Pattrick Smellie: Water royalties – get on with it

Polls show Kiwis think charging a royalty on exported bottled water is commonsense.
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Polls show Kiwis think charging a royalty on exported bottled water is commonsense.

OPINION: The electoral bidding war is heating up, but there is one issue on which the government is hopelessly out of the money: The idea of a charging a royalty on freshwater just like we put on oil and gold.

Recent polling suggests 87 per cent of New Zealanders think charging a royalty on exported bottled water is commonsense.

The government doesn't want to. It might cause trouble with Maori and would definitely be a big step on the slippery slope to charging businesses for the fresh water that they use. For businesses, read farmers and electricity generators.

For a tired nine-year old government, charging a royalty on water also feels like the sort of impure interventionism that might scare off foreign investment.

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But if the royalty were small enough and the commercial rewards are obvious enough, it's hard to imagine that water bottlers would baulk for long.

Pattrick Smellie says it's time to impose charges for water bottlers.
SUPPLIED

Pattrick Smellie says it's time to impose charges for water bottlers.

Also, it's the policy of Labour, the Greens and New Zealand First. All claim parentage. The Opportunities Party has been campaigning on it too.

The policy's moment is now ripe.

It also responds in a simple and compelling, if not entirely accurate, way to the deep concern so many New Zealanders have about the state of the country's lakes and rivers and their feeling of powerlessness at the extent of the recent spread of dairying and irrigation.

Charging royalties doesn't fix dirty rivers, but fixing freshwater quality is hard. Charging a royalty on water is easy – and strikes a blow for a deeply felt concern that we are giving away a precious resource.

Among politicians, the boffins are Environment Minister Nick Smith and Labour's David Parker, who claims to have written many of the South Island's Water Conservation Orders as a lawyer in Dunedin before entering Parliament.

Smith birthed new freshwater standards this year that confused the experts, let alone the public, many of whom decided it was a smokescreen for lower-quality waterways.

The Government may worry it would be the start of charging other businesses for the water they use.
TONY BENNY/FAIRFAX NZ

The Government may worry it would be the start of charging other businesses for the water they use.

Parker has produced a simpler policy for Labour that would simply disallow further agricultural intensification as a "permitted activity" when applying for a resource consent.

In a less farmer and electricity sector-friendly way, he would try to resurrect the water-charging rationale embedded in the electricity policy Labour has abandoned under Andrew Little.

But that's all complicated, whereas there's virtual electoral consensus on charging for water being bottled and resold, especially where it's foreign capital dipping its bucket in a pristine New Zealand water source and paying nothing for the privilege.

The issue stirs fierce emotions particularly because of the huge-sounding numbers involved. Freshwater arguments are conducted in millions, billions and trillions of litres. The export water takes are a tiny fraction, but they sound huge to the passing voter.

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If water's so valuable, they say, a surcharge on every one of those millions of litres is a no-brainer.

And they're right.

Those who say a royalty wouldn't work because of Maori claims to water rights and interests are wrong. The court decisions on the partial privatisation of the state-owned electricity companies in 2013 made it clear that Treaty issues need not be settled ahead of public policy decisions on property rights and natural resources.

Those who say a royalty would be the thin edge of the wedge for other water charges are right. And about time too. Successive governments have been avoiding placing a value on water for the best part of 30 years.

Yet valuing water economically as well as environmentally is vital to its more efficient use and eventual clean-up. Anything that moves the country in that direction is progress.

- BusinessDesk

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