5. Mahuta avoids council amalgamation talk

Local Government Minister Nanaia Mahuta says water reforms are the top priority when it comes to local government. Photo: David Williams.

Local Government Minister Nanaia Mahuta has addressed the annual gathering of mayors and councillors, calling for improvements in water quality, but shying away from full council amalgamations, as David Williams reports.

The question of whether the Government will use water reforms to drive a wider shake-up of local and regional councils has been answered. Well, in a “it’s not on the table but we’ve got to do things better” kind of way.

In her speech to Local Government New Zealand’s conference in Christchurch on Tuesday morning, Local Government Minister Nanaia Mahuta made it clear that change was on the way, for water delivery at least.

Upgrades to drinking water infrastructure in many small places will be simply “unaffordable”, she said, while even bigger councils face a string of daunting challenges.

She called the Havelock North inquiry a call to action for local and central government. As she’s previously said, the Government is considering the inquiry’s recommendation for larger, dedicated water providers.

Mahuta said she sensed the “anxiety across the room” about such a change, but it’s a “conversation we have to have, all together”. She tried to take some of the heat out of the coming changes by saying any solution must “fit our context” and water would remain in public ownership.

But there remains the spectre of mandatory treatment of drinking water.

'No forced amalgamation agenda'

In a question and answer session following her speech, it was asked whether, given the large-scale economic issues facing councils, the Government would be tempted to reorganise local government.

Mahuta said there might be a view that by even discussing “aggregated water service delivery” that will be followed by an drive for amalgamation.

“I don’t think that does follow. In fact, look at what happened in Wellington. While they had aggregated service delivery there and had an amalgamation process happening, one did not necessarily mean the other.

“You’re talking to someone who belongs to this government, to this coalition government – by nature we do not have a forced amalgamation agenda.”

There was a caveat, of course. She pointed to districts with small ratepayer bases can’t afford the increasing expectation of the investment required to upgrade their infrastructure.

“That’s, again, the conversation we have to seriously way up about, well then, how are we going to do it better?”

In May, the Government announced it had asked the Productivity Commission to investigate local government funding.

That inquiry, in part, should help to respond to that, Mahuta said, but it won’t be the whole solution.

“It’s going to require a lot of local leadership and conversation around, again, as I pointed to in my speech, lifting up our vision for how we can do things better, how we can serve our communities better, how we’re going to pay for it, and what’s going to be required, in terms of retaining localism and investing in that.”

Mahuta has just returned from a trip to Ireland, Scotland and England as part of the Government’s review of the "three waters". The review, led by the Department of Internal Affairs, should generate options for the Government to consider by October.

While central government considers imposing a shared approach for council water services, Local Government New Zealand has launched an inquiry aimed at central government devolving power and funding to them - something that Newsroom Pro’s Bernard Hickey argues shouldn’t happen yet.

Mahuta acknowledged today that many councils are interested in the broader agenda about their roles and functions, adding: “We should figure this out together.”

The message seems clear. Let’s do water reforms first and then see what trickles out after that.