Hon DAVID CARTER (National) Link to this
I think the important section of the bill is around clause 2, “Commencement”. This legislation has to be passed by 31 December 2007. The date is important because it was the original date on which the allocation to Fonterra of these licences was set. The history goes back to the issue around quota allocation being very difficult to determine at the time of the dairy industry’s restructuring in 2001, when the Dairy Industry Restructuring Act was going through Parliament.
I point out that although the Act went through Parliament in 2001, the discussions on the deregistration of the New Zealand Dairy Board and the opening up and restructuring of the industry actually commenced through the late 1990s. I think Parliament should record today the efforts made by a former Minister of Agriculture, the Hon John Luxton, who drove this process and initiated it. It was something that at the time was not widely accepted by some of the dairy—
Well, Mr Woolerton says that they managed to start up a cheese factory, which was a very successful initiative. It was allowed by this very legislation, and it is something that that member ought to applaud instead of knocking. But that member is at the stage when he is living in the last century, I assure members. Mr Woolerton is living in the last century, but I just say to him—I have a few things I want to say, but I do not want to use up my time—that this industry has been moving on for a long time. It is time that “Rip Van Winkle” woke up and took the chance to look at what has happened, because we should be very proud of this industry.
I say to the Minister in the chair, Jim Anderton, that one of the interesting little developments in the Primary Production Committee was to be found in the definitions. We found, to our surprise, that the whole of the quota issue is determined by the amount of milk solids collected on New Zealand farms. Through this process we found, to our absolute amazement, that the word “milksolids”—and I say it as one word because we found there was a reason why it had to be one word rather than two words—had never been defined in legislation. So we have included that definition to make sure it is there in the legislation so that any subsequent allocation is made on that basis.
The other issue I will touch on, which I did not mention in my first contribution, is around the calculation of quota and the ability of companies now to do that over a period of three seasons. This was something that struck the select committee. The select committee members know, because of the climate change issue as much as anything else, about the issue of droughts affecting particular regions. It is certainly something that is on the minds of the select committee members.
For example, if Westland were to be devastated by a drought in any one particular year, then more than that year would be affected in production terms. The effect of that drought could flow over 1 year, 2 years, or even 3 years. The select committee recognised that and has therefore given the ability for the calculation of quotas to be on the basis of recognising the effect on more than 1 year or 2 years’ production, but in actual fact 3 years’.
I think those are the main points, but one that is certainly of annoyance to members on this side of the Chamber is the fact that the Government, after having had this bill on the Order Paper for some time, has not been able to move it in normal sitting time. Here we are now in urgency, driving the bill through all its stages so that the Governor-General can get it on his desk prior to the Christmas break, sign it, and make sure it is done.
This issue has been around since early 2000. The Government has had 7 years, and now here we are, in the very last, dying days of this Parliament—in fact, in the dying days of this Government, I suggest—rushing it through all its stages.
Dr Ashraf ChoudharyAshraf Choudhary laughs, but he is the only member on that side of the Chamber who is laughing. At least this bill is finally being attended to, and for that I congratulate the Minister.
ERIC ROY (National—Invercargill) Link to this
As has been suggested, there is a great deal of unanimity about this Dairy Industry Restructuring Bill (No 2). However, it is appropriate that we need perhaps to highlight one or two natural issues because, as the Minister said, we are in a process of evolution and we may want to come back and look at some of the things recorded in this debate.
I draw members’ attention to clause 4, “Interpretation”, in Part 1. I note the somewhat vitriolic attack on my good self by Doug Woolerton in the earlier stages of this debate about the need to be xenophobic. If he is prepared to look at who is an eligible participant within the interpretation provision of this legislation, he must be shaking in his shoes. There are two qualifications to be a participant: an entity must hold an export licence and it must collect at least 0.1 percent of the milk production of New Zealand. For a member who is claiming that we need to be xenophobic and need to protect the monopolistic structure, he is allowing and sanctifying in this legislation a provision that someone who holds one-thousandth of the production of New Zealand and an export licence is out there competing in the export field. I am sure this must be of great concern to Mr Doug Woolerton, who has this view that it is extraordinarily necessary to be a monopoly.
I would just make the point that we are in a state of evolution. That is good, because we cannot stand still—we go either forwards or backwards. I believe this legislation is going forward. But the time may well come when we say: “Hang on, we used to have a monopoly and now it is an oligopoly.” As I said in the second reading, as far as I am aware—someone may correct me—seven players are now contesting with Fonterra. At the moment this is not an issue, because those players only have to have one-thousandth of the production in order to be in there.
Some of them could be anybody. Yes, that is a very good point, I say to Mr Carter. For example, New Zealand Dairies, which is situated at Studholme, is a Russian investment in the New Zealand dairy industry. Mr Woolerton, who is claiming the xenophobic approach to monopolistic management of the dairy industry, must be gravely concerned about that.
