Annual Review Debate — Primary Sector

I would like to move that the report for the Primary Sector be noted. I think it is a fantastic report card, which we can spend some time exploring. We have an aspirational goal of growing exports for the Primary Sector to $64 billion by 2025, and the question is how do we get there if we accept that goal. I think it is great to have a stretch target; it is something that we can aspire to. We have such great performance now starting to come through in other sectors, like the horticultural sector and the wine industry, which is really driving exports. In fact, although the dairy sector is going through a difficult time, we have increased exports, and that is underpinned by those other sectors. So it is a pretty good story.

But what I want to focus on today are some of the areas in irrigation that the Ministry for Primary Industries, through Crown Irrigation Investments and the Irrigation Acceleration Fund, has helped to drive some irrigation schemes on. In particular, Crown Irrigation Investments has a fund of $400 million available for direct capital investment for regional-scale irrigation schemes. What does that mean, and how does that help? There is often talk about how irrigation schemes should be able to stand on their own two feet, and they will in time, but the issue is that there are so many moving parts to get an irrigation scheme up and running.

There is a funding hump to get over—and the Flaxbourne Community Irrigation Scheme, in particular, comes to mind. It is a scheme in which individual farmers would have to fund a 15-kilometre pipe to storage, and an individual farmer could not afford to put that in—even two farmers would struggle to make it past the feasibility stage. The council funding has helped in that particular scheme by providing a mechanism for the farmers to get together and get their scheme over that hump, but also there has been some great help from the Irrigation Acceleration Fund, and the Minister for Primary Industries made a very good announcement on that not so long ago.

To demonstrate the benefit of that irrigation scheme, you really only have to look at the example of a farmer like John Hickman from Taimate, which is in the Flaxbourne region. Three percent of his property, a sheep and beef property, is irrigated and growing grapes. That 3 percent of the area provides 40 percent of the revenue for that property, and if you look at it on the basis of profit, it is an even greater advantage to have irrigation there—it is closer to 50 percent of the overall profit, from just 3 percent of that area.

Viticulture, as we know, is a very environmentally friendly industry, and it goes on to have great value-add through the wine-making process, where all that value is added to the grapes that leave this shore in a bottle of wine with “New Zealand” on the bottle. It is actually a great advantage to New Zealand in other industries, because it really gives us a reputation overseas as a producer of high-quality, world-class products, and I think that is a wonderful example of what can happen through an irrigation scheme.

The Flaxbourne scheme still has to go through the process and get the final tick-off by the farmers, but I really look forward to it growing, by many millions of dollars, the export potential from the Flaxbourne region. In fact, the Marlborough region has just done a labour market survey and, based on surveying all its members, 7,000 hectares are proposed to be planted by 2020 in the Marlborough region. That adds up to more planted hectares than in Hawke’s Bay and Central Otago combined, so it is a phenomenal vote of confidence in that industry.

If we go further south to the Hurunui water project—the Hawarden-Waikari area, which is the main command area for the Hurunui water project—there are some fantastic soils there. Anyone who is a cricket fan will have heard of Waikari pitches. Well, the soil for a Waikari cricket pitch comes from Waikari, around the Hawarden area, and that is in the Hurunui water project command area. It has fantastic soils but it is a very dry area. It is drier now than it has been in the last couple of years. It has been 2 years of drought, and it is really getting worse as every day goes by. That area just wants an irrigation scheme. Thank you.

Can I thank Stuart Smith for his contribution. I would like to take a call this evening on the Appropriation (2014/15 Confirmation and Validation) Bill, covering the primary sector. It is a huge part of the New Zealand economy. We have set an aspirational target out to $64 billion by 2025—

💬 Hon David Cunliffe: How’s that going for you? How’s that going?

—and we know that is going to be challenging right now, Mr Cunliffe, with the dairy prices, but, importantly, when we set that aspirational target, it is about doubling the value of the primary sector. If Mr Cunliffe had been listening this afternoon he would have heard me talking in the House at question time about how the horticulture sector is going gangbusters.

A new report out from Plant and Food Research shows it is worth about $4.3 billion of exports. Now Mr Cunliffe has gone quiet. Actually, the Trans-Pacific Partnership (TPP) agreement, which Mr Cunliffe—I am not sure where he sits personally, but his party is all over the place on it. It cannot come out and support the Trans-Pacific Partnership agreement, whereas in the past, the two big political parties in the New Zealand Parliament have supported free trade and market access opportunities. So here we have Mr Cunliffe, who is saying “How’s it going for our aspirational target of doubling the value of our primary sector exports?” when, on that side of the Chamber, the Labour Party cannot support what we want to do, which is to open up new market access opportunities to 800 million consumers. The biggest benefactor of the Trans-Pacific Partnership is the primary sector, so I think it is fantastic that a lot of the primary sector is actually doing very, very well.

What else is doing well? The red meat sector. We have just come back from a very successful trip with the Prime Minister into China, where we have made some rapid progress on the chilled meat protocol. That is going to be fantastic. Instead of our meat products going into the chilled market frozen, we have an opportunity to put them in the best restaurants in Shanghai, Beijing, and all the other cities in China to continue to add value. Also on that trip we made significant progress, and further discussions have been had in terms of tourism, and it is great that Amway has signalled plans to bring a whole lot of its professional staff down into Queenstown in the off-season shoulder peak. We have an opportunity with these air links coming down to New Zealand, planes full of tourists, to put some of this wonderful chilled meat product into the back of the planes. The seafood industry is also growing and so is the forestry sector, so, actually, a big part of the primary sector is going pretty well.

