Farmers thirsting for answers about Labour's water tax

Non-profit membership organisation Irrigation New Zealand has taken questions about the water tax to social media.

A campaign to get key questions on Labour's proposed water tax answered is gathering momentum - while the fundamentals remain unclear.

The questions were sent to Labour Party leader Jacinda Ardern on August 11 by non-profit membership organisation Irrigation New Zealand asking for a confirmed response in writing.

The organisation was prompted to act after a one-page statement issued by Jacinda Ardern announcing the water tax provided very little detail on what the tax would involve.

Key questions that have not been addressed include: what is the impact of the tax on ordinary New Zealanders; what it will cost; who will it apply to; and how it might be implemented?

Irrigation NZ has also taken their questions to social media where it is generating lively debate, with two Facebook posts pressing for answers seeing more than 12,500 people interacting with the posts.

Comments include questions on why the proposed tax won't be applied to businesses using town water, given the latest Ministry of the Environment report says urban rivers are generally more polluted than rural ones. Another is why have hydro power generators been let off the hook, given they are commercial users of water that make healthy profits, much of which ends up offshore.

Rate uncertain

Since Jacinda Ardern's announcement on August 9, Labour's Environment spokesman David Parker has reportedly quoted significantly different figures for what the tax would cost, from 'less than $500 million', to $100m*.

Confusingly, Parker quoted the lower figure of $100m based on a higher tax rate of 2 cents per 1000 litres, as opposed to the 1c per 1000 litres he calculated the 'less than half a billion' figure on.

Calculator

To assist Labour and others interested in the water tax debate, Irrigation NZ has published a calculator based on water use to better understand the impact of the tax on irrigators, sectors and regions. Users can plug in a cents per 1000 litres cost and a volume to see the impact of the tax.

The calculator can be downloaded as an excel spreadsheet - go to http://irrigationnz.co.nz/news/advocacy/watertax/.

Another unanswered question, however, is if the rate will be calculated on a water use or the maximum water allocated to users through a consent. Water allocations are not always fully used due to NZ's variable climate - wet and dry years.

Irrigation NZ CEO Andrew Curtis said: "It's clear from the wildly different figures quoted by Labour since their initial announcement - from $500m, to $100m - that Labour does not understand the impact of this tax and they have scant grasp of the detail on how it will be applied.

"New Zealanders deserve answers on the water tax. We are asking the questions, but so far Labour is not answering. We're asking not only on behalf of our members, who contribute $5.5 billion to New Zealand's economy annually, but on behalf of every New Zealander who will be impacted by this tax.

"Ultimately the water tax will increase the cost of production, with a knock-on effect for New Zealanders and on the country's international competitiveness.

"Farmers who are already spending billions upgrading irrigation infrastructure, complying with environmental legislation and upgrading the health of their rivers and lakes will have less to spend.

"Given the complexities of applying a water tax, the money raised will inevitably be chewed up on administering it.

"A blanket water tax is not the answer."

Water charges

Ultimately the water tax will increase the cost of production, with a knock-on effect for New Zealanders and on the country's international competitiveness.