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Ben McKay

NZ PM Hipkins throws Ardern's water policy on bonfire

Several of Jacinda Ardern's plans have been axed by New Zealand Prime Minister Chris Hipkins. (Mick Tsikas/AAP PHOTOS) (AAP)

New Zealand Prime Minister Chris Hipkins has moved to cauterise one of Jacinda Ardern's biggest missteps, reshaping her besieged Three Waters reform.

On Thursday, Mr Hipkins announced a new infrastructure model for NZ's wastewater, freshwater and stormwater, which are in crisis after underinvestment.

Water management is a surprisingly major issue for Kiwis in an election year.

Reform is important on health grounds, spurred by a major gastroenteritis outbreak in Havelock North in 2016 which made more than one-third of the town's residents sick.

However, the issue has become the front line of two of the country's existential debates: centralisation versus regionalisation, and Maori management of natural assets - a right yielded to indigenous New Zealanders through the Treaty of Waitangi.

Ms Ardern and then-Local Government Minister Nanaia Mahuta had proposed creating four mega-entities to manage NZ's water systems, shifting control away from councils.

Contentiously, she also guaranteed Maori a 50-50 split with council representatives on the boards of the new bodies.

The policy, and specifically that "co-governance" arrangement, has drawn much criticism from opposition parties on the right.

To alternative prime minister Chris Luxon, it is divisive and undemocratic.

His National party has blanketed regional centres with Stop Three Waters billboards in the hope of capitalising on the policy's unpopularity at the October election.

Other groups out on the fringe see Three Waters as a first step towards "a separatist state" as described by former deputy prime minister Winston Peters, planning another comeback at 78.

As the responsible minister, Ms Mahuta has borne the brunt of many ugly and racist attacks.

Ms Ardern has also faced criticism from the left for not using her political capital to stand behind Ms Mahuta and argue for the policy.

This week, Mr Hipkins - who replaced Ms Mahuta with Kieran McAnulty - said the "disgusting abuse" Ms Mahuta faced was one of the reasons he shifted her out.

"If I reflect critically on that period, we probably left Nanaia Mahuta out on her own defending the Three Waters reform program and the co-governance debate by herself for longer than we should have," he told television show The Hui.

"It was very unfair. It became very personalised ... I wasn't willing to allow that to continue ... She deserved better."

Mr Hipkins and Mr McAnulty hope the new policy will allow Labour to neutralise political attacks and gain support among councils and Kiwis.

Instead of four entities there are 10, with councils retaining ownership, and boards "appointed on competency and skill", with Maori offered places on local representative groups.

Mr McAnulty said the changes were part of a months-long listening tour.

"These reforms are absolutely essential. Leaving things as they are will mean unaffordable rate bills," he said.

The Three Waters policy joins several other on the "policy bonfire" of Ms Ardern's plans which the prime minister set alight on taking office.

Mr Hipkins, who said he is reorienting the government towards "bread and butter" issues such as the cost of living, has axed unpopular and expensive Ardern-era plans such as a public broadcaster merger and climate initiatives.

It appears to have won favour with the public. Kiwis have rewarded Labour with a small poll bump, and Mr Hipkins has better favourability than Ms Ardern's last polls.

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