S&P Global Ratings says the credit risk for New Zealand’s local councils is rising after the coalition Government repealed Labour’s water reform legislation last week.
An assessment by the international credit rating agency said council incomes were not increasing fast enough to cover the costs of growing infrastructure responsibilities.
The gap between revenue and expenditure was widening and sector-wide deficits and debt levels were much higher than had been forecast last year.
Plus, previously “extremely predictable and supportive” institutional support from the central government was weakening.
“This is because of rising inflation and infrastructure budgets, and given the new National Party-led coalition government's promise to repeal existing water reform legislation”.
“The former government's water legislation was developed after many years of reviews and working groups, and the sudden reversal makes it difficult for councils to prepare their upcoming 10-year long-term plans,” the report said.
S&P Ratings said National’s alternative legislation was expected in mid-2025, but council finances could continue to deteriorate while implementation dragged on for years.
Plans pending
National has promised to legislate a new kind of council-controlled organizations that will achieve balance sheet separation, but hasn’t given much more detail than that.
Rating agencies have said council-controlled organizations would likely be viewed as being part of its parent or at least a contingent liability.
Simeon Brown, the Minister for Local Government, said the coalition had been “very clear” about how they were going to deliver its water policy.
“We're working at pace around implementing that. It's all about making sure that local councils have the financial sustainability and what's required to invest in infrastructure over the long term”.
Prime Minister Christopher Luxon said he was not concerned about S&P’s warning. The new proposal would establish “robust, proper” CCOs with balance sheet separation.
“That means that they can access long term debt and funding and financing in ways they haven't been able to do before. I think it’s gonna work fine”.
Indebted to ideology
S&P Ratings noted that most of the opposition to Labour’s Affordable Water Reform related to “ideological differences” and not the “significant debt relief” it could have provided.
“The New Zealand central and local government appears to be unwilling to address the growing imbalance between revenue growth and rising expenditure for the local government sector.”
Councils are able to raise property rates but even seemingly large increases in recent years have been “cannibalized by high inflation, and rising interest expenses and infrastructure spending”.
“We estimate the after-capital account deficit across the sector grew to be 16% of total revenues in 2023, and total debt rose to 184% of operating revenues”.
Part of the problem was that the central government had “steadily withdrawn financial assistance” while simultaneously increasing the sector's responsibilities.
Still rated
While the note warns about increasing credit risk, S&P didn’t downgrade any of the councils’ actual credit ratings.
“New Zealand's local councils remain highly rated. We have not lowered the ratings on any local council today. We have flagged a potential weakening in ratings and revised several outlooks to negative.”
S&P said the outlooks on 15 councils were revised from stable to negative, meaning they could get a credit rating downgrade if the trend continued.
“Even if we revised downward the institutional framework and lowered the ratings, New Zealand councils remain highly rated in a global context at between AA and A categories”.
116 Comments
Spot on. We are entering a few years of economic downturn... councils want to raise rates by 25% as peoples real income drops.. there will be a huge backlash, change of leadership for most as we elect prudent mayors and a demand for local govt to slash costs as per central govt ... the chances of local govt investing in water are non existant.
Central govt has no money to fix it either.
No Jimbo, you're adding to the problem with talk like this. Right wing government's can spend and left wing government's can cut back (the main difference is who they look after when they do).
This isn't about left of right it's about the right solution to problem. Over simplifying like this adds to the black and white polarisation, it means right wing politicians can't be seen to spend when it is necessary and left wing politicians can't be seen to cut. We need to move away from left and right and focus on the right solutions to the problems we're facing.
Yes - and this is why we'll have back to back "worst governments ever".
National are pulling the pin on government spending, as Labour were promising to do also. This will create a rift in the economy which will be filled by either the private sector spending less, or borrowing more. Neither of these outcomes will lead to fixing any of the issues we're facing with infrastructure and primary services.
The only thing we're looking to grow in NZ is the bank balance sheet, but it's stuttering now. Contracting slightly in December. If this continues and we get public spending cuts well underway, the private sector will be looking at a fairly hefty cut in living standards.
