Ewan McGregor: Who will decide who pays for water?

Former HBRC deputy chairman Ewan McGregor.

Charles Dickens' Mr Micawber's oft-quoted law defining the recipe for happiness states: "Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and six pence, result happiness.

"Annual income twenty pounds, annual expenditure twenty pounds and six pence, result misery."

The point is that the margin between happiness and misery is just a shilling. Such a small difference can have serious consequences to one's spirit - and to the politics.

This is what has happened in this country, especially Hawke's Bay, with water. Within a relatively short time available water (income) has moved from abundance, or at least the perception of such, (happiness), to scarcity (misery).

This is the result of growing demand through population increase, and the upsurge in irrigation driven by the constant pressure to increase production, enabled by advances in irrigation technology.

So the distribution of water has become a major political issue.

The Labour Party has responded with the intention, if elected, to introduce a royalty on water.

This country has not had a royalty on water since the birth of nationhood, yet on the eve of an election, Labour springs this on the commercial users with the details to be worked out later.

In a free economy, which ours essentially is - and happily so - pricing is the primary mechanism for rationing resources. It may now be argued for placing a monetary value on water, but it needs to be introduced with due notice so industry can adjust, and needs to be non-discriminatory. That is, consistent across all industrial uses.

Indeed, why not on all water users?
If the objective is to promote more efficient use, why shouldn't we all play our part as domestic consumers?

Well, obviously, the compelling reason why not is a political one.

Labour has indicated varying levels of royalty will be set according to the value of the output. How do you work that out?
A water bottler, a food processor, a freezing works and an irrigator may draw water from the same aquifer, but different levels of royalty will apply.

Why? And who will decide?
Will it be politicians?
If so, the politically influential will use their resources to get a favourable rate. Those out of favour, such as water bottlers and dairy farmers, need to be worried.

In any case, how will you determine the value of water that is needed to produce a bottle of wine? A container of milk, or ice cream? An apple? A leg of lamb? A tin of peaches, or packet of frozen peas? I

It needs to be consistent, not just for commercial neutrality and fairness, but because differential rates will be impossible to objectively determine. Let the market, not politics, sort out the priorities.

Has anyone done any research to determine whether water bottlers create as much commercial payback for the region per unit of water through the demand for labour and services as other water users?

It may well be that they do. Further, the royalty is going to be applied to cleaning up waterways. But the bottling industry has no downstream affect. All the water is exported, unlike processing factories and irrigators.

Moreover, those who established this industry so recently did so in good faith and within the laws of the land, acquired the necessary resource consents then built the infrastructure.
They saw an opportunity (which obviously the politicians didn't) and put their money at risk - just the sort of entrepreneurial spirit this region, and this country, needs.

To hit them so soon after getting established because they are held in low public regard is quite unfair.

Ewan McGregor is a former deputy chair of the Hawke's Bay Regional Council. Views expressed here are the writer's opinion and not the newspaper's. Email: editor@hbtoday.co.nz