I’ve already written critically of the Three Waters reforms in a polemical way. It's rather curious that Nanaia Mahuta is so committed to these reforms given she has no record in her political career of ever having passionate views about structural reforms of any sectors of the economy. You wouldn't know what she thinks about energy, transport or communications sectors, so why water? Surely it can't be because of the transfer of some power to Iwi under the new mega-water "entities"?
Regardless of her motivations, I think the problem definition is largely correct. The status quo has failed appallingly, and that status quo is combination of leftwing ideology about the "power of general competence" of local government (and it being committed to "economic, social, environmental and cultural wellbeing") and rightwing ideology about supporting localisation of power (although that power still lies with politicians, apparently local politicians that fewer people vote for are more accountable than MPs).
Yet it is abundantly clear that the options assessed (at least from the public documents) were remarkably narrow minded, apparently only considering:
• Sector-led reform: This would be returning to the philosophy of the “power of general competence” that local government is capable of reforming itself to address the problems listed. This seems unlikely and is in effect a “status quo” option.
• National Three Waters Fund: This option is frankly bizarre. It is touted as being similar to the National Land Transport Fund (NLTF), yet there are so few useful parallels. The NLTF is funded mostly from user fees on motorised road users, through fuel tax and road user charges. There are NO centrally collected user fees on water users, and many local authorities don’t even impose user fees at all. Furthermore, the NLTF fully funds the State Highway Network, which is central-government owned and operated, there is no equivalent in water. This looks like a brain fart from some politician.
• Regulatory reform only: This has its merits, if only because there is poor oversight of what territorial authorities do with water already, but existing governance structures range widely from being promising (Watercare Services) to being very poor. This is unlikely to be enough.
It might be too much for me to expect a Labour Government to have assessed privatisation, even if it dismissed it on grounds of being contrary to the policies and principles of the Labour Party, but it should have been included to see what the benefits and risks would be.
So assuming privatisation per se would fall on deaf ears, here’s my quick and dirty alternative. Quite simply it is to commercialise and transfer control of water assets to ratepayer or consumer owned companies, those entities would carry the local authority debt associated with those assets. My proposal is: