A major Government-led reform of New Zealand's drinking water, wastewater and stormwater services (the 'three waters') is under way. We're working through understanding what it could mean for our community.

Latest updates

  • The Government has announced it will introduce legislation to move ahead with setting up four independent entities to control drinking water, wastewater and stormwater services in New Zealand, as outlined in its proposal earlier this year.
  • The decision means councils and communities will no longer have a choice about whether to be a part of the new entities; it will be mandated by the Government.
  • Read Mayor Lianne Dalziel's response: Government's three waters decision 'extremely disappointing'.(external link)
  • The Government has since announced the establishment of a working group made up of local government and iwi representatives to recommend strengthened governance and accountability arrangements for the four water entities. Mayor Dalziel has been appointed to the working group.

Challenges for councils

At the moment, New Zealand's drinking water, wastewater and stormwater (the 'three waters') services are mostly provided by 67 local councils, including ours.

However, councils around the country are facing a number of challenges, including:

  • large debt and affordability issues
  • meeting safety standards and environmental expectations
  • building resilience to natural hazards and climate change into their three waters networks
  • supporting the growth of their communities.

The Water Industry Commission for Scotland estimates that $120 to $185 billion needs to be invested in New Zealand's water services over the next 30 years, while the combined forecast spend in councils’ latest long-term budgets is about $81 billion.

There are also increasing concerns about the quality of New Zealand's drinking water and the safety of the infrastructure that delivers it.

Taumata Arowai

The Government's inquiry into the 2016 drinking-water contamination outbreak in Havelock North, and the following Three Waters Review, has led to the introduction of a new national regulator for water services called Taumata Arowai.

Taumata Arowai has responsibility for overseeing and enforcing new drinking-water regulations and providing oversight of the environmental impacts of wastewater and stormwater.

The Taumata Arowai – Water Services Regulator Act, passed in July 2020, established Taumata Arowai as a Crown entity. 

In November 2021, Taumata Arowai assumed its role and powers as the new independent water services regulator for New Zealand under the new Water Services Act 2021, replacing the previous responsibilities of the Ministry of Health.

Water Services Act

The Water Services Act 2021 was passed into law in September 2021.

The Act contains all of the details of the new drinking-water regulations, the requirements for the protection of freshwater supplies, and Taumata Arowai’s wastewater and stormwater functions.

Water services entities

The Government intends to establish four publicly owned water services entities across New Zealand.

Christchurch is included in the South Island entity ('Entity D') that comprises the Ngāi Tahu takiwā, the tribal boundary that covers most of the South Island.

This entity will provide drinking water, wastewater and stormwater services to a total population of 864,350 people.

The proposed structure will see the 21 councils in most of the South Island represented by six elected members and six iwi representatives in a Regional Representative Group.

The Regional Representative Group will appoint an independent selection panel, who in turn would appoint the water entity’s board members.

The board members will independently govern the entity.

Councils will be the 'owners' of the entities, on behalf of their communities, in a ‘no shareholding’ ownership model, with no financial recognition of ownership.

Read the Government's Frequently Asked Questions about the entities(external link).

Support package

On 15 July 2021, the Government announced that a total of $2.5 billion would be split between the councils that continue with the Three Waters Reform Programme.

The Crown would contribute $1 billion of this, and the new water entities $1.5 billion.

Christchurch would get $122.4 million, and this money could go towards projects that meet specific criteria related to improving resilience to climate change, housing development, and community wellbeing.

Some of this $122.4 million would be made available from 1 July 2022, with the majority available from 1 July 2024, when the new water services entities are expected to be set up.

Additionally, Christchurch would also get a share of $50 million to be split between Auckland and Wellington too.

This $50 million is aimed at addressing the financial impact on councils as a result of the reform programme and the transfer of three waters assets, liabilities and revenues to the new entities. The exact amount Christchurch would get is yet to be determined.

Read the Government's Frequently Asked Questions about the support package.(external link)

The Government's main objective of the Three Waters Reform Programme is to provide a more efficient and consistent way of delivering three waters services across the country.

It is believed that by councils and communities joining together to provide these services at a larger scale, greater efficiencies and capabilities can be achieved.

Other specific objectives of the Three Waters Reform Programme can be summarised as follows:

Safe and reliable drinking water

For all New Zealanders and visitors. In 2016, thousands of people were infected in Havelock North by drinking water from contaminated bores. Four people died and others were left permanently disabled.

Affordable water services in the future

In some parts of the country, it is becoming increasingly unaffordable for councils, especially smaller councils with fewer ratepayers, to provide safe and reliable three waters services.

Climate change readiness

Increasing flooding events and sea-level rise will put pressure on three waters infrastructure and services. The Government is concerned about the ability of councils to meet this challenge without reform.

Same level of service for everyone

With 67 councils providing three waters services across the country, some communities receive a different level of service to others. The reform aims to provide a more consistent level of service for New Zealanders.

