Our key concerns with the Water Services Entities Bill

The impact of the Water Services Entities Bill will be profound. The public and many local authorities appear to share many common concerns about provisions set out in the Bill. These include:

  1. The take-over of council assets. Council – and therefore ratepayers’ - assets will be taken without the consent of the local communities, and without fair compensation. The public has been told by the Government, including in the Bill’s explanatory note, that councils would continue to own the three water assets and that there would be accountability and transparency. However, provisions in the Bill tell a different story.

  2. The so-called ‘ownership’ model. To call territorial authorities ‘owners’ of the Water Services Entities is meaningless, as they won’t be able to exercise any of normal ‘ownership’ rights of control. The proposed shareholding model does not provide any of the conventional benefits that typical shareholding arrangements convey. Councils are denied the rights of possession, control, derivation of benefits, and the defining attributes of ownership. This is made clear in clause 166 of the bill, [which says a “territorial authority… (a) has no right, title, or interest (legal or equitable) in the assets, security, debts, or liabilities of a water services entity (and the constitution cannot confer any such right, title, or interest…); and (b) must not receive any equity return, directly or indirectly, from a water services entity;….]”. The only possible benefits of the shareholding to be (i) a right of veto in the instance that privatisation is proposed, and (ii) in determining the make-up of the Regional Representation Group.

  3. The loss of democratic control, and poor accountability to the public. Taking three waters infrastructure and delivery services out of the control of local councils and placing it in the hands of the proposed entities with their complex governance structures will greatly diminish proper public accountability. John Ryan, the Controller and Auditor-General, wrote to Parliament about the bill, saying the legislation “could have an adverse effect on public accountability, transparency, and organisational performance”. Furthermore, he said, “Water Services Entities cannot be held to account by ratepayers like local authorities are, nor can they be held accountable by Parliament because they are not Crown entities this makes direct accountability to their respective communities more important.” 

    The Office of the Auditor-General’s submission to the Parliamentary select committee says the proposed Three Waters changes will result in ‘a serious diminution in accountability to the public for a critical service’ and ‘no proposed audit scrutiny’.

    Under the proposed structure, the loss of local communities’ influence over their water services will be further diluted by the 50/50 co-governance-with-iwi make-up of the Regional Representation groups and the Regional Advisory panels, which are the only avenues open to local authorities to have any influence on the behalf of their communities. 

  4. The proposed governance structure is overly complex and top-heavy. “The complex accountability mechanisms mean the Boards of the mega entities will have multiple ‘masters’. Management will have multiple accountability documents, including various important socio-cultural obligations that need to be balanced against cost efficiency and maintaining minimum service levels. This creates room for mismanagement or worse, compared to a more straightforward council-owned, corporate state-owned enterprise or Crown Entity model.” (Communities4Local Democracy submission).

    The multiple levels of bureaucracy will result in increased costs, and erode any potential efficiencies created by centralisation. 

  5. The co-governance model will give iwi members a much greater say than other citizens. Considerable weight has been given to providing for iwi/Māori input, without the same consideration given to other New Zealanders. This is a significant departure from a society where all citizens are equal before the law. 

  6. The requirement for everyone who exercises functions, duties and powers under the Bill to give effect to both the principles of Te Tiriti o Waitangi, and Te Mana o te Wai. 

    Under the requirement to give effect to Te Mana o te Wai statements, iwi and hapū will wield a significant degree of power over how the Water Services Entities operate. Iwi/hapu can formulate Te Mana o te Wai statements as broadly as they wish - there are no strict definitions or limiting criteria. As the Department of Internal Affairs states: “The [three waters] reform will provide for local expression of Te Mana o Te Wai that will enable development of Mauri frameworks, application of mātauranga Māori measurement or any other expression that iwi decide is relevant to them”.  

    Furthermore, there is no limit to the number of statements an entity must refer to - section 140 of the Bill makes it clear that iwi and hapu can make such statements as often as they like.  And the entities must respond to them with a plan that sets out how they will give effect to the statements.

    As Te Mana o te Wai statements lack carefully articulated definitions and constraints, this provision is open to abuse.

    On the other hand, there are no solid and clear mechanisms to ensure other local perspectives are heard and considered by the proposed entities. While some detail regarding consultation and engagement with local communities is set out in Part 6 cl 202, there is a lack of clarity on what engagement and consultation entails, and at what level this is required. Although the entities are required to have "consumer forums" and prepare a series of "stocktakes" this does not guarantee community input, as they are not required to act on any of the issues raised.

  7. The Government’s claims of cost-savings through proposed water reforms are unrealistic. It has been reported that the cost saving claims are based on dubious modelling and implausible assumptions that exaggerate the benefits of mega entity reform. The effect of the erroneous assumptions includes understating the likely cost to water users. (Refer to the Whangarei District Council Castalia report). Nor does the bill recognise the unpredictable cost implications in implementing Te Mana o te Wai statements.

