English flip-flops on fresh water exporting debate

Bill English

Should foreign companies be charged a royalty if they export NZ water?

Yes
70%
No
30%
Total votes: 443

Prime Minister Bill English has changed his tune on selling fresh New Zealand water to foreign companies.

This morning Mr English told the AM Show it's looking as if it will be “too hard” to put a price on New Zealand water.

His comments come after increasing discontent over China-based Nongfu Spring wanting to take five million litres of water a day from the Bay of Plenty.

Consent hearings are also under way for more water to be piped out of Mt Aspiring National Park.

Over the weekend, the prime minister said there would be an opportunity over the next few years to change the rules over water and foreign companies.

But this morning he shifted his stance.

Mr English says a century of convention would be upended if New Zealand suddenly started charging companies to use or take water.

“You'd have to work out pretty basic things like who owns it? What would you charge them? Who else would you charge?

“Because other people make money out of water, including the tourist boats that float on it.”

He says if there were a simple, easy answer, it would already exist.

“Right now, it is too hard. You want to be careful about rushing in and starting to charge people that historically no one's owned and no one's paid for.”

Mr English says the government's first priority remains the quality of New Zealand's water.

His comments are now more in line with his Environment Minister Nick Smith, who has expressed opposition to changes to New Zealand’s fresh water exporting regulations.  

Last week, a 16,000-signature petition seeking a moratorium on all water exports from New Zealand was rejected by Mr Smith.

Mr Smith called the idea “farcical” as bottling plans made up just a small fraction of water use in New Zealand.

“We’re not talking about 1% or even 0.1%, we’re talking about 0.00002% – it’s about as silly as suggesting we’re going to solve our traffic problems by banning tricycles.”


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89 Comments & Questions

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It was interesting to see John Bostock on the TV last night. He uses about 5 BILLION litres of water a year and doesnt pay a cent for it. He might not be wise to pick a fight with Nick Smith !!

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Simple fix. Charge them a couple of cents per liter. There all done.

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If John Bostockf or example paid 2c per litre, he would have to pay $100,000,000 in royalties. Its just un realistic. 2c per 1000L is more like it

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Banning water exports is a feeble argument, promoted by the feeble. We all own the water we all use it. Water has been used in large quantities in all manner of manufacturing. It has been exported directly or indirectly for decades, most products contain large amounts of water, or are processed with large amounts of water. If we are going to charge for water then all users must be prepared to pay. We can then all look forward to rapid inflation as these costs will simply be passed on. Nothing else will change.

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Following your logic there shouldn't be a price on anything as a pricing mechanism is simply useless at changing behaviour through either supply or demand.

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If NZ water is not valuable, why is a Chinese company selling it in China. They should charge a reasonable tax on all water exported overseas.
We can give away the air rights too.

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Its a no brainer...Charge royalties....

Price should be equivalent to local authority charges, discounted to exclude the capital cost charge of infrastructure if taken from the source.

This cost should extend to farmers, and based on a stock unit; which doesnt have to be great; say $1/per year/per stock unit. Extra irrigation or use at a stand royalty rate, say $8 per 10,000 litres of use.

Why should farmers get a free ride when most cities are being charged way more than I have proposed. Regional Council have been dominated by farmers for too long, with little regard to the value water provides to the wider community.

As a comparison, costs me $80 to fill a 50,000 litre pool; which is why I dont empty it other than for maintenance.

The rates proposed suggest the following costs:

1,500 sheep farm equivalent to $1,500 per year
1000 dairy cow farm equivalent to $8,000 per year
200 0.5 litre water bottles equivalent to $0.08 cents per 200 bottles
John Bostock
- 5,000,000,000 litres over 500 hectares $8,000 per hectare

One may have to transition the charge over say a decade, for high uses to adjust the debt levels and/or production to be sustainable. Excuse the pun, but that shouldnt be a bad thing.

Lets clear up our waterways, to attract more overseas tourist and wildlife, which have the potential to provide a much better return than personal greed.

All seem pretty far to me. If its not commercially viable, then go for less (more long term sustainable) production or change the use. Olives and grapes will help you out.

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water possibly the new oil in the future being given away by NZ virtually free why am I not surprised by such short sightedness.

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Why are you not surprised?

