Dairy Industry Restructuring Amendment Bill (No 2)

I move, That the Dairy Industry Restructuring Amendment Bill (No 2) be now read a second time.

The Dairy Industry Restructuring Act’s automatic expiry provisions were triggered in 2015, as we’ve heard in this House—and dairy processes other than Fonterra, where they have collected more than 20 percent of the milk solids in the South Island. I think this House has heard some interesting questions, put down on the table by both the Opposition and by the Government themselves. These are questions that are, for the most part, legitimate. There are a few extreme ones that probably don’t bear any consideration. But they are questions that will be thoroughly canvassed through the review process that will be conducted over the next 12 months.

I have to say that it would’ve been good to bring the terms of reference for the review to this House. The reality is that all those in the Ministry for Primary Industries committed to the dairy industry and knowledge of it are basically focused on the control of Mycoplasma bovis, and that’s where they should be focused.

We will arrive at a position very soon. We will have the terms of reference out. It will be more far-reaching than that of just a simple Commerce Commission review, and it will ensure that the industry that we are legislating for and making amendments for is the one that is fit for purpose moving into the future. And that is the objective of this Government. This is our biggest and best company—bar none—and we need to ensure that it can operate efficiently, effectively, and in a fair way for its shareholding suppliers.

I applaud the members in the House who have raised legitimate issues and, as I say, they will be addressed. The necessity to pass this bill through under urgency is to give effect to the protection for Fonterra that would otherwise go at the end of May. And so we were unable to do that—that is, to protect Fonterra and have a comprehensive hearing through the select committee process, because we would’ve simply run out of time. And I know there will be—whether it’s a small piece of legislation or a comprehensive review—many people in this country and in the industry who will want to come and have their point of view heard. So that is what we are, effectively, laying the groundwork for.

The Labour Government put in place the legislation to set up Fonterra. We are passionate about its success. There have been minor adjustments. There is another roll-over provision in this bill that then allows us to look at the more significant issues surrounding not just Fonterra but the dairy industry. I, therefore, commend this bill to make progress as quickly as possible through this House. Kia ora.

Thank you, Madam Assistant Speaker. Dairy farmers, do not listen to a word from that member, Damien O’Connor. That is simply not the intention of what we are seeing here in this House tonight. This is an attack on dairying, it is an attack on the values of private enterprise, and it is an attempt by the Labour and Green parties, and New Zealand First, to strip that industry of its economic potential.

We’ve heard today from that Minister—and his very words were—that the Labour members will determine the industry fit for purpose for the future. That was his line from his last speech. That was your exact line. Why would an industry—New Zealand’s biggest industry—trust a group of failed Labour academics to determine how a New Zealand industry should actually work itself out? It is up to the New Zealand dairy industry, it is up to Fonterra, to work out its future. It is not up to those failed academics over there to actually tell New Zealand’s biggest industry how it should operate.

We know they’re going to set up a committee, and it will be a committee set up of their own stooges, and it will be a committee that’s given the intention and told what to do, and we have been told what they are going to do. We have been given a broad outline of those terms of reference. And we go back to that quotation from the Minister—the very Minister sitting here today—that said it’s about environmental issues, land use, and the industry in general. And he nods now, because the Dairy Industry Restructuring Act (DIRA) was never set up for any of those things. DIRA was set up after the formation of Fonterra to deal with some milk supply issues. It was never set up to determine the future look of what Fonterra or any other company will provide, it was never set up to determine the environmental outcomes of the New Zealand dairy industry, and it was never set up to actually look at land-use change.

This Government is being disingenuous in the way they’re using the DIRA legislation to set up a whole review of New Zealand primary industry. That is what they are actually doing, and the Greens are loving every moment of this, because this gives them the opportunity to put all those crazy ideas that they want to apply to the New Zealand dairy industry in place, and the Labour Party are letting it happen, because the Labour Party are greener than the Greens. The leader of the Labour Party should be in the Green Party. This is what you are seeing here now with Labour and the Greens, and New Zealand First have got as much backbone as you would expect from a party that swivels around in the political landscape looking for the net to be held by—they will not put up a decent fight against this.

This is Labour accommodating the Greens’ wishes. This will be part of the agenda that those political parties set out. They’re looking for a way that they can attack New Zealand dairy farmers, and what better way than to go through the DIRA legislation and create a review. Look, there’s no reason that the member and the Minister opposite didn’t follow through with the legislation that National had put through.

If we look at some of the things that were in that legislation: first of all, exit and entry—exit and entry. You’ve taken that section out, that exit and entry. The Green Party, if anything, should be supporting that, because it says no to new conversions that Fonterra can say no to increasing supply from. That would be what you’d expect the Green Party to support. The Green Party have said that they will let that section be taken out. They know that they’ve got a bigger angle coming. They know that the entry and exit’s only a small thing to give up now, because they’re going to bring in land-use change legislation as a result of the new DIRA reforms.

The second thing that was in that legislation that’s been taken out—and this is where New Zealand First has failed, again, to commit to the New Zealand public—is that where there is regulated milk, Fonterra has to sell to new processors. The legislation that we introduced would have taken that away and would have meant that they wouldn’t have to do it. The New Zealand First Party had quote after quote saying, from their leader, that they don’t believe New Zealand milk should go to foreign-owned companies—foreign-owned companies that dominate the supply of New Zealand milk—apart from Fonterra. Open Country Dairy, Oceania Dairy, Yashili New Zealand Dairy, you name it—foreign ownership in them. The New Zealand First Party is not standing firm with the words that they said to farmers before the election. They are not standing up for the words that they put out to the New Zealand public.

