Summary[1]
Managing the increasing pressures New Zealand is facing on its natural resources is already focusing attention on the use of royalties on “Crown” or “public” natural resources; i.e. those resources owned or managed by central government on behalf of New Zealanders, such as freshwater and coastal space.
A core set of principles is desirable to guide the design of natural resource royalties in New Zealand.
Such a debate needs a sound foundation in terms of what a royalty regime would be intended to achieve. The goal proposed here is to maximise the net benefits to New Zealanders from use of public resources.
This goal leads to a working principle that the allocation and management of rights to use resources should reflect the highest value use, and allow for change over time. Highest value use encompasses all aspects of sustainable development: environmental, social, cultural and economic. Any royalty proposals should be consistent with that principle.
Policies should explicitly identify where a royalty may not be appropriate and rigorously assess whether that is actually the case before granting any exemptions, or considering application of a subsidy.
Revenue raised from such a regime should generally not be automatically funnelled to related activities but applied to the highest priority public use as for revenue from other sources.
Notes
- [1]Referee comments from Jim Sinner and Mike Jebson were appreciated. All errors remaining and opinions expressed are of course my responsibility.
