Wednesday, April 20, 2016

Why we need to price water II

Two weeks ago, we learned that Ashburton District Council plans to sell 40 billion litres of pure water from an over-allocated catchment to a water bottling company in a time of drought. Today we have another example: National's friends Oravida:
New Zealand water could be the next big export to China and one of the companies that has just jumped in for a slice of the pie is none other than Oravida.

[...]

They've now expanded from Scampi and milk, to water from a plant in the Bay of Plenty it bought for an undisclosed sum last year.

Oravida has a consent to 146 million litres of ground water a year and the regional council says Oravida pays an annual compliance charge of around $500.

Oravida markets the water at $1.60 a litre, meaning if all 146 million litres were sold it could be worth $233 million a year.


$500 for a $233 million revenue stream? This is simple plunder. But its a perfect example of why we need to price water: to ensure that we actually benefit from our resources, rather than letting them be effectively stolen from us for beads and blankets.