Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill

on behalf of the Minister of Agriculture: I move, That the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill be now read a second time. The bill had its first reading on 14 October 2010, after which it was referred to the Primary Production Committee for consideration. The committee received and considered 13 written submissions and heard eight oral submissions on the bill.

The bill extends the market share thresholds for the expiry of the pro-competitive provisions in Part 2, Subpart 5 of the Dairy Industry Restructuring Act—the DIRA. The bill also provides a new provision for expiry once the new market share thresholds are met. Subpart 5 of the Dairy Industry Restructuring Act promotes dynamic efficiency of the New Zealand dairy industry by regulating the activities of the dominant market player, Fonterra. It ensures that despite Fonterra’s dominant market position it operates in an environment that is contestable—that is, one where it faces potential competitive pressure. This environment drives Fonterra and other dairy companies to improve their economic performance.

Subpart 5 of the Dairy Industry Restructuring Act is, however, subject to sunset clauses because the regulatory intervention is necessary only until competitive pressure can be put on Fonterra by existing or potential competitors. The thresholds in the current sunset clauses could be reached by 31 May this year in the South Island. If that happens and no other action is taken, the Dairy Industry Restructuring Act’s pro-competitive provisions would expire in the South Island. The Government considers that without the regulatory provisions contained in the Act there is currently unlikely to be enough competition to ensure the efficient operation of the New Zealand dairy market.

The bill resets the market share thresholds for the expiry of Subpart 5 of the Dairy Industry Restructuring Act for the North Island and South Island to 20 percent of the milksolids being collected by independent processes in a season. This means that if Fonterra collects less than 80 percent in the North Island in a season, then the pro-competitive provisions will no longer apply in the North Island, and if Fonterra collects less than 80 percent in the South Island in a season, then the pro-competitive provisions will no longer apply in the South Island.

Under the existing market share thresholds in the Act, milk collected from within the boundaries of the West Coast Regional Council is excluded from the South Island market share threshold. When the Act was introduced, it was considered uneconomic for independent processors in the West Coast to purchase milk from farmers in other parts of the South Island and transport the milk across the Southern Alps. The consultation process for this bill told us that independent processors can now economically collect milk outside the boundaries of the West Coast and transport it back to their plants. We are also aware of the discussions between processors and farmers from the West Coast and Canterbury about the transfer of milk supply between those regions. These points demonstrate that there is a single market for raw milk in the South Island. For that reason, as recommended by the select committee, this bill provides that milk collected in the West Coast will be included in the new market share threshold for the South Island.

Another key feature is that the bill requires the Minister to request a report on the state of competition in New Zealand when the new market share thresholds are met in either the North Island or the South Island. This report will provide the opportunity for the Government of the day to consider whether, when the new market share thresholds are met, the dairy industry is indeed ready to move to a regulatory regime consisting only of a generic competition law, rather than the additional industry-specific Dairy Industry Restructuring Act. Some submitters are concerned that there is no time limit for when that report must be completed. Having no deadline could result in uncertainty for the dairy industry while it awaits the report’s recommendations. For that reason, the select committee recommended that the bill include a time limit of 12 months within which the report must be provided to the Minister.

Some submitters were also concerned that the nature of the industry could change considerably, even without the threshold being met. As per the select committee’s recommendation, the bill therefore provides that the Minister must request the report either when one of the market share thresholds is met or in June 2015, whichever is the earlier. If the report is requested in 2015, without the market share thresholds having been met, it would not automatically trigger the expiry of the pro-competitive measures, as the automatic expiry process is tied to the market share thresholds being met. However, the Government could choose, on the basis of the report’s recommendations, to take actions such as promoting legislation to bring about the expiry of the pro-competitive measures.

This bill also introduces a requirement that all processors keep a record of the total amount of milksolids they collect in a season. They must provide this information to the Minister if requested. This requirement is to ensure that the Minister can access the information necessary to monitor the market share thresholds for the expiry of the pro-competitive measures. This bill ensures the continuation of the pro-competitive provisions of the Dairy Industry Restructuring Act until the new market share thresholds are met.

There is currently a significant amount of attention on the dairy industry. Fonterra is proposing a capital restructure. The Ministry of Agriculture and Forestry has commenced a review of the Dairy Industry Restructuring (Raw Milk) Regulations, and the Commerce Commission is considering whether an investigation into the price we pay for milk is warranted. With all this going on, it is important that the Dairy Industry Restructuring Act remains in place and provides a stable reference point for any work being done.

Due to the likelihood of the existing market share thresholds being hit within the next season, it is not possible to wait to make these changes to the Act so that they coincide with one of the other pieces of work. It is imperative that the Act is still in effect in order to promote competition and provide a mechanism by which to regulate the behaviour of the major participants in the New Zealand dairy markets.

The current concerns about the level of competition in our dairy markets strengthen the argument that, in the absence of regulatory provisions contained in Subpart 5 of the Act, there is unlikely to be sufficient competition in the dairy industry to ensure the efficient operation of the New Zealand dairy markets.

I thank the members of the Primary Production Committee for their consideration of the bill, and for the report tabled on 22 February 2010. I commend this bill to the House.

Listening to the speech made by the member for Northland was a bit like watching grass grow, I have to say. I am surprised, really, because he comes from a big dairying area. I thought he could have done it with a bit of passion, given that the dairy industry is the No. 1 industry in this country, and is still owned—for the moment—by New Zealand farmers, for the most part. The Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill has been, I guess if one wanted to be critical, a waste of the time of the Primary Production Committee and of Parliament. The day before the first reading of this bill, the Minister had indicated that he was going to get a full review of the dairy industry regulations under way, something that is referred to in the Dairy Industry Restructuring Act, and which this bill has addressed in a technical way. If one listened very carefully to every word that the Hon John Carter said—on behalf of his colleague Mr David Carter, the Minister of Agriculture, who could have been in the House explaining this—one heard that, none the less, this is a technical bill that is designed to continue the supply of milk to other companies that take in processed milk that is produced by Fonterra farmers, in summary.

Without going back over the technical parts of this bill, in simple terms there was the potential for the threshold to be met, as set down when Fonterra was set up in 2001 under the Dairy Industry Restructuring Act, and at which time an automatic process was undertaken. That was the review of the regulations, and the uncertainty that that may have created.