Because you've had nine years of National government to acclimatise you to the idea of giving away all NZ's most important assets to foreign ownership for a song, at the expense of next generations of Kiwis.

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Nonsense, oil is a finite resource, water is constantly recycled by nature, it's price is same as water, that is; the price of scarcity, finding it, refining it and fetching it.

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You are so naive with your comments.

Go check out the waterways of more densely populated countries. While its renewable, the issue is its deterioration. This increases the cost to drink it.

(Edited)

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We are here talking about water that is discharging constantly into the Tasman.

(Edited)

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Here we go again
The National government will give these assets away to foreigners as well before then addressing the problem when it's too late

They have already screwed our housing market. They have allowed out farmers to get free water and export polluted water into our rivers
Our prime land is being sold to foreigners

When will NZ wake up and stop this nonsense
Forget your political connections and do what is best for NZ long term. Stand up and say NO to this pathetic government

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Perhaps you could put some flesh on your accusations and explain what changes in policy and/or law this government has introduced causing all of these terrible things to happen?

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Indeed.National have sold out this country. Naivety or venality?

The result has been the same for too many rf our own people. We can't afford another term of now heavily compromised party in office. And the the iwis' best friend, apparently, Chris Finlayson- heaven help us- has now decided that the Wanganui River (forget the PC "h") is now a person.

Are they all barking mad? (Only a question...)

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no one owns water but for heavens sake don't let foreigners profit from NZs resource

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To resolve the ownership issue why not set up a govt/Iwi managing trust that collects water fees for the purpose of reestablishing and maintaining water quality for the benefit of future generations

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That would require this generation of politicians giving a rat's posterior about the lot left to future generations.

Look at housing. They plainly don't. Everything is for the benefit of their contemporaries today.

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Your comment may as well be directed at voters. Government merely a reflection of the voting public

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Charge those bottling companies the same price that Watercare charges.

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They probably do in Watercare jurisdiction

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Better yet, a simple levy on any exported water is used to fund all NZ'ers fresh water supply needs.

It's seems wrong for fresh water to be going overseas when we have substandard local supplies. Think Hawkes Bay Regional Council debacle, Watercare, the lot of them seem to useless at getting fresh water to kiwis, chargin us rates for it and there they are exporting the best stuff for free.

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Main reason I said to charge the same price as watercare is due to that water being naturally of drinkable quality. Now imagine I own land in the upper reaches of those catchments and I wanted to start a dairy farm. Either my resource consent application would get declined or I would have to meet far more conditions than if the same farm was in the lower Waikato river catchment. So I would suffer an economic loss and the government and indirect loss as my farm would be paying tax on its profits. Yet the bottling company will be making a higher profit as they hardly have to add any value to the water (filter it) before they can sell it.

Another way of looking at this. Imagine I need very large amounts of drinkable water in Auckland. I could get consent to take that water from a river. And then spend money filtering it myself. Or buy that water from watercare. Either way getting access to drinkable quality water definitely is not free.

What I propose - setting a base quality standard and value of water in the natural environment. And that standard being swim able, but not suitable for drinking, and with some suspended sediment in the water. And all such water shall have a value of nothing. And only water that is naturally of better quality will have a price on it. Ie is naturally clear (no sediment) and / or naturally safe for drinking. With no costs charged for any use that returns the same water back again. Such as electricity generation.

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Why does Bill make it out to be a problem of gigantic proportions. Bill it's simple. Water "used" in NZ is for the profit of NZ - think tourism, dairy etc etc. (our water Bill, not yours to control) is not chargeable it's a resource. Water that goes out of NZ to provide profit to overseas companies is a valuable resource just like oil. Everyone in the world is talking water shortages and you decide in your wisdom to give it away. Volumes compared to capacity have no relevance here to the long game.

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Nonsense Sir.
Water ex NZ can be drunk in China, peed out in China, refined/evaporated by mother Nature and then fall again on NZ from the sky, all ready to go around again or maybe ending up in Mr Noes gin and tonic.
Cheers

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You had the same view on the housing issue - free market etc

The same Chinese bought our houses from China to get their money out - supported by our legal and accounting profession - and all of this was speculative which screwed our housing market and our young peoples housing aspirations.

