Wairarapa farmers have reacted strongly against a Labour Party proposal to charge them royalties for irrigation to finance the cleaning up New Zealand’s waterways – one said he did not understand the thinking behind it and another that the added cost would reduce competitiveness on the international market.
The party’s intention to tax the commercial use of water was announced by its leader, Jacinda Ardern, yesterday.
She did not say how much farmers or water bottling companies would pay.
Charges would vary depending on water scarcity and quality. It would be worked out post-election.
If voted into government, she would meet with affected sectors to establish the royalty.
“I will not set a rate until I have met with those who will be affected; this is an issue that we must tackle together,” she said.
Martinborough sheep, beef and cropping farmer Mark Guscott said the lack of detail on how much farmers could be taxed was a huge concern.
“If they want people to vote for them without telling us what the tax is going to be, then that’s ludicrous.”
The tax would add to production costs, making it a struggle to compete with international growers.
It was “another kick in the guts for the rural and urban divide”, he added.
“The country needs to have a grown-up conversation about water without the hyperbole and emotion of an election campaign.
“It needs to be discussed what is fair and what is not fair — and most farmers are happy to have a discussion.”
His main crops on his South Wairarapa farm included barley, wheat and some specialty seeds.
While these crops did not use a lot of water, the tax would add to the cost of production – it would be hard for the industry to compete with international growers who did not have such charges.
Wairarapa Federated Farmers dairy chairman Chris Engel, who runs a Carterton farm, said the royalty was not a logical step.
The policy was “pretty broad” and he wondered if Labour was looking at taxing other alleged water polluters.
“It’s a tax on water that is used in agriculture to sustain animals in the heart of summer, in a drought . . . I don’t understand.”
There was inconsistency in Labour’s approach. It needed to be fair across all industries — agriculture and commercial water bottling were separate industries, he said.
“If they are trying to get money to clean up rivers, I hope they are then going to apply that policy to urban [users too],” he said.
All Wairarapa towns discharged treated wastewater into the rivers.
“Are they going to apply a tax on the effluent discharges from most towns into the rivers?”
Mr Engel said farmer were using water economically “to grow pastures, which has nothing to do with the cleanliness of rivers”.
Federated Farmers water spokesperson Chris Allen said the policy was counter-productive.
“Adding an extra cost in the form of a water tax drives a perverse incentive for farmers to intensify their activity, and deprives them of income that, at worst, puts them out of business and at best leaves them with less money to spend on environmental protection work.”
Federated Farmers believed that if there was to be a charge for commercial use of water, it should be paid by all.
“If you’re going to be stupid enough to bring this in, it’s got to be fair.”
Water New Zealand chief executive John Pfahlert, said the proposal could help provide communities with better resources needed to restore waterways.
However, he believed a fairer approach would be to charge every water user.
Horticulture New Zealand chief executive Mike Chapman said absence of detail was a concern.
“Extra costs on growers of fresh, healthy fruit and vegetables will make healthy food more expensive.”
The organisation did not support a blanket tax without consideration of New Zealand’s water priorities as a nation, he said.