So this legislation is not going to be dressed up as some kind of South Island process that is part of the dairy industry that needs to be sorted out before May. This is a blatant attack on New Zealand dairy farmers, and New Zealand dairy farmers need to wake up and stop it. The reason they’re doing it in urgency is to not give New Zealand dairy farmers that opportunity. That is the whole purpose they are doing it for, because they know they don’t want to give people the chance to protest, like in Morrinsville, where people actually had their say in a democratic country, unlike the democracy over the other side that they want to impose on New Zealanders.

But there’s more. This will affect not only New Zealand dairy farmers, because when they are talking about land-use change, that will affect all New Zealand agriculture and horticulture. This will not stop at dairy farmers. Once the Labour-Green review comes into place—and they are talking about land-use change—and they come and put down rules, such as the Waikato Regional Council has put down around land-use change, it cannot apply just to dairy farmers. It has to apply to all agriculture and horticulture to be effective, and this will, effectively, constrain the future of New Zealand’s growth industries, because a lot of those horticulture and agricultural industries that could take off actually have a higher nitrogen use than dairy. You see that in the Waikato with that land-use change where there’s not allowed to be that change into dairying and there’s not allowed to be that change into cropping. This will come to all New Zealand landowners. This is an attack on the property rights of those people that run the businesses that keep this country going, and this is what this whole bill is about.

The other thing that will happen in this case is that the Greens will use this opportunity to put in some of the content that they’ve always wanted to do to New Zealand dairy farming, and that is to limit the number of stock in New Zealand. They have been wanting for years to stop the dairy industry, and this gives them the opportunity to put the parts into the legislation, such as a limit on the number of cows per hectare. That will definitely constrain the New Zealand dairy industry, because what’s going to happen under this review is that a group of Labour and Green MPs will determine the future of the New Zealand dairy industry.

That is not what happened in Fonterra. In Fonterra, the two main companies came together and asked the Government of the day to support that process through legislation to make it a reality. This is not the same case. The New Zealand dairy farmers have not come and asked Labour and the Green Party to do a review and tell us what we need to do on farm to make our businesses better. No, this is a mandate that the Greens and the Labour Party have been wanting to do for a long time, and New Zealand dairy farmers need to wake up and smell the roses, because this will directly affect their ability to do business going forward. It’s not a commercial decision that their cooperatives have made; it will be a political decision made by a group of people that have no interest, no understanding, and no comprehension of what the agricultural sector makes.

The worst part of it, apart from the Labour and the Green Party doing something that is their ideology, is a New Zealand First Party that tries to go around saying they represent regional New Zealand when they are actually supportive of the biggest attack on regional New Zealand that we will see in the next three years. This is a deliberate ploy from the Government parties to attack rural New Zealand. They couldn’t do it any other way. They made a deliberate attempt at this stage to use DIRA for that attack, and we need to be upfront and aware of that. We don’t have to wait for the terms of reference; they’ve told us what they will be: environmental, land use, and whatever else they think.

These are not terms of reference that we need to wait and see about. We know that they are beyond what DIRA intended in the first instance, and this is purely an attempt by those parties to dictate to the rural sector their values of how farming should operate, their impression of how farming should operate, and their expectation of what farmers will do. And that will be a disaster for New Zealand, because those people have never run a business, they never will run a business, and it is up to the commercial people in those areas to make those decisions and not that pack of left academics that are tired and finished.

Thank you very much, Madam Assistant Speaker. Such negativity. I’ve sat here for about, well, since dinnertime, and all I’ve heard is a whole lot of really negative stuff. Phil Twyford, were we like that nine years ago when we were in Opposition?

💬 Hon Phil Twyford: No, we were constructive.

Goodness me! If you want to be part of the conversation, if you want to be part of the solution, then be constructive. You don’t get it, do you? You haven’t figured it out—that the reason why Jacinda Ardern is so popular is because she’s positive. She’s offering solutions, and all you can do is attack. I haven’t been called a failed, left-wing academic for a long, long time ago. There you go, eh. There we go.

This bill is about doing the right thing—there’s no doubt about that—in terms of preventing the expiry of certain provisions in the Dairy Industry Restructuring Act 2001. And there’s the first great irony: 2001—the Dairy Industry Restructuring Act 2001. As Miss Allan stated, it was the Labour Government that actually gave rise to Fonterra, that had the foresight—that had the foresight—to create Fonterra. It wasn’t the National Party; it was the Labour Party.

It wasn’t a farmer Government from the rural electorates but a pragmatic, progressive Government that understood business and global markets—hence Fonterra. Farmers on that side have had nine years to sort this mess out, nine years to address the issues. I don’t know what Mr Bennett has been doing for nine years, as a dairy farmer himself. You would have thought that if he believed that there was something wrong in the industry, he would have stood up and advocated, but I don’t know what he’s been doing, and after nine years it will take, yet again, Minister Damien O’Connor and a Labour Government to sort this out and make some changes.

I’m really looking forward, actually, to a comprehensive review of Fonterra. And isn’t it about time! As the Minister for Small Business, I’ll tell you, I’ll be watching very, very closely how Fonterra’s monopoly position in certain communities will be managed. Let me just give you one short example, and that’s payment terms: 61 days from the end of the month that an invoice is sent—it’s up to 90 days. Australia’s Small Business and Family Enterprise Ombudsman, Kate Carnell, singled out the cooperative for, and I quote, “extortion-like behaviour”.

💬 Hon David Bennett: Stick to DIRA.

Mr Bennett talked about economic potential. What about the thousands of small suppliers to Fonterra that are having cash flow problems because Fonterra is using a monopoly position in the market to treat them like a bank? That’s what economic potential is. That is why this Labour - New Zealand First Government is the party for rural and provincial New Zealand.

💬 Hon David Bennett: Oh, there’s no way.

And Mr Bennett knows it—and he knows it. Look, let’s be honest about one thing. Fonterra is a hugely valuable company for New Zealand’s economy and for various rural, provincial, and city communities, but it is now time, 17 years later, after that original Act was passed by a Labour Government, for a review, and I welcome it. I’ll certainly be supporting this legislation, and I’m assuming Mr Bennett will as well. Thank you.

