Nick Smith - Nelson MP, Minister National Government

Water Reform Needed to Lift New Zealand’s Game

01/03/2010

New Zealand is blessed with an abundance of fresh water. At nearly 80,000 m3 per person, we are to water what Saudi-Arabia is to oil. We Kiwis regard freshwater to drink, swim in, kayak on or fish in as our birthright. It is also New Zealand’s most strategically important natural resource. Fresh water is at the heart of our competitive advantage.

New Zealand has experienced a boom in intensification of agriculture since 1990. The area of irrigated land has more than doubled – albeit it is still only 5% of our total agricultural land and a third of that which could be irrigated. This intensification has seen agricultural production and export receipts increase by 50% and kept our balance of payments deficit in check.

The water intensity of milk and beef production is massive. It is estimated it takes 800 litres of water to produce one litre of milk and 1000 litres of water to produce a kilogram of beef.

As Prime Minister John Key said in his Statement to Parliament last month, the Government is in favour of unlocking resources for economic benefit – this includes freshwater.

The growth of irrigation and dairying, the demand for more renewable energy, the aspirations of Māori, the rights of freshwater fishers and the concerns of environmentalists are causing growing tensions over water. That is why the Government is having to take a fresh lead.

After climate change, fresh water is the Government’s second most important environmental priority and is part of Phase II of the Resource Management Act reforms. Our focus is on three main areas: water quality, water allocation and water storage.

Our water quality is among the very best internationally but there is increasing evidence of deterioration. Lowland streams and lakes are being increasingly polluted, and the taxpayer is having to fund substantial clean-up initiatives with over $450 million committed to Lake Taupo, Rotorua Lakes and the Waikato River over the next two decades.

On the issue of water allocation we need to move from first-in-first served approach to a system that is focused on getting the most value from the use of water.

We also need to do much better on water storage and develop much-needed infrastructure. The Government is committed to ensuring that water storage and irrigation projects which meet environmental standards, and which are good economic propositions, happen in a decent time frame.

In June last year Agriculture Minister David Carter and I announced a new process with stakeholders and Māori to improve New Zealand's fresh water management.

This work is being led through a collaborative process by the Land and Water Forum and has pulled together iwi, farmers, environmentalists, fishers, power generators, irrigators and other stakeholders to try and build a common vision forward on how to better manage our water resources. Their report is due in July from which Government will have critical decisions to make.

This approach reflects a new style of collaborative environmental governance outlined in National's 2006 Bluegreen vision document and inspired by Scandanavian countries like Sweden.

The set of issues about the legislation governing water quality and allocation arising from the Land and Water Forum is the first of three major decisions on freshwater involving the Government this year.

The second is the application for huge new dairying operations in the Mackenzie Basin.

On 27 January I made some important decisions about the resource consent applications involving the Mackenzie Basin by calling in the discharge consents to an independent Board of Inquiry.

I called them in as they nationally significant due to their scale, the fragile and iconic nature of the Mackenzie Basin environment, the importance of freshwater quality to the Government and the high level of public interest

Three related companies, Williamson Holdings, Southdown Holdings and Five Rivers, are proposing intensive dairy operations involving the housing of nearly 18,000 cows on 8000 hectares of land near Omarama in the Waitaki District.

This call-in decision reflects the Government's policy of providing stronger national leadership on resource management and water quality issues. This process will enable the most robust decision possible for these contentious consents.

Nowhere is the water debate as hot as in Canterbury where nearly 70% of New Zealand’s irrigation currently occurs. You’ve got commercial giants like Fonterra, Meridian and Ngāi Tahu flexing their muscles over water while the weakened referee Environment Canterbury is struggling to maintain order.

That is why the third major decision involving the Government this year is the future of Environment Canterbury. A high-powered review group led by former Deputy Prime Minister Wyatt Creech last month recommended to myself and the Minister of Local Government Rodney Hide that the regional council lose control of water management and the councillors be replaced with commissioners. The report was far worse than the Government expected and no decisions have yet been made.

Environment Canterbury aside, it is clear that new tools are needed for managing freshwater in our country. The issue underlying all others is that we are hitting resource limits and in some parts of New Zealand we are already exceeding the amount of water that can be taken from our rivers, lakes and groundwater. We are also seeing deteriorating water quality in some of these water bodies.

The way forward is a balanced approach that recognises the strategic importance of freshwater to New Zealand and carefully balances the economic development potential with the environment.