Proper investment in infrastructure

Through stage one of the reform process, the Government concluded there is ongoing underinvestment in three waters infrastructure in parts of the country. There may be large costs over the next 30 years as infrastructure is brought up to standard. These costs may be too much for some councils to carry alone.

All water services meeting new requirements

With a new national water regulator, Taumata Arowai, and a new economic regulator being set up, the Government is concerned councils may not be able to meet future requirements without reform.

Memorandum of understanding

In July 2020, the Government announced a financial package to maintain and improve three waters infrastructure and to support a three-stage programme of reform.

Like many councils in New Zealand, we signed a memorandum of understanding (MoU) with the Government to receive the financial package(external link) and to explore possible new ways of delivering our three waters services in the future. The MoU did not commit us to change the way we delivered our water services.

To date, we have received the first half of the financial package (about $20 million) and the remainder will be paid to us as progress payments. All of the three waters projects we planned to fund are underway around the city, and competitive pricing on some large water-mains projects means we even have spare funding to commit to additional projects.

Request for information

In January 2021, we responded to a national Request for Information from the Government. This allowed councils across the country to provide detailed information about their three waters networks to inform the Government's analysis and reform proposal.

Joint Three Waters Steering Committee

We have also been part of the Joint Three Waters Steering Committee, with representatives from central and local governments overseeing and providing input into the design of the reform proposal.

The Steering Committee is made up of elected members and chief executives from local government, along with members of Local Government NZ (LGNZ), Taituarā (Local Government Professionals Aotearoa), and central government officials from the Department of Internal Affairs, the Ministry of Business, Innovation and Employment, and the Treasury.

Working group

In November 2021, Local Government Minister Nanaia Mahuta announced the establishment of a working group made up of local government and iwi representatives to recommend strengthened governance and accountability arrangements for the Three Waters Reform Programme. Christchurch Mayor Lianne Dalziel was appointed to the working group.

The group will report back in March 2022, to ensure there is time for its advice and recommendations to inform the final design of the entities.

As part of the eight-week engagement period between the Government and councils during August and September 2021, we provided detailed feedback on the Three Waters Reform Programme.

Read our full feedback response. [PDF, 1.5 MB]

In our feedback to the Government, we said:

  • The Government had presented a strong case for increased investment in the delivery of drinking water and wastewater services (two waters) across New Zealand.
  • There had been little visibility of, and no ability to provide feed back on, the short-list options to achieve such a change; the Government had only moved forward with its preferred option.
  • We believed there were alternative options that should be given the same level of consideration and an opportunity provided for local authorities to evaluate these alongside the Government’s preferred entities approach.
  • We recommended a pause and a reset in the Three Waters Reform Programme, in order to properly explore other options to achieve the Government's objectives.

New legislation

On 27 September 2021, the Government announced it would introduce legislation to set up the four independent entities to control drinking water, wastewater and stormwater.

Working groups

On 10 November 2021, the Government announced the establishment of a working group made up of local government and iwi representatives to recommend strengthened governance and accountability arrangements for the four water entities. Christchurch Mayor Lianne Dalziel has been appointed to the working group.

The Government is also planning to set up two more working groups: one to focus on the interface between the reform and the resource management system, and another to focus on transitioning rural community water supplies.

 

Timeline of reform

2016

Campylobacter outbreak in Havelock North. Thousands of people were infected by drinking water from contaminated bores. Four people died and others were left permanently disabled.

2017

Government inquiry into the Havelock North drinking-water contamination.

2017–19

Government's Three Waters Review.

Dec 2019 – Mar 2021

Taumata Arowai set up as a Crown Entity, to regulate drinking water from late 2021.

May 2020

Three Waters Steering Committee set up to oversee the Three Waters Reform Programme.

July 2020

Water Services Bill introduced, containing details of a new regulatory system.

July 2020

Government financial package announced to improve water services delivery and to explore water reform in partnership with councils as part of a memorandum of understanding (MoU).

Aug 2020

Christchurch City Council signs the MoU with the Government to receive the financial package and to explore water reform options.

Apr – Jun 2021

Government to make more detailed decisions about the Three Waters Reform proposal.

Jun – Jul 2021

Government-led nationwide education campaign to help New Zealanders understand the Three Waters Reform Programme.

Aug – Sep 2021

Eight-week engagement period with the Government, to better understand the implications of reform for councils and communities.

Sep 2021

The Water Services Bill is passed into law, becoming the Water Services Act 2021. The Act contains all of the details of the new drinking-water regulations, the requirements for the protection of freshwater supplies, and Taumata Arowai’s wastewater and stormwater functions.

Oct 2021

The Government announced it will introduce legislation to move ahead with setting up four independent entities to control drinking water, wastewater and stormwater services in New Zealand, as outlined in its proposal earlier in the year.

The decision means councils and communities will no longer have a choice about whether to be a part of the new entities; it will be mandated by the Government.

Nov 2021

Taumata Arowai takes over from the Ministry of Health as New Zealand's drinking-water regulator.

2022

Preparation for forming the new water services entities.

2024

New entities expected to start providing water services.