Mahuta on Three Waters

Matt Burgess
Insights Newsletter
12 November, 2021

This week, Local Government Minister Nanaia Mahuta recorded a lengthy podcast with the Taxpayers’ Union. If you missed it, or do not want to spend 32 minutes unpicking platitudes, here is a summary:

Taxpayers’ Union: How does taking water assets off councils save money?
Nanaia Mahuta: Because of economies of scale. We need to solve under-investment. Water has to be financially sustainable. We’re not taking the assets.

What do mean you’re not taking the assets? Councils lose ownership except in name.
Councils will own the assets. We have to prevent privatisation. Economies of scale.

What ownership rights will councils have?
Councils will set strategic performance expectations. There will be good governance. Water won’t compete with other council services for funding.

Can you rule out iwi groups receiving water royalties?
We have to prevent privatisation. Iwi cannot sell the assets. Iwi care about the long term.

You said iwi won’t have a veto right. But iwi will be 50% of boards and major decisions require a 75% majority. So, iwi hold a veto, correct?
No.

Given 61 of 67 councils oppose your reform, how has consultation shaped your reform?
First, we need public ownership. Second, we must prevent privatisation. Third, we need solutions. Fourth, we want good governance.

Will ratepayers be represented on the working group?
Only through councils.

You signed off a Cabinet paper on the reform on 18 October. Four days later, your office received a summary of council submissions. Was your consultation a sham?
I received regular feedback from DIA and LGNZ through that period.

Why are the reforms so unpopular?
The current system does not work.

61 of 67 mayors oppose your reform.
It’s about the ratepayers.

Ratepayers hate your reforms. Have you seen our poll? It’s three to one against.
It’s about economies of scale.

Castalia has rubbished your cost modelling.
Castalia accepts privatisation. We must prevent privatisation.

Your cost savings are based on Scottish data which was not adjusted for New Zealand.
It was adjusted.

You are promising operating cost savings of 50% and [up to 9,000] more jobs in water. How does that make sense?
Economies of scale. Better funding.

You only looked at new statutory entities, not the existing Council Controlled Organisations (CCO) model. Why?
Because water needs to be able to borrow off council balance sheets. There is no way to do that with a CCO. Economies of scale. Prevent privatisation. Good governance. Affordable services.

Why is the Treaty relevant when we’re talking about pipes not water?
Excellent question. Iwi will achieve better environmental and drinking water outcomes for the whole community.

How are Māori more connected to the environment than anybody else?
They’re not. But Māori are very connected to the environment.

Why not leave water with councils and guarantee their debt instead?
Economies of scale.
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So, in summary, Three Waters is about alleged scale economies and thwarting a privatisation nobody wants. You can listen to the full interview here.

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