So this bill was designed to offer certainty. The Minister then decided he would create more uncertainty by having a full review, and that probably is warranted. Since that time, of course, Fonterra has stepped in and set a fixed price for domestic milk for the rest of the year—until after the election, I would say. That was a move by Fonterra to try to keep ahead of a rising concern around the price of milk—and milk products, I have to say.

This bill ensures supply to those people, some of whom are competitors and others who supply the domestic milk market here in New Zealand. In continuing the supply under a complex set of arrangements to establish the price, there are still many, many questions that need to be answered. There have been indications that the Commerce Commission is currently looking at whether it should investigate, which is a very brave move for the Commerce Commission. It usually takes the commission at least 3 to 5 years to do anything. The commission has decided that it should investigate whether it should investigate. It is an ongoing process. I think the commission has given itself 2 months. I understand that it is struggling to get some information from Fonterra. We have had assurances from Fonterra that it welcomes a review by the Commerce Commission, so that we can get on the table the realities and, I guess, the challenges of pricing milk on the domestic market—milk that could otherwise be destined for export markets that are currently enjoying record prices for commodities and ingredients.

The likelihood is that those prices will continue to climb a little bit, if not hold steady. That means that New Zealanders will probably have to continue to pay quite a bit for their milk—more than they would like to. None the less, Fonterra has held the price. I say that it is a political deal, in an election year, and one that is connected to another issue of recapitalisation of Fonterra, but I will not go into that now.

One of the questions asked of me by my colleague is “What about Miraka?”. This is a small, emerging Māori-owned dairy company in the central North Island. Its plant is under construction, and it is expecting to get milk from Fonterra under the Dairy Industry Restructuring Act provisions. It will continue to be able to get milk until a comprehensive review of the regulations is undertaken—one that the Minister indicated would take place but has yet to decide when it will be completed.

Other companies are getting milk, such as Open Country Dairy, Synlait, and Westland Milk Products, which are all competing with Fonterra in the international market place for the sale of milk powder and other ingredient products. Many farmers think this is a bizarre set-up, that they, as shareholders of the company obliged to take their milk, have to supply milk to competitors. It is a trade-off established at the formation of Fonterra to ensure that although having a dominant position in New Zealand—that is, well beyond 80 percent of the market—Fonterra should be obliged to provide milk in small amounts. I guess 50 million litres of milk is not a small amount if one tries to put it in a bottle, but in relevant terms it is a small amount of milk for our industry. People who are innovative, people who are developing new products, can then get on and do so with certainty over supply. The reality is that we have seen the set-up of companies that are competitors—a number of them foreign-owned, foreign-controlled—and Fonterra and New Zealand shareholding farmers are obliged to supply that milk.

I will not get into the debate around the whys and wherefores and the justice of that, other than to say that for the moment this bill will ensure that ongoing supply. The issue of the price they pay for that milk is one that could be looked at in part by the Commerce Commission if it does decide to do so, if it is brave enough—and it is not very often brave enough, I have to say; if it considers that to be a challenge, then so be it. The commission is rarely brave enough to take on some of the real challenges in our economy around pricing, but if the commission does decide to do this around milk, then it may identify who is really making money from the supply of domestic milk products in this market.

The farmers make a little bit, Fonterra makes a little bit, and the supermarkets make a little bit, so we are told. I think that the inquiry may identify the reality that there are some profits in the whole process, but the underlying driver of the international price for milk is what is actually pushing the price of products to what many in New Zealand consider to be an unaffordable level.

Labour does support the bill. We found it somewhat bizarre that the day the bill was introduced, the Minister had made it redundant. But it is necessary to stay ahead of what are effectively thresholds set down in 2001, which are almost being met.

Before I finish, I would like to comment on the issue of foreign ownership and foreign control, and the issue of the restructuring of Fonterra. I think the Government has done a deal that the price of milk will be held in New Zealand during this election year, that the Government will undertake to commit to process the trading among farmers, and undertake the recapitalisation of Fonterra, which I believe is one step towards the slippery slope of demutualisation and floating on the market. That is my personal view. The Labour caucus has yet to take a position on that. None the less, that will lead to greater levels of foreign—

💬 Hon Dr Jonathan Coleman: And your views and theirs are often different on a range of subjects.

It is very good that Mr Coleman has spoken, because it reinforces my suspicion of him as a man who works in the background, keeping happy the supporters and funders of the National Party. I say that there is a level of foreign investment in the New Zealand dairy industry, and that is growing. The international demand for protein will continue to climb as the world population increases. As the prosperity of many in Third World countries increases they will look to take in more protein, much of it through milk. So the opportunities are huge. Many investors offshore are looking for opportunities in the New Zealand market, and the dairy industry is the last big multinational industry owned by New Zealanders, for New Zealanders, that we still control and are proud to own. If we let it go on to the market, I have to say it will be gone before we can say Jack Robinson. That is the way we tend to be, as investors.

I come back to the bill. It is a technical bill. It has taken up a bit of Parliament’s time. Strictly speaking, it is unnecessary. Labour will support it, but awaits the outcome of the Commerce Commission inquiry into the pricing of domestic milk and to see what the Government does with the recapitalisation proposals of Fonterra.

It is a pleasure to rise in support of the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. Before I speak, I must declare an interest. I am a shareholder in one of the affected parties in this process.

Before we proceed with why we have got to where we are with the Dairy Industry Restructuring Act at the moment, I think we need to remind ourselves a little bit of the history of how the Act came about in the first place. It came about because two of the major and largest dairy companies in New Zealand, Kiwi Cooperative Dairies Ltd and New Zealand Dairy Group, chose to merge, thereby having a very dominant role in supply of dairy products in New Zealand. Also, they merged with the New Zealand Dairy Board, our statutory board at that stage. Hence the birth of the Dairy Industry Restructuring Act 2001.

At that point in time, to allow that to happen, the Government agreed to give the new entity—GlobalCo, I think it was called; the new co-op was another name that was used—a dispensation around normal Commerce Commission regulations. As they say, the devil is always in the detail. An agreement was thrashed out that the new co-op would sell or divest up to 52 or 53 percent of its domestic market products, therefore giving it under 50 percent. So the nonsensical debate that is going on at the moment about Fonterra’s 80 percent shareholding or 80 percent ownership of the domestic market is factually incorrect and is outlawed by the legislation. It cannot by law own that percentage of the domestic market, but no one would let fact get in the way of the debate.

