Dunne Speaks: What to do about fresh water exports?
According to media reports, 20 billion litres of pristine New Zealand water are going to be exported over the next
fifteen years, with not one cent in royalties being paid here.
By contrast, it has been estimated that the oil and gas industry paid around $230 million in royalties to the New
Zealand Government in the last year alone, and has paid as much as $430 million in earlier years, based on products
discovered and sold. The oil and gas royalties regime is notoriously complex and uneven, with many tax deductions
available, and no levy on exports. It is applied at rates that can vary from 5% to 20%. Nevertheless, petroleum
exporters are typically paying about 42% of their profits in taxes and royalties to the government.
Leaving aside the argument about whether oil and gas exploration is a good thing to be encouraged, and the complexity of
the regime, it does provide a useful point of comparison to the way in which the likely burgeoning fresh water export
trade is treated, all the same.
It is certainly true that New Zealand has an abundance of fresh water, so it is easy to see the attraction fresh water
exports pose. And it is not new. For over 30 years there has been steady yet periodic interest in establishing a fresh
water export industry. So, at one level, the argument could at least be mounted that fresh water exports are just
another form of primary products exports from this bounteous country.
But the argument is not that simplistic. The great debate occurring about water needed for irrigation demonstrates the
pressures being placed upon our water resources. The argument over the proposed Ruataniwha Dam in Hawkes Bay and the
virtual drying up of Canterbury’s major rivers earlier this year as a result of a high demand for irrigation brought on
by dairy intensification highlight the point. And it is also intensely political. Environment Canterbury was sacked by
the Government in 2010 over the allocation of water rights; iwi interests have long recognised the power of the
ownership of water as the Resource Management Act debate shows; freshwater recreational interests have for equally long
sought to preserve their traditional roles and relationships with water; and, the Land and Water Forum has patiently
attempted to bring all the groups to the table to try to achieve a coherent policy response. On top of all this comes
mounting justified public concern about the swimmability of our major rivers. The response of seeking as a first step to
make all major rivers at least wadeable is widely seen as too little, too late.
Against this complexly yet finely woven tapestry, it seems somewhat incongruous that a virtually unregulated and
certainly untaxed water export industry is being allowed to develop. At the very least, there needs to be a coherent
royalties regime put in place, akin perhaps to that for oil and gas, to ensure that our water resources are not being
just given away. But that will not be enough of itself. There also needs to be a clear national policy developed about
water exports. For too long there has been a complacency that water will always be abundant in New Zealand, and while
that is generally true, recent developments show we can no longer take it for granted. Dirty and dried up rivers, and
contaminated aquifers are not what we have usually been used to, nor do we want them to become the norm. Especially, if
at the same time, we have to sit and watch the ships sailing away with millions of litres of our pure water for which
they have paid virtually nothing.
ends