Water abstraction tax concerns

Travelling irrigator on the Waitaki Plains. Photo: ODT files
Travelling irrigator on the Waitaki Plains. Photo: ODT files
Concern has been expressed about the Government's Tax Working Group recommendation for a water abstraction tax, but the issue of Maori rights will further complicate the issue.

The working group said there was the potential for significant long-term revenue and added:

''There are significant design considerations that would need to be addressed before advancing potential water tax instruments, including Maori rights and interests, pricing localisation concerns and equity issues.

''Any potential water taxes will need to take account of Maori rights and interests in water.

''There are well-established concerns about questions of access, as well as ownership.

''Maori have less access to water than other landowners.

''Analysis from the Ministry of Primary Industries [MPI] suggests that in drier regions of New Zealand, only 3% of good quality Maori-owned land is irrigated, compared to 27% of all good quality land.

''There is ongoing work to better address Maori rights and interest in water including through the Waitangi Tribunal and discussions between the Crown and iwi/Maori.''

The Tax Working Group said ''the different knowledge systems of Aotearoa/New Zealand which are preserved in matauranga Maori and tikanga values will improve on what we currently have and accelerate our potential to achieve our collective resource management, sustainability and development goals.''

Dr Carwyn James, senior law lecturer at Victoria University said the precise nature of Maori rights and interests in freshwater were still the subject of dispute.

''The Crown acknowledges that Maori have rights and interests in freshwater but maintains that no-one owns freshwater.

''The Crown's position is that the content of Maori rights to water is primarily directed at use and control and that such rights can be recognised via regulation and or co-governance arrangements.

''Some Maori parties have contended that these parameters that have been set by the Crown are preventing an exploration of the full range of options that might provide for the most appropriate recognition of Maori rights.''

IrrigationNZ chairwoman Nicky Hyslop said the water tax would apply to all types of water use including hydro generation, household use and commercial water use.

''This would result in higher power and food prices for households and businesses and higher rates bills to pay for the irrigation of parks and reserves, as well as a direct water tax on household and business use.''

The Tax Working Group said better pricing of water had the potential to encourage a broad range of efficiency measures by water users as well as a greater investment in storage.

Ms Hyslop disagreed.

''If you look at the most recently improved water storage project - the Waima Dam - a price increase for the dam construction nearly resulted in it not being built.

''Introducing a new tax on water use will add to the long-term costs of this and similar projects and make them less viable and less likely to be built.

''We really need more investment in these projects to ensure we have enough water to supply our growing population and get through more frequent future droughts.''

Ms Hyslop said IrrigationNZ was concerned farmers and growers in many regions could face water tax costs more than $10,000 a year ''which will make it more difficult to fund the environmental improvements we all want to occur to improve waterways''.

-Chris Tobin

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