An economic appraisal was undertaken by an independent consulting team to assess the costs and benefits associated with the proposed NES. The team comprised a resource management consultant, an economist and a water scientist.

The potential costs and benefits of the NES are very specific to individual situations. Regional planning frameworks, the nature of individual catchments, the types of activities that affect water quality, the nature of treatment plants and the size of communities all determine the balance of costs and benefits from the NES. As a result, a fully quantified national cost-benefit analysis was not possible because of the high degree of variability in individual situations. Instead, a case study approach was used, which looked at specific drinking-water supplies in their context. This was then scaled up to provide a national estimate.

Nine case study catchments from five regions were selected (see Appendix 6 for a description of the methodology used). The case study catchments were selected to reflect a wide range of circumstances, in consultation with regional council representatives and based on analysis by a drinking-water scientist. Potential case studies were stratified by the nature of their sources and the quality of water supplied to consumers.

5.1 Overview of impact

Five stakeholder groups are likely to be affected by the proposed NES:

  • central government – development and guidance on implementation

  • regional councils – implementation, administration, monitoring and review of permitted activities

  • resource consent applicants – application and mitigation costs

  • drinking-water suppliers – implementation, consultation, avoidance of upgrade costs

  • general public – health benefits.

Total costs associated with the NES were estimated at $24.4 million over 20 years (see Table 4),[This is considered to be an upper estimate as conservative assumptions were applied by the consulting team when conducting the assessment of compliance costs.] with the majority of costs borne by consent applicants.

It is difficult to quantify the benefits directly attributable to the NES. However, a range of scenarios have been run to indicate the magnitude of the possible quantified benefits. Economic valuation, based on the incidence of water-borne disease in New Zealand, estimates that the cost of disease associated with contaminated drinking-water is approximately $25 million per annum. Improving the quality of the source of drinking-water will reduce this ill health and provide a benefit to society through increased productivity and a reduced burden on the health system. Analysis shows that at a 10 percent discount rate the NES would need to deliver a 15 percent improvement in drinking-water source quality in order for the benefits to outweigh the costs. If the improvements were higher than this (say 30 percent), then the cost-benefit equation is very favourable, with a net present value (NPV) of $27 million. At lower discount rates (appropriate for long-term health benefits), the “tipping point” is approximately a 10 percent improvement in the quality of drinking-water at its source.

The costings above are based on a single benefit - improvements in health. However, the NES will deliver much broader benefits, which should make it highly efficient. For example, protecting drinking-water sources will also lead to improved recreational opportunities such as swimming, kayaking and fishing. It will also complement initiatives to protect water sources for ecological reasons. By reducing the risk of disease outbreaks from drinking-water, protecting source water contributes to maintaining New Zealand’s image as a safe tourist destination. It will also assist with maintaining New Zealand’s clean green image as a source of healthy, environmentally sound agricultural produce for export markets.

The NES is also likely to result in substantial cost savings over time in terms of reducing the need to upgrade drinking-water treatment plants, through maintaining source water quality at a level at which existing water treatment plants can deliver safe drinking-water. The quantified benefits should therefore be viewed as a minimum. The NES will deliver a range of favourable outcomes that will improve health, the environment and the overall quality of life for New Zealanders.

Table 4: Present value (PV) costs: national impact of NES over 20 years



PV costs of NES


Central government costs

Preparing guidance material



Regional councils (all) Identifying drinking-water sources $75,000 0.3%
Defining drinking-water management area $88,000 0.4%
Administering changes to consent processes $70,000 0.3%
Monitoring for permitted activity impact $1,020,000 4.2%
Permitted activity review $680,000 2.8%
Drinking-water suppliers (all) Consultation with regional council $70,000 0.3%
Consultation with applicant $1,260,000 5.2%
Upgrade costs (negative = costs avoided) -$1,900,000 -7.8%
Resource consent applicants (all) Application costs $16,100,000 66.0%
Mitigation costs $6,700,000 27.5%





Source: Harris et al, 2006

The impact of the NES on each group of stakeholders is discussed in more detail in the following sections.

