Who will pick up Essential Freshwater’s $80b price tag?

13 November 2019

Excessively stringent freshwater policies that won’t achieve significantly better water quality outcomes will cost New Zealanders more than $80 billion over the next thirty years, says DairyNZ chief executive Dr Tim Mackle.

“The water quality limits under Essential Freshwater are so severe that the net result is a significant economic loss, both regionally and nationally, potentially without the environmental gains they are hoping for,” Dr Mackle said.

“An $80 billion price tag equates to a cost of over $38,000 for every household in the country, according to independent and robust economic analysis of the Essential Freshwater proposals.

“These costs are more than three times higher in Southland, Taranaki and the West Coast. Here, they rise to around $120,000 per household.

“This will have a devastating impact on regional employment, too. Our analysis shows that there will be an extra 800 households in Southland and 1000 in Taranaki left with a breadwinner out of work.

“These are significant costs to be borne, particularly in rural communities, and they should not be taken lightly.

“These points emphasise the role of dairy farming as the economic engine of the regions where there is no guarantee another sector will replace it.

“By 2050 this will be costing the country $6 billion per year – equivalent to the cost of unmitigated climate change in that year, predicted by the OECD.

“Our current scientific understanding and economic modelling indicates there is a more pragmatic way to achieve similar environmental outcomes at less cost to the economy and communities,” said Dr Mackle.

“To be clear, the Essential Freshwater policy isn’t all about economics or money. Healthy and swimmable waterways are important to all New Zealanders, including dairy farmers, who share the same aspirations to protect our rivers, lakes and wetlands.

“Up to twenty percent of New Zealand waterways run past or near a dairy farm – and many of those farmers have already made great strides in taking initiative to protect the environment. 98 percent of waterways greater than 1m wide already have dairy cattle excluded.

“Farmers are committed to doing their bit, but there are water quality targets available that better address scientific objectives and do not incur substantial economic cost.

“DairyNZ is proposing an alternative approach to managing ecosystem health, based on strengthening existing standards for nitrogen toxicity to further protect sensitive indigenous species, alongside the proposed attributes for macro-invertebrates (MCI index) as the overall indicator of ecosystem health. Similar approaches are being proposed by regional councils.

“The New Zealand dairy sector is solutions-focused. Moving forward, it is crucial for the New Zealand government to work proactively with the dairy sector,” Dr Mackle concluded.

Note for the editor:

DairyNZ and independent economic consultancies Sense Partners and Infometrics carried out extensive modelling of farm systems and waterways, alongside regional and national economies, to assess the Essential Freshwater proposal and its feasibility. What we found was the Essential Freshwater proposal is unlikely to deliver the water quality results it hopes to achieve – and worse, it’ll fail at significant socio-economic cost. 

Read more about DairyNZ’s economic modelling and Essential Freshwater submission at www.dairynz.co.nz/freshwater.

Media inquiries:

Aaron Letcher

Senior Communications Advisor

Phone 027 538 2437

aaron.letcher@dairynz.co.nz

Lee Cowan

Senior Engagement & Communications Manager

Phone 021 930 836

lee.cowan@dairynz.co.nz

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