Well the previous government must surely have allocated the funding that their Three Waters scheme would require. Those funds could be lent to the councils where necessary. That means that the councils that have invested and maintained their water services can be left alone as they should be. Finance as/where required can be monitored by central government to ensure firstly it is necessary and secondly that it is efficiently spent and not pilfered for other things. Interest to be paid at an appropriate rate with the mayors and councillors left to explain to their ratepayers why it all became necessary.
Borrowing from govt is different from being funded from govt in terms of how their balance sheet is treated, which impacts their credit rating which impacts the interest they are charged. Labour didn't propose Three Waters due to ideological reasons, it was the best solution that they could come up with. National has cut it based on ideological reasons (as the articles clearly states) with no practical alternative to replace it.
They will bankrupt Local Councils which will result in asset sales which will benefit the rich National party donors who will buy them all up as basement prices.
We don't even need to guess about this, it's already happened in the UK under the Tories austerity, you can see the end game. Libraries closed and sold, energy prices through the roof, water polluted as private firms cut corners for profit, huge increases in rail fares ....
This is precisely why it should be in the hands of local councils. Every region is different and needs a solution tailored for their unique needs. If the the water resource aren't being maintained then vote for the people that will do this and hold them to account for failures. Do you expect a staff member to improve on poor performance if you never hold them to account? Passing this off to central govt doesn't solve the root cause of the issue there.
Point taken. Funding could be advanced then as capital with central government thus becoming a stakeholder. As with the government already having shares in Christchurch City Holdings for example. That would entitle them to board representation but whether that would actually ensure the requisite management is a moot point. The thing is, whether local or central government, it’s hard to raise much confidence in what resources are on offer to address the longstanding issues arising from neglect and which go far beyond, just money as a fix.
"Labour didn't propose Three Waters due to ideological reasons"
Yes they did. Te mana o te wai was all about their ethnostate agenda
https://breakingviewsnz.blogspot.com/2023/09/graham-adams-government-qu…
100%. The coalition pitched their opposition to 3 waters based on anti-Maori narrative. The longer term plan is actually to force council's to sell. NACTNZF voters drank the coolaid and will now get privatisation and higher prices. It's OK though, the rich ones will own the companies. More wealth concentration to the top 10%
My husband is involved in this too - he said the same. He also said the previous National Government was talking about making a similar move before being voted out and in broad terms both the previous National Govt and the Labour Govt were suggesting similar course of action. Councils cannot fix this. He said that it is the result of 40 years of lack of investment in water treatment plants and water provision. He admitted that 3 waters wasn't perfect but that it was an probably the best option out of all the difficult options. Complex problem, no simple fix.
The best option?
"The proposed debt financing of Three Waters has received little coverage in the media but it brings its own set of risks to the reforms which could turn out to be ruinous for the country’s finances"
https://www.bassettbrashandhide.com/post/thomas-cranmer-three-waters-an…
Do tell me, what are the similarities between a private UK water company leveraged to the eyeballs by investment banks under OFWAT's ridiculous financial regulation, asset-stripped for dividends, inflicted with enormous derivative liabilities and Labour's plan to centralise work and funding for publicly owned water assets?
If NZ ever reach a stage where our water assets are privately owned, it's game over and Nationals crony's have won. You will beg for iwi to get involved at that point.
The electorate voted and within that rejection of the Three Waters format there was undeniably a dismissal of the status as proposed for Iwi. It is hardly likely in any circumstances that 85% of any population would be reduced to beg from the other 15% unless you were go back to the middle ages and serfdom.
If we take your suggestion to its conclusion - I think what you are saying is that the governance structure of 3 Waters (iwi/Crown 50/50 share of seats on the overall Board entity) was what the electorate opposed? Right?
If so, then why can the whole legislative project to restructure the ownership, funding and management of this infrastructure, as opposed to just amending the legislation to reflect a Board composition of 100% Crown appointments?
