Meat Board Restructuring Bill

I move, That the Meat Board Restructuring Bill be now read a second time. The bill was introduced on 2 December 2003, it had its first reading on 17 February 2004, and has been considered by the Primary Production Committee. The bill provides for the Meat Board to focus in future on its critical meat export quota management role. The bill removes the current board’s levying powers. Industry-good activities in the meat industry can now be undertaken by a non-statutory industry organisation funded under the Commodity Levies Act. The meat and wool industries have formed a new joint organisation for this purpose.

The bill has new provisions governing the management of the Meat Board’s reserve funds. The board currently holds around $100 million in farmer reserves. The bill provides for the new board to manage the board’s reserves and other assets in the interests of livestock farmers, including managing the reserves for action in relation to any major industry crisis, preserving the integrity of the quota management systems, and funding specific industry-good activities.

Some submissions to the committee opposed the proposal to maintain reserves to preserve the integrity of quota management systems, on the grounds that the reserves could become a potential litigation target, and that quota holders, as the direct beneficiaries of quota, should meet such costs. I support the committee’s recommendation to insert a clear definition of reserves in the bill, and its recommendations for clarification of the board’s powers to recover the costs of quota management and to replenish any reserves used to meet quota management costs.

The bill provides for two of the 10 or 11 directors of the Meat Board to be appointed by the Minister. Some submissions to the committee considered a board of 10 to 11 directors to be excessive, and some opposed having two ministerial appointees to the board. The committee has not recommended any change to this requirement. It agreed with the original intent that having two ministerial appointees on the board will help to ensure that the board has around its board table directors with in-depth expertise in the international meat trade, quota management, and international trade relations, and would ensure that the wider national interest was considered when quota management decisions are being made.

As the remaining directors will come from the new meat and wool industry-good organisation, I consider that as directors of that organisation, the two ministerial appointees on the Meat Board are necessary to ensure that proper attention is given to its key function of quota management.

The size of the board reflects the industry’s desire for most, or all, of the industry-good organisation directors to also be directors of the Meat Board. The bill retains and updates the Meat Board’s export quota management functions. It provides that the Crown owns the rights to secure the economic benefits deriving from quota markets, and that the meat industry is the recipient of the economic benefits deriving from quota markets. I support the committee’s recommendation that it be made clearer in the bill that the economic benefits deriving from quota markets are assigned for the benefit of the meat industry.

The Meat Board’s quota management functions, including any costs associated with litigation arising out of events postdating the commencement of this Act, will be funded on a cost-recovery basis by export quota holders and applicants for quota. I agree with the committee’s recommendation to clarify that this provision does not authorise the board to collect fees relating to costs arising from events that took place prior to the commencement of this Act, except for costs that could have been recovered under the Meat Board Act.

The bill continues to require a part of meat export quotas to be available for allocation to new entrants as provided for in the Meat Board Act. The new entrants provisions make it easier for new entrants to get access to quota and are intended to encourage innovation in the industry. I accept the committee’s recommendation that all applicants for a quota allocation under the new entrant provision, even if unsuccessful, should be able to be charged application fees. Every application would impose some processing costs on the board.

The bill provides for the Crown to audit aspects of the board’s quota management systems. These audits will assess the nature of the board’s compliance enforcement systems to provide a high level of assurance that such systems comply with New Zealand’s international obligations relating to meat export quota management. The committee has recommended amendments to these quota compliance audit provisions in the bill in order to distinguish more clearly between scheduled and unscheduled audits. I support the committee’s recommendations.

This bill represents an important step in the ongoing evolution of the New Zealand meat industry. I would like to thank the members of the Primary Production Committee for their consideration of the bill and for their report tabled on 27 May 2004. I commend this bill to the House.

It is with great pleasure that I rise to speak in favour of the proposed bill. When we listened to the Minister give his speech—this is the Minister, of course, who in Opposition campaigned vigorously for years against this kind of proposal—we can understand what happens to a person when he has to carry 19 socialists on his back as the only Minister carrying the flag for primary producers in New Zealand. The National Party supports agriculture 110 percent—not the 51 percent, or sometimes 49.5 percent, that that Minister can scratch up occasionally. We are 110 percent behind the agricultural industries of this country.

This bill is a very good move forward for a number of reasons. One is that it identifies the synergies that exist between both the former Wool Board and Meat New Zealand. Over 80.3 percent of farmers on stock numbers voted in favour of this move, so it is an industry-driven move, supported, reluctantly, by a tired Minister who had to work and break arms in his own Cabinet to get it through.