Madam Assistant Speaker, thank you for the opportunity to make a second contribution to the Dairy Industry Restructuring Bill (No 2). First of all, can I say, on the contribution we’ve just received from Stuart Nash, that we’re not here debating Fonterra’s monopoly position, as he said. We’re actually here debating the fact that there is now so much competition in the South Island market particularly—in fact, 24 percent of the farmers now supply a company other than Fonterra—and that is the reason this legislation has to be before the House today. There is no monopoly for Fonterra. There was at the time that the legislation was first passed, when they collected 96 percent of the milk that was produced within New Zealand. Those days are gone, Mr Nash, and that’s a good thing.

While Mr Nash claims full credit for the Labour Government for passing the legislation in 2001, as I pointed out in an earlier contribution I made, the work was actually done for a long period of time by the former Government, which was then not re-elected at the end of 1999. The process of the amalgamation of two major co-ops took probably four or five years. So, yes, Labour can claim that they finally passed the legislation—

💬 Hon Damien O’Connor: National didn’t want to do it, though.

Oh, Damien O’Connor interjects that National didn’t want to do it. I sat with the likes of John Roadley and with Henry van der Heyden on numerous meetings that went on for many, many hours, chaired by the Rt Hon Bill Birch, who did a stunning job in doing the initial work to get this to conception. For Labour to deny the history of this, repeatedly, is just wrong.

💬 Hon Damien O’Connor: That’s why you didn’t do it, because you couldn’t work it out.

Oh, the Hon Damien O’Connor says we couldn’t do it because we couldn’t work it out. It was handed to them on a platter. The only thing that hasn’t been worked out by the Labour Government is the mess we find ourselves in tonight, when that Minister of Agriculture has sat on this issue since he became the Minister in October last year, five months ago—hasn’t been prepared to do anything about it until he finally finds he’s embarrassed by an expiry date, which means he’s got to bring this to the House and put the House into urgency. That urgency was supported tonight by the Green Party, and when the great late Rod Donald sat in this House as the, sort of, first member of the Green Party, he used to talk and rail against the use of urgency. It shouldn’t be happening. The farmers of the South Island have a right to have a say on this piece of legislation by going to a select committee.

💬 Hon Damien O’Connor: And they will.

Damien O’Connor just interjected and said, “They will.” Well, I need to point out to Damien O’Connor that we’re doing the first reading, the second reading, the committee stage, and then the third reading. There is no chance—no chance—Damien O’Connor, and I would have thought, for a person that’s been around this House for so long, he’d actually understand the legislative process. Now, I know he took the first contribution for the second reading debate and he lasted about two minutes and 15 seconds, with his contribution. It may be because he doesn’t understand the significance of this legislation, and if that is the case, he should stand by and let somebody else attempt to represent the primary sector of New Zealand—

💬 Hon Members: Stuart Nash did longer.

—because I—well, I’m not sure that Stuart Nash has had a charming record either, to be honest. But, listen, the point I want to make is we had a Labour Government that’s been talking about honest and transparent Government. It sounded great. I remember the Prime Minister - elect talking about how this Government will be open and transparent. So what the Minister has done is he’s rushing this legislation through as quickly as he can, evidenced by his two-minute, 15-second call earlier in the second reading, and then he talks about a review of the dairy industry. Well, if he’s going to have a review of the dairy industry, give us tonight the terms of reference, because the Hon Damien O’Connor has been absolutely silent tonight on the terms of reference. Now, the Hon Meka Whaitiri got a bit more loose with her tongue and said it would be comprehensive. So that’s all we know, and I suspect that my colleague the Hon David Bennett is absolutely right that in the terms of reference we’re going to see the chance of the Green influence on the Labour - Green - New Zealand First Government, and they’re going to move this into environmental issues.

💬 Hon David Bennett: It’s here—it’s written.

David Bennett says it’s already written down on paper. I haven’t seen that yet, but I think if that’s the case, then Damien O’Connor has the opportunity to stand in this House and tell this House what’s going on.

As I said earlier, I think Fonterra is a great company. I’m fully supportive of Fonterra. I don’t think it’s performed to the expectations they said they would when they were first put together. They gave us a significant outlook on where the company could take the New Zealand dairy industry to. They’ve got part-way there. They haven’t done it perfectly, but, as I said in my first reading contribution, they are the envy of many of the dairy producers around the world for the way they operate. They haven’t done it perfectly, but they’ve done it pretty well. And now, if the Labour - Green - New Zealand First Government proposes a review, then why can’t we know what that review will encompass? It’s a simple question—

💬 Hon Members: New Zealand First selling out farmers.

Well, I don’t rely on New Zealand First. They went round the election campaign saying they were the friends of the farmers, representing rural New Zealand, and then the first thing they did in the coalition discussions was they signed up with the Greens—yeah? So what New Zealand farmer has any trust at all in the Rt Hon Winston Peters and the New Zealand First Party? Now, Mr Patterson over there is dumbfounded. He’s silent, and I’m not the least bit surprised, because I listened to his contribution earlier, and he made that man Richard Prosser look good. I can tell Mr Patterson, having watched the way the New Zealand First Party operates, that he’ll have to lift his game, otherwise he’ll get a call from the leader in the not too distant future, and it will be a “DCM”—don’t come Monday—because that’s the way the New Zealand First leader operates, and that’s why we’ve got that waka-jumping bill before the House.

