Meat Board Bill

As I rise to speak for my second contribution to the bill restructuring the Meat Board, I want to start off by saying “Thank you” from all parties to the Primary Production Committee members, who did a fine job on this legislation. The bill had cross-party support, and I acknowledge the work put in by my colleagues Doug Woolerton and Clayton Cosgrove—who, I know, has been a long-time member of that committee—and the work done by the officials and other members of that committee.

I notice with some interest that only the Green Party hung out to the bitter end on the issue of Māori and women being included as of right when the select committee recommended that they should not be. That says it all, does it not? I wonder—and perhaps some of the Māori members on the other side of the Chamber will know this figure—what percentage of the meat and wool industry Māori and Māori incorporations now actually make up. I suggest that it would be substantial, and potentially as much as a third of the industry. I know that there is a high capability amongst the leadership there, and if those leaders want to be on the board, they will be on the board. I suggest they put their names forward to make sure that they are represented.

As has already been stated, the bill sets up structures and regimes principally to manage the quota, which is very, very important to this industry. We cannot get access to a large percentage of the international markets we export to without a proper, robust, and well-negotiated quota. I see that the Minister has come back to the chair, and I acknowledge the work he does on behalf of farmers in that regard. That said, I have to say that that is where the philosophical difference lies between us and them—that is, the Labour minority Government, with its new partner the Green Party—for the forthcoming election. That is clearly a recipe for disaster for them. The Green Party does not believe in free trade at all, and it certainly does not believe in trading meat products in countries like the US, which is the largest market, and in a number of other markets where we do that business.

So in the campaign that is coming around the corner, I look forward to the Minister justifying to New Zealand not only how he is going to win against the 19 other Cabinet Ministers he is carrying on his back—perhaps 25 or so with all the hangers-on outside Cabinet—but also having to carry Ian Ewen-Street, Nandor Tanczos, and one or two others. There is Keith Locke, that champion of free trade around the world! The Minister will have to carry him on his back, as well. It just cannot be done. He might as well give up while he is ahead, because it is not going to happen. The public of New Zealand know it is not going to happen, and they will not vote for it to happen. They will vote for a National Government, and that will be the end of that.

National supports the agricultural industry. It always has, and it always will—110 percent. We are not fair-weather friends like those on the other side of the Chamber. We do not come in and out like them, riding in on a high tide and going out when the tide goes out. We are 110 percent committed and would never make a comment like that of a former Labour Prime Minister, who said that this industry was “a sunset industry”, and the sooner all the land in the South Island became a national park the better. That is, of course, the approach of this current Government. Something like 40 percent of the South Island land mass is currently in some kind of conservation estate—40 percent! This Government now has a proposal on the books to take 600,000 stock units—that is something like 100 productive meat and wool farms—out of production over the next few years.

What do members make of that? Here we are today debating a restructuring bill that will allow those industries, the backbone of New Zealand, to get on and produce the very high returns that this Government and the Minister of Finance are benefiting from. At the same time the Government is doing that, it has the Minister of Conservation running around the country trying to take 100 productive meat and wool farms out of production. Where is the logic in that? It is beyond me; maybe the Minister will explain it to me. For that reason, I say that that Government will not be back.

This meat industry bill has a number of very important roles to play. First of all, as I said, it is being set up to manage the quota. Second, it is being set up to make sure that there is a proper conduit for a levy to be paid for things like research and development. They are so important to this industry, and it is good that the select committee was able to come to that conclusion. When the Minister makes appointments to the board, which he will, he should forget about the old Labour lackeys, because they are history. He should not even consider them for a moment.

New Zealand First will obviously be supporting this Meat Board Bill. A very well-known motivational speaker from America said: “Its time has come.”, and I think the time has come for the Meat Board to be restructured. Of course, this will be music to the ears of the farmers in the Wairarapa, and common sense will prevail. That is not like the National Party, which obviously left the farmers alone in the 1990s and had to reconstruct its efforts to bring them back.