Kate that certainly presents a hypothetical question and a good one and it’s one that the last government should be seriously considering too. Seemingly there is consensus that local government, with some exceptions, has failed to maintain essential water services to their communities and it is now beyond their capacity to restore them to a sufficient standard necessitating central government to get involved. That involvement though is hardly one size fits all. For a start, fairly the exceptions have proven themselves and deserve to be left alone. The Crown could thus provide capital on a case by case basis with representation to oversee management, for want of a better word. For example the Crown has involved itself already with a 25% share in Christchurch City Holdings which in turn is progressing the new international airport in Central Otago, so the precedent and mechanisms already exist.
and a good one and it’s one that the last government should be seriously considering too.
You miss my point - it's a question for the current government; i.e., if they didn't like the governance structure due to Māori co-governance (and this was the populist aspect of the public discord) - then why not just amend the legislation to change the governance structure?
If I had to have a 'punt' at why they didn't just do this - I'd say it is because they want to turn these services in to private sector utilities, perhaps the same mixed-ownership type model that John Key went for during his time in office;
https://www.nzherald.co.nz/nz/pm-nats-to-sell-parts-of-state-assets/TUG…
And if privatisation is their reasoning - I think they ought to come clean on that with the public.
You miss the point actually. Regardless of the co-governance or whatever involved the model was flawed in the first instance as explained to a small degree in my post. As far as any prospect of any government meddling in terms of privatisation of NZ’s water resources , I would wager any iota of a hint of that would see that government hightailed out of town in a faster and sharper fashion than the last government may have been over the prospect of said co-governance.
hightailed out of town
After doing the deed... maybe. Don't forget that lots of folks/entities benefit from buying the shares;
https://www.rnz.co.nz/news/political/285835/have-asset-sale-funds-gone-where-promised
and
https://www.rnz.co.nz/news/political/230858/asset-sales-will-go-ahead,-says-key
Well if you can read the future, good for you. Much of the councils are on the verge of bankruptcy if not already there. Case in point Christchurch, the daft cathedral rebuild now half done and completely out of funds, a urban sports complex blown out by over $300 mill, a covered sports arena never ever budgeted in rates planning and the icing on the cake a brand new international airport 4 hours drive away in Central Otago, pie in the sky, construction still unfunded and likely never to pay a dividend in our lifetime. Therefore in just that case if the government or city council think they should sell the peoples’ water to pay for any of that stupidity they are inviting rioting in the streets. The main point now is that central government has both the power and the duty to oversee good governance by local government. Regardless of which government of whatever hue they have failed to exert the necessary disciplines and control and now at the end of the day, must now take some responsibility for that omission.
Long straw there Kate. Unless of course the deed should be entrenched in the manner attempted by the last government and friends. Can always be repealed and venture to suggest the political party undertaking to do just that would bolt in by a country mile, and one even longer than the outcome witnessed last election. And you are absolutely correct NZF would undeniably be a spoiler to any such attempt which in its own way is a very good vindication of the merits of MMP and the electorate’s good use thereof.
Unless of course the deed should be entrenched
Not sure what you mean there. The deed I'm referring to is the sale/privatization of these infrastructure assets - once sold, that's it (unless run down and bought back by a successive government, as per rail).
Entrenchment as I understand it (with reference to assets/infrastructure) would be used to thwart any future attempts to privatize (at least that was my understanding of the attempt at introducing entrenchment in the last Parliament where this 3W legislation was concerned)..
I think you misinterpret what the Greens were trying to do with introducing an entrenchment clause in the Three Waters legislation in the last Parliament. Their amendment sought to protect the assets from privatization in the future. The were not trying to entrench privatization of the assets - quite the opposite - they were trying to prevent privatization through the use of the entrenchment clause;
https://www.newshub.co.nz/home/politics/2022/12/why-greens-pulled-suppo…
Kate - "I think I'll take S&Ps view instead - no axe to grind, just a business to run."
Spare me days - did you not learn anything from the GFC?
"We rate every deal ... it could be structured by cows and we would rate it."