The big debate about domestic milk at the moment has occupied a fair percentage of media time and people’s speculation, and I guess I am reminded, when I see that, of the words of Charles Darwin. He said that it is not the strongest of species that survives, nor the most intelligent, but the most responsive to change. That is the species that survives. So Fonterra, in recognition, despite the facts, has come to the Government and said that it accepts that the Dairy Industry Restructuring Act should be extended on the basis that the Government will hold an appropriate inquiry into who is eligible for this milk. I ask members to bear in mind that what the Act requires Fonterra to do is make available 50 million litres to any one single entity who wants to take advantage of that milk. One of the big debates at the Fonterra farm gate was about the price of that and whether the Fonterra shareholder farmer was getting a fair price. There were arguments on both sides, and the Government agreed in principle —that is, the Ministry of Agriculture and Forestry officials agreed—that the current legislation, which is being amended by this bill, was unfair. In other words, Fonterra shareholders were subsidising that 50 million litres to the competitors that were able to pick it up.

The second and most important issue in that debate was that Fonterra’s farm-gate price is, I guess, as transparent as any price one could get. It is advertised in the paper. People know what it is. Just by the way, as an aside, as a farmer I know that the average price per litre of milk to my farm in the last 10 years has ranged between 35c a litre and, this year, potentially 79c a litre. There is nothing hidden about that. Everybody knows it; it is published, it is in the paper, it is there for anyone to see. So the Commerce Commission inquiry that was spoken of by the previous speaker will be an interesting inquiry. Clearly, the difference between the 79c the farmer gets paid at the farm gate and what mum of Glenfield is paying at the supermarket is substantially different, and it would be interesting to find out where that difference is.

That said, it was decided that this amendment legislation should be passed to improve the farm-gate price—that is, the price Fonterra gets paid for the 50 million litres it must by law make available to its competitors—and the setting for that was the farm-gate price plus 10c a kilogram, to take into account shoulder milk, which I will not explain now, because it would be a bit difficult for people to understand in the time I have available to explain. So it was the farm-gate price plus 10c, which is not hard for anybody to work out.

In the process of submissions on this bill, Westland Cooperative Dairy Co. Ltd , a company who chose in the initial merger of the major companies to stay outside of the new Fonterra or GlobalCo structure, said in its submission that “the correct status for compulsory supply of raw milk is to distinguish between raw milk for domestic retail purposes and industrial product for export. Regulated raw milk supply is appropriate for the protection of domestic customers but not artificially support industrial (ingredient) producers. Westland believes that manufacturers of dairy products for export are competing for an international market share and should not have access to DIRA raw milk.” Now, that was said by one of the small companies, and I happen to agree. The original principle was that a small amount—50 million litres of milk and a total amalgam of that of up to 600 million litres of milk—should be made available by the big new co-op to small start-up companies who were going to deliver products into the domestic market. What we have is some large multinationals using their muscle to invest in small processors and gaining access to this milk. That was never the intent of the original legislation, and the review that, as the Minister announced, will take place in March—and which is now ongoing—should bring some clarity to that and, hopefully, some further transparency to how that process works.

Finally, I must say that this industry collectively is 27 percent of this country’s export earnings. It is our single-biggest industry. It is the industry that will help this Government and successive Governments into the future pay for the social services that this country so badly requires and desires. It is probably the least interesting debate in terms of what people pay attention to in this Parliament. So we have an industry that is one of the largest if not the largest single industry in the country, and it is the one that gets the least attention in terms of some of the detail. I have always found that quite amazing. That said, we are supporting the passage of this bill. We look forward to the review that has been announced and the findings of that review. The submission process was one that was thoroughly gone through, and the end result, I am sure, will be one to the satisfaction of all those involved. Thank you.

I was a member of the Primary Production Committee through much of the time it was considering the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill, so I am pleased to take a call in its second reading and to affirm that Labour supports the bill. We definitely want to see a healthy and competitive dairy industry. It is essential for New Zealand’s interests. We want to see a market where consumers are able to get high-quality product at affordable prices, but there are some questions around that, which I will come to in a moment.

The other thing I want to note is Labour’s view that dairy processing companies having the benefit of the provisions of this legislation and its predecessor cannot take comfort from the fact that this will be an ongoing situation. We must get to the point at some time where New Zealand’s dairy farmers in the Fonterra fold do not continue to subsidise their competitors indefinitely. I think it has to be accepted, whatever the arguments put up, that there is an element of subsidy in this. I remember well in the select committee process the former National Minister, Mr Wyatt Creech, who is, of course, associated with dairy interests in the Waikato’s Open Country Cheese Co., railing against the New Zealand Institute of Economic Research’s analysis of the cost to Fonterra of the requirement that it take and process milk on behalf of its competitors. The estimate of that report was in the order of some $400 million to $500 million a year. Mr Creech made some play of the fact that anybody can get the result they want if they pay the consultants the fee. I noted to him that the Government used his services to do a review of Environment Canterbury last year, leading up to the disembowelment of that democratic franchise. So, yes, anybody can probably get the outcomes they want if they are prepared to pay the fee—in some situations.

The reality of the situation is that as this bill was starting to come through the select committee process, we had the Minister announce his own review of Fonterra’s obligation to supply milk to those independent dairy processors. That review was just coming through, and it would have made much more sense to have had that aligned with this bill so that any changes that came out of the review could have been incorporated in the bill. It was an odd process. We acknowledge that we needed to extend the sunset clauses for the industry, but that certainly was not in alignment with best practice, shall we say. Although we support this review and the new clauses in the bill in relation to supply, we have to note that it is concerning to see that, in effect, we have New Zealand - based farmers in the Fonterra fold, all of whose income comes back to New Zealand. It is a critical element in the make-up of our economy. It is a $10 billion export earner, and every dollar that Fonterra makes comes back to New Zealand. It is glorified socialism at its best, I have to say, and Labour has a proud history in respect of the support it gave to the dairy industry back in the 1930s under Michael Joseph Savage. It rescued the industry from its knees, gave it the cooperative structure and the capital for it, and has served the industry well to this very day.

