Federal government proposes GST on rain ...

In a clear sign that the National Water Commission has lost touch with reality, an email from the NWC has surfaced which discusses the likelihood of taxing the water that runs into household rainwater tanks.

On average, when there are no water restrictions, about 30% of household water use is used outdoors.

We are being encouraged to reduce water use and reduce our dependence on dam water supplies.

Imagine the impact on water use if everyone installed a rainwater tank even just for outdoor use.

Then imagine how many people would give up on their rainwater tanks if a NWC plan to tax rain is adopted by the Federal government.

Excerpt from the news.com.au (annotated):

State fuming over 'rainwater tax' plan

14 January 2007

The Victorian Government is outraged at a leaked federal proposal to tax rainwater collected from roofs.

The idea was revealed in a leaked email seen by the Sunday Herald Sun.

Acting Premier John Thwaites yesterday warned that if water was privatised - as proposed by some federal Liberals - a tax on rainwater in tanks would follow.

The Bracks Government is furious at the mooted tax - it pays rebates on tanks as a water conservation measure.

In the email, National Water Commission chief Ken Matthews says, "Legally, all water in Australia is vested in governments." Mr Matthews' email continued: "Governments have not yet considered the capture of water from roofs in rainwater tanks to be of sufficient magnitude to warrant the issuing of specific entitlements to use this class of water. However, if rainwater tanks were to be adopted on a large scale such that their existence impacts significantly on the integrated water cycle, consideration could be given to setting an entitlement regime for this class of water."

Such a regime already exists for farmers catching rainwater and storing it in dams. A residential household version could include a licensing arrangement and taxes for those wanting to collect more than a set amount.

The commission yesterday confirmed the email was accurate.

Mr Thwaites said there were also fears the Federal Government could seize control of the resource from the states and tax rainwater. Federal water parliamentary secretary Malcolm Turnbull has said that if the Australian constitution were drawn today, control of water would be given to Canberra.

Prime Minister John Howard's environment parliamentary secretary, Greg Hunt, also has talked up water privatisation.

Mr Thwaites said yesterday the Bracks Government opposed any taxes on rainwater.

"We want people to use rainwater to take pressure off Melbourne's storages," he said. "We are encouraging people to install rainwater tanks and that's why we offer a rebate of up to $1000 on them. Greg Hunt is saying private companies should take over recycled water. If private companies were allowed to take over water they would seek to maximise profits at the expense of the public. Private companies would not want the competition from water tanks and would therefore seek to control tank water or have it taxed."

[This was certainly the case in Toowoomba. Toowoomba City Council was not encouraging the use of rainwater tanks while it schemed in the back rooms of City Hall to introduce its failed recycled water scheme. Toowoomba City Council also trod on State government plans to allow people in Toowoomba to reuse greywater, knowing that this would reduce the amount of water directed for recycling and the related profits.]

Mr Howard said in his New Year message water had to be looked at from a "national perspective".

Mr Hunt has signalled a plan to force states to recycle more waste water or allow private firms access to it.

Mr Matthews said in his email: "It is important to think of the capture of water from any source in an integrated way. If 1000 homes were to install 5000-litre tanks with an annual yield of 57,000 litres, this is 57 million litres that would not have reached a river or ground water system, or - viewed another way - is taken from either the environment's entitlement or another productive use."

See - Government plans GST on rain.

Crazy stuff but not completely unexpected. As people reduce water usage, revenues from water rates are similarly reduced. But encouraging rainwater tank use and then slapping a tax on it just won't work. If introduced, streets will be lined with disused tanks awaiting collection ...