Michael Brewster, Colin Crampton and Vaughan Payne were appointed to set up three of the Government’s four proposed water super-entities.
They started their roles in February/March – but in April, Local Government Minister Kieran McAnulty switched the plan to 10 mid-sized entities. Now, their jobs no longer exist but they remain on the public payroll.
In an interview with Newsroom Pro, McAnulty defends that. “They’re still being utilised,” he says. “And where they end up remains to be seen. Yes, there’s going to be some people that were in positions that are no longer, but I don’t see that as a waste if it’s brought the sector much closer to what we’re trying to achieve.”
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The role of a fourth establishment chief executive, former Watercare boss Jon Lamonte, is continuing as planned. He was appointed to set up the Auckland/Northland water entity, which is proceeding to its original July 2024 start-date.
Given the expertise of Brewster, Crampton and Payne, they would be frontrunners for chief executive roles on the other nine new regional water corporations – but whether they’d want to take the smaller roles and smaller pay cheques remains to be seen.
For now, they remain on their original big salaries, job-sized to match big roles like the heads of Transpower, NZ Post, ACC, Kāinga Ora or KiwiRail.
“It shows complete disrespect to councils which have relied on relied on promises from senior Labour Government ministers when … engaging with their communities on the costs and benefits.”
– Simon Court, Act Party
Act Party MP Simon Court is raising concern about the additional costs of paying the salaries for the three chief executives recruited to the original four entities, who remain in the employment of the Department of Internal Affairs despite not necessarily having future employment in any of the entities.
“That is an outrageous waste of taxpayer funds,” he says. “It shows complete disrespect to councils which have relied on relied on promises from senior Labour Government ministers when forming their view on the reform proposals, and when engaging with their communities on the costs and benefits.”
McAnulty has disclosed the establishment chief executives’ salaries range from $602,500 to $815,500. In addition, the Department of Internal Affairs hired recruitment consultants at a cost of $500,000. “This amount reflects the Department’s decision to engage outside expertise to assist with the recruitment of appropriate staff as these roles were of a specialised nature,” he said.
“This salary range sits at a similar level to other public organisations, in terms of the scale of organisational responsibility and operational service delivery needed to successfully lay the foundations of a world class water system.”
“When you’re saying that the current funding system is unsustainable, that’s pretty significant. So that in itself is telling.”
– Kieran McAnulty, Local Government Minister
Newsroom asked McAnulty whether the expense of keeping the three men on the payroll is justifiable, when there is a funding crisis in local government. “I’ve never used the term funding crisis,” he said.
But he did acknowledge councils’ ability to pay their way could no longer be sustained. “When you’re saying that the current funding system is unsustainable, that’s pretty significant. So that in itself is telling.”
“Many of the issues the local government sector are facing are down to the fact that they don’t have the resources to be able to do something. That even goes down to things like retaining and attracting staff. We’ve got strike action at some councils at the moment because staff believe that they should have a much higher increase in their wages.”
The cost of the Three Waters reforms has increased by about $1 billion, in part because of increasing the number of entities from four to 10 in response to council concerns.
McAnulty acknowledged that there had been discontent at the cost. “We had a plan. We listened to the sector, we changed it. Now they’re a hell of a lot more comfortable than what they had been.”
Vaughan Payne was to have been establishment chief executive of Entity B, containing Taranaki, Waikato and Bay or Plenty.
He started on February 8, after leaving the new national vocational education institute Te Pūkenga at the end of last year – one of three deputy chief executives who left the beleaguered organisation without completing their three-year contracts.
At the time, Te Pūkenga’s acting chief executive Peter Winder refused to disclose the details of Payne’s redundancy packages and remuneration, and why the contract was cut short
“The intention is that they will continue to assist with leading the transition work to set up the remaining nine new water services entities.”
– Internal Affairs spokesperson
Colin Crampton was to have set up Entity C, running from East Cape down through Hawke’s Bay to Wellington, and also including Nelson and Marlborough. He started on February 22, after a difficult stint leading Wellington Water.
Problems with burst and gushing water mains and sewers were followed by the revelation that the water provider has turned off the fluoride facilities at two plants without informing its six shareholding councils or the public. Shortly before he left last year, he said that finding out about the fluoridation debacle was a “terrible day in our lives”.
“It’s just hard to manage when you manage an organisation that you think doesn’t have surprises,” he told Stuff.
Michael Brewster was the last to come onboard, on March 13. He was in charge of Entity D, containing all the rest of the South Island. He had previously spent nine years as chief executive of TasWater, the drinking water provider for the Australian island state.
He retired after a 2021 parliamentary inquiry, considering problems state-wide relating to TasWater. This included nine years of problems with heavy-metal contamination in the township of Pioneer.
All three men resurfaced in the Three Waters transitional chief executive roles. Plans for those three new entities were thrown out with the bathwater, when McAnulty announced in April that the Government would instead create 10 small entities in response to local councils’ concerns about community control of their water assets.
And last week, the government administration select committee reported back this Government’s final piece of water services reform legislation, disestablishing entities B, C and D. Labour expect to pass that bill before Parliament adjourns at the end of August.
An Internal Affairs spokesperson says the four previously-appointed establishment chief executives will continue in those roles until passage of the Water Services Entities Amendment Bill, which disestablishes those four original entities and their associated chief executive roles. The exception is Entity A in Auckland and Northland, where the legislation specifically provides for the existing chief executive to continue.
“The Bill also provides for the current entity B, C and D chief executives to continue to be employees of the Department of Internal Affairs,” the spokesperson confirmed. “The intention is that they will continue to assist with leading the transition work to set up the remaining nine new water services entities.”