Once again they peed on us from China.
This is not anti Chinese - this is just protecting our country and not being short sighetd and selling NZ down the dunny for very short term gain

(Edited)

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The Chinese did not "screw" our housing market. Our housing market was "screwed" in the nineties by a shortage of houses. Exacerbated by a Reserve Bank Governor who conned the then Government that he alone could fix the problem simply by ruling from the Reserve Bank and playing with his lever.
Ever since then we have been playing catch up. A chase worsened by the success of our present Government making people from everywhere wanting to come to NZ with much fewer wanting to leave.
This is not hindsight, the situation was clearly visible two decades ago

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Our housing market was screwed by the banksters, who have been peddling their printed money for hard assets. A succession of politicans have either been in on this biggest scam out or too scared to touch them. The easy thing was to regulate loans to a maximum of 4.5 times the household income, but that horse has left the stables.

Go back to drink polluted waterways your idealogy has created.

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University doesnt tell you much. Business ownership and life experience is much better. So no extra education needed. Just a dose of common sense from you.

This discussion is as much about the charging of water, and to bring in a charge this has to be universal. Not cherry pick your subsidises, to favour your idealogy.

Freemarket doesnt exist. Theres barriers everywhere you go.

(Edited)

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Then again, when countries have valuable assets, it's pretty stupid to just give them away to all and sundry rather than profiting from them. By this logic, Norway and Saudi Arabia should have given away their oil rather than having the nerve to charge for it. And Brunei...well, Brunei are abhorrent socialists for daring to sell their desirable natural resources and use the money to help the general populace with the money.

It's absurd that we have self-professing capitalists here suggesting that it's somehow NZ's best approach to give away natural resources for which there is international demand, rather than charging for them.

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Look here Mr Horse, going down the road you are suggesting, implies that a NZ gov. should sell access to wild deer, wild pig, wild mushroom et al.
I should not have to tell you where you can stick that idea.
But I shall take the time and attempt to teach you that it is not your elbow that you put trousers on when rising in the morn.
Here goes,
The price of everything is in the labour required to bring it to market, scarcity plays a role, the water we are talking about is not scarce nor is it hard to find.
Unless someone applies their labour to the fetching, I tell you, the west coast water, the wild deer, the wild pig, the wild mushroom, the ironsands on the beach, the great kauri tree in Waipoua forest ain't worth a plugged nickel. They are a gift from Nature and if we choose to spit in Mother Natures face and let them go to waste, that is our choice.
I suggest it be a very daft choice.
But such is life *sigh*

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So on your logic, our natural resources are worth nothing!

And by your own statement, you are spitting in Mother Nature's face by letting our water resources go to waste by not charging for them.

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The water is "wasted" now, it flows into our oceans. Charging for it would put up the cost of production on the vast majority of our exports be it lamb, milk, wool, wine or whatever.

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So your contention is that if we charge for one thing, we have to charge for all other things.

That's nonsense. One does not automatically follow the other.

And as others have pointed out to you, water is not an unlimited resource. It can be overused. I suggest you get out in the world and see how this has occurred elsewhere.

And again, it's just plain silly to give away what you can charge for.

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BTW, your logical fallacy today is 'slippery slope'
https://yourlogicalfallacyis.com/slippery-slope

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What is wrong with putting a tax on exported water - reduces the tax burden on NZers. I suspect the expoters would pay. So no lose in terms of export revenues.

Would be interesting to see if these companies are booking the profits in NZ or offshore.

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Trouble with that Sir, as I see it, is the water that we are talking about is, at the mo. wending its way into our oceans. In other words, like the deer in our forests, worth nothing 'til someone lays claim to it by expending their labour to shoot and cart the deer out, now I venture to predict that if said shooter was to face a tax on bringing that deer to market before sale then taxed again after sale, his keenness on hunting and fetching deer might dissipate somewhat.
Your tax would be what I call, (and hate with a passion) adding unearned increment to the production of goods and services.
The West Coast is constantly discharging beautiful water into the Tasman.
I say, let those who which to capture it and bring it to market do so, and let the Gov. of NZ frame the conditions of what they can do and cannot do whilst they operate.
Let these adventurers employ whom they wish, (their wages will be spent in the 'Coast towns) let them register in NZ, fully equal under our laws to any other company in NZ. That is, should they make a profit? Then that is taxed by Mr Joyce.
Should they make a loss? Not our problem.