Importantly, it is pretty tough right now for the dairy industry, but a lot of the things that are happening in the dairy sector are beyond the Government’s control. I have just been to an OECD meeting up in Paris with a whole lot of other agriculture Ministers. When I talked to my colleagues in many of the bilateral meetings that I had, they said that their farmers are feeling the strain as well with the global milk price. Actually, the European farmers, who are subsidised, are finding it very, very tough, even with subsidies. The milk price is below the cost of production for European farmers, just like it is for New Zealand farmers, and we know the reasons for that. Of course, the Russian ban means that European products that used to go into that market, like butter and cheese, are now going into other markets. We also know that the oil-producing countries have less buying power. We also know that the European farmers, since their quotas have come off, are producing more milk—up by about 2.2 percent in the last 12 months, and forecast to grow by another 1 to 1.5 percent. That is a 157 billion-litre market, so it is significant.

The fundamentals of the dairy industry across the world, with global population increasing—when you get back to the China market, it is fascinating when you see that 250 million to 300 million people are now in the middle class in China, and that is forecast to grow by another 150 million people in the next 10 years. When you think about China’s softening of its one-child policy, where it is forecasting 38 babies to be born a minute, from memory—that is about a New Plymouth a day. So they are significant—the opportunities in China. It was a very successful visit by the Prime Minister and the Minister of Trade up there, leading a strong trade delegation.

We also heard, when we were up there, from Jack Ma, who is the founder of Alibaba. Alibaba is an online trading mechanism—goods in, goods out; people buying and selling—and he is very focused on New Zealand products being showcased there. There are 407 million consumers in China who shop on Alibaba. The New Zealand Trade and Enterprise - Alibaba memorandum of understanding was signed when we were up there, and this is going to be significant to showcase New Zealand products through Alibaba. As we know, we produce a premium product. We know that we are world leading in our food safety standards and our overall systems. We know that our animals are predominantly farmed outdoors, all year round, hormone-free—all of those things. We have got an opportunity to add more value, particularly in these markets like China.

What I also want to talk about—and it was touched on a little bit earlier by Stuart Smith—is the focus that this Government has on doubling the value of our primary sector exports out to 2025. The important point here is the value—there is no way that we will be able to go and double the production. You think about our oceans. There is no way that we can go and catch, sustainably, double the amount of fish. The opportunity for us is to continue to add value. The opportunity for us is to have more water storage projects. We collect and store only 2 percent of the rain that falls in this country. The rest of it gets in the local streams and rivers and heads out to sea. We have got a huge opportunity to store more water in this country and to use it reliably. Right now, you just look at the Tararua Ranges—the average rain up there is about 5 metres a year. Look at Martinborough; from memory, it is about 700 mm a year. You could almost throw a stone, if you were a good cricket player, from the Tararuas and hit Martinborough. So on one end we have got huge amounts of water, but not at the right place at the right time.

That is why this Government is very focused on water storage projects. I know the Greens hate it when I talk about water storage projects being good for the environment. They are good for the environment because you take the pressure off groundwater aquifers. That is hugely important. Look at Central Plains Water recharging into Lake Ellesmere/Te Waihora. We know that we have got an opportunity to store more water in this country, and we know that it is good for the social fabric of society, we know it is good for economic growth, and we know, fundamentally, it is good for the environment.

What we have also done as a Government is we are investing more in biosecurity, and I am very proud of the fact that we are investing more. I am very proud of the fact that we have got more dog detector teams now. Actually, for those interested, any school pupil in New Zealand can get involved and name one of the beagle puppies right now. I think, from memory, it is the “G” litter, so they are out there talking to every school in the country, and it is a wonderful opportunity for schoolkids to get on board. These beagle puppies, and others that we have now got trained, are an important part of the overall multilayered biosecurity system that we have in New Zealand. We are investing more in terms of dogs. We are investing more in terms of people.

We have brought in the border levy, which now means that passengers—and about 55 percent of passengers who travel are foreigners—need to pay for our border services. As we have an increase in passenger numbers, which we are experiencing, at about 3.5 to 4 percent a year, that means that the cash will follow and we can do more in terms of those very important biosecurity services, particularly at our airports and for cruise liners.

Also, we are out there consulting right now on animal welfare regulations. This is hugely important for us as an exporting nation. It is worth about $23 billion, and I know that about 66 percent of New Zealand families own a pet, so it is important that we strengthen our animal welfare regulations. It is fundamental to us as an exporting country, and I know that New Zealanders care about their animals. So, in summary, it is a great opportunity to be able to talk about the primary sector, which is a big part of the New Zealand economy. Actually, fundamentally, the primary sector is doing pretty well and we are doing what we can to support our dairy farmers through a pretty tough patch.

In speaking to this section of the annual review debate, the Primary Sector, it is a good opportunity just to acknowledge, on behalf of the Labour Party, all of the hard-working men and women of our primary sector—our farmers, who get up early every morning and go and milk the cows, till the fields, and provide the backbone of the New Zealand economy. So we want to acknowledge them.

The Minister for Primary Industries has talked about water management. I want to talk a little bit about water management too. I am not going to talk about the white elephant that is the Ruataniwha Dam, which the Government cannot make pay, nor am I going to talk about the white elephant that is brewing in Ashburton, where the Ashburton District Council is doing a sweet deal, by the sound of it, for somebody while bearing the risk of having an aquifer that might go bad. I am going to talk about a river that I am rather fond of: the Manganui River in North Taranaki. When I was a kid, I used to fish for trout in the Awakino, which is right next door.

