Tax as a Solution for Irrigation Water Scarcity, Quality and Sustainability: Case studies in Australia and New Zealand

Abstract

This cross-country case study presents an analysis of the use of taxation as a tool to address water scarcity and quality issues in contemporary irrigation. We examine three case studies where water quantity, purity and sustainability is compromised by irrigation and suggest a role for tax policy in improving outcomes. Specifically, our case studies are the Murray Darling Basin (MDB) in mainland Australia, the state of Tasmania in Australia, and the Canterbury region in the south island of New Zealand. These three case studies are selected as they each raise different water issues for irrigation and there is the potential for the tax system to resolve these issues. In Australia, water scarcity is a concern in all parts of the country. In New Zealand by contrast, some parts of the country have supply concerns, but a more common issue is water quality. Both countries need to address water sustainability issues.