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Home / The Country

Opinion divided on Labour's water tax policy

Hawkes Bay Today
18 Aug, 2017 10:35 PM5 mins to read

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Hawke's Bay Fruitgrowers Association president Lesley Wilson is unhappy about Labour's water tax proposal. Photo/File

Hawke's Bay Fruitgrowers Association president Lesley Wilson is unhappy about Labour's water tax proposal. Photo/File

Labour's recent policy announcement around cleaning up New Zealand's waterways, including a royalty on bottled water and a tax on water used for irrigation, has prompted concerns in the rural sector, but some see it as a reasonable start for a conversation about the country's fresh water quality.

In announcing the policy, Labour leader Jacinda Ardern said a royalty on the commercial consumption of water would assist with the costs of keeping water clean and would be flexible to reflect the scarcity or abundance of water in different regions, the different quality of water, and its use.

She said royalty levels would be set following consultation and the revenue would largely be returned to regional councils.

"To help set the royalty, in my first 100 days, I'll host a roundtable on water at Parliament, with all affected sectors. I will not set a rate until I have met with those who will be affected; this is an issue that we must tackle together," she said.

Industry groups initially criticised the lack of detail in the proposal, and the potential impact on fruit and vegetable prices, but lobby group Irrigation NZ's Andrew Curtis said there had been progress this week when it was clarified that the charge would be 2c per cubic metre (or 1000 litres) for irrigated water.

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As such, he said, the direct impact on the likes of fruit, vegetables, bread and milk would be quite small, but ongoing costs would be borne by farmers and growers.

There was also concern over how and where the income from proposed charges on irrigators would be spent in the regions.

"When we ran the numbers on what regions would receive in funding it produces some really ridiculous outcomes where regions with really poor river quality end up with hardly any money, while other regions have more than they could spend."

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Hawke's Bay Fruitgrowers Association president Lesley Wilson said the industry was also unhappy about the proposal, and the fact it was such a step change in how water use was managed.

"We're also not 100 per cent sure it will be 2c per 1000 litres - once you start charging that it might end up at 10c, and there's also the question of what happens in a drought year?"

She was concerned that there was an implication that fruitgrowers were polluters, when they were not.

"We have spent years calibrating our systems and working with our crops and soils to get it right ... we consider ourselves guardians of our waterways and we need good clean water to irrigate."

She said it was another way of pitting urban against rural which was not helpful and sent the wrong signals.

Hawke's Bay grape grower Xan Harding, however, did not consider the potential charges too onerous and said the policy had opened the door to discuss the issue.

On his 14ha vineyard near Bridge Pa, at a rate of 1 to 2c per cubic metre (cumec) for irrigation, that would equate to $20 per year per hectare for vineyards, in his case about $280 a year, which he was willing to pay.

"This would be one of a myriad of charges we face but I am willing to accept that because it is addressing the underlying issue [of water quality] that we have not come to grips with."

Details were still sketchy, but from a holistic point of view discharges into the aquifers or waterways would also need to be addressed, but the initial focus on freshwater was a start for the conversation, Mr Harding said.

Hawke's Bay regional councillor and Pipfruit New Zealand board member Peter Beaven agreed.

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Looking at it from a regional council perspective, he said there were a large number of degraded water bodies in the region and around the country and that Labour's policy seemed to be a step towards resolving many years of poor land management, and providing a way for regional councils to pay to clean the waterways up.

He said the current Government's promise of $100 million was a drop in the bucket, and that one possible source of funds for regional councils to address the issue was such a charge on commercial water use.

"If I look at the cost of an orchard operation - it uses 1200 to 1500 cumecs of water annually - that would be $24 to $30 per hectare - that's a manageable cost."

The most expensive crop to water was grass, he added, so dairy farms, for example, would be faced with higher costs than orchardists, but he believed it was incumbent on this generation not to pass the problem on to the next generation.

More efficient use of water was one way commercial water users could minimise such a cost, and as such a charge could drive efficiencies.

"If people can afford to sign up for Ruataniwha Dam water that was 27c per cubic metre they can't tell me they can't afford 2c a cubic metre.

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"Water has been free up to now but it's being recognised as a valuable commodity and it makes sense that commercial users pay for it."

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