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Affordability

Many local authorities struggle to fund three waters infrastructure to the levels required in order to meet standards and community aspirations.

Under-investment over a long period has meant many communities face a significant investment challenge to ensure three waters infrastructure meets current and future community expectations and regulatory standards.

Analysis conducted for the Department of Internal Affairs, based on information provided by local authorities, estimates a future national investment requirement in three waters infrastructure in the order of $120 billion to $185 billion over the next 30 to 40 years.

Without reform, the cost per household could be between $1,900 and $9,000 per year over the next 30 years, depending on location. With reform, costs are projected to range between $800 and $1,640. This represents a much lower average cost per household.

The four Water Services Entities will have sufficient asset and customer bases to be financially sustainable. Alongside this, balance sheet separation (financial independence) from debt constrained councils and economic regulation will provide water service providers greater flexibility to direct significant investment to where it is needed.

This will improve the resilience of the new water service providers, enabling them to finance the required catch-up investment at an affordable cost for ratepayers, and respond to short-term shocks like earthquakes, and long-term challenges like climate change.