It galls just a bit to see that companies such as Synlait, which is based in my home province of Canterbury, are beneficiaries of this. I visited Synlait a couple of years ago, and I was quite surprised to see the number of Fonterra tankers pulling in and bringing milk to that plant. Of course, it started with the great, grandiose objective of producing product that nobody else was producing. It was going to go into the high-value end of the commodity chain and produce the sort of stuff that Fonterra could never do, but, in fact, as I toured around the plant, it became very obvious it was producing milk powder, as Fonterra does at any number of its plants, and, effectively, competing against Fonterra at the medium end of the food chain rather than at the high end of the food chain, as it began. The other cost and consequence of an organisation like Synlait is that it has just recently had Overseas Investment Office approval; the model it had set up has not proved successful, so at a very early stage it has had to bring in capital from overseas. It is a Chinese investment company, but it makes very little difference whether the company is headquartered in Shanghai or Sydney. The net result is the same: the profits will go offshore. The net effect is we need to find that capital in some other way, and, as a nation that is not generating its own capital, we have to effectively import it. That keeps our dollar high and our interest rates high, and, increasingly, it makes us a poorer nation as time goes on.

💬 Dr Russel Norman: Well, vote against it.

No, we have to have a bill that will encourage competition, and this is the best we have. I acknowledge the comment from my colleague from the Greens that we do not have the sort of competitive model we need. We need only to compare the price of milk on this side of the Tasman and the other. I was across in Australia just last week for a Finance and Expenditure Committee conference, and I noted that the price of milk there is as low as about $2.58 for 2 litres. Here we pay $4.80, so the model ain’t working, but I would rather see a model where Fonterra continues to dominate than an increasing amount of foreign investment in our dairy industry, and that is in prospect.

We saw the extraordinary situation a couple of years ago when the Minister of Finance, with the wind in his sails, announced a review of foreign investment law that would liberalise the rules, which were “penalising” investors from overseas, and that would open us up to more foreign investment in industries like the dairy industry to provide that true edge of competition. The Prime Minister got wind of the fact that New Zealanders were becoming increasingly concerned at the fact that we were seeing an increasing amount of foreign investment. The New Zealand Herald piece by Brian Gaynor last Saturday noted that in the last 20 years more than 40 percent or thereabouts of the sales of assets listed on the New Zealand Exchange have gone into foreign hands, and that was not including companies that have gone offshore such as Goodman Fielder, Brierley’s, and a number of other companies. We are probably nudging up to half of the sales that have happened through the stock exchange over the last two decades have gone into foreign hands. What has been the particular benefit of that? It has not been bringing more income back into New Zealand and it has not been advantaging us.

That is why Labour is making no bones about the fact we will review foreign investment law and we will make sure we will see a New Zealand benefit in things. I have to note that even after the Prime Minister U-turned the Minister of Finance on this issue and said we would not have a liberalisation of the rules, and the Government has kept the strategic asset test, the reality is that Bill English is still saying we will have greater ministerial flexibility. That gives no certainty whatsoever in respect of foreign investment in our dairy industry or any other industry. The reality is that when questioned about it, the Minister for Land Information, Maurice Williamson, could not say whether the changes to the overseas investment rules would actually amount to much. In fact, he could not say whether they meant he would decline more purchases of New Zealand farmland. The Government is posturing on this issue, and I believe that the net result will be that we will end up seeing more investment under a National-led Government, allied with ACT, in respect of the dairy industry, and that does not bode well for our future.

I think there are members opposite who have come through the Fonterra system, who know its value, and who see that it delivers every dollar back to the farm gate, not to foreign investors. It does deliver for New Zealand—it may not be delivering as well as it should be doing on price, and the Government has been forced to start looking at review options for price, but the reality is that if we do not get a real change in terms of foreign investment laws, we will see increasing foreign ownership, because the world wants more milk and dairy product, and increasingly affluent nations such as China and others want to buy into industries like ours and extract the value and benefits for themselves. It is a very natural thing for them to do, but it is not in the net interests of “New Zealand Inc.” for that kind of process to happen. It is more likely to happen under a National-ACT coalition Government. I note that the former leader of the National Party Don Brash, now the new leader of the ACT Party, is a director of a dairy company down south, which is largely—or was, at least—foreign-owned. So that is the model I am sure he would like to see, and that he will be leveraging to get more of under a returned National-ACT Government. That is not in New Zealand’s interests, it is not in the interests of the dairy industry as represented by Fonterra, and it is an issue that this Government has to address. It has not done that through this bill, and it is about time it did.

We stand in the House today debating a bill that will require Fonterra to subsidise its foreign-owned competitors. That is the long and the short of it—that is what the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill does. Pretty much everyone is agreed that that is the effect of this bill. In fact, it is worse than that. Originally when we set up the Dairy Industry Restructuring Act we put a set of goalposts beyond which point Fonterra would not have to continue to subsidise its foreign-owned competitors or its competitors, and now we are moving the goalposts through this amendment bill. Fonterra was about to reach the point where it would not have to subsidise its competitors, but now the Government has said that as Fonterra is about to reach that point, we will move the goalposts so it will have to subsidise them for longer.

It has been very interesting to listen to National members such as Shane Ardern, who talked about being a Fonterra shareholder, and to Labour members saying how this was a terrible thing, yet do members know what they will do? They will vote for it. Both National and Labour will vote for this bill, which requires Fonterra to continue to subsidise its foreign-owned competitors in New Zealand. Not only that, National and Labour are moving the goalposts on Fonterra, so that it will have to do it for longer than it would have otherwise. National and Labour members are standing up in this House with crocodile tears, saying that this bill is a terrible thing, but they will vote for it. Fonterra has its problems, particularly in environmental issues, I will give you that, but it is a fantastically successful company. It is one of the few companies from New Zealand that can stand on the world stage, and we will require it to subsidise its foreign-owned competitors in New Zealand. We must be stupid. What other Parliament in the world would vote for legislation that requires its biggest company to subsidise its competitors?