Let me just give members an example of some of the things that the very well chaired, National-led select committee had to alter in this bill.

💬 Brian Connell: Who was the chairperson?

The Hon David Carter, the agriculture spokesperson, chaired the select committee, and chaired it very well.

Firstly, an allocation for both women and Māori was going to be inserted into board management. I recognise that women play a leading role in this industry, and I also recognise that Māori are quite a large minority in the meat and wool industries of New Zealand, but to suggest that they should be put on the board just by right because of some politically correct philosophy just shows us where this Government would take us if it were given a chance.

The second major issue that was discussed at length in the select committee—even though I am not a member of the committee, I have read the submissions—was quota management, which is the essential part of this legislation. Here lies the major philosophical difference between that side of the House—that Labour minority Government—and those on this side of the House, who understand the farming industry. I acknowledge the officials here. I recognise some of them from days gone by when I was on that committee, and acknowledge the fine work that they must have done in cajoling this Government into not going down the track it would have gone down—that is, quota ownership and quota management.

It is true that quota is negotiated Minister-to-Minister, Government-to-Government, and State-to-State internationally at the direction of the industries generally, and as a result of the industries identifying a potential market. That is how it works. But here is where National differs from Labour. Labour believes that once the Minister has negotiated the quota, it owns it. The socialists will nationalise it, it is theirs, and they should have benefits from that over and above what they are entitled to. That is where National differs. National believes strongly that the industry the Government negotiated on behalf of owns the quota. For that reason, and because of the very good work of the Primary Production Committee, the following words have been inserted in clause 22, in Part 3: “The Crown owns the rights to secure the economic benefits deriving from quota markets, and those benefits are assigned for the benefit of the meat industry …”. It is not for the benefit of the socialist Government’s tax or for the socialist Government to get its sticky fingers into. It is for the benefit of the industry.

I say to those members on the select committee, who are supported by the very good officials: “Well done for getting that put in!” It was clear to me, and it would be clear to anybody who took more than 5 minutes to read the bill, where the socialists were heading with this legislation. They were going to nationalise the quotas of the meat and wool industries, and there would be an opening for them to do that. Once we changed the legal structure of the board for which those quotas were negotiated, we would open up an opportunity for people to say: “Hey, you have changed the deal, so all bets are off and we’re going to change the structure of this quota.” The socialists would love that. We can just see it. Look at them, baying over there! They could get their sticky fingers into this. They think it would be a great thing if they were able to take on that quota.

The industry-good activities, which the Minister touched on in his speech, are also hugely important. Here is the interesting point, which this Government has not understood and never will understand. The socialists are busy out there, looking for the new Nokia, or some other magical star that will be coming over the horizon. What they do not understand is that we already have it in New Zealand; it is already here. It is called our primary industries. The growth rates in the economy are marginally successful at about 3 percent, compared with about 2.7 percent OECD average over the last 5 or 6 years. Where have they come from? Primary industry growth rates over the last 10 years have been about 4.5 percent, so not only does the agricultural sector underpin the New Zealand economy, it is the one that is leading the New Zealand economy. It is the Nokia of New Zealand. So forget about looking for that magical star! We already have it—it is called our agricultural sector, and we should recognise and understand it. Did we see anything in the Budget about it? Not on your Nelly! We saw a $7 billion surplus on the back of this industry, but did we see any recognition of it? Never have we seen any recognition, and never will we see any recognition of this industry from that lot.

Any farmers out there who are listening—led by the very capable chairman of the New Zealand Meat Board, Jeff Grant, who knows a bit about how things happen in this House—will know that what I am saying is true. They are lining up in droves against this Government, and they will continue to do so. This combined industry earned $6 billion in export earnings for this country last year. Name an industry on the horizon in the Jim Anderton photo opportunity, travel around the country, regional development programme—

💬 John Carter: Or in Auckland.

Or in Auckland. This is about five times the size of the export earnings from Auckland, but is there any recognition of it? Not on your Nelly! We will never see that, not from this Government. Not on a cold day in hell would we see that.

On 30 October 2003 the Minister said: “Yes, we will accept the direction that this industry is wanting to go in, and we will accept, under the Commodity Levies Act of 1990, that a levy could and should be charged for industry good.” I come back to that point in my closing notes. I record in this House today that the future of this country will be driven on the back of value-added products coming out of primary industry, such as nutraceuticals, pharmaceuticals, the high-tech fibres that will come out of the wool industry, and products that come out of wool, like lanolin, that we have never even heard of in terms of what they can be used for. This will come as a result of a robust science and research and development programme, which this industry will invest in as it goes forward.

