Water tax debate would require decisions on ownership, allocations, charge fairness across industries, PM English says

A proper debate on a water tax would first require agreement on the issue of who owns the resource, Prime Minister Bill English says.

Speaking on Radio NZ’s Morning Report, English said the issue could be tackled, while indicating a view that the discussion needed to focus on a broader set of issues to the current bottled-export focus.

“That has raised all these other issues around allocation, who owns it, who should pay what for what, and [under] what circumstances. I can tell you, from grappling with these issues, that you’ve got to be quite careful to understand what you’re doing,” English said.

It would be tough charging one industry but not others, he said. “We have to sort out a systematic way of dealing with it and a tax on water needs a lot of work to be able to get to that point.”

The critical issue of who owned water needed to be dealt with first. “The business of how you actually overturn a century or so, or more, of the law that no one owns the water, and no one actually pays for the water – they might pay for the usage of it, or the facilities, or the infrastructure – there’s a lot of questions there that would have to be answered,” English said.

“It’s certainly not going to change before the [23 September] election. If only for the very basic issue of deciding who owns it, after decades of everyone being extremely sensitive to the idea that anyone owns the water,” he said.

English noted work by the Land and Water Forum on allocations and charges had raised a number of issues that would need to be addressed. This work had indicated how complicated the debate was.

Meanwhile, English said the bottled-export debate needed to be separated from issues like the Havelock North water supply.

“I don’t think the two issues are connected at all,” he said. “In Havelock North, they have every right to have a secure and safe water system. There’s an extensive enquiry going in to why it turned out that wasn’t the case.”

Water exporters using bottles or larger tanks were doing so legally, he noted. “They’re doing it where there’s a renewable resource. It’s on a very small scale, and we’ve had a higher priority, which has been the quality of water for all our communities.”

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33 Comments

Taxing water use would require political leadership

Taxing water will mean Maori putting their hands out.

Do you mean the legitimate owners of the water? And a bit of other stuff.

https://www.nzgeo.com/stories/the-stones-are-talking/

How would the overindebted value of property look if this plays out?

Maori had no word for ownership.

But in our judicial systems there is such a thing as a lawful owner and occupier.

I pay for my water usage already every month, maybe I should tell watercare they don't own the water and according to the PM its free

https://www.watercare.co.nz/SiteCollectionDocuments/AllPDFs/Domestic_Cha...

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I had to laugh the other night when old mate Mike Hosking (who is full of hot air) said to get over it - 'water comes from the sky, how the hell do you charge for it'.

Well Mike, Oil comes from the ground and that has worked out pretty damn well for OPEC nations. Whats the difference?

The difference is that as a species we can live without oil, but we can't live without water. So in time, if you are fortunate to have good quality, which will become more valuable? One provides life, the other kills it when burnt.

He still don't get it. Does he really think ownership kicked this off??? Sure it's a by product, the real issue is how water quality is being degraded all over the country. If water quality was being maintained these bottling companys would not be under the attack they are. They are the high profile targets but they are not the cause and they should be taking a lead in encouraging water quality for all.

If water it was being managed as it should, we could have a winners alround. Just watch the govt turn this shambles they created into a Maori Treaty issue.... Sorry Maori, you are about to become a scapegoat.

Simple solution - tax the consents that allow companies and people to take the water. And tax all of them equally.

Sometimes I think that our politicians pretend that the only possible solutions to problems are, like, really difficult ones, to justify their complete inaction.

Yes, neoliberalism was born of the TINA (there is no alternative) mantra - and given that game is up because history has proven otherwise - they've now shifted the failed ideology onto TINS (there is no solution).

TINS is used by the Government time and time again - for example, the excuse that the China FTA prevents us from doing anything about foreign investment in our residential housing.

Yes - is there an issue in the last 5 years or so that National have actually dealt with effectively (and effectively, I mean anything other than denial or sweeping under the carpet, or distraction by raising another issue)?

Complex issue that clearly English or his advisers have not thought through properly.

Firstly agree that no one owns the water, therefore it needs to be seen as a national resource. Taxing it's use should be done on what it is used for. Commercial use could be done on a royalty basis, the amount determined by the quality. Thus a company exporting drinking water could pay 50c per litre in royalties. Farmers needing it for irrigation should pay too, but at a lesser rate as the quality is less important, but they do get rich of it when drawn from irrigation schemes, which has a cost on the down stream environment. This needs to be recognised. If their business cannot be sustained under that load, then perhaps they need to reassess their business model and build in some down sides, and stop working from a debt model.

Residents with reticulated water in many municipalities already pay for water usage at a rate applied on a per litre basis - the question is this fair considering that what they are paying for should only be the infrastructure, it's maintenance and the water treatment. Companies should not be profiting from this.

we should be charging companies that take water for export royalties, same as the government does for minerals and same as it does for oil and gas.
the argument will come later when maori will ask for a piece of the revenue and so what if they do and to my mind it is not big deal to profit share ,
before now nobody got anything and the companies taking it are exporting profits offshore,

"Firstly agree that no one owns the water"

But not everyone agrees even this basic premise, not even in the strict legal sense. Your other ideas are probably even more contentious.

Say why they are contentious - offer an opinion and have the debate. Don't just criticise. I toss an opinion in to get a debate going. sometimes I deliberately play the devils advocate to learn what others think, and hopefully learn from them. So my question for you is - WHAT and WHY?

Fair enough, no offence was meant. Some thoughts:

If price is dependent on quality then who is liable if I paid for "pure" but got something less?

Who gets to state the legal measure (the now very important economic cost) of quality standards?

