- By Simeon Brown, Member of Parliament for Pakuranga
The Government has approved new water service delivery models that will drive crucial infrastructure investment as part of our Local Water Done Well plan, immediately providing improved access to finance for water council-controlled organisations (CCOs) to deliver the water infrastructure New Zealanders need.
We’ve set out the enduring components of water services delivery in New Zealand, which is about providing local government with certainty to deliver water services while minimising costs on ratepayers.
Our plan will enable new models for financially sustainable water organisations and increased borrowing from the New Zealand Local Government Funding Agency Limited for water services, reducing the burden on ratepayers across the country.
The Local Government Funding Agency has confirmed it can begin lending to water CCOs that are financially supported by their parent council or councils, enabling councils to better manage debt and make essential infrastructure investments without drastic rate hikes.
Using debt to spread the costs of long-term assets means councils can invest for long-term growth and repay their debts across the lifetime of new assets, ensuring the costs of those assets are paid for by those who use them, rather than simply pushing up rates today.
The new water service delivery models will also ensure sustainable water services across New Zealand by providing councils with the flexibility and tools they need to meet their unique needs.
By working together, councils can achieve greater efficiency and access the borrowing they need to keep water services affordable for their communities.
Our expectation is councils will use this certainty and additional borrowing capacity to reduce pressure on ratepayers while being able to invest in the critical water infrastructure New Zealand needs.
Alongside new water service delivery models, our Government is establishing a new economic regulation regime to provide ratepayers with peace of mind that revenue collected by local government water services providers, through rates or water charges, is spent on water infrastructure.
These changes will ensure water revenues are ringfenced for water services and aren’t siphoned off for other council priorities or pet projects with little transparency for the ratepayer.
Local Water Done Well not only keeps water infrastructure in local ownership and control, but also provides a pathway for significant infrastructure upgrades.
We’re committed to supporting councils to deliver high-quality, financially sustainable water services.
The legislation to implement the new water service delivery models and other enduring settings for Local Water Done Well is expected to be introduced in December 2024 and passed by mid-2025.