The commentary on the bill, under “Introduction”, states: “The bill restructures the New Zealand Meat Board and makes management of meat export quota the Board’s primary focus. The bill provides for the meat industry to be the recipient of the benefits of the quota markets.” Just quickly, as we do not have a lot of time, I want to cover one or two very important issues. In relation to the definition of reserves, the Primary Production Committee—on which my colleague Doug Woolerton is very well-known as a farmer, unlike others on that committee who are “Queen Street farmers”; I must mention the name of Mr Gerald Eckhoff, too, and also at this stage Mr Connell—recommends an amendment. It is expressed by clause 4(1): “reserves means all the net assets of the Board other than—(a) fees collected under section 55 to meet the costs of exporter registration: and (b) fees collected under section 36 to meet the costs of quota management, except to the extent that they are collected to fund past payments made by the Board that—(i) were made in relation to quota management; and (ii) were not themselves funded from quota fees set under section 36.”

We note that Federated Farmers of New Zealand opposes the prioritising of reserves as a backup to the quota system, or the use of reserves to settle liabilities arising from litigation relating to quota allocation. All I want to say to Federated Farmers is that I believe that is a safeguard for the future of the industry.

Of clause 13, “Governance” of the board, the committee, in relation to the Minister, appointments, and size of the board, said it did not recommend any changes in the requirements for ministerial appointments that resulted in a board of 10 or 11 people. Some submitters argued that the size of the board was excessive, and some that ministerial appointments were inappropriate. In speaking to Mr Connell this morning, I went along with his view in respect of ministerial appointments, but after reading the bill, I think it is appropriate that directors are appointed. However, there are some key points, which I think the Minister brought up: experience, expertise, and not being a bureaucratic handbrake that will pull us up. I am happy as long as there is no bureaucratic handbrake that prevents the industry from prospering in the future.

The other aspect of that is the representation provision of clause 13(4), which I was very interested in. With the exception of the Green member, we did not see the need for clause 13(4), which required the Minister to give consideration to the representation of women and Māori farmers’ interests on the board when making ministerial appointments. Can I say to the Minister and to this Committee that New Zealand First does not support separate representation, but I do support Māori farmers. I want the Minister not to ignore the contribution that Māori make to this industry. I want him to make it quite clear that Māori farmers and incorporation blocks out there make up a large part of the income of this industry.

I will just mention one or two figures. The value of Māori agricultural output is estimated to be approximately $700 million. It cannot be ignored; it represents almost 10 percent of New Zealand’s total agricultural income. Only 15 percent of the population provides $700 million in agricultural income. Considering that their occupation of farming land is very small, I want to applaud those Māori farmers and incorporations for the direction they have taken.

I listened to the National Party going on about how this should not happen, and also about the representation of women. Do my colleagues know that today women play a very important role in administering farming operations?

I note that this is a wide-ranging debate, but one of the particular aspects of this bill that concerns me and, I think, many of the farming community—and, hopefully, there will be a few listening in to the debate this morning—is the question of inappropriate behaviour by the meat industry. The industry has just gone through a rather tumultuous period, where one company, PPCS, was vying to take over another very important meat company in the North Island by the name of Richmond. Hopefully, in the interests of the wider industry, that issue will be settled. But my concern is the huge influence that major companies will now have throughout the meat industry. For example, PPCS will be the biggest meat company in New Zealand, and probably one of the biggest companies in New Zealand by half. It will be twice the size of any other company.

When I look at the offences, penalties, and proceedings provided for in clauses 66 to 69, I really cannot see anywhere that a significant penalty can be imposed on companies that choose to behave in an inappropriate way. I note that the bill provides for penalties of up to $200,000 for an individual committing an export-related offence, and can suspend for a year that individual’s ability to export meat products. But really the issue is this: if the company is a cooperative, who is hurt? Is it the board? It is certainly not the Meat Board, nor is it the board of that particular company. It is the farmers who own that company who pay the price for the inappropriate behaviour of a director. We have seen comments made by a judge of the High Court, when talking about gross commercial misconduct, about who actually has the ability to sanction directors. I made mention at the Primary Production Committee that I felt that the meat industry and the Meat Board should have some powers to bring those companies into line if, because of their size, their influence and inappropriate behaviour become pervasive. That is something that is not in the bill—and maybe that is right and maybe that is wrong—but I just want to flag that point. I think it is inappropriate that, given the history of the last 5 years and what, I repeat, has been described as gross commercial misconduct, we seem not to be addressing that particular issue, either through this bill or perhaps through one other bill that might appropriately go to the Commerce Committee in the future. That may happen, and I want to flag that.

