Dunedin councillor says rates will rise unless Government helps fix ageing water infrastructure

Source: 1News

Some councils are warning rates may have to rise if they don't get enough financial help from the Government to address their ageing water infrastructure. 

Dunedin City Councillor Jim O'Malley told Breakfast he didn't feel it was getting enough help to repair some 80 to 100-year-old pipes. 

The cost to do this in the city's current 10-year plan was $560 million, but he said he was "sure" this would almost double in future plans to about $3 billion. 

He said if such costs were put on the ratepayer, rates would have to increase 50 per cent.

This would take current rates of $2200 to $3400, O'Malley said. 

"The thing is though, you can't rob Peter to pay Paul. If this is going to be paid for, it's still going to be paid by New Zealanders," he said.

"It's still going to be paid by you, one way or another. It's either going to come out of your left pocket or your right pocket.

"It either comes out of rates or your tax. It's got to come from somewhere."

"We do need help" from central Government he said.

O'Malley said the ageing water infrastructure issue had come about due to a "philosophy" many councils had had about keeping rates down. 

This had resulted in underinvestment, he felt. 

"If you look at servicing the water, that's around 40 per cent of your rates bill, so if you deliberately keep your rates down and then try and keep your water in good condition afterwards you're in an impossible arrangement."

Lower Hutt Mayor Campbell Barry, who was recently appointed chairman of the Wellington Water Committee, told Breakfast he was under "no illusion" around the scale of the challenge the region had.

He said there was a "trifecta of issues" - ageing infrastructure, significant growth in parts of the community, and underinvestment over decades.

The city was looking at $5 billion over the next decade to address the issue, Barry said. For Lower Hutt, this was $1.2 billion and for Porirua, $1.8 billion. 

"If we weren't to address this issue, then the impact on our business, on our people, on our environment and our reputation, is completely unacceptable. 

"That's why we need to be doing everything we can to put this at the forefront of our minds and our focus."

In order to persuade ratepayers to spend so much money, Barry said local politicians needed to be up front and honest around the scale of the challenge.

"I think ratepayers can accept paying more when it goes towards the right things. It needs to be our absolute focus together to get this right but it is going to be challenging when it comes to funding and local government tools are very limited and that’s a conversation we’re going to have to have in the future of local government."

Barry said this was why the Three Waters Reform conversation was "absolutely necessary" to help with funding due to not enough of a ratepayer base.

With 67 councils around the country owning and operating the majority of the country's drinking water, wastewater and stormwater services, the Government is intending to reform local government’s three waters services into a small number of multi-regional entities with a bottom line of public ownership.