Friday, 04 August 2017 08:55

Farmers are already paying for water use

Written by  Andrew Curtis, chief executive of IrrigationNZ
 IrrigationNZ says it makes no sense to impose a water tax on one sector when we all use water. IrrigationNZ says it makes no sense to impose a water tax on one sector when we all use water.

Suggestions that farmers should be taxed for water use ignores the fact that irrigators are already paying for the water they use.

Irrigation New Zealand calculates the average cost of water supplied by irrigation schemes every two years, and in 2016 the average cost was $780/ha/year – 14 cents/cubic metre.

However, this figure only includes the infrastructure required to take and supply the water. The cost of the infrastructure onfarm and increased rates – because irrigated land is of higher value – is extra.

The cost to install irrigation equipment onfarm is $5000 - $9000/ha plus annual maintenance costs. For rates, as an example, a 100ha irrigated sheep and beef property pays at least $2000/year more in rates than the equivalent dryland property.

On top of this, farmers also pay for the monitoring and reporting on water use done by local councils every year and to improve their environmental performance so they comply with environmental limits.

It makes no sense to impose a water tax on one sector when we all use water. Everyone in NZ benefits from water so common sense would say a water tax should be applied to everyone who uses it.

You can’t just tax people you don’t like, such as foreigners who bottle it and sell it offshore, or farmers, because you think they’re getting it free when they’re not.

Applying a water tax to farming will hit NZ households because in the end a tax on commercial use would be passed on to domestic consumers.

That extra few dollars for low income families promised in this year’s budget? Tax water and all of it, plus more, would disappear on higher food, energy and travel costs.

Taxing water isn’t an effective way to incentivise water use efficiency or clean up our rivers. Farmers and growers are already spending heavily on improvements – $1.7 billion upgrading irrigation infrastructure since 2011; reducing their income would reduce the amount they could spend on this.

The means to conserve water and improve water quality is to continuously improve how irrigators use water, protecting water and water quality through regulation and good practice, and increasing reliability and security so we’re not adversely impacted by climate change.

 

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