We’re here today because when Fonterra was established, we wanted to make sure that we had competition in the industry. At the time it was established, 96 percent of all milk collected in this country went to one company, and that worried me because if it became a fat, inefficient organisation, certainly the dairy farmers of New Zealand—and at that stage there were about 12,000—suffered, but it was far more important than that. This is our biggest export-earning industry in this country. So we set up an arrangement in the DIRA legislation, Dairy Industry Restructuring Act, which ensured that competition developed, to the extent that we’re here in urgency tonight because the Hon Damien O’Connor has ignored the fact that we’ve now triggered the limits put in for the South Island level of competition.

Around 24 percent of all milk collected in the South Island doesn’t go to Fonterra, and that, Mr O’Connor, is a choice the producers make. They look at the likes of Synlait, they look at Oceania Dairy, they look at Westland Cooperative Dairy, and a number of others, and they decide that they’ll send their milk somewhere else for various reasons. Now, it may be around the capital structure of Fonterra, it may be around the price for milk solids, but what this legislation did—which I had a significant involvement, as a junior Associate Minister in the late 90s, in bringing together and introducing to this House—was a complete transformation of the dairy industry where we set up an industry that was competitive.

The reason we are here tonight is because that competition threshold for the South Island has now been met. So I say to Mr O’Connor, if you’re going to have a review, because you’ve spent the last nine years dreaming about the future of the industry rather than getting anything concrete, tell us tonight the terms of reference of that proposed review.

The second reading of the Dairy Industry Restructuring Amendment Bill (No 2)—New Zealand First rise to support this, as well, despite the melodramatics that we hear across the floor. This is indeed a functionary bill. We’re looking to roll over legislation that has been in play for the nine years that that previous Government was in office, and, as my colleague Kiritapu Allan pointed out, this provision in the South Island was triggered in 2015, so all of a sudden they seem to care a little bit about the Dairy Industry Restructuring Act (DIRA), belatedly.

We have a clear alternative. We have the alternative that was put up by the National Party, which was a series of half-measures, and, as Mr Bennett pointed out, some of those were perfectly good provisions. The foreign ownership one was one of them, and I’m sure that that will come under scrutiny and that will be a thing of the past. But it is time for a thorough review, and we totally agree with that—a root and branch review. I think that what we’ve heard from contributions over that side of the House is like listening to dinosaurs. You’re talking volume mentality. We’ve got to start adding value.

💬 Hon David Bennett: This is just a value-add.

We’ve got this freight train of synthetic proteins coming up. If you don’t want to have those conversations, Mr Bennett, they’re coming at us anyway. We have to have those conversations, and we have to make sure that we give Fonterra the right tools to adapt to that environment.

We need to foster New Zealand competitors, and that will be something that we will have to look at. That will all be part of this review, but we cannot just carry on doing what we’ve done in the past. That commodity mentality is where we got, and I hate to be lectured by the National Party about proactivity in this space. I came here time after time lobbying the National Party to take some interest in the meat industry and they were nowhere to be seen, and that is why I stand here—nowhere to be seen. So we need to get this right. We need to get this right. This is our most important company. It needs the tools for the future. We will give them some certainty by rolling over the existing legislation for the next 12 months, but after that—after this thorough review—we will have a company that’s fit for purpose well into the 21st century.

So this is the sort of contribution we can expect from the National Party. If they are just going to sit in the past and expect to do what we’ve done, it’s not going to work. It is absolutely not going to work, and you’re going to have to lift your game over there if you want to continue to pretend that you’re representing the best interests of farmers, because from what I’ve heard tonight you have got no idea what’s coming down the pipeline at you. On this side of the House, at least we’re prepared to address those issues. We are going to address those issues and we are going to see some future-focused legislation come out of this and not a half-measure.

Thank you, Madam Assistant Speaker. One of the strengths of the dairy industry over the years has been their effort to get consolidated and find answers to problems, and it really isn’t appropriate that you stand there and go, “We’re going to do it for them.”, because there’s all these things coming down the track—sorry, Madam Assistant Speaker. The previous speaker—MP, over there—talked about solving all the problems of the dairy industry. Well, it’s really interesting that this is going ahead tonight under urgency and you haven’t had any—sorry, apologies. The members and the Government have not given the farmers any opportunity to go through a submission process with this.

This is a band-aid to get this piece of legislation through the House, so, all of a sudden, these terms of reference can come out and we know—we’ve heard about the terms of reference today, including, for example, environmental issues, land use, and how to achieve the best outcomes for farmers, consumers, and the New Zealand economy. Look, it’s a conversation that all of us have to have, but we in here are not the people that know all the answers, so I think it’s really important that a submission process should have been taken with this. There has been a review. There is a lot of information out there from that review. All of this has just been ignored. We’re going to start over again and we’re going to do another review, but at what cost? So a lot of information is already accessible.

I think the other thing that’s really interesting is the targets that are coming back to this side of the House. We heard it from, not Minister O’Connor but Greg O’Connor before, actually, about this side of the House and the Morrinsville protest, and the divide between rural and urban. Well, I tell you what: it became a very big issue during the process of the election and it wasn’t coming from this side of the House. And guess who had the biggest bus at the protest? So New Zealand First was very—so don’t sit here, Mr Patterson, and tell this side of the House that we were engaged in inciting rural-urban divide, because one of the reasons you stood up—[Interruption] No, look, we actually want to put this rural-urban divide together.

One thing I do say—I want to issue a challenge to Gareth Hughes. I want to issue a challenge to Gareth Hughes to be as proactive as his leader James Shaw, because I know that James Shaw does go out and he does go on farms and he does talk to people. When Gareth Hughes stood up before, he talked about all this bulldust, about what the farmers would be thinking about what we were saying. I haven’t seen Gareth Hughes out and about on any farms. So, Mr Patterson, you might have been but I’ve never seen Gareth Hughes out there, and I know that James Shaw does. I hope he listens, because he’s going to get a barrelling from this.