Of course, without some kind of levy mechanism, not only to negotiate the quota access and maintain it, but also for investment in research and development, those things would not be possible. I say to the Minister: “Good on you for allowing that to happen!”, because without it the industry will not survive in the future.

I rise as a member of the Primary Production Committee to support the Meat Board Restructuring Bill. I say, in a charitable way, that that was not a bad speech from the Opposition member. I am sure that Mr Woolerton, who is also a member of the Primary Production Committee, would back me in saying that after the last election we had hoped that Shane Ardern would end up chairing that committee. A bill like this is close to that member’s heart. He is a real farmer—one of the few left in the National Party.

💬 Darren Hughes: Phil Heatley did the numbers.

With all his fingers and toes, Phil Heatley did the numbers. Unlike the present chairman, who is a Colombo Street farmer out of Christchurch, we know that Shane Ardern is a real farmer and a good bloke. He has a lot of support around the place as a bloke—a real farmer. He is not even on the committee, but has been sent down to the House for this second reading to put the boot into the bill, because David Carter refuses to take a call. I rise to support this bill.

💬 Hon Harry Duynhoven: He wasn’t even on the committee.

Yes, he is not even on the committee. A good bloke like Mr Ardern, a good, substantial farmer in our community, is not even on the committee.

I rise to support this bill. This bill follows what occurred in the wool industry and the dairy industry. The farming communities, the growers, held a referendum and came to the Government. This bill meets our criterion, which is that if there is substantial, overwhelming grower support for the measure, then we will move to deregulate. That is unlike the previous Government, which had one crack at deregulation with the fruit legislation. Fruitgrowers wanted a certain scheme of arrangement, and the then Minister, Mr Luxton, corporatised the fruit industry and blew it apart, and now the industry has collapsed around our feet, as we have seen in the last couple of years. This bill does what the industry itself wants.

The other interesting thing about this bill is that it allows the Meat Board to retain its reserves of around $100 million for the purposes of assisting the industry. I think that is quite substantial, and is a very good safeguard. But of course we know—and I will refer to a quote from the chairman of the Primary Production Committee, Mr David Carter, who will not take a call but stuck poor old Shane Ardern out on a pole today. David Carter said that if he had his way, those hundred-million-dollar reserves would be gone—they would be sold. He stated, in the Rural News of 8 June 2004:

“We indicated before the last election that we would sell, for instance, Landcorp if we got into power, and I don’t see that changing.” It means that a National Government would sell assets. It would do away with the Meat Board—flog the lot. As with the apple industry, the poor old grower, the hard-working grower with the intellectual property and all those assets, would be left out in the cold.

I pity Shane Ardern, in a lot of ways. I reckon, from the speech he made, that he knows that the Primary Production Committee is the most depoliticised committee in this Parliament. Poor old Shane Ardern has been stuck out on a pole this morning, on his own. He is the only real farmer on the Opposition side of the House. He was told to ramp up the debate, and politicise it. What a shame that was. I think Shane Ardern should have said to the chairman of that committee there was no way he would do that, and the chairman should do his own dirty work. But the chairman has refused to come to the House to take a call.

As I said, this bill will assist the industry. It will give some synergies and some cost efficiencies. It has the support of growers, as demonstrated by a substantial referendum in August last year. But let me also point this out: the committee made a unanimous report on the bill. Again, I say this is not a political issue. I think that even our ACT colleague, our New Zealand First colleague, and our other colleagues on the committee support this legislation as a good way to go forward for the meat industry. I just say to the Opposition members that they should look at their own legacy from the time they were in Government, in terms of what they did in the agricultural sector. The only crack those members had at a restructuring was in the fruit industry. Shane Ardern will not stand and agree with me now, but I know even he will agree with me in the lobbies that National blew that industry apart. The growers came to us on wool and on dairying, and we have ticked those requests off. Now they have come to us on meat, and we can tick that one off. We have done what the industry wanted, in putting a substantial bill and a substantial entity together. More especially, we are ensuring that the $100 million of reserves are kept out of the hands of the Opposition members and out of the hands of this Parliament, to ensure that the industry is protected and the money is used to benefit it.

