Three waters proposals will be subject to independent financial analysis before being introduced as law, the minister says, as opponents urge an apology for the reforms' handling.
Photo: RNZ / Samuel Rillstone
Local Government Minister Nanaia Mahuta is now considering feedback on the reforms - which would see water infrastructure management handed to four regional water 'entities' - from a working group of mayors and Māori representatives.
Among 47 recommendations, the group called for councils to be shareholders in the Water Service Entities (WSEs) to further protect against privatisation, and for the government to support the entities by guaranteeing their debts.
Balance sheet separation - a financial term for separation of ownership and control - would allow much greater levels of borrowing by the WSEs and has been a point of contention, with councils wanting to retain both control and ownership over pipes and systems paid for by rates.
The government has so far been firmly against the idea of central government being left with the sizeable bill required for repairing and improving water infrastructure across the country, and came up with the reforms as a way to do so without leaving councils to carry the can.
Heading into the debating chamber this afternoon, Mahuta would not give a straight answer when asked if the government would considering being a guarantor, but hinted it would prefer to see whether the new organisations could stand on their own financially.
"One of the key aspects of the recommendations is that those 47 recommendations have to be tested with [global ratings agency] Standard and Poor's in terms of balance sheet separation.
"That'll be a key element of ensuring those water service entities are able to sustainably fund infrastructure, and that'll be the test," she told reporters this afternoon before heading into the House."
Internal Affairs has already committed to more engagement with Standard and Poor's on the reforms before introducing legislation in the middle of the year.
Mahuta said she did not expect her deliberations to take too long.
"However I do need to assess based on previous Cabinet decisions and the fullness of consideration of the recommenations what I take to Cabinet."
Councils' frustration rankles
Mahuta said the recommendations strengthened governance, representation and local voice aspects of the reform programme, despite the objections of Auckland mayor Phil Goff.
"Those concerns were really focused on the Auckland-specific interests but if you look at the full range of recommendations, a number ... do cover beneficial opportunities for Auckland as well."
Prime Minister Jacinda Ardern said she was heartened by the feedback.
"It really reinforced that we actually have the same goals - none of us want to see privatisation of assets, we want strong local voices in the management of water infrastructure, we want strong accountability, and what the group has put forward is their views about how we can further enhance all of those."
She said the overwhelming message from the sector was the status quo was not working, and the government would consider the recommendations and move forward.
"They really focused on the issues that were of most concern to councils, and I think as councils look at those recommendations they'll see the merit of the ways those have been put forward.
"Because our communities sorely need progress on water infrastructure to be made ... we have the opportunity to now move forward with consensus."
But consensus may be too strong a word - a group of 31 councils opposed to the reforms called the working group's report "predictably disappointing", and that the government had deliberately limited the group's scope.
National Party deputy leader Nicola Willis said the changes did not get to heart of the problems councils had with the reforms.
"Which has been that this was a proposal that was forced on them, that was compulsory, you even had the government engaging in an advertising campaign spending millions of dollars convincing ratepayers that their local government authorities were doing a bad job.
"That bad faith remains, so we will be very interested to see how local government reacts to these proposals."
She said the party was not convinced the reforms could achieve the efficiencies promised by the government, nor that they would ensure the water entities would be accountable to local communities.
Indeed, the working group called for the government to acknowledge the efforts of local authorities thus far, with member mayor Campbell Barry saying there was humble pie that needed eating.
Green Party Spokesperson Eugenie Sage said the report was constructive, and hoped it could lead to a more constructive approach.
"The Green Party encouraged the government to hit pause, we're really pleased that Minister Mahuta did that. And now I think is the time for further engagement, we hope the government will seriously engage with the recommendations and also work with Auckland and mayor Goff on the issues that are raised there around Watercare."
Concerns over misinformation on Māori co-governance
ACT leader David Seymour also believed the reforms had fundamental problems, but his target was measures intended to ensure co-governance.
"This is not an infrastructure project, this is not an infrastructure reform project, this is a Treaty settlement masquerading as an infrastructure policy," he said.
He rejected the idea that failing to implement the reforms in such a way could open the Crown up to judicial review for failing to live up to Te Tiriti o Waitangi.
"If we really take that interpretation of the Treaty seriously you are on a pathway to a weird south-Pacific experiment where there are two types of humans in this country, Tangata Whenua here by right and Tangata Tiriti here by some other basis."
Mahuta quoted the working group, which itself highlighted an increase in misinformation and scaremongering about Māori involvement.
"They also discussed this isn't about ownership, this is about service delivery. This is about security for communities big and small being able to have the investment into the infrastructure that they have to deliver better water.
"It is a significant opportunity for councils and mana whenua to work together for the benefit of catchments and when we think about sourcing water for drinking and returning water back into ... their receiving environment, the perspectives of Māori can contribute and add to those of council.
"The working group's considerations have really tried to ensure that the full balance of interests on behalf of all the community can be taken on board, whereby the Māori interests on the oversight group - the representative group - are able to advocate for Te Mana o te Wai."
Te Mana o te Wai is a mātauranga Māori approach to water which focuses first on the health and wellbeing of water and water systems, secondly on the health of people, and third on social, economic and cultural wellbeing.
Willis said iwi already played a role in water decisionmaking, and National's concerns were more to do with the models put forward by government.