Taxing our water

FIigures released yesterday  by Irrigation New Zealand included bad news for Otago when it comes to funding being taken in irrigation tax for "Clean Rivers".

The figures show Otago will pay the second-highest amount of irrigation tax of $7.8 million when it has 8% of rivers said to be poor for swimming and just 3% of irrigated land.

Canterbury, as could be expected, will pay the most at $41 million. The region has 4% of rivers declared poor for swimming but 11% of irrigated land.

Labour has declared it will implement a royalty on the commercial consumption of water to assist with the cost of keeping New Zealand’s water clean. The royalty will be flexible to reflect the scarcity or abundance of water in different regions, the different quality of water and its use. Royalty levels will be set following consultation and the revenue will  largely be returned to regional councils.

Labour leader Jacinda Ardern says to help set the royalty, she will host a roundtable on water in Parliament with all the affected sectors. Labour also believes when water is exported for profit, private companies should  pay a royalty.

The party will work with iwi to resolve Treaty of Waitangi water claims in a manner respecting iwi’s mana and which restores the mauri of the lakes and rivers.

National reacted predictably with claims the price of cabbages is likely to rise to $18 each if a water tax is implemented.  It also questioned the reopening of Treaty claims.

Whatever happens, the concept of water belonging to no-one is quickly changing.

Dairy farmers are likely to feel the most pain with a water tax, particularly in Canterbury where millions of litres are poured on to pastures not really designed to host the many thousands of cows. 

The prospect of foreign-owned companies bottling Canterbury water for export, without paying a royalty or tax, must be particularly galling to campaigners for a better use of New Zealand’s precious natural resource.

Back to Irrigation New Zealand and its figures for Otago and Canterbury and its challenging of Labour’s logic. The body says regions with more swimmable rivers will receive more funding from the water tax while those with the least swimmable rivers will receive less funding to clean up the water.

Otago, presumably through the Otago Regional Council, will receive back the $7.8 million when 8% of its rivers are rated as poor for swimming. That means 92% of its rivers are fine and the question needs to be asked  whether there are enough projects on which the money could be spent?

In contrast, Waikato will receive back $1.8 million in tax when it has 44% of rivers poor for swimming, and Northland, which has 48% of its rivers unsuitable for swimming, will receive a mere $700,000.

New Zealand’s largest city of Auckland will receive even less tax back at $500,000 when, according to Irrigation New Zealand, 62% of its rivers are not swimmable.

If Labour wants to convince New Zealanders of the benefits of the water tax, Ms Ardern and Labour need to be much clearer about the collection and distribution of the tax. Any new tax takes money to collect and distribute through extra administration. Inland Revenue has already indicated it is cutting its numbers. Whether regional authorities have the ability or expertise to implement a scheme as being proposed by Labour needs to be investigated closely. There will be some who are simply not up to the task.

While many will not see a problem with water exporters paying a tax, implying New Zealanders should pay more tax to clean the rivers will not be welcome without more detail and less rhetoric.


Instead of perpetuating blatantly false claims about water, how about some journalism?

Highest estimates of the water needed to grow a cabbage are around 250 litres without any assistance from rain. At 1 cent a cumec, that's 4 cabbages per cumec (some scientists claim the more realistic figure with rain is 70 cabbages per cumec).

Even using the high figure, that's just 1/4 of a cent of water per cabbage.

So $18 would be the extra cost on 7200 cabbages, or put into percent, the cost has been exaggerated by 720,000% - yes - seven hundred and twenty thousand percent.

So rather than perpetuating fear-mongering and falsehoods by merely calling them predictable, why not call the $18 a cabbage claims them for what they are.

More accurate descriptors of such an absurd claim would be "blatantly dishonest" or from a maths or fiscal point of view, "grossly incompetent".


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