Lake Rotorua Incentives Scheme Policy

Incentives Scheme Policy Framework agreed by Council To RTALSG on 27th September Success of framework depends on incentives scheme – including Central Government funding Cabinet meeting in December – information due October Seeking StAG views and endorsement of approach Success of framework relies on incentives getting 100 tonnes out This relies on Cabinet approval of funding transfer in the Deed Cabinet sitting in December – MfE are writing the Cabinet Paper MfE have requested a package of information to make the case for funding Incentives Scheme Policy is one part of the package information is due to Ministry for the Environment in October We are seeking StAG views and endorsement of the approach today

Previous policy and design Draft principles and design presented Allocation framework was delayed Incentives policy restructured to fit the approved framework Incentives design to follow at later date This paper presented today should be familiar Draft principles and design presented earlier in the year Allocation framework was delayed and was different to the original proposal Restructured incentives policy to fit the final framework Incentives design – with the detail, will follow One step at a time What we are looking at today is what we will provide to the Ministry to assure Cabinet that we are going to spend the money responsibly

Overview Before we get to the words of the policy document A visual overview – nothing to scale or showing proportions General idea of what the funding will cover and what it won’t NDA is the line Above the line and below the line All pink shades above the line – owner’s cost Anything outside current water and land plan rules – not covered – owner’s cost Getting to good practice owner’s cost In most cases owners will have to achieve the NDA mostly at their own cost Dark green shows above the line funding available Below the line – nothing that isn’t part of the incentives scheme is shown No TDRs, no nutrient trading – although this may take place Light green is funding Blue is the farm’s final sustainable discharge

Hypothetical farm scenarios Every farm will be different some may need to get to good practice Some may end up with very low sustainable discharges Some may make minimal changes Some may go no further than the NDA Totals above the line (excluding those not in compliance with water and land plan) equals 140 tonnes Dark green 5.5 million Below the line the total light green equals 100 tonnes and 40 million Blue is the sustainable load for the lake

Incentives Scheme Policy Aim Approach Principles of funding allocation High level criteria Exclusions Conditions of funding

Aim Provide financial assistance above the line to assist pastoral farmers to meet their NDAs (up to $5.5 million) and Incentivise land use change and land management change below the line to reduce the nitrogen discharge to the lake by 100t/year (up to $40 million) Dual aim to fit the framework design

Approach Run according to the following approach: An open and transparent process Fair access Well governed Based on efficient administration Responsive to opportunities Mechanisms to ensure fairness, transparency, adaptability Top four basic requirements for public service – use and distribution of public funds last one ensures adaptability over the duration of the programme

Principles of Funding Allocation When selecting funding recipients we will favour The most nitrogen reduction per dollar Proposals with co-benefits Actions that commit to significant change Key word here is favour Basic principles that guide the selection of successful applicants

Criteria for Funding Allocation Only actions with a high degree of certainty of nutrient reduction will be funded Funding below the line will only be provided for actions demonstrated to achieve reductions below the NDA for the property Landowners must be compliant with Regional Water and Land Plan rules Crossing the line to design

Exclusions Funding will not be provided for Actions to get to good farming practice Any nutrient reduction actions already completed Gorse control Nutrient reduction activities that are cost neutral to do or that are financially positive

Conditions of Funding Clear, quantifiable and measurable Perpetuity Legal mechanisms to enforce reductions e.g. caveats, contracts Funding paid when work is completed or at agreed milestones All limits and targets, set at the time of legal binding