The problem with taxing water

As an academic and international consultant who has spent his life on water management and irrigation, and a proud New Zealander, I am horrified at the fundamental lack of understanding about water issues in our country.

I see emotion pitted against the science and I hold my aged head in my hands. I see mistruths spread by the environmental lobby, the media getting things factually wrong time and again, and it’s no wonder the public are so confused and the issue has become a political football.

This has to change if we are to protect our water for future generations.

Fresh water is recognised globally as our most precious resource, bar none. Pakistan has gone to war with India three times over the share of surface water from the Indus River. Two Central Asian states moved close to conflict over water as recently as 2008.  Large areas of the world, like Western California, wouldn’t exist without irrigation. I’ve seen uncontrolled water takes in China and India, where locals are free to dig their own wells, go horribly wrong when the population expands and groundwater supplies run dry. Water futures are serious matters.

With an ever-increasing world population requiring a doubling of food supplies by 2050, climate change, and inevitably more intensive industrial and farming practices, it’s fair to say that management of our water resource has become one of the world’s most critical issues. It won’t surprise you to know New Zealand isn’t the only country to debate how to balance using water with maintaining it as an ongoing resource. But our conversation has the luxury of balancing environmental quality against economic water use issues, in a situation of ample per capita water resources.

Common sense concerns about equity, fairness and economic efficiency do not appear in the current water tax debate. They have been forgotten in the melee created by media headlines and a lack of understanding by current players.

So what do other countries think about how New Zealand manages its water? While we have clear legacy issues we now have to deal with, most of the international experts I’ve spoken to seem to think that New Zealand has the potential to get it about right. We have the science, the tools and the technology – and an informed and educated people. They might change their view, however, if they were privy to the current screaming match developing around the protagonists.

It is debatable if the implementation of the Resource Management Act has been enough to materially improve our water environment. More progress is now being made by people on the ground – farming industry commitments to improve and manage environmental issues; and local communities coming together to agree on their water futures.

Stock are increasingly fenced off from waterways. Riparian strip plantings are increasing. Precision agriculture is reducing nitrogen in groundwater. We introduced a collaborative forum, Land and Water Forum (LAWF), that got everyone round the table in an attempt to balance the competing needs for water – from food and energy production to the needs of the environment and community values. But then Fish and Game, and a few other environmental groups, left LAWF. Greenpeace began calling for irrigation to stop. And then Labour decided to propose a water tax.

Common sense concerns about equity, fairness and economic efficiency do not appear in the current water tax debate. They have been forgotten in the melee created by media headlines and a lack of understanding by current players. The justification now for introducing a water tax is largely driven by the desire to de-intensify agriculture in the belief that this will solve current environmental concerns about water quality. But it has not been shown that taxing water would de-intensify agriculture, or that a tax is the best approach to getting the environmental improvements we desire. There is no science to justify such a move – or history.

What other people have found, and the Labour Party needs to learn, is that a water tax is too complex, impossible to be equitable, and causes a raft of unforeseen social and economic consequences.

Forms of a water tax have been attempted in many countries over the last 200 years, but they have largely been abandoned. What other people have found, and the Labour Party needs to learn, is that a water tax is too complex, impossible to be equitable, and causes a raft of unforeseen social and economic consequences. Water taxes have been replaced by transparent targeted user charges to cover water management costs and address environmental quality issues.

Tackling our legacy problems of reduced environmental quality needs a cooperative effort from all concerned and a move away from adversarial and costly legal and regulatory processes. These will not work. They have not worked to date.

We also need stability and transparency supported by all sides of the political agenda – changing direction every political cycle is a guarantee of failure.

Drop the proposed water tax and re-instate the LAWF with bi-partisan support.

The Canterbury Water Management Strategy (CWMS) shows how gains can be made when opposing views have a science-based conversation and not an argument based on personal or group agendas. The international interest in CWMS processes is intense.

If we keep on the present track – increasingly dominated by adversarial processes in a post-truth era and with the associated media hype – we will lose the promise of progress through collaboration, creating a common way forward for everyone with a long term interest in water. If we do, it is at the great detriment to our country’s precious fresh water heritage.

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