    Furthermore, the mega entities significantly increase Crown fiscal risk. A Standard & Poors’ report concludes that there is an "extremely high" likelihood that the New Zealand sovereign will provide timely support to the water entities if they are in financial distress. Therefore, significant risk will be transferred to the Crown without the typical control and accountability mechanisms.

  8. There is widespread opposition to the proposed reforms, including from 60 out of 67 councils. Polls commissioned by various groups prove this reform is highly unpopular. One such poll was commissioned by Democracy Action in November last year – please click HERE to read.

Further ideas are available in the Water Users’ Group submission, and the Democracy Action submission. 


Water Services Entities Bill

Communities4Local Democracy: Submission to Finance and Expenditure Select Committee on Water Services Entities Bill

The Whangarei District Council Castalia report

Department of Internal Affairs: Three Waters Reform FAQ 

Controller and Auditor General: Submission on the Water Services Entities Bill


Gary Judd QC: Ideological government indulging sectional political constituency

Dr Muriel Newman - Time to Oppose Three Waters

Graham Adams: Talk of a coup ratchets up Three Waters debate

Media coverage

Newsroom: Ratings agency says Govt will bail out Three Waters corporations in a crisis

National party press release: Labour Must Listen To OAG And Scrap Three Waters

Stuff: Auditor-General raises concerns about accountability in Three Waters plan


Government to force Three Waters scheme despite overwhelming opposition

The controversial Three Waters legislation is one step closer - the Water Services Entities Bill was introduced to the House last week. Local Government Minister Nanaia Mahuta said it was the first of several pieces of legislation concerning the proposed water entities. Continue reading

Taxpayers’ Union takes to the streets to fight Three Waters

Christchurch was the first of 39 stops in a nationwide roadshow run by the Taxpayers’ Union to oppose the Government’s Three Waters reform. Executive director Jordan Williams said the tour was being held to hear and highlight the concerns of ratepayers and local councils opposed to the “undemocratic three waters asset grab.” Continue reading

Three Waters - Government removes vital information from public view

The Water Users’ Group legal challenge to the Government’s Three Waters Reform proposal has met an unexpected snag: “Something strange happened in December after we filed our High Court application for judicial review. Crown Law asked us to redact information that was previously in the public arena,” Stephen Franks writes in a recent communication to supporters of the Water Users’ Group. Continue reading

Three Waters update - Mayors still not convinced

It appears the Recommendations Report by the working group set up by the Government to address major national concerns around Three Waters has done nothing to quell the fears of many councils. Whangārei Mayor Sheryl Mai said the working group's recommendations to Government around dealing with the three sticking points of representation, governance and accountability simply made her council more determined in its High Court Three Waters challenge. “Our concerns remain regarding democratic accountability, and ownership rights and responsibilities…….” Continue reading

Three Waters Legal Challenge Underway

You may not have heard of the Water Users’ Group. This is a group of concerned citizens who are taking legal action against the Labour Government’s plan "giving some Māori the effective control of more than a hundred billion dollars of ratepayer funded three waters assets". A link to the Group's website is here: www.waterusers.org.nz Continue reading

Major survey: Kiwis demand consultation on Three Waters

The most comprehensive polling to date on the Government’s Three Water reforms reveals the overwhelming majority of New Zealanders believe the Government should consult with them over the highly contentious policy proposal. Continue reading


All Water Services Entities will be required to give effect to Te Mana o Te Wai. Three of its six principles will encompass all aspects of the water delivery system - specifically Mana whakahaere, Kaitiakitanga, and Manaakitanga. These principles are to be defined by tangata whenua. Continue reading


Incensed at the Government forcing through a plan for four mega entities to take over the country’s three waters infrastructure and service delivery - despite widespread opposition from 60 of the country’s 67 councils, and the promise from the government that their proposal was optional – three councils have banded together to file an application in the court against Minister of Local Government Nanaia Mahuta and Secretary for Internal Affairs Paul James. Continue reading

Outrage at power grab - “a dark day for democracy”

"A deceitful, lying pack of bastards," exclaimed Masterton councillor Tina Nixon on hearing that the government will force councils to hand control of their water assets to four mega water entities, despite the previous promise to Councils that they could choose to opt in or out of the proposed reform programme.  Continue reading


There is strong level of opposition across the country to the Government’s proposed Three Waters service delivery programme. Comments from councillors show very serious concerns. In some quarters there appears to be a suspicion that the Government is not being completely open about everything it is seeking to achieve.   Continue reading

Three Waters reform to give iwi/Māori dominating influence

As the Government releases more information about its Three Waters reforms, it is becoming obvious that the proposed system is to be dominated by the rights and interests of iwi/Māori. The Department of Internal Affairs (DIA) Three Waters paper ‘Opportunities for Iwi/Māori in the Three Waters Reform’ sets out how this will be achieved.  Continue reading

