In July 2020, the Government launched the Three Waters Reform Programme – a three-year programme to reform local government three waters service delivery arrangements, including water, waste water and storm water.
This reform programme builds on the progress made through the Three Waters Review and establishment of a new crown entity, Taumata Arowai, as the new water services regulator for Aotearoa. 

Currently 67 different councils own and operate the majority of the drinking water, waste water and storm water services across New Zealand. Central government has identified that the three waters service sector is facing urgent challenges in the provision of these services including: funding infrastructure deficits, complying with safety standards and environmental expectations, building resilience to natural hazards and climate change into three waters networks, and supporting growth.

The Government believes comprehensive, system-wide reform is needed to achieve lasting benefits for the local government sector, our communities, and the environment.

Local Government Minister Nanaia Mahuta spoke on Thursday at the Local Government New Zealand Conference about the need for partnership and courage to tackle one of the biggest challenges facing all New Zealanders.

After looking at water reforms in Scotland and Australia, the Government has decided that reform to our current three waters services and infrastructure is needed. In June 2021 they released high level decisions about the number of entities, the boundaries, their organisation form and governance. A lot of the more operational aspects are still being worked through and will be resolved as legislation is developed.

The recent announcement included the following key decisions:

• Water services will be delivered by four statutory, publicly-owned entities. This Council is part of Entity 2, which is made up of the Bay of Plenty, Waikato, upper central North Island and Taranaki regions.
• The legislation establishing the entities will formally establish the local authorities as owners of the water entities and force any privatisation proposal to go to a referendum.
• There will be a transfer of ownership of three waters assets to enable cost-effective borrowing so the new entities can make the required investments. There would be no pay out to councils on the handover of their three waters assets, however, all associated debt would be transferred with the assets.
• Independent, competency-based boards will govern each water entity. Board members will be appointed by a three tier process:
  • Local authorities and mana whenua will each appoint up to six members to a Regional Representative Group (up to 12 members total);
  • the Regional Representative Group will appoint and monitor an Independent Selection Panel; and
  • that Panel will appoint board members to govern the local three waters entity and monitor the board's performance.

 This model is designed to ensure partnership with mana whenua is maintained at a co-governance and oversight level.

• An economic regulator will ensure consumers receive a best value for money service.
• National policy direction for the three waters sector, including expectations relating to the contribution by water services entities to any new spatial / resource management planning processes as part of the RMA reform.
• An industry transformation strategy will be developed to support and enable the wider three waters industry to gear up for the new water services delivery system.

It is expected the new entities will be operational from July 1 2024 and that councils will continue to deliver water services until then. Further detail will be provided on how this transition phase will work.

Four entities ensures there's a large enough catchment (or number of connections) to gain the benefits of scale. The proposed boundaries of the four entities still needs to be agreed.

Our elected members are working through the information to form a view on the proposals. This includes three cabinet papers that record the Government’s thinking to date and information specific to this Council that shows the impact of the proposals on the Council and community.

Central Government also announced on Thursday a $2.5 billion package to support local government transition through the water reform. The package includes $500 million to make sure that no Council is worse off as a result of the reforms, and $2 billion for Councils to invest in the future for local government, urban development, and the wellbeing of communities. We are expecting more information in coming weeks and at this stage, it is too early for Matamata-Piako District Council to have formed a view on the Three Waters reform. As information is made available we are able to continue to constructively engage with Central Government on the final shape of the reform, at which point we will make a decision.

See below for links to more information.

• July 2021 – information on setting out transitional and implementation arrangements (including storm water and community/private supplies)
• Water Services Bill to be passed into legislation and the Local Government Act amended
• September 2021 –  councils to conduct public consultation on the reform, that will follow a prescribed process provided by central government
• September 2021 – entity boundaries confirmed
• October 2021 – Government discussion paper on the economic regulator released
• December 2021 – councils to decide if they are opting in or out of the proposal
• January 2022 to June 2024 – transition phase
• April 2022 – Cabinet decision on economic regulator and legislation introduced late 2022
• 1 July 2024 – entities fully operational

• View the dashboard data from the review
• View the full reports released in June 2021
• Learn more about the new water services regulator Taumata Arowai
• Find out about the Water Services Bill and how it’s progressing
• Learn more about the Three Waters Review

Information on the financial package announcement – 15 July 2021

• Government support for water reforms
• Support package information
• Local Govt NZ and Central Govt joint statement