Under the Mikeroscope
Fuel, water and capital gains taxes are key issues for Election 2017, following the change in leadership of the Labour Party.
Water tax is enormously unfair
On growers’ behalf, we have engaged with Labour to try and find out the details and the rationale for these policies. We have also raised with Labour, as well as in extensive media commentary, the fact that these policies raise many issues beyond what they may have considered to date.
One of our prime concerns is the New Zealand voter making decisions without the full picture. There is not a lot of detail around how the proposed taxes are going to work, what problems they are designed to solve and whether in fact, they are the right solution to those problems. In my view, this is not how democracy should work. Voters should be fully informed on the details of a party’s policies before they go into a polling booth.
When growers tell us that these proposed taxes will affect your commercial viability, then we step up our submissions to politicians significantly and in tandem, come out in media seeking the essential details and costings. We are disappointed that there has been no consideration given to your contributions to the health and financial well-being of New Zealand and your environmental stewardship. So we are saying that is unfair and we are asking for recognition of horticulture’s contributions to communities, the economy and the health of New Zealand.
When we met with Labour to get an understanding of its proposed water tax, we first tested whether this was something that Labour was committed to. On being told it was and that the detail would be worked out after the election, if Labour was the government, we asked to be involved in the development of the detail and for fruit and vegetables to be exempt.
During the meeting with Labour we were at pains to clear up some misconceptions about horticulture and what we had said in the media. First and foremost is that no-one in New Zealand pays for water. Urban New Zealand pays for water infrastructure and water treatment. As you well know, outside urban supply, you pay for your water infrastructure and any water treatment that is required. So commercial businesses located in urban areas will not pay for water use, but the same business in “rural” New Zealand will pay for water use. This is enormously unfair. The history of taxes that are not fair is a short one. The success of GST in New Zealand is because of its simplicity and equal treatment of all. But note that with GST, progressively governments have increased its rate. History will no doubt repeat itself with any water tax that is imposed, with rate increases over time.
One of the major inconsistencies with the proposed water tax is that it taxes water users, yet is supposed to provide funds to clean up water pollution. Water users are not necessarily water polluters. If there is to be a punitive approach to water polluters, shouldn’t the tax be directed at them as a matter of fairness?
Labour has said this tax is a royalty, or resource rental, and that it could be used for more than just cleaning up waterways. One suggestion was that it could be used for rates rebates. This is unclear and particularly unfair. While the prime purpose of the tax is said to be cleaning up water ways, for it to also have a general taxation purpose providing other money for regional councils to spend creates enormous and, in my view, unacceptable uncertainty going into an election.
If indeed, as Labour says, the water tax is a resource rental or a royalty, then the question of ownership arises. The generally accepted position in New Zealand is that no-one owns our water. In fact, more than 90% of it washes out to sea. It is a renewable resource. To charge a rental requires the ownership of this resource to be determined. It is somewhat perplexing to claim ownership of something that falls from the sky and, linked to this, Treaty of Waitangi issues will rightfully need to be determined.
Finally, not many people appear to know, unsurprisingly or surprisingly depending on your point of view, that plants need water at the right time and in the right quantities to grow high quality, good sized produce economically. All these issues have been raised with Labour and in our various media and social media comments. For this election, Hort NZ asked all the parties represented in Parliament for their policies on the key issues facing horticulture. Only three bothered to respond and their replies are published in this copy of the magazine to assist informed choice.
This is one of the more volatile election campaigns in recent times. Predicting the result with any certainty is nigh on impossible. In any event, post-election we will work the government of the day to ensure that your voice is heard and that, to the best of our abilities, their policies meet your requirements.