KEY POINTS:
A major report on the country's water resources warns of an impending "gold rush" for water with most catchments expected to be fully allocated within four years.
A two-year, $300,000 research project into the country's fresh water problems has also warned that water access problems could kneecap new businesses, harming economic growth.
The findings are in "a best use solution for New Zealand's water problems" report released today by the Business Council for Sustainable Development.
The report highlights an inefficient system of allocating water rights with huge volumes of allocated water being wasted. It found that 20-80 per cent of water allocated for commercial use, including municipal supply, in some waterways was not being used at any one time.
Council chief executive Peter Neilson said current fresh water management practices came out of an era when supply was vastly greater than the country's needs.
It would surprise most New Zealanders to learn that within four years the water in most major catchments in the country would be fully allocated, he said yesterday.
Increased competition could lead to higher prices and in most parts of the country those wanting new access to water would have to buy land from current consent holders.
The report called for policy changes to allow the easier transfer of water from one commercial user to another. It suggested managing water resources with a mix of statutory planning and a market-based system with transferable water access entitlements.
Mr Neilson said that could add an extra $180 to $300 million in output to the economy each year.
Proposals included providing better security for community use of water (environment, recreation, customary rights) and integrated catchment management plans to set the volume of water needed to protect such uses as well as other needs.
Commercial users would have a proportional share of the water available for commercial use, rather than fixed volume under current consents.
Mr Neilson said water quality and management were key issues for everyone, including urban consumers.
The report proposed a "cap and trade" on contaminants allowed into waterways, allowing discharge rights to be transferred between water users.
Mr Neilson said water trading arrangements were common in countries around the world such as Germany which had 50 years' experience of them.
He said New Zealand faced increased demand for water with the growth of intensive agriculture.
From 1999 to 2006 the amount of consented irrigated land had increased by 52 per cent.
Canterbury accounted for two-thirds of irrigated land, followed by Otago with 14 per cent.
"If we don't get around to managing water, there will be more fights for access."
Mr Neilson said the Government needed to find ways of getting consensus on the issue. "This report suggests a reasonable basis to move forward."
Council chairman Nick Main said lack of consensus was a major difficulty and there would have to be significant collaboration with businesses and organisations to produce solutions for practical policy improvement.
The council has worked with 19 other key organisations, and consulted a further 14, in producing its report.
It wanted the incoming Government to use the report to quickly develop a national accord among water users, including draft legislation to implement changes and introduce new policytools.
The council called for co-ordinated central and regional government action over the next five years within priority water stressed catchments.
It suggested a new way of managing water be trialled in a highly stressed catchment like Canterbury or Waikato.
Environment Minister Trevor Mallard said unused water consents were a problem but he did not agree with proposals to trade rights as that would effectively be privatising water.
"I think most New Zealanders would think water should be universally owned."
Mr Mallard said efforts were being made to better measure water use and "screw down" those wasting their entitlements.
An improved allocation system would come out of the national policy statement for fresh water management.
GOALS
* Clear national priorities for long-term water use.
* Law changes to separate water take and use consents from water entitlement and transfer rights.
* Integrated catchment management plans in stressed catchments requiring measuring and monitoring.
* Accurate measurement of water available, taken and returned and contaminant discharges.
* National registry of consented access rights to record transfers.
* Protection of existing water users' rights where feasible.
* Simpler system for transfer of unused commercial supply.
KEY FACTS
* 500,000 million cubic metres of water fall each year, enough to fill Lake Taupo from empty eight times over.
* Hydrogeneration uses 11 per cent total inflow, the water remains available for other users.
* Five per cent extracted for commercial use - mainly farming.
* 20,000 individual consents.
* 78 per cent for irrigation, 11 per cent industrial, 9 per cent public use and 2 per cent stock use.
* Total water allocated for abstraction increased by 50 per cent from 1999 to 2006.
