Central Otago Mayor protests water tax

Tim Cadogan. Photo / Supplied

Central Otago's economy could lose $6 million a year through Labour's proposed water tax, a strongly-worded letter from Central Otago Mayor Tim Cadogan to Labour leader Jacinda Ardern says.

Mr Cadogan, who wrote to Ms Ardern yesterday, said Labour's water tax announcement had been greeted with "fear and dismay" in Central Otago and would be "grossly unfair" on the region.

His letter comes at the same time as a group of Maniototo women are separately preparing a campaign against the water tax.

Puketoi Station farmer Emma Crutchley said the campaign would portray a "positive image" of Maniototo farming in a bid to show a water tax would be unjust. It would cost Maniototo farmers about $2 million a year - part of the wider $6 million loss for Central Otago.

Farmers could be forced to either sell irrigation shares, sell their family farm - possibly to corporate owners - and move somewhere with higher rainfall, or convert to a more intensive land use such as dairy farming.

Mr Cadogan said the tax was basically "a reverse tax on rainfall".

"Central Otago producers must store water in winter to cover the shortfall in summer. Wetter areas do not have to do this at all, or to the same extent.

"The amount of tax that will be paid by the producers in my district will therefore be determined not by usage of water through irrigation, but by the lack of rainfall here".

Mr Cadogan's letter included figures from the Otago Water Rights Users Group that showed about 40,000ha of land was irrigated in Central Otago.

At 2c per 1000 litres, Labour's proposed tax would cost $6 million a year over the irrigated area.

New schemes, such as the proposed raising of the Falls Dam on the Manuherikia River, would add significantly to primary industry exports, but they would become marginal to the point of unviable if the tax was introduced as proposed, Mr Cadogan said.

"In addition, I am advised that the extra cost the tax would impose may lead current non-dairy operations to convert to dairy in this district to remain viable. "

Commenting on the letter, Mr Cadogan said yesterday he felt it his responsibility to "shine some light" on what the proposal would mean in Central Otago.

"The letter shows the simple unfairness that this blanket measure brings, and I think it's my job to speak up for the community."

The Maniototo women were holding a public meeting at the Ranfurly Hotel last night to decide the detail of their campaign, Mrs Crutchley said.

The Otago Daily Times contacted Ms Ardern's office for comment but none was received by deadline.

- Otago Daily Times