If no one owns the water where does the legal liability sit on the supply side? If there is no owner, who entered into the supply contract? Who are the iwi suing in the high court? I suspect if that isn't well sorted it would again be the poor tax payer on the hook.

If I set up an economic activity using "paid for" water do I get any rebate off the cost of "using" the common asset for the common "benefit" I provide the country/city/district in employment and to the national accounts (or other benefit)?

You need to add in some kind of cost of money return on top of your list of infrastructure, maintenance and treatment or else there is no reason to invest in such an enterprise. No profit means no private investment, in which case you might as well go the whole socialist hog and nationalise the thing - with all the political fallout that entails (endless lobby groups, demands for enquiries, impossible political promises and grand standing before elections, cost over runs, leaks and scandals and alternative facts etc).

If we allow a commercial water market how will we stop the poor being priced out of it without building more expensive, bloated bureaucracy we can't really afford to police that?

I agree to a large extent with Bill English's main point, that it is a complex issue to work through. Overly simplistic solutions and political footballs don't add anything useful to the debate. Better to have that debate in a non election year so as to take some emotive heat out of it.

"....Better to have that debate in a non election year so as to take some emotive heat out of it." you mean Kick than can down the road until we have let big dairy destroy more and more waterways. I don't think so...this is urgent, this is why we have elections!

2037 sounds about right

"you mean Kick than can down the road"

No, I mean taking the time required to make carefully considered decisions that don't end up hurting people unnecessarily because you were in such a hurry you didn't think.

..Hurry?? You think this is a new issue? Sorry to say that AIr NZ safety vidoes are not an accurate reflection of the dirty green NZ we have become. Fish and Game pulled out of the Water forum in 2015, now Forest and Bird have gone too. The issues are old, the problems are well documented and need urgent action.

tis sad how so far out of touch most kiwi's are about the environment...happy to rely on b###t but incapable of seeing it as it is. Always an excuse.

"You think this is a new issue? "

No I don't.

@murray86

Or, conversely, English's advisers have thought it through and he's correct that it is just too complex.

Royalties seem a reasonable approach until you start thinking about hydro generation, tourist and recreational users etc. Then there are the political consequences, including Maori ownership assertions and local council empire building potential through taxing water, once it is invested with a monetary value. Pandoras box.

Bottling extracts tiny quantities in relative terms. Opposition to it is not expressed in logical reasoned terms. Media airheads have picked up it is trendy to be against it so it gets negative press. Especially where you can throw in a dose of personal prejudice against foreign investment.

Hydro generation is more about using the mass of water than selling it off. The water passes through and carries on. If they degrade it through this process then yeah sure it needs to be looked at. Water that travels through your average cow turns into urine and faecal matter which in turn ends up back in the water ecosystem. Distinctly different outcomes, I think its pretty easy to draw a line in the sand based on usage and outcomes.
A lot of bottling is virgin water from underground springs, if they are profiting from it shouldnt we charge them for the water ?

But hydro is still profiting from using the water. If we decide it has a commercial value then logically any user that profits from it should be charged or pay a royalty. Not just those who degrade it in the process. There is a sound argument that degraders should pay more but not that other users should be exempt.

Hydro systems have to maintain certain mimimum flows in rivers. In times of drought they have to cut back, causing price peaks and requiring more expensive and often carbon based plants to fire up. Lack of water is a real cost to them and us as end users. So....everytime we grant another water consent in the catchment it has a flow on effect with power prices and carbon levels....mass irirgation is a yet another subsidy to farmers paid for all of by us in more ways than one realises.

Here is a guide of what they do in Australia - may give some focus - this is not new

In Victoria australia if you live on a rural farm or a lifestyle block you are not allowed to build a dam because the water is not yours. You may only stroe run-off from the roof on your buildings

However

‘Take and use’ licences for dams

A ‘take and use’ licence is needed for all dams used for irrigation or commercial purposes, regardless of their location or size.

You should obtain the water licence before building a new dam, as your licence conditions may need your dam to include particular works to be incorporated into the dams construction

https://www.melbournewater.com.au/waterdata/waterwaydiversionstatus/Page...

Is their goal to discourage any commercial investment in water management?

.

Interesting idea; but if any group (Maori included) don't own the water under what legal right should they receive direct proceeds from whoever did own it and subsequently exercised their ownership rights in the sale of it?

Neither dairy nor dams actually take the water away: perhaps we only need to tax the removal of water from NZ. That can be put in place immediately then we can spend the next 30 yrs discussing who owns it, or perhaps, given the Govt is unlikely to want to give that money to anyone, we could agree that the water belongs to NZ and that it is the duty of the Govt to own it for everyone in NZ.

Agree about tax on removal of water from NZ and then it could apply to beer and wine production, whatever contains water such as is being drawn from aquifers (I am fast coming to the conclusion that water does need special consideration over and above much other). It would not have to a vast sum on each individual litre but it would make a serious difference to water simply being bottled with little waste.
The socialist in me would rather that this work was done on behalf of the people of NZ through an SOE, it is not like it is rocket surgery or anything. Big problem would be the temptation then to draw far too much. This especially seeing as how very contentious water could become in the future. In the end though, we will need to find something better than sticking water into single use plastic containers that are creating absolute havoc in the planet's environment. Part of me thinks that is the biggest issue out of all of this.
I would also like to see dairying halted in areas that are clearly naturally not suited to it.

Why should water be treated any differently to any other resource.

Surely all that's required for clarification of ownership is a reclassification in the Crown Minerals Act (or whatever the bl**dy thing's called).

Then we can start the long, fraught, process of trying to deal with it all. . .