The water journey to date

Background – the national picture

Major regulatory changes and structural reform of the delivery of water services across New Zealand has been a focus of both local and central government for some years. The 2016 water contamination issue in Havelock North, and associated widespread gastroenteritis outbreak, was the catalyst for this, triggering Government review and inquiry.

The Government inquiry was two-stage. The first stage focused on identifying the direct causes of the outbreak, the second looked at the wider regulatory context and ways to reduce the likelihood of another outbreak in the future.

The inquiry found widespread systemic failure of water suppliers to meet the high standards required for the safe supply of drinking-water to the public.

Starting in mid-2017, a Three Waters Review, run in parallel to the Inquiry, raised further questions about the effectiveness of the existing regulatory framework and about the capability and sustainability of New Zealand’s water service providers. Later work identified massive funding shortfalls in waters infrastructure provision, with initial estimates of $185 billion over 30 years.

Between 2020 and 2023 the Labour-led Government introduced new water regulations, a new regulatory body (Taumata Arowai) and structural changes to delivery – creating new multi-region entities to take over water services delivery from councils.

Following the 2023 elections, the new coalition Government repealed Labour’s legislation relating to three waters service delivery, replacing it with its Local Water Done Well policy. Councils were required to put the costs of waters back into their LTPs. This has had significant rating impacts for many councils.

In early 2024, Government announced councils (or groups of councils) are required to prepare a Water Services Delivery Plan for DIA approval. This plan will include 10-year high-level projections for future provision of water services, with a detailed three-year plan.

Enabling legislation in 2024, and in 2025 will provide options for CCO arrangements and establishment of economic regulation. 

Background – the Hawke’s Bay picture

In 2018, the five Hawke’s Bay councils commissioned an independent report to review the current and potential three waters (drinking, waste and storm) service delivery options for the region and develop a recommended approach to ensure sustainable delivery of these critical services over the long term.

In September 2020, the review concluded and was formally received by councils. It recommended an Asset Owning Council Controlled Organisation (CCO) as the best option for meeting the region’s investment objectives and principals (both of which were developed as part of the review process).

With the Review completed, Hawke’s Bay had a really good understanding of the scale of change needed to ensure three waters services are affordable and sustainable for its communities.

Armed with the information from this Review, the region was well positioned to continue a conversation with Government as it reformed New Zealand’s three waters service delivery. When the Government unveiled its Three Water’s Reform programme, including the plan to transfer ownership and delivery of three water services from councils to four new regional entities, all five Hawke’s Bay councils were staunchly opposed to this plan and made that stance publicly clear.

In 2023, when the Government announced significant changes to its proposed Three Waters Reforms which would see Hawke’s Bay and Tairāwhiti form one of ten new entities across New Zealand, there was a much more positive response from Hawke’s Bay councils.

Fast forward to 2024 and the region’s four territorial authorities have agreed to pick up from this joint work carried out in 2020/21 and explore see whether there are benefits to developing a region-wide solution to the way we manage drinking, waste and storm water services across our region that would meet the legislative requirements of Local Water Done Well.

No decision has been made in regard to a regional model - there is considerable analysis, modelling and consultation to come. It’s important that we complete all of the detailed work required so the councils can fully evaluate all of the options.