Councillors pass buck on water tax

‘‘This is the heart of dairying. It’s natural dairying country. But for heaven’s sake, we have to make certain it remains a viable industry.’’ Russ Rimmington

Councillors have backed away from a contentious water tax decision and instead sent it up the chain to be mulled at a national level.

Waikato Regional Council watered down its submission to the Government’s Tax Working Group, removing a section on charging for water and another on Ma¯ ori knowledge and practice.

But instead of scrapping the two sections altogether, council voted to send it to Local Government New Zealand (LGNZ) in the hope it would form part of that organisation’s submission.

Council voted 13 to 1 to send its submission to the Tax Working Group with the two sections omitted. Only Cr Hugh Vercoe voted in opposition. Then councillors voted 9 to 5 to send the parts it had left out – Taxes and Prices and Tikanga and Ma¯ tauranga Ma¯ ori – to LGNZ ‘‘to inform their submission to the Tax Working Group’’.

Crs Kathy White, Tipa Mahuta, Stu Kneebone, Bob Simcock, Barry Quayle, Kataraina Hodge, Jennie Hayman, Fred Lichtwark and chairman Alan Livingston supported the motion. Crs Stu Husband, Jane Hennebry, Dal Minogue, Russ Rimmington and Vercoe voted against the motion.

‘‘Just so I understand,’’ said Husband, ‘‘motion three is saying you are still going to give it to LGNZ, so what’s the difference?’’

Council chief executive Vaughan Payne said matters consistent with others in the local government sector can be used as a national submission.

‘‘If they don’t believe it aligns with the local government sector, they won’t use it,’’ Payne said.

Council supports calls for a charge on water use. A report says it would be another tool to complement existing regulation.

Council’s statutory roles are hampered by the current framework and some form of pricing should be considered.

Options include a water tax, a price-based allocation system, tradeable permits or some other approach. It suggests agreement needs to be reached between the Crown and iwi as to who owns the water if royalties were introduced.

The Labour-led Government established the Tax Working Group after the 2017 General Election. Submitters were asked to give views on environmental taxation, land taxes, tax as incentives, tax and natural capital and Te Ao Mãori. The environmental taxation question aligns with council’s 2017 Fresh Water Strategy.

A water tax is draconian, Rimmington said, and the submission too dangerous.

‘‘Dairy farmers, if we get taxed on water, I think that would be disastrous for our country,’’ Rimmington said. ‘‘This is the heart of dairying. It’s natural dairying country. But for heaven’s sake, we have to make certain it remains a viable industry.’’

Husband said the submission attempts to lead the Government toward a water charge and it’s outside council’s scope. ‘‘It’s government stuff. Not our ratepayers’ responsibilities. I know it’s important to us, but don’t lead the Government to conclusions,’’ Husband said.

Simcock said council should define the problem and let the Tax Working Group sort the rest of it out. ‘‘I don’t have any faith in competitive market economic instruments to solve this problem. They tend to bias towards the short term and they invite monopolisation of the resource,’’ Simcock said. Lichtwark said it’s a tax on the polluter.

‘‘Tax the pollution as far as what we are discharging into the environment in wastewater – so, yeah, the dairy sector might have to end up paying again. But I’m sure they will just increase the price of milk and we’ll all pay.’’

Council has also asked for rates exemptions on revenue-generating Crown land to be removed – including state highways – to account for services that spill into other council zones.

Flood protection schemes and drainage infrastructure at the lower Waikato and Hauraki Plains have a spillover effect into ‘‘a number of Auckland residents’’.

Minogue said it is ‘‘an absolute must’’.

‘‘It’s crazy not to use the opportunity for that,’’ Minogue said.

But Vercoe, speaking after the vote was taken, said the submission on rates exemptions for Crown land is irrelevant and council was stepping out of line.

‘‘Our item number two tells me how we should spend tax, not how we should raise tax. That is not the purpose of ths submission. They want to know how we should raise tax,’’ Vercoe said.

‘‘You then go on to talk about rating on public land. They are not asking you how local government should increase their rate. They are asking how Government should increase their taxes.’’

Submissions are due on April

30 and an interim report will be published in September, with final recommendations due in February

2019.