5.2 Central government

Costs to central government were estimated at $300,000[Present value.] over the first three years of implementation of the NES.[There are not expected to be any substantial costs to central government beyond this time, because the majority of implementation guidance will be required in the first two or three years after the standard comes into place.] The major likely costs for central government will be incurred through producing guidance materials to help councils implement the NES. The likely costs were estimated based on experience implementing the existing national environmental standards for air quality.

5.3 Regional councils

The total cost to all regional councils was estimated at $1.9 million over 20 years. This translates to an average cost per council of $120,813.[Average cost per regional authority was calculated by dividing the total cost by the number of regional authorities in New Zealand (16).] However, it should be noted that costs are likely to vary between regions depending on factors such as councils’ existing practice, the nature of water sources and the number of drinking-water supplies in each region.

Costs to regional councils were considered to arise from:

  • coordinating information on drinking-water sources and catchments

  • consent processing

  • monitoring for the impact of existing permitted activities

  • reviewing permitted activity rules as part of scheduled plan reviews.

These are summarised in Table 5. More detail is provided below.

Table 5: Tasks included when estimating costs for regional councils



Information on drinking-water sources and catchments


Importing geo-referenced Ministry of Health data on drinking-water sources

$5000 per council

Defining drinking-water management areas (catchment boundaries)

$240 per drinking-water source (> 500 people) in region

Consent processing


Changing consent templates (includes check for drinking-water)

$5,000 per council

Checking consultation has occurred


Assessing impact of permitted activities


Monitoring sensitive sources

$1200 per source (average: six sources/council = $7200)

Permitted activity review


Assessing data, policy review, plan change if required


* Many of these actions are not specifically required by the NES, but have been included as estimates for procedures councils may choose to undertake.

5.3.1 Information on drinking-water sources and catchments

The Ministry of Health have geo-referenced water supply take points in the Water Information New Zealand database, and this data is being updated and checked. The data would be supplied to regional councils, with only small costs incurred by councils to import the data into their systems. A one-off cost of $5000 per council was assigned for this task based on discussions with councils.

Defining drinking-water management areas is not compulsory under the NES. However, councils may choose to define key areas to improve the efficiency of administering resource consents.

The Ministry for the Environment will develop an implementation package, including guidance on defining drinking-water catchments. This is a relatively simple task for surface water. The consulting team considered it unlikely that councils would need to undertake full modelling of groundwater catchments, and that a guideline approach should suffice to ensure that water management issues were adequately addressed. It is likely that more complete modelling will be required if consents are contested, but these costs have not been included in the estimate.

Consultants costed this component by allowing for geographic information system (GIS) programmers’ time per water source to define and map the drinking-water catchments. This is a cost of $240 per drinking-water source, and has been multiplied by the number of drinking-water sources in each region to provide the national estimates in Table 4.

Some costs will increase for local government in administering the consent component of the proposed NES. When any application is processed for a discharge permit, or a permit to take, use, dam or divert water, there will be an additional step required to check whether the activity could adversely affect a drinking-water source, and, where this is the case, to ensure that the necessary impacts have been included in the assessment of environmental effects. The consulting team considered that the costs councils would incur from this would be relatively small, and that most costs would be incurred by applicants. Thus $5000 was allowed per council to implement changes to their consenting processes to:

  • include drinking-water as a check item

  • change the template for consents to include a condition whereby the consent holder must notify the drinking-water supplier in the event of an incident that may adversely affect a drinking-water source.

A further 10 minutes was allocated per application ($20[At a charge-out rate of $120/hour.]) to check that the appropriate consultations have been carried out.

There may be isolated instances where a resource consent application that would otherwise be processed as non-notified has to be notified because of the NES. However, feedback from councils suggests that this will be relatively uncommon, so it has not been included as an additional cost.

5.3.3 Assessing the impact of permitted activities

The proposed NES does not require any specific monitoring. The extent of assessment undertaken to assess the impact of permitted activities is at each council’s discretion. However, in order to review permitted activities more thoroughly, councils may choose to increase their monitoring programmes.

The consulting team considered it was unlikely that every drinking-water source would need to be monitored. Rather, they considered that monitoring would be undertaken in a limited number of key pressure catchments in order to allow the council to do some case studies of how permitted activity rules were affecting drinking-water sources.

