Simon Watts: Local Government Minister happy with council's response to new water infrastructure model

The Local Government Minister is pleased to see councils joining forces under the new water infrastructure model.

The Department of Internal Affairs expects councils to spend nearly 48-billion dollars on Local Water Done Well over the next decade.

The reforms could create more than 40 water entities, with some councils joining multi-council-controlled organisations.

Simon Watts told Mike Hosking that 38 councils have already combined to form 12 entities.

But he says it's never been about the number of entities - the critical part is whether it's financially sustainable.

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
It's new numbers around the water done well programmed for

(00:02):
you this morning, forty eight billion as you bill over
ten years though thirty billions for waste and stormwater. Previously
scrap three waters that was estimated at one twenty to
one to eighty five billion over thirty years. Now. Simon
Watts is your local government minister and his weather's good morning.

Speaker 2 (00:16):
Very good morning, Mike.

Speaker 1 (00:17):
The forty eight billion is made up of what for
who and where.

Speaker 2 (00:22):
The forty eight billions an estimate by councils of how
much they think they're going to spend on water infrastructure
over the next decade. It's spread across the forty two
different entities. I think you have to put it in context, Mike,
that what they think they're going to spend is different
to what the industry is currently spending. The industry is
only spending between two and three billion dollars a year

(00:44):
at the moment in terms of run rate on this
type of infrastructure, So forty eight is a big differential
verse that, and I think there has to be taken
in context that you know, what they think they're going
to spend and what will be spending are two.

Speaker 1 (00:59):
Different and how much is debt, Well.

Speaker 2 (01:03):
It depends on the structure of each of the councils,
but you know they have the capability to take borrowings
significantly more than what they could under the last model.
I haven't got the specifics for each part, but forty
eight is of totality number.

Speaker 1 (01:18):
How much do you how many do you reckon they're
going to end up in trouble with debt?

Speaker 2 (01:22):
Well, we've had the ComCom review the financial sustainability of
their enerities, of all the entities and looked at what
they have got in terms of whether they can cover
their costs and repay their debt, and the ComCom said
to me that these entities are financially sustainable, and on
that basis, I'm comfortable that they can deal with the
challenges that are in front of them. I think without

(01:43):
doubt as we go into ten years from now, the
challenge around making sure that rates are affordable and all
that they can repay a debt is going to be important.
But I'm comfortable based on the Comcom's assessment that these
guys have got. You know, they've got the financial strength
depending them.

Speaker 1 (02:00):
How many have you got left who have got a
plan that you don't like.

Speaker 2 (02:04):
We've got one that I've put a facilitator in, and
we've got about six more that need to be approved.
But my view is that eventually all of those are
going to be fine. But we've probably got a couple
more weeks before I can sort of raise the flag
and say we're done in terms of a full assessment
of all the councils.

Speaker 1 (02:21):
And what's the breakdown with cooperation councils coalescing versus people
going alone and do any of them bother you?

Speaker 2 (02:28):
Yeah, we've got basically thirty eight of the councils have
joined together into twelve different entities, so that's a pretty
big success. Twenty two are doing it themselves and eight
have moved into a new structure. So we've got forty
two entities and totality and might you know, there's been
some pushback around the numbers and all of that. It's

(02:49):
never been about the number of entities. It's been about
whether financially sustainable, and you know that's the critical part
is the reform over No, you know, we've got other
groupings councils that are currently working on coming together as
well that are currently stand alone at the moment so
this is an evolution. We're not going to you know,
we're taking a bite to the apple. But are we

(03:11):
at the destination. No, But I think we've created we've
softened the ground and you're seeing this coming through in
the regional council conversation. We've softened the ground and the
dialogue that people are going, oh, well, you know, this
sort of makes sense that maybe we should consolidate and
continue on that journey. And that doesn't just happen. You know,
you've got to bring people with you on this and awards,

(03:32):
infrastructure reform, soften the ground for the conversations that we're
not having as a country, and I think that's that's
a pretty exciting prospect for the next five years ahead.

Speaker 1 (03:40):
All right, appreciate it. Simon Wat's local government minister.

Speaker 2 (03:42):
There for more from the Mic Asking Breakfast, listen live
to news talks that'd be from six am weekdays, or
follow the podcast on iHeartRadio.