"The fact is, there was a lot of internal pressure in S&P to downgrade lots of deals earlier on before this thing started blowing up," the analyst wrote. "But the leadership was concerned of p*ssing off too many clients and jumping the gun ahead of Fitch and Moody's."
https://www.reuters.com/article/us-mcgrawhill-sandp-timeline/in-the-gov…
"what are the similarities between a private UK water company leveraged to the eyeballs by investment banks under OFWAT's ridiculous financial regulation"
The similarities relate to the extreme (10x) leverage applied that makes interest rate movements much more significant and can literally cause a defaul or in the governments case significantly more cost to the taxpayer.
The example holds as it was the example the government references and has debt leverage at the same or similar levels as that proposed under 3 waters.
I won't personally be begging for Iwi to be involved at any time (my personal experience if Iwi management capability leaves me cold), but if they wanted to get into buying the debt I am sure that would be welcomed.
Yes, odd choice. Perhaps so he can quote his psuedo-self in other forums? Which begs the question: does he think Thomas Cranmer has more credibility than Philip Crump? Given he's here as 'profile' perhaps he wants to explain.
https://www.lawfuel.com/unmasking-the-kiwi-power-lawyer-influencer-turned-conservative-blogger/
Basset, Brash and Hide, I laughed so hard I have coffee in my nose.
Of course, we can take their opinions as un-biased. Hahahahaha.
Do me a favour and take a look at where the NZGB swap back to and then where Local Govt bonds swap back to, the difference is considerable. Not only that, Treasury can fund for 30 years whereas local govt can't.
"Standard & Poor’s already warned that the water service entities will be aggressively leveraged and that the Crown’s backstop guarantee will matter considerably in their credit rating. Taxpayers more broadly could yet wind up footing the bill if a bailout proves necessary."
https://newsroom.co.nz/2022/09/12/eric-crampton-bad-debt-and-a-bad-prec…
For the proposed Three Waters financing the Department of Internal Affairs Info Memo states that leverage will start at 9x. Other key indicators are noted as ‘aggressive’. As set out in the below table ‘Financial risk profile overview’, the Government clearly states “we have assumed an ‘aggressive’ financial risk profile”. Leverage is in fact forecast to increase to closer to 10x
If you are too sensitive for Basset, Brash and Hide:
https://cranmer.substack.com/p/three-waters-and-one-mountain-of?r=1q83z…
We are lowered to that the conversation is about credit ratings, and how much can be borrowed. It's no solution at all.
The real problem is that we have first world needs and desires, with second world incomes.
Borrowing can solve none of that. Time to fess up and have some honesty. What is it we need to change?
One of the catch-cry's of the anti 3 Waters campaign was local assets managed by local residents. Now you have that all the talk is about central government's role. Sorry, don't change your tune. You pay for your water assets, it's what you wanted. No Govt assistance is appropriate.
https://www.stuff.co.nz/business/350183036/apartment-mogul-joins-mayor-…
excerpts;
“The more residents in the CBD, the better. We actually have all the roads and the infrastructure here, as opposed to Drury where if we’re not careful we’ll be paying to subsidise,” Brown said.
“When you have growth in our city [at the edge], the government collects more GST and tax, but the council, all we get is more cost.”
Todd was also passionate in his views that development should be focused in the central city, rather than in the rural south, when speaking to a reporter.
“We have no shortage of high density land. We don’t want to be developing in fu.....g Drury, it’s so wrong.
“All the money [there] is in rezoning the land, and building the houses is an afterthought, and the city is left picking up the legacy of bullshit development.”
Todd was referring to developers who buy land in Auckland’s future urban zones at a low price and then apply for a plan change to make it’s zoning available for housing development, substantially increasing its value.
“And, it’s all those rapacious money grubbing ... those big old developers ...you know who they are,” he said.
Fuck me, when the financial establishment industry starts calling out a right wing government for being ideologically driven we know we're in trouble. This is similar to the warning that they were giving to Liz Truss before she catastrophically tanked UK economy and got the boot super quick. This National party incarnation is the current Tories twin. Worse National leadership in living memory.
