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Budget 2011: Govt brings irrigation schemes to market

Budget 2011: Govt pledges $7m a year to bring irrigation schemes to market

By Pattrick Smellie

May 9 (BusinessDesk) – The government puts its money where its mouth is today on supporting agricultural irrigation schemes with a $7 million subsidy over the next five years to get schemes to the point where they could be implemented.

Environment and Agriculture Ministers Nick Smith and David Carter announced the policy after Cabinet today, with Prime Minister John Key. The use of the high-powered trio indicates the importance of irrigation policy to the National Party-led administration’s visions for economic growth, and its need for a story to tell its traditional farming support base, going into the 2011 election.

Smith also released a new National Policy Statement on Freshwater Management, the third such NPS issued by this government, and only the fifth since the Resource Management Act came into law in 1990.

Today’s key announcements are:

*$35 million funding over five years under an Irrigation Acceleration Fund “to support the development of irrigation infrastructure proposals to the investment-ready prospectus stage”;

*$15 million over in new funds for waterway clean-up. On top of other clean-up funding already announced, total clean-up commitments over an extended period of years now totals 264.8 million;

*Willingness to consider investment up to $400 million as a minority partner in public-private partnerships to build new irrigation infrastructure. This projected funding will not, however, appear in the Budget 2011 forecasts of capital expenditure, and will not crystallise before new water allocation methods are determined. That could irrigate an additional 340,000 hectares of agricultural land, said Carter;

Decisions on new water allocation methods by October 2012, preceded in February by decisions on limits to water quality and quantity, including how access to water catchments should be governed.

Smith was at pains to stress that “no group of New Zealanders will own water”, and that the need for a water policy stemmed from the growing demand in many catchments, where over-allocation had already occurred or threatened.

The proposed $400 million PPP fund, to be considered “in a future Budget”, was intended to show “the government will be there as a minority shareholder while this is an immature funding sector,” said Carter. No such funding was likely to be released before 2013/14.

“Developing irrigation has huge potential to unlock economic growth and prosperity for primary sectors,” said Carter. “From an environmental perspective, more reliable access to water will lead to more efficient use of water and can provide for the replenishment of aquifers and the restoration of stream and river flows.”

The new freshwater NPS was released today, will be gazetted on Thursday, and will take effect from July 1, when regional governments will be required to “have regard to” the national guidance it contains.


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