Tax unfair and inconsistent

The fruit sculpture in  Cromwell. Photo: Joy Bennett.
The fruit sculpture in Cromwell. Photo: Joy Bennett.
Labour’s proposed water tax will have a major impact on Otago fruit growers, write Jeremy Hiscock and Peter Vernon in this abridged version of a letter sent to Labour leader Jacinda Ardern. 

Dear Ms Ardern,The Central Otago Fruit Growers Association and Ettrick Fruit Growers Association Presidents write to express our views on your proposed tax, and your response to the Waitaki Irrigation Collective of August 18.  We appreciate your understanding of the importance of horticulture and agriculture, and the people within these sectors who produce New Zealand’s food, create export earnings and the tens of thousands of jobs spread around New Zealand. We also desire a clean rivers policy that restores and maintains our waterways in a clean swimmable state for future generations.

We note your comments: "Restoring the quality of waterways will mean using water more carefully and being smarter about how we manage activities that pollute. For instance, Labour is proposing steps to protect waterways from agricultural pollution. Our Ready for Work programme will take young people off the dole and have them working on projects like fencing waterways and riparian planting. To help fund such work a royalty on the commercial consumption of water from rivers and aquifers will be put in place."

Central Otago fruit growers produce premium food for the world. One of our competitive advantages is our dry, arid climate, requiring carefully managed water and land use. Successful management of our environment contributes to the world-renowned high-quality cherries, apricots and apples  we export worldwide.

We question why your policy would tax food producers in our dry climate, such as Central Otago, and not tax food producers in a wet climate, if the purpose is to fix our rivers? I refer to your comments about the likely royalty rate " . . . In parts of the country that don’t irrigate it is nil."

You also state: "We also want to stress that those who are on municipal supply will not pay the royalty."

We question why your policy does not recognise or address the significant pollution of our waterways from municipal domestic or industrial water use? If the purpose of your policy is to clean up waterways, it must be fair to all. This policy is not.

For example, you will tax a rural vegetable grower who irrigates only as needed. You will exempt a municipal hydroponic producer.

Your policy proposes to tax water bottlers at a higher rate. Where is your consistency that will tax (penalise) bottlers of fresh, pure New Zealand water for export, and exempt Coca-Cola (located within the Auckland municipality) from the same tax? Rural horticultural irrigators operate in a virtually closed water cycle. The water drawn from our waterways, if unused by crops, returns to the land or rivers, or evaporates. This water is not changed into grey water or waste water needing treatment.

It is very important  you understand the difference between irrigators and water polluters.

The Ministry for the Environment (MfE) website   provides water quality information on the "swimmable state" of New Zealand rivers and lakes. The three worst regions with the poorest waterway quality, based on E. coli and toxic algae levels are: Auckland,  where  76% of rivers  are poor or of intermittent quality (the two lowest grades), Northland  on  76% and Waikato  on 63%. Contrast these results, with the highest irrigating regions (obviously, the driest places ): Canterbury on  14%, Otago   21% and Marlborough 2%.

In Otago, the MfE map grades the water quality adjacent to major horticultural areas (Cromwell, Alexandra and Roxburgh districts) as excellent or good.

The MfE data shows that regions with the highest levels of river pollution, are the wettest. If your policy is designed to clean up waterways, why will these areas not be taxed? If regions with good water quality, (which are the driest and irrigate) suffer the highest level of tax take, this policy is completely untenable.

The consequences of your water tax policy in Otago will take money from our food-producing exporters and use it for remedial work elsewhere. If the tax is to clean up waterways, we question your plans to use this money for other purposes, such as retraining unemployed young people.

We wish to know full details of your proposed water tax and where the tax take will go. Tax policy should be clear in objectives, efficient in collection, and transparently fair to all.

While we commend your policy intent, we strongly oppose the method of funding it. Sufficient tools exist within regional and district councils to act against those who cause water pollution.  This tax would be divisive, unnecessary, bureaucratic and will not accomplish its intent. Finally, we stress that water, like air; cannot be owned by State or citizen. Water is a renewable gift that comes from the sky, is free for all, and must remain that way.

- Jeremy Hiscock is president of Central Otago Fruit Growers Association and Peter Vernon is president of Ettrick Fruit Growers Association.

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