In order to match the permitted activity review costs outlined below, the consulting team assumed that each council would monitor six of its most sensitive catchments. Cost estimates by Environment Canterbury ($1200 per source) were used to estimate the total cost of monitoring for other regional councils. This $1200 per source, multiplied by six sources per council, gives an estimate of $7200 per council for monitoring costs. These costs have been aggregated by the total number of councils to provide the figures in Table 5.

5.3.4 Permitted activity review

The costs of undertaking a review of permitted activity rules to comply with the second part of the NES were assessed after discussion with regional council staff. Permitted activity rule reviews will be undertaken in conjunction with scheduled regional plan reviews. The additional costs of reviewing relevant permitted activity rules for compliance with the NES were not considered to be very large, and to vary greatly depending on the level of detail a council decided was necessary to implement this part of the NES in their region.

Costs could include a review of monitoring data, assessment of land-use change, and assessment of the effects of activities on source water quality. Based on the results of these findings, the need for policy review would be considered. If a change to a permitted activity rule was considered necessary based on this assessment, costs would also be incurred for preparing a report and input to council decision-making.

Indicative figures of $30,000 to $100,000 were provided by council staff for undertaking a review of their permitted activity rules in relation to the NES requirements. An estimate of $50,000 per council was allocated to review permitted activity status once in the period of analysis. As noted, this will vary greatly depending on how many activities need to be reviewed, and whether such reviews need to be region-wide or restricted to specified supply catchment areas.

5.4 Resource consent applicants

The total estimated costs for resource consent applicants resulting from the NES are $22.8 million over 20 years. These costs are associated with:

  • information supporting applications for resource consents

  • mitigation required to comply with the NES

  • possible changes of activity status.

In many cases the additional costs associated with the NES are likely to be minimal for individual consent applicants. This is because existing RMA requirements for receptors such as aquatic ecosystems or farm animals are often more stringent than for water that will undergo treatment before consumption. Also, a number of councils already require applicants to consider the effects of activities on drinking-water sources. In these situations, the NES will introduce few - if any - additional requirements for consent applicants.

The major difference to the status quo is likely to occur in situations where communities are supplied by untreated groundwater. In these cases, the drinking-water supply may be the most sensitive receptor that needs to be considered. The requirements of the NES may lead to additional application and mitigation costs in these situations.

Costs for consent applicants were assessed by commissioning an environmental engineering consulting firm to determine the likely increase in costs associated with considering effects on drinking-water sources for different consent application types. The same firm also provided cost estimates of upgrading discharges in the key categories they had identified as likely to require changes to consent conditions in order to comply with the NES.

5.4.1 Application costs

The additional costs of applications associated with the NES were estimated at $16.1 million over 20 years (for all of New Zealand). This was based on an analysis of the types of consent applications for which additional assessment (eg, groundwater modelling) would be required to comply with the NES.

It should be noted that actual costs of assessment to accompany a consent application in order to comply with the NES will vary widely depending on a range of factors, including:

  • available chemical/microbiological drinking-water supply compliance information (including groundwater supply security)

  • catchment type and surface water and groundwater quality

  • catchment land-use patterns

  • existing knowledge of catchment hydrology and hydrogeology

  • existing knowledge of surface and groundwater quality

  • the scale and risk profile of the discharge activity

  • existing knowledge of the proposed discharge activity

  • the scale of the water supply take

  • the distance between the discharge and the water supply intake.

5.4.2 Mitigation costs

The total costs of mitigation measures required by consent applicants in order to comply with the NES were estimated at $6.7 million over 20 years (for all of New Zealand).

Where an activity may adversely affect drinking-water sources, consent applicants are likely to incur some mitigation costs to avoid or reduce source water contamination (eg, increasing the level of treatment of wastewater). The size and scope of these costs are difficult to determine. They may vary from very significant (if major engineering works are needed to mitigate the effects of an activity)[It is considered that such instances would be rare, as in most cases existing requirements to protect ecological receptors or stock drinking-water will be more stringent than those required for a drinking-water source that undergoes treatment prior to human consumption.] to low (where only minor mitigation measures are required).