I tell the Opposition members to give it all a break, to support the growers and the industry, and not to politicise this legislation, because all that that will do is to send the wrong message to the industry. The industry knows that we have backed it. The industry knows the real speech that Shane Ardern really wanted to make this morning but was not allowed to, because Mr Heatley over there on the Opposition benches put the axe into him, so that he could not chair the Primary Production Committee. I thank Mr Ardern for the speech that he could not make. The speech that he did not make was a very good speech, and I agree with the speech that he could not make.

Let us just get on with it. This is a good bill. It is non-partisan, it supports the industry, and it is good for this country.

New Zealand First, likewise, supports this bill, and as previous speakers have said it has cross-party support—as many things do in agriculture, because we have a habit of being very practical people—and the solutions are sensible ones. Mr Speaker, you would know, as I know—and I apologise for bringing you into the debate, but I do so purposely—that we are watchers of the political scene. That is as far as you go, Mr Speaker. But it is one of the beautiful ironies of politics, and watching from the centre of the political spectrum it is interesting to see, that there is something that is a fact in New Zealand. Even in my earlier days of farming, I recognised that the National Party, the Tories, or the parties of the right—call them what one will—will talk about agriculture, and say how important it is and that it needs to be kept strong in order to keep the country strong. Thereafter, National biffs the agricultural sector around, kicks it in the guts, and uses it mercilessly. Unfortunately for National, along came a Labour-led Government in due course, and the farmers prospered. Now that is a delicious irony, because the farmers do not respect that fact and, by and large, do not give Labour credit for that. National, of course, answers by saying that it set the scene and Labour has reaped the reward. Well, I wish I had somebody to set the scene, so I could reap the reward.

New Zealand First supports the passage of this bill. We have it as a matter of policy that if an industry conducts a vote and 75 percent of the participants in that industry agree to change, we will accept and support that change. That is what has happened in this industry, so we very definitely support it, and support it enthusiastically. It is true that the restructuring of the farming sector, which has led to Meat and Wool New Zealand Limited and to the retention of the board that we are discussing now, was started by National. It will have escaped no one’s notice to see that a very good business person, or, in fact, two very good business people who were previously members of this House, have gone out and taken full advantage—and good luck to them—of the restructuring of the Dairy Board by starting up their own dairy factory, something that previously they could not do. I do not criticise that, at all. But I think it is worthy of note that they were able to do that, and that they have done so because of the restructuring they initiated.

It is also worth noting that some of the restructuring in the early days, as Mr Cosgrove has rightly said, and as Mr Shane Ardern will admit privately when we are talking as farmers over the fence or somewhere else, was less than successful, shall we say, initially. It has come right in the case of the fruit industry, but that industry is largely privatised. Interestingly enough, the kiwifruit industry, which was at the forefront of the need for change, so it was said, did not restructure along the private model but on the cooperative model. The dairy restructuring retained to a large degree the cooperative model. Both those industries are working well. The cooperative model was not followed in the fruit industry, where the restructuring did not work as well as in the kiwifruit and dairy industries.

New Zealand First sees no need for a period of destabilisation following change, and sees no need for farmers to be affected detrimentally. New Zealand First sees no need at all for there to be disruption in an industry when change takes place. In this case there is to be none. There are significant advantages in what has happened, and New Zealand First enthusiastically supports the retention of a board to specifically make sure that our quotas, which give us access into foreign countries, are looked after, nurtured, and monitored. Those quotas are our access into very, very, lucrative markets, and it would be nice if we could have all our products go through them, but that is not to be. The quotas are important. They add the icing on the cake for this very important industry, an industry that is at the present time enjoying quite substantial benefits. I made a small note that Mr Shane Ardern did not mention that the returns for meat at the present time are at, or very near, record levels. I do not blame Mr Ardern for failing to mention that. Mr Ardern was around when Rob Muldoon was around, and Rob Muldoon had a saying, which was: “If you can’t kick ‘em, don’t hug ‘em.” So Shane Ardern would not mention the fact that—

💬 Phil Heatley: He went to school with Rob Muldoon!

R DOUG WOOLERTON: Yes, but Rob Muldoon is somewhere far colder than this House, and he is somewhere where I am not yet, and where I am not likely to be for a number of years. God bless his soul. But it is true that I was wandering amongst the dinosaurs at one time.

