Irrigation New Zealand has expressed concerns about the
implications of Labour's proposed resource rental for
irrigation. Photo by ODT.
Irrigation New Zealand believes Labour's policy on water
use and irrigation could ''cripple'' farmers and lead to
increases in food prices.
In a statement yesterday, IrrigationNZ chief executive Andrew
Curtis said the body was not convinced Labour had fully
considered the implications of a ''resource rent'' for
irrigation, particularly how it would be practically
In a speech on environmental policies this week, deputy
leader David Parker said Labour was committed to encouraging
the fair and efficient use of the country's ''precious''
public freshwater resource through a resource rental on large
Irrigation accounted for nearly 80% of freshwater
All domestic users of water, which on a per capita basis was
small, would be exempt from the rental, whether in cities or
All the revenue raised within a region would go back into the
region to fund water management and delivery, new storage and
irrigation schemes, safe rural drinking water supplies, and
projects such as the restoration of degraded waterways, Mr
That was how irrigation infrastructure ought to be paid for,
''rather than by selling SOEs or through taxpayer funded
subsidies'', Mr Parker said.
But Mr Curtis questioned how the many complex water takes,
involving combinations of irrigation, hydropower and domestic
supply, such as the Opuha Dam in South Canterbury, could be
split apart to allow for resource rents.
He also believed it was not equitable given that private
energy companies and commercial business connected to
domestic water supply systems also prospered from the use of
A resource rent would mean increased cost for domestic water
supply and electricity alongside food price increases and
such a tax would therefore impact upon low income earners the
most, he said.
Additionally, that increased cost to the farmer would impact
production and prevent farmer investment in improved
environmental management to meet the water quality limits now
in place in some regions.
''Ultimately, it will see the demise of the traditional New
Zealand family farm,'' he said.
Despite Mr Parker's comment that irrigation was funded by
subsidies, that was not the case, Mr Curtis said.
The $400 million Crown Irrigation Investment Fund - which
Labour would axe - was an investment company receiving market
returns, he said.
However, New Zealand did need to consider the benefits of
subsidising modern irrigation scheme development, which would
allow increased farmer investment in improved environmental