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Nothing much different to oil. We don't let oil companies (or, most countries don't) take out oil resources without the country getting some money for it. Charging for it hasn't stopped oil companies in their tracks.

Likewise, good quality water is a natural resource NZers should receive some monetary benefit from.

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so why does the government charge royalty for oil or minerals - they have no value till someone digs them up etc. What we are seeing is a change in the value of water - once worth bugger all, but now with a real value. I am not suggesting charging local use just exports. but as others have said maybe we stick to our principal just to cut off our noses.

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Royalties are charged on oil, yes, it is a non-renewable finite resource, like guano, (as the people of Nauru I'm sure would agree), once it is gone it is gone.
The water discussed here is being constantly replenished.
You know? You anti-jobs brigade would be much better off complaining about plastic bottles and plastic shopping bags. Protest for their banning and I could do nought but join you.

royalties are charged on oil, gold

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Charging a royalty will not significantly change the economics so will not change the number of jobs but will add revenue for NZ.

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How about fish? I assume NZ charges for those quotas and they are also being replenished or at least should be..

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No, fish quota was distributed using catch history to determine who got what.(Except iwi, but's that's another astory) some sold their qouta some bought more. Trading is still going on, as it should. The system works okay as it limits what can be taken and how much can be taken. Depending on surveys of our fish stock, the Gov. can reduce or increase without compo.
The quota owner pays a fee each year to cover the management of this system.

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I think the point is by selling "NZ water" they are making money off NZ's branding. The water itself is secondary.

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Correct, "Water from clean green NZ"
That is a dangerous and should not be permitted.
Remember the baby formula scare,? the nz velvet containing chicken blood scare?
We do not need a bottle of "clean green NZ water" testing positive for disgruntled emoployee pee.
So I say "YES" if a company, be it Fonterra, Wrightsons who ever choose to use NZ for leverage then NZ should monitor/quality control that company on a full cost recovery basis.

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"Last week, a 16,000-signature petition seeking a moratorium on all water exports from New Zealand was rejected by Mr Smith. Mr Smith called the idea “farcical” as bottling plans made up just a small fraction of water use in New Zealand."

Good to know "Doctor" (I use that term with extreme trepidation in this case...) Smith thinks 16,000 people are farcical in the head and that he would just run rough shod over them. Easiest thing to do would be to put a temporary cap on existing plants and no new ones until a solid framework is agreed upon and enacted.

It is obviously more than just a minor inconvenience to a select few - start listening to the public or start losing votes, your choice...

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You say "Smith thinks 16,000 people farcical in the head"
Well then Dr Smith would be terribly wrong. I can tell you from personal experience that that number is much much higher and a very high percentage having been through our Universities.

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New Zealand's Reverse Midas (Smith) strikes again, once more writing-off NZers concerns about their own resources and the lot left to future generations.

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I challenge anyone to find a worse government minister in New Zealand's history than Nick Smith

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The Government, with some reason, wants to avoid another Iwi claim on a resource that rightfully belongs to us all. Why not apply a levy to companies not domiciled in NZ? Well, the trouble here is that that may upset certain trade agreements. Back to the IWI - ask them to agree that water belongs to everybody. They won't, as they are experts at claiming such assets - including renewable - and hence we are all in a pickle.

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Share royalties with the Iwi 50:50. That way we get 50% of something rather than 100% of nothing. And it's not as if the Iwi live in another country - their 50% will join the money-go-round and everyone will benefit.

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Its already shared with the iwi, through government collecting royalties. There's only one government, and its time to bury past grievances. I got past debts, but have let them go. Time to move on.

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NBR readers comments are getting scarier by the day

There was only 9million litres exported out of NZ last year in the form of bottled water. Auckland uses 450 million litres a DAY flushing toilets and brushing teeth!

If you put sugar or alcohol in said water, these numbties would think its great! Or even mix the water with spray and then spray it on trees !!

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10/10 Mr Anonymous.
Cheers.

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no worries about exporting water - just think we should be charging for what is a precious resource........what is wrong with that. Have a look at any industry - when demand grows etc prices go up. Demand for NZ water has gone up so prices should. 20 years ago you probably could not charge for water, today we probably can. So the NZ government is being an idiot in not charging.

