‘It’s time to turn off the tap on the Three Waters Reform and rethink the proposals’, says Raf Manji, Leader of The Opportunities Party (TOP).
“Everyone wants safe and clean drinking water, and a wastewater system that works”, Manji said, noting that The Opportunities Party is supportive of the newly created water regulator, Taumata Arowai. “But, we are concerned about the financial structure of the proposed new water entities. The Prime Minister has talked about balance-sheet separation to limit councils’ influence over water assets, but this funding structure is highly-risky and completely unnecessary.”
Manji pointed to the recent change in funding plans for KÄinga Ora, the Government’s housing agency, which is now proposing to access funding directly from the Crown, instead of issuing bonds in the private debt markets.
“Cabinet has finally realised that it’s cheaper to fund core public expenditure from the Crown balance sheet and that doing so, provides more certainty around what KÄinga Ora can deliver in the future. The Government should apply the same thinking to funding water infrastructure” Manji said.
By setting up off-Crown balance sheet entities, the Government is simply shifting debt obligations, but increasing costs and introducing a higher risk profile. The debt markets are already naturally wary of extending too much credit to these artificial structures, even when they believe the Crown will stand behind those debts.
This debt challenge extends to Local Government too. Before Local Government moves 30 percent or more of its balance sheet and transfers those assets to new and untested structures, the Government needs to work out what future Local Government structures will look like. Otherwise, it’s just a highly risky proposition which doesn’t prepare for any future changes.
The Opportunities Party is proposing a sensible alternative to Three Waters which uses a cheaper, more secure and lower risk funding model. Efficiency is also top of mind, with the development of a 30 year publicly funded infrastructure plan to upgrade our water infrastructure creating economies of scale. TOP proposes to:
- Maintain Crown funding through Crown Infrastructure Partners.
- Create a national 30 year water infrastructure strategy, funded via 30 year infrastructure bonds issued by the Crown.
- Set up a Ministry of Water Works to commission and oversee the infrastructure upgrades required.
- Create an Alliance Contracting Model to work on rolling 10 year delivery plans building on the SCIRT and Watercare models.
- Ensure Iwi interests in water are addressed at the local level.
Manji says, ‘This approach will provide the cheapest, most secure and efficient combination of funding, oversight and delivery for New Zealand’s water infrastructure. And together, with Taumata Arowai, will ensure safe, clean drinking water and waste disposal for the whole country’.
The current Three Waters proposal needs to be paused and reconsidered.
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