$34m of taxpayer money spent developing and selling Three Waters reform

The Government’s three waters reforms propose taking water infrastructure off councils and handing it to four mega-regional entities.
Andy Jackson/Stuff
The Government’s three waters reforms propose taking water infrastructure off councils and handing it to four mega-regional entities.

The Government has spent $34 million developing and proving its case for the controversial Three Waters reforms, documents show.

A Christchurch city councillor says the figure is “a lot of money to have no single pipe put in the ground”, but the Department of Internal Affairs says it is in line with the costs of other substantial reforms.

In July 2020, the Government officially launched its programme for radically changing the way water services are delivered in New Zealand.

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As it now stands, the Government will force councils to hand over control of water infrastructure to four new mega-regional entities. One entity will cover the majority of the South Island, and councils and local iwi will co-govern the new entities.

Using the Official Information Act, Christchurch city councillor Sam MacDonald, an outspoken critic of the reforms, asked the Department of Internal Affairs to provide a breakdown of the cost of the reform programme.

Cr Sam MacDonald says the city needs to “get on and build the bloody thing”.
Joseph Johnson/Stuff
Cr Sam MacDonald says the city needs to “get on and build the bloody thing”.

The department’s response, which MacDonald shared with Stuff, said between July 1, 2020, and February 28, 2022, $34.1m was spent on the reforms.

The response showed $18.2m had been spent on “legal and consultants”, $2.7m on “accommodation and corporate support”, $6.1m on staff costs and $3.1m on contractors.

“Other operating costs”, which included the costs of a public information campaign, totalled $3m.

MacDonald’s OIA response also detailed the costs of each external contractor and consultant for the 2022 financial year. This showed:

  • Professional services firm EY was paid $2.4m for accounting and tax advice, as well as work relating to the funding packages for councils;
  • Martin Jenkins & Associates was paid $1.2m for comprehensive policy services;
  • Mafic Partners was paid $887,000 for commercial rating agency and other financial advice;
  • Senate Communications was paid $616,000 for communication services.
Local Government Minister Nanaia Mahuta is overseeing the Government’s Three Waters reforms.
ROBERT KITCHIN/Stuff
Local Government Minister Nanaia Mahuta is overseeing the Government’s Three Waters reforms.

MacDonald said the Government had talked about the need for urgent investment in infrastructure, “and yet they’ve instead spent a lot of time on consultants”.

He added: “If the Government were actually serious about investing in local communities, they would put that money into local communities. All they’ve done is spend it on bureaucrats in Wellington who can fly around the country and pretend to listen to us.

“It looks like they’ve spent a lot of money on muffins and on airfares to deliver something the public don’t like.”

MacDonald said the Government could’ve saved a lot of money “by coming and talking to local government first”, or instead spending it on 100 kilometres of new water pipes in Christchurch.

STUFF
Local Government Minister Nanaia Mahuta says the Government will create four new public water entities, with local councils taking non-financial shareholdings in four new public water entities.

The Department of Internal Affairs said while the costs of the reform programme were “significant” they were in line with other substantial reforms, including the changes for resource management and the health sector.

A spokesperson said separate to the $34m, the Government had provided $523m in three waters infrastructure stimulus funding to councils nationwide.

The Three Waters reforms had required “a significant programme of public policy, legal, commercial, economic and other analysis to be undertaken”.

They said external consultants and “other expertise” had been used because the reform programme required “a level of capacity and specialism that is not typically retained within a Government department”.

“The programme has also involved extensive stakeholder engagement across the country over a sustained period and has involved substantial public communications.”

Local Government New Zealand president Stuart Crosby says he is not surprised the reform programme has cost $34m.
SUPPLIED
Local Government New Zealand president Stuart Crosby says he is not surprised the reform programme has cost $34m.

The department has estimated, based on information provided by councils, that between $120 billion and $185b will need to be invested into water infrastructure over the next 30 years.

A Ngāi Tahu spokesperson pointed out this estimate when asked for comment on the $34m reform cost.

“Ngāi Tahu has worked closely with mayors and councils in the takiwā on engagement with DIA throughout the programme,” the spokesperson said.

Local Government New Zealand president Stuart Crosby said he was not surprised by the $34m figure.

Crosby said the Government’s proposal involved tens of billions of dollars of public assets and people would want due diligence to be complete.

“Yes, it’s an enormous amount of money, but when you consider what’s at stake here ... you would want them to do a robust job.”