Water levy design confirmed

Economic regulation is a key feature of Local Water Done Well. It promotes consumer interests over the long term so New Zealanders get value for money from our water services.

The Commerce Commission is the economic regulator for water. The Commission has a range of regulatory tools available, including mandatory information disclosure, to promote transparency and ensure investments are made where they are needed most.

As with other regulated infrastructure monopolies, such as electricity lines businesses, the cost of this regime will be recovered through a levy. This means the Commission is funded appropriately to do this important work.

The Government has now confirmed the design of this levy. It has been set to recover the Commission’s estimated annual costs of $6.5 million in 2025/2026 and then $7 million per year ongoing. The levy will be paid by regulated water services suppliers.

The levy regulations come into force on 1 January 2026 and the first levy invoices are intended to be issued in April 2026. The levy will be apportioned to regulated water services suppliers by population.

It will be up to regulated water services suppliers to decide how to recover the levy costs from consumers – for example, through rates or water charges – and how to record these costs (such as including levy charges as a line in rates bills). The levy cost is expected to be about $1.30 per person or $3.51 per household (for an average household of 2.7 people) in the first year (2025/26).

Further information

More information about the economic regulation regime:

Economic regulation of water services