Government plans to seize ratepayers’ assets - without compensation

Local Government Minister Hon Nanaia Mahuta has announced further details of the Government's regulatory and structural reform of water service delivery in New Zealand. The plan is for an unprecedented transfer of billions of dollars of ratepayer-funded assets from local bodies to four entities. Continue reading

Three Waters Reform – further constitutional change by stealth

In another step in what the Government terms ‘partnership-based reform’ Local Government Minister Nanaia Mahuta last week released further information on plans to move the ownership and management of water infrastructure from local councils into the hands of four multi-regional water service entities across New Zealand. This information includes the proposed boundaries of the four water providers, and further details on the proposed water services entities - including governance arrangements, how they would be regulated, and the role of iwi. Nanaia Mahuta stated: “The Government will continue to work with the sector, iwi and industry on some of the details to give these transformational reforms the best chance of success. We will be making further announcements in the coming weeks, including a three waters reform support package for councils and their communities’’. Continue reading

Next Steps for Three Waters Reform

This is a complex set of reforms the Government intends to implement in stages over the next three years.  The first stage was the Water Services Regulator Act - which created the water services regulator ‘Taumata Arowai’. This body will oversee and enforce a new drinking water regulatory framework, and have oversight of the management of our wastewater and stormwater networks. This is designed to ensure that minimum water standards are met no matter who the supplier. This new Crown entity is currently being established, and will become responsible for drinking water regulation when the second stage, the Water Services Bill, is passed, which is expected to be mid-2021. Continue reading

Update on the Three Waters Reform Programme

Early last year many of us made submissions on the Water Services Regulator Bill. Following the public consultation process the Government passed the Taumata Arowai – Water Services Regulator Act in July 2020. The reform programme is now being progressed through a voluntary, partnership-based approach with the local government sector, alongside iwi/Māori as the Crown’s Treaty Partner.  Continue reading

Influential role for Maori at new Water Services Regulator

Taumata Arowai—the Water Services Regulator Bill, open for public submissions until 4th March, seeks to create a new water regulator - to be called Taumata Arowai. The Bill includes provision for a Maori advisory group to work alongside this new Crown entity. The Maori Advisory Group is another manifestation of the government’s commitment to support agencies to form true partnerships with Māori "by actively facilitating new prototype partnerships between the Crown and Māori", as outlined in a cabinet paper released in July 2019, 'Building Closer Partnerships with Māori'. Continue reading

Submission: Local Government (Electoral Legislation and Māori Wards and Māori Constituencies) Amendment Bill

  Written submission Thank you for the opportunity to provide feedback on the Local Government (Electoral Legislation and Māori Wards and Māori Constituencies) Amendment Bill. Democracy Action supports the policy of enabling local electors to take part in their local elections and decisions about their local electoral arrangements. Continue reading

Democracy Action oral submission to Auckland Council re: designated Māori seats

Oral submission to the Auckland Council Governing Body on 2 October 2023 Good morning your worship Mayor Brown and Councillors. Thank you for this opportunity to share our views on the council’s proposal to introduce designated Māori seats. I am here representing Democracy Action – a group of citizens advocating for the protection of democracy and equality of citizenship. Continue reading

Submission on the Hauraki Gulf / Tīkapa Moana Marine Protection Bill

We have put together a simple submission on the Hauraki Gulf / Tīkapa Moana Marine Protection Bill, which you are welcome to use as a template for your own. Remember the final day for submissions is Wednesday 1 November. Continue reading

Submission on the Crown Minerals Amendment Bill

Below is our submission on the Crown Minerals Amendment Bill. Continue reading

Submission on the Natural and Built Environment Bill

Below is a copy of our written and oral submissions on the Natural and Built Environment Bill and Spatial Planning Bill. Continue reading

Aotearoa New Zealand Public Media Bill Submission

We at Democracy Action have significant concerns about the independence of public media under the proposed legislation. We believe the bill does not adequately safeguard editorial freedom. Continue reading

Submission on the Canterbury Regional Council (Ngāi Tahu Representation) Bill

  WRITTEN SUBMISSION Democracy Action does not support the Bill.  We do not support establishing iwi-based power by appointment in our governance arrangements. Therefore, we oppose the purpose of the Act, that is, to enable Te Rūnanga o Ngāi Tahu to appoint up to 2 members to the Canterbury Regional Council.  We urge the Government to reject the Bill in its entirety.  Continue reading

Submissions on the Pae Ora (Healthy Futures) Bill

Oral submission text: Thank you for the opportunity to provide comment on the Pae Ora (Healthy Futures) Bill. I am presenting this submission on behalf of Democracy Action.  Firstly, I want to make it clear we wholeheartedly support the purpose of the Act - that is to protect, promote, and improve the health and future health of all New Zealanders. But, if the intention is to improve the health of ALL New Zealanders, this proposed legislation is absolutely the wrong way to go about it.  Continue reading