The Government has approved the sale of 1,300 hectares of iconic land on the side of the Manganui River to a Panamanian-registered company called Ceol and Muir. That has come to New Zealanders’ attention by a thing called the Panama Papers. That sale was approved by a Government agency, under Minister Louise Upston, called the Overseas Investment Office. You might call it the “Overseas Investment Optimists”, because this is the kind of office you have when you do not really have an office. That office accepts the word of foreign investors that they are of “good character”, and it does it through a thing called a statutory declaration.

The CHAIRPERSON (Lindsay Tisch): We are on the Primary Sector debate, and I would ask the member to come back to it—the primary industries; the primary sector. This is what it is about.

I raise a point of order, Mr Chairperson. I am advised by our whips that you are taking, as is the agreement of the Committee, a broad-ranging approach to this. We are clustering related groups of portfolios—

The CHAIRPERSON (Lindsay Tisch): We are clustering them. This is to do with the Primary Sector. [Interruption] When I am on my feet, the member will sit. You must relate whatever you are saying back to the Primary Sector. I have not yet heard one word on the Primary Sector in the time you have taken.

The primary sector requires good land and water management. The Manganui River borders the Onetai Station in North Taranaki, in the primary sector. It was purchased by Rafael and Federico Grozovsky—two gentlemen from Argentina and Italy who have criminal convictions for toxic waste pollution in the Luján River in Argentina. But the Overseas Investment Office thought that was no threat to our primary sector. It was happy to tick off the sale of iconic primary sector land bordering the Manganui River to a group of people who have criminal prosecutions and who have been held criminally responsible for toxic waste pollution—really bad pollution, carcinogenic pollution that made people seriously ill, for which they were criminally responsible.

But our Overseas Investment Office did not protect our primary sector, did not protect our land, and did not protect our awa, the Manganui River, from this purchase because it did not even check the bona fides of the investors. In fact, it may be that the particular people it thought were the ultimate shareholders of the purchase of this land in the primary sector were not, in fact, totally the shareholders at all, and it has said it cannot tell. Furthermore, we now have information sourced from the UK Companies House and from a Florida court that shows that one of the directors of this company that purchased this land in our primary sector was tied up, through another Panamanian company, with a large-scale scandal involving the possible non-payment of tax in relation to the football sector in Europe, to the tune of tens of millions of dollars.

The CHAIRPERSON (Lindsay Tisch): Back to the Primary Sector.

My point is that the supposed watchdog of the sale of iconic New Zealand primary sector land is not doing its job. It is taking an investor’s word for it, and it cannot even, by its own admission, do a simple Google search to find out whether somebody is who and what they say they are. It cannot do a Google search. The proof of that is that the office has announced today a review, finally—what Labour has been calling for, for weeks now; an independent review—and has said itself that amongst the things it wants to find out is how to use Google. It is unbelievable. This is the Government agency presiding over the sale of thousands and thousands of hectares of New Zealand land. In fact, it has turned down only one sale in the last 5 years. It has approved 99.85 percent of farmland sales. The only one it turned down was Lochinver Station, and that was after weeks of public attention and ministerial intervention.

I am pleased to take a short call on the review of the appropriations in the primary sector. I think the speech we heard from the Minister for Primary Industries summed up the Government’s arrogance and its lack of understanding of the fact that when rain falls on the land and drains into rivers, that sustains life. Rivers are not to be captured always for irrigation. The fact that the Minister was claiming that irrigation and big storage schemes are good for the environment shows what little understanding he and this National Government have about what rivers are really important for—for sustaining life, for sustaining a lot of our indigenous plants and wildlife, and for their recreational values.

We cannot exist without water. This Government wants to direct it into big irrigation schemes, and that is what I would like to talk about this afternoon, in terms of the Irrigation Acceleration Fund, which is a major part of the Ministry for Primary Industries’ promotion of more intensive agriculture. This Government has helped to create the perfect storm that we are now experiencing in dairying. With funding for things like the Irrigation Acceleration Fund and the handouts that it and Crown Irrigation Investments give to irrigation, it has encouraged a very high-input, high-cost model that has a high environmental impact. It relies on imported feed, like palm kernel expeller, and very high levels of debt. So when you have had the change in the dairy supply payouts, that has helped to create the perfect storm.

Under the Ministry for Primary Industries, through the major investment in the Irrigation Acceleration Fund—$35 million over 5 years, with another $25 million pumped in, in last year’s Budget, to be spent from 2016—this Government is making it very easy for these think-big storage projects to go ahead. To date we have had that fund spend $27 million in handouts to 18 irrigation projects. We have had $6.5 million go to Ruataniwha, $8.7 million go to Central Plains, $7.6 million go to Hunter Downs, and another $1.8 million go to Hurunui. Even just one of those grants exceeds the amount that the Ministry for Primary Industries allocates for sustainable farming through its Sustainable Farming Fund.

It just shows the Government’s priorities. It gives big handouts to irrigators and agribusiness, and yet in 2015 it provided only $7 million for the Sustainable Farming Fund. It just shows how little weight the Government gives to sustainability, and that is despite one of the ministry’s stated outcomes being to increase sustainable resource use. The focus seems to be more on increasing resource use, rather than on improving sustainability. What we have seen with this whole growth in irrigation and intensive agriculture has been a disaster for our rivers, our streams, and our aquifers, and that is what National is failing to take into account.

