National's Christopher Luxon admits rates could rise under party's alternative plan to Three Waters

National's Christopher Luxon admits his party's alternative plan to Three Waters announced at the weekend could result in some councils "having a slightly higher charge".

Luxon on Sunday confirmed his party would scrap the controversial water reforms if elected and proposed an alternative plan that included supporting "greater access for councils to long-term borrowing, which is an appropriate way to fund long-life water infrastructure".

The Government has continued to defend Three Waters, with Prime Minister Chris Hipkins saying the reforms were designed to save money in the long term. 

Hipkins told AM on Tuesday Three Waters would put "a structure in place that will allow for a 30-year investment in water infrastructure".

While Luxon at the weekend said National's plan for water would deliver financial sustainability to "enable the long-term investment in infrastructure that will deliver the quality drinking water, cleaner rivers and swimmable beaches that New Zealanders want and expect", on Wednesday morning he told AM "you might have to have people within a particular council, that hasn't managed its assets well, having a slightly higher charge". He said that would mean ratepayers "may pay slightly more, for example, if their council hasn't actually delivered or managed their assets well".

"The reality is, what we're doing here is making sure that councils can get long-term access to long-term debt funding and financing," Luxon said. "Councils are voluntarily choosing they want to work, in many cases, in this way.

"There are big incentives for councils to come together - even councils that have difficult assets or haven't invested in assets."

He's standing by National's plan, saying scrapping Three Waters was still "job number one".

Christopher Luxon.
Christopher Luxon. Photo credit: Newshub.

"What we're saying is, let's give councils access to long-term debt funding, like a 30-year mortgage, so they can actually pay for a 30-year 'house.' We know if councils can get access to that funding, they can actually fund the future investment that we need."

The Prime Minister has said Three Waters is a necessity, even more so in the wake of Cyclone Gabrielle.

"This work has to be done in the next 30 years. If we don't intervene to do it more efficiently, ratepayers are going to pay and they're going to pay in the form of higher rates," Hipkins said.

"If you look at the water infrastructure in those [cyclone] affected areas, it hasn't stood.

"These recent events of the past few weeks have highlighted that we don't have the water infrastructure that New Zealand communities need… the plants and the treatment facilities simply did not cope with what we've experienced."

ACT leader David Seymour said Three Waters needed to go. His party is proposing revenue sharing between central Government and councils to fund local infrastructure.

"It is essential that infrastructure assets built up over generations by ratepayers remain under the democratic control of their local council," he said in a statement.

"ACT has campaigned for years on sharing half the GST collected on construction activity in a region with the local council. ACT's Housing spokesperson and deputy leader Brooke van Velden's member's bill would require the Government to share half the revenue collected on construction in a region with the local council," Seymour said.

The estimated total of Three Waters over 30 years was between $130 billion and $180 billion.