5.4.3 Cost of changes to permitted activity rules

Consent applicants may incur extra costs if the review of permitted activity rules results in a change in activity status in the regional plan (eg, a lower threshold for a permitted activity, or reclassifying an activity so that it becomes discretionary).[Additional costs may also be incurred (eg, by land users) if an activity that was previously not regulated under the regional plan is given permitted activity status in order to comply with the NES. Due to the high level of uncertainty involved in predicting possible changes in activities over the next 20 years, the economic analysis was not able to quantify the possible costs associated with changes to permitted activity rules for land uses and other activities.]

It was not possible to quantify what these costs might be because of the wide variation of possible outcomes of permitted activity review. It should also be noted that even if a council decides that a change to a permitted activity rule is required, this will not necessarily result in any extra costs for consent applications. For example, councils may decide to manage effects on catchments through non-regulatory methods (eg, riparian vegetation) rather than by changing permitted activity rules.

5.5 Drinking-water suppliers

Drinking-water suppliers will experience some increased costs as a result of implementation of the NES. However, this may be offset by a reduction in the need for future treatment plant upgrades if the NES prevents or reduces source water deterioration.

During initial implementation, cost increases are likely to be minor and associated with increased consultation with regional councils. Discussions with treatment plant operators indicated considerable variability in their level of knowledge of the NES and interaction with regional council staff. A one-off cost of two days’ time ($1900) was estimated per district council for liaison and consultation during the implementation phase.

During ongoing implementation of the NES, drinking-water suppliers can expect greater referral of consents as affected parties. This will greatly depend on the location and type of drinking-water source, the activities in the catchment, and current practice with consultation on consent applications.

  • Where drinking-water catchments are protected, or are limited in size, the impacts are not likely to be significant.

  • In some cases, referral of resource consents to drinking-water suppliers already occurs, and so the cost increase will not be large.

  • In some cases where referral is not routine, but where drinking-water suppliers have been vigilant in protecting their catchment, there may be a decrease in costs because the assessments of environmental effects will now be required to include issues of concern which may otherwise have required a submission on the water supplier’s part.

  • Where consents have not routinely included impacts on drinking-water sources, the costs for suppliers may increase in dealing with a larger number of consents as a potentially affected party.

Costs during this phase were estimated in discussion with water treatment plant staff in the case study catchments. Again there was a wide range of views, from those who already actively participate in consent hearings in their catchments (costs of $10,000 to $15,000[These costs include preparing the assessment of environmental effects (AEE), council costs in processing, costs of hearing commissioners, costs of those appearing for the applicant at the hearing, and writing up the decision (Jenny Ridgen, Christchurch City Council, personal communication).] where the consent was contested), down to those who currently appear to take little interest in activities in the supply zone. One hour of consultation ($120) per application was allowed to cover the costs of treatment plant operators’ involvement in the consenting process. This was multiplied by the number of consents in each catchment to provide the figure in Table 4.

Where consents are notified, these costs are likely to be higher. The consultants did not consider the number of notified consents would increase significantly as a result of the NES. They considered it likely that most major discharges would be notified anyway, and that proposals with more minor or less contentious discharges would be resolved through consultation with the drinking-water supplier.

The NES requires any consent holder who breaches the condition of their consent[Note: the wording in the final regulation will be done in a way that makes it clear that self-incrimination by the consent holder is not required.] to notify the drinking-water supplier (for events that could have adverse effects on drinking-water sources). The consultants did not identify any costs associated with unauthorised discharges from consented activities causing problems for treatment plant operators. They stated that it would be very difficult to quantify costs because typically plant operators were currently not made aware of the occurrence of such events. Equally, the consultants were unable to quantify a benefit to this component of the NES because of the lack of data on existing events in the case study catchments.

However, the consultants considered it likely increased notification would result in benefits for treatment plant operation and water quality, as it would allow treatment plant operators to take action if necessary. The consultants also considered this provision likely to prevent costs for water treatment plants and public health in the event of consent breaches.

5.5.2 Protecting treatment plant infrastructure

Reducing the need for treatment plant upgrade

In some cases the increased protection offered by specifically considering the impacts on drinking-water sources will result in savings in treatment costs, particularly for drinking-water suppliers with low or minimal treatment in place. International research shows that these savings can be considerable (see section 2.2.1).

