I’m very concerned with the changes to Cabinet that the government might be considering watering down the 3-waters proposal. This will be a serious mistake, given the country’s poor record of investment in infrastructure.
When I worked for Porirua City Council in 2006, they were concerned that the council was wasting money by spending it unnecessarily on asset maintenance. Their solution was to create a new asset manager position and give the person the job of analysing how effectively the council was spending its money. The conclusion was that, in fact, the council wasn’t spending enough money and needed to increase its asset budget.
Ten years later that the council admitted in its long-term plan that 40 per cent of the wastewater pipes needed to be replaced, at a cost of $800 million. PCC now strongly supports the three waters proposal because it knows that it can’t squeeze its ratepayers for the huge amount of extra money required to pay for this deficit.
It knows that greatly increasing rates for this is unpalatable, both politically and socially. It’s politically unpalatable because there are a significant number of well-off people in the city who will vote against increasing rates, and there are always people who are prepared to stand for election on that platform and get elected. It is socially unpalatable because we have quite a lot of low-income people in the city, such as the working poor or retirees, who simply don’t have the money to spend another 20 per cent on their rates if they’re also going to buy food and keep the power on.
So, reform is essential. This isn’t a matter of finding a new group of taxpayers to extract money from to spend on infrastructure. It’s about increasing the ability of the organisations managing the water infrastructure to borrow the money necessary to build and maintain our water infrastructure to the standard that’s required. It’s also about removing the self-interested political interference from property owners who want to spend as little as possible, do the bare minimum for the infrastructure they use, and not invest for the future.
The recent storms in Auckland and the fact that the drainage systems were woefully inadequate for dealing with the torrential rainfalls show that a lot more money needs to be spent on this. Storms like this will become increasingly common as climate change has more severe impacts.
The Productivity Commission has estimated that New Zealand has a $100 billion deficit in infrastructure — that’s right across the board, not just water — and that over the next couple of decades, we will need to spend another $100 billion to cope with expected population growth and impacts of climate change. The current funding mechanisms for infrastructure investment through local government, and the political systems that provide governance over much of our infrastructure, are inadequate and need to change.
Our current business-as-usual approach is showing up to be a failure and is not up to the job that is in front of us. That needs to change and we need to start on that immediately. Something like the 3-waters proposal is essential to ensuring the country is in a good state to cope with climate change.