Financials may tip balance of support for new Three Waters proposals

Mike Yardley is a Christchurch-based writer on current affairs and travel

OPINION: The prime minister’s “reprioritisation programme“ is all but complete.

The multi-pronged policy purge, from dumping the state media merger to deferring the legislative crackdown on hate speech, has laid bare Chris Hipkins’ naked ambition.

He is unswervingly ambitious for resuscitating Labour’s political prospects, proving to be a ruthlessly tactical and cunning clinician, the hyper-pragmatist in a hurry, undaunted by the severity of a course change or the sacrificing of any sacred cows.

“Whatever it takes” would seem to be this prime minister’s lodestar as he carves out a more viable pathway for Labour to snatch a third term in power.

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But as the flickering embers fade on his latest policy bonfire, will the axe be swung through Labour’s polarising Three Waters reform model? All eyes will be on Wellington on Tuesday, with an assortment of mayors invited to the Beehive for an update from Local Government Minister Kieran McAnulty.

Two trenchant opponents to the Government’s reform model, Christchurch Mayor Phil Mauger and Waimakariri Mayor Dan Gordon will both be attending. In the lead-up to the come-together, they are keeping their powder dry as to their respective hopes and expectations.

But the signals from Wellington strongly suggest that Labour’s contentious reform model is not destined for the scrapyard. Rather than being sent to the shredder, McAnulty appears confident that he can salvage the thrust of the reform model by making some targeted tweaks.

As it stands, shoe-horning all council water assets and services into four mega-regional entities is never going to secure broad support. Expect big movement on that entity structure. Similarly, the co-governance arrangements for those regional entities is surely going to be disbanded.

I have no objection to the co-governance or joint management of environmental features, whether it be a lake, a mountain or a national park – as we have seen through many Treaty settlements. But applying co-governance to core public services is a bridge too far, in my view.

Labour has disingenuously tried to deny the precedent at play here, but their Three Waters co-governance arrangements takes the application of Treaty principles into a whole new orbit, undermining democracy’s one person, one vote principle. With a 50-50 split in the regional representative groups, the model accords Māori considerably greater representation than non-Māori as a percentage of the population.

Defusing the tension around this is a critical task for McAnulty. Most councils already have pre-existing relationships and collaborative vehicles for engaging with mana whenua on issues of significance, like water. Why not simply stick with that?

From a Christchurch council perspective, an absolute non-negotiable is that stormwater assets and management remain under its sole jurisdiction. The Government’s reform model fails to recognise the integrated nature of the city’s stormwater management system, which includes public and private land, parks, wetlands and waterways.

Then there is the blue-green infrastructure, like tree pits, rain gardens and swales. Stormwater management and ecological restoration form key parts of the regeneration of the Ōtākaro Avon River Corridor. The notion of transferring all of these assets and responsibilities into a regional entity is not just ludicrous but risks jeopardising the city’s dramatic improvement in managing flood risk.

But I suspect the biggest battle McAnulty faces in brokering greater buy-in for his reworked water reform model is his insistence on balance sheet separation. In Christchurch, the city council’s water infrastructure assets are valued at $6.9 billion, while carrying $1.1b worth of debt. Stripping all of that off the council’s balance sheet, and funnelling it into an anti-democratic regional entity, in return for $122m of “better off” funding is a dud deal in anyone’s book.

Many mayors on the Communities 4 Local Democracy grouping, including Gordon, will attend Tuesday’s Beehive meeting. To their credit, they have formulated detailed alternatives to the Government’s reform model, which retains local ownership, allows for voluntary regional collaboration, but avoids the expropriation of community assets or local autonomy.

I’m not convinced the Government is willing to roll back its reforms that far, but just how PM Hipkins wrestles with this smouldering political potato could well be his biggest test yet.