So you talked—sorry, Madam Assistant Speaker. Mr Patterson, you talked before about the commodity trap, so then this Government is wanting to delay this process for another year, leave people out there with uncertainty about where it’s going to end, and then talked again about foreign owners that come in and turn farmers into price-takers. So tell me where the nexus is between that? You’ve got a cooperative that wants to—we’ve got a cooperative that wants to collect farmers’ milk, it wants to add value to farmers’ milk, and it’s processing and adding value to a lot of milk. Up until now it’s been coming at it faster than it could process it.

Things are going to change. There are limits; I’m not stupid. We know there’s going to be limits, but the industry is working those things out and with a bit of conversation we can work it out. But the problem is we have a piece of legislation up here. It’s two pages, it’s a band-aid, and it’s designed just to hold the process until we have another one of these inquiries that this Government is getting well known for. We don’t need change for change’s sake. Why can’t we just pick up what we already have and go for it?

There were a couple of other concerns that came up before. I can’t remember who the member was, but I can go back and look at the Hansard and find out. It was that the far-reaching shareholders of Fonterra had to be protected. Now Fonterra have already said that they would not be seeing their cooperative members put to one side and that anybody that was in the cooperative would remain in the cooperative, because they had signed up to the process and they were all in it.

So I think it’s really important to realise that Fonterra’s got no intention of actually getting rid of its own shareholders just to achieve a purpose. I’m sure that if you have the conversation—and I imagine that Minister O’Connor has had heaps of conversations with Fonterra. I’m not sure that many others have, and I’m just mystified as to why this Government calls itself open and transparent, and then won’t give us the terms of reference but will write things in a press release that are going to put the wind up farmers.

So look, we’ve got a hundred submissions that came in, in a prior review. They’re the same people that will still put the submissions in. But I can tell you what, if you go around this and try to add things to it that simply aren’t related in the first place, you are going to get your—sorry, Madam Assistant Speaker, again. This Government’s going to get itself into some strife, because I know that in the conversations we’ve had, farmers say, “We signed up to this thing. We’ve met the criteria. We made criteria that fitted for the South Island and for the North Island.” They feel that they’ve done the deal, they’ve gone through the process, they’ve met all of the criteria that they signed up for, and they understand that there has to be a process to work out whether the commercial realities are in the right place. They’re going to be really disappointed when they find out that what’s being reviewed around these commercial realities is actually opening up to a whole lot of things. They’re going to say, “The ballpark has changed and the goalposts have been shifted.”, and they’re going to be very, very disappointed.

They are not shying away from their responsibilities, but they’ve got a piece of legislation that they agreed to. Minister O’Connor, you can argue all night—we’ve heard lots of debate over there about which Government actually did it, and I know there was a huge amount of work that went into it—but I do know that there are farmers out there that know that it was the Labour Government that signed the dotted line. That was the agreement with farmers that said, “When you get to this point, you reach this level, and then we will free Fonterra up.”, and I know we’ve got to make sure we’ve got all the right settings around that. But they’re going to turn round and they’re going to tell this Government that this Government has shifted the goalposts.

So it’s a very, very disappointing day today in that we have not been able to have a select committee process, where we would be able to have farmers put submissions in and we would be able to have producers put submissions in. We would have had submissions coming in from the processes from both sides of the fence, because we know that some agree and some don’t agree, but I don’t know why this Government is so scared to put the terms of reference on the table so that everyone in the dairy industry in this country knows what they’re dealing with and so that people can have some input. Communities and industries—surprise, surprise to this Government—have a huge amount of knowledge about their own patches, their own industries, and they would dearly relish the chance to come and talk to this Government about what their hopes and dreams are for the future of this industry. So—

💬 Hon Ruth Dyson: The microphone is working.

Yeah, well, we’re wound up over here, and I have actually been listening to some of the debate. People have been wound up—and it hasn’t been only on this side of the House—because I think it’s about a fairness of process. This process is flawed. No one minds having the discussion. We don’t mind having the discussion, but we do object to working with flawed process, and I know that people around our dairy industry and our rural communities are going to be feeling pretty aggrieved at not having the chance to come in and go through a submission process. So I hope that in the course of the committee stage, the Minister for this open and transparent Government will put some terms of reference on the table so we can understand what it’s all about, and then we can start having the real discussion about where this piece of legislation needs to go.

So, thank you, Madam Assistant Speaker. I apologise for bringing you into the debate more than once, but I thank you for the opportunity. I appreciate that. Thank you.

Thank you, Madam Assistant Speaker. It is a pleasure to have the opportunity to speak on this bill. While, as the Rt Hon David Carter said earlier, the Green Party generally objects to the use of urgency, one of the upsides of urgency is that you actually have a proper debate. You get to respond to each other. You get to pick up points that each other make and respond to them. So, given that this is the second reading, I will do so, because that is one of the great pleasures of this part of the process.

First of all, there have been some strong contributions. I would like to start with the Rt Hon David Carter, because that was a thoughtful contribution and deeply knowledgable about the sector from someone who has had a long history both in this sector and also, obviously, in Parliament and as a Minister in this sector, and I think he was displaying that. It was a pleasure, actually, to see him freed from the constraints of being Speaker, so that he could really let rip and make some good points, some of which were about the terms of reference, some of which were about the process, and so on. So I take those points on board. He did make one error. I’m kind of hesitant to correct the former Speaker on this, but, of course, dairy is not actually the leading export earner in New Zealand—tourism is at the moment—so we’ve got to have a bit of context around this.

Barbara Kuriger, of course, is also similarly deeply rooted in the sector. Like the Rt Hon David Carter, she is someone who knows the industry and is from the industry and who makes some very good points about the industry, about the effect of the legislation, and about the process—all of which I think are relevant, and we should pay heed to those.

