Alex's Election diary: Labour Party leader Phil Goff addresses Federated Farmers; A look at Labour's policies which would affect the farming sector

Alex's Election diary: Labour Party leader Phil Goff addresses Federated Farmers; A look at Labour's policies which would affect the farming sector

By Alex Tarrant

Labour Party leader Phil Goff addressed a Federated Farmers National Council meeting in Wellington on Thursday morning, where he was asked about Labour's opposition to the Puhoi to Welsford highway, Labour's policy to put agriculture under the Emissions Trading Scheme in 2013, and his party's irrigation policy.

Puhoi to Welsford

President of Federated Farmers Northland Matt Long said he was disappointed at Labour’s decision to scrap the Puhoi to Wellsford highway. Labour announced earlier this month it would use the money earmarked for the highway to put toward a NZ$1.2 billion investment in an Auckland inner city rail loop, if the Auckland council put up NZ$1.2 billion of its own money as well. Labour has attacked the Puhoi to Welsford highway as being ‘the holiday highway’.

Goff was told it was vital Northland was not isolated from its suppliers and markets, and Long invited him on a freight truck from Northland to the Auckland Port to see the importance of the route.

“I said in my [earlier] speech that in the current economic conditions, the decisions that we’ve got to make are tough decisions,” Goff replied to the Federated Farmers meeting.

“We don’t have money to throw at every problem that we’ve got, and therefore we have to prioritise. The priorities on the Puhoi to Welsford highway are, to me, the black spots where we’ve had fatalities, and the bottlenecks, such as around Welsford. We’ll spend about NZ$320 million solving those problems, and much faster than what the so-called holiday highway would provide," he said.

Goff said there was only so much money. Goff said as an Aucklander, when he needed to drive into the city on the Southern Motorway at peak hours, it could take an hour-and-a-half for the trip.

“If Auckland is going to be a truly international city, it needs a truly international public transport system. At the moment the bottleneck in Brittomart halves the number of trains that we can put through there. If we keep building more motorways, we simply keep getting more cars on the road. We have to supplement that," Goff said.

"My priority is the rail link. That will make the Auckland City a truly international city in terms of its transport, and it’ll stop the huge loss in productivity that that congestion causes every day of the week – every day of the week, not to mention the extra pollution and the extra fuel charges," he said.

“It’s a decision that I believe we’ve got to make. It’s about priorities, and that’s a priority that I’ve set.”

See Federated Farmers' Matt Long ask Phil Goff about Labour's policy to cancel the Puhoi to Wellsford 'holiday highway' in the video above.

ETS

Meanwhile Goff was also quizzed by a delegate on Labour’s policy to put agriculture under the Emissions Trading Scheme in 2013. The delegate indicated the ETS costs would increase the price of New Zealand’s export goods from the agricultural sector.

Here is Goff being asked about Labour's policy to put agriculture under the Emissions Trading Scheme from 2013:

Irrigation

Goff was also asked about Labour's irrigation policy: Here is Goff being asked at the Federated Farmers meeting about Labour's irrigation policy:

Policy watch

Agriculture into ETS effective 2013

Labour angered the farming sector when it announced in May that it would put agriculture under the Emissions Trading Scheme from 2013 in order to pay for the resumption of Research & Development tax credits. That is in contrast to National's plan to include agriculture in the ETS from 2015 (following a review in 2014) and contingent upon new technologies being made available to help the sector with its greenhouse gas emissions and New Zealand's trading partners making similar moves.

See and compare all parties' global warming/ETS policies here.

Capital Gains Tax

Labour's capital gains tax policy will also affect the farming sector. Under its policy if a farm was sold, the main farm residence and surrounding land used for domestic purposes would be exempt from the 15% capital gains tax. But the wider land used for the business of farming would be subject to the CGT.

However, there would be concessions in some cases. Farmers 55 or older still working the farm (and also having owned it for more than 15 years), would be exempt from the tax on the first NZ$250,000 of their gain.

See and compare tax policies here.

