The battle over the water tax is over, but the war will rage on.
As expected, the new Government – made up of Labour, NZ First and the Green Party – yesterday confirmed a watered-down version of Labour’s proposed water tax.
A royalty on exports of bottled water will be introduced, but irrigators are in the clear.
In National Party parlance, it might have been one tax too far.
At least fearmongering about $18 cabbages can now be dug into the garden of election misinformation.
The Government’s other big water policy announcement yesterday seems like a win for the Greens.
It will honour existing commitments for Crown Irrigation – an up-to-$400 million fund set up to seed investments into water projects. But once that money’s spent, that’s it.
Prime Minister designate Jacinda Ardern told the media yesterday afternoon, the policy means: “We will honour existing agreements and commitments but not continuing on with future subsidies.”
Or as the Labour-Green agreement puts it “winding down Government support for irrigation”.
The Greens had called for Crown Irrigation Ltd to be dismantled, so that’s a win.
But it also wanted to halt all new big irrigation projects, of which there’s no sign.
Killing the water tax, for now, is a win for New Zealand First.
Charging irrigators for water might play well as an issue in the cities – where many Labour-Green voters come from – but for New Zealand First it’s an important ingredient of the regional economy.
As has been signalled by the coalition structure, Labour is backing Deputy Prime Minister Winston Peters over confidence and supply partner, the Greens.
Peters has positioned his party as the champion of the regions, with a $1 billion-a-year fund for provincial growth, including big spending on regional rail and plans to plant 100 million trees a year.
Its pre-election policy was to support water-efficient irrigation and economically viable water storage.
Now, IrrigationNZ seems to be making a pitch straight at Peters.
The Labour-Green confidence and supply agreement shows a focus on improving water quality, as well as a $100 million Government-backed Green Investment Fund. You could argue the coalition has started its re-election campaign before it’s officially been made the Government.
As one dam spillway of funding closes, it’s hoping another linked to regional development may open.
IrrigationNZ chief executive Andrew Curtis told Newsroom regional economic development studies for east coast regions, and many others, highlight the importance of water, because of climate change.
Scientists predict the country will get warmer and drier, and rain events more intense, making it harder for farmers, particularly in the east.
“It does imply the need for some form of water infrastructure and storage is going to be fairly paramount for New Zealand.”
Curtis says the economic development strategy for Northland – Peters’ old electorate, coincidentally – has water “front and centre”.
Water is critical to the development of Māori land and high-value horticultural production, he says.
Curtis expects Crown Irrigation funding to fall well short of the initially earmarked upper limit of $400m.
He says existing projects with confirmed Crown Irrigation funding are dotted all over the country, from Northland to Central Otago, as well as the North Island’s east coast and a few in the irrigation powerhouse of Canterbury. (Almost two-thirds of the country’s irrigated land is in Canterbury.)
Some areas of Canterbury are over-allocated – more water can be taken than is healthy for groundwater, rivers and lakes.
Without storage, consents might have to be clawed back, he says, and “businesses become less profitable and less benefits flow into local towns like Timaru”.
IrrigationNZ is open to ensuring irrigation is done within environmental limits, he says.
And perhaps given the difficulty of pushing through massive projects, like the now-dead Ruataniwha Dam proposal in the Hawke’s Bay, he says there are modern ways to build effective, smaller schemes.
“It’s not just about big dams everywhere.”
The Greens might be buoyed by the coalition’s focus on water quality, which might force the hand of irrigators if pollution in rivers and lakes can be pinned to certain farms.
The Labour-Green confidence and supply agreement shows a focus on improving water quality, as well as a $100 million Government-backed Green Investment Fund.
You could argue the coalition has started its re-election campaign before it’s officially been made the Government.
Environmental groups might point out an economic argument won’t wash if that “backbone” is slowly polluting the country’s rivers and lakes.
Uncertainty and a lack of detail over water charges would have turned off some rural voters.
A more pragmatic line this term might give the coalition a chance to woo agricultural voters who might have paused this time on hitting the red button.
But that could play very differently for the Greens.
Its members might frown on a lack of progress over water pollution, to which farm irrigation undoubtedly contributes.
After years of lurking in the back channels, water charges splashed into the public consciousness even before this year’s election campaign.
In March, in the wake of public pressure, then Prime Minister Bill English’s Government said it would consider slapping water charges on bottled water exporters, only a week after Environment Minister Nick Smith said no charge would be imposed.
But it was the Labour’s intention to charge large irrigators – that’s farmers – for using water that pushed the debate to a different level.
In August, water spokesman David Parker said a charge of two cents per 1000 litres would raise about $100 million across the country in a year.
But by then, the “water tax” label had stuck.
Some saw it as a straight-out attack on farmers, culminating a made-for-TV protest in Morrinsville (Jacinda Ardern’s hometown) last month at which a rugby jersey-wearing bloke sported a “She’s a pretty communist” sign.
National leapt on the water tax with a torrent of attack ads focused on potential taxes, some of it misinformed or untrue.
Farm lobby group Federated Farmers called the proposal “ugly”. President Katie Milne said they’d told Labour “they don’t appreciate that irrigation is not just used by dairy farmers and is not the evil polluter they’ve been convinced it is”. She added: “A water tax simply won’t solve the problems.”
Now the water tax has floated away, the Feds’ line is it’s “ready to engage”.
Milne: “The primary sector is the backbone of the New Zealand economy so we anticipate the new government will be mindful of that when formulating policy.”
Environmental groups might point out an economic argument won’t wash if that “backbone” is slowly polluting the country’s rivers and lakes.