S&P Ratings noted that most of the opposition to Labour’s Affordable Water Reform related to “ideological differences” and not the “significant debt relief” it could have provided.
The old 4th dimensional chess argument aye?
"Yeah they might be making what seems like bad decisions, and currently getting bad results. But they are playing the game in a manner you can't understand, and if you just wait till it all comes together you will be pleasantly surprised at the end results.... They are just on another level."
Not when one has much higher borrowing costs than the other. It's the same with PPPs, they don't avoid the need to pay it just means we all pay more because the private sector has higher borrowing costs than central govt, similar with LG.
The plan here is to extract as much as possible from the wider population and transfer it to the wealthiest.
I don't understand the first question, are you taking about govt borrowing costs vs local govt borrowing costs or are you talking about the higher costs to taxpayers of PPPs?
It's no secret National want to privatise water. They repeatedly refused to support etrenchment, why would they not support it if they wanted to keep water publicly owned? They also have a history of selling of state assets.
"Another protection against privatisation is entrenchment - a requirement for at least 75 percent of MPs in Parliament to support any proposal to merge or sell any of the entities' assets."
Everywhere I’ve ever lived outside NZ, no one really cared how clean water was delivered, just that it was while keeping rates reasonable.
It’s unnerving (but not surprising) that the PM isn’t concerned about the outlook for 15 councils going from stable to negative. If those councils are eventually downgraded, borrowing becomes more expensive, and rates will need to increase in order to borrow the same amount of $$. Hopefully National’s plan helps, but their approach seems like a “not my problem” kind of approach and so local councils will likely need to manage the increasing infrastructure demand/failures, inflation, and higher (for longer?) interest rates themselves. Seems like rates will be increasing quite a bit over the coming years. Again, the PM isn’t concerned, but I sure as hell am.
Councils like Nelson and Tauranga have excellent water treatment plants. These have been paid for out of rates and long term borrowings. While councils like Wellington spent their ratepayers' money on nice to haves, some other councils were more prudent. Under 3 waters those prudent councils would have been paying for the reckless spending of others to fund their infrastructure.
Biggest vanity project there has been the town hall utter debacle. Because its "heritage", they have to spend double the cost of the new convention centre, a far nicer building conceived of, built and likely to have been operating for years before they come close to the end of the town hall. Cycleways by comparison are really just some paint on the road, getting rid of some curbs/parking and having some physical barriers, nothing in comparison.
- Town Hall music venue $340 million
- Rebuild central library rather than use existing ones – $189 million
- A $13 million carpark building
- Cycleways $226 million
- Convention Centre $169 million
- $32 million corporate welfare for Reading Cinemas
- $139 million on the Golden Mile (removing cars)
- $236 million on food recycling
2014 - $100 million for urban cycleways
https://www.beehive.govt.nz/release/100-million-urban-cycleways
2015 - Government to spend $330m on 41 new cycleways across the country
https://www.stuff.co.nz/national/69712345/government-to-spend-330m-on-4…
Nelson do have a nice water treatment plant, but the resilience of getting water TO the potable water treatment plant (and getting wastewater to the WW treatment plant via SH 6) are an ongoing issues, among others. They are doing well as a council, but by no means are they done borrowing money and there’s lots of work that still needs to done in the 3 waters space. NCC were also 100% on board with joining 3 waters, since it would have allowed them to fund their backlog of work.
Local council elections are dominated by older voters who don't give a shit about the long-term health of their towns or the planet. They just want low rates so they can have to spend less of their Super Benefit on it. This is why Local Councils have been failing.
There is also an efficiency in scale in terms of expertise and management. Each individual council needs to secure the expertise of appropriate engineers and then set up a suitable management structure. Wasteful.
The other issue is the loss of scale and efficiency, going from 63 entities to 10. National is hoping the councils will do this voluntarily to a degree, but i would say there is a lot of management and councillors with a lot to lose from doing so . Can't shake to old boys network up too much !