Because the situation will vary so much from catchment to catchment in terms of whether an activity will result in source water deteriorating to the point where the existing treatment plant can no longer deliver potable water, it was not possible to determine the benefit of the NES in reducing the need for treatment plant upgrade in future. However, the consulting team’s case studies found at least one situation in which the NES could prevent the need for additional upgrade, at Cambridge, in the Waikato region (depending on the nature and timing of regional council actions).

Cambridge currently has compliant treatment processes, but is at risk from further blue-green algal blooms in Lake Karapiro, which is the main source of supply. If the NES prevented an increase in these blooms, a capital cost of $600,000 for upgrade to activated carbon filtration would be avoided. The case study also found that the NES could delay the need for an upgrade at Amberley in the Canterbury region.

The consulting team was unable to estimate how widespread these benefits from avoiding a treatment plant upgrade were likely to be nationally because of the case study approach used.[The case study included nine communities with varying source water types, different levels of treatment and different degrees of compliance with DWSNZ 2000. Given the small sample size and the wide variation in existing regional plan provisions, source water types and compliance with DWSNZ 2000 around the country, it was not possible to extrapolate from the case study to a national estimate.] However, some examples of possible cost savings from maintaining the current quality of drinking-water sources are provided below.

Generic upgrade cost estimates

Depending on the degree of deterioration of source water, an additional level of treatment may be required for a plant to continue to comply with the DWSNZ 2000.[In the example given, the district council engineer estimated that an additional log credit of treatment would be required. Log credit is a measure of the efficacy of a treatment plant in removing or inactivating protozoa (eg, Giardia).] The costs of this will vary depending on the level of treatment already in place.

  • Plants that currently comply with the DWSNZ 2000 and use conventional treatment (including coagulation): if source water quality deteriorates, the cost of additional treatment to deliver safe drinking-water would be approximately $300,000 for a plant supplying a community of 2000 to 5000 people (this is the cost of adding an ultraviolet disinfection process).

  • Plants that previously had sufficiently good source water quality (in particular, low turbidity) so that disinfection was the primary means of treatment (ie, did not have coagulation/filtration processes): the estimated cost is approximately $3 million, as more advanced treatment processes would need to be installed.[Cost estimates provided by Timaru District Council water supply engineer, 2006, personal communication.]

In addition to avoiding the need to upgrade treatment plants, protecting drinking-water source quality has financial benefits through reducing the need for additional chemical use in existing coagulation and disinfection.

5.5.3 Protecting existing sources

In situations where there is currently little or no treatment of drinking-water, deterioration of source water could lead to a situation where either new treatment needs to be put in place, or a new water source needs to be found. This can be very costly.

Christchurch City Council has assessed the cost of providing alternative water supplies should part or all of the Christchurch aquifer become non-potable. If the aquifers supplying Christchurch became contaminated, Christchurch would need to either find a new supply of potable water, or install treatment plants. The cost of this has been estimated at $118 million (MWH, 2005).

5.5.4 Improved communication

The NES will result in improved communication between consent holders, drinking-water suppliers and regional councils. While it is not possible to quantify the extent of the benefit, there are certainly situations in which this will result in improved outcomes for the drinking-water supply – either in terms of reduced health impacts or savings in treatment upgrade costs. These were not able to be identified in the case study approach used for the economic appraisal. However, the consultants note that these unquantified benefits should be set against the costs quantified here.

5.6 Health benefits

Health benefits from the NES are likely to derive from:

  • reducing the background burden of water-borne disease (compared with the status quo)

  • reducing the risk of outbreaks of water-borne disease from major contamination events.

5.6.1 Estimates of reduced disease burden

Water-borne disease is estimated to cost New Zealand $25 million a year (Harris Consulting et al, 2006; see Appendix 3). Advice from national and international health experts and authorities was sought to determine whether it is possible to quantify a reduction in disease burden associated with the proposed NES. Their advice was that it is extremely difficult, if not impossible, to quantify the health benefits associated with source protection independently of other steps in the multiple-barrier approach to drinking-water protection.

