Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill

This is a very important bill, and it is good to see the Minister of Agriculture in the chair. I am sure that he will be able to answer many, many questions.

The bill has taken quite a bit of parliamentary time. We did not filibuster at all at its first reading, and it has been through the select committee process, but I have to say up front in this Committee stage that it is a waste of time, except for one provision, and that provision is the reason Labour is supporting it.

The bill ensures an ongoing supply of milk to independent processors. We will ask questions later about competitors to Fonterra and why they should be able to get this supply. The reason that Labour has supported this bill—and the day after the Minister introduced it he said it was redundant because he was conducting a full review, because a bit of political weight had been brought to bear on him—

Sitting suspended from 6 p.m. to 7.30 p.m.

We are looking at the title of the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill, which includes the words “Sunset Provisions”. I hope no one takes those words to mean that the dairy industry is on the way out. But if this National Government were to get back in, who knows? It would like to restructure the dairy industry—

💬 Chris Tremain: Yes, they’re gone.

That is right—there is an admission.

While the Minister of Agriculture is in the chair and able to answer a few questions, following on from my speech earlier I want to ask him about the review of the Dairy Industry Restructuring Act regulations. I understand that the review took place and he may have before him recommendations on the review. Labour will support this bill, which is an interim measure. As I said earlier, it is possibly a waste of time, but it guarantees supply to independent processors.

The Minister announced that review, and I understand that there are recommendations before him. I hope he can bring to the Committee some wisdom so that in discussing this bill we can know exactly his ideas for the Dairy Industry Restructuring Act regulations into the future. Is he going to remove them? Is he going to ensure there is access to other independent processors, either for export or for domestic? Labour’s preferred position is that there be ongoing supply for domestic production, but the supply for the export competitors of Fonterra needs to be seriously looked at. It is important to put that issue on the table. Labour supports this bill not to guarantee supply to competitive exporters into the future but to ensure that there is ongoing supply to the domestic market.

There are a lot of questions around the dairy industry at the moment. We spoke about some of them earlier when debating the Environmental Protection Authority Bill and the likelihood that it will be looking at a large-scale expansion of the dairy industry. That is all well and good, and we like to see that, but only with the right environmental protections.

One of the big questions hanging over the industry is the level of foreign ownership. The National Government has allowed Synlait to be purchased by majority foreign shareholding.

The CHAIRPERSON (Lindsay Tisch): Clause 1.

That is right. That issue is around the restructuring. Synlait takes milk through the Dairy Industry Restructuring Act regulations. Synlait currently—

💬 Hon David Carter: Clause 1.

Yes, it does. The Minister is trying to say no. It takes milk—

The CHAIRPERSON (Lindsay Tisch): We are on the title, clause 1.

That is right. It is the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. The Dairy Industry Restructuring Act regulations enabled many companies to take milk and to set up in competition with Fonterra.

We do not want to be confused about titles or anything like that. We need to know that this bill is basically about an odd commercial arrangement that was laid down when Fonterra was set up. The reasons were that Fonterra’s dominant position in the market required some access to milk to be assured for independent and innovative producers. We did that, but we have seen emerge some large export competitors of Fonterra who continue to access this milk, and it is important that we review the situation. I hope the Minister takes a call and explains where he has got to with that matter.

It is good to speak during the Committee stage of the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. When members on this side heard the member opposite, Damien O’Connor, talking about farming going out of fashion, it triggered a bit of thinking on this side. When we look at the title we remember that probably back in the 1990s Helen Clark was talking about the dairy industry and all the primary sector industries being sunset industries. So it is quite appropriate that we have the title Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. One wants to think about the role that the primary sector is playing in the most difficult economic times in New Zealand, I would imagine—

💬 Chris Tremain: Are you saying this is a memorial to Helen Clark?

I would say it is more of a memorial tomb to Helen Clark, in the sense that listening to a number of the Labour members speak, one would think the world did not start until 2008. There is a legacy whereby Labour miserably failed the primary sector. The very able Minister David Carter is taking this bill through the House, extending provisions to ensure that the primary driver of this nation’s economy has certainty. That is very, very important. I just advise members on the other side of the Chamber that we do not want to treat lightly the importance of this legislation. The Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill provides certainty going forward until we get everything else in order so that we can address the substantive matters.

The title is very, very appropriate. It is appropriate from the point of view that it is just a reminder to the Labour members. I have some sympathy for the former member for West Coast - Tasman, because he is probably the final remnant of any rural representation of the Labour Party. When he goes we know that we will no longer—

The CHAIRPERSON (Lindsay Tisch): We are on the title.

—have a dairy representative on the other side of the Chamber. The representatives will continue to be teachers, academics, and misguided unionists.

This is a very, very important bill—

The CHAIRPERSON (Lindsay Tisch): We are on the title.

The title is the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill and it is appropriate, even though it reminds us of what the Labour Party said back in the 1990s. It said that primary production was actually a sunset industry. It is a very appropriate title, and it needs to be treated with great reverence and respect, because this bill transitions us beyond where we were with the Dairy Industry Restructuring Act 2001. This bill bridges that gap until we get something more appropriate. Thank you very much.

This academic certainly loves dairy and certainly loves farming. I have spent my life in one way or another in farming or helping farmers, along with my colleague Damien O’Connor, who is a good dairy farmer—

💬 Hon Dr Jonathan Coleman: Who is also leaving Parliament.

That is fine; that is all right. I am leaving the Parliament in a very happy way. Do not worry about it. We still have a lot to contribute to agriculture.

The Primary Production Committee received 13 submissions on the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. We heard eight of them, and most of them were in support of the bill.

Clearly, this is a very small bill. It basically extends the market-share threshold for the expiry of the pro-competition provisions of the Dairy Industry Restructuring Act. The Labour Party and the Government both want to see more competition in the market. We want to see healthy domestic dairy prices and good processing markets for everyone concerned, whether for local domestic consumers or for export. This bill extends the threshold.

We are delighted to support this bill because it clearly increases competition, and particularly because it includes the West Coast in the South Island market share. In the past it was excluded, but this bill now includes it.

I think it has been mentioned earlier when we were discussing the Environmental Protection Authority Bill—

The CHAIRPERSON (Lindsay Tisch): We are debating the title.

I know, but I think this is part of it. The processing of dairy impacts on our environment and our income, and this particular bill certainly increases competition and the welfare of our people. It enhances the market, and that is good.

As has been said before, this bill is only one part of the wider dairy industry restructuring. I am sure the Minister of Agriculture will come back to the House in the not too distant future to get it right. We have to get it right, because this is something that both sides of the Committee support. Dairy is our main industry, and it is the future. In my view, this is not a sunset industry. I spent my life in the industry, and I fully support this bill. Going forward I can see opportunities, particularly in China, India, and the whole Asia region. That will be the future for this country. I commend this bill to the Committee.

I move, That the question be now put.

Motion agreed to.

Clause 1 agreed to.

Clause 2 Commencement