Local councils can now apply for the first tranche of $2 billion worth of funding to help with the transition to the controversial Three Waters reforms.
But because the fund doesn't have to be spent on Three Waters - it can go towards local parks and gardens, swimming pools or even public transport - ACT has labelled it a "bribe" to win over councils.
Three Waters is the Government's plan to establish four publicly-owned entities to take responsibility for drinking water, wastewater and stormwater from local councils.
Under the Three Waters model, local councils will remain the owners of their water assets but will not have control over them. Their influence will be via regional representative groups, consisting of 50 percent council members and 50 percent iwi.
Prime Minister Jacinda Ardern in July last year announced a $2.5 billion support package to ensure local councils were not only "no worse off", but "better off" from the restructure of water assets.
Local Government Minister Nanaia Mahuta announced at the weekend that councils could now apply for the first $500 million of the funding by submitting an online proposal outlining how the money would be spent.
"This 'better off' funding can be used for those projects communities feel they need the most, be it local parks and gardens, swimming pools, libraries and community centres, or investment in public transport and infrastructure to protect against extreme weather events and sea level rises," Mahuta said.
"Councils are facing significant challenges over the coming years; with population growth, housing pressures, an increase in natural disasters and climate change, it is important that councils are able to prepare their communities for the future."
Applications are now open until September 30 for councils to submit funding proposals for their share of the first $500 million tranche. Any unallocated money will be rolled into the next tranche, which becomes available in July 2024, when the four publicly-owned Water Service Entities will be established.
ACT MP Simon Court has labelled the financial support a "bribe", considering the Government has struggled to appease councils who last year expressed concerns about losing control of their water assets and potential privatisation.
"When people are squeezed from every direction, Labour is using taxes to bribe councils and ratepayers," Court, ACT's local government spokesperson, said.
"If this was really about Three Waters, the money would be earmarked for water infrastructure upgrades. Instead, it can be used for anything councils like."
The Government has already had to force Three Waters reforms on local councils, after initially pitching it as voluntary. Before then, Whangārei District Council had voted to withdraw from the plan, while big players like Christchurch and Auckland expressed dissenting views.
A Newshub-Reid Research Poll in November found that about 48 percent - almost half the country - didn't support the reforms.
In a move widely perceived as the Government trying to bring councils on board, Mahuta last month said she would consider a proposal to establish a public shareholding structure for Three Waters to ease concerns raised by councils about losing ownership of their water assets.
It would mean that no privatisation could occur unless every shareholder council agreed, and councils would be required to consult with their communities.
The Government is also facing opposition to the co-governance structure of the regional representative groups. ACT leader David Seymour announced last month that a referendum on co-governance, which he likened to an "unequal society", was a bottom line for any coalition negotiations in 2023.
Ardern confirmed recently that public consultation on co-governance will begin later in 2022.
There is evidence to suggest that water facilitation reform is needed. The latest drinking water report revealed that just 78 percent of the population received drinking water that met all Ministry of Health standards.
The Three Waters reforms stem from Havelock North's outbreak of gastroenteritis in 2016 when four people died and 5000 became ill, as well as drought in Auckland and old pipes bursting in Wellington.
A report by the Water Industry Commission for Scotland estimated that New Zealand needs to invest $120 billion to $185 billion in water infrastructure over the next 30 years to meet standards and provide for future population growth.
Without the reforms, Department of Internal Affairs modelling has shown the average household bill for water services could be as high as $1900 to $9000 by 2051.