New Zealand First is pleased to see the retention of this board, which will nurture the quotas that are so important to New Zealand’s growth. The one thing that Mr Ardern did point out quite correctly was that all the efforts in this country to take us down a path—through some knowledge wave conventions or conferences—leading to some new technology roads have added small amounts to our economy, and small amounts to our exports. But it is our agricultural exports, our fishing exports, and our land-based exports that are still the guts of this economy. While that may not be recognised in some large cities around the country, it is recognised by anybody who knows anything at all about the New Zealand economy.

I cannot sit down without saying that all these industries rely on something that is unquestionably under the control of the Minister of Finance—in many cases, people say it is not, but in New Zealand First we believe it is—and that is a low exchange rate for the dollar relative to the currency of our trading partners. New Zealand First believes that the Government should remain active in that area. We encourage, and have supported, Dr Cullen when he has made noises to bring the dollar down in order to help our farmers, and I cannot sit down without saying that that is a huge part of this industry.

I would like to lend my voice to that of Clayton Cosgrove in urging the National Party—in fact, begging the National Party, and saying we will make every endeavour to help the National Party—to promote Shane Ardern, not only to the front bench but to the chairmanship of the Primary Production Committee. That is not to take anything away from David Carter—I will not be unkind—because we hope he exists. My leader has an interest in David Carter’s welfare at this point in time, so we want him to continue on. But in New Zealand First we would like to see Shane Ardern promoted and brought into the chairmanship of the select committee.

It is with real pride that I stand in the House, as a genuine farmer—

R Doug Woolerton: Genuine?

Yes, a very genuine one. I think I have removed the manure from under my fingernails! In fact, standing here makes me reflect that I should have brought my Driza-Bone hat to wear. I note that Mr Nandor Tanczos from the Green Party wears his tea cosy in the House, so I cannot see why a genuine farmer cannot do something of a similar nature.

💬 Nandor Tanczos: I raise a point of order, Mr Speaker. It is actually a tam, not a tea cosy.

The ASSISTANT SPEAKER (H V Ross Robertson): I accept what the member says. I point out to Mr Eckhoff that his comment was a personal reflection on the member, under Standing Order 116. He will stand and withdraw.

I am happy to stand and withdraw. I meant no disrespect to the member. It was just an observation.

💬 John Carter: I raise a point of order, Mr Speaker. Although you have every right to direct, the member himself did not take offence. He made a correction. He had the right to take offence, and ask for a withdrawal, which he did not do. It seems quite odd that the member on his feet should now be directed to withdraw—which he has done—given that the member himself made a correction but did not seem to take offence. It is odd that you intervened.

💬 Nandor Tanczos: The honourable member makes a good point, but on reflection it is offensive to liken my head to a teapot, in which case I think a withdrawal is in order. [Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): All right, we have had our fun. I thank all honourable members very much for their contributions, but I do require a withdrawal and apology.

I withdraw and apologise. As I mentioned earlier, it is a matter of considerable pride for me to stand and speak on a matter that does concern the wider farming industry. I have to say that the meat industry, despite the very sound rhetoric I have heard so far, is under real threat. One has only to look at the newspapers daily to understand the threat to the industry from the environmental lobby and the cost structures that local government and central government impose on the industry on a regular basis. So there is real concern about the future.

But when we compare the past with where we are today, we have to say the industry can take great pride in its achievements. I doubt very much whether any other industry in this country has achieved as much as the meat industry has achieved over the last one and a half decades. When we look at the high-tech industry, and at items such as computers, we see there has been a huge fall in those commodity prices. Yet when we look at the commodity price for lamb—a product much maligned for years—we see that it continues on a steady march upwards. The commodity price for lamb has risen dramatically over the last 20 years, and that hugely reflects the ability of the industry, and the fact that it is almost entirely deregulated. It is no longer controlled by Government. We no longer see Budgets where the Minister of Finance stands and announces supplementary minimum prices, or some other kind of incentive to assist the industry. The industry actually works well without Government input. That is something that all other industries and all aspects of our social life could well reflect on. I pick up on a point made earlier by other speakers that is worth reflecting on, and that is that in the past many people regarded the meat and wool industries as sunset industries. I think maybe Jenny Shipley made some reference to that in the past. Nothing could be further from the truth in terms of where our meat industry has been and where it is heading.

Some concerns were expressed by members of the Primary Production Committee, and I am delighted the influence of the centre-right, shall we say—

R Doug Woolerton: Centre-right?

