A suggestion on how to work together to solve New Zealand’s infrastructure problems

Neil Holdom is mayor of the New Plymouth District.

OPINION: Historically, significant events change our perspective and at times priorities.

The North Island’s upper and eastern regions have been smashed. Fragile infrastructure has been overwhelmed. The repair bill will be in the billions and we are the ones who will have to pay for it through taxes, rates and insurance premiums.

New Zealanders now have an acute focus on infrastructure. Primarily roading and three waters. All four asset fleets clearly showing the scars of decades of systemic underinvestment and the weather.

Labour’s three waters (3W) reform has sparked New Zealand’s most divisive political debate this century with protests across the country and many Kiwis experiencing a mix of anger and confusion.

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National and Act started the reforms when they were last in power. They agree something needs to be done to tackle New Zealand’s crumbling infrastructure but also know there are votes in scrapping Labour’s reform model.

Prime Minister Chris Hipkins has signalled changes in 3W as part of his pragmatic policy bonfire.

The PM has already rebranded 3W as ‘infrastructure reform’ and delegated responsibility for the overhaul to new Local Government Minister Kieran McAnulty.

And as the minister looks around for trusted advisers to help craft a viable alternative to the multi-billion dollar four mega-entity juggernaut he will find the pickings are slim.

You would think Local Government New Zealand (LGNZ), the membership organisation representing councils, might be a good start. But LGNZ has its own problems, having signed up to an agreement with government committing ‘not to oppose the reforms’ back in 2021 without consulting its members.

The membership outrage that followed sparked the creation of Communities for Local Democracy (C4LD), a council-funded lobby group focused on driving significant change to Labour’s model.

LGNZ has been so shaken by the fallout of its previous political misstep it won’t propose any material change to the reforms for fear of further annoying its membership and/or the government.

C4LD has made progress and have been highly influential in the development of the National Party’s recently released policy. It has also reached out to non-member councils in the hope of creating broader consensus. But the C4LD model is not for everyone and the movement has not endeared itself to mana whenua, who have generally indicated support for Labour’s model.

Everyone agrees the status quo is not viable for NZ Inc but the opposition has struggled to articulate a compelling counter-proposal until this week’s announcement which pretty much said:

‘We agree with C4LD, it should be up to councils to prove they can do the job by January 2025 or we will take unspecified action.’

And so to the core of the matter.

The current hugely unpopular 3W model could accurately be described as the world’s most complicated response to what is essentially a funding and financing problem.

Three waters assets have been run down for three reasons. 1 Politicians have not felt their communities could afford the investments. 2 Politicians have not felt their political careers could endure the rate rises required to do the right thing. 3 Council balance sheets don’t have capacity to fund prudent 3W investments.

C4LD has compiled changes to the current model that would appease councils and communities but has not clearly articulated a viable funding and financing solution.

Labour’s four mega entities will have the scale to gear up and borrow at low cost, or at least that is the theory.

National and C4LD’s model leaves a placeholder over the funding and financing question with a note that says Government ‘may’ come to the party as a one-off funder of last resort. This does not solve the issue of councils at or near borrowing limits.

And so to the big hairy audacious goal/opportunity. Labour are ready to move. National’s policy is fairly fluid.

The gap between the left and the right is not as wide as many would think. Right now there is an opportunity for the large parties to come together with the support of the Greens, Act and Te Pati Māori to put the uncertainty behind Aotearoa and land on a bipartisan solution that works for all Kiwis over the long term.

So what is the solution?

Well if we learned anything from the last few weeks it is that stormwater doesn’t care about politics, council boundaries or reform. And further, given the scale of the carnage across New Zealand, it is clear that solutions to these major infrastructure problems are going to need far more central government funding than previously envisioned, a fact acknowledged by our PM.

Applying these new insights a pragmatic Minister of Local Government would do the following:

1. Remove stormwater entirely from the reforms.
2. Knock on the Minister of Finance’s door and ask for a government guarantee for …
3. Up to 10 regional water and waste water companies owned by local councils.
4. Allow councils to work in partnership with mana whenua to develop local governance arrangements for the companies reflecting local relationships and values aligned to their communities of interest.
5. Empower the Commerce Commission, as economic regulator, to make sure prudent investments are made and the organisations are efficient.
6. Kick the implementation date out 12 months to 1 July 2025 and offer councils and mana whenua the opportunity to come up with something better if they can implement it before that date.

Such a proposal would largely meet the needs of everybody and then it would just be a matter of detail.

Government would need to make it clear if any regional water company called on the government guarantee of funds there would be significant consequences, including likely further amalgamations.

So here’s the challenge for all political parties.

Do you care about New Zealanders and the quality and sustainability of our public infrastructure or just about getting elected?

Because if the focus really is on Kiwis, you will come together, reach a deal that works for all of us and sign it off collectively before the election so the people focused on keeping the taps running safely and the sewage out of our streams can get on with the business of building and maintaining this critical infrastructure for NZ Inc and the generations to come.

Neil Holdom is mayor of the New Plymouth District.