19 Sep 2017

VIDEO: Ardern 'holding firm' on water tax despite protest

2:10 pm on 19 September 2017

Labour leader Jacinda Ardern has defended her party's water tax on farmers, saying the focus remains on cleaning up waterways.

Watch the interview here:

Ms Ardern told Morning Report's Guyon Espiner the planned levy would be one to two cents per 1000 litres of water, which would only apply to commercial use, though once in government the party would sit down with those affected and make sure it was workable.

"Sometimes we will make estimates of the best way to make it workable but sometimes we need to refine when we're in office."

She denied there would be any U-turn as there had been ahead of the election on certain tax policy timing.

"I'm taking heat and I'm holding firm on this."

Only some of the country's farmers would be affected, she said.

"It excludes, however, stock water and municipal supply. So it's mostly going to affect those who use irrigation. The one to two cents, we always talked about it as being much much lower than what someone who is a water bottler might pay."

Companies taking water for bottling would pay ten times what farmers did - at least 10 cents per 1000 litres, she said.

Ms Ardern acknowledged many farmers were environmentalists and were trying to do their best for waterways.

About 500 people gathered in Ms Ardern's home town of Morrinsville yesterday to protest the proposal and what some saw as attacks by politicians on rural New Zealand.

Some protesters took a swipe at Labour, with signs such as "fart red for Labour".

"I accept there's real strength of feeling around this, absolutely, and even though that area [Morrinsville] is essentially not particularly affected at all by what we're proposing on a water royalty," Ms Ardern said.

"They will be positively affected by what we can do for the rivers and waterways in that area."

Morrinsville protest organiser Lloyd Downing told Morning Report the rally wasn't just about a water royalty but many of the Labour and Green policies.

"It was palm kernel, nitrogen taxes, the Greens want to reduce stocking rates by 30 percent. It's emissions taxes, it's the whole lot of them.

At least one person at the protest took a personal swipes at Ms Ardern, holding a placard labelling the Labour leader a "pretty communist", which drew a rebuke from former prime minister Helen Clark.

Mr Downing said he did not find any of the signs offensive.

"I've got no control over what signs people put in," he said. "Everyone's got their own axe to grind."

Rural economist Peter Fraser told the programme any other natural resource had a levy or some sort of royalty attached to it.

"For [farmers] to have a business, or for irrigators to have a business, that basically zero prices a natural resource - that's not a sensible business," he said.

"If you want to look at a public policy failure, go and have a look at the Mackenzie Country."

Land there which had been irrigated and converted to intensive use - "green dots you can see from the international space station" - would not have occurred unless the water was zero priced, he said.