Mr Woolerton takes a jump back in horror at being regarded as part of the centre-right. But the influence of the committee members was quite significant in a number of aspects. The biggest issue for me personally is the quota, which has been alluded to by other speakers. I make the point that the quota is regarded as terribly important, but I am one who does not believe that the quota is owned, or should be controlled, by the Government. As Mr Ardern pointed out, a Government negotiates these things. A former Government negotiated the Closer Economic Relations agreement, for example; does that mean the Government should have some form of influence over somebody—

💬 Shane Ardern: It does on some.

I thank the member for that point. Should the Government have some sort of influence over the way in which Trade and Enterprise works, and should it have representatives on that board to get some Government point of view across to the industry? I do not think anybody would suggest that is appropriate.

As we go through the Committee stage, it is important to recognise that the majority of farmers did not vote. When the ballot was put before them as to whether the meat and wool industries should be amalgamated and called some sort of pastoral board, the majority did not vote. Of those who did vote, I think 83 percent voted in favour. I repeat that the majority of farmers in this country did not vote for this bill or for the restructuring of the industry. I suggest to members that that is something we—and, indeed, members of the Meat Board—should reflect on. The fact is the majority of farmers in this country do not see boards, or associations, or anything of that nature as relevant to their profession any more. They work alongside their meat company, or their dairy company, or their wool industry representatives. They do not see the relevance of a meat board or a wool board, to a very large degree. So I make that point, which I think is very important, and one that Mr Grant and the Meat Board would do well to reflect on. It is worth noting that a mere handful of farmers actually bothered to turn up at the first annual meeting of Meat and Wool New Zealand—a handful! That, again, reflects the fact that the industry is totally deregulated, and the relevance of a board is brought into question by a lot of industry members.

But there is no doubt that there is a need to ensure that the quota is fairly and reasonably administered. We have just gone through a major exercise in this Chamber called a scampi inquiry into the allocation of quota. Those in the Labour Government might do well to listen for a moment or two. There is also a case before the Privy Council at this very time on the issue of meat quota, because there are those within the industry who say it was not fairly allocated. I note that a member of the Labour Government agrees with me on the point that an allocation committee should not only be independent but should be seen to be independent. I have grave concerns that there are members of the Meat Industry Association who, although they do not sit on the allocation committee, sit on the full board, which actually talks and discusses these things. I think allocation of quota is probably one of the single most important aspects of this bill. The Government says it is necessary to have two members appointed by the Government to sit on this board. Well, I do not, and I do not believe that National—and possibly New Zealand First—feels that way. But I am not prepared to die in a ditch on this issue. We will see how it will go.

💬 Brian Connell: Oh, why not?

Well, if I die in a ditch it will be alongside a couple of my National Party colleagues as well, no doubt. I am not sure that it is totally necessary, but we have got a couple of representatives, and I hope the Minister will ensure that those appointed have the necessary commercial expertise to assist. I hope he does not put the old Blue Kennedy types on the board, just because the Government can appoint those sorts of people.

As I said earlier, this industry has an extremely bright future, but its future will be fully exploited only if Government and controls are kept right out of its way into the future.

I rise on behalf of United Future to speak on this second reading of the Meat Board Restructuring Bill. I cannot stand with the same pride that the member before me, a real farmer, stood with, but I do own more cows than anybody else in our caucus. Owning five cows probably does not qualify me as a genuine farmer, but it has given me some appreciation for those who work hard in the primary industry around our country. Taking care of 5 acres is enough for me, and it has given me an appreciation of the hard work and good management required in order to produce the maximum we can from our land in this country.

I share in the comments that have been made by other speakers that we as a nation are very much dependent upon our primary industry. It is always encouraging to see it do better each year as commodity prices continue to rise. It is always a worry when we hear there is a possibility that farmers may be in for a glum time, because we know that will pass on through the rural communities to affect so many other people in our nation. It has been heartening this year to hear that, rather than the predicted doom and gloom, there has been a marvellous upturn in the incomes of farmers in terms of projected payouts. We really welcome that news for the whole of the country.

Our party not having a member on the Primary Production Committee, I want to pay my regards to the members on it, who worked so hard in hearing the submissions. They received eight submissions and they heard four, which is an incredible workload for any committee to have to deal with. I thank the members for diligently working through these issues. The bill returns to the House with some recommendations, and I would like to make a few comments on those before ending our contribution on this second reading, following which we move to the Committee stage.

