The Government knows its decision to force Three Waters reforms on local councils isn't a popular one, Nanaia Mahuta says.
Three Waters is the Government's plan to create four public entities to take control of New Zealand's waterways.
Local Government Minister Mahuta announced on Wednesday it would force the reforms through - despite widespread opposition.
It's seen a fierce backlash from councils across the country, with Mayors - including former Labour party members Phil Goff (Auckland) and Lianne Dalziel (Christchurch) - describing it as "unacceptable" and "wrong".
But Mahuta said councils needed to look at the facts.
"There's a certain amount of misinformation out there causing quite a bit of fear and it's unnecessary," she told The AM Show on Thursday.
"They [councils] will continue to own the assets so that greater leverage across that entity can be used to invest in water infrastructure and I think that's a far better outcome than what is currently the situation."
Mahuta compared the reforms to carpooling.
"To ensure that you're getting the most efficient use out of the car, everyone living in your neighbourhood can share the car to get the best use, best cost efficiencies and things like that."
Mahuta insisted the reforms were necessary, despite the Opposition National and ACT parties promising to scrap them if elected in 2023.
"There have been at least two decades of underinvestment in water infrastructure," Mahuta said. "That has led to frailty in the network and councils alone cannot fix the issue within their own area because modelling shows that the amount of investment required is too heavy [of] a burden on today's ratepayers.
"Overall, what we're trying to ensure is that the nation benefits and communities benefit, and collectively councils will continue to own assets and be able to leverage from those assets for the benefit of their regions.
"I don't think we can kick the can down the road any longer on this - we need to do something about it. Now it's not a popular set of decisions but it is necessary and what we don't want for our kids and their kids is dirty water to go into streams, lakes and oceans."
A Curia poll commissioned by the Taxpayers' Union found just 19 percent of New Zealanders were in favour of the reforms.
How will it work?
Local councils will by legislation remain the owners of the new water entities. But they will not have many of the rights that owners of assets usually have, such as the right to call the shots.
The influence of local councils will be via regional representative groups of no more than 12 council members and iwi representatives - 50 percent council members and 50 percent iwi. The regional representative groups will appoint members to the four water entities, who will be chosen for their expertise.
Since the four water entities span multiple regions, the regional representative groups will be made up of councillors and iwi from multiple regions. Therefore, they'll be expected to have an "appropriate distribution of representation".
A key part of the reforms is what's called 'balance sheet separation' which essentially means that whilst the water entities will be owned by the councils, they will be financially independent, so the financial position of councils will have no effect on the financial position of the entities, and vice versa.
Work is underway to establish a working group of local government, iwi and water industry experts to work through elements of design. The group will work to look at the governance and accountability arrangements of the entities and provide an opportunity for public participation.
Cabinet has also tasked the Department of Internal Affairs with establishing a unit to focus on the implementation of the reforms. It will work with local government, iwi, water industry and other stakeholders to "ensure a smooth transition".