A health and drinking-water expert group was convened to assess this question. They confirmed that it is not possible to quantitatively assess the health impacts of the NES, even within a specific catchment, because the nature of the relationships between activities, source water, treatment and health are too uncertain. However, using a linear dose-response relationship (which assumes a linear relationship between the amount of drinking-water contamination and disease burden[Graham McBride, NIWA, personal communication, July 2006.]) it is possible to provide an indication of the change in health status associated with a change in final drinking-water quality.

Table 6 shows estimates of the cost-benefit ratio for different levels of reduction of water-borne pathogens. This was developed using a simple model based on health cost data. A range of national scenarios was then run to determine the cost-benefit ratio at varying percentage reductions in pathogen loading due to the NES (from 5 percent to 50 percent). This has been done for a range of discount rates (including Treasury’s recommended 10 percent rate).

Dark shading indicates where the NES is not economically justified; light shading indicates where the NES is economically justified. The break-even point varies by discount rate, but it is estimated that the NES would be economically justified if it resulted in a 15 percent reduction in water-borne pathogens. At lower discount rates (appropriate for long-term health benefits), the tipping point is approximately a 10 percent improvement in the quality of drinking-water source. If the improvements were greater than this (say 30 percent), then the cost-benefit equation is very favourable (with a NPV of $27 million).

Note that this analysis focuses purely on health impacts. Other benefits (eg, aesthetic, environmental, recreational) are all additional.

Table 6: Indicative quantification of health outcomes

Discount rate

Reduction in waterborne pathogens due to NES





































































Note: Sensitivity test: present value of impact under different assumptions of the proportion of disease attributable to populations over 500, and different levels of impact from the NES

Notes: (B/C = benefit-cost ratio; NPV = net present value).

Quantifying the disease burden

It is important to stress that quantifying the improvement the NES would contribute to drinking-water quality is an assumption made for comparative purposes. It is very difficult to quantify a level of drinking-water quality improvement that is attributable to the NES because there are many steps in the causal pathway for water-borne disease. It is very difficult to numerically attribute the health benefit of reducing contamination at any one of these points. Measuring an improvement also assumes the ability to measure a baseline level of the disease burden, which is also extremely difficult.

It is difficult to quantify the total burden of water-borne disease, including both outbreaks and background rates of disease in the community. Water-borne disease is substantially under-reported, both in New Zealand and internationally. There are several reasons for this.

  • Many people with gastroenteric disease – the most common form of water-borne illness – do not report it to the doctor. If illness lasts just a few days, many people will wait for it to pass without seeking any medical assistance. International studies suggest that for every case of infectious intestinal disease reported to a general practitioner, there are almost five other cases undetected in the wider community (Wheeler et al, 1999).

  • Even when people do go to doctors, only some of these cases will be verified by laboratory samples. Without taking such a sample it is almost impossible to confirm which disease the patient has, since most gastroenteric illnesses have very similar symptoms.

  • Not all cases of water-borne diseases are reported to the appropriate authorities as notifiable diseases. This means they do not appear on national registers as cases of disease, so comprehensive statistics cannot be obtained.

  • It can be difficult to determine if a case of disease has arisen from drinking-water or from another pathway (eg, from food, or contact with an infected person).

5.6.2 Reducing the risk of a contamination event

The drinking-water source is often the origin of drinking-water contamination events.[The contribution of source water problems to water supply contamination events is documented in a 2002 paper (Hrudey et al, 2002) summarising the causes of 19 outbreaks in six developed countries. This paper concluded that 14 of the 19 outbreaks resulted from source water problems.] The effective protection of a community’s drinking-water from contamination, and thus from disease outbreaks, relies on a multi-barrier approach (previously described). Source protection is one of several barriers that contribute to this approach.

The objective of the NES is to increase the protection of source water by reducing the risk of drinking-water source contamination. Therefore, the NES requirements are likely to contribute towards reducing the frequency of contamination events and associated outbreaks.

New Zealand has been fortunate to have had only relatively minor contamination events and outbreaks, but international examples provide some indication of the costs associated with more major events. The most notable and well documented are the Walkerton and Milwaukee outbreaks in North America, already referred to in discussing the international context for the NES (see section 2.2).