Foreign investment

Last year Labour announced a big change in its stance on foreign investment following the Natural Dairy/May Wang bid for the Crafar farms. It also followed the government's move to tighten overseas investment rules, by introducing a 'good character test', and giving Ministers more power to reject applications to buy New Zealand land.

See and compare Labour and National's foreign investment policies with other Parliamentary parties in our party policy section here.

Under Labour's policy, foreigners would not be able to own more than 25% of monopoly infrastructure, for example airports and seaports, if their interests were more than NZ$10 million. Asset purchases over NZ$100 million would also need government sign-off.

On sales of farm and forestry land to foreigners, Labour said the majority of applications would be rejected unless there were subsequent investment in processing.

"Sales will be declined unless the overseas purchaser of farm or forestry land will also invest in significant further processing of related primary products and related jobs. The investment in further processing can be either new products or extra capacity for existing products where extra capacity is needed. In either case the purchaser must prove that such capacity would be unlikely to be provided by the existing New Zealand industry," Labour says in its foreign ownership policy document.

"Long-term leases have similar consequences to sales and will be treated in the same way. Long-term means 20 years or more, including rights of renewal," it says.

"In respect of any farm sales that are approved, strict controls will be imposed and enforced to ensure that reasonable access is allowed through properties adjacent to rivers, lakes and beaches."

Trade

Labour says it will continue to pursue free trade initiatives, with a focus on the Trans Pacific Partnership and South America.

National yesterday announced its trade policy ahead of the November 26 election. See it here.

Compare all parties' trade policies here.

Monetary policy

Labour says it will encourage more members from the export sector to be on the Reserve Bank board. It wants the Reserve Bank to be more active in foreign exchange markets in efforts to keep the New Zealand dollar down. It also says the Reserve Bank's policy targets agreement should explicitly consider the effects monetary policy has on exporters.

See and compare monetary policy policies here.

Federated Farmers later put out a statement on irrigation policies proposed by Labour and the Green Party:

Policies by the Green and Labour parties for ‘resource rentals’ could not only close down arable farms, it could see most forced to convert to dairy in order to stay economical.  That is the warning of Federated Farmers David Clark, who has costed the policy for his Canterbury farm.

“Ten cents per cubic metres of water may sound like a drop in the bucket but for my arable and lamb finishing farm, it wipes out any surplus I’d make from farming,” says David Clark, Federated Farmers Mid-Canterbury Grain & Seed chairperson.

“Ten cents per cubic metre adds up to $234,000 per year and that sum is frightening.

“I’m an arable farmer so the crops I grow go into the bread people eat.  Those crops rely on irrigated water but in Canterbury, much of that water is drawn from ground water.

“Having costed resource rentals and the near quarter of a million it would cost my business, the only way for me to keep farming is to build a milking platform and go dairying.

“I’m not sure that’s what Labour Leader Phil Goff wants but that’s the practical outcome of his party’s policy.  Dairying would be the only way for arable farmers to keep up with the astronomical cost of resource rentals.  As a country, we’d also have to import more grains too.

“It’s one example of why Federated Farmers warned the Labour and Green parties about their policies towards farming.  These are policies that could make the family farm a folk memory and Federated Farmers doesn’t want that.

“I do however wish to take up Phil Goff’s offer to meet with him and his spokesperson Brendon Burns at my farm. 

“The more we can do improve their policies, the better the outcome will be for everyone as I don’t think they’ve thought through things enough,” Mr Clark concluded.

(Updates with statement from Federated Farmers, videos)

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33 Comments

Goofy will get the welcome he deserves. He should take that fool cunliffe with him. The farmers will dress them both with boning knives..serve them up for the voters....

And once again Wolly can't resist resorting to namecalling. What an infantile little person you are. No doubt the stress of seeing your beloved Nats going down in flames is getting to you.

Hey guys. Let's play nice.

cheers

Bernard

It's the thought of seeing them getting boned out ....that's not nice Bernard...!

 I do sometimes wonder where that boys sense of tact is...ah well  ! he is after all just Wolly.

But we'll give it the old school try just for you Big B....... 