If that was not ridiculous enough, let us step back for a moment. At the moment we are looking at what is called “the global land grab”, and Mr Burns referred to this to some degree as well. There is, understandably, a great desire around the world for high-quality land with access to water to produce food. In a world that is finite, with a growing population, the price of food can only go up, and access to food is becoming increasingly important. Right now we have a whole bunch of foreign-owned companies coming in and buying up New Zealand land and agricultural companies. The competitors of Fonterra, such as Open Country Dairy, Synlait, and New Zealand Dairies, are overseas-owned. Synlait is the greatest example. It is owned by Bright Dairy and Food, which is effectively owned by the Communist Party of China. That is whom we will have to subsidise through this particular bill. It is just ridiculous. There are also Open Country Dairy and New Zealand Dairies. Fonterra will have to compete with those companies because, of course, all around the world foreign-owned companies are buying up land and agricultural companies. They are buying up access to those resources. We have seen it recently with Agria buying into PGG Wrightson. That was one of the deals that happened just recently. In New Zealand we have seen a series of foreign takeovers of some of our primary producing sectors. We talked about the forestry sector, which has been subject to a foreign takeover, and now is no longer a very high producer for New Zealand, and the wine industry has a similar problem.

Right now the dairy industry is the target of foreign companies, so should we not be standing alongside Fonterra, when it is currently the target of foreign attack, and saying we will support it because it is a really important company? Instead, National and Labour will vote for legislation that requires Fonterra to subsidise its overseas-owned competitors. Those competitors do not lack access to milk; they have heaps of their own milk now. They have heaps of their own bulk milk supplies, because they have been buying to acquire their own bulk milk supplies. What these companies are doing with the milk they are getting from Fonterra now is to use it in the shoulders of the season, which is when production falls off, because by using the milk from Fonterra during that period they can maximise production in their processing facilities. The foreign-owned competitors can maximise the production in their processing facilities, and hence their efficiency, by using Fonterra milk that this Parliament—the people in this room—will make Fonterra sell to its foreign-owned competitors so that those competitors can maximise the efficiency of their processing plants during the shoulders of the season.

Thank goodness the Green Party is here, because otherwise that would not be said. It would just be suppressed and swept under the carpet by National and Labour, with their mad ideology about free trade and so forth, if the Green Party was not here to point out the fact that National and Labour are making Fonterra subsidise their foreign-owned competitors. It must be difficult for Mr Ardern to go to Fonterra shareholder meetings, because when people ask what he is doing, he will say he is voting to make Fonterra subsidise its foreign-owned competitors when he is in Parliament this week.

💬 Shane Ardern: Read their submission.

When we look at the submissions, which Mr Ardern talks about, we look at the submission from Westland Cooperative Dairy. It states that it makes sense to have the dearer milk, the bulk milk, available for domestic producers, and I agree with that. It does make sense to have that milk available in the domestic market, because Fonterra obviously is such a big player. It does not totally dominate the domestic market as much as people think, but it is a huge player. It makes sense to have the dearer milk available around the domestic market. However, how can it make sense to force Fonterra to sell it to the overseas competitors, who will then compete with Fonterra in overseas markets, using milk that Fonterra has been forced to sell to them? How can it make any sense to force Fonterra to sell milk to the overseas-owned processors, who then use that milk and process it to compete with Fonterra overseas? How does that make any sense for New Zealand? It does not make any sense for New Zealand.

What we are seeing today is a Parliament—well, National and Labour, let us face it—that has lost its mind. National and Labour are weeping crocodile tears about how sad it all is, but they will vote for this ridiculous bill. The Green Party will not be voting for this bill. We think Fonterra is a really important player in the New Zealand market. It is one of our most important companies. We do not think we should force it to subsidise its foreign-owned competitors, hence facilitating the foreign ownership of the New Zealand dairy industry. The industry is facing an enormous challenge from overseas buyers who want to come in and buy it up, and that is fair enough. Those buyers want to make money out of it. It provides access to food, to land, and to water. The land is very, very valuable. There is a big grab going on to access land that can produce food, and we are helping overseas buyers. We will help them by forcing Fonterra to subsidise its overseas competitors in New Zealand. It is an absurd situation, and National and Labour should be ashamed of themselves for putting Parliament in this situation. The Green Party will be voting against this ridiculous law.

Tēnā koe, Mr Assistant Speaker Robertson. A fortnight ago in Rotorua at the New Zealand Dairy Business Conference Waikato-Tainui’s Te Arataura chairman Tuku Morgan told delegates that farmers and iwi shared an intergenerational interest in the land and what it produced. He went further and laid a simple challenge to the industry: work with us; work with iwi across the country in genuine partnership. In his kōrero he referred to Māori cultivation of the land prior to its alienation and seizure. He also brought out the critical role that Princess Te Pūea played in establishing New Zealand’s dairy industry when she bought land and began building a dairy herd in the 1920s. The Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill threatens to disrupt this relationship by introducing uncertainty about Subpart 5 in Part 2 of the Dairy Industry Restructuring Act 2001. This subpart is the one that promotes the efficient operation of dairy markets in New Zealand by regulating the activities of Fonterra to ensure that New Zealand markets for dairy goods and services are contestable. The bill states it will provide for a new process for the expiry of the pro-competitive measures when the new specified market thresholds are reached. In its effect, the new legislation provides for a more detailed approach in determining when the threshold is met, and increases the threshold to 20 percent. The new legislation effectively empowers the Minister of Agriculture to forcibly enact the expiry of this subpart in the event that the threshold is met.

So why is there such a concern? Let me go back to the points raised by Tuku Morgan. A review of the Māori commercial asset base for Te Puni Kōkiri in November 2003 showed that there were 436 Māori authorities with substantial businesses. We know also that by farming an area of 720,000 hectares, worth an estimated $7.5 billion, Māori are the largest natural grouping of pastoral farmers in New Zealand. In fact, given the collective nature of their landholdings, and the number of shareholders they support, there is also a strong case for saying they are the most sustainable farmers in New Zealand. Mr Morgan’s challenge to the dairy sector was to take the relationship between iwi and farming to a new level. He promoted the urgent need to recognise Māori concepts associated with the land, such as tikanga, or heritage; kaupapa, or conceptualisation of Māori knowledge; and kaitiakitanga, or guardianship, to work together and create a more environmentally, culturally, and socially sustainable dairy industry. Enter Miraka Ltd.

Miraka is a new entrant to the dairy processing industry, and is constructing a plant at Mōkai in the heart of the Waiariki electorate, 30 kilometres north-west of Taupō. It will commence operations in August 2011. Miraka is backed by a group of Māori trusts and incorporations that have a combined asset base of over $1 billion. These organisations include Wairarapa Moana Inc., Tuaropaki Trust, Waipapa 9 Trust, Hauhangaroa Partnership, Tauhara Moana Trust, and Huiarau Farms, and the Māori Trustee is also an investor. As a majority Māori-owned and Māori-controlled dairy company, Miraka is here for the long term. Miraka’s owners share a vision of sustainable business practices that secure long-term returns for current and future generations from land that will never be sold. Yet if this legislation proceeds unchallenged, it may well be that the unique partnership Miraka can bring to the dairy sector is compromised—in fact, sacrificed—under the possibility of a restricted public market.

