Hon Nathan Guy
Minister for Primary Industries

18 May 2017 Media Statement

Budget 2017: Irrigation investment to better manage fresh water

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water, says Primary Industries Minister Nathan Guy.

“A reliable water supply for growers and farmers has major potential to boost economic growth, creating jobs and exports in the regions. At the same time these schemes can deliver real environmental benefits by maintaining river flows and recharging groundwater aquifers,” says Mr Guy.

“The importance of water storage has been reinforced over the last few years with severe droughts in places like the east coast of the South Island and Northland. The funding we are providing in this budget will help develop new private sector schemes which will reduce the impacts of droughts on rural communities.”

Mr Guy says new irrigation schemes must meet stringent environmental tests. “It’s important to note that any new developments or conversions must farm within environmental limits set by regional and local councils.”

Of the new funding, $26.7 million over the next three years provides matched grant funding to regional scale irrigation schemes, helping them progress through the phases of development to reach construction.

$63 million of new capital funding will support investment in the construction of regional irrigation infrastructure. Both initiatives are administered by Crown Irrigations Investment Limited (CIIL).

“Capital investments made by CIIL are usually in the form of secured loans, as in the case of the Central Plains Water Scheme where CIIL invested $6.5 million in the first stage – since repaid – and is now investing $65 million in Stage 2.

“CIIL’s role is to be an early-in, early-out investor to kick-start projects that otherwise wouldn’t get off the ground. The investment is important because research by NZIER has found that irrigation contributes $2.2 billion to the national economy and this has the potential to increase further.”

“In the next few years there are a number of potential projects likely to need investment, including the Waimea community dam near Nelson, Flaxbourne community Water Project, Hunter Downs Water and the Hurunui water project. These would support a wide variety of land uses, including horticulture, sheep, beef and arable.

“Importantly, the water can also be used for urban supply and improving environmental, recreational and social outcomes.

“This Government is committed to improving the quality of our waterways while maintaining the livelihood of our regional communities. The Government’s investment in improving water storage helps achieve both goals.”

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