This piece has been contributed by Lynne Taylor, Executive Director, PwC New Zealand. Lynne presented on this matter at a recent Taituarā CEO Forum.
Councils and water organisations have spent the past few years navigating reform, uncertainty and public debate. It would be understandable if the new economic regulatory regime for water services felt like one more layer of compliance in an already crowded environment.
However, the regime is not just about producing another report, filling in a template or meeting a deadline. Over time, economic regulation will influence how water services are planned, funded, delivered, and explained to communities. It will also create a more transparent picture of whether water entities are acting in the long-term interests of water users.
That matters because water services have many of the features that make regulation necessary. They are essential and require long-term investment. They involve major assets that communities rely on every day. And, unlike many other services, water users cannot simply choose another provider if they are unhappy.
The new regime is designed to respond to that reality. Whether water services remain within a council or move into a separate water organisation, the regulatory expectations will still have practical implications for governance, data, systems, planning and accountability.
Information disclosure is the foundation
At first, much of the focus will be on information disclosure. That may sound administrative, but it is the foundation for everything that follows. Disclosures will cover areas such as revenue, expenditure, asset values, ring-fencing, financing, asset management, investment and delivery planning, and annual performance reporting.
This information will allow regulators, councils, directors, management and communities to see more clearly what is being spent and invested, what outcomes are being achieved, and where there are gaps.
The practical implication is simple. Councils and water organisations need to take readiness seriously now and the first question to ask should be “how do we know the information we will disclose is reliable, complete and supported by evidence?”
Disclosure will focus on finance, assets, operations, strategy, governance, and customer outcomes. It will require clear ownership, reconciled data, documented assumptions, and a traceable evidence base. Certification should be the final step in a controlled process, not the control itself.
Starting early will reduce surprises later
For chief executives and directors, this is a governance issue. They do not need to verify every number personally, but they will need confidence that the process is robust. They will want to understand where the information comes from as well as how it has been reviewed, what judgements have been made, and what evidence supports the position being put forward.
Starting early gives organisations time to find and fix gaps before formal assurance or regulatory scrutiny. Dry runs, readiness reviews, early auditor engagement and, where needed, discussion with the Commerce Commission can all help reduce late surprises.
The bigger opportunity is to treat the regime as more than compliance. Done well, it can support better planning, stronger investment decisions, clearer accountability, and improved outcomes for water users.
That will not happen automatically. It will depend on how seriously organisations approach the first stages.
How ready would your organisation be today? Where are the gaps in the data, ownership, controls or governance, and how long would they take to address?
Those questions are worth asking now, while there is still time to respond in a deliberate and structured way.
The regime is coming into effect progressively, but the direction is clear. Transparency will increase. Comparability will improve. Expectations will rise.
For councils and water organisations, the best place to start is with the system underneath. That means the data, processes, controls and governance that make confident disclosure possible.
Lynne Taylor lynne.taylor@pwc.com