Mark Patterson from New Zealand First, of course, is someone who is a strong advocate for the sector—someone who truly understands that what New Zealand needs to do is to move up the value chain. He is someone who is concerned about countries like Ireland, with their Origin Green programme, who are getting ahead of us and saying, “Actually, the way to extract more value from this industry worldwide is to focus on the ‘clean, green’ brand to really capture the value that we have available at our fingertips.” That is why he’s such a strong advocate for this sector, and it is good to have him in the House to do that.

Now, this, of course, brings me to the great pleasure of this evening: David Bennett. David Bennett, “the Accountant”, referred to this legislation as “the biggest attack on [the agricultural sector] in the next three years.”—the biggest attack on this sector in the next three years—and yet, at the end of the first reading, when it came to votes against, I didn’t hear his voice. I didn’t hear anyone voting against it, and yet, for the biggest attack on this sector in the next three years, he voted for it. I find that extraordinary.

The biggest attack on the sector in the next three years, which you—I beg your pardon, Madam Assistant Speaker. If Mr Bennett honestly believes—and I know that he doesn’t—that this is the biggest attack on this sector in the lifetime of this Parliament, then surely, surely, he would vote against it. If I thought that a sector that I was seeking to represent in this Parliament was under the kind of sustained, existential attack that he spent his contribution referring to—the end of the industry; the absolute collapse of dairy in New Zealand!—then, surely, I would vote against that bill because it was such an existential crisis, and yet he failed to do so, and I noticed that no one in the National Party voted against this bill on the first reading. So I have to take his words with a grain of salt.

Barbara Kuriger referred to the urban-rural divide in her speech, and I do want to take a moment to acknowledge this, because one of the things I personally am most worried about for the future of this country, present and in the near-term, is the notion and, actually, the very real possibility that we will have a true urban-rural divide. I am absolutely committed that we do not—that we do not—have such as divide. I have to say that the kind of language that David Bennett was using in his contribution earlier on in this debate fanned up that possibility. I know it may be great for recruitment; it may be fantastic when you stick it up on your social media pages and you say, “Look, here is what I’m doing heroically to defend the sector from the greatest threat in the lifetime of this Parliament.” without actually voting against. That kind of language, that creates the urban-rural divide. That’s what creates it, Mr Bennett, and you should be ashamed of yourself. I dare Mr Bennett, if this is the fatal dagger in the heart of the dairy industry, to vote against it. I bet that he won’t do that.

I have to say that this has been an entertaining debate, and there has been, you know, a great deal of, I think, completely over the top contributions. There have been some very thoughtful contributions made, as I said, from the Rt Hon David Carter and Barbara Kuriger, and I think that we should take those things on board. One of the things that, I think it was, the Rt Hon David Carter said earlier in the debate—and I might have the speaker wrong, but somebody on the National side—was that the Dairy Industry Restructuring Act (DIRA) wasn’t set up to look at things like land use and it wasn’t set up to look at things like the effect on the environment and so on.

💬 Hon David Bennett: That was me.

That is correct. It’s correct. So I will acknowledge that amongst all of the other points that he made, the one point of substance that David Bennett had was that: that DIRA was not set up to look at things like land use or the effect of the industry on the environment and so on.

That’s correct, but it has an effect—it has an effect. It wasn’t set up to deal with those things, but the system that is set up inside the Act has an effect on land use and the environment and a whole series of other things, and that is why it is worth taking a bigger-picture view, stepping back, having a broader term of reference, and saying, “Let’s take a look at this sector.” and taking a look at those things. In fact, this happens a lot in politics: we set up a piece of regulation, and we take a narrow view of it, and we say, “That look goods for that,”, but, actually, it also has wider effects on the system, and we don’t take account of those externalities. Then we end up in a problem, and we’ve got to go back and fix it, and that is the position that this Government finds itself in. And so, while that point is correct, Mr Bennett, actually, what we need to do is to take a look at it and say, “Well, what are the effects on the broader system—not just inside the industry and its economics, but what are the broader effects and the externalities of the way that that legislation is designed?”

That is why it is worth having a review. That is why the Green Party supports this piece of legislation. That is why, also, I absolutely cannot take seriously this notion that this is a fatal dagger in the heart of the dairy industry, that it is communism by stealth. That was actually one part of Mr Bennett’s speech that I desperately miss, because in virtually every other speech that David Bennett has ever had, in which he’s referred to the Green Party, he’s referred to communism by stealth. I missed that in this part. But you’ll have another shot. He’ll have another shot in the third reading, and it’ll be good to hear those words, because I’ve missed those words from David Bennett.

I do say that everybody understands the need for sustainable food production in this country. We do look at countries like Ireland who are moving ahead of the pack with things like their Origin Green branding. I have to say that ethical food production, sustainable food production, is one of the most noble pursuits there is. That is what this country has to aim for. That is where the value is for this country. We have some of the best farmers in the world—some of the most productive, some of the most responsive, farmers in the world—and what we need to do is to maintain our leadership position. That is what the Minister is attempting to do by calling for a review. That is why this particular piece of legislation is significant, and any talk from the Opposition about what a fatal piece of legislation this is, I think, should be backed up with action. I think that they need to vote against this bill if they truly believe what they are talking about.

Well, that was a riveting address there from James Shaw; enlightening—enlightening.

It’s interesting, I follow rural media clippings very, very closely as the Opposition spokesperson for the primary sector, and guess who I saw on a farm in the last week or so? Go on, have a guess—have a guess. His first visit ever to a dairy farm. Come on, who’ve we got? Have a guess. No, it wasn’t Metiria Turei, she’s gone. No. It was James Shaw. I scrolled down the photo to have a look at the gumboots he had on—Wairarapa’s been pretty dry, it’s almost in a drought—and there they were, shiny, brand new gumboots, never been on a farm before. But I acknowledge James Shaw for getting out on a farm. He made some—

💬 Hon James Shaw: Biosecurity.

