Media release

Charging For Water Would Open A Can of Worms

July 10, 2017

Federated Farmers is worried talk of charging for commercial water use will take the country down an irreversible path of taxing ourselves unnecessarily, increasing prices and limiting economic growth.

The Green Party plan announced at the weekend to charge a 10 cent a litre tax on bottled water and to charge for other commercial water uses, like farming, could end up costing New Zealanders billions.

"We understand why Kiwis hate seeing our water bottled and sent offshore, with barely more than a couple of people employed locally to do it," Federated Farmers water spokesperson Chris Allen says.

"But, charging for every litre used does not make this problem go away. In fact, it is likely to put cost burdens on our people, our taxpayers and our communities which are simply unsustainable," Chris says.

The main problem with this policy is, where does it end?

"The Greens and Labour have both talked about charging for commercial water uses. But no one has calculated what effect this would have on the economy, or on ordinary Kiwis."

We’ve crunched some numbers based on water consent applications and:
  • About 60 percent of water consumed in New Zealand is used for electricity generation. Adding just 1 cent a litre charge to the water used by the Manapouri power station alone would require passing on a cost of $160 billion dollars to New Zealand electricity users (that’s 65 percent of the total value of our economy).
  • About 9 percent of consented water takes are for ‘industrial’ uses, which would add $24 billion in costs at 1 cent per litre of water used.
  • People connected to domestic drinking water supplies would pay an extra $18 billion, including commercial users working with domestic water supplies.
  • The price of fruit and vegetables grown for the domestic market would increase meaning that domestically grown produce would be unable to compete with imports.
  • The price of milk and meat would go up for domestic consumers and make our exports less competitive.
"Basically if we go down this path, we will all pay more, for everything. It’s like a tax on living," Chris says.

For more information contact:
 Chris Allen, 021 251 0016