The bill is all about enshrining in legislation the necessary provisions that lay the groundwork for best practice and help ensure the ongoing success of New Zealand’s meat industry and its members. It is pleasing to be part of supporting legislation that has been requested by the industry rather than imposed upon it. I take note of the honourable member Clayton Cosgrove’s earlier comments that during my time in this House we have responded to requests from the wool industry, the kiwifruit industry, and here we are dealing with something requested by the meat industry. That is really the role of this House: to hear from the communities that it serves, to design legislation, to hear submissions, and to progress the issues that those who voted us here are interested in our progressing. It is a pleasure to take part in this legislation proceeding through the House so that it can meet the needs of the industry.

The recommendation to define the term “reserves” in concise language to mean meeting the costs of quota management is a prudent measure to offset litigious opportunism. It will also ensure that the $100 million reserve fund remains the primary means to ensure solvency and the ability of the board to carry out its core quota management functions at all times. It is pleasing to note the importance given to livestock farmer buy-in and participation, which has been recounted in numerous recommendations made by the select committee. Whether it be with regard to consultations over the reserve fund policy or over the validity of reserve management decisions, it is important to ensure that livestock farmers’ wishes are suitably considered.

Also, clarifying the terms of reference of the board with regard to the power to delegate quota functions and the capacity to contract for services is a necessary tightening-up of its terms of reference to remove confusion within the industry. In fact, many of the committee’s recommended changes are made with the intent to provide more clarity to grey areas in terms of the structure, ownership issues, and effective functioning of the Meat Board. It is sensible to clarify that although the quota markets are there to benefit the industry, ownership of the rights resides firmly with the Crown. United Future supports that principle. Furthermore, the recommendations to minimise the scope of legal disputes by clarifying distinctions between scheduled and unscheduled audits—a bugbear in many industries—is another judicious measure that deserves praise. With any overseeing body whose core role is to benefit its members, an affirmation of its core purpose, tempered with flexibility, is essential to allow for best practice. The recommended changes that provide this necessary flexibility by requiring the industry-good organisation to be owned by a trust whose beneficiaries are all livestock farmers do just that.

The recommended changes to this bill are sensible measures that will help make sure that the Meat Board fulfils its duties effectively and properly, and that the meat industry and its members all benefit from such duties. United Future has pleasure in recommending this bill to the House for the passage of its second reading.

I rise to speak in support of the Meat Board Restructuring Bill, a bill where the Labour-led Government is doing what farmers want.

💬 Clayton Cosgrove: He represents a rural constituency.

I represent a rural constituency. There was a day when the National Party represented all the rural constituencies. There was a day when it had all the farmers. Why is that we do what farmers want? Because we have more farmers on this side: Parekura Horomia, Mita Ririnui, Jim Sutton, Damien O’Connor. The farmers are on this side, and that is why the farmers vote for us—[Interruption] In contrast, we have Mr Connell speaking up, the member for Rakaia. He is an East Street farmer. The National Party used to have the occasional Queen Street farmer, but it has lost even them. It is down to East Street farmers.

In any event, this is good legislation, in contrast to what the previous National Government used to do. What did it do to the fruit industry? Exactly what the fruit industry did not want it to do, and it ended in tears. The farmers in my area want this legislation. They want the meat industry restructured in the way that we are doing with this bill. I commend this legislation to the House, and I remind those tired members opposite that the reason their former voters voted-in me and this Government was that they knew that this Government would back farmers. Farmers do better under this Government, and that is why I am here.

I rise on behalf of the National Party. There is certainly no shortage of National Party members who could sit on the Primary Production Committee. There is a lot of depth in our party, which comes from people who have a rural background. That is why Shane Ardern is standing in the wings, waiting to replace us at any time, and there are plenty of others in the National Party with a respect for farming who are standing right behind him. We in the National Party certainly support this industry and would like to acknowledge the productivity and the go-forward attitude of the primary sector that has carried this economy for many, many decades, and certainly with no help from this Government for the last 4 years.

National supports this Meat Board Restructuring Bill, with the changes that we have made in the Primary Production Committee. I would like to touch on some of those. We are very comfortable with the merger of Meat New Zealand and the New Zealand Wool Board to create Meat and Wool New Zealand Ltd, a limited-liability company. We on the select committee did have some concerns, particularly with regard to the governance arrangements. For example, members will see in the commentary that some submitters argued that the size of the board was excessive—being a board of 10 or 11 people—and some argued that ministerial appointees were inappropriate. In this case, the legislation states that the Minister would have two appointees. In the select committee that particular clause was referred to as the “Jim’s job clause”.