Yeah, yeah, that’s right—that’s right. He talked about biosecurity, clean gumboots, well done. But it would pay that he gets on a few more farms as Minister for Climate Change. Because farmers are focused on environmental sustainability but they’re also very mindful of the fact of this review that is proposed following this very truncated bill that we are debating under urgency this evening at 8.45. I can’t believe, as I said in the first reading—there’s no reason that I can fathom that this bill couldn’t have gone to the Primary Production Committee for even a truncated select committee period. I get the fact that the date in the South Island is going to expire 31 May 2018, but you would’ve thought that there was an opportunity for the Parliament to get going on this a bit quicker. It wasn’t part of the 100-day programme because Labour and the Greens don’t care about the primary sector, we’re still trying to work out whether New Zealand First does. So here we are now debating under urgency; no select committee process. And people on the other side of the House used to rail against a National Government whenever we put the House into urgency, and we’re not hearing that tonight; they’re saying, “Just put it through.”

But getting back to the point of why James Shaw went on a farm, he went on a farm so that the Green Party tentacles could reach inside this review. He’s already concluded rightly that the Dairy Industry Restructuring Act (DIRA) doesn’t have anything to do with the environment. Yes, dairy farming, we acknowledge, does have an impact on the environment, just like humans do, just like buildings in metropolitan areas, but the reason that James Shaw went on a farm was so that he—

💬 Hon Tracey Martin: Come back to the bill.

—I am—so that he could understand this bill this evening and the importance of the dairy industry to New Zealand but also so that when the review comes through the Cabinet process he knows what he’s talking about. And so that that review, instead of being tight and considered and concise, to do with export markets, open entry and exit provisions, raw milk regulations, farm gate, factory gate—all of those things are logical in a review—but what we are going to see is that this review is going to be broadened out so that the Green Party can have their way and get their tentacles into it. So it’s going to be a broader review than just the state of the New Zealand dairy industry.

What was also telling this evening in the second reading of this bill was when the Minister stood up and said, “Oh, yeah, I should’ve brought the terms of reference down to the House but my officials have been too busy dealing with Mycoplasma bovis.” I know that that is a very significant issue not just for the dairy industry but for the beef industry, but for the Minister to come down to the House when he has got 2,500 officials working in the Ministry for Primary Industries and say, “Oh, we couldn’t get round to doing the terms of reference, getting them through a Cabinet process, and bringing them to the House so that we could all understand them because they’re just too busy on M. bovis.”, well, that is so disappointing to hear from the new Minister when he’s got all these officials queued up at his door, writing down every “um” and “ah” that he stutters when he’s talking about the New Zealand dairy industry.

What we also haven’t heard about from him—we’ve heard the rhetoric about a primary industries advisory council. What would happen if they advised the Minister that there should be changes made to this bill this evening? Wouldn’t that be kind of interesting? He’s also talking about something a bit like Sir Peter Gluckman, a science adviser but having something for agriculture. I think that could actually be quite a good idea.

But what is not acknowledged in this bill tonight, and, hopefully, will be acknowledged in the review, is how the dairy industry is moving out of commodities and into value-add—nutraceutical products. It’s not just whole-milk powder; mozzarella cheese, which I’ve already talked about. Fantastic innovation coming out of Palmerston North—Fonterra’s innovation centre is massive and doing really well. That is not acknowledged by anyone on the other side of the House.

Here we are this evening debating under urgency a bill that is affecting just the seller, and that is still significant by itself. You would think we would hear acknowledgment from the other side of the House about how important the New Zealand dairy industry is to the overall New Zealand economy. You can bet your bottom dollar that Grant Robertson is up there with his Treasury officials, hoping like hell that the Fonterra milk price stays up where it is, because if it drops, and it may well do in the future, at some stage in the next season or two, then it’s going to make it very difficult for the Government to balance its books with its spending priorities that it faces in front of itself.

Anyway, to conclude, really where I started. This bill should be going to a select committee, and there’s no reason why it can’t. I’m disappointed that the Minister has chosen to put the House into urgency for this. The second part is that it’s great that James Shaw has been on a farm for the first time. Well done! He needs to get on farms more often and understand what farmers are doing in terms of environmental sustainability, excluding dairy stock from waterways. I know the reason he did that, and that’s so he can understand the terms of reference. It’s going to take 12 months and it’ll be really costly. We still don’t know who’s going to drive it. Is it the Ministry for Primary Industries, is it the Ministry of Business, Innovation and Employment, is it Treasury, is it an external lead person? We still don’t understand about the submission process on that.

Also, I’m very disappointed in the fact that in the campaign we saw the arrogance from Labour and the Greens using the dairy industry as a bit of a whipping boy. As a result of what they did and proposed to do with the irrigation tax, farmers rallied and met in Morrinsville. That was a massive rally. It was as big as the one that I saw on the steps of Parliament, with the tractor that Shane Ardern drove up the steps.

💬 Hon Tracey Martin: Winston Peters was there.

So I say to Barbara Stewart, who keeps chipping away and trying to interject—well, they’re not very funny, and they’re not rare, and they’re not reasonable. So I’m just ignoring her. But I say to her that it’s kind of interesting, when we read Winston Peters’ press releases, leading into the campaign, about the DIRA, and now they are supporting it.

So we will watch this space with a great amount of interest. We look forward to our questions that we are going to propose to the Minister when he’s in the chair in the committee part. We have got numerous questions, and we look forward to ongoing discussion and debate.

I call Dr Liz Craig—five minutes.

Thank you, Mr Assistant Speaker. It’s a real pleasure to take a call on this bill. I think the problem is, sitting here listening to the intensity of the debate across the other side, I’m almost forgetting why we’re here. Why we’re here, under urgency, is actually for a very, very simple thing. It’s actually because what we’re trying to do is to prevent some of the provisions of the Dairy Industry Restructuring Act (DIRA) from expiring for us in the South Island. It’s actually very, very simple. What we’re trying to do is provide some certainty for our farmers that Fonterra is going to continue to take their milk in 2018.

