Water tax won’t affect food prices
Food will not cost more under the Labour Party’s policy to charge a levy on irrigated water.
Irrigationnz confirmed that after a meeting with Labour’s David Parker and Damien O’connor, the situation had been clarified with the announcement of a 2c per cubic metre figure for irrigated water.
‘‘We had a good chat with them. The impact on fruit, veges, milk and bread will be minimal,’’ Irrigationnz chief executive Andrew Curtis said.
The two groups still had issues over how to address poor water quality issues in different regions.
Labour’s Primary Industries spokesman Damien O’connor said until Labour became government it would not have all the information it needed, and wanted to consult further with farmers and businesses.
‘‘David’s [Parker] indicated from 1-2c per cubic metre but how that will be applied to the different sectors is something to be negotiated. The risk is that if we were to lock in details now without genuine consultation and without access to all the information you get with being in government, then it would be unfair.’’
Labour has been under fire from primary sector organisations ranging from Federated Farmers, Hortnz, and Irrigationnz, while industry good bodies such as Dairynz and Beef+lambnz see the policy as problematic.
Curtis also said water quality standards that were starting to be applied across New Zealand by regional councils, regardless of who wins the election, would be tough to meet. ‘‘There’s a big question over whether the whole of the country will be able meet these, and big implications for farmers and businesses if the standards are applied too quickly.’’
While the irrigation levy would not impact on food, it would hit some farmers hard. He gave the example of a North Otago farmer he knew who would have to pay $22,500. ‘‘That will cut into investment and cashflow. Cashflow is pretty key in business,’’ Curtis said.
Economist Peter Fraser predicted the levy would be more likely to have an impact on land prices. ‘‘The capital gains farmers have been making on land have come from things like free water, so if they had to pay, this would be factored in on land prices.’’
He said many people had argued that farm prices were too high, especially for young people trying to get on land.
Irrigationnz argued that many of the least swimmable rivers were in areas that were non-irrigated, so if Labour planned to spend the levy in the region where it collected it, some areas would be neglected.