“3 Waters” proposed reforms, activity since the last Tuesday Club notes

The Tuesday Club has orchestrated the bringing together of Council’s around NZ to discuss the proposed 3 Waters legislation. We operated behind the scenes. No fuss. No bother. We just rang people and got them talking to each other. It’s ironic that we did this as volunteers performing the role which Local Government New Zealand (LGNZ) is supposed to perform. Instead LGNZ has been neutralised by a letter of agreement with the Government. Smart work by the Government. Dumb behaviour by LGNZ.

We have found that councillors and mayors have been really interested in talking to each other. Their concerns are very similar. So far, the Councils talking to each other have been working on what they can agree on. This list is:

1. Before undertaking any 3 Waters reforms that the review of Local Government be conducted first in partnership with local government and communities around NZ
2. Demand that the current Three Waters entity model is abandoned because it is fundamentally flawed
3. Support Taumata Arawai (the new water authority) 
4. Support iwi co governance
5. Demand that LGNZ be released from the Heads of Agreement, and other agreements related to 3 Waters Reform  
6. Agree to work with LGNZ and iwi to develop policy and governance options that can achieve excellent outcomes for service delivery and iwi/mana whenua, with a priority on regional and local solutions that enhance democratic process.
7. Demand a thorough analysis of all practicable options

One council which has been part of our discussions has been Hastings District Council. This was where the Government started its blanket reforms. Remember the Havelock North mass poisoning? It appears that the Council had been dragged down into the “keep the rates low” barrel. Successive Councils had wound down rate increases for years and what happened? They didn’t spend on their infrastructure. The mayor during this period, a civil engineer, is now a National MP in Parliament.

Hastings now has a new Council and they have spent up large, and their infrastructure now is getting proper investment. This is despite the Government reforms. They have done it anyway. Hastings has also engaged with all the Hawkes Bay councils, and they have developed together a regional model which makes a lot of sense. They have done this exercise with their local iwi.

This model could be made to work in Canterbury…

One report which captured the imagination of Councils was one written by Mike Richardson, a former CEO of CCC. It is a serious study of the process to date on the water reforms and contains some gems of where to next.

• Given that many but not all councils were assessed as delivering high quality services and were capably managed then it follows that some parts of the country would not be enjoying those standards. But is that sufficient to declare the whole framework as unsatisfactory? If a building leaks does one tear down the whole building or address the specific problem areas?
• The lack of adequate funding options for local government to enable it to carry out all its activities has been a cry from the sector for more than forty years^[i]. This is not a problem specific to the water services. It remains that the issue should be framed as one facing all local government activity (including the inequities of rates as the principle means of funding). As such it should not reasonably be seen as a reason for changes to service delivery arrangements for the water services.
• There are indeed significant affordability issues facing all services, but these should be seen in terms of the lack of alternative revenue streams for local government. I am not aware of any local government jurisdiction in the OECD, other than New Zealand, that does not have either the ability to levy taxes on sales or income or very sizable funding from central government for capital investment. Central government has allowed local government to be malnourished for decades and is now saying that it is not 100% healthy. 

He concludes:

1. There are indeed significant issues for local government in the current climate of constantly rising standards. This includes the need for major investment in water infrastructure. Such diagnosis is correct and would be generally shared by the sector. The treatment however should be a review of revenue and debt funding arrangements and / or cost sharing arrangement between local and central government, not restructuring.
2. The cost reductions claimed for the proposed model are not supported by analysis.
3. The proposal rides roughshod over a range of subtle relationships in policy for land-use, regulation and various service delivery streams that are established at the local level.
4. The co-governance proposal does not appear to flow from any interpretation of the crown’s Treaty obligations (local government itself is not part of the crown and so has no such obligations other than those imposed by statute).
5. Centralisation of decision making away from local government is contrary to the subsidiary principle which is long accepted in liberal democracies. It reduces community identity and autonomy and thereby undermining the sense of autonomy and well-being not only of communities but also the individuals within them.
6. Gisborne, Manawatu and Nelson, to name only three have no community of interest and very different contexts and challenges for delivery of water services. On the other hand Whanganui, Rangitikei and Manawatu may well have some similarities.

The National Party’s spokesman, Christopher Luxon, wrote an interesting article in Stuff last week. One point he made was:

Perhaps the biggest concern is the threat to local control. The 20 district councils and the iwi (potentially 10 to 20 per entity) that could make up a single water entity would each appoint representatives into a small “representative group”.

That group then appoints an independent panel, which appoints the entity’s board, which then appoints the management team, like a bewildering series of Russian dolls.

