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Guy Trafford finds National's opportunistic climate policy flip-flops extraordinarily disappointing when farmers need to champion the science to remain credible and competitive

Rural News / opinion
Guy Trafford finds National's opportunistic climate policy flip-flops extraordinarily disappointing when farmers need to champion the science to remain credible and competitive
back flip

It’s about now as we start the countdown for the next elections that a four-year term starts to seem really attractive.

The benefits of a three-year term are; if you don’t the like the current government you can turf them out (or at least try to) a year earlier than would otherwise be the case. This may sound a minor benefit. But given that oppositions to government have become more extreme in the last couple of terms, having a shorter term may mean some of these groupings may not resort to more extreme actions of civil disobedience than would be the case if they thought they had another year to wait before having a chance to exercise their democratic right.

We saw the extremes, by New Zealand standards, in what began as an anti-vax movement but then morphed into anti anything that the disaffected didn’t like. This probably wouldn’t have altered much whether the term was a three- or four-year term as rational debate appeared to have been thrown out the window. But there have been other issues such as Three Waters and the Groundswell movement against some government policies where I wonder if there was still another year plus to wait before those groups or individuals have the chance to exercise their rights to vote, whether they would remain as ‘civil’ as they have. Especially given the passion some seem to feel around these issues.

So, to me, a net benefit for the three-year term but whether it is enough on balance to stay with it, I’m not sure. An interesting project for an up and coming political scientist could be to compare the amount of disturbance between three or four year systems, although the three-year term systems are getting few on the ground now with only five countries left still using them.

Looking at Wikipedia’s list of electoral systems and length of periods between elections the countries with three year terms they are all in Oceania with Australia and New Zealand pus some of our smaller pacific neighbours making the list. This doesn’t necessarily mean four (or longer) terms are better but it may be an indicator and while there has been plenty of discussion around having a referendum between three and four years I haven’t seen too much evidence or information put out to the general public to help people form sound decisions. Although as elections seem to be run on ‘seat of your pants’ bias and ‘knowledge, perhaps keeping a referendum to the same has some merit.

The obvious benefits for a four year term (I think a five year term is pushing the boundaries for most except the most ardent anti electioneers’) are that it gives the incoming government more time to develop and roll out policies that, hopefully, are better constructed and not necessarily a reaction to short-term populous politics. Although, of course there is no guarantee of that.

Also, a four-year term is a cheaper option spreading an elections costs over four years rather than three.

Compounding the economic impacts is at least one study has shown that prior to elections very little economic expansions occurs leading up to them. The resulting declines, which are called reverse electoral business cycles, require sufficient levels of polarisation between major parties and electoral competitiveness.

Sticking with elections, for the agricultural sector the flip-flopping of the emissions policies for livestock farming by National could possibly be considered to be a reaction to the short-term populous category. The Act Party have been consistent in their views but National seem to be sniffing the breeze and letting policy take them after their nose.

One of the reasons New Zealand has such a mountain to climb in regard to getting emissions under some sort of control is due to National throwing out or devaluing programmes going back to 2009 which could have softened the costs today.

Their latest policy of seems to be a return to the past and sends a message to farmers that they don’t really need to take reductions seriously as they will undo what has gone before. What is a little surprising is the sums regarding election wins or losses National must have done in coming up with this policy. The farming sector who are likely to vote National due to this policy are likely to be voters who would vote National anyway. But how many swingers are likely to move to a ‘greener’ party because of yet more delays to a workable policy?

National may believe on balance they stand to gain. But when you see the numbers of people switching to EV’s and hybrids you can’t help but think the public in general want to lower emissions and not just the fringe “greenies”.

With the cost of new EV’s etc it is the wealthier end of society that is buying these cars and not cheaper Nissan Leaf’s (by ‘tree huggers” and I say this with the best intentions not to stigmatise) which, while useful, are going to those with less surplus cash.

Given the time spent coming up with a workable policy and, at least in my eyes, the distance between what most farming groups were prepared to live with and what government was offering not being insurmountable (especially) in an election year. To throw out this work seems almost immoral.

Negotiating should always begin with what you can agree upon and then build from there, except, it seems, in an election year.