Bernard, you are naughty too - where is your article about outrages wages increases of $ 7’000 for our MP’s ?

How can that not make instant topic on your site and how can it be justified in the current and upcoming economic and financial environment ?

 

Updated with trade and monetary policy policies.

Will try and do these policy round ups every day or so from now on

 

A farmer, or for that matter, a free man, voting for Labour, would be like sheep voting for abattoirs.

What about an imprisioned Farmer...?

I rang the ANZ,..... they said they had never heard of a free farmer..!...unless they missed one.

What about pointed sticks..?

What about making sense?

It's a python thing..Tribeless ..I guess you had to be there..!

Mr Goff, plesae don't mention this two word 'Fart Tax" I will miss you if you do..

Goff hit by a dozen eggs and a cow pat bomb at fed farmers....said it "was the best reception he'd had so far in three months"

 by your post Wolly...I see the chicken farmers are more keen to dirty their hands than the dairy boys...(just one pat)....their just all so corporate laadeedaa  now are they not....? 

Phil floored by cow pat bomb...think of the votes that'd be worth...

I wonder if Key will speak to the Railway Union workers in Dunedin....now that would be fun.

Our PM, or for that matter, a Nats man, talking to the union would be like sheep going for abattoirs.

or maybe he could pop back in on Pike River for a pep talk..!

or call in and ask Christchurch " what's shaking  baby...?" in that amiable Kiwi bloke way...he could share a pie with the fat man...as long as he get's first bite /......that is..!

It wants the Reserve Bank to be more active in foreign exchange markets in efforts to keep the New Zealand dollar down. It also says the Reserve Bank's policy targets agreement should explicitly consider the effects monetary policy has on exporters. 

Yeah, right.

How about a true shift in RB emphasis to exchange rate moves. China is upsetting the rest of the World with what Obama describes as "a rate 20%- 25% below where it should be"

Fortunately if we did that there would be little disturbance as we are just a flea on the elephant. I have no concern if farmers get an extra 25% gross income as they would not then be able to complain about ETS and CGT and they would be able to pay off a few loans as well. 

here here....! BB III.....Trouble is, by the time Bolly  digests what was said ...observing the Wait and See then Do Nothing policy I fear it may be a little late.

Phil Goff made a lot of sense at the FF meeting. The farmers may not like what he had to say but the rest of NZ probably does. He'll be making swing voters pay extra close attention.

 

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10766739

...............................................

 

Under Labour's policy, regional councils would be responsible for allocating water rights under a user-pays system, which the party said would help fund new irrigation schemes and the cleaning up of polluted waterways.

...

Mr Goff stood by the policies, saying taxpayers should not be saddled with costs while farmers profited.

"It is a user-pays approach, I make no apology for that," Mr Goff said.

"Whether it's an industrial plant or an agricultural plant, if there's a resource that's being used for your benefit and for your commercial viability and profit, then the first place we should look to pay for it is the person that's using it."

..........................................

The conservative 'right' have always touted user-pays as the natural scheme of things and the only way to go, yet they become remarkably unenthusiastic in cases where it applies to themselves.

LOL

Of course if farmers did not pay stupidly high prices for their land they could well afford any ETS levys

We did not pay stupidly high prices for our farm - we have owned it for more than a decade yet with dairy payout expected to have a 5 in front of it, in the 2012/2013 year, even we would struggle to remain profitable after paying for cost of a specific ETS on our farm, as proposed by Labour. We would be swapping paying income tax for ETS - so NZ wouldn't gain a cent from us.

CO,

Based on a pure business proposition, most farm prices have been over-valued for as long as most can remember. This has been aggravated by both the buyer pool (accumulation by existing holders and new young buyers) and by the ease of borrowing from banks.

Borrowing limits should always take account of the risk and the biggest risks in farming include payout and weather.  Most farmers either choose not to insure or cannot afford to.

Chances are you stretched yourself at the beginning.  You would be very fortunate  if you did not.

All I say is that with ETS built in, prices would be lower than otherwise. An adjustment has to be made to accommodate those changes and it all a matter of how long it takes.

