likely to be more controversial as it will likely benefit one cultural group and not be valued as much by other cultural groups in society.
When they stop including water services on a rates assessment, a city council risks becoming a coalition of cultural clubs with a threat-based fundraising approach. It is particularly divisive in a multicultural society to be forcing people to pay for cultural activities for which they have no interest.
I think people have been tolerant of their council’s cultural spending while it was only a minor fraction of council spending that was down-the-list behind the major spending on water and transport infrastructure. However, many councils have been spending larger amounts on sports venues, convention centres, theatres, and other cultural facilities in recent decades. There is also the trend towards councils providing less of their core services using in-house capabilities.
If more councils are encouraged to outsource their water services to new corporate entities with separate billing, then expect councils to become more divisive institutions. Expect more ratepayers to question why they are paying to fund things they do not use.
It would more appropriate for various voluntary associations, charities, and commercial enterprises to provide and maintain frivolous things such as venues for comedians who are on for-profit international tours.
Councils around Wellington have outsourced many water services to Wellington Water as a Council Control Organisation (CCO), and that has been an ongoing series of disasters. Wellington City Council now exists as a mixture of ‘cautionary tale and running joke’. Auckland Council has put much of its core services into entities such as Watercare and Auckland Transport (AT). Auckland Mayor Wayne Brown is now trying to “take back control of council organisations” such as the Auckland Transport CCO.
“The layers of bureaucracy and management within AT are totally impenetrable to elected politicians. We ask for information and don’t get it. We tell AT through the letter of expectations what they should do, and they often don’t do it. They have made some progress on a few things, but there is no sense of urgency.”
Auckland Mayor Wayne Brown as quoted by The New Zealand Herald in Council to ‘take back control’ of Auckland Transport’s policy functions, NewsTalk ZB, 3 December 2024
As many councils rush to transfer their water services to new CCO entities, they need to ask themselves two important questions:
- What will councils become once they are no longer providing major core services?
- Will people keep paying council rates when essential services are on another bill?
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Further reading on this issue:
Newsroom article: Three Waters repeal forces councils to hike rates by a third