In the current arrangements there are consistencies between the current Subpart five of the Dairy Industry Restructuring Act 2001 and the kaupapa of rangatiratanga, as the current subpart provides for effective regulation and transparency of Fonterra’s activities within the dairy industry. So it ensures that, despite its dominant market position, Fonterra operates within an environment that is contestable, such that it faces potential competitive pressure. But this new legislation proposes to provide for the subsequent expiry of Subpart 5 to be timed to enable any future Government to review and/or amend, if required, the pro-competition provisions of the Act to meet the policy objectives of the time. In short, various dairy operators in the sector are telling us that it is unwise to leave the door open in a way that may expose the dairy industry, and independent processors such as Miraka, to an unacceptable level of risk.

As the House will know, there is currently a significant amount of attention on the dairy industry, particularly relating to Fonterra’s capital restructure proposal, the review of raw milk regulations, the domestic retail price of milk, and the way in which Fonterra calculates the price it pays its farmers for milk, known as the farm-gate milk price. The Māori Party is acutely aware of the heightened levels of public concern about the level of competition in the domestic market, as well as the claims of anti-competitive behaviour by Fonterra, and the effects these have on the price of milk. I acknowledge the initiative that has been taken by the Commerce Commission in undertaking some preliminary work to determine whether a formal investigation into the price of milk is warranted. That was great news for our constituents. The Māori Party had called for a commission investigation into milk prices, because of the claims that Fonterra had an effective monopoly in collecting over 90 percent of the milk produced in New Zealand. The advice we received from consumers and dairy producers alike was that the concern related to the proposed share-trading proposal, in that it would sacrifice a fundamental principle that guarantees farmers easy entry into, and exit from, Fonterra, the world’s largest dairy exporter. As is now well known, of course, the Commerce Commission decided it would not hold an inquiry into milk prices, but it did suggest it was open to hearing arguments.

This debate has ranged far and wide across the impacts and effects of the dairy industry legislation, and although one might say that this legislation is not specifically focused on Fonterra’s plan to introduce share trading amongst its farmers, I have to say that there is simply too much uncertainty around for us to be able to agree to repeal and replace the provisions that promote open markets. This bill is being read in a volatile environment. We know that the Federation of Māori Authorities, for instance, has indicated concerns about the Ministry of Agriculture and Forestry’s discussion paper on a regulatory regime to accompany Fonterra’s capital restructuring. The underlying premise in this legislation is that there is unlikely to be sufficient competition in the dairy industry to ensure the efficient operation of New Zealand dairy markets, yet, as the Federation of Māori Authorities will tell us, there is significant scope not only to lift the performance of dairy producers but also to build on linkages between producers, processors, and marketers to capitalise on value-chain opportunities within the dairy industry. We agree with the Federation of Māori Authorities that an open entry and exit mechanism is essential for a competitive dairy market. We also believe that a full and informed investigation needs to be completed by the Commerce Commission before we can be in a position to support this bill going through. To this end, the Māori Party cannot support this bill at its second reading.

It is a pleasure to stand and speak during the second reading of the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. The bill itself deals with interim procedures to ensure that we retain the structure and the basis of the Dairy Industry Restructuring Act as it stands. That makes sense, because when we look back to the year 2001, which does not seem very long ago, we see that 10 years have gone by. It is very important, from the point of view of cohesion, to ensure that until we get everything within the dairy industry into a structured format, we have consistency. Hence we have this bill.

The bill deals principally with sections 147, 148, and 149 of the existing Act, and it readjusts the very volume at which the trigger is set for us to start to curtail the purpose of the Act as it was set up. When we look at the original section 148, we see that it talks about independent processors collecting 65 million kilograms of milk solids in the South Island, and one processor collecting 25 million kilograms. When we turn to this bill, we see that in fact it repeals sections 147 through to 149 of the Act. New section 147(1) in clause 4(1) of the bill states: “(a) 20% or more of milksolids on or from dairy farms in the North Island of New Zealand … or (b) 20% or more of milksolids on or from dairy farms in the South Island of New Zealand …”. That is an indication of the principal change from the Act as it stands at the moment.

The bill also ensures that there is some consistent process in the event of that happening. It is unlikely to happen, because as a country we produce 1.44 million tonnes of milk solids. When we look at that and do our maths, we see that effectively we are asking a processor to pick up somewhere in the region of 280,000 tonnes of milk solids.

However, it was interesting that during the select committee process in the Primary Production Committee we heard from Westland Cooperative Dairy. The 400 suppliers to Westland Cooperative Dairy have been very, very successful, but as we speak I believe the company is making moves to have a collection point just out of Rolleston so that it can pull back milk from Canterbury, take it through the tunnel, and process it over in Westland. That certainly is a change of thought and understanding of what was the case back when this particular Act was put together.

We look forward to the comprehensive review that the Minister has made clear is to occur. We realise that this legislation is an interim change. It is appropriate, and on that basis we can support the bill with confidence. Thank you.

It is a pleasure to rise and speak to the second reading of the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill with its new sunset provisions. But as much as I am pleased to speak to this bill, is it not disappointing? For the last 2 weeks this place has been in what we euphemistically call a recess. During that period of time I have been speaking with people out in the streets and ordinary New Zealanders about what their issues are at the moment. They want to see from members of this Government some sort of plan—any kind of plan—that would show that they have been thinking about what is happening with the economy, because it is flatlining.

Here we are, and this is the best the Government can come up with. This is the best it can come up with that represents anything like a plan. It actually extends some provisions the previous Labour Government put in place to ensure that there was competition in the dairy industry. That was a wise move at the time, but we were in completely different economic times from those we are in currently. New Zealanders want a plan from that lot over there to actually deliver economic growth, but we are debating this legislation instead. I think it is very, very disappointing. Although it just allows a situation that was already happening to continue for a small period longer, it does not do anything to fundamentally shift or grow the economy. That is what this country needs to do, so it is very disappointing.