What makes for better accountability: water services controlled by an elected council whose meetings you can turn up to, or diluted by layers of faceless managers and appointed governors spread across hundreds of kilometres?

Assets owned by communities that have paid for them over decades through their rates will be surrendered from council control and bundled into these entities with virtually no accountability.

He is dead right. The people who designed the proposed structure must have failed at business school. The structures proposed will be just unworkable and unresponsive.

It is worth reminding Christopher that these reforms date back to when the National Party was in power. Havelock North, then led by one of his now caucus colleagues, was just the excuse they needed.

https://www.stuff.co.nz/opinion/126361729/three-waters-four-entities-several-problems.

Tuesday Club readers have responded by email and text and phone calls:

Here’s one email:

The proposal pushes the relationship between the state and society in favour of the state.   Is the water plan a Government Policy or something being pushed by the machinery of the state?   If is the latter then no mandate exists except to ensure we get clean water etc.  From what I read it does not have great support from the electorate and therefore it would seem to being pushed by some force other than the Government.  This is not how our democracy works.

Economic cycles last around 35 years so any financial projections made now can only last until tomorrow.   Projecting out 30 years is absolute nonsense because we are currently being forced to undergo an economic restructure to address the inequities etc that exist.   Treasury has problems predicting out a year let alone attempting to predict economic value in 2050.   There is no economist on earth who would be capable of that because they have no idea what the social conditions will be out that far.   Most reputable economists (and I’ve read a few over the last year or so) would not be that stupid.    Let’s consult the oracles and read the sheep entrails.   That we supposedly intelligent humans of the 21st century would come top with something as outlandish as those projections means we have no understanding of the history of human development.   This is a Magna Carta moment over the control of our resources.   A push back against the State’s dictates.  

You so rightly point out that it takes local out of the discussions.   Our water issues have mainly arisen because of Central Government intervention in ECan.  As I have said before successful farming is based on successful cities so if we kill the latter we know what happens.  The Key Government was playing to its rural base with that move and now we are seeing the economic costs associated with the damage to the aquifers.  Who projected what here?   Short-term economic gain for what?

My last point and one that I mentioned last time is that the restructure will not improve delivery.   The very nature of the bureaucracy drives out the human element required to manage society.  The State sector demands research based evidence to support an argument or counter argument.   That evidence does not exist because no one has access to all the facts available.  What does exist is a number of facts that may support a particular argument or proposition.  The demand for total rationality is actually irrational because humans do not think that way.  Most of the decisions made are based on intuitive thinking despite what the bureaucrats may think.    I think its works like this – this would be a good idea now let’s find some evidence to support our position.    We only need to look at the history – Sumer, Egypt, Rome, Greece etc to see the impact of human decision making.  Who cut down the last tree on Easter Island?   Who decided that irrigating a desert would be a good economic decision and then drained the Aral Sea – destroying the environment and another economic contributor.  

This is more than a decision about 3 waters – this about the fundamental aspects of our democracy.   Don’t consult if you are not going to like the result seems go be the Government’s answer to this.   I have read Te Maire’s booklet and I think we have to work alongside Ngai Tahu on this issue.    I think if this goes ahead we will end up irrigating the plains, polluting all the water ways and to overcome that dump tons of chlorine into our water to compensate.   The research that we have available today tells us that.  

The Councils have been canvassing their ratepayers:

1. Waimakariri:

Waimakariri District Council recently canvassed their ratepayers on what they thought about the 3 Waters Reform. Here is what they sent out to the media on the topic:

Ninety five percent of Waimakariri residents want the Council to ‘opt-out’ of the Government’s Three Waters Reform according to a recent survey.

The Council received over 3800 submissions over a three week period. Residents expressed concerns about:

·         Losing local say, knowledge and control on how water services are provided

·         Rates being used to subsidise upgrades in other areas

·         Wanting local management and provision of Three Water Services

·         Appropriate compensation for transfer of community assets

·         They sought for the reform proposals to take place alongside wider Future for Local Government and Resource Management Act (RMA) reforms

·         Serious concerns were raised about the accuracy of the proposed efficiencies behind the proposal for change.

2. Christchurch:

The Christchurch City Council ran an online survey on 3 Waters recently. They had 5123 responses. Some of the results were:

1. 77% want water managed and operated locally.
2. 73% want local ownership retained.
3. 88% want a say on 3 Waters.

For some odd reason CCC did not ask people if they wanted in or out, unlike Waimakariri. If I were on the Council, I would draw the conclusion that this is pretty convincing that people want to keep the status quo.

Reading the Star on Thursday I found it comforting that there wasn’t a single Councillor who is in favour of the reforms. Well done Councillors, and Mayor I guess.