National are classic. Come to government with no policy except repeal, repeal, repeal because anything the last lot did was terrible apparently. They have completely thrown the baby out with the bathwater on multiple things where they could have just made adjustments to governance and reset the programs. Result is mass confusion, nobody knowing what is happening, further infrastructure failings and mass unemployment to boot, also as a result of the uncertainty. They have forced cancellation of dozens of projects in government via cost cutting and will find themselves with the same problems as the last lot, but with no solutions.
If Luxon was in charge of AirNZ when it got a rating downgrade, he would have been crapping his pants. Now when its the country he is like "meh, who cares". That's some quality leadership right there...
S&P Ratings noted that most of the opposition to Labour’s Affordable Water Reform related to “ideological differences” and not the “significant debt relief” it could have provided.
A case study in the unintended consequences of populist politics.
I recall participating in the 2006 Local Government Rates Inquiry (national consultation on these very same issues regarding infrastructure deficit and long term capital expenditure forecasts) on behalf of a national civil sector organisation.
Finally, after 17 years of various governments being fully aware of the current and pending/worsening situation in the local government sector, a government in power addresses and enacts a solution - only to be turned over by populism. Big problem in so many ways.
The National Party will do everything they can to privatize water services in NZ. (Private enterprise loves monopolies.) Exactly the same as our electricity suppliers ... that worked out well, right?
They'll do what they did in the USA, i.e. the Councils will be lumbered with more and more debt until the Council's are forced to sell. Their talk about keeping the assets in Council (i.e. public) hands is a con-job. Dumb Kiwis will rue the day they ditched 3 Waters and got sucked in by the alternatives.
S&P said the outlooks on 15 councils were revised from stable to negative
It would pay to know which councils these are.
Clearly, this announcement and action by S&P is sending a warning shot across the bow of those 15 entities, saying: 'we need to see increased revenue through the next striking of rates in your jurisdictions'.
Rates are becoming such a large part of the expenses associated with property ownership, that families in future will begin choosing a local authority by most stable/best place to avoid high taxation.
The thinking is long term debt from aggregated locally controlled council bodies will deliver better local results. The important part here if the aggregation of similar councils to access that debt.
The S&P rating relates only to the quality of the debt issuance (their only expertise - such as it is given they missed the 2008 crash) and I believe the government will step in to guarantee that debt once it allows the Councils themselves to come together.
I voted for this change, I want Councils to be accountable for their service delivery and drop the pet projects, I don't want any racist policy controlling common assets (we are not SA yet), and I want good management of resource to be respected by not nationalising well managed local assets.
Rates are already on an absolute tear away and that means rents will go up in kind. Tough but it turns out if you put in speed humps instead of water pipes it's not as useful!
The thinking is long term debt from aggregated locally controlled council bodies will deliver better local results. The important part here if the aggregation of similar councils to access that debt.
That's not how I viewed it.
I thought it was more a matter of who has the lowest borrowing costs (central vs local governments) and who has the balance sheet and funding flexibility to meet these costs.
Local governments must (according to NZ law) write balanced budgets, whereas central government can write a deficit budget if it so chooses. So, the way rates (the bulk of local government income) are calculated is a Local Authority determines via its long-term and annual plan, what it intends to spend - and then it adjusts rates in order to meet all of those spending intentions in the single year (the annual budget). It does this every year. Whereas, central government estimates what its revenue in a single year (and outyears) is likely to be and writes either a budget for either a surplus, a deficit or a balanced budget.
Additionally, the revenue collecting instruments a Local Authority can budget for are limited to what central government allows them to tax/budget for. They have far less flexibility in terms of revenue gathering. I've always viewed CCOs as a governance separation (normally done to allow a CCO to make profit, as opposed to break-even/cost-recovery as its governance structure/intent), as opposed to balance sheet separation - and I think that's what S&P are saying as well.
The cost of the funding would be a very small issue (the difference between billions of govt debt vs local govt debt secured by govt will not be large) perhaps but the flexibility will be through the roof and cheaper (nullifying the cost of funding difference).
Local Authorities have plenty of debt -https://oag.parliament.nz/2012/ltps-2012-22/appendix2.htm
You are right in how rates are calculated, but what they spend those rates on is entirely without control and has been wasteful.