But he is still voting for this provision.
The second point I wish to raise is in relation to section 28A, which is to be inserted into the Dairy Industry Restructuring Act by clause 12. Here we give a delegated responsibility in terms of transferring export licences. I commend to members the amendments that are in place. One of the things we tend to do with quite a degree of abandon at times is to put these delegated responsibilities into legislation that states that we can do whatever we want by Order in Council. To transfer a licence is quite a significant issue, and although it is appropriate that it be done by Order in Council, it is also appropriate that we have a very clear methodology and process so that there is adequate consultation and adequate checks and balances. That is why I commend to members that the amendments in this bill are passed, because the Primary Production Committee has given due consideration to all of those elements.
The third point I would raise again in this Committee debate relates to the elements to the database. Although the dairy industry is a leading light in many respects in the New Zealand pastoral industry, in terms of genetic gains it is not the leader. The leader now in terms of production through genetic gains is the sheep industry. I believe that one of the key factors is the fact that the sheep industry has open access to its database. Yet the dairy industry has said that it is under the Livestock Improvement Corporation and, yes, there can be access, but the access costs so much per cow. One of the members of the select committee may remind me what the figure is, but I think it is about $2 a cow. As David Carter said earlier, price is access. If I were a dairy farmer and I said that the genetic property of the Livestock Improvement Corporation is the only one we are really interested in—
COLIN KING (National—Kaikoura) Link to this
It is a pleasure to speak in the Committee stage of the Dairy Industry Restructuring Amendment Bill (No 2), and I take great confidence and comfort from the speakers who have spoken previously. I want to deal with two areas, one of which is the integrity that is required around a quota system. It is very, very important, because we mention the farmer a lot—the producer of milk solids and suchlike—but the quota is owned by the Crown, and is part of the process of our getting free trade or privileged access to various markets. On that basis, whatever a quota management scheme is about, it has to have integrity.
When we look at new section 29A, inserted by clause 14, we understand just how structured and how principled this process is. That cannot be overlaboured, because we are an export nation; we export 85 percent of what we produce in this country. It is very difficult when we hear the speaker from New Zealand First talking about Fortress New Zealand and that kind of mentality, because, in actual fact, we have to continually argue for the removal of barriers. Quota access, by its very nature, is privileged nation access. It is a very fine line. Effectively, in the world of trade, New Zealand runs two arguments, and it is very important that we are seen to be very thorough and have quota management processes that have integrity.
When we go through section 29A to section 29J, we find that the chief executive has some wide, sweeping powers to be able to go in and check the data, the record-keeping, of anybody who has access to that export market. We see that, at the end of the day, if any of those laws and regulations that underpin the integrity of the quota system are breached, the fines are quite substantial. We see that the fines have been extended under this bill up to $200,000, with a further fine not exceeding $10,000 for every day or part of a day during which an offence is continued. So there is a high level of accountability. That is good to see, and I myself think it has to be there, because from time to time people from the dairy industry have been dragged before various countries’ officials to explain their actions. That sometimes can have an effect upon other quota markets that are held. When we look at the dairy industry we see that this quota is not large as a proportion of the whole of the dairy industry—it is rather small. But in the sheepmeat industry, a very large part of the access to Europe is under quota. So I am pleased, and I take great comfort from the way that this bill progressed through the select committee. I am comfortable that it is fine.
The second thing I want to talk about is the Livestock Improvement Corporation’s core database. This issue is something we need to get sorted, because in itself it can actually be a barrier to improving the productivity of this nation—and not only within the dairy industry. As there is more demand for our products to be scrutinised, we will have to get into areas such as animal identification, and the Livestock Improvement Corporation’s database is a vehicle whereby we can identify the very cuts of meat that people are consuming. The Livestock Improvement Corporation has raised an issue here—we see that it came from AmBreed New Zealand originally, which is a competitor within the market—and it is important to realise that there are other valuable aspects that the Livestock Improvement Corporation’s animal database can contribute to. As a nation we will continue to export a lot of what we produce, and when we consider that 85 percent of what we produce overall goes overseas, it is important that we do it well.
I commend the select committee for processing this legislation in a timely fashion. This issue is something that those in rural areas have been very concerned about since 2001.