I think there is another missed opportunity in this legislation. It is the missed opportunity to think about what else we should be thinking about in this Parliament with regard to the dairy industry and the aspect of competition. I am interested in the fact that the competitors that this bill forces Fonterra to subsidise—their competitors, as I think the Green Party quite rightly pointed out—do not have to live by the same rules and regulations with regard to labour standards that Fonterra does. I think that is a very great shame. It is something really positive that this Parliament could be debating. I would look forward to debating a bill that said it does not matter whether a company is Fonterra, Open Country Cheese, Synlait, or whatever, if it employs people to process dairy products, then decent wages and conditions should go with that employment. We do not have that legislation in this country.

That issue was the subject of a very lengthy and bitter dispute in the Waikato in the small village community of Waharoa, in fact, just last year. The Minister of Labour, Kate Wilkinson, is sitting over there, and she knows that that dispute was caused by industrial legislation that means it is OK for Fonterra’s competitors to have substantially lower wage costs than Fonterra agrees to.

From Government members’ perspectives, they do not have a problem, at all, with low wages being paid in the dairy industry, or any other industry, for that matter—any other industry. They do not care that there are no good laws in place to make sure that decent wages are paid. They are quite happy. As Bill English said, they see it as a competitive advantage, in fact, that we have wages that are 30 percent lower than Australia’s. If the Government has an economic plan, that appears to be about the amount of it. Bill English’s plan is backed up by John Key and, I guess, the rest of the Cabinet as well. It is a great thing, says the National Government, to have low wages in this country, because that is apparently our point of competition.

My guess is that on this issue the Government would think it is a great thing that there is competition—that Synlait and Open Country Cheese can significantly undercut Fonterra by paying lower wages to the workforce, even though those workers are doing exactly the same jobs they would be doing for Fonterra. But no, we have silence from the Government on that issue, because those members do not really care about low wages, even though they should know, if they are doing their jobs, that ordinary New Zealanders face a week-to-week and day-to-day struggle to make ends meet because wages are standing still—if they are not going backwards. The cost of living is primarily driven, as John Key said quite rightly in question time today, by that Government’s desire to increase GST on every single food item, or any other item people buy. Those are the issues confronting ordinary New Zealanders. There is a lost opportunity on those grounds.

There is a further lost opportunity to do with milk prices. We know that that is a significant issue—

💬 Sandra Goudie: Oh, here we go. Never let the facts get in the way of a good story!

Let me share some facts with that member, because she may not have heard them from the people she claims to represent. She should be listening. Ordinary New Zealanders will tell her that the price of milk and other dairy products has skyrocketed under National. This bill will do very little to change that. It will do nothing to change it, in fact. New Zealanders have been feeling the squeeze at the checkout as the price of food has increased by 5.5 percent in the last year. Since April 2008 the cost of a litre of Home Brand milk at Foodtown has increased by 20 percent, or 37c. With minimal wage increases Kiwis are finding it harder and harder to afford the basics. Families are cutting back on dairy goods, and the health of New Zealanders, particularly young children, will suffer because of high prices for dairy goods.

Is the Government interested in that issue? It would seem not. Sandra Goudie wants to deny there is even an issue out there with the price of milk, or with the price of anything. We are debating a bill about restructuring the dairy industry. Does it go near that issue at all? No way.

💬 Sandra Goudie: Done your homework?

I ask Sandra Goudie whether she has done her homework. I think she should look at the cost of living statistics that came out recently, which show how high the cost of food has gone in this country. That member should think about what is happening to people’s wages.

💬 Sandra Goudie: Why didn’t she think about that when she had the opportunity to make a difference when in Government? She did, and it failed.

Here we go. Sandra Goudie has forgotten about the minimum wage increasing every single year under the Labour Government. She has conveniently forgotten that wage increases happened regularly for workers across all industries under the Labour Government. She has forgotten that the lowest unemployment in the OECD was achieved by Labour when it was in Government. I tell that member to contrast that to what is happening under National. It does not even rate a comparison.

I challenge that member and all of the members opposite to go out, talk to ordinary people, and ask them one question. It is a simple question that does not take long: “Do you feel better off?”. I challenge every single member of National to go out and ask people on the street that question. I can tell those members that the answer to that question is no, they do not. They feel worse off under this Government. They feel worse off because they are actually worse off under this Government. This Government put up GST and it put up prices on every single thing that people buy. It has done nothing to create growth, which would lift people’s wages. It has done nothing to reduce unemployment, which would create jobs and incomes for families as well.

We are debating the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. It is an interesting little bill, but it will do nothing to improve economic performance. Is that not the hallmark of this Government? The bill will do nothing to reduce unemployment. Is that not the hallmark of this Government? It will do nothing to resolve price increases for ordinary families. Is that not also the hallmark of that Government?

I am delighted to get up and speak to the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. I cannot add much more than my excellent colleagues Shane Ardern and Colin King, so I want just to respond to “Mrs Rip Van Winkle”. I refer to an article in The Cattleman, an annual magazine put out by the Angus Association and the comments that were made by Massey University Professor of Pastoral Agriculture Jacqueline Rowarth. She points out that food is cheaper than it seems. She has statistics on her side because she has done her homework. Sue Moroney, Labour, and the Green Party have not done their homework. When adjusted for inflation, 2 litres of milk in 1999 would in today’s money cost $3.87. In 2009, 2 litres cost $3.48 and today in Woolworths supermarkets house-branded milk is at $3.60. It is actually cheaper. So get that—it is actually cheaper. Do the homework, I say to Labour and the Greens.

Professor Rowarth added an interesting fact: on average, New Zealanders aged over 18 spend $16 million a day—that is $5 each—on impulse buys. She has pointed out that she has the facts to back up that income has risen faster than prices. So if the Opposition and all those other members did their homework, they would be able to pick up on the same facts that Professor Rowarth has. They should do some homework and stop making spurious statements about prices. Those facts are all available to us all on the Statistics New Zealand website. Maybe they would like to do their homework and use it.

If anyone was in doubt why the National MP for Coromandel has been rolled by a person who was the chair of the Epsom local electorate committee, they no longer are. That speech was the reason why someone who was the chair of the Epsom branch of the National Party is now standing in the Coromandel. The National Party said: “We have got to have quality candidates, because we have got no quality candidates. What we’ve got to do is get rid of that candidate in Coromandel because she is doing us an immeasurable amount of harm.”

