Government injects $2.5 billion into water infrastructure overhaul

The Government is pouring $2.5 billion into helping councils with the country's water infrastructure overhaul.

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The $2.5 billion sweetener is being called a bribe by National. Source: 1 NEWS

It has also added "bottom line" provisions to protect against water asset privatisation. 

Local Government Minister Nanaia Mahuta announced the funding today alongside the Prime Minister, saying that "all of our water assets will be retained in local ownership ... we have added a public referendum provision to provide the ultimate protection against privatisation".

"There will be mechanisms to ensure a strong community say in how the assets and services are run and how planning will be managed," Mahuta said today from the Local Government conference in Blenheim. 

Prime Minister Jacinda Ardern said overhauling drinking, waste and stormwater services "will benefit all New Zealand communities, no matter where they are in the country". 

"The support package announced today will ensure that no council is worse off as a result of the reforms," Ardern said.

"Five hundred million is set aside to provide certainty for local authorities that they will be supported through the transition process, and to ensure the financial impacts of reform will be managed."

"The remainder of the package seeks to ensure Councils are better off despite this change to their asset base. To do this we have set aside $2 billion for councils to invest in the future for local government, urban development, and the wellbeing of their communities."

Nanaia Mahuta. Source: 1 NEWS

The Government and Local Government New Zealand signed a commitment to work and engage with councils and stakeholders on the reforms. 

The plan, released two weeks ago, for New Zealand's drinking, waste and storm water would see power over water taken out of the hands of councils and local government and into the hands of four entities, divided geographically.

"Without this change, communities are going to either face very large bills for water services; or infrastructure will continue to degrade with ongoing health and environmental consequences. Both of these outcomes are unacceptable," Mahuta said at the time. 

It instantly saw pushback from councils, including Auckland Mayor Phil Goff questioning the proposed 40 per cent representation from Auckland despite 92 per cent of the assets coming from the city, and Whangārei District Council also signalled it would not take part in the reforms.

National called the plan "unconvincing", today beefing up that criticism, calling the $2.5b injection as a "bribe". 

"This entire sham exudes desperation from a Government which has refused to listen to the feedback coming from councils in favour of pushing their own agenda," National leader Judith Collins said. 

"National has been vocal in proposing central government investment in council infrastructure, however, our approach would be to tie this to requirements for councils to build housing.

Collins labelled it a "slush fund to buy compliance from local governments".

"These reforms are poorly-conceived and will result in low accountability, bloated service entities, more bureaucracy, and messy cross-subsidising between neighbouring regions. The claimed scale benefits and cost-savings remain unconvincing."

Councils could apply for funding from the $2 billion package, comprised of $1 billion from the Crown and $1 billion from the new water services entities.

Mahuta estimated between $120 to $185 billion would be needed for the country's water upgrades in the next 30 years.