Labour's water tax wrong to target irrigators, says lobby group

Nicky Hyslop says the levy would add around $22,500 to the annual running costs of her family farm

The Labour Party's proposal to tax water used for irrigation will fail because lakes and rivers most in need of freshwater clean-ups have low levels of irrigation, says Irrigation New Zealand.

The lobby group's chair, Nicky Hyslop, and chief executive Andrew Curtis met Labour water spokesman David Parker at Parliament today to argue Labour's plan to funnel funds raised from water levies back to the regions where the water came from simply would not work.

"They say the tax collected in the region would be used in that region," said Curtis. "That means about $1 million for Northland", which had some of the most polluted rivers but very little irrigation. "It (the water tax revenue) is not correlated to the size of the issue, so will it achieve anything? We need to get back to polluter pays, bringing towns and other land users into the mix."

Labour's plan is to hold a national conference on becoming government to establish a new regime for freshwater allocation, including settling Maori claims and imposing a royalty at around 2 cents per cubic metre of water used for industrial and farming purposes, unless it's taken from a town supply. Based on an annual 5 billion litres of water used for irrigation, that would cost farmers around $100 million a year.

Hyslop said the levy would add around $22,500 to the annual running costs of her family farm and that those funds would be better applied to improved farming methods.

Irrigation NZ produced graphs that compared Ministry for the Environment statistics for dirty rivers with its own figures showing most of the country's irrigation takes place. The graphs show the most heavily irrigated parts of the country - Canterbury, Otago and Marlborough - were amongst the least likely to have rivers graded as 'poor' quality for swimming.

Relatively lightly irrigated areas such as Auckland, Waikato and Northland had high levels of contaminated rivers unfit for swimming.

"This tax doesn't bring in all the other influences and other users," said Hyslop. "Irrigators represent 6 percent of farmed land in New Zealand. They are targeting a very small group of farmers to fix a widespread problem."

(BusinessDesk)


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Wow must use a heck of a lot of water on that family farm.
Likely 2c per 1000 litres = .00002c per litre.
$22500/.00002c = 1,125,000,000 litres > a billion litres per year.

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Labour has a pitiful water "policy" (thought bubble?) based on hysteria. It's a phantom floated to appease urban sentiments which is mistargetted and cannot be implemented efficiently or effectively. Just like the "I'm going to build a wall" promise. And I actually support charging for water.......

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And as we know, all businesses pass on costs, so it will be the Labour supporters on lower incomes who will ultimately suffer. Super bright idea - not. I support charging exporters for our bottled water, but the answer to cleaner rivers and lakes isn't in charging (ultimately) end consumers of dairy products and meat here in NZ.

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IrrigationNZ confirmed that after a meeting with Labour's David Parker and Damien O'Connor yesterday, the situation had been clarified with the announcement of a 2c per cubic metre figure for irrigated water.

"We had a good chat with them. The impact on fruit, veges, milk and bread will be minimal," IrrigationNZ chief executive Andrew Curtis said.

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"impact will be minimal" that doesn't mean there will be no price increases as a result Terry.

If this water levy is so insignificant what's the point of having it in the first place? I'll give you a hint, because one day it will go from 2c to 4c, then to 6c and so it begins.

Once the tax is implemented - you will never see the end to it, and WE the citizens will be cash cows for all eternity. And we haven't even got the water ownership rights yet, the Pandora's box that will be opened as a result.

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More correctly should be $.02 per 1000 litres = $.00002 per litre
$22500/.00002 = 1,125,000,000 litres > a billion litres

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The RDR which irrigates between the Rangitata and the Rakaia draw 33cumecs or 2,851,200,000 litres per day. It runs most of the year. When not used for irrigation is feeds the Highbank power station.
Most, Anon above,and including Labour politicians have no idea.
Will the farmers pay for water and the power generators not do so for water from the same source.
Its another way of robbing the South Island to feed the Maori entitlement industry.

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Your response seems to be so what!
1.125 billion litres of water for the family farm, or the equivalent of 450 olympic swimming pools a year, compared to what is used daily by irrigators daily is peanuts!
You then point the finger at Maori as being in the entitlement industry.
If anyone is sounding self entitled it is you and your lobby group.
400 million from the taxpayer for your irrigation schemes, as much water as you like, unrestrained at minimal cost, wanting to avoid responsibility for the clean up of the polluted waterways, but enjoying the active water trading profits, and nice tax free capital gains on the farms you sell off to foreign buyers.
With so much of NZ farms being sold off each year, how much of this water is now being used on foreign owned farms?

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you make very good point right down to your last sentence where you make a mockery of all your other statements "so much of NZ Farms being sold off" naturally you mean to foreign owners. Do you know foreigners own less than 3% of farms in NZ?