We want to have a reputation overseas for producing safe food—food that people can trust because it comes from a clean and healthy environment—yet the Government, with its very weak standards for the regulation of land and water use, its very permissive National Policy Statement on Freshwater Management, and these big handouts to think-big irrigation projects like Ruataniwha and Central Plains, is encouraging more intensive agriculture and more water pollution. In Canterbury, where a lot of this has happened, and where a lot of these irrigation grants have gone, we have got the medical officer of health warning midwives to warn pregnant mothers to ensure that if they are bottle-feeding their babies, they do not take the water for that infant formula from their local bores, because nitrate levels exceed the World Health Organization standards. Nitrate is not like E. coli. You cannot boil the water to get rid of it; it is there permanently.

💬 Hon Jo Goodhew: Scandalous—you want to scare pregnant women.

It is not scaremongering, Minister. Environment Canterbury’s monitoring of water supply bores is showing an increasing spike in nitrate levels that exceeds World Health Organization standards. The medical officer of health has warned midwives. The Government is in denial about the impacts on our human health and the environmental health that its policies, through the ministry’s handouts to irrigation, are having.

So the Irrigation Acceleration Fund is not about promoting sustainable land and water use. It is all about allowing agribusiness—

I rise to take a call in this debate and to try to balance some of the ridiculous assertions that are so broad-sweeping, and scandalous in that respect. The first thing I want to say is that the member Eugenie Sage is just the teeniest little bit right when she says that midwives are warning pregnant women about the risk of wells in contracting blue-baby syndrome. Where the member is just completely off the planet is in thinking that this is widespread. The member knows it is not. It is a very, very small number, and every single farmer who takes well water that is affected in this way knows about it already. This was a very general warning that went far wider and scared many of the pregnant women in my electorate unnecessarily. But that actually is the modus operandi of that particular party sitting over there.

I want to talk about the record that we have in terms of the support for the forestry sector, and then in general. What we have heard today is about how the economy is benefiting from primary industries in very many ways. I want to start by reminding members of the benefits that certainly accrue, through free-trade agreements, to the forestry sector. The free-trade agreement with Korea will see 99 percent of exports duty free within 10 years, and then the Trans-Pacific Partnership agreement will see $11 million worth of savings every year, and once it is fully implemented, it will be tariff-free.

So that is the return back to our forestry sector. But, in fact, the forestry sector will say it needs to grow in other ways too, so we are planting more forestry through the Afforestation Grants Scheme—$22.5 million over 5 years. In addition to that, we are updating the timber standard because there is much more to be gained economically through engineered timber. So although this is the economic side of things, I think it is really important that we put on the record today that for many in the primary industries sector—not all—it is a pretty tough time right now. In my electorate we have certainly seen that, and we have seen it further afield, up in North Canterbury as well.

But this Government has put out support for the mental health of rural communities—for the rural support trusts it is $150,000 extra. You know, most of the rural support trusts people are volunteers. They are fantastic, warm, caring, skilled volunteers who are out there supporting their neighbours, and out there responding to need. It is very much a neighbourly thing. In the next 3 or 4 weeks we have got two events—one in South Canterbury and one in mid-Canterbury—to support farming families to come together, enjoy a bit of time together, and gain that support. I was with Annabelle White—she was doing the entertaining; I was doing the listening and the laughing—in North Canterbury on 1 April when a well-supported rural support trust meeting had 300 women there, a few police members, who were not women, and, in fact, a waiting list of 60 as well. So there was fantastic support—people coming together. We see banks, we see vets, and we see transport companies linking arms. They are all out there, doing their level best to support some farmers who are finding it really challenging. And we are not talking just about dairy; we are actually talking about other farmers as well. But this is very different from the 1980s when that support did not seem to be there; it certainly is there now.

I particularly want to mention the $500,000 that has gone towards mental health support. There have been an extra 60 rural support trust facilitators trained, and also 14 regional mental health clinical champions and a medical director appointed. So it is not just money that is floating around. What we know is that the rural support trusts have helped to train a number of people in what is called Mental Health 101 training, so that they can recognise when people in rural communities are feeling under pressure—under the pump, so to speak.

Suicide is always considered to be a problem, but what we know across New Zealand is that it is more frequent in rural areas, when you look at it on a population basis. This, of course, causes concern, but what we also have out there is a much better understanding now of how to recognise when people are feeling under pressure. Putting aside those people, those rural support trust facilitators, and getting around the country, both Minister Nathan Guy and I have been able to catch up with rural support trusts from the top of the North Island earlier in the year, in February, to the bottom of the South Island at the Southern Field Days, and then at A and P shows as well. They are doing a fantastic job and I want to lay it on the record here today.

I am pleased to rise on behalf of New Zealand First and take this call in the Committee of the whole House on the annual review debate examining the performance of the Ministry for Primary Industries. I want to say that in the last 12 months it has been quite a woeful performance from the Ministry for Primary Industries. It has been painful to watch, and New Zealand First knows that this is not the fault of the ministry at all, or the fine people who work within it. The blame solely lies on this Government. This National-led Government has become so distant, so divorced, and so detached from the grassroots of its farming foundation, where the genesis of the party itself sat, that it now no longer actually understands what makes the primary sector tick. This is to the point where it has lost touch with its origins, and those origins are beginning to realise that fact, and that this will be a damning fact at the 2017 election.