  • In the small rural town of Walkerton, Canada, an outbreak of the toxin-producing bacteria E. coli O157 in 2000 led to 2000 cases of illness and seven deaths. The total costs of the outbreak were estimated at CAN $155 million (NZ $205 million [Canadian dollars converted to New Zealand dollars at an indicative rate of 0.7558 on 30 August 2006.]). The contamination that caused this event entered the water supply from effluent run-off (Livernois, 2001).

  • In Milwaukee, United States, an outbreak of cryptosporidiosis resulted in an estimated 403,000 people becoming ill and led to the death of 120 people. The total cost of the outbreak (Corso, 2003) is estimated at US $96.2 million (NZ $140 million [US dollars converted to New Zealand dollars at an indicative rate of 0.6821 on 30 August 2006.]).

If the NES contributed to avoiding one Walkerton-scale disease outbreak in New Zealand, the cost savings are likely to be in excess of $200 million.

5.6.3 Health impact assessment

A health impact assessment of the proposed NES was also conducted. Health impact assessment is an integrated approach to addressing the social, economic, health and environmental consequences of policies, programmes and projects. Its aim is to deliver evidence-based recommendations that inform the decision-making process, maximise gains in health and well-being, and reduce or remove negative impacts or inequalities. It is largely a qualitative multi-disciplinary approach that investigates the potential public health and well-being outcomes of a proposal.

A multi-disciplinary group of stakeholders was convened to conduct a screening (high-level) health impact assessment of the proposed NES. The group comprised public health experts, drinking-water managers and community representatives, and was facilitated by a health impact assessment practitioner.

In addition to the key benefits of reducing the burden of water-borne disease and decreasing risks of outbreaks, the group identified the following specific public health benefits:

  • increased protection for sectors of the community at greater risk from drinking-water contamination (the immuno-compromised, children and the elderly)

  • increased protection and decreased vulnerability for urban dwellers or tourists (who are accustomed to a higher level of water quality) when visiting smaller towns or rural areas that currently have greater potential for water contamination.

Additional benefits to society from improved protection of drinking-water sources identified by the health impact assessment screening included:

  • protection or improvement of waterways for recreational purposes

  • improved recognition of the cultural and spiritual importance of water

  • improved public confidence in the water supply (potentially leading to increased consumption of drinking-water compared with less healthy alternatives such as soft drinks, and decreased reliance on bottled water, home filters or boiling water)

  • improved public valuation of waterways (including intangibles such as a greater sense of place and connectivity to water bodies).

5.7 Other benefits

5.7.1 Environmental, recreational and aesthetic benefits

There are likely to be additional environmental benefits from requiring tighter controls on some contaminants in water bodies. Contaminants that are of concern to drinking-water are often of concern to other in-stream values, including ecosystem values, contact recreation and aesthetic values. Capping or reducing contaminants in the source water for a drinking-water supply would also result in benefits to these other in-stream values.[If these are not adequately provided for already by existing mechanisms.]

Although a monetary value could not be provided for these benefits, the co-benefits should be acknowledged when considering the overall value of the standard.

5.7.2 Maintaining New Zealand’s international reputation

To attract tourism and trade, New Zealand markets itself internationally as “100% Pure” [Tourism New Zealand runs a “100% Pure” marketing campaign (see]. AWalkerton-scale outbreak has significant potential to affect the credibility of this brand and negatively impact on tourism and trade. New Zealand’s international reputation would be particularly vulnerable if an outbreak were to occur at a tourist centre (eg, Queenstown, Wanaka or Kaikoura).

5.8 Summary: efficiency and effectiveness

As stated in Chapter 1, efficiency is a measure of whether the benefits of an option outweigh the costs. It is considered that the proposed NES will deliver substantial benefits. These include the public health benefits of reducing the risk of drinking-water contamination, decreasing the need for future upgrades of water treatment plants, and wider environmental benefits. The net environmental and public health benefits are considered to exceed the net economic costs of the proposed NES.

Effectiveness is an assessment of how well an option will work. The proposed standard was considered to be an effective method of reducing the risk of drinking-water source contamination compared with the available alternatives. In particular, it is considered that it would be a consistent method of ensuring effective drinking-water source management at a national level.

In summary, it is considered that the proposed national environmental standard is the most appropriate, effective and efficient means of achieving the objective of reducing the risk of contaminating drinking-water sources.