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NZ has no official database of all foreign land owned in NZ, farms, vineyards, forests etc. National has blocked NZ First's Land Transfer (Foreign Ownership of Land Register) Amendment Bill, which was to be a comprehensive register open to the public.
So neither you nor I know the exact facts, and National certainly does not want the NZ public to.
For some strange reason, they don't think it would be in our public interest?
What we really want to know is what % of productive land in use right now, by industry, by region, is owned by whom, from where, and to be able to monitor changes of this ownership. You will not know it, and I will not know it, and National is not interested in us knowing it.

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Classic case of:
1 - Create Problem, any problem.
2 - Create hysteria to provoke reaction.
3 - Solution: Tax.

See Climate Change.

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The RDR which irrigates between the Rangitata and the Rakaia draw 33cumecs or 2,851,200,000 litres per day. It runs most of the year. When not used for irrigation is feeds the Highbank power station.
Most, Anon above,and including Labour politicians have no idea.
Will the farmers pay for water and the power generators not do so for water from the same source.
Its another way of robbing the South Island to feed the Maori entitlement industry.

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Labour at least are starting the discussion. More than can be said for "sit on the fence" National. Wake up. Nick Smith has done nothing. Nothing to give congidence around future mgmt of yet another natural resource.

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Agree. The usual suspects screaming and whining, but with little of substance to add beyond tax = bad.

Apparently taxes are for the little folk, the workers, and countries should give away their natural resources for foreign companies to profit from. Someone should've told the oil-rich countries that - look at all the foolish profit they've made.

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If you think this discussion started just the other day when Ardern raised their policy then you haven't been paying much attention

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Don't get too hung up on the detail there Tim. Point is, Labour is at least trying to frame the issue and get some meaningful debate going. Their current rhetoric might be a bit simplistic and blunt, but better than sitting on your chuff letting it just pass us by......

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Maybe the areas with less irrigation are more polluted because they already have extensive farming. Irrigating leads to more intensive farming leads to polution. So maybe taxing and stopping polution is the right solution for those areas.

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Considering the Nats recent pandering to the ridiculous lobbying from REINZ, these guys will definitely have Bill's ear.

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So you think Labour's taxing water is an enlightened move? (Labour always tax things in the absence of any commercial knowhow about how business works.) You are okay with higher food prices as a result? You are okay with the winegrowers being less competitive overseas, in light of their thin margins? You are okay for some people to pay the water tax directly but not others? And you are okay for the taxed (water users) to help fund yet another huge Maori land claim on which the lucky Iwi don't have to pay tax?

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No. While I am a fan of user pays, I am not a fan of this policy.
But, in simple terms, this all boils down to a price increase for a component used by many businesses to produce and sell a product for a profit.
In any other industry, price increases are part and parcel of doing business. Prices for a component go up and you adjust accordingly. And a lot of these other industries aren't propped up by the government in the form of a subsidy.
My statement above is a dig at the current govts tendency to be limp wristed when the lobbyists start whining. At no point did I say that I agree with Labour's policy. If ALL the cash goes to fixing our polluted fresh water sources, and not to specific groups, then I may change my tune.

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Understood. However, I have brothers who are farmers and they already pay plenty for their water 'component' in their cost structure. (I also pay for it in Auckland via Watercare.) Frankly there are better ways to address polluted waters, not that Jacinda had the commercial nous to check them out.

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Agreed. This is the issue with rushing through any policy.

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Maybe you can inform all of us as to how to clean up the rivers and who pays? You seem to be suggesting there are better ways.

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So how can all the neo-liberal free marketeers be complaining? If water is simply provided free to them, there is no incentive to use it productively and avoid wastage. Or is this what they are wanting to avoid while making their unconstrained profits?

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Please explain how they "already pay plenty for their water component in their cost structure".
And what you as an urban dweller pay Watergate for your water at least encourages you not to waste water.

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Farmers pay for it through commercial charges depending on the scheme:
https://www.stuff.co.nz/business/farming/95650607/farmer-hits-out-at-bot...

As a residential water user, I don't need to pay for it to conserve it.

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Some are in quite different situations too, aren't they - wherein they're able to resell their free water through for-profit commercial businesses onselling it.

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The Greens started targeting farmers for all filthy stream's & rivers after one or two farmers were found to be letting waste flow into streams and somewhere this became the gospel. There is no doubt some farmers have contributed to the mess but so has every town & city in NZ> Auckland alone put more pollution into the stream and creeks which flow to the rivers and sea than and other entity in NZ. If you are to charge for water then charge everyone, we all need to play our part. I have no problem with the concept but this policy from labour is policy on the fly. Develop the correct policy and then put it out so there is no confusion.

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I agree JP, and during the development of this "correct policy" there will be a need to work out a system that can measure the water that is not taken up and used by the farmers crop.
Labour surely can't be planning to tax that water again and again?
Or are they??

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