R DOUG WOOLERTON (NZ First) Link to this
I just want to cover a couple of points made by Eric Roy, when he mockingly said I would be quivering in my boots at this legislation. Of course, he is right, because I and some of my colleagues voted against the Dairy Industry Restructuring Act, the one put into this Chamber by Mr John Luxton when he was the Minister for Food, Fibre, Biosecurity and Border Control. It broke up the monopoly of the Dairy Board and allowed Fonterra to become a monopoly, to a degree. Before that it was not possible to start up a private dairy company, as we know. While Mr Luxton was changing the law for the dairy industry, he was proceeding with plans to start up his own dairy factory, and that is what he did. The National Party thinks that that is good business. I do not think it is the right thing to do. Yes, Mr Luxton obeyed the letter of the law, as we do, but did he do what was morally right? No, he did not, and neither did his colleague Mr Wyatt Creech. He also did not do what was morally right, but now they both have a very successful dairy company, which they are about to lose control of. Mr Talley is going to own that dairy company in Matamata, and Mr Luxton and Mr Creech will do very well out of that. So I will not be going to great lengths to thank Mr Luxton for the Dairy Board restructuring, or, indeed, for any of the legislation that followed.
We in New Zealand First do worry about those sorts of things, because the laws that allowed the dairy industry to become huge and great and internationally competitive are now bit by bit being dismantled. Part of that is the record-keeping that we hear the members of the National Party talking about in LIC, based in Hamilton, which has an amazing database. It is one of the most amazing outfits in the world when it comes to genetics for dairy cows. There have been many assaults on the Livestock Improvement Corporation, which is what it was known as then. People have wanted to get access to its database and access to its information for years, not for the assistance of the dairy industry and not to progress our enterprises, but for their own material gain. That has been staved off, but for how much longer, one wonders?
The arguments are always along the lines of those we have heard today: that opening up access to that information to everybody and his or her mother’s dog will help things in New Zealand and in other countries. We in New Zealand First want to know how it will do that, because we do not believe it will. We think that information should be protected for the benefit of the people who paid for it, for the people who set it up, and for the people—
No, it is not about communism. New Zealand First supports PGG Wrightson and the sort of enterprises it is involved in overseas, such as operating dairy farms in Chile and that sort of thing, because hopefully the money will return here. But we do not support people who come here and take our money back to their country.
We do have a one-way street. Those members over there used to believe in reciprocity in the sheep industry, and they used to believe in a fair go.
I remember my father telling me about the days when the farmers in the South Island would toddle across to Tooley Street—I do not like to bring the Chair in, but this is of interest to people, I am sure—and the English of the day used to treat them to drinks, look after them, and give their wives little presents. And they would do the farmers like a dinner. My forebears in the dairy industry thought that that was for toffs and idiots who did not know how the world worked. We believed that an industry should be tied up by those who owned it and should operate for their benefit. But no, no, the people across the Chamber who come from sheep and beef stock backgrounds believed that we should give the wealthy English lords and ladies their cut of the pie. They have done so, and they still do today.
I hope those people are happy about that, because in the dairy industry we think that is nonsense. In the dairy industry, we think that is a rip-off. In the dairy industry, we think that is just childish, naive behaviour. We think the dairy industry should be run for the benefit of the farmers, not for the benefit of the ticket-clippers throughout the world. That is the way the dairy industry has been run and that is what has made it great, over and above other industries that have been going a lot longer than it and that were in fact seen as the premier industries in the agricultural business.
New Zealand First reluctantly supports this bill. We make the points I have made: that it is certainly a sad day when we see people gradually losing control of their industry, supported by the National Party. [Interruption] While I am making this speech I am being mocked by the very people whom farmers put into this Parliament, thinking they would support farmers. I am here to tell farmers not to rely on the National Party for the support of their industry, sadly.
RODNEY HIDE (Leader—ACT) Link to this
I rise on behalf of the ACT party to support the Dairy Industry Restructuring Amendment Bill (No 2); it is a good bill. I will respond to some of Mr Woolerton’s comments. It seems to us that this is a good bill, because I do not think that farmers’ interests and producers’ interests are served by having only a monopoly exporting into those quota markets. If we look at the history of the world, then we will see that it has always been smaller companies with an idea that have come along, have innovated, and have provided the new markets and the new ways of doing things, and they have provided for an increase in prosperity for everyone. That is why we support this bill.
I have to say that I was somewhat amazed when I listened to Mr Woolerton’s comments. He does know the industry, having worked in it, but I would suggest to Mr Woolerton that if xenophobia worked, as he says it does, then countries like Albania, North Korea, and Cuba would be rich and prosperous. In a country of 4 million people, we cannot eat all the cheese we produce, we cannot drink all the milk we produce, and we cannot use all the primary produce we produce, and that is why xenophobia does not work. We have to be open to the world. We have to like people from other countries.
Mr Woolerton has an idea to build a fortress around our industry, where we would not change anything, we would not allow any competition or choice, and we would not innovate.
Mr Woolerton says he did not say that, but the implication of having one buyer and it being run as a farmer cooperative is precisely that. Mr Woolerton said that, yes, New Zealand First has the view that we should have a fortress around New Zealand and that we should protect ourselves from foreigners. We also learnt that Mr Woolerton thinks that anyone who disagrees with New Zealand First and Mr Woolerton is, somehow, an idiot who does not understand the issues as well as he does. He would rather say that than debate the arguments and ideas.