She stands up here and she tries to tell ordinary New Zealanders that the price of food has dropped—she tries to tell them that the price of food has dropped. That is someone who is so out of touch with reality. That is someone who has not spoken to the people in her electorate about how they are coping in this day and age. The average wage in New Zealand is $50,000. Seventy-five percent of New Zealanders earn below the average wage—75 percent of New Zealanders earn below $50,000. They are people who are really struggling. I am not talking about those 650 people who earn over a million dollars, who got a tax cut of $1,000 a week. I am talking about people in Napier on the median wage who got about $5 a week in the hand. They have seen the price of petrol go through the roof, they have seen the price of milk go through the roof, and they have seen the price of food go through the roof to the point where something has to give. That tends to be things like milk.

There are only three points I will make with regard to this Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. The first one is that Fonterra is of vital importance to the New Zealand economy. If we allow the sale of New Zealand assets to overseas interests, then New Zealanders will become tenants in their own land. The second point I will make is that this bill is simply an interim measure until more can be done—and more does need to be done; we all admit that. The third point is that if I look at the statistics I think the dairy industry is an industry that appears to be under threat and in trouble, and I will talk about that a little bit more.

The first point is about this being of vital importance. About 74 percent of New Zealand’s export earnings at the moment are from the primary sector. We are not talking about just dairy; we are talking about forestry, agriculture, and horticulture, but dairying is a large component of that. This is a very important part of our economy. Let us face facts—we are an agricultural-based economy, a primary production - based economy. That is why this is such an important part of our economy. But it is also why I have grave concerns about what is happening to the ownership patterns of New Zealand’s agricultural sector.

I will give members a classic example, one that has been in the news a lot: the Crafar farms. I do not know why, I cannot find one good reason why, Landcorp does not buy those farms, hold them in some sort of trust, and use them as training farms for young New Zealanders who want to get on the land, who want to learn about dairying. That would keep the land in New Zealand ownership and it would allow our young people to learn how to become great dairy farmers. It would not allow a Chinese company to tie up that whole supply chain from New Zealand farm right through to Chinese market. New Zealanders want to control that supply chain. We want to be in control of landownership. This is our country and I firmly believe that it should remain in New Zealand control.

New Zealanders do not want to become tenants in our own land. New Zealanders do not want to become a nation that has sold its land, sold its assets, and sold its competitive advantage to those large companies so we can be milked. Other countries appear to be a lot smarter around this issue. We are not allowed to buy land in a lot of the countries that are buying our own land. That is wrong.

The second point I will make is that this bill is simply an interim measure. Personally, I have concerns with the fact that Fonterra is forced to sell part of its production to competitors. That concerns me. It is only 6 percent, but it is the principle. That principle is why a company should be forced to subsidise other companies. As I said, it is only 6 percent, but it is the principle. That brings us to the price of milk. I for one am very pleased that the Commerce Commission decided to reopen its investigation on the price of milk. It may be that its conclusion is that everything is fine—that is fine. But all that New Zealanders want is a little bit of transparency. We want the knowledge that we are not being ripped off and rorted.

When I was young I was a milk boy. I used to get up at 6 o’clock every morning and push a trolley round the streets of Napier. I used to drink milk by the pintful. When I got home I would scull a pint of milk. Before school I would scull a pint of milk. After rugby practice I would scull a pint of milk. We were a family of four children. Mum used to put out six milk bottles. That did not cost her much, at all. We used to have milk in schools. Mr Assistant Speaker Roy probably would not remember that, but in the old days we used to have milk in schools. We recognised that milk is a meal in a bottle, milk is incredibly healthy, and milk is a necessity. It is not a luxury, but it has been priced almost at the luxury point. Goodness me, Coca-Cola is cheaper than milk! Something that is rotting the lives of our young people is cheaper than something that builds their lives. Somehow we need to get back to the point where people choose milk over Coke. Would that not be a great day? Because milk is a very healthy food and it is a necessity.

When we hear the statistics—Jonathan Coleman will know this; he is a former doctor—that New Zealand is the third-fattest country in the world, I have to ask what is going on here. I ask where we have fallen down so much that one in four of our children starting school is obese. That is a dreadful statistic, and it is something we have got to do something about. In fact, it is the reason why Labour has decided to take GST off fresh fruit and vegetables. We decided it was time to send a message that we value the health of this nation.

The other thing I will talk about is that this appears to be an industry under threat. Members may ask why I say that. First of all, Fonterra, since 31 May 2007, has made $77.4 billion, but it has had tax credits of $23 million. It has had a profit before tax of $1.865 billion, and a profit after tax of $1.888 billion. So Fonterra has paid no tax whatsoever on $77 billion of revenue. According to Inland Revenue Department statistics, there are about 17,244 dairy farms at the moment, but in 2009 they paid only $26 million in tax. That equates to $1,507 tax per dairy farm.

As mentioned, Fonterra is a vital part of our economy in terms of the export dollars it brings in, but we are getting absolutely no tax from this industry whatsoever. Fonterra has paid no tax since 2007. The dairy farmers have paid $26 million in tax. Obviously, if we look at the statistics, this is an industry that is struggling. That goes against everything we know in terms of the price of milk, so I have some questions as to how those farmers are structuring their businesses in such a way that allows them to minimise their tax to such an extent that there is an average of $1,500 per dairy farmer, but that is an argument for another day.

Just to close, I will make three points. Firstly, Fonterra is vital to the New Zealand economy. Secondly, this bill is simply an interim measure until more can be done—and more needs to be done. The third point is that the dairy industry appears to be an industry under threat. We do support this bill, but we absolutely understand that this is simply an interim measure. Thank you very much.

I rise to speak very briefly on the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. It is important that this bill travels through the House at this time, given that we need to have these provisions in place before the conditions are met that would otherwise trigger the expiry of the sunset provisions of the Dairy Industry Restructuring Act.

Dairying is a particularly important industry to New Zealand, to New Zealand’s future, and to New Zealand’s economic growth in the rural community, and it is certainly one that this National-led Government supports wholeheartedly. We are making sure that our markets operate efficiently with competition, and we are also encouraging innovation and enabling faster growth. In my electorate of Rangitata, one-third of the primary production area is used for dairying. I know it is very important that we get the settings right for dairying in this nation. I commend this bill to the House.