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National says it doesn’t plan to provide financial support to local councils for water infrastructure under its alternative to Three Waters

Public Policy / news
National says it doesn’t plan to provide financial support to local councils for water infrastructure under its alternative to Three Waters
Labour's local government spokesperson, Kieran McAnulty
The Labour Party's local government spokesperson, Kieran McAnulty in Parliament during 2023

Labour claimed to have found another “hole” in National’s fiscal plan on Monday, but it appears to be based on a misrepresentation of the party’s Three Waters alternative. 

Grant Robertson and Kieran McAnulty alleged the National had promised financial support for local councils to upgrade water infrastructure, but hadn’t accounted for it in their fiscal plan.

This was a “multi-billion dollar hole” that would result in rate hikes for rate-payers, they said. 

However, National’s policy document doesn’t commit to giving councils any automatic financial support. It only promises to step in as a last resort. 

The party would retain $1 billion the Government has already allocated to water reform and use it to support local councils’ that need help shifting to sustainable financing models. 

“Funding will be allocated to councils on a needs-basis, but only when other options – like accessing long-term borrowing – have been exhausted,” the policy document says. 

A yet-to-be-created Water Infrastructure Regulator would advise the Government on councils’ proposals for the delivery of water services and assess if any temporary funding was needed. 

“Where the Government concludes that a council cannot achieve financial sustainability by, for example, gaining access to long-term borrowing, it will provide limited one-off funding to bridge the gap”. 

Chris Bishop, the National Party’s campaign chair, said Labour was incorrect and his party did not intend to provide significant funding to councils in the next few years. 

“This is more nonsense being spread by the Labour Party which, frankly, should know better,” he said. 

“We’ve said, as a last resort, we’d potentially consider transitional funding as those new entities transition in [from 2026]”.  

There would only be a “fiscal hole” if councils need transitional funding in the next Parliamentary term and, even then, only if the amount required could not be met within operating allowances or money already provisioned for water reform. 

However, any councils backing National’s water plan should be aware that the party does not expect to be providing much, if any, financial support for water infrastructure maintenance.  

In many ways, there is not that much difference between the two parties’ proposals. 

Many councils will have to amalgamate to achieve balance sheet separation and residents will have to pay for improvements to water infrastructure — either through rates or water charges. 

Labour’s plan takes a top-down approach, by setting up these amalgamated entities on behalf of the council, whereas National would let local councils set them up themselves.

If councils failed to come up with an arrangement that worked, a National government would take over and set up the entities on their behalf, anyway. 

Bishop said there was actually a “widespread consensus across the parliament” on how to fix the problems facing water in infrastructure in New Zealand.

“[But] the debate is mired in intricacy and, frankly, frustrating conversations about politics rather than economic regulation of water,” he told reporters on Monday.

Other holes of dubious size 

Last week, the Taxpayers’ Union, a fiscally conservative advocacy group, claimed to have found a “fiscal hole” in Labour’s GST policy

The group argued that lowering the prices of fresh produce would lead to increased demand which hadn’t been accounted for in Labour’s cost estimate. 

It called on the party to release its spreadsheets, as others have asked National to do with its foreign buyers tax

Grant Robertson said the Taxpayers’ Union was wrong, and there was no need to release a spreadsheet model as the estimate process was “very simple”.  

Labour just took the amount of money spent on fruit and vegetables in recent years and extrapolated it forward, while assuming all savings were spent on more of those produces

The TPU went one step further. It used a study, published in the Lancet Public Health Journal, to estimate how much extra demand might occur in response to a 13% drop in prices. 

It argued that removing GST could lead to consumers buying 17% more fresh and frozen fruit and vegetables, at the expense of processed products.  

“The shift away from processed fruit and vegetables will mean less GST is raised on these products and this should be taken into account in any costing,” it said in a statement. 

It could add up to $90 million to the annual cost of the policy, if the full tax cut was passed on.

However, most experts think that is unlikely to occur. Some similar policies overseas have resulted in just 30% of the tax savings ending up in consumers’ pockets.

If so, the TPU said Labour’s cost estimate would only be about $30 million short each year. 

One economist told the price sensitivity numbers in the Lancet study were very high, and might be lower in real life. This would make any shortfall even less than $30 million. 

An older study, which measured a 12.5% discount on fruit and vegetables, found there would be an 11% increase in demand for those products.

While the Taxpayers’ Union was likely right to say Labour might have underestimated the total cost of the policy, it was not enough to materially alter the cost of the policy.

