Irrigation New Zealand

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29th June 2017

Recent suggestions that farmers should be taxed for water use ignores the fact that farmers already pay for the water they use, says Irrigation New Zealand.

Irrigation New Zealand calculates the average cost of water supplied by irrigation schemes every two years, and in 2016 the average cost was $780 per hectare per year, or 14 cents for every cubic metre.

However, this figure only includes the infrastructure required to take and supply the water. The cost of the infrastructure on farm and increased rates – as irrigated land is of higher value, is additional.

The cost to install irrigation equipment on farm is between $5,000 and $9,000 per hectare, with annual maintenance costs on top of this. For rates, as an example, a 100 hectare irrigated sheep and beef property pays over $2,000 per annum more in rates than the equivalent dryland property.

On top of this, farmers also pay for the monitoring and reporting on water use performed by local councils every year and to improve their environmental performance so they comply with environmental limits.

Irrigation New Zealand CEO Andrew Curtis said: ‘It makes no sense to impose a water tax on one sector when we all use water. Everyone in New Zealand benefits from water so common sense would say a water tax should be applied to everyone who uses it. You can’t just tax people you don’t like, like foreigners bottling it and selling it offshore, or farmers, because you think they’re getting it for free when they’re not.’

‘Applying a water tax to farming will hit New Zealand households because in the end a tax on commercial use would be passed on to domestic consumers. That extra few dollars for low income families promised in last month’s budget? Tax water and all of it – plus some more – would disappear on higher food, energy and travel costs.’

Andrew Curtis added: ‘Taxing water isn’t an effective way to incentivise water use efficiency or clean up our rivers. Farmers and growers are already investing heavily in improvements – $1.7 billion upgrading irrigation infrastructure since 2011 – reducing their income would reduce the amount they could spend on this.

‘What will conserve water and improve water quality is to continuously improve how irrigators use water, protecting water and water quality through regulation and good practice, and increasing reliability and security so we’re not adversely impacted by climate change.’

For more information contact Andrew Curtis, CEO Irrigation New Zealand, 027 496 6314

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