Part 2: A more strategic and integrated approach to water management is needed

Reflecting on our work about water management

In our view, a more strategic and integrated approach is needed to address New Zealand's water management challenges. Developing and applying such an approach is complex because roles and responsibilities for water management are spread throughout the public sector.

Public organisations are established for a defined purpose and are limited by what their enabling legislation allows them to do.

Māori organisations, communities, and the private sector also play an important part in addressing New Zealand's water management challenges.

A strategic and integrated approach to water management needs to provide a framework that promotes collaboration. It needs to build consensus on the main issues, and develop and implement responses and actions that work together towards a common goal over the long term.

The Government is proposing new ways in which agencies can work together. It has introduced the Public Service Legislation Bill to provide a legislative framework for achieving a more adaptive and collaborative public service.

The Government wants a public service that can better respond to complex issues and deliver better outcomes and better services to New Zealanders. The Public Service Legislation Bill provides for "… a more flexible set of options for organisational arrangements to support the public service in better responding to priorities and joining up more effectively …".4

In our work on water, we saw that many public organisations' water management priorities and work programmes conflicted with or duplicated those of other public organisations. We also observed that changes to policies and standards for water management created uncertainty. This made it challenging for public organisations to plan, make investment decisions, and sustain efforts over the long term.

Meeting new and changing water standards also incurs significant costs. This has been highlighted in several reports, including two reports commissioned by the Department of Internal Affairs about costs to meet drinking water standards and the National Policy Statement for Freshwater Management as they relate to water and wastewater treatment plants.5

The Government is responding to the need for a more strategic and integrated approach to water management

The Government's freshwater and drinking water reform programmes demonstrate its desire for a more strategic and integrated approach to water management. The 2018 publication Essential Freshwater: Healthy Water, Fairly Allocated states that "To achieve the Government's goal of healthier waterways and freshwater ecosystems, New Zealand needs a coherent policy framework that will lead and drive widespread change in behaviour."6

On 5 September 2019 the Government announced its Action for Healthy Waterways and began consultation on a package of proposals to support a material improvement in freshwater quality. Submissions were accepted until 31 October 2019. These proposals are a new National Policy Statement for Freshwater Management, a National Environmental Standard for freshwater, the concept of national standards for wastewater discharges and overflows, amendments to the national environmental standards for protecting sources of human drinking water, and regulations to keep stock away from waterways.

An independent advisory panel will provide ministers with a report recommending how to respond to submissions received and whether to proceed with proposals.

On 30 September 2019, the Government agreed to establish a new drinking water regulator as an independent Crown entity. This is one of the main decisions resulting from the Government's review of the regulation and supply arrangements of drinking water, wastewater, and stormwater (the three waters). It is an acknowledgement of the need for greater national oversight of the provision of safe drinking water.7

The challenge in seeking to achieve multiple outcomes for water management is ensuring that government policies, objectives, and priorities are clear and aligned. If they are not, the risk of conflicting actions and/or duplication of effort by public organisations and of making investment decisions that are not targeted to where the greatest benefits can be achieved will remain.

The Government is aware of this issue. It notes in its Cabinet paper on consultation on the Essential Freshwater reform proposals that "The Three Waters programme is proceeding in tandem with the Essential Freshwater work programme, and together they are designed to create a cohesive system to better manage urban and rural water issues".8

A strategic and integrated approach would support targeting of investment decisions

Public organisations and others, including iwi, non-governmental organisations, and communities, invest significant time and money in managing water and delivering water-related services. It is important to use taxpayer and ratepayer funding effectively and efficiently to target where the risks are and where the greatest benefits can be achieved.

Our work on how well the Ministry for the Environment (the Ministry) funds the clean-up of freshwater bodies highlighted the issues associated with the lack of a national strategy for clean-up investment. The Ministry's ability to effectively manage freshwater investment has been limited because there is no national freshwater clean-up framework to guide clean-up efforts throughout New Zealand.

We found that the Ministry cannot yet demonstrate the overall effectiveness of its freshwater clean-up funds. This makes it difficult to tell whether the money invested has been targeted as effectively as it could have been. It is also difficult to assess the effect of specific freshwater clean-up projects.

