Councils are being blamed for the country's looming water infrastructure bill, tipped to be as big as $185 billion over the next three decades.
Independent reports released on Thursday found a worst-case scenario could see household water bills rocket to nearly $14,000 a year by 2051 if the status quo - water services decentralised amongst 67 different council-owned and managed water service providers - isn't fixed.
The Government's plan is to consolidate services into just a few publicly-owned entities, which Local Government Minister Nanaia Mahuta says will keep the bills to a far more reasonable $800 to $1600.
"It is clear the affordability challenges facing our water infrastructure are too great for councils alone. This research underscores the overall benefits of reform by reducing future costs on households, creating new jobs and contributing to regional economies and local industry."
But the investment would require three to four times as much public money is spent on water infrastructure than at present.
"I knew it was going to be lots of money," freshwater ecologist Mike Joy told The AM Show on Thursday.
"I've observed over the last 30 years the way councils fail - they fail to look after infrastructure and they fail to look after the environment. This is... payback time for not doing the job when it needed to be done and just kicking the can down the road all the time. Eventually, you have to pay up."
Dr Joy has been a consistent critic of the Government's environmental record over the past decade, as well as the dairy industry. He said the new reports have failed to pinpoint where the biggest savings could be made - at the source.
"To me, that's where you save money. If you have to put an ambulance at the bottom of the cliff, then it's always more expensive than putting a fence at the top.
"We've got degraded catchments, so we're going to have to spend more and more to treat that water because one lot are polluting it... and not paying for it, so the costs are being shoved onto the other lot, which is us, to have to pay for that water to be treated."
He said New York got it right when it set up a protected catchment area in the 1990s. Nowadays, 90 percent of the city's water isn't treated at all - it flows from nature straight into people's homes, saving the city billions of dollars.
"They got rid of all the animals out of that catchment and looked after it," said Dr Joy. "It's a one-off cost that now they're reaping the advantage of. They don't have to treat the water - it's in beautiful condition... If the councils did their job and protected the catchments, then we could save a lot of money in the future."
Another way councils have failed, Dr Joys says, is by allowing large areas of impermeable construction - such as concrete carparks. This means more stormwater infrastructure is needed to prevent flooding, rather than just seeping into the ground.
The analysis on New Zealand's water situation was done by the Water Industry Commission for Scotland. Scotland's reforms reportedly cut residents' water bills in half.
Despite the councils' failure to plan for the future, Dr Joy doubts setting up new water authorities will achieve much.
"I don't know if these bureaucracies we build have ever solved a problem. Potentially they just create more."
Gillian Blythe, chief executive of industry body Water NZ, agreed that councils have not spent enough on infrastructure - because most of it's underground, it's "out of sight, out of mind".
"Councils over the years have not invested enough... Now is the time that we need to catch up and to ensure that our water infrastructure is appropriate."
