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Local Water Done Well - First stage implemented with repeal of Affordable Water Reform

Home Insights Local Water Done Well - First stage implemented with repeal of Affordable Water Reform

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Contributed by: Petra Carey, Steven Sutton, Ayesha Goel and Charles Baker

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Published on: February 14, 2024


Repeal Bill awaiting Royal assent

The Water Services Act Repeal Bill (Bill) repealing the previous Government's Affordable Water Reform (or Three Waters) has now passed through the House. The Bill is expected to receive Royal assent this week and therefore will come into force before the end of the month.
The Bill is an omnibus bill that will repeal the key legislation that underpinned the Affordable Water Reform - the Water Services Entities Act 2022, the Water Legislation Act 2023, and the Water Services Economic Efficiency and Consumer Protection Act 2023. This means the end of the 10-entity model which envisaged control of water assets by new statutory water services entities.

Contents of the Bill

The Bill returns responsibility for water services delivery to local authorities. The Bill will also make the following changes:

  • Disestablish the Northland and Auckland entity, its establishment board, and its establishment CEO, given this was the only entity out of the 10 planned entities that had been formally established so far.

  • Make consequential amendments to the Local Government Act 2002 to enable local authorities to:

    • Include water services provision in their 2024-2034 long term plans (LTPs) (in some cases, without reconsulting). There are also a range of other options available to local authorities, including extending the statutory deadline for adoption of the 2024 LTP and annual reports.

    • Defer reviews of bylaws relating to water services.

  • Make technical amendments to the Taumata Arowai – the Water Services Regulator Act 2020 and the Water Services Act 2021 relating to the regulation of water services by Taumata Arowai. A more substantive amendment relates to the definition of "stormwater network", which retains, in substance, the definition under the Affordable Water Reform legislation, by extending the definition to include overland flow paths and relevant green water services infrastructure and watercourses.

Next steps – new legislation

The repeal completes step one of the National Party's Local Water Done Well policy (available here). Two further bills are expected over the next two years to complete delivery of the Local Water Done Well policy:

  • The first bill, expected to be passed in mid-2024, will set out provisions relating to council service delivery plans and transitional economic regulation. The Government has indicated that this bill will enable councils to voluntary start shifting the delivery of water services into more financially stable models.

  • The second bill, expected to be introduced in December 2024 and passed by mid-2025, will provide for long-term requirements for financial sustainability, a complete economic regulation regime, and new types of structural and financing tools, including a novel financially independent council-controlled organisation structure.

If you would like to discuss the implications of the repeal or future water reform, please get in touch with one of our experts below.

This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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