Speech to Building Nations 2050 conference

Local Government

Tēnā koutou, tēnā koutou katoa.

Good morning and thank you, Jack, for the introduction.

I’d like to take a moment to acknowledge Infrastructure New Zealand Chair, Margaret Devlin and all the sponsors and organisers of this event for bringing us together in ‘Building Nations 2050’.

I would also like to express my appreciation for the support we have and continue to receive from Infrastructure New Zealand, as we work towards bettering our future systems across the country.

We all acknowledge that the step change required, needs a real leadership shift in how we consider the future of water services and funding its infrastructure sustainably.

There is a lot work underway to reach the goals we want to see reflected in the Aotearoa of our future moving towards 2050.

We are transforming the way our waters services are currently managed and delivered into a system which our future communities can be proud of.

In 2050, we want to see a system which works to benefit all New Zealanders through delivering for the communities they serve and belong to, and leveraging new technologies while also building awareness around the role every New Zealander has in the water system and value of this precious taonga – our wai.

Through providing New Zealanders with resilient infrastructure, we will effectively invest in communities and their long-term wellbeing.

Addressing the planning for and funding of infrastructure, ensures communities have the facilities that are both safe and resilient, therefore allowing them to thrive and prosper.

We’ll deliver healthy and safe water to all households through a uniquely New Zealand approach through building on a world class water system guided by the principles of Te Mana o te Wai and upholding the Treaty of Waitangi.

This transformation is already underway with the Water Services Entities Bill continuing to progress through the House.

The Finance and Expenditure Committee reported back to Cabinet on the Bill earlier this month and the second reading of the Bill occurred last week.

More than 80,000 New Zealanders engaged with the Select Committee to have their say on the Bill.

As a result of this feedback, the Select Committee has recommended over more than 130 amendments.

The changes ensure that the new water entities are more accountable to communities and help keep a lid on rising rates.

At a time when the cost of living challenges confronting households are real, these reforms help lessen the burden of vital water infrastructure investment on ratepayers.

We all agree we need to fix water networks and keep costs down.

We also want safe drinking water and better environmental outcomes.

Once passed, this Bill will shift water services from 67 councils to four new water service entities owned by each region’s councils on behalf of their local communities.

This reform is complex and it’s unsurprising that it has generated significant debate, both in the local government sector and in the community.

Despite this, we are committed to act and fix the problem. We will not kick the can down the road.

We will soon introduce further legislation which will set out functions and powers of the entities, provide the means to transfer assets and liabilities from local authorities to the entities, and ensure their effective integration into planning systems including resource management.

My goal is for this legislation to reflect international best practice, yet also reflect the unique requirements of Aotearoa New Zealand’s local environment.

This is why it is crucial to continue to refine aspects of the proposed new system as well as mechanisms for the transition through continued partnership with the local government sector and industry.

With the introduction of further legislation, will also come opportunity for public submissions via the select committee process.

Although this process has now closed for the first piece of legislation, there will be the opportunity to participate in this way with the upcoming legislation and I strongly encourage you to continue to engage in this way.

Alongside progressing the legislative framework, we are also working hard to lay the groundwork for a seamless transition on 1 July 2024 and a long-term transformation to see us into the future.

The chief executives of the new entities are expected to be appointed before the end of the year. They will provide stability and certainty through the transition process as well as ensuring continued momentum as we work towards day 1 of the new system.

They will sit within the Department of Internal Affairs National Transition Unit until the new entities are established.

With the establishment of the new entities comes additional capacity and capability, which will allow them to build and sustain a highly skilled and adaptable water workforce whose ability to innovate and collaborate will drive positive outcomes throughout New Zealand.

This will also mean new development opportunities for the people who deliver our water services now, and attract new people into the sector.

The retention and development of the workforce is crucial if we are to realise the benefits of reform.

The pathway for water industry professionals to develop their careers should run in step with successful reform.

We’re taking a comprehensive and systematic approach to staffing the new entities and grasping the opportunity to move the existing workforce up the skills and capability curve.

To achieve this we are looking to the wider water sector and industries within it, which many of you this room represent, to work with us to realise the full potential of these plans.

By doing so, we want to create an enviable industry for the workforce to thrive, advance, and take pride in.

The opportunities presented by reform extend well beyond the water services delivery sector. Projections indicate that the proposed new service delivery system has the potential to create a further 9,000 jobs across the wider economy, boosting our economic output by between $14 billion and $23 billion over the next 30 years.

Localism and local knowledge will be a key part of procurement consideration that the National Transition Unit (NTU) will consider as it supports the creation of procurement strategies for the water services entities.

They expect there to be a mix of local, entity wide and national level procurement across the new water service delivery model.

The NTU is also currently partnering with Councils and Iwi to develop ‘Entity Initial Asset Management Plans’ which will set out the capital and operating work programme for 10 years.

The Entity Initial Asset management plans will be approved by the Entity Boards by mid-2023. These plans will ensure that the existing Three Waters infrastructure investment pipeline continues and the transition from Councils to the Water Service entities does not interrupt the supply chain.

Our system of local governance needs to evolve to meet the challenges facing our communities; such as

  • the climate crisis,
  • changing demands for infrastructure,
  • persistent funding pressures,
  • strengthening our democratic institution,
  • evolving our Treaty partnerships;
  • and helping the sector’s ability to adapt to all the changes required to meet these challenges.

An independent review into the Future for Local Government was established in 2021.

The Review Panel were set an ambitious, but critical task: to reimagine the roles and functions of local government, to design a sustainable system that delivers enhanced wellbeing outcomes for all communities.

This is a once in a generation opportunity to future-proof local government.

We know that this must be done in a way that ensures Aotearoa's current and future communities continue to thrive, and in a way which actively embodies the Treaty partnership.

The Panel has worked tirelessly for the past year and a half. They have undertaken an ambitious engagement programme to inform a vision for a future local government system.

I would like to acknowledge this work, and the Panel's commitment and dedication – as I have said, this is no small endeavour.

The Panel recently released their draft report at the end of last month and the public consultation process is now underway.

In the draft report, The Panel reimagines local government as a champion and activator of wellbeing – working with central government, iwi/Māori, industry, educators, health professionals, businesses, and communities.

And as we all know, infrastructure is one of the essential contributors to wellbeing in our communities. 

I believe strong and productive relationships between local government and others in the infrastructure sector, such as yourselves, will also continue to be essential to deliver the foundations that support connected and prosperous communities.

I want to encourage you all to read the draft report and take the opportunity to make a submission and I look forward to seeing how the Review Panel’s thinking evolves as they shape the final recommendations, which are due to me by next June.

The steps we are taking now to progress the Future for Local Government review, resource management reforms and transformation of our water service delivery system will ensure that our future systems are fit for purpose and benefit all New Zealanders.

To achieve this, it’s vital that we continue to work together. Your expertise and support is hugely appreciated.

I am proud that, in 20 years' time, when we look back on these significant changes, our children and mokopuna will be able to swim at their local beaches, have the assurance of safe drinking water, and be assured that we have a resilient waters infrastructure that underpins a quality of life second to none.

Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.