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Govt avoids Akl 25.8% water rate hike in Local Water Done Well deal

The Government has announced its plan to provide a “financially sustainable model” for the future of Auckland’s water that keeps rates low and retains control of water assets.

Last month, Auckland’s water provider Watercare warned customers that water rates may need to increase by as much as 25.8% to run the business, while keeping to the council’s borrowing limit.

The Local Water Done Well plan unveiled today would instead see Aucklanders pay a “more manageable” rate increase.

The coalition Government announced today that it has worked with Auckland Council on designing a new model for Watercare.

Speaking from Watercare’s Central Interceptor construction site in Māngere, the joint announcement was made by Prime Minister Christopher Luxon, Local Government Minister Simeon Brown, and Auckland Mayor Wayne Brown.

Simeon Brown said the plan was unanimously endorsed by Auckland Council’s Governing Body at a meeting on Thursday.

“Some said that Local Water Done Well could not be done. But within the space of just six months, the coalition Government has worked with Auckland Council on designing a new model for Watercare.”

He said the new model means Watercare will be able to borrow more money for long-term investment in water infrastructure and spread the borrowing over a longer period rather than front-loading the cost on to current ratepayers.

Speaking to media this morning, Luxon said he was “really proud” of the “smart solution that has been developed between Auckland Council and the Government”.

“This partnership between central and local government working through what has been a very complicated, very drawn out topic of conversation around Three Waters,” he said.

“The fact that we’ve been able to work so constructively and proactively in such a short amount of time between the mayor, minister, council and Government, I think, is a really good sign.

“We know there are real infrastructure challenges in Auckland in respect to other challenges, but both of us are parties that want to work together in good will and good faith with one another to find solutions.”

Auckland Mayor Wayne Brown said he had been working closely with central government to provide a simple, affordable water solution and described the outcome as “exactly what we’ve been looking to achieve”.

“The new Government asked us to come up with a preferred model, and they’ve agreed to implement it, which is good. I want to thank the Minister and the Prime Minister for the way they have handled this,” Brown said.

He slammed the idea of ​​water rates increasing by more than a quarter in the year ahead as “unacceptable”.

“There had to be a better way, and by working in partnership with central government we have found one.”

‘A solution for Auckland, but it won’t work anywhere else’ – McAnulty

Labor local government spokesperson Kieran McAnulty.

Labour’s local government spokesperson Kieran McAnulty said the Government’s plan will still cost Aucklanders more in rates than if the Hipkins-era Affordable Water Reforms had not been repealed.

That plan would have seen the establishment of 10 regionally owned and led public water entities based on existing local authority boundaries.

McAnulty said water charges would increase by 7% under the coalition’s plan, as opposed to 2% if they had followed through with Labour’s affordable water plan.

“This is because the Auckland/Northland entity would’ve had a credit rating of AA, while Watercare will be BBB at best, so the cost of borrowing will be larger.”

He said Auckland was always going to be the easiest region to resolve as it had the largest population.

“What the Government has put forward today is a solution for Auckland, but it will not work anywhere else in the country.”

The cost of repeating affordable water was already hitting ratepayers across the country, McAnulty said.

“Every time a ratepayer opens their rates bill and sees an increase, they can lay that at the feet of this Government.

“The longer they take to spell out to Kiwis what they’re going to do, the more expensive it gets for ratepayers.”