Every day in New Zealand First we are receiving phone calls from one end of the country to the other, and right across the farming and agriculture spectrum—good people who have become completely disenfranchised with the attitude of this Government due to lack of proper understanding of the most important sector of our economy. The consequence is inadequate funding for the Ministry for Primary Industries, which is tasked with looking after the safety and security of our agriculture sector. Where is the support to our farmers right now? Where is the support that this National-led Government has promised to this fundamental sector, right now? It is no secret that the dairy industry is experiencing the deflation of a bubble that was always going to burst, because, ironically, trends tend to repeat themselves over a period of time.

You have an out-of-touch Government that is also unfocused; a Government that has forgotten about the farmers at the gate who are having to wear the biosecurity risks that are contaminating their very livelihoods, such as the velvetleaf incursion, not only in Southland but also in Canterbury, and also in the Waikato region. This biosecurity breach will see farmers at their gates having to detect velvetleaf weeds themselves, from their own resources that they should be putting back into their farms in order to ride out this tough time. I am not just talking about now; I am talking about the generations to come, from the farmers’ families. I am talking about potential buyers of the contaminated farms that we will see in the future, and that is a real problem.

It has been said that this National-led Government did not see it coming. There is a well-known saying, woven within the fabric of our society, that no man, no woman, no child should get left behind. In the case of the farming and agriculture sectors, the Government has bolted and pigeon-holed itself amongst the wine and tourism industries. It has been dropping the ball on traditional New Zealand - based bread-and-butter sectors. In other words, the marriage is over, and the men, the women, and the children in the farming sector have been left out in the dark. Come this time next year, the Government will be back on its high horse, out rallying for the votes of farmers when it has shut its door on them now. It has failed to listen to the farmers’ needs or even protect them from basic biosecurity threats.

Now let us talk about Fonterra—the great old elephant in the room. Although we think we can blame Fonterra’s senior management, it has to be remembered that Fonterra exists as a creature of statute. Fonterra came to the Government and said: “We want to be a virtual monopoly because that will give us the size and the strength that will benefit the entire country.” The Government said yes, and Parliament realised that having the great bulk of our dairy industry condensed into one single entity of global proportions would be a good thing. But the Government also has a responsibility to ensure that Fonterra stays true to its original aims, and that the ministry tasked to oversee and look after this is adequately resourced.

It is clear that the Ministry for Primary Industries does not get resourced adequately to allow it to do the job that it is entrusted to do. The Government’s meddling hands in the financial structure of Fonterra, with the 2013 Dairy Industry Restructuring Amendment Act and the cynical Trading Among Farmers scheme, have only made things worse. New Zealand First said so at the time, and we have been proven right by what is happening here today, and what is happening now. But the greatest failing that this Government has heaped upon New Zealand and the primary sector is, of course, an utter lack of anything remotely realistic in terms of resourcing for our biosecurity. Minister Guy said that it is his highest priority, but John Key’s Auckland-focused, finance and banking - prioritising Cabinet simply does not seem to realise how essentially important the line of defence is in New Zealand.

Kia ora. E ngā mema o Te Whare nei, tēnā tātou katoa. In the time that I have got remaining—probably 30 seconds—I am happy to take a call on the Appropriation (2014/15 Confirmation and Validation) Bill, focusing on the primary sector. We had the Minister talk about the wonderful strategy that he has under way—his vision for 2025—but my contribution is going to be about the cost of that progress. It is the cost of the progress that I want to highlight. So what has been the cost of progress in the primary sector? We only have to look at the dairy sector, and the dairy sector is in crisis. Milk prices are down—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.

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

Before we broke, I was taking the honour to make a contribution on the 2014-15 annual review of the primary sector. I started off by acknowledging the Minister getting to his feet and explaining how pleased he is with the performance of his particular sector, and I thought I would offer the cost of that progress. I started to talk around what is happening in the dairy industry in terms of the prices around low milk production—and, obviously, auction prices are hurting farmers—but I also want to talk about the whole sector’s performance around water management.

It has been mentioned by previous speakers on this particular sector that we really do want a quality that means our water is swimmable, as opposed to the current quality standard, which is wadeable, which this Government is promoting. I fully support the Minister’s ambition to double the value of our primary sector by 2025, which is merely 9 years away. I guess the offer to the Minister, to be the progressive Minister I believe that he thinks he is, is that we seriously have to clean our rivers, because one of our added advantages of doubling the value in our primary sector is that we actually have clean rivers. That is our economic advantage on the international stage—that we are a primary producing country that actually values the clean, green image and the added value it brings to our exports.

We also want a country that offers and implements robust and world-class labour laws so that when our workers in the primary industry go to work—and there are many, many workers who derive their livelihoods from the primary sector—they come home. So they go to work, they come home, and they are safe while they are at work. Obviously, in that space, we want to ensure that the jobs that the primary sector is creating actually go to Kiwis first. I did want to say, from this side of the Chamber, that the progress terms of the primary sector is fairly wanting in terms of water management, but the area that I am particularly keen on is actually the land issue.

We have had numerous applications to the Overseas Investment Office and only one application has been turned down. So there are some concerns around how robustly we are checking overseas investors when they are coming to, obviously, buy up our land—land that is part of our country, which is really important. It is part of our psyche, it is in our DNA, and we want to ensure what land we have left in New Zealand remains in New Zealanders’ hands. So in this part of the annual review, there are some issues, seriously, that need to be addressed around the role of the Overseas Investment Office.

