So our Local Government Minister, Nanaia Mahuta, has managed to get Three Waters legislation (Water Entities Bill) to create four new water entities that would take on the water assets currently owned by councils pushed through the house under urgency using the Labour Government’s majority.

 

All other parties refused to back the Bill.

 

So the Labour government which had an ideological idea and little practical experience with water delivery made the decision to effectively steal these assets from their rightful owners, “The Ratepayers who paid for them”.

 

To enable that theft of assets to happen they needed to set up the management structure first and this is what they were doing with the Water Entities Bill.

 

They are going to take the management of those assets from the councils which have decades of experience, suitably qualified staff and local knowledge & information about running three water operations in their areas and transfer that to the four new water entities.

 

The main changes as a result of this Bill is the creation of four large centralised entities to control the management of the three waters assets & services and the removal of any local representation with total control effectively being granted to Iwi through the 50-50 make-up of the management boards (50% Maori and 50% other races) combined with the requirement for a 75 % majority for decision making.

 

There is also a requirement for the water entities proposed Boards of management to be adequately competent both as a Treaty partner, and with expertise in accessing matauranga Maori, tikanga Maori and Te Ao Maori knowledge to inform the water entities activities

 

We have been told for many months that one of the major advantages for the reform is to allow the water suppliers to borrow up to $180 billion which councils could not do.

 

We have been informed that the reason the water suppliers can borrow up to 8.5 times revenue against the commercial sector’s 1.5 is that the Government – that’s you, the tax payer – will under write their debt.

 

The transfer or confiscation from many councils of up to 30% of their total assets for an 8 cents in the dollar payment is not commercially acceptable and feels reckless.

 

The borrowing of up to $180 billion by the new proposed entities using the assets confiscated from our councils and people and paid for by generations of New Zealanders as security feels reckless.

 

Surely if they are to borrow money to upgrade and expand services they will need to provide a security for that lending and the only assets they will control are the water infrastructure assets which we are told will not be privatised.

 

So if they cannot be used as collateral for any loans (given the risks of foreclosure on default) then what are the water entities going to use to guarantee their borrowing.

 

Are they going to rely on a government guarantee (funded by the taxpayers) and if so why could this facility not have been offered to the existing council owners of the assets therefore negating the need for this whole Three Waters reform proposal?

 

Of Course the greedy rent seekers in charge would not have been given access to the public trough to dip their snouts!!!

 

Minister Mahuta stated that the overhaul of water assets could create between 6000 to 9000 jobs, and boost the economy by $14 billion to $23b.

So although the Minister has said that this reform will not cost the ratepayers and in fact will save them money on the future costs likely if the reform was not done, she has also stated that this reform is going to create 6000 to 9000 jobs and boost the economy by $14 Billion to $23B.

 

All of that cost will be paid by the users of the water, the ratepayers who already own the assets. They will be required to fund the extra jobs and the boost to the economy through their water bills but they will not face any extra increase in costs. “YEAH RIGHT”

 

One example that has been given, based on existing rates demands (from the Westland Council) shows that under the new system of control using the government’s figures, through the Three Waters model that costs for all three waters services will rise by approximately 37%.

 

The Treasury has forecast it will cost $659 million to build and operate a new computer system for the four entities that will manage the country’s drinking and waste water after the Three Waters reforms.

 

It estimated in its half-year economic and fiscal update (Hyefu) on Wednesday that the system would require $75m in capital expenditure and $582m in operational expenditure.

 

It said there was a risk “additional funding may be required” and that the actual split between operating and capital expenditure could also differ from its forecast.

 

But remember the Minister has told us that we will not face any extra increase in costs on our water bills. “YEAH RIGHT”

 

Given the facts as set out above and using the government’s own statements, let’s look at what is going to change as a result of the Three

 

Waters Reform Project.

 

Government statements:

• The ownership will remain with councils.

• Without the reforms we will not have adequate drinking water.

• Councils won’t be able to fund development and upgrades in the future.

• Councils will receive payment for the assets.

• Costs will be lower under the new water entities.

• There will be a large number of jobs created under the reforms (6000 to 9000).

• There will be a huge boost to the economy ($14 billion to $23 billion).

 

True Facts behind those statements:

 

Public ownership will be a “bottom line” for the Government.

 

Fact: If one has no rights in relation to a thing — e.g., no right to use it, to enjoy it, to gain a return from it, to dispose of it, to destroy it, to control it or to control its use — one does not own that thing and this proposal strips local authorities of all the rights of ownership which proves that this claim of ownership is blatantly untrue.

 

Without the reforms we will not have adequate drinking water.

 

Fact: Whether the reforms go ahead in their current proposed format or not, the problems around guarantee of adequate safe drinking water supply do not change. The only difference between the status quo and the reform model is around funding.

 

Councils won’t be able to fund development and upgrades in the future.

 

Fact: As in the answer above the only difference between the status quo and the reform model is around funding. We have been informed that the reason the water suppliers can borrow up to 8.5 times revenue against the commercial sector’s 1.5 is that the Government – that’s you, the tax payer – will under write their debt. This statement just confirms my contention that the only problem is around funding and also shows that the answer is a government guarantee against default. If the government was to give the same guarantee to the councils then the funding issue is no longer an impediment to development or maintenance of the three waters assets and there is no absolute need to use the proposed model for management of the assets.

 

Councils will receive payment for the assets.

 

Fact: The Reform model gives a return to the councils of approximately 8 cents in the dollar on the current valuation of what will amount to up to 30% of their total assets. A totally unacceptable reality for any council, and their ratepayers, as a return on their investment in the assets over many generations.

 

Costs will be lower under the new water entities; there will be a large number of jobs created under the reforms (6000 to 9000); there will be a huge boost to the economy ($14 billion to $23 billion).

 

Fact: The three statements above are all interlinked and need to be addressed as one. If the reform model is to be implemented then the water entities so created will be required to at the least be self-funding and therefore will need to make a profit on their basic operations.

 

If the large increase in jobs that the government is predicting and the huge boost to the economy are both going to be over and above the current council model then there will be huge extra costs involved and the only place that the new water entities can get the money to pay these costs will be to raise the charges being levied on the ratepayers for the three waters services.

 

If they are to be part of a similar model to the current council structure then they are just obfuscation/PR spin on a grand scale and need to be ignored.

 

The only figures that have been published to date to show an example of what the result of the proposed funding scales will be are those published by the Westland Council Mayor. When the proposed scale of charges under the Three Waters Reform model were compared to the current charges paid by Westland ratepayers they showed that there would be a 37% rise in direct costs to the ratepayers of Westland.

 

So what will actually change?

 

Analysis of this proposal and of the government statements put out in support of this reform show that the main changes as a result of this proposal will be the creation of four large centralised entities to control the management of the three waters assets and services; the removal of any local representation with total control effectively being granted to Iwi through the 50-50 make-up of the management boards (50% Maori and 50% other races) combined with the requirement for a 75 % majority for decision making.

 

There is also a requirement for the water entities proposed Boards of management to be adequately competent both as a Treaty partner, and with expertise in accessing matauranga Maori, tikanga Maori and Te Ao Maori knowledge to inform the water entities activities

Given all of the above there can be no compelling reason for the indecent haste with which this proposal has been pushed through the house by the Labour government.

 

None of the above takes into account the possibility that there will be royalties charged for water use, by the water entities which would significantly increase the water costs to the taxpayers and have a major impact on the cost of living figures.