John MacDonald: Affordable water - robbing Peter to pay Paul

So the question today is “are we being ripped-off big time by the Government’s latest version of its water reforms?”

That’s the question. And my answer is a resounding “yes”.

And it’s the rip-off bit of the “Affordable Water Reforms”. Until yesterday, they were called the 3 Waters reforms. Today, they’re known as the “Affordable Water Reforms”.

You may already know my view on the money the Government’s previously put on the table in exchange for the water assets currently owned by local councils. I’ll get to that. But, first, let’s remember what these reforms are all about.

A few years back, in Havelock North, a whole lot of people got really crook and a few people actually died after the drinking water up there got contaminated.

And, quite rightly, after that happened everyone sat up and wanted to know how that sort of thing could happen in the modern day and councils all around the country got a bit spooked. Because they didn’t want the same thing to happen in their neck of the woods.

So, in Christchurch for example, the council started looking underground to see what sort of shape its water infrastructure was in - and it wasn’t pretty.

There was a particular issue with the well heads. Which meant, potentially, all that beautiful Canterbury water was coming out of the aquifers but, by the time it reached your kitchen, it could’ve been contaminated a bit because of the state the wellheads were in.

So panic stations at council HQ and they started putting chlorine in the water to protect us. And they got on with the job of repairing the well heads.

That was the band-aid bit. Then the Government stepped in and said “we don’t trust you councils to do the right thing anymore”. That isn’t exactly what they said, but you get the gist. And so it came up with the 3 Waters reforms.

Which, basically, meant that councils wouldn’t be responsible anymore for drinking water, wastewater and stormwater - and four new entities would be set-up around the country to take over.

But, for the Government to take over and make decisions about what happens with water services, it needed to actually own the infrastructure that delivers water to houses and businesses. The infrastructure that takes the wastewater away from houses and businesses, and the infrastructure that gets rid of stormwater. Pipes, pumps - all that stuff. Which are worth a truckload of money.

In Christchurch city, for example, the pipes and pumps and all the other stuff owned by the Christchurch City Council is valued at about $6.9 billion.

And guess what the Government offered to pay for it when it first came up with the 3 Water plan? $120 million.

And ever since that $120 million’s been on the table, I’ve likened that offer to paying an as is/where is price for a house that’s had all its earthquake repairs done.

$120 million in exchange for $7 billion worth of assets was just offensive. But yesterday, it got a whole lot worse.

Because instead of offering $120 million for assets $7 billion worth of assets - the Government’s reduced the offer to $30 million.

$30 million in exchange for billions of dollars of assets.

The reason for this, of course, will be the fact that the Government has to find money to set up 10 new water authorities around the country - instead of the four it originally proposed in the first version of its reforms.

Which, in a way, is a bit of a tale about being careful what you wish for. Because councils all around the country have been saying having just four water authorities is crazy. So the Government’s said “fine, we’ll give you 10. But that’s going to cost, so we’ll pay you less money for your assets”.

Which, as far as I’m concerned, is nothing short of outrageous.

See omnystudio.com/listener for privacy information.