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Care to back that 9m figure up you are quoting with a factual reference.

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Why be scared of a Treaty claim? Why not agree a blanket levy on all water extracted/consumed, rebate it to NZ resident consumers and agree that the revenue will be split between the Crown and Iwi? As per the comment above maybe in trust spent on waterway remediation? Can't believe the Govt is so scared of appropriate taxation to change bad behaviour (internalise externalities). Was the same with land tax (apply blanket, rebate NZ taxpayers only to hit offshore freeloaders). There are simple ways to do all this...

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I wonder what Peter Thiel would do?

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The issue has been triggered by the water quality issues around NZ, such as the dying and polluting of rivers, lakes and acquafiers etc. The bottling coys need to step up and join the debate in supporting water causes - as at he end of they day their industry is in peril - bot from public pressure and from the reputation of dirty green NZ. If priced, they could afford to pay - it would be the high user low value dirty dairy boys that would become uneconomic.

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There is no industry to stand up

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Regardless of the fact that it is a renewable resource. We are still giving it away to international interests for free. I don't see the sense in that. It does not matter how big or small the amount is comparatively.

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Maybe NZ get free marketing in the bottles. I wonder how much they sell them in China? Are they in Bars & hotels? Is this comparable to Perrier water?

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You raise a valid point. However, I'd be inclined to guarantee the income from the resource as it goes out rather than attempting to calculate what our water is doing to draw tourism dollars. I can put hand on heart and say Perrier is not in my top 10 reasons for visiting France. Plus, charging for the water on the way out is more easily scalable and does not require large infrastructure spending to support it.

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Why do I get charged $1.59130435 (excl GST) per cubic metre of water I use in Tauranga, plus a base daily rate of $0.0678 (excl GST) when those exporting and profiting from our water are charged nothing?

I don't care less Dr Smith how small the export percentage is. Explain the inequity!

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Actually, local water charges are more about the cost of processing your waste water than the cost of sourcing clean water. Now that waste water can't be just dumped in the sea it is quite expensive to deal with!

I would hope water processors are paying various taxes on their NZ operations - income tax, GST and rates. If not, then someone is not doing their job properly.

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No. In Auckland they are charged separately for their waste water in addition to their water consumption.

Here, the processing of waste water is part of our rates - a per residential unit amount of $393.70 (excl GST) plus a further amount for waster water management availability to each residential unit.

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The Human Body has 7 Trillion nerves, Nicks Myth gets on every single one of them!

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There was only 9million litres exported out of NZ last year in the form of bottled water. Auckland uses 450 million litres a DAY flushing toilets and brushing teeth!

Interesting statistic - not sure the public gets it. The demonstrators make it sound like a huge proportion of potable water is being exported. In reality it is miniscule. And - unlike oil cited by several commenters - water runs out to the sea.

But I suspect the political environment we are in will DEMAND a tax on exported water. Either way - why call Bill English's response a flip flop. More like refreshing flexibility about policy settings a la superannuation age. Good stuff. Too often these poli's paint themselves in a corner and won't change.

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It's not the quantity of water that matters - it's the principle that they get to profit outside of NZ from using NZ resources.

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nick smith supporter you sound like but ignorant around the facts that clean fresh water is an finite resource, ask the many countries who have no fresh water about it. Fresh water is a resource and we give it away free full stop.

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Hi Sue, I too pay water charges, but I don't believe I pay for the water, but rather for the fetching and maintanence of our system. The amount I pay is based on usage. The actual water is free from our maker.