But one report that has come from the Minister’s own department, the Ministry for Primary Industries, is about growing the productive base of Māori freehold land. That, to me, is one of the reasons why I have come into Parliament as the member for Ikaroa-Rāwhiti, one of the largest holders of Māori freehold land. It is important that we ensure that land that is in Māori hands remains in Māori hands. I draw that reference only because we do have a bill coming later to the House, Te Ture Whenua Māori Bill, and I will leave that for that time.

I actually want to draw the Committee’s attention to the Auditor-General’s own audit of the Ministry for Primary Industries. If I can just mention his report to the select committee, he talks about an area of performance for the ministry that I am sure the Minister is going to take care of, and that is performance information and associated systems and controls. Although the audit has noted its general performance as good for the previous year, it did make a comment that the primary industries, including Māori, have greater access to capital and have skills needed to grow and innovate. It noted that the indicators of progress that give a view as to whether industry has found access to capital more or less challenging over the review period were missing. So we need to do better in this space.

I want to focus my comments on animal welfare. Last year our reputation for being world leaders in animal welfare took a really big hit. We saw broadcast on TV compelling evidence of animal cruelty to farm animals occurring in nearly every sector—dairying, pig farming, and the egg-laying sector. Undercover footage showed baby calves, laying hens, and mother and baby pigs either being violently handled or kept in appalling conditions.

Last year TV One’s Sunday programme aired appalling footage of baby calves being seriously mistreated on farms, in transport, and in a slaughterhouse. Earlier this year Story aired footage that showed conditions on a brand new colony-cage farm as bad as any I have seen on battery farms; scenes of dead, dying, de-feathered hens crammed in cages in appalling conditions. Add to this the hundreds of deaths of mother pigs and their babies packed in farrowing crates in a piggery farm and it clearly has not been a good year for farm animals.

What really did it for me, and gets many others, is that despite the compelling video evidence and witness statements that have been handed over to the Ministry for Primary Industries of suffering to the animals, hardly any have actually resulted in the Ministry for Primary Industries following up with a prosecution. It is particularly shocking that it has said that it will not prosecute the colony-cage farm that was aired on Story. If footage of dead, dying, and suffering hens in overcrowded cages is not enough evidence for the Ministry for Primary Industries to prosecute, then something is seriously wrong. That level of suffering that was shown should have resulted in more than a slap on the wrist with a wet bus ticket.

So in my view, and in the view of the many thousands of New Zealanders who really care about what is happening to our animals, and not just our pets but what is happening on the farms to farm animals as well, the Ministry for Primary Industries is failing them on several fronts. It is failing our animals by leaving it to members of the public to go undercover and film the footage of what is happening behind closed doors on factory farms and in cage slaughterhouses to expose the cruelty that is happening there. It should not be up to members of the public. If the Ministry for Primary Industries was proactive enough and doing on-the-spot audits of these farms without notice, then it would be on top of this and there would not be anything for undercover footage to reveal.

The ministry is also failing our animals because it is still saying it is OK to keep hundreds of thousands of animals in cramped cages even when these systems are clearly in breach of the Animal Welfare Act, as farrowing crates are. Keeping animals in confined cages is doubly cruel because they are not set any requirement for there to be fire sprinklers, which means that these poor animals not only suffer miserable lives in these cages but are at risk of horrible deaths by being burnt alive when a fire breaks out, as happened in the Waikato piggery and on multiple occasions on factory farms over several years. We need to be able to trust the Ministry for Primary Industries to ensure that all our animals are treated humanely and our international reputation is protected.

As I said before, the Minister is right; New Zealanders do care about our pets, but we also care about farm animals, and what we are seeing on our TV screens of what is happening to these farm animals is not OK. Especially, these colony cages are not a humane alternative to battery cages. If McDonalds and Wendy’s and Burger King have all committed to going cage-free—if these major fast food companies can afford to ditch cruel eggs—then the Ministry for Primary Industries can say that we can ditch them too, as a country. We do not need them. They should go.

At the risk of repeating some things that have already been said, in taking this call—unfortunately, I was away today attending the funeral of a Shannon primary school teacher who was 27 years in the business in, of course, the previous territory of our Minister for Primary Industries. I need to start these few words by congratulating Martyn Dunne and his large team at the Ministry for Primary Industries on doing such a great job in producing a very good annual report. The organisation has moved very quickly from amalgamation to become a real force in the sector. As I commented in my opening remarks to the director-general, Martyn Dunne, this sector has made great strides in the past year, producing a very good annual report and facing some very interesting challenges in the biosecurity, animal welfare, and food safety sectors—coming through them all with flying colours.

The first of these challenges was named Operation Concord and managed the blackmail threat over the 1080 scare, one of the most distressing in New Zealand’s history. But it was satisfactorily resolved, and at the same time it gained New Zealand great credibility for our food safety response capability worldwide. The second major challenge was, of course, the fruit fly outbreak in Auckland—again managed extremely well by the Ministry for Primary Industries.

I want to get on to the issue that the last speaker was talking about—that of animal welfare. Although, unfortunately, the Ministry for Primary Industries was well tested by a major animal welfare inquiry in the treatment of bobby calves in the last year—this will result in some prosecutions, but for those of us with a lifelong love of animals it is very disappointing to believe someone could treat animals in this manner—it is reassuring, of course, to know that the Ministry for Primary Industries has an extremely efficient system, and that the Animal Welfare Amendment Act (No 2) passed last year will enable effective action to be taken against these inept and irresponsible people. I want to defend the sector’s record in animal welfare, however, because I think that many of the issues raised by the last speaker, Mojo Mathers, are in fact not applicable. I think that almost all sectors of New Zealand farming take their animal welfare issues extremely seriously and do a great job with them, and I think we should be proud of our record in that area.

