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Betterment levies for irrigation schemes

  • April 24th, 2014

I wonder why I've not seen betterment levies proposed for irrigation schemes. A century ago they reimbursed far-sighted local government for its massive investment in roading New Zealand's hinterland. They meant that:

  • landowners with windfall gains were required to pay a portion of their gain;
  • those whose land did not benefit did not have to pay (ensuring fairness within the County or roading district);
  • landowners who gained economic potential had a strong incentive to use it, because they had to up their income to fund the levies;
  • the capital infrastructure expenditure therefore began earning its full potential earlier than otherwise.

Our forebears pioneered may sensible things. We are unworthy inheritors of the country they built with shovels, picks and wheelbarrows if it remains beyond us to  capture a small part of the rain that flows uselessly to sea. If central and local government and private investors must risk capital to make it possible because the beneficiaries are too anxious about the future, when they get the increases in land value and economic activity from irrigation they should richly reward those who took the risk. Deloitte have put their reputation on the line for Ruataniwha.

And if the naysayers are right, and there is no net betterment (as reflected in land value increases) then the risk takers have done their dough.

What is unfair about that?

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