Another issue that I think is rather important is the use of the very substantial reserves—over $100 million, as I understand it. I think it is entirely appropriate that the reserves should be for a specified use. There is little doubt that in this world of ours today bioterrorism is a huge threat, especially to our agricultural industry. We must have some form of reserves, and probably very substantial reserves, to meet that threat should it ever arise. God forbid that it ever should arise, but if it does, there needs to be reserves to meet that threat. But those reserves should not be frittered away to settle court cases that the board may have to front up to in the future. The money should remain for a specified use, and nothing else. I am quite sure that the meat farmers of this country want those reserves left for a specified purpose. If the board makes inappropriate or illegal decisions, as determined by a court in the future, then the board members should be responsible, and should have some sort of insurance policy, if possible, to cover those costs. But they should not come from the reserves that have been built up over the years.

We all know that with the increasing numbers of tourists coming to this country—and, indeed, we are encouraging tourism—the likelihood of organisms such as foot-and-mouth disease coming to this country increases. Indeed, the back-up and the financial reserves are an integral and hugely important part of our ensuring that should something of that nature arise in this country, we have the capacity and financial resource to fight that threat.

Can I start by congratulating my friend Edwin Perry on the quality of his speech. Notwithstanding the fact that I think he got it wrong regarding the Government’s patsy appointments to the Meat Board, it is good to hear a member get up and speak with passion about his rural constituents, and I commend him for that.

A lot of talk has taken place in this debate regarding Mr Ardern not being on the Primary Production Committee. The simple answer to that is that National has so much depth in terms of its rural portfolios and rural—what is the word—

💬 Hon Member: Team.

—I thank the member—team—

💬 Shane Ardern: The farmers.

—the farmers—that we were lining up to come down here and take a call. For that same reason, Mr Carter is not here today; we just muscled him out of the way and said: “David, it’s not necessary, because we want to go down and take a call.” There are real farmers on this side of the Chamber and on this team. In fact, we have many farmers—[Interruption] I am not certain what one has to be to be a real farmer according to the Government’s definition, but I know that we have Mr Ardern, Mr Carter, Lockwood Smith, and myself. I own 700 acres of prime Canterbury real estate. What does one have to do to be a farmer in this place? I do not know, but I can tell members that we have plenty of them, and we all were keen to come down and take a call. Madam Chair, you could have knocked me down with a purple tea cosy when Mr Parker came down here and took a call.

💬 Government Member: It was a great call.

It was good that he did, and I commend him for it, but he suggested that he represents rural constituents in Otago. When I go to Otago and ask who the local member of Parliament is the answer is: “Who? Who? Oh, you mean the ‘Parker Pimpernel’! We search for him here, we search for him there, and we can’t find him anywhere. He is never here, so I suppose he is in Wellington.”

I draw my attention back to this bill, to look at clause 3, “Purpose”. There are a couple of things that do disturb me, notwithstanding the fact that I think, generally, the thrust of this legislation is right. The component under the “Introduction” heading in the commentary that I want to dwell on disturbs me a little bit. It states: “The bill requires that the Board manage reserves for: action in relation to a major industry crisis, preserving the integrity of quota management systems, funding specific industry-good activities.” I pose this question to members: do we really want to legislate for this type of thing? Surely, that is a board function. Any worthwhile board would do that as a matter of course. I believe that is a worrying trend. We tend to legislate for anything. It is not just this Government; there has been a propensity over the last 20 years to put in place legislation if anything goes wrong. Someone does something silly somewhere, so we legislate. I hope members will be cognisant of that point.

