Coke tax-free under Labour’s plan

August 11, 2017

Rushed policy can have perverse outcomes:

Some of the biggest multinational bottlers operating in New Zealand, including Coca-Cola, would effectively be exempt from Labour’s proposed water charges.

The Labour Party plans to introduce royalties for commercial water use if it becomes the government – including for farm irrigation schemes.

But any companies who get their water through a city or district council water system would be exempt.

Some of world’s biggest bottlers have factories in New Zealand, but this means they would not have to pay any extra for it under Labour’s policy.

Coca-Cola Amatil, with its Kiwi Blue brand, takes about 36 million litres a year at its South Waikato plant, paying $40,000 a year.

But that is not for the water – South Waikato District Council said that charge only covered services for bottling such as infrastructure, operations and maintenance.

It gets the water for free. . .

That is what happens for everyone everywhere now. Any charges are for the costs associated with treating and delivering water not the water itself.

Under Labour’s mis-guided policy people taking water to grow food and those taking water that doesn’t come through a local body water system will pay a tax.

Those taking water for processing food, bottling water or fizz won’t.

That’s neither fair nor logical.

It’s sending the message that using water that doesn’t come through council infrastructure is bad but using water from the council is good.

It will encourage water-bottlers to move from the regions where they provide much-needed employment to cities.

It might even encourage councils into water-based businesses which shouldn’t be their business.

The water tax policy is being described by some winegrowers as dangerous and deceitful.

It’s a policy built on the shaky foundation of public opinion fed by emotion not facts:

. . .While the public is vehemently opposed to exporters taking water for next-to-nothing, Prime Minister Bill English isn’t convinced they’ll back such a wide-ranging tax.

“It’s not just farmers – it’s people who run gardening centres, there’s horticulture, there’s the vineyards, anyone who grows anything, as well as a lot of industrial use of water,” he told The AM Show.

“It’s not something you want to charge into based on the concern of foreign companies bottling water, which is an issue of itself which we want to pay attention to. But to go from there to taxing everybody and sharing all the revenue with no legal basis really, that’s a big leap, and I think they need to be a great deal more cautious.” . .

Why should farmers and horticulturalists  in one area who are doing everything possible to protect and enhance waterways on and near their farm pay a tax to clean up waterways or settle Treaty claims in other parts of the country?

This is bad policy which will send wrong messages and have perverse outcomes.


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