Hon Simeon Brown
Minister of Local Government
Hon Andrew Bayly
Minister of Commerce and Consumer Affairs

17 December 2024

Legislation to enable new water service delivery models that will drive critical investment in infrastructure has passed its first reading in Parliament, marking a significant step towards the delivery of Local Water Done Well, Local Government Minister Simeon Brown and Commerce and Consumer Affairs Minister Andrew Bayly say.

“Councils and voters resoundingly rejected Labour’s expensive and bureaucratic Three Waters, which wasted $1.2 billion on stripping local communities of control over water assets, while failing to address New Zealand’s water infrastructure deficit,” Mr Brown says.

“Earlier this year, our Government repealed their divisive policies and passed legislation to enable timely establishment of new water services council-controlled organisations (CCOs) to deliver the safe and reliable water infrastructure that Kiwis expect.

“Our Government is now delivering the enduring components for water services through our Local Water Done Well plan, giving local government the clarity it needs to invest in infrastructure while delivering economic regulation to minimise costs for ratepayers.”

“The Local Government Water Services Bill will implement economic regulation of water services and comes alongside councils being able to increase borrowing capacity though Local Water Done Well,” Mr Bayly says.

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“This Bill will implement a new economic regulation regime which will be overseen by the Commerce Commission to ensure water revenue is ring-fenced for investment in water infrastructure and not diverted to other council pet projects. This will provide ratepayers with peace of mind that their water rates will be spent on water infrastructure.”

“In addition to the reforms, the immediate access to improved finance for water CCOs confirmed earlier this year by the Local Government Funding Agency (LGFA) enables councils to better manage debt and make essential infrastructure investments without drastic rate hikes,” Mr Brown says.

“The LGFA is the lowest cost provider of financing available to councils, and this arrangement means that water organisations can borrow up to a level equivalent to 500 per cent of operating revenues – around twice that of existing councils – subject to water CCOs meeting prudent credit criteria.

“The LGFA’s expanded lending capacity is a game-changer for local councils. It allows councils to manage debt responsibly and invest in the infrastructure their communities need, without the need for steep rate increases.

“It is encouraging to see councils developing water service plans, and working collaboratively across council lines to deliver for their communities.

“The Government has already approved the Watercare Charter to keep Auckland’s water services affordable, saving households about $899 million over four years while ensuring improved service quality and record infrastructure investment.”

The Local Government Water Services Bill to fully implement the Government’s Local Water Done Well plan has been referred to the Finance and Expenditure Committee and is expected to be enacted by mid-2025.

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