Dr Bryce Edwards’ NZ Politics Daily Political Roundup: Is Three Waters really about water infrastructure or iwi co-governance?

So Wellington
On Friday the Government made some announcements about their Three Waters programme that were meant to assuage public concerns about the reforms. Instead, the announcements merely reinforced that Local Government Minister Nanaia Mahuta is determined to push the reforms through in the face of strong public opposition.

The gist of Friday’s announcement was that, following on from consultation with local government, Labour is making some significant improvements to Three Waters. In reality, the core of the water reforms remains the same, with critics pointing out that the changes are largely cosmetic.

The central and most contentious element of Three Waters, co-governance with mana whenua iwi, has been reconfirmed. The new four mega water companies that are being set up to amalgamate the drinking, waste and storm water infrastructure around the country, will be subject to equal control by iwi and local government.

The concept of co-governance means, in this case, that the new water companies will be directed by “Regional Representative Groups”, which will be half controlled by elected local politicians, and half controlled by mana whenua iwi. Therefore, the elected local governments that currently own and control water services will lose half of their control, despite in theory still owning the companies.

The problem is that iwi co-governance of water has never been explained or sold to the public. Quite the opposite in fact. The Government has sought to downplay or even disguise the introduction of this huge change. They have attempted to deflect debate or discussion from how it will work and what it will mean. Unsurprisingly opponents have therefore labelled it as “co-governance by stealth”. This is given weight by the fact that Labour didn’t campaign transparently at the last election on implementing co-governance into water reforms.

In one sense the co-governance model is a form of privatisation. The new companies will be half controlled by private organisations – iwi, which are increasingly highly corporate in their business operations.

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Whether or not this gives iwi any rights and ability to extract financial charges for water has not been explained by Mahuta, who has avoided this topic. It’s also not clear that ordinary Māori and pākehā will benefit from this business model. Instead, it will be elite vested interests likely to benefit. Certainly ordinary people will have less democratic influence on water resources, and accountability will be significantly less.

Another privatisation feature appears inevitable under the proposed model – increased user-pays features, such as water meters and charges. The new mega companies are being structured in a way that makes cost recovery a key part of their operations. Critics say that this market mechanism will lead to increased water charges that will disproportionately impact the poor.

A key driver of Mahuta’s reforms is now obvious – to enable mana whenua greater control and influence over water resources. The Government has not been clear whether this is due to a legal or moral Treaty obligation, nor how this will work. Some suspect the Government see this co-governance mechanism as a shortcut to avoid dealing more substantively with iwi water claims. It might take pressure off the Government to consider more considerable Treaty claims.

The co-governance component of the water reforms is clearly something that the Labour Government is fundamentally tied to. The suggestion is that they would now rather cancel the whole reform process than simply remove the contentious co-governance element.

It is a shame that Labour takes this approach, as there is now a strong political consensus in favour of water management reform, including the consolidation of assets and services. There is an appreciation of the need for substantial change throughout all local government, all the political parties, and the public too. Labour has the opportunity for enduring and popular reform, but is dogmatically resisting the opportunity. It will therefore be sadly ironic if Labour’s own stubbornness on co-governance leads to urgently-needed water restructurings being further held up.

Broadcaster Heather du Plessis-Allan responded to Friday’s non-announcement with a scepticism that the Government is really more concerned about implementing co-governance than it is about water reforms: “The longer this goes on, the more the Government refuses to budge on the co-governance aspect, the more it looks like this reform isn’t really about cleaning up your water at all, is it? It’s actually about entrenching a new way of running things in New Zealand, isn’t it? It’s about entrenching Māori co-governance as a system.”

Iwi co-governance might well have many advantages for the management of water reforms. But the Government and Mahuta simply haven’t advanced those arguments, and until they do, it seems likely that Three Waters will languish, and lack legitimacy in the eyes of the public.

Even if Labour decides to bulldoze the reforms through, this will simply create ill-feeling when there is actually a strong consensus for reform. By avoiding the hard job of talking to the public and opponents, and making the case for co-governance, the Government will set the reforms up to fail and ultimately be reversed by future administrations. Parties campaigning to repeal co-governance will be rewarded with votes at the next general election, and in the upcoming local government elections, expect to see candidates do well in campaigning against this elite-driven change.

Cheerleaders for the reforms asserted over the weekend that “It’s time for less talk” and more action on the reforms. But the problem is quite the opposite – that the Government have not been willing to allow a real conversation about water reform, and especially about their co-governance model, which now looks likely to dog the water reforms for a long time yet.

Further reading on Three Water

Luke Malpass (Stuff): How did the Government stuff up the politics of Three Waters so badly?
Heather du Plessis-Allan (Newstalk): The longer it goes on, the more it looks like it isn’t really about cleaning up water
Richard Harman: The real reason for Three Waters reforms (paywalled)

Jonathan Milne (Newsroom): Govt refuses advice to commit ongoing taxpayer funding for Three Waters
Thomas Coughlan (Herald): Three Waters reforms – what is Govt trying to do, where the Nats stand on it and what’s next (paywalled)
Imogen Wells (Newshub): Treasury warned Government against $2.5 billion Three Waters package for councils
Steven Walton (Stuff): ‘Time to get this done’: Ngāi Tahu commends Government for three waters tweaks
Justin Giovannetti (Spinoff): Lifesaver or ‘asset grab’? The Three Waters programme, explained
Russell Palmer (RNZ): Three waters anti-privatisation entrenchment rejected by opposition parties
Newstalk: David Seymour: Three Waters announcement is a triumph of spin over substance
Sinead Gill (Stuff): Council leaves anti-three waters reform group over its ’emotional’ reactions
Rachael Kelly (Stuff): Southern mayors pleased with the Government’s Three Waters announcement
Jono Galuszka (Stuff): Three Waters: ‘Devil in the detail’ for councils in and near Manawatū
Stuart Crosby (Stuff): Three Waters: Water assets must stay in community ownership
Stephen Ward (Stuff): Updated Three Waters package still leaves big concerns for Waikato leaders

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