A balance to that criticism, National have shown some positive leadership what they are proposing around genetic modification which does sound a step forward and better considered.

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16 Comments

Mr Luxon drives a Tesla, apparently. That does not make him a Greenie. He just thinks his EV experiment may have a good cost benefit ratio. If so , he keeps it. If not, back to the best compromise, which a lot of us still think is a diesel Ute.

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My two cents worth (which back in the day could buy 6 wine gums).

Shorter terms between elections favour the incumbent CEO and management over governance.

It takes 6 months for the newly elected to understand the system and the processes and how to get anything done in a structure that is designed for long term survival not quick decisions. Then at the end of the cycle your control is weakened as management understands your involvement may be about to finish and the last 3 months there is an understanding to not pursue any new policy..

So in a three year term the elected (local and central) only wield influence and direction for maybe 18 months to 2 years..

A four year term could well increase the ability to accomplish much more and gain greater control/authority over management. The risk is if the government/council pursue an agenda they were not elected to.

And yes I speak from experience.  

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What a strange article.

Moving from the ridiculous herd reduction policies that Labour/Greens want must be a good thing surely? Also surely the effects of GHG's produced in food production should fall on the consumers and not the producers? And they are largely overseas.

We should be INCREASIING our farm output if we are producing dairy and meat at half the world average for CO2/kg - and not worrying what Tesla drivers think to form our policies. 

I guess Luxon is banking on logical thinking showing through as these policies get debated closer the the election. 

 

 

 

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Strange and weird Roger. Guy ranged over many subjects trashing farmers as he went. 

Perhaps Guy we have had enough of this tripe. You may as well say I have no mortgage its so low. Yet I cannot see my way clear to fixing anything. When I came here everything was in good nick. Woolshed, yards, house, fencing. 30 years of farming and despite upkeep a lot of things need serious r and m or replacement. Well that wont happen. If you look around at all the dairy farms, sheds etc, most getting on to the 20 year mark. Most of that was borrowed on interest only. Where is the money going to come from to fix our infrastructure. 

You think we are cash cows. If you believe there is money to reduce production or pay more taxes, you have rocks in your head. 

I know many farmers who were only able to buy their farms with interest only loans. 20 years later not a cent repaid. They are renters really. Conned over the last 10 years that interest rates would stay low or go negative, led into deeper debt. Who thought two years ago floating rates would be 10% in mid 2023. Overdrafts mid teens. Stock loans costing $150 to $300 per annum per animal. Fertiliser spreading companies are struggling to stay in business. Look around the country and you will see yellow and grey hills everywhere. Fertiliser usage has slowed considerably. Great the greenies will say. Until the international deposits stop arriving. Many are using the last funds in the bank...the last fertility they have, after 3 years of zip.

I sound a bit dire. Perhaps Guy you should interview a few stock agents. Our local guys are very worried. They travel the back roads and see what is happening to our communities.  All this saving the world stuff wont count for anything when the deficits get so high, our interest rates rise further, and our food production wanes. Get a grip and get real. We cant afford this nonsense. 

 

 

 

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I take a slightly different tack. I suspect they paid too much for the farm so interest costs were far too higher proportion of their working costs. They hoped there would be sufficient capital gains to enable them to sell at a later date. Appears  that has not transpired so are hanging on for dear life. Not easy to cut your losses especially when tied up with one asset.

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No kidding Nige. However I guess I am more understanding. Its quite the battle to get a farm. The banks have pushed and pushed the money. Just as they have done urban. So Sam down the road can bid higher than Sue, cos Sams bank wants a piece of the action. Sues bank is keen as well so she pushes the barrel out as well. Sam has a contracting business and has good cashflow, so his bank just throws money at him. Both Sue and Sam desperately dream of owning their own farm. Sue gets back in the game when her parents come to the party and guarrantor whatever she can pay. The banks are loving this. But wait....corporate un taxed charity Maori owners come in and clean them out. Farm goes to the corporate. Next time Sam and Sue go bigger and bolder. And get in way over their heads. But at least they got their dirt. 

The banks. The charities. The overseas corporates. The tree people. Its quite a competition to get NZ farmland. Despite it not really making a lot of sense financially. Not many get rich actually farming.  I have a lot of sympathy for the average nzer trying to get their bit of dirt. Its generally to live a cool way of life. Its not usually for monetary reward.

