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submitted 21 July 2022

Executive Summary

RDRR opposes the Water Services Entities Bill. We ask the Select Committee to recommend that it be withdrawn on the basis that it is contrary to the public interest and harmful to democracy.

Our main concerns are that:

  • Communities have not been properly consulted over the proposals
  • The modelling and assumptions cannot be relied on
  • The estimates of costs to water users cannot be trusted
  • The growing debt will create a huge burden for future generations, and
  • The co-governance arrangements are discriminatory and anti-democratic.

In our view, the Bill should not proceed.


This submission is on behalf of the 1,093 members, associates and friends of the Rotorua District Residents and Ratepayers (RDRR). We oppose the Water Services Entities Bill and the Three Waters reforms.

We would like to be heard by the Committee, ideally in person in our community. I will be serving as RDRR’s spokesperson.

RDRR’s General Case Against the Water Entities Bill

Given that local councils were denied the opportunity to conduct their own local consultations last year, we suggest that the Select Committee to go on the road and hear oral submissions face to face in the communities directly affected by the Bill. Three Waters is a uniquely local issue that warrants authentic local consultation.

We believe that the proposed reforms lack democratic legitimacy because Labour did not campaign on these reforms during the last election. It is now forcing councils to support the complex, far-reaching reforms without time for local consultation. According to the poll commissioned by the Taxpayers’ Union in June 2022, 76 per cent of New Zealanders believe that those responsible for the provision of water services should be directly accountable to voters.

We believe that the Water Services Entities Bill and the Three Waters policy will result in higher water costs. The Government claims the larger water entities will be more efficient. The Government’s own peer review contradicts the claimed savings, not including the financial implications of co-governance.

There is no limit on how much the unelected entities can charge for water services, no stopping iwi groups charging ‘water royalties’, nor is there a requirement for councils to reduce rates to reflect the fact they will no longer supply water services.

Despite the Government’s claim that councils will still ‘own’ water assets, councils will lose their rights of control. Decisions around selling assets, receiving dividends, and setting charges will be made by unelected entities, with no provision for councils to withdraw from the new regime.

These reforms will add multiple layers of unnecessary bureaucracy. Ratepayers will be separated from the new water entities by four layers of bureaucracy. Council representatives will join with iwi to appoint a regional body, which will appoint a selection panel, which will appoint the entity board. There is needlessly complex and apparently designed to embed co-governance, which we reject.

This Bill requires that mana whenua representatives make up half of all appointees to both the regional representative group and the regional advisory panel for each new water entity. This doubling down on co-governance will further diminish accountability and adds yet another layer of expensive bureaucracy that will increase costs for water users.

An alternative structure likely to be far more efficient is that used by NZTA/ Waka Kotahi. It provides roading services nationally and negotiates responsive plans for local roads.

Detailed Suggestions

RDRR suggests that:

  1. Government adopt an alternative structure that is likely to be far more efficient – that used by NZTA/ Waka Kotahi. It provides roading services nationally and negotiates responsive plans for local roads.
  • Phase transition where that makes sense. Water Service Entities (WSEs) should start operating when they and their councils are ready.
  • Explore the delay of stormwater transition where that works for councils. The stormwater proposals are underdeveloped and their impacts uncertain. Drinking and wastewater could transition first, with stormwater waiting till the WSEs are up and running and resource management reform is implemented.
  • Address councils’ placemaking role – and how this interfaces with the three waters system – in the legislation. Councils must be seen as leaders in placemaking and have the right powers over WSEs to deliver on that role.
  • Ensure central policy direction comes with greater central government investment. Any centralised control via a GPS needs to be followed by funding from the centre. Central government also needs to assist with assessing and funding investment needed to address historic degradation and inequalities.
  • Closely involve councils in developing the WSE constitutions. Councils and communities must also have strong mechanisms to feed into the development of the WSEs’ various planning and accountability documents.
  • Address how funding and pricing decisions will be made, and the issue of affordability. This includes making sure small or isolated communities don’t pay disproportionately more.
  • Change any transition provisions that place an unreasonable burden on councils so that they are both workable and reasonable.
  • Resource Iwi/Māori to participate in the new system.

We ask that the Committee recommend to the House that the Bill not proceed.


Text, letter

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Reynold Macpherson

Chairman, RDRR

484 Pukehangi Road, Rotorua 3015

07 346 8553, 021 725 708