‘Let’s Answer This’ - Questions mounting on water tax

‘Let’s Answer This’ - Questions mounting as New Zealanders demand answers on water tax

‘Let’s Answer This’, a campaign to get key questions on Labour’s proposed water tax answered is gathering momentum – while the fundamentals remain unclear.

The questions (attached) were sent to Labour Party leader Jacinda Ardern on Friday 11th August by non profit membership organisation Irrigation New Zealand asking for a confirmed response in writing.

The organisation was prompted to act after a one page statement issued by Jacinda Ardern announcing the water tax provided very little detail on what the tax would involve. Key questions that have not been addressed include the impact of the tax on ordinary New Zealanders, what it will cost, who it will apply to and how it might be implemented.

Irrigation New Zealand has also taken their questions to social media where it is generating lively debate, with two Facebook posts pressing for answers seeing over 12,500 people interacting with the posts.

Comments include questions on why the proposed tax won’t be applied to businesses using town water, given the latest Ministry of the Environment report says urban rivers are generally more polluted than rural ones. Another is why have hydro power generators been let off the hook, given they are commercial users of water that make healthy profits, much of which ends up offshore.

Water tax rate remains uncertain

Since Jacinda Ardern’s announcement on Wednesday 9th August, Labour’s Environment spokesperson David Parker has reportedly quoted significantly different figures for what the tax would cost, from ‘less than $500m’, to $100m*. Confusingly, Parker quoted the lower figure of $100m based on a higher tax rate of 2 cents per thousand litres, as opposed to the one cent per thousand litres he calculated the ‘less than half a billion’ figure on.

Irrigation New Zealand publishes irrigation water tax calculator

To assist Labour and others interested in the water tax debate, Irrigation New Zealand has published a calculator based on water use to better understand the impact of the tax on irrigators, sectors and regions. Users can plug in a cents per 1,000 litres cost and a volume to see the impact of the tax.

The calculator can be downloaded as an excel spreadsheet – click the link on the second sentence on this page http://irrigationnz.co.nz/news/advocacy/watertax/

Another unanswered question, however, is if the rate will be calculated on a water use or the maximum water allocated to users through a consent. Water allocations are not always fully used due to NZ’s variable climate – wet and dry years.

Irrigation New Zealand CEO Andrew Curtis said: ‘It’s clear from the wildly different figures quoted by Labour since their initial announcement – from $500 million, to $100 million– that Labour does not understand the impact of this tax and they have scant grasp of the detail on how it will be applied.

‘New Zealanders deserve answers on the water tax. We are asking the questions, but so far Labour is not answering. We’re asking not only on behalf of our members, who contribute $5.5 billion to New Zealand’s economy annually, but on behalf of every New Zealander who will be impacted by this tax.

‘Ultimately the water tax will increase the cost of production, with a knock on effect for New Zealanders and on the country’s international competitiveness. Farmers who are already spending billions upgrading irrigation infrastructure, complying with environmental legislation and upgrading the health of their rivers and lakes will have less to spend. Given the complexities of applying a water tax the money raised will inevitably be chewed up on administering it. A blanket water tax is not the answer.’

ENDS

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