The other issue that concerns me is under the heading “Definition of ‘reserves’—clause 4” in the commentary: “We note that Federated Farmers of New Zealand opposes the prioritising of reserves as a back up to the quota system or the use of reserves to settle liabilities arising from any litigation relating to quota allocation.” I have to say I share their concern. I simply say that, surely, no board can operate with a slush fund. A board must manage in an accountable fashion and in accord with its fiduciary accountabilities. Having deep pockets, and pockets that do not belong to it, will send the wrong messages about board responsibility. I take heed of Federated Farmers’ concerns, and I believe that this is something the select committee should have looked at in more detail.

The one area I want to take some time to talk about is the composition of the board. Certainly, we need a board that is skilled, that has the right people on it, and that has the right expertise. I do not have an argument with that. But, surely, having selected a board with the right skills, we do not then need to have two patsy members—Government appointments—put on that board. Their fingerprints will be all over that board, and will constrain its ability to manage according to its charter. That, I believe, is something we should look at in some detail.

I should respond to that last point, because it was the first point made by any of the members opposite who have spoken on the bill that really had anything to do with the policies covered by it. I explain to him—it was explained to the members of the Primary Production Committee, and that is why they did not propose any change—that the reason for having two ministerial appointees on the Meat Board to manage the quota is that the quota belongs to New Zealand. It does not belong to the board; it belongs to New Zealand. It has to be managed in the interests of New Zealand and with a wider view of New Zealand’s interests than just the interests of this particular industry. I have had experience before of a board that was not acting in a prudent way with all the requirements of quota administration. Those board members endangered the viability of other quota held by New Zealand for the benefit of another industry. So it is essential that there be someone on the board—in fact, two people are better than one, because we all know that one board member can become isolated—to keep an eye on the wider New Zealand interest.

Because most of the elected board members are mainly involved with delivering and managing industry-good functions that have nothing to do with quota, there is absolutely no reason to believe that the board would have had within its members people with the specialist expertise in international trade negotiations and quota management that is needed to do that specialised job. That is why those people are there. They are there for a particular purpose, and I am sure that the Minister, after consulting with the chairman of the board and, through him, the elected members of the board, will appoint suitable people.

Apart from that, most of the discussion was a political rave, and one has to wonder whether, in the end, it is better to have a wide-ranging debate on these matters or to try to get members to concentrate on the subjects in the bill. The ACT member Gerard Eckhoff demonstrated some wide-ranging hostility to cooperatives. He attacked Richmond and PPCS. He does not like cooperatives. He thinks they are a step on the road to the salt mines of Siberia. We have seen that attitude in the right-wing parties in Parliament in the past. At the same time, he wants to tell the board exactly what it should do with the reserves it manages. Those are not his reserves; they are the reserves of the producers of New Zealand. That member wants to tell the board exactly what it should do. He thinks he should define what it spends the reserves on. I am sorry to say he was supported by Brian Connell, the member for Rakaia. I thought that was a bit surprising. It shows how impressionable some of the novice right-wingers are.

This is a good bill. It provides for the slimmed-down, more-focused producer organisation that producers have been calling for. It will be more accountable in the way that it raises funds and spends them on industry-good activities, and it will be involved in the administration of the quota, in the interests of the industry. I appreciate, particularly, the words of support from Edwin Perry, a New Zealand First member. Indeed, apart from a little action that occurred off the ball in the debate, I thank all the members of the select committee and all the parties that participated, because they have demonstrated bipartisan concentration on the issues of the bill, which speaks well for Parliament on issues concerning our primary industry.

I want to take a quick call in rebuttal of the retiring member for Aoraki. There are some clear arguments as to why what the Minister of Agriculture said just does not make sense. He said that the composition of the board needs the two Government members because of their expertise. That flies in the face of what other boards do all across New Zealand—in fact, of global practice. What he is saying, if members think about it, is that if a board has a legal requirement on it, it must have a lawyer, and if it has a marketing requirement on it, it must have a marketer. What absolute nonsense! Any board worth its salt goes out and gets that expertise, consults it, takes it into account, then comes back and uses it as part of the decision-making process. But to have two patsy members on the board, with their fingers all over the decision-making process, just to keep the Minister informed does not make sense.

