The surprise move to allow a year’s deferral came after feedback from councils, as they had wanted "further measures" than the planning flexibility signalled late last year, Local Government Minister Simeon Brown said.
The government indicated in December councils would be permitted to push out adoption of their 10-year plans by up to three months.
This was taken up last week by the Queenstown Lakes District Council, which intends to adopt its long-term plan (LTP) in September, rather than meet the usual deadline of June 30.
Mr Brown said he listened to councils’ feedback and asked officials to develop extra measures, including the option of deferring LTPs by a year.
"These measures were intended to provide councils with further flexibility and options as they worked through the LTP issues created by the previous government’s Three Waters amendments to the Local Government Act."
This was formally communicated to councils on February 13, he said.
Mounting costs for maintaining and upgrading water and wastewater networks are a prominent problem for the local government sector.
The new government reversed the previous administration’s plan to take control of such activities away from councils.
It is not yet clear what arrangements will replace the previous government’s reforms, exacerbating an already uncertain environment for council planning.
The government offset this last week by allowing councils to run just annual plans for the 2024-25 year, followed by nine-year LTPs.
The Dunedin City Council responded by suspending development of its 10-year plan.
City councillors, as well as elected members from the Central Otago and Waitaki district councils, will decide next week whether to defer or carry on preparing their draft 2024-34 LTPs.
Gore District Council interim chief executive Stephen Parry last week described the Three Waters situation as chaotic and Clutha District Mayor Bryan Cadogan said messaging from the government about this had been late, mixed and confusing.
Mr Brown said the government was working at pace to deliver its policy.
It repealed "Labour’s divisive and unpopular" legislation and would introduce two Three Waters Bills to Parliament this year, he said.
The government recognised "the importance of local decision-making and flexibility for communities and councils to determine how their water services will be delivered in future," Mr Brown said.
The policy would enable councils to move their water assets and delivery services into more long-term financially sustainable configurations, he said.Labour’s local government spokesman Kieran McAnulty said councils now had difficult decisions to make in quite a short period of time.
"The one thing local councils need right now is certainty.
"Repealing something without having a replacement lined up provides the exact opposite."
Mr McAnulty said the National Party sent signals before the election about co-funding, implying central government would chip in with much-needed help.
Evidence and analysis showed councils could not realistically meet the burden by themselves.
Dunedin city councillor Jim O’Malley last week doubted the government would be able to produce a model that genuinely achieved balance sheet separation, which would be where a water entity and a council were kept distinct.
Mr McAnulty had similar reservations.
"You simply cannot have council ownership and control, and balance sheet separation," he said.