I agree, Local Authorities need more access to funding streams.
The Regional Council Controlled Organisations will be the new separate entity that will hold this debt on behalf so that model still holds, S&P are simply saying this debt is not as safe as government debt, which is true, but when the likely debt holder will be the government themselves then it is a mute point I think.
but when the likely debt holder will be the government themselves then it is a mute point I think.
So, are you saying that central government will borrow directly to fund these new regional council CCOs?
Who will be charged the interest costs on such borrowings; ratepayers or taxpayers?
I hadn't seen any of this explained by the current Government.
So, if that is the case and the CCO turns a profit - what's the deal there?
Hi Kate, yep in my opinion the government will sell treasury bills to fund these CCO bonds once these new CCO's have formed.
Rate payers will foot most of the bill (via the CCO bond) in the new model (The taxpayer will carry the funding delta between the treasury bills and the CCO bond) but this is one of the reasons for the new policy, taxpayers in Nelson won't be paying for Wellington's new infrastructure etc.
The current government policy is not well formed here I agree, but it can't really be until the Councils have organised themselves and that will need to be guided by the Minister of Local Government. The CCO profit would be returned to the Councils, I imagine in terms of their shareholding in the shared entity.
Just my opinion
re ... "The cost of the funding would be a very small issue (the difference between billions of govt debt vs local govt debt secured by govt will not be large)"
LOL. I love it when people who know jack sh** about a subject come up with statements like this. (What I'm saying is that you could not be more wrong.)
You're wrong. I've provided as much evidence in that statement as you provided in your reckons.
Pull off you ideological blinkers, you got duped. You're going to end up paying more and instead of Maori co-governance (which is not ownership) you're going to get privatisation.
S and P's opinion of Labours 3/5 waters plan was "an aggressive financial risk profile" not some water finance utopia. How quickly we forget.
"Although our government has taken advice from the Water Industry Commission of Scotland on some matters, we have not adopted Scotland’s approach to financing its water infrastructure, which instead relies on a combination of water rates and debt from the Scottish Treasury.
By contrast, New Zealand is proposing a highly leveraged financing described by the Department of Internal Affairs and the rating agency, Standard & Poor’s as having “an aggressive financial risk profile”. The Three Waters model of financing is the same model used by Thames Waters and a number of other English water utilities.
Last October I wrote two articles on the risky nature of the financing proposed for Three Waters, and specifically drew attention to Thames Water as an example of how these structures can go badly wrong. Those articles are available here and here."
https://breakingviewsnz.blogspot.com/2023/06/thomas-cranmer-thames-wate…
Given most ratepayers will be tenants who don't see rates at all they will mostly blame landlords for rent increases. Following that those who see rates bills have for a long time done nothing to read or challenge the rates spending so little to be done there. Of those that ever look at the spending for rates in detail that is still less than 5% of the public. Just look at the numbers of those that challenge council CV values as an example.
Hence all council rates increases will be mostly unchallenged by the general public. Sure elderly investors who have fewer assets will complain but the smart investors get tenants to pay for everything ahead of time and then claim market conditions for ahead of time unjustified rent increases anyway.
So the only people who will complain about the rates increases are generally the social groups the councils have openly admitted they ignore wholeheartedly anyway. Some council meetings just said since the elderly can claim housing benefits & rates relief on top of an already generous benefit income so any that are actually stretched have no reason to complain & can be ignored and those poor (for councils only the elderly are seen as poor and deserving of council support even when they have 50k income and 3 investment properties), are mostly in council housing already getting below market rate rents as well. I know a lot of councils have wealthy tenants on their council housing books but that is a factor of giving social welfare for those who do not need it while denying those who actually need social supports any to encourage early death.
So yeah there has been a big ideological song and dance about the government movements, (as part of the endless left vs right, 2 party system divide), but don't expect a sudden massive out pouring of most the general public when the councils push through the next bills. Even the loudest council protests are small crickets in comparison to everything else.
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