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Your 100% right Belle. The economics and complexity of farming makes it very hard for family units. The trends been going for decades and won't stop.

We need to get honest about what is happening and many industry groups don't help by saying it's not happening. For example BandL put out profit before drawings. Thats loop fruit stuff from a business perspective bit like saying my business makes profit but I dont account for wages and salaries. Warren Buffet has the same argument about EBITDA - you can't ignore depreciation or next your profit measure will be gross profit!!

Farm amalgamation is transitioning from what worked post WW2 to today. Also land that can make profit is shrinking. No one wants steep hard stuff.

I see massive changes in the next 10 to 15 years as time passes and the current crop of older farmers want/need to leave. Will the younger ones want or be able to take over. 

Also the money available to corporate/investors types has grown much larger than traditional farmer capital - due to more profit - so that force will only grow and they will be very business return focussed so landuse will change radically if it's not washing its cost of capital.

 

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When they advertise small business's for sale they include the owners salary or drawings as profit. Of course any decent accountant will point this out to a buyer.  the reason is simple ,many(maybe most) small business make bugger all above what most workers would consider a decent wage.

I don't think farmers are picked on , or singled out on this . 

 

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I agree and I'm not picking on them at all but it shows the true state of affairs. You are buying a wage not profit.

Let's just be honest about it.

With no true profit it's very hard to pay debt, reinvest, etc etc

If others are making profit in proportion you get left behind. A small, low asset business fine but when dealing in high asset values guess who will end up owning them.

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Your 100% right Belle. The economics and complexity of farming makes it very hard for family units. The trends been going for decades and won't stop.

We need to get honest about what is happening and many industry groups don't help by saying it's not happening. For example BandL put out profit before drawings. Thats loop fruit stuff from a business perspective bit like saying my business makes profit but I dont account for wages and salaries. Warren Buffet has the same argument about EBITDA - you can't ignore depreciation or next your profit measure will be gross profit!!

Farm amalgamation is transitioning from what worked post WW2 to today. Also land that can make profit is shrinking. No one wants steep hard stuff.

I see massive changes in the next 10 to 15 years as time passes and the current crop of older farmers want/need to leave. Will the younger ones want or be able to take over. 

Also the money available to corporate/investors types has grown much larger than traditional farmer capital - due to more profit - so that force will only grow and they will be very business return focussed so landuse will change radically if it's not washing its cost of capital.

 

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How i see it is we are just catching up to the rest of the world.  We have been the only country that you can start from scratch to buy a farm for a long time. Those day's are long gone. You will see more corporate farm's whether it's big money corporate or family farming corporate.

Have a friend looking at building a new cowshed, he's looking at $1.7m. Use to get a 400 cow farm for that in the 2000s and have change left over.

 

 

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Really good article Guy. It's a shame National's approach to this election seems to be a winding back of anything useful Labour has done and more can kicking on anything mildly controversial. A complete lack of leadership on anything. Luxon really is the worse National leader in living memory 

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I doubt you could wind back enough of Labour's policies. I can't think of one I wouldn't repeal.  Seems the people who create the jobs in NZ think the same - this direct quote form Tony Alexanders email today....

"Feedback in my most recent Business Survey with Mint Design shows that in the business sector there is high discontent with the current government. They are seen as incompetent, interfering, bereft of knowledge of issues affecting the business sector, and failing across a wide range of non-business fields as well"

 

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Anyone know what % of farmers vote Nact,? I assume it's high, but not 100 %.

I think the mistake National is making is listening to the people attending their meetings, perhaps inexperience of Luxon showing.

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The assumptions that our emissions reduction is based on are not accurate, in my view as a graduate in environmental sciences (University of California).  We are going to trash the NZ economy with the nonsense spouted by fanatics, or those receiving government grants to push this agenda.  And for what?  Do you see similar efforts from China, the U.S. and Europe as extreme as those of NZ?  Even if the assumptions were accurate, New Zealand could go to zero emissions and it would make no difference whatsoever.

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A possible reason why National are trying hard to get ACT votes back,is because if ACT does well , National run the risk of getting no List seats. So no Willis , unless she wins Ohariu 

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