Tuesday 9 August 2022

Three waters and revenue bonds

Will be up at Select Committee tomorrow, along with Nick Clark, to talk about three waters reforms.

The Initiative is a member of the Local Government Business Forum - a peak body of organisations that interface with local government. The Initiative didn't put in a submission on the Three Waters bill (there's just so much on) but the Forum did, and I helped a bit with that. Nick Clark is the Forum's secretary and did much of the drafting. 

The Forum's submission is here. As always, not all members of any peak body outfit will agree with every word on a consensus document - some will be part of organisations that have decided to stay out of the fray on 3 Waters. But it isn't far from my own views either.

We just don't see any of the proposed reforms as being necessary. 

There's a real problem that the legislation is trying to address, but it's gotten itself bogged down in piles of other issues. 

The real problems are water quality enforcement and monitoring, which is already being dealt to by a new regulator, and access to funding and financing tools to ensure that the pipes are up to spec and can be rolled out to support urban growth. 

That latter problem is serious, but seriously doesn't need forced amalgamation into four enormous water service entities. Just let councils issue long lived infrastructure bonds backed either by special rates on serviced properties, or by user fees, or by volumetric charges, or by connection charges, or any combination of all of them. How? The Local Bodies' Loans Act 1913 isn't a bad place to start. It's how councils used to be able to fund the building of stuff, back when it was possible to build stuff. 

Don't need complex new governance arrangements that open up piles of additional contentious issues. Just let councils issue ring-fenced debt. If solving water's what Parliament actually cares about. If they have some other agenda, they can just keep going as they are - but it won't work and it'll get overturned come a change in government. 

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