Smith on water

A good column by Nick Smith:

News that companies are extracting millions of litres of water for bottling and export has got the Green Party demanding a moratorium, Labour a new water tax and New Zealand First a prohibition on export.

So the Greens want to ban bottled water, NZ First want to ban exporting it and Labour wants a special tax on water.

New Zealand has 500 trillion litres of water flowing through our lakes, rivers and aquifers. Each year we extract 10 trillion litres, or 2 per cent. The water shortages we have are in quite defined areas and for only some of the year. NZ has no overall shortage.

The 10 trillion litres of water we extract each year is made up of six trillion for irrigation, two trillion for municipal supplies and two trillion for industry. Three billion litres used for the bottled water industry may sound a lot but it is less than 1 per cent used by industry and 0.004 per cent of the annual resource. The suggestion by some that Mr and Mrs Average Kiwi won’t be able to bathe because of bottled water exports is ridiculous.

0.004% is what they are complaining about.

Regional councils manage about 20,500 water permits of which 41 are solely for water bottling and a further 30 for a mix of uses, including bottled water. But only 23 of the permits are being used for now, reflecting the fact this is a niche industry. More than a dozen water-bottlers have gone broke. It is a myth that this is an easy industry in which to make lots of money.

This is true.

The only fair charging option would be to charge everyone. I heard one opposition MP call for a uniform charge for all commercial water users of 10c a litre. Kiwis need to appreciate that our major export earners such as horticulture and dairying are water intensive. A litre of milk takes about 250 litres of water to produce so that would be an extra cost of $25 a litre – a cost which would push the price of milk through the roof for consumers and destroy our largest export industry.

The Government is open to modest charges for water users, for the cost of managing water resources. We are proposing as part of our current freshwater reforms to allow councils to charge water users a per-litre levy for the costs of the water quality, monitoring water takes and ensuring compliance, rather than on rates paid by everyone. However, the charge would be for cost recovery only and would not price the natural resource.

That seems fair. User pays.