The Minister in the chair, Jim Sutton, knows that. Federated Farmers raised the point, and it was raised right around the country. When the restructuring initiative was taken around the country, every farmer who was thinking about the issue stood up and said that he or she wanted the best individuals possible on the board, not patsy members appointed by this Government. This is a Government that does not really understand farming practice, so how dare it say what farmers will have. It just does not make sense. This is the same Government that insisted, in the select committee process, that we have Māori representatives and female representatives on the board, regardless of their merit. My message to the Minister is simply that people should be selected on merit, and we should let the board get on with doing its job.

I too would like to respond to the comments made by Jim Sutton, a man described by many as one who will never make the top 10 but who will have no trouble getting into the bottom three of anything. The Minister seems not to have read the commentary to his own bill when he criticises my attitude to the use of the reserves. I can do no better than to quote from the bill’s commentary: “We note”—that is, the select committee—“that Federated Farmers of New Zealand opposes the prioritising of reserves as a back up to the quota system or the use of reserves to settle liabilities arising from any litigation relating to quota allocation.” That is exactly what I have said, and I make no apology, with the support of the farmer-owned organisation called Federated Farmers, and the Minister stands in the Chamber and criticises me for having done so. Well, I make no apology for that, and the farmers of this community and Federated Farmers can make their own judgment call on the contribution of the Minister.

The other aspect that he criticises me on is that I am flagging the size and the ability of a very, very large meat company into the future called PPCS in combination with Richmond, and their ability to influence, perhaps, the quota management of the meat industry. It will have two members sitting on the quota allocation committee. The full board, of course, makes the judgment call but there will be two members of the New Zealand Meat Industry Association sitting on that board. Their influence will be huge because they are so big. Now, I do not, and never have, criticised the sense of two big companies, PPCS and Richmond, getting together in terms of the geographical distribution of meat, the timing of the meat kill, etc. It makes enormous common sense, but I will say, as I have done publicly in the past, and I do again today, that it is totally wrong for a company to abuse its size, and, indeed, the goodwill of its shareholders. Indeed the company has been criticised by a High Court judge for gross commercial misconduct. That is something that we cannot take pride in, in this country. It needs to be spoken about so that these companies know that the representatives—and I count myself amongst them—of the farming community have the backbone to stand in Parliament and criticise if they believe it is necessary.

I say to Mr Sutton that if that means I end up in the political salt-mines, I do not care. I am perfectly happy to go to a political salt-mine but I will not compromise my integrity, and what I believe, for the sake of political expediency, although quite clearly the Minister seems to think that that is a necessary part of politics in this country. I say to the Minister that I do not think it is, and that is why I have come to this place to try to change that, in my own way, if it is at all possible. It seems as though the Minister does not agree with me.

So these are issues that I think are terribly important. I believe that the farming community thinks they are terribly important as well. But there is also one issue that—instead of criticising the Minister on this time—I am delighted to say the Government does understand the significance of—trade. I think the Minister does understand, in a perverse sense, if one likes, given his dedication to the meat industry, that New Zealand will progress only through trade—it is absolutely essential. The Greens, of course, and this has been alluded to here earlier, do not agree that trade is vital to this country. Well the Minister for Trade Negotiations does do a lot of calling around the world, along with members of the meat industry, the Meat Board—the pastoral board, the new Meat and Wool New Zealand. That is an essential part of government, and I understand that. The question of whether in fact the Government owns the quota, I think, is a moot point, but as I said earlier, it is one that I am certainly not going to die in the ditch on, as long as the country and the Minister understand that the real benefit comes from an industry like this one.

The meat industry has the ability to go out there, service its clients, and service the world, without the constraints, the controls, and the cost structures that are constantly being imposed on us by this Government. But there is no question that I think some members of the Government do understand the absolute necessity to get out there and sell our product and open access to New Zealand.

The CHAIRPERSON (Ann Hartley): Members, further to the leave granted by the Committee for one wide-ranging debate, is it the wish of the Committee that I put the question as one?

💬 John Carter: Yes.

The CHAIRPERSON (Ann Hartley): It is.

Clauses 1 to 89, and schedules agreed to.

Bill reported without amendment.

Third Reading