The Productivity Commission’s report into local government funding and financing highlights some of the key challenges faced by local authorities around adapting to climate change and funding for improved drinking, storm and wastewater quality.

Water New Zealand Chief Executive John Pfahlert says he welcomes the report’s findings.

He says the report makes it clear that the Government will need to provide local authorities with increased support to meet those challenges and the increased responsibilities they will face.

“It is evident that small, rural and low-income areas will struggle to meet infrastructure costs and the requirements of regulatory reform in the three waters sector.”

Water New Zealand also agrees that the Government needs to take a stronger lead on climate change resilience and provide councils with better tools to regulate development on at-risk land.

“While the funding to rebuild and relocate three waters and roading assets because of sea level rise or flooding will largely continue to come from local government, there is also a role for central government to play – especially around risk assessments.”

The report has suggested that the government give councils the power to levy volumetric wastewater charges.

“While we see the benefits of volumetric charging for water supply, we would question the practicality and the ability of local authorities to measure household wastewater usage.

“Currently there is no practical volumetric measurement tool for household wastewater and that’s why we believe it is more feasible to charge households for total water usage.

“Watercare in Auckland is the only council that has a wastewater levy and that is calculated as part of an overall volumetric charge based as a percentage of the total household water use.

“We know that councils that charge for water on a volumetric basis, such as Kapiti Coast District Council, achieve better water efficiency and that is why we generally support volumetric charging for water.”

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