Irrigation NZ chief executive Andrew Curtis said agri-economist Peter Fraser’s “one tax – all users” approach made the most sense and was most equitable.
“As it is now the tax sends the wrong message when it comes to cleaning up waterways.
“Farmers will pay it and just think nothing else needed to be done. It will not result in them improving water systems.
“And hydro generators would also have to be included. Their use of water restricts the ability of others to use it in areas like the Waikato and Waimate and they make a huge amount of profit from this ability.”
Massey University agri-expert Dr James Lockhart said the market for tradable water rights was relatively crude, often enabled only between users who shared specific water schemes, such as Central Plains Water.
However, having a value on water might help build a market for tradeable rights.
In Australia the water entitlement market was valued at A$30 billion with allocations based on how much water a holder was allowed to take in any one season.
Growth in values of the entitlements was resulting in a transition from lower value to higher value agricultural production but unlike a uniform charge the entitlements applied specifically to irrigation rights.
The largest water take area was the Murray Darling Basin, comprising 35 trillion litres of which 30% was used for irrigation.
However, the Australian Financial Review reported earlier this year there continued to be a push to have more water returned to the environment.
But Curtis said while economic theory of a water market was appealing, NZ’s hydrology was too complex and the infrastructure lacking for it to happen.
“If you look at Australia, they basically have a big pond (the Murray Darling Basin) they draw a known amount from each year.
“NZ has a lot of run-of-river schemes and our groundwater supply is complex, with issues around adjoining wells drawing off each other, complicating water take amounts.”
Research by Farmers Weekly found determining NZ’s annual total water use to be approximate at best, with conflicts between consented water takes and actual water consumption.
One estimate from 2011 was that Manapouri use aside, NZ consumed 15 billion cubic metres of water a year.
Lockhart acknowledged putting a value on water also opened a can of worms on ownership, including iwi claims.
“You can understand why National has avoided it for the past few years after Helen Clark’s foreshore and seabed issues.”
There were also complications over who would “own the rain”.
“For example, if you have a large farm irrigation storage pond, how do you allow for the water it captures that is rainfall?”