Basel, By selling a farm in the north island we were able to buy considerably more acreage at a time before dairying really took off in Southland.  So we were not stretched at the beginning and we have only employed 50/50 sharemilkers.

ETS will not make a discernable difference to farm prices.  The single measure that will dictate prices in general on dairy farms in the future is payout. Mind you I sat in with a young farmer meeting his bankers the other day and he asked them a question about their lending limits as a % of total cost.  Their answer was 'well if it is secured over land then so long as it is cashflow positive the % is entirely flexible'!  Sounds like they haven't learnt much from the past. I actually agree that some  farmers have borrowed too much.  At the moment it is said to be around 10-15%.  So that means 85-90% of us will be ok.

Last time I spoke to my insurance broker dairy farmers cannot insure against weather.  FMG have a policy re weather - but it is only for sheep farmers. The dairy futures market is an option to try to guess and therefore 'insure' yourself against payout fluctuations, but it's not for everyone.

Corporate farmers and foreign buyers (not all of them are existing dairy farmers) have had a considerable influence on the prices of dairy land.

What's the bet you will see a very watered down Labour policy on ag once they are in government.  You only have to watch the videos to see Goff saying 'come and talk to me and I am ready to listen' to the farmer who will have to convert from arable to dairy and also to the questioner re irrigation. The irrigation policy seems to have been made in a vacumm of understanding. Therefore it will not produce the fiscal result that they say it will.

 

So they are not wanting to get caught in any backlash - leave that to the regional councils - what cowards!

Why should farmers in Canterbury pay for the cleanup of the Waikato river?  There is very little irrigation in the Waikato yet according to their policy there is no ring-fencing of the $ being spent in the area in which it is raised.  The $ raised should be going to the regional councils NOT the government.  But we all know that will not happen.  Consolidated fund here it comes!

Why should anyone other than the polluters pay for the cleanup?

' ' Why should farmers in Canterbury pay for the cleanup of the Waikato river? ' '

Mate how about SOUTH Canterbury? You should take a look at the area around the town of Twizel -- that is in SC. It is irrigated half to death and what a blimmin mess that is. Whoever said it was alright fhem to do the damage they have done there should have their goolies chopped off.

Whoever said it was alright fhem to do the damage they have done there should have their goolies chopped off.

it is much easier to blame the farmers than the rule makers.  ;-)

Chargeing for irrigation water has got to be the dumbest idea yet. The water is already expensive. The cost of setting up a farm for irrigation costs many $100ks. The financial benifits for an individual farmer has a long payback period but for his local community it is immediate from the companies that do the installation onwards to the local towns that benifit from the much increased economic activity.

Perhaps during the next drought irrigated farmers should stage a mass shut off of irrigators for a season. Allow production to plummet, have to slaughter capital stock, have crops fail. We farmers would be alright we'd just hunker down as we always do. But just watch the fallout for the local communities, dole queues lengthen and  food prices soar as well as fuel and other imported goods as the bottom fell out of the $NZD.

Irrigation and the ability to do so economically are hugely important to this countries economic well being. In this respect Nationals irrigation policy is right on the money.

Unfortunately the debate goes, irrigation-cows-pollution. This does not have to be so. Its a matter of getting a balance. I agree with the greens stance and one taken up recently by the Southland regional council to make dairy conversion a consentable activity. We need to mitigate enviromental damage but lets do it useing science and best practice. It can be done and most farmers are keenly aware of this. Now how are you townies getting on mitigateing your pollution footprints?

Townies pollute SS????  ;-)

No, I was only kidding CO. We all know its only dairy farmers that pollute. All those sewerage outlets, factory chimneys and landfil sites are totally the fault of dairy farmers.

Cripes...!

Goofy doesnt get it. He's all about welfare handouts. Money for nothing. Breeding a nation of lazy useless people, dependant on Labour staying in power for ever increasing handouts.

What did the USA & Germany do to help get out the the great depression? Build roads etc. How many jobs would the "Holiday highwway" create. Short term yes but long term benefits are there too. Also provided an NZ company picks up the work.