Labour's proposed water tax on farmers to be scrapped

Both Labour and NZ First support tax on exported bottled water. Photo / 123RF

Prime Minister elect Jacinda Ardern has signalled that Labour will scrap its proposed water tax on farmers as part of its agreement with New Zealand First.

Speaking on Morning Report this morning, Ardern said the aim of the water tax - which included a 1c to 2c per 1000 litre tax for commercial irrigation - was always about cleaning up rivers and lakes, and she remained committed to that.

But she added that New Zealand First leader Winston Peters was "very strong" on the irrigation tax, and the new agreement would reflect a "balanced" approach that reflected his views. Peters opposed the irrigation royalty, though he supported a tax on exported bottled water.

"It will be obvious to members of public ... there was common ground on water bottlers being treated," Ardern said.

She declined to discuss details of transport policy, but said that Labour's 100-day plan was mostly intact, and that "rail is a strong theme and will be a strong theme of this Government".

She confirmed there will be 16 Labour and four NZ First ministers in Cabinet, with three Green ministers and five Labour ministers outside Cabinet.

She said there was a lot of work to be done, and she would take time to "reflect on this moment and indeed on the campaign once Christmas arrives".

She found out the news while watching Peters' press conference last night, but had a sense early on that he was going to choose Labour when he started talking about economic prosperity for the benefit of all New Zealanders.

Asked about being labelled a coalition of the losers, Ardern said: "Obviously I would characterise that as unfair. This is an MMP environment. We formed a coalition Government based on a majority of votes and based therefore on what a majority of New Zealanders sought this election."

Asked about moving in Premier House, Ardern said no decisions had been made, but she went home to her Wellington apartment last night and had a "pot of noodles".