Peter Dunne argues New Zealand needs to introduce a coherent royalties regime for water exports similar to oil & gas, and a clear national policy, with water export industry set to grow

By Peter Dunne *

By contrast, it has been estimated that the oil and gas industry paid around $230 million in royalties to the New Zealand Government in the last year alone, and has paid as much as $430 million in earlier years, based on products discovered and sold. The oil and gas royalties regime is notoriously complex and uneven, with many tax deductions available, and no levy on exports. It is applied at rates that can vary from 5% to 20%. Nevertheless, petroleum exporters are typically paying about 42% of their profits in taxes and royalties to the government.

Leaving aside the argument about whether oil and gas exploration is a good thing to be encouraged, and the complexity of the regime, it does provide a useful point of comparison to the way in which the likely burgeoning fresh water export trade is treated, all the same.

It is certainly true that New Zealand has an abundance of fresh water, so it is easy to see the attraction fresh water exports pose. And it is not new. For over 30 years there has been steady yet periodic interest in establishing a fresh water export industry. So, at one level, the argument could at least be mounted that fresh water exports are just another form of primary products exports from this bounteous country.

But the argument is not that simplistic. The great debate occurring about water needed for irrigation demonstrates the pressures being placed upon our water resources. The argument over the proposed Ruataniwha Dam in Hawkes Bay and the virtual drying up of Canterbury’s major rivers earlier this year as a result of a high demand for irrigation brought on by dairy intensification highlight the point.

And it is also intensely political. Environment Canterbury was sacked by the Government in 2010 over the allocation of water rights; iwi interests have long recognised the power of the ownership of water as the Resource Management Act debate shows; freshwater recreational interests have for equally long sought to preserve their traditional roles and relationships with water; and, the Land and Water Forum has patiently attempted to bring all the groups to the table to try to achieve a coherent policy response.

On top of all this comes mounting justified public concern about the swimmability of our major rivers. The response of seeking as a first step to make all major rivers at least wadeable is widely seen as too little, too late.

Against this complexly yet finely woven tapestry, it seems somewhat incongruous that a virtually unregulated and certainly untaxed water export industry is being allowed to develop. At the very least, there needs to be a coherent royalties regime put in place, akin perhaps to that for oil and gas, to ensure that our water resources are not being just given away.

But that will not be enough of itself. There also needs to be a clear national policy developed about water exports. For too long there has been a complacency that water will always be abundant in New Zealand, and while that is generally true, recent developments show we can no longer take it for granted. Dirty and dried up rivers, and contaminated aquifers are not what we have usually been used to, nor do we want them to become the norm. Especially, if at the same time, we have to sit and watch the ships sailing away with millions of litres of our pure water for which they have paid virtually nothing.

* Peter Dunne is the leader of the UnitedFuture Party and MP for Wellington's Ohariu electorate. He is the government Minister of Internal Affairs, Associate Minister of Health and Associate Minister of Conservation.