We also should be proud of the fact that we produce food in a very competent and caring manner, which is great for our animals, great for our farming sector, and great for our international reputation. Our industry should not be measured by the inept behaviour of a few renegades. Our farming practices are world-renowned for our animal welfare, care, innovation, and many other things. To maintain and improve our place in the world market, we must ensure all of our practice relating to environmental matters, food safety, animal welfare, and biosecurity is the very highest it can be, and we must continue to root out of the industry those people who cannot perform. There is no room for complacency here—the Ministry for Primary Industries is well aware of that.

It is also very reassuring to witness the new biosecurity agreements adding significant value to our response capability, as noted by the Office of the Auditor-General in its recent report to Parliament, a report that documented the great progress made by the Ministry for Primary Industries in this area. I want to thank all members who have served on the Primary Production Committee in the last 12 months. We have a very consensual select committee. I think we do a pretty good job, and we do a pretty good job of reviewing some pretty important legislation and important issues for New Zealand’s future.

I just want to take one issue, though, that has been in the news again today. I think it is a shame that political interference occurs in a process around Silver Fern Farms that was democratically taken by the shareholders of that company. We now have a whole lot of politicians jumping on the back of it, thinking they know better than the 82 percent of the shareholders who voted in the course of that event. I think it is extraordinary that we think we know better, in this Parliament, than the shareholders of that company. I think it is a tragedy for New Zealand, and I think it is plain silly—irresponsible, frankly.

We in the Primary Production Committee also review Land Information New Zealand, AsureQuality, Landcorp, Crown Irrigation Investments, and animal products. I will briefly comment on the performance of Landcorp, as it is a very large asset in the Government books and is currently demonstrating the challenges faced by many of us in the agricultural sector. We certainly hope it can turn the current situation round, because if it cannot, the rest of the agricultural sector will not. Notice that it has abandoned further dairy conversion on the central volcanic plateau. It is worth noting that this was the subject of a petition to the Primary Production Committee, which enabled us to better understand the challenges facing our region. Thank you.

I acknowledge Ian McKelvie, the member who has just returned to his seat, and I acknowledge the hard-working Kiwis who are out there in our primary sector every day, doing their work and ensuring our country moves forward.

Mr McKelvie mentioned Silver Fern Farms, and I am glad that he did, because the 82 percent who voted in favour of that merger, we will call it—what is of issue is whether they voted so based on accurate information, and whether the Overseas Investment Office also had accurate information and had done due diligence. I think that is, it is fair to say, an issue that we will be returning to in weeks to come. The member opposite has rightly noted that land information is part of the review for us today, and, of course, the land information portfolio takes in the Overseas Investment Office, which has been much in the news of late and not for good reasons.

Our primary sector, as with the rest of New Zealand, faces a choice. Are we going to be simply a hard-working producer of relatively raw materials, where we do not get very much share of wallet, or are we going to add value and knowledge and are we going to be world-beaters for premium products that we can put on restaurant tables and shelves around the world? If it is the latter, then we are going to need several things. We are going to need knowledge and information all the way along that value chain, from the farm to the table, and we are going to need high-quality investment along the way—high-quality investment.

The Labour Party is in favour of having high-quality foreign investment in New Zealand business. We believe we should be international traders. We believe that we should be out there in the world, but not in a stupid way.

That brings me back to the Overseas Investment Office, because today it has—by the Minister for Land Information’s own admission—been the case that the Overseas Investment Office got it badly wrong in the case of a sheep and beef station in North Taranaki called Onetai Station, where it did not properly do a due diligence test on the foreign investors who were buying it. This station is alongside a sensitive riverway in Taranaki, and the guys who bought it just happen to have criminal prosecutions in their background for toxic dumping into their local river before they bought the Taranaki station—not ideal.

What is worse is that in the first place our watchdog, the Overseas Investment Office, which New Zealanders depend upon to keep our country safe from investors of ill repute, relied upon them saying they were clean. The office tried to do a quick Google search, but, according to documents that we have seen, it did not find anything. That is why in the review that the Minister has, belatedly, announced today, the terms of reference include helping the Overseas Investment Office to find someone who can actually work Google. That is extraordinary. New Zealand’s official watchdog of investment quality into our primary sector could not find criminal convictions that the Labour Party took 30 minutes to find—30 minutes to find. And, if it is true of that case, how many other cases are sitting in the Minister’s problem pile? I will bet you this. The Minister would not opt for a full external review if she thought everything in that box was hunky-dory, and, in the farm language that is around out there in this sector, I would say “Bugger!”.

Something is very wrong in the Overseas Investment Office, and it is going to take members across both sides of this House to fix it. We want good trade. We want our primary sector to move forward. We want high-quality foreign investment that will add skills, knowledge, distribution chains, and market access, but what we do not want is sensitive New Zealand land sold off without so much as a wet bus ticket to people who actually do not have the credentials that they are required to have under our New Zealand law. That is sloppy. That is not appropriate. That is not doing justice to the hard-working farming people up and down New Zealand, who get up every morning and work their guts out to make a decent living. It is not honouring them to allow their land to be bought up by people who may or may not have been fully frank about their criminal records when they made those investments. [Bell rung] Mr Chairman.

The CHAIRPERSON (Hon Chester Borrows): The Hon David Cunliffe.

