I was recently sent a video by Bruce Smith, Westland Mayor, on the Three Waters proposal (drinking water, wastewater and stormwater). His concerns are presented in a measured manner and what he outlines is of concern to us all, especially on ownership matters and democracy.

At the 2021 local body conference, Prime Minister Jacinda Ardern and Nanaia Mahuta presented the Three Waters proposal to mayors and chief executives. The government is proposing to give councils $2.5b to transfer their infrastructure and water rights to the government. Some mayors have called this a bribe. Bruce Smith would like to call this an incentive. The Westland Council would receive $11m to spend on what they would like and be no worse off after handing over their Three Water infrastructure.  However, no details have been provided, only that the funds would become available in July 2024 (one year after the next election), but councils must decide to participate by September 2021.

The government will set up a masterplan of three waters reform and one of four companies to hold the assets. Any money spent must be approved by Iwi. Further, Māori will be granted 50% ownership and voting rights, plus veto rights in perpetuity over governance and future strategy. This has dangerous implications for democracy.

Mayor Smith’s objection is that only 10.4% of the Westland population is Māori and only 16.7% of the total New Zealand population, yet they would be entitled to 50% ownership and do not have to pay anything for the infrastructure and rights to the Three Waters.  

Mr Smith highlights this proposal is very unorthodox where 100% of the population have paid for the assets, but transfers 100% to the government, of which 50% ownership goes to Māori who will pay nothing for these assets. As Mr Smith states, this is a playbook straight from He Puapua (refer to my blog article – “He Puapua – The continuing debate”). A strange governance structure sits over the operating companies, with no ownership or shareholding as per the Companies Act and an ad hoc distribution of voting rights. To Mr Smith, this structure has no logic.

Nanaia Mahuta has stated that councils must decide to participate by the end of September 2021, yet detailed information from the government will not be supplied to councils until August/September. How can councils make an informed decision? Councils must consult with ratepayers when strategic asset purchases or sales are being considered under the Local Government Act. Westland Council would need a minimum of three months to give consideration and allow submissions from ratepayers as to whether they support this proposal. Essentially, the council is transferring 25% of its assets below value. To do this, the council needs a binding referendum from ratepayers to allow this proposal to proceed. The government is attempting to circumvent democracy and the rights of the people by forcing councils to make a hasty decision without going to the people. Why?

There are two reasons. Firstly, this government does not believe in democracy when related to Māori affairs as seen with Mahuta changing the law on the creation of Māori wards regarding councils, by removing the right of councils to hold a referendum on the matter. Secondly, Labour needs to satisfy its Māori caucus at the expense of the general public, because they know any referendum would in all probability, not accept the transfer of assets to the government, and nor 50% going to Māori.

This is an undemocratic process in all its forms. It is likely councils will still be nearly 100% in the dark at the end of September on how this will unfold, according to Mr Smith.

Currently, Westland rates for water are as follows:

• $527.40 per annum for residents
• $927.12 per annum for businesses

If this proposal was mandated, water costs would be $1,640 for residents, with the amount for businesses unknown. Does this include GST?

The cost will not be deducted from the rates bill. As Mr Smith said, assuming the rates bill for a resident is $3,000, of which $527.40 is deducted, thus making the rates bill $2,427.60. Under the proposed Three Waters, the $1,640 will be part of the rates bill, making the total payment for a resident $4,112.60, an increase of 37% to ratepayers.  I assume 50% of the $1,640 will go to Māori, who have paid nothing for these assets and ongoing income. This will be applied across all councils. This is wrong.

All three water assets will be handed over to government and Māori in 2021 or 2022 with no tangible conversation or democratic process and no payment to councils until July 2024. In the meantime, ratepayers will receive an increase of 37% on their rates with no control or say. This seems very unfair to me.

Mr Smith summarises his presentation by stating that the decision to remove assets from councils to government and Māori contravenes our democratic process and way of life. A total of 50% of the assets go to Māori at no cost, with 50% of the voting rights and a veto on all future decisions into perpetuity.

I assume that the veto rights go both ways for Māori. For example, if government or the company overseeing the Three Waters wishes to do something and Māori disagree, they can apply their veto rights, regardless of any change being for the benefit to all. Conversely, if Māori propose a change, but the other party disagrees with this change, Māori can apply their veto rights to this objection. Thus, the democratic process has been nullified. This proposal is an elitist, racially created system, ostensibly called ethno-nationalism. Democracy no longer exists and will be subjugated by an ethno-nationalist elitist system. This is the fundamental principle of He Puapua, a break.

Therefore, I believe councils would be well advised not to sign up to the Three Waters proposal because of the concerns I and Mr smith have raised.