A more complementary and integrated national approach to cleaning up freshwater bodies would support funding being directed and prioritised more strategically. It would also ensure that projects complement each other and build towards achieving long-term, integrated environmental goals.

In our view, improving collaboration between local and central government and non-government funders would lead to better co-ordination of funded projects. This means that funders need to align national and regional priorities and synchronise individual project timings with funding availability. This could help increase the effective and efficient use of available funds – Office of the Auditor-General (2019), Crown investment in freshwater clean-up, page 20.

A stronger focus on implementation is needed when setting strategy

It is one thing to set objectives and priorities, to be clear on the outcomes being sought, and to establish targets. It is another to translate this into programmes of work in a way that co-ordinates that work within and between public organisations.

When we looked at the development of a marine spatial plan for the Hauraki Gulf (Sea Change – Tai Timu Tai Pari), we found that the plan was not easy for central and local government agencies to implement.9 This shows the importance of having a strong focus on implementation when setting strategic objectives and priorities, and planning how to deliver these over the long term.

We identified that developing an appropriate scope when the project was first set up would have made implementing the plan easier. It would also have helped for agencies to have planned how they would implement the plan, including how they would work together with other organisations and stakeholders, and the role of mana whenua in implementation.

Long-term thinking is needed when setting a strategic and integrated approach

As well as turning strategy into action, sustaining that action over the long term is also a challenge. As we noted in our report Introducing our work programme – water management:

Addressing … adverse effects [on our water resources] and delivering outcomes that could take generations is challenging to achieve in short political cycles, and when multiple organisations are working to deliver these outcomes.10

This is important if taxpayer and ratepayer funding is to be effectively and efficiently used now and in the future.

In our work, we saw the value that applying a long-term approach to water management challenges can bring. We looked at the approaches that Horowhenua District Council, Kāpiti Coast District Council, Manawatu District Council, and Palmerston North City Council took in addressing the challenges they face in supplying drinking water to their communities.11

We found that three of these councils took a supply management approach (focusing on increasing supply to meet demand). The other, Kāpiti Coast District Council, applied a demand-management approach that took a long-term view, focusing on water conservation and efficiency. This enabled it to defer significant investment in new water supply infrastructure.

In our view, councils that take a more comprehensive and long-term approach to providing drinking water by balancing supply and demand management tools are in a better position to respond to future challenges such as demographic and climate changes.

Our work on the funding of the clean-up of freshwater bodies12 included looking at how the Waikato River Authority manages projects. We did this to improve our understanding of common challenges with, and lessons about, freshwater clean-up.

We observed that the Waikato River Authority's vision and strategy provides guidance and a plan to ensure that longer-term considerations inform funding decisions. The vision and strategy are complemented by a 5-year to 15-year clean-up Restoration Strategy.

In our view, this helps freshwater clean-up projects to be integrated, prioritised, and co-ordinated. In turn, this means that they are likely to have a long-term and cumulative effect on freshwater quality. We consider that, in the Waikato region, this will ultimately increase the overall effectiveness of clean-up funding.

4: Public Service Legislation Bill, Explanatory note, page 2.

5: Beca Limited (2018), Cost Estimates for Upgrading Water Treatment Plants to Meet Potential Changes to the New Zealand Drinking Water Standards. GHD and Boffa Miskell (2018), Three Waters Review: Cost Estimates for Upgrading Wastewater Treatment Plants to Meet Objectives of the NPS Freshwater – Final Report. See also Beca Limited (November 2019), Additional Analysis on Drinking Water Costs for Compliance.

6: Ministry for the Environment and Ministry for Primary Industries (2018), Essential Freshwater: Healthy Water, Fairly Allocated, Wellington, page 21.

7: Department of Internal Affairs (2019), Three Waters Review, at

8: Paper to Cabinet Business Committee, 2 September 2019, Essential Freshwater – Public Consultation on a National Direction for Freshwater Management, page 6, at

9: Office of the Auditor-General (2018), Sea Change – Tai Timu Tai Pari: Creating a marine spatial plan for the Hauraki Gulf, pages 32-33.

10: Office of the Auditor-General (2017), Introducing our work programme – Water management, page 9.

11: Office of the Auditor-General (2018), Managing the supply of and demand for drinking water.

12: Office of the Auditor-General (2019), Crown investment in freshwater clean-up.