If people out there in New Zealand think that this is an isolated case, then I think that the Labour Opposition has news for them. This is a system failure. Where does this go now? Where it goes is very simple. The Onetai Station scandal is the tip of an iceberg. It is one of many approvals that the current Government let past the goalie over the last 5 years. Do you know that only one overseas investment application into New Zealand farmland has been turned down in the last 5 years? Only one.

💬 Tracey Martin: Unbelievable.

“Unbelievable.”, my colleague says. Unbelievable—only one. That was Lochinver Station—the Crafar farms—and that was after weeks and weeks and weeks of media attention and of Opposition work, and only then, reluctantly, did Ministers say: “Oh, it’s too hard.” But the Overseas Investment Office probably would have ticked it off, just like it ticked off every other application, without exception, during the period. Why? Is it that it thinks that it is appropriate to rely upon a statutory declaration—the word of investors who may or may not have come through shell companies run by Mossack Fonseca and others? Does it think that that is good enough for New Zealanders? Does it think that it is OK to do a 5-minute Google search, find nothing, and say that it has done its job? Or is it more sinister?

Is it possibly the fact that the current Government is so intent on keeping the tap of cash open that it does not really care where it comes from? Could it be the case that the National Government is more intent on looking after the interests of the powerful—

The CHAIRPERSON (Hon Chester Borrows): Order!

—and the moneyed—

Order! If the member could resume his seat momentarily. We have noticed that the Labour Party has exhausted all its supplementary calls and all its calls on this particular sector. So unless the honourable member is using a call from a subsequent debate, then we should probably pause it there. He has had a free hit for about 2½ minutes. [Interruption] Sorry, you do not have another call. You have had 2½ minutes of the next one.

Was that not a fascinating contribution from David Cunliffe? What he has forgotten about with the Overseas Investment Office is when his mate David Parker was in, signing off these large tracts of agricultural land. Last time I had a look at a time-frame level, Labour had, proportionally, sold about twice as many as what the National Government has sold. He has got short-term memory loss. He has forgotten all of that, and he stands up here and talks about: “We want high-quality foreign investment and we want good trade.” And yet on that side of the Chamber they do not support the Trans-Pacific Partnership, and so I cannot believe that anything that David Cunliffe says actually has any credibility.

What I want to talk about this evening, on this final call from the Government’s side on the Primary Sector—

💬 Hon David Cunliffe: I raise a point of order, Mr Chairperson. I take offence at the fact that the member who has just resumed the chair could possibly infer from a rational opposition to the Trans-Pacific Partnership—

The CHAIRPERSON (Hon Chester Borrows): No. No, the member will be seated. That is a frivolous point of order. He knows it is not a genuine point of order. A man of his extensive experience should never have called it.

Is it not great when you get under David Cunliffe’s skin? Anyway, what I wanted to do, moving right on to the issues that really matter—it is about the leadership of the Primary Production Committee. I want to acknowledge Ian McKelvie and the great job that he does, and the reviews that he has done over the last 12 months. I also want to talk about—because it has not been touched on this evening—having had contributions while I have been in the chair about animal welfare, about irrigation, about water quality, about biosecurity. Those sorts of things are very important. But what we have not touched on in the primary sector is, actually, research and development, and how we are going to see the aspirational goal of doubling the value of our primary sector exports by investing wisely in research and development. The Primary Growth Partnership is a classic example of where the Government is partnering with industry, and we are starting to see some really tangible results.

If I think about the Precision Seafood Harvesting net design—recently I was up there applauding the commercial sector in the Hauraki area, where they have now got 100 percent camera-coverage and vessel monitoring systems, which is basically the GPS. As a result of that—and we link in with the fantastic net design—fish are able to be selected for size at sea, which is fundamental to the overall ocean sustainability of our fishing stocks. They come on board the vessel in a better shape—another selection process there. Boats are now being designed with holding tanks to hold these fish in a pristine condition. This is all about sustainability. This is reaching into these very important lucrative markets that, of course, Labour and New Zealand First and the others do not want to support through the Trans-Pacific Partnership. This is about New Zealand investing in world-leading net technology, and I am really excited about it.

Another one that is really important for the forestry sector is the steepland harvester. It has been so successful that it has now been exported around the world. It was designed by a couple of Kiwi guys in Nelson. Basically, it is a digger that operates on a steepland slope. And now they have designed it so that you do not need to have an operator working this machine. Is that not fantastic? Just last year I saw the guy—and my kids are not bad on the PlayStation, but I saw this operator and he was even better—working remotely, offsite. The digger was operating, felling trees, a cable coming down with a sensor on the end of it and a grapple picking up these trees—not a human on site. You think about the productivity advantages from this technology, but we should not forget health and safety as well. So, once again, New Zealand is leading the world in research and technology.

Also, we have just recently celebrated nearly $7 million in the Sustainable Farming Fund. It has been going, actually, since Labour’s time, and it has been very successful. In 16 years $125 million has been invested in grassroots programmes. Very, very successful, whereby farming groups and arable groups come forward to the Ministry for Primary Industries with ideas, and they are appraised by a technical group deciding which programmes get funding. But this is about grassroots research and technology: farmers and growers and foresters making decisions for themselves to actually help us to realise our aspirational goal of doubling the value of our primary sector exports out to 2025. There is a huge amount happening and I am very excited and very supportive of a big part of the New Zealand economy, which is our primary sector.

Reports noted.

Social Development and Housing Sector