Major shakeup will see affordable water reforms led and delivered regionally

Local Government
  • 10 new regionally owned and led public water entities to be established
  • New approach avoids a rates blow out and delivers savings to households between $2,770-$5,400 per year by 2054
  • Entities will be owned by local councils on behalf of the public, and entity borders to be based on existing regional areas
  • Each entity to be run by a professional board, with members appointed on competency and skill
  • Strategic oversight and direction to be provided by local representative groups with every local council in the country, as well as mana whenua, getting a seat at the table

The Government has listened to feedback from local government and is announcing major changes to New Zealand’s affordable water reforms by agreeing to establish 10 new regionally led entities, which will still deliver big cost savings to New Zealand households says Local Government Minister Kieran McAnulty.

“These reforms are absolutely essential. Leaving things as they are will mean unaffordable rate bills,” Kieran McAnulty said. 

“Over the last few months I’ve been working closely with Local Government leaders and relevant stakeholders on how to progress New Zealand’s long overdue water infrastructure reforms.

“The feedback has been overwhelmingly clear that our water infrastructure deficit needs to be addressed now if we’re to save households from ballooning bills that will make water unaffordable. But also that the reform programme must be led at a regional level - we have listened closely and absolutely agree.

“The cost of meeting the upgrades needed for our water systems is projected to be up to $185 billion over the next 30 years. Local councils cannot afford this on their own, and households in some areas could see rates rise up to $9,730 per year by 2054 if we do nothing.

“The projected costs have been peer reviewed by both Farrierswier Consulting (an expert Australian regulatory economic specialists) and Beca (a leading international engineering firm) and make for pretty grim reading. Leaving councils to deal with this themselves will lead to unaffordable rate rises. It would be setting councils up to fail and I can’t in good conscience do that.

“Under our proposal to establish 10 entities New Zealand households will still make big savings, projected at $2,770 - $5,400 a year by 2054 on average within each region. 

“By extending the number of publicly owned water entities to 10, every district council in the country will have a say and representation over their local water services entities through regional representative groups, forming a partnership between council representatives and iwi/Māori that will provide strategic oversight and direction to the entities.

“These groups will continue to sit below the governance board, in which each member will be appointed on merit and qualification, but by increasing the number of entities we will be able to ensure the needs of every community, especially small rural towns, are heard and met.

“Our reform proposals will respond to long-running problems that have resulted in rapidly rising rates, poor health and environmental outcomes for many communities, deteriorating infrastructure due to sustained underinvestment, and wide variation in service quality.

“The need for investment is only getting greater. The recent flooding and cyclone is a taste of the extreme weather events to come, and our water infrastructure needs to be ready.

“I have seen first-hand the impact of the devastating floods and extreme weather events. These events have highlighted the criticality of waters services, especially stormwater, for community adaptation and resilience. They have also shown the fragility of critical water infrastructure in some areas,” Kieran McAnulty said. 

The water services entities will start delivering water services from 1 July 2026 at the latest. Entities are able to proceed before this if ready. 

“These are once in a generation reforms, and it’s important that we get it right, we landed on this by working with councils and will continue to do so to ensure a smooth transition,” Kieran McAnulty said.