I have also learnt this about Mr Woolerton, and I think this is a sad day. When Mr Woolerton disagrees with someone, it is because that person has ulterior motives. I think it is a sad day when we attack former members of this House for having ulterior motives for what they do. We might disagree with them, but I do not think we have seen people here with ulterior motives promoting legislation.
I make this point, again to Mr Woolerton. Having people who are doing well in business and making money is good for New Zealand, it is good for the farming industry, and we want a successful and prosperous dairy industry all the way along, at every step of the way. That is what will make the dairy industry successful into the 21st century and beyond. The idea that we can somehow have a locked-up little market, where one company sells to the world and that will be good for farmers, has to be absurd. Like I have said, I say to Mr Woolerton that if that worked, then Albania would be rich, North Korea would be rich, and Cuba would be rich.
And Doug could be the president of those countries for life. So the ACT party rises to support this bill.
I learnt one other thing about New Zealand First members. Here they are, railing against this bill, and I have learnt that they are xenophobic and proud of it. I learnt that they want to have a fortress around New Zealand, that they believe in monopolies, that they attack people who disagree with them as having ulterior motives and for being stupid, and that this bill is a disaster for the dairy industry. I then learnt one other thing: New Zealand First will vote for the bill, along with every one of us. Thank you, Mr Chairman.
Hon JIM ANDERTON (Minister of Agriculture) Link to this
Because of some of the comments made, I should apologise profusely, having been in Parliament for 24 years, 9 of them under National Governments. Never before has there been urgency before Christmas to push things through, so I have to acknowledge that this is an extraordinary precedent, and it is probably due an apology! Those members who have not been here as long as I have will know that this is all correct! I am putting this through to the Tui ads, so they can say “Yeah, right!” at the end of it.
In a slightly more serious vein, I want to move an amendment on the advice of parliamentary counsel, which I have discussed with the Chairman of the Committee. The amendment will see a minor change in wording, but there will be a different meaning. I refer to page 18, paragraph (b) in clause 29, which has the wording: “(b) the right to access documentation relating to the application for a search warrant and the exercise of a search power under the Official Information Act 1982.” I am advised by parliamentary counsel that the correct wording should be “the right under the Official Information Act 1982 to access documentation relating to the application for a search warrant and the exercise of a search power …”. I am sure the select committee meant exactly that, but I am advised that it would better to have that wording rather than the original wording. Thank you, Mr Chairman.
Hon DAVID CARTER (National) Link to this
The National Party will certainly accept that amendment as proposed now by Mr Anderton. I just want to tidy up a comment that Mr Anderton made. It is not clause 29; it is actually clause 14, which inserts new section 29K(6)(b). Just for the record, it is clause 14 that is being amended. But I think it is a very sensible amendment. I am surprised the select committee did not pick it up in the first place.
The question was put that the amendments set out on Supplementary Order Paper 171 and the following amendment to clause 14 in the name of the Hon Jim Anderton to Part 1 be agreed to:
(b)the right, under the Official Information Act 1982, to access the documentation relating to the application for a search warrant and the exercise of a search power.
NATHAN GUY (National) Link to this
I want to make a contribution today that I think is very important in the Chamber. I want to talk just on the schedule. The Primary Production Committee worked hard on this to get it right, and I think it is a fair point that I am about to make. The director-general or chief executive of the Ministry of Agriculture and Forestry technically allocates the export licences. We need to be mindful that the New Zealand dairy industry is primarily based on pasture-fed diet, and primarily our animals are outdoors all year round. We all know that climatic changes occur. In parts of New Zealand we can have a drought, and we are currently experiencing a mini-drought on the East Coast of the North Island. If we think back, in recent times we have had floods, we have had snowstorms, and we have had weather bombs throughout the country.
The significant point I want to make to the Committee is that the select committee worked hard and has come up with the provision in schedule 5B that allows those seeking an export licence to have their historical data analysed out to three seasons. The point I am making is that if we have a weather bomb, and farmers are constrained, as we know can be the case, that flows through to the heifer replacements—that is, the young cows that are going to come into the herd. It needs to be broad in its approach, so that we looking at not just one season or two seasons, but we are taking that data analysis out to three seasons, which I think is very, very important. I acknowledge the hard work, under David Carter’s leadership, of those members on the select committee who do own a set of gumboots, and who have come through a grassroots upbringing, like some of us in the National Party, who were well aware of the point that this is very, very important.
I turn to those members on the other side of the Chamber who were on the select committee and who have not come through that process. I am not sure whether there is one farmer left in the Labour caucus who would even be aware of that point. So this is a significant point in this bill that will mean it is fair, right across the board, that when the director-general or the chief executive of the ministry is technically allocating quota, he or she can look back across those three seasons of data.