Economically, New Zealand is entering a dramatic era of unprecedented change, Prime Minister Jacinda Ardern told the Federated Farmers conference.
Ardern says the royalty on the commercial consumption of water will assist with the cost of keeping our water clean.
“The royalty will be flexible to reflect the scarcity or abundance of water in different regions, the different quality of water, and its use. Royalty levels will be set following consultation and the revenue will largely be returned to regional councils.
“To help set the royalty, in my first hundred days, I’ll host a roundtable on water at Parliament, with all affected sectors. 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.”
Farmers say Ardern’s statement is a worry.
Federated Farmers water spokesperson Chris Allen says consultation is welcome "but talking won’t allay the fears of farmers of where this could go".
The Federation remained opposed to any royalty on irrigation water, especially when it remains unclear what purpose it would serve, other than adding another tax.
"At least Labour appears now to be proceeding with caution, recognising the considerable risks. They’ve promised that if they are part of a new government, deciding the levels of any royalty on commercial use of water will be preceded by consultation."
Labour’s Coalition partner, the Greens have floated a 10c/litre water charge.
Allen says the 10c a litre figure some had bandied around would bankrupt farmers and cripple our export competitiveness and regional economies.
“Even one thousandth of that figure, if that's a level Labour has in mind, would be "eye-watering" given the volume of consumptive water use.
"With any royalty, farmers and growers would have little choice but to pass on the extra cost, if they could, meaning New Zealand consumers would pay more for food, and our products would be at a disadvantage against imports."
Farmers recognised some positives in the Labour policy announcements. They would applaud that riparian planting would qualify for carbon credits under the Emissions Trading Scheme, "but we hope this is not a hint of a policy announcement to come on including animal emissions in the ETS".