$10 Million per year Drinking Water Subsidy Scheme reopens

Cabinet last week approved re-opening the drinking water subsidy scheme for small communities of under 5,000 people.

Health Minister Tony Ryall says "The government was concerned that the scheme had been running on a first-come first-served basis - allowing comparatively better off communities to apply for subsidies, and not targeting the communities most in need of the funding."

The criteria for the Drinking-Water Subsidy Scheme have changed:

$10 million is available for allocation each year until 2015

· the scheme will pay up to 85% of costs (previously it was 95%).

· only those communities with a deprivation index higher than 7 are eligible. (deprivation index of 10 is the least socially and materially well off)

· the criteria clarify that asset replacement, maintenance, land purchase and applications from city councils are not eligible for subsidies.

· an engineering review is required for subsidy applications that exceed $1,000 subsidy per person for a water supply scheme.

· Applications are invited for the next round of drinking-water subsidies which close on 31 March 2011.

The Drinking Water Subsidy Scheme, which was originally launched in 2006, was put on hold in 2009 amid concerns subsidies did not represent value for money.

The revised criteria are estimated to generate $18 million in savings over the next five years which can be shifted to fund other high priority health services.

Other changes have been made to reduce administration and costs to communities. The full revised criteria are on the Ministry of Health website at www.moh.govt.nz