The Local Government (Water Services) Act 2024 has now been enacted, replacing the centralised Three Waters framework with a system led by councils. Responsibility for drinking water, wastewater, and stormwater services returns to local government, within a new framework that emphasises planning, funding, and accountability.
Implications for Developers
Under the Act, councils must prepare Water Services Delivery Plans, which will outline how infrastructure will be funded and rolled out to support population and development growth. These plans are intended to provide greater transparency around the timing and availability of water services, which may assist in reducing uncertainty for development projects.
Decision-making is also shifting closer to councils and communities. Councils can choose from five different service delivery models, including options for shared regional approaches. The intention is to give councils flexibility to determine how services are structured in their areas, which may create opportunities for developers to engage earlier in planning processes.
The Act also introduces changes to funding and investment settings. Councils will be required to reinvest water revenues into water services and will have increased borrowing capacity for water infrastructure projects through higher borrowing limits under the Local Government Funding Agency. This could enable councils to invest in infrastructure ahead of demand, with potential impacts on the way costs are shared between councils and developers.
Consistency in technical and performance requirements is also expected to increase. National engineering and performance standards will apply across the country, reducing variations between regions and providing developers with clearer expectations for new infrastructure. Oversight by the Commerce Commission will monitor council financial sustainability and accountability in delivering water services.
Key Dates
The first key milestone was 3 September 2025, when councils were due to submit their Water Services Delivery Plans. These will provide important insight into each region’s priorities for infrastructure delivery and should be on the radar for developers planning projects in the year ahead. As councils set delivery models, there may be opportunities for developers to engage early in planning processes to ensure growth priorities align with infrastructure rollouts.
Although the Act does not alter the existing framework for development contributions, councils’ increased borrowing powers may influence how infrastructure costs are allocated over time.
Overall, the Local Government (Water Services) Act 2024 establishes a locally led, but nationally regulated, system for water service delivery. For developers, the main areas to monitor are the new delivery plans, funding mechanisms, and national standards, all of which may affect project timing, infrastructure requirements, and engagement with councils.
The Local Government (Water Services) Act 2024 introduces new planning and funding requirements that may influence project feasibility and timing. Our team can provide legal and strategic advice on how these obligations interact with your development objectives. Contact us to arrange a discussion.
