Labour’s water policy the wrong solution to the wrong problem – agribusiness academic

A Massey University agribusiness expert says Labour’s newly-announced water policy is problematic on several fronts. There are better ways to make New Zealand’s waterways cleaner, without punishing specific sectors and damaging property rights, says senior lecturer Dr James Lockhart.

Dr Lockhart says the policy has been borne out of unsustainable growth by the dairy industry and foreign-owned bottling plants exporting water at no cost and creating little, if any, benefit to New Zealand.

“There is no doubt that some of our waterways have degraded with the intensification of land use,” he says. “This is due to many things – water extraction for irrigation, reducing flow levels, is only one. But if these are the problems that Labour is trying to solve, then the policy cabinet is full of tried and true methods to rectify them.”

He says the impact on farmers will be immense, especially those in regions where water supply is at risk, including the Heretaunga Plains, Marlborough, Nelson, Canterbury in particular and North and Central Otago.

“If this tax, and it is a tax, is at the levels being mooted, there could be as much as $500-600 billion to be paid by irrigation users, including vegetable growers, vineyards, and orchardists. Agriculture and horticulture is being asked to bear the entire burden for the nation’s water use and the degradation of its waterways.”

Dr Lockhart says it is also unclear how property rights will be affected.

“Due to the abundance of water in New Zealand, we have not assigned value to it in the way we should. That means New Zealand has built an agricultural and horticultural sector around water being free, while the volumes used are regulated to some extent, all the costs to date are around access and application, such as storage, pumping and distribution.

“So, if a business has its own harvesting and storage, does it pay the same royalty as a business that takes artesian ground water or surface water? At that point some fundamental property rights are being removed from those who have invested in their own systems.”

He says the thorny issue of who owns water in New Zealand has, until now, been something that successive governments have tried to avoid.

“Who owns water in New Zealand? Right now, Labour is saying that if they become government they do. At that point, water ownership becomes highly contestable and immediately opens the door for another round of Treaty claims.”

There are also anomalies in the policy, Dr Lockhart says, including during periods of drought.

“Labour appears to be offering some leniency during drought events so when water has the most value to the agricultural and horticultural sectors, and the environmental consequences are greatest, the tax will be either lowered or removed completely. That shows it is not an environmental issue they are trying to solve at all.
“Labour is boldly going where no government has gone before – but this is looking largely punitive as opposed to being a deliberate effort to restore the quality of our waterways.

“The policy simply has not been thought through as anything other than a vote gathering exercise. Our tax system should not be built on the principle that someone has to do worse for you to do better.”

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