Thursday, March 12, 2026
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Federated Farmers Warns Of ‘Water Tax’ Risk


Federated Farmers says while it supports the intent of
the Government’s resource management overhaul, a deep dive
into the draft legislation has revealed some serious
concerns.

Most concerning are provisions allowing
freshwater rights to be auctioned, tendered, or levied –
effectively enabling freshwater to be taxed, says Federated
Farmers RMA reform spokesperson Mark Hooper.

“It’s
not an exaggeration to say we were alarmed when we read
clauses in the Natural Environment Bill that give future
Ministers sweeping powers to tax water to manage
demand.

“There is no way on earth Federated Farmers
can or will support that.

“I’ll be seeking urgent
clarification from the Beehive, because any reform that
allows water taxes by stealth is completely unacceptable to
us.”

Last December the Government released two new
bills – the Planning Bill and the Natural Environment Bill –
to replace the Resource Management Act.

Hooper says
Federated Farmers staff have spent the past eight weeks
working through the detail.

“It’s important to state
up front that Federated Farmers is completely on board with
the aims of the reform.

“The promise of a stronger
focus on property rights, a tighter scope, fewer resource
consents, more standardisation and less litigation all sound
like the reset farmers have been calling for.

“But as
we’ve worked through the detail, it’s become clear that
there are parts of these bills that do not align with those
aims at all.”

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Hooper says the risk of water taxes is
not the only concern. As currently drafted, the new system
may be more permissive where environmental limits are
comfortably met, but significantly more restrictive where a
catchment is at or near its limit.

“Councils often set
limits that aim to maintain current water quality levels, so
this could mean many catchments are immediately at or beyond
environmental limits from the outset.

“As the Natural
Environment Bill becomes more restrictive as catchments
approach those limits, that could actually mean more
resource consents for farmers as the bills are currently
drafted.

“This is on top of requirements for all
farmers to also have a Freshwater Farm
Plan.

“Federated Farmers supports a shift to a farm
plan approach, but only if it replaces, rather than sits
alongside, the need for a resource consent.”

Another
area of concern is the wording around when councils must
compensate landowners for loss of property
value.

Hooper says Federated Farmers welcomed the
Government’s earlier commitment to compensation when
restrictive overlays – such as Outstanding Natural
Landscapes and Significant Natural Areas – are imposed on
farms.

“But now, when we read the draft legislation,
we’re seeing a compensation regime that’s much more
uncertain than many expected.

“It relies on proving a
‘significant impact on the reasonable use of land’,
which means compensation could be very limited and will
ultimately depend on how future court cases interpret that
threshold.”

Hooper says another major concern is that
Water Conservation Orders remain largely untouched, despite
being an outdated planning tool.

“Farmers and growers
are pretty baffled that these relics haven’t been ditched,
as they’re a very poor way to manage freshwater
resources.

“They allow any member of the public to
override regional council processes and push for stricter
freshwater controls.”

Hooper says much of the most
important detail in the Natural Environment Bill – including
the meaning of key goals, the scope of regulation, and what
regional plans must contain – is deferred to future national
direction set by the Minister.

“That creates a
‘trust us and wait’ model and opens the door to wildly
different interpretations by future
governments.

“Farmers need certainty if they’re
going to invest in their land. A system that leaves key
details up to future Ministers creates risk, delays
decisions, and undermines confidence in the whole
reform.”

Federated Farmers is preparing a strong
submission aimed at highlighting weaknesses in both bills
and supporting the Select Committee process to amend both
bills.

“We’ll be doing all we can to ensure the
reform delivers what farmers were promised,” Hooper
says.

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