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9 Maintaining the Status Quo: Future Implications

9.1 Description

Maintaining the status quo would involve retaining the existing policy framework for the allocation and use of freshwater, including the limited level of support and guidance provided to regional councils.

9.2 Benefits

It is likely that over time there will be continued improvement in regional council processes as councils gain more experience and seek to more fully exploit the potential provided by the present policy framework to assist them to resolve pressures arising from increased competition for freshwater. Such developments might be manifest in all councils developing adequate water plans, better development of regional policy statements and water plans involving a more strategic approach to water allocation issues, and greater attention to individual efficiency in water use.

9.3 Risks

The extent to which the current system will evolve to better manage environmental risks and competition for water is, however, uncertain. Further, current processes provide central Government with limited scope to influence the nature and pace of such change.

In regions where plans do not clearly specify an upper limit on the amount of water that can be allocated, there is a risk of an unacceptable loss of instream values. The potential for conflict between those wanting protection of instream values and those seeking further abstraction would increase and there is likely to be a greater need for clawback of allocations which is difficult and involves costs to users.

In situations where water is fully allocated, greater use of the transfer of water permits to enable the reallocation of water between uses might emerge as the incentive for trade increases and both councils and water users increasingly recognise the value of such arrangements in addressing competition for water. However, at present there would appear to be limited appreciation within the community of the potential for transfer of water permits and there appears to be some resistance to the concept, especially among some land owners who believe that the transfer of water permits should only occur in the context of the transfer of ownership of land.

As the availability of water becomes a more binding constraint the underlying weaknesses in current systems will become more apparent. The shortcomings of first-in first-served as a basis for allocation will become increasingly obvious, and tensions between those with and without water will increase. There is a risk of continued resistance to transfer of permits, which would act as a barrier to new and innovative uses of water and would mean there is limited capacity to allocate and facilitate the re-allocation of abstracted water to its highest environmental, social, cultural and economic values over time. Were greater use of transferability to emerge, there is a risk that current arrangements are not sufficiently robust to protect environmental bottom lines, especially if sleeper permits are activated, as occurred in Australia. To the extent that councils are required to use clawback arrangements and/or do not renew permits to protect environmental bottom lines and to manage competition for water, uncertainty for permit holders would increase with implications for investment.

Overall, there is a risk that in the emerging context of areas of New Zealand approaching the limits of available freshwater, existing processes will not necessarily lead to water being allocated and used in a way that makes the greatest possible contribution to securing desired environmental, cultural, social and economic outcomes. Over time, as the demand for fresh water increases, there is a risk that further pressure points, such as the recent problems in the Waitaki, will emerge and the need for reform will become more urgent but that the associated costs and difficulties will be further exacerbated.


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