5 Apr 2016

Commercial use of water - who pays?

8:50 pm on 5 April 2016

Academics and environmental groups say putting a charge or tax on water use would force the resource to be better utilised and improve conservation outcomes.

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Photo: 123rf

The government is reforming freshwater management but is not considering a water charge, saying no one owns the water.

Creating a charge or tax for water use has been a topic of debate for some time. Some councils provide companies with resource consents to extract water for commercial use, but critics argue the companies aren't charged enough - or shouldn't have access in the first place.

The issue was raised again this week, as the Ashburton District Council continued with plans to sell the right to extract billions of litres of water to a bottled water company.

Despite writing four reports about the issue, the Land and Water Forum - formed to help bring resolution to freshwater management - has not managed to reach a consensus.

Forest and Bird is part of the forum, and advocacy manager Kevin Hackwell said other resources such as oil, gas or minerals all attracted royalty payments - but not water.

Companies were making money out of a public resource and if organisations paid for the litres of water used, they would be more careful about how they used it, Mr Hackwell said.

"You'll be much more efficient in your use and that's something we don't see at the moment. The farmers for example will pay for resource consent to take the water but they don't pay per litre for the water, and have situations where there is not a market incentive for them to actually use it efficiently.

"It's quite an irony, because you often get these people arguing market forces for all these other parts of their business, but they actually don't believe in market forces when it comes to paying for the raw material, water."

Fish & Game pulled out of the forum because it didn't believe it was achieving its purpose.

Its chief executive, Bryce Johnson, said a charge was worth exploring, but was adamant it shouldn't imply ownership of the water.

Both groups thought a commercial charge could work, but would not like to see the same thing levied on personal or recreational use of water.

However, Waterways Centre for Freshwater Management director Jenny Webster-Brown said a charge for water use - based on a measure like volume - applied to rural and urban water users would improve water management.

"New Zealand has a reputation for being a very pluvial country, one in which water is not in short supply, and we tend to over use possibly for that reason.

"We need to value it, and attaching a price to water encourages that type of behaviour."

Otago University freshwater scientist Marc Schallenberg said water was managed in terms of how much water people were consented to take.

Putting a price on it would create a market which would mean it would be regulated and should lead to a more efficient use of water, he said.

But he warned that was not a panacea and irrigation subsidies created problems.

Federated Farmers oppose charging for water

Many members of the Land and Water Forum, such as Federated Farmers, are totally opposed to the idea of a charge.

Its water spokesperson, Chris Allen, said farmers were efficient with their water use, and there was not enough water allocation for it to be wasted.

"We only get enough for what we need as a bare minimum and if we use it too much too soon, later in the season we won't have enough.

"Those are called seasonal limits, Canterbury has those sort of things and other regional councils are heading along that track anyway."

Business New Zealand economist John Pask said it was an incredibly complex issue, but owners of existing resource consents might need to be compensated if a charge was introduced.

Having an across-the-board price for water would not work because New Zealand had regions with copious amounts of water and others with none.

Maori Council chair Maanu Paul said the government was wrong saying no one owned the water and the Supreme Court had found Maori did have interests in water.

"Every citizen should have access to potable water for recreation but any commercial operation will have to pay a fee, and that is the issue as far as the council is concerned - because these people are profiting from the use of a common good that belongs to Maori."

Public submissions on the government's freshwater reforms close later this month.

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