Background – Government’s case for change

Government is leading a nationwide reform of the way New Zealand manages drinking water, wastewater, and stormwater (together known as the Three Waters). 

Government has stated it is creating four regional entities to manage the Three Waters services currently provided by 67 councils. 

The reform follows several investigations after a water contamination issue in Havelock North in 2016 made thousands of people ill, with around 40 people hospitalised, and led to four deaths. The investigations found widespread failures in New Zealand’s drinking water supply system, the regulatory framework, and the capability and sustainability of New Zealand’s water services. 

Government says the reform addresses national challenges, including ageing infrastructure and historical under-investment by councils. Nationally, there are many wastewater plants to be reconsented, water contamination issues and the impacts of climate change. 

Government says addressing these issues, and meeting the future costs, cannot be met under current structures.

Two aspects of the reform have been completed – a change to regulations through the Water Services Bill, and the creation of a new regulator (Taumata Arowai) which has taken over drinking water compliance from Ministry of Health. The third phase is a change to how services are delivered and managed.  

Government says the changes will mean future costs for ratepayers are less than they would be without reform, will protect the environment and public health, support housing and infrastructure development and deliver services in an efficient and sustainable way. 

Government says the new entities will: 

  • be publicly-owned by councils on behalf of communities, with strong protections against any future privatisation 

  • have joint oversight through Sub-regional and Regional Representative Groups made up of equal local government and mana whenua membership to ensure the entities are driven by community expectations and priorities 

  • have independent competency-based Boards to manage the entities and oversee the maintenance and renewal of infrastructure  

  • be financially separate from councils with a greater ability to borrow to fund long-term infrastructure 

  • The Government has also proposed an economic regulator and new consumer protections. 


Page reviewed: 17 Jun 2022 1:52pm