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.
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.
Goff was also asked about Labour's irrigation policy: Here is Goff being asked at the Federated Farmers meeting about Labour's irrigation policy:
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.
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.
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.
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."
Labour says it will continue to pursue free trade initiatives, with a focus on the Trans Pacific Partnership and South America.
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.
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)