💬 Shane Ardern: His retirement clause.

“Jim’s retirement clause”. There was some cynicism from people in the industry when they came to the select committee about who the Minister, Jim Sutton, would give those two jobs to—whether one would land in his lap, or whether he would give them to other Labour Party lackeys. That concern was put to us. We reflected on that, and with some reluctance the industry—and, I must say, the National Party—will accept having two ministerial appointments. Yes, eyebrows were raised at that possibility, but with some reluctance, “Jim’s retirement clause” was passed.

Interestingly enough, we were quite interested not only in the number of directors, but also in clause 13(4) of the original bill regarding the management of the board. I think the country will be quite shocked at that clause, particularly with the current climate out there. It stated: “In appointing directors …, the Minister must have regard to the desirability of—(a) the representation on the Board of women;”. The Minister must consider putting women on the board. How condescending and patronising is that? We have a large number of women involved in the running of “New Zealand Incorporated”, both at Government level and in the private sector—Telecom and other companies. Clearly, we have a woman Prime Minister—as Don Brash pointed out the other day—we have a female Governor-General, and so on. Women have done very well and are quite capable of getting these appointments on their own merits, but no, the Labour Government felt that for some reason this appointment should be put at their feet, regardless of merit. How condescending and patronising is that?

Another clause stated that in appointing directors, the Minister must have on the board: “… persons qualified to represent the views of Maori livestock farming interests.” How condescending and patronising to Māori is that? As if Māori, amongst themselves, do not have people who are more than able, on their merits, to sit on this board and to achieve for livestock farmers throughout New Zealand all the things that need to be achieved. How condescending and patronising is it, that the Government would lay out the red carpet for Māori, regardless of merit, and say that Māori were in? I can tell members that Māori in the fishing industry are more than capable of reaching governance levels and jobs like that on merit, without those jobs being passed out to them like a welfare cheque. So we opposed that, and we are delighted to see that those particular clauses that put Māori and women on the board, without necessarily having merit, have been scrapped. We look forward to seeing Māori, women, and New Zealanders of other descent on that board because of merit. I recall that when we raised this issue—when we said that women and Māori would be put on the board as of right—Clayton Cosgrove asked why. Clayton Cosgrove himself said: “Why?”. He could not understand it, and neither could we, so he scrapped that clause—as did we—and we are pleased about it.

There is another clause that will go through to the Committee stage, and it is about the Crown and its approach to the rights of the quota. Members will be interested that the clause originally said that the Crown—this is what the Labour Government said: “… owns the rights to secure the economic benefits deriving from quota markets,”. I would have to say that there was a shade of nationalisation of those quota rights in that clause, and we are delighted that it too has been changed to better reflect the Crown’s role in this. The clause now states: “The Crown owns the rights to secure the economic benefits deriving from quota markets, and those benefits are assigned for the benefit of the meat industry ...”. The quota rights are for the benefit of the meat industry. They are not for the Government, not for the Government’s coffers, and not for the Government to get some benefit that it might redistribute in some way to every New Zealander, but for the benefit of the meat industry alone.

I am also pleased to see that some accountability will be given to this board with regard to fees in relation to quota management, and to the operation of quota management systems. I was somewhat concerned when I saw that the board could recover the costs to it of carrying out its functions in relation to the quota markets, and that the board may set fees payable by meat exporters who are allocated a quota—not that I think the board should not be able to recover those costs through fees, but simply that it would have the ability to set those fees. They would need to be fair and reasonable, and the fees would need to provide the board with adequate funding. My concern was that those fees would be set and that there would be no redress for exporters if the fees were excessive, unfair, or unreasonable.

But I see now—and it was in the bill—that those fees are to be treated as a regulation for the purposes of the Regulations (Disallowance) Act. In other words, they are to be subject to the Regulations Review Committee, and can be reviewed. I say to exporters that should problems arise in the years to come regarding those fees, they do have access to Parliament through the Regulations Review Committee to see that the fees are reviewed and are set accordingly. So there is a degree of accountability there.

National certainly supports this bill with those changes. The bill was originally quite condescending, particularly with regard to who owned the quota and who should get the benefit, and to whether Māori and women should be on the board as of right simply because of their race or gender. I am glad that those clauses have been changed. National supports the bill. We are pleased with the accountability processes, and I commend this bill to the Committee stage.

Bill read a second time.

Name changed to Meat Board Bill.