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The fact some people are missing here is that fresh, clean water is not a non-exhaustable good.
Numerous commenters who have sided with Mr Smith argue that it is pointless to tax a renewable, non-scarce resource. And that it should therefore be allocated as a perfect public good - such as the air we breathe - and that no cost for consumption (eg a tax) should be applied.
If this was the case there would be no debate regarding swimmable rivers, there would be no debate on the dry plight of the Ashley River, there would be no debate on water use for hydroelectricty, and there would be no debate on the state of Canterbury's aquifers.
The fact of the matter is that there are endless parties who want to use (actively or passively) our water resources. While the water may be renewable it is only renewed at a certain rate or quantity per annum. Discount this quantity over time and you have a resource that is not infinite. It should be allocated with this understanding.
This would mean a price for water consumption is a reasonable measure. The soultion I envisage would involve a market price for water that is a factor of the quantity/flow removed and the length/distance the water is removed from the water body (this would encourage removal as far downstream as possible - eg at the river mouth - to limit the externality to other users). Passive consumption eg boating is a near perfectly non-scarce resource and can therefore be "given away" freely. All other consumptive users (including hydroelectrical generator and irrigators) would be required to participate in the market. I am loathe to suggest central planners (aka regional and district councils) decide on the total water quota available to the market (think fisheries) but this may be the only/best workable method.

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Shhhhh!

Your logic and soundness of argument is going to give some people on here a headache which the will only be able to sate with a nice tall class of clean, infinitely available, endlessly renewable and best of all free to all comers New Zealand water.

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All water exported should incur 1cent perlitre royalty. That would not be an impost on the exporter but would help reduce rates for the Councils in the areas concerned. 9 million litres annually? Really. I suspect higher, and if we impose royalties we can encourage other exporters to take our water.

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I have heard Antipodes water ( the NZ brand) retails for up to USD $28 a bottle in China. Here's a recent article on CNN looking at a Chinese water sommelier. http://edition.cnn.com/2017/03/08/foodanddrink/water-sommelier-shanghai-...
Pure - especially water that's been filtering through the aquifer for hundreds of years and has a unique taste and mineral composition - is an increasingly valuable resource and we should be making the most if it.

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I think it would be health with an election coming up to debate the claim that Iwi have on natural resources.
At uni I was an unprompted Maori empathist learning Te Reo and redefining my views of the Treaty.
Now Im not. I just see apartheid and looming problems.
And I dont accept that the law should be formed in a courtroom either.
No reira ka huri oku whakaaro,

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Put the claim of ownership by some groups to one side. Are you suggesting that iwi don't have any legitimate interest in the future of water?

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No but Im saying that the only credible way forward is via democracy with equal rights before the law.
Let the rights of iwi be addressed at the same time as everybody elses via the same systems without special powers without special rights.
Im saying the rights of iwi should be addressed through the rights their individual members have through citizenship.
So I think the Maori party is good but Maori seats are too far down the slippery slope.
As are special seats on Tribunals, Local Government representation etc etc
It needs to stop and stop fast because democracy is actually designed for equity and if you introduce systemic inequity then democracy itself begins producing skewed results.
Its like kicking a spinning top - it gets wobble and that gets rapidly worse.

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Then you didn't read the Treaty correctly, particularly the preamble to it.

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It's pleasing to note that NZs fastest growing bottled water brand PARKERS is 100% kiwi owned and operated

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Carbonate the water, add artificial flavouring and colouring; problem solved

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You mean like DB? Lion Breweries? *burp* Fresh Up? Fonterra? *burp* L & P? *burp*
Cheers Bicarb, could it be some of these NBR postings that is the cause of your heartburn? You have to admit, though they may be the cause of your heartburn, they are rather good for a chuckle.

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Maybe we are missing the point. Maybe money itself is the new beads and blankets(cf 1840)
Maybe water and air is the new 'land' and selling it is missing the point all together.

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Hear, hear.

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These are our resources. 2% of the world's water is accessible. Half of that is drinkable. The quality drinking water situation will worsen with population growth and increased contaminants fed into the ground, further polluting accessible drinking water. It is fast becoming a real issue for cultures around the globe, many of whom already have to ship their water in. It's simply nuts to just ship it offshore without some kind of deterrent.

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Water metres any one? We get charged for water if we go over a certain level so enough of this rubbish that it's not charged for. Or is it okay if it's only New Zealander's being charged? Our water and aquafers are in dire straits - stop the exportation of it now and let's have a proper debate.

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wrong, you are not paying for the water, you are paying for the fetching to your tap and toilet and its exiting plus the maintanence of said fetching and exiting system.

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Instead of all moaning, why dont you all buy a water bottling plant? You can give as much money as you want back to whoever you feel like then

Its all just moaning, less hui more dui needed

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Nice one :) 10/10 except I think the "moaning" is just envy from the, "do nothing brigade"

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