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Labour sure are doing a lot of shouting. This and missing out on a leaders debate even though their leader is the one not available meaning it wouldn’t be a leaders debate would it. Need to realise shouting  louder doesn’t actually change what you are saying or make it any more convincing. Their goose is cooked, fuss and feathers and all, going down, desperate for straws to clutch. 


This and missing out on a leaders debate even though their leader is the one not available

Actually Labour has offered:

1. To have the debate on almost any day next week

2. To sub in an alternative person to do the debate

3. To do the debate via Zoom.

National has declined all of these options. It is Christopher Luxon who is missing the debate, not Chris Hipkins, who is simply sick.



Chris Luxon’s response;

”I’m extremely disappointed to see Labour falsely claiming that I have "pulled out" of the Stuff Press debate scheduled for tomorrow evening.

To be clear, I have not pulled out of the debate – the debate isn’t going ahead because Chris Hipkins has Covid and rescheduling during the last week of the campaign has proven impossible.

I’ve already debated Chris Hipkins twice and I look forward to debating him again in the final debate on TVNZ next Thursday night.”


Sums it up doesn’t it. Labour needs to get out of fluffing around in the playground and get into the classroom.  Six years of a mostly primary school pantomime has worn itself out.


I think they are talking about Nationals previous promises to councils. 


Some strict regulation is needed to to ensure Council stick to their knitting on the 3- waters. Too many nice to have projects resulting in much higher debt resulting in lower borrowing ability needed for the 3-waters. Auckland comes to mind where Water Care whatever could borrow more but because they were thrown in with Council debt were unable to borrow more. Not sure if the current mayor can actually do anything about it. I know he and another Councillor were trying to inform what appear to me to be financially ignorant councillors on the rates/debt issue.

National trying to shut the door after the horse has bolted. Its no good offering some special loan to Councils who have already got into trouble because of mis-managed funding allocation.


Many smaller councils just don't have the capacity to raise debt, or execute the large and complex capital projects required. And politically these water projects are often voted down as the public feel they are paying for the status quo and would rather pay less rates or have something shiny. Some councils haven't even been able to implement volumetric water charging. This is what people are used to, until something goes bang and then it's a surprise.


It's not a fiscal hole, Dan.

It's a physical issue, completely. Entropy is one part of it; there has never been more infrastructure, never older, never more prone to events. Then there is the attempt to 'improve', which is undo-able, given where we are in energy and resource terms. 

Calling it in, was a misunderstanding of the problem - as will be the inevitable coming attempt to privatize the gains and socialize the costs.

All pipework is fossil-feedstock originated, all related work is ditto. Same goes for bitumen - which gets the diggers from A to B. 150,000 tons of the latter, to give you some idea.…

All imported. All increasingly contentious. The IEA -  prodded we think by Simon Michaux - is going to look at resource-scarcity.

Do some research. Fiscal? Pshawwwww... Deckchair discussions circa 1912



According to NZTA

Bitumen alternatives – non-renewable materials 
1 Coal Tar   
2 Concrete   
3 Sulphur   
4 Shale oil/oil sand bitumens  
5 Peat    
6 Natural bitumen   
Bitumen alternatives – renewable materials 
1 Lignin    
2 Thermolytic process oils (pyrolysis, hydrothermal liquefaction) 
3 Tall oil pitch and other pine resins  
4 Microalgae  
5 Polymerised vegetable oils and related products  
6 Commercially available products
Recycled materials 
1 Waste tyre rubber 
2 Plastics 
Recycled bitumen 
1 Asphalt mix 
2 Chip seals recycling 


People might start eating more fruit and vegetables. Oh no, we can't have that! 


Governments can spend from a 'hole';  later they can chose to fill the hole with some bond sales 


Mr Hipkins is supposedly unwell with Covid and hence isolating of his own volition. He will not attend another leaders debate tonight in Chch.

Surely another TV1 debate due next Thursday in Auckland can be swapped out to Chch? South Island then has one and Auckland has had two.? Seems fair.


Seems fair but the National kitchen cabinet ain't full of south Islanders like in Key's government. Apart from Brownlee will be mostly Jafas and wellingtonians .


Like Labour, National has hung the ratepayer out to dry allowing councils to name their own figure when comeing up with their rates increases.

The very minimum expected for the next government is to limit rates increase to that of inflation.

Suggest Party Vote NZ First as they are the only party looking after the elderly