Un­der the Mikero­scope

Fuel, wa­ter and cap­i­tal gains taxes are key is­sues for Election 2017, fol­low­ing the change in lead­er­ship of the Labour Party.

NZ Grower - - Contents - Mike Chap­man | Chief Ex­ec­u­tive | Hor­ti­cul­ture New Zealand

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.

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