I live in Southland, and in Southland a lot of our farmers have been doing it really tough of late. We’ve had the drought just declared, we’ve got Mycoplasma bovis, and over the last couple of years the dairy prices have been up and down, and a lot of our farmers are under a heck of a lot of stress. The problem is that this afternoon’s scaremongering by members across this House is going to do very little to alleviate that situation.

What we’re actually wanting to do here is just retain the status quo until we can get a more comprehensive review of DIRA and take that uncertainty off the table. In the medium term, though, we shouldn’t step back from that broader debate, because we do need to think about what the future is for our dairy industry. I think our Minister signalled that he’s going to do just that. He’s going to take some time to think about our broader strategic direction.

To do that, though, is going to take time. I’m hearing, on one hand, members across the House decrying the fact that we’re not going to select committee, and yet, on the other, they’re saying it’s going to take so long to have some consultation. But to get this right, we do need to have some decent consultation. We need to talk to farmers, milk processors, industry leaders, and communities. So we’ve got to have that and get it right, for the futureproofing of our dairy sector moving forward.

I don’t think we should step back from that broader debate about the environment, about land use, and about how we do achieve those best outcomes for farmers and consumers and for our country. What we’re talking about is thinking about the future of our dairy industry. The problem is that we’re now marketing into a world market where we’ve got increasingly discerning consumers, and they will care about our economic bottom line and how we’re managing our environment.

But coming back to this bill, all it does is it just buys us time so that we can have a broader review that does the due process. It means that we can have that without a whole lot of the instability that would ensue if we suddenly lost the DIRA provisions in the South Island. If we do nothing, we get a whole lot of problems. But preserving the status quo—what it means for our farmers is that Fonterra still has to take their milk. What that means is that they can continue to have that certainty in terms of their future planning. It also means that they can still continue to exit, should they want to.

The other thing that this preserves in the meantime is our current milk price monitoring regime. What that means is the Commerce Commission will still have to review how Fonterra is calculating its farm-gate milk prices. In the meantime, we can have that transparency and that confidence in how Fonterra is setting its prices.

The other thing with this bill is that it lines up with what the Commerce Commission was saying in 2016. They were saying that there still wasn’t enough competition within the sector and that we needed to maintain things until we could have that broader review. So this bill just buys us time and it creates that stability so we can have a broader debate. I therefore commend this bill to the House.

I call Andrew Falloon—five minute call.

Thank you, Mr Assistant Speaker. It’s a pleasure to take my second call tonight on the Dairy Industry Restructuring Amendment Bill (No 2). Since I last contributed to this debate, I’ve had a couple of emails from dairy farmers in Canterbury. Both of them are quite confused as to why there is a need for a review. Isn’t that an excellent question?

This is a Government that for nine years railed against nearly everything that the National Party did in the primary sector when we were in Government. So now that they finally have the chance to correct everything that we did, all the things that we apparently got wrong, the first legislation that they bring to this House to affect the dairy industry is the Dairy Industry Restructuring Amendment Bill (No 2).

What does it do? It amends the Dairy Industry Restructuring Act to prevent the expiry of certain provisions in May 2018. So their big plan in this piece of legislation is continuing with the status quo, but with a review. And doesn’t this Government love reviews? They’ve set up reviews for all sorts of things, and where they haven’t, they’ve set up committees and quangos. This Government’s big plan for the dairy industry, for tax, for climate change, for anything of any importance, is to kick it down the road, to set up a review, a committee, or a quango.

It shows that they’ve already run out of ideas, if they ever had any to begin with. I equate it with a dog chasing a car. The car has stopped, they’re looking at each other, and they don’t quite know what to do next.

So instead of making changes, like with this Act, they’re setting up reviews and committees and quangos. And who are they getting to run those reviews and committees and quangos? Seasoned, experienced Labour politicians like Michael Cullen and Pete Hodgson? So it raises the question: who will run this review? My colleague David Bennett has already made, I think, a very worthwhile suggestion, which is Sue Moroney. Can I also throw into the mix Dianne Yates or Barbara Stewart—both former members of this House.

I want to end by noting the struggles that the industry is currently going through at the moment with Mycoplasma bovis. We’ve heard today that it’s now expanded to 23 properties across New Zealand, with new cases in Waitaki and in Southland, and there are a further 38 properties that are under Restricted Place Notices. Mycoplasma bovis has had a dramatic effect already in my area, both for the dairy industry and also for the beef sector. I’ve spoken to a number of farmers in my electorate who have been directly and indirectly affected by Mycoplasma bovis. All of them feel incredibly guilty and devastated, and, in terms of the guilt, wrongly, in my view, because there’s nothing that they could have done to prevent the situation that’s happened to them.

So I do rise to speak in favour of this bill, despite what I’ve been contributing so far. We will vote for it, but we do question the need for a review. It’s not needed. We’ve been there and done that. All the Government needs to do is go back and look at what was done previously. Thank you.

Thank you, Mr Assistant Speaker. It’s with alarm that I sit here and listen to the members for the other side missing the point entirely. They’re talking entirely outside of the scope of the bill. I heard David Bennett say that this was an attack on private property; in fact, nothing could be further from the truth. This is a bill that will protect private property. A short lesson in economics might help the member—perhaps that wasn’t included in his little commerce degree.

What we need to think about here is that we have a massive monopsonist—a monopoly buyer—and we cannot simply unleash it on the market. The Dairy Industry Restructuring Act was set up to put in place protections so that the dairy industry would both be internationally competitive and be able to grow internal competition. We don’t want to see that go by the wayside. Fonterra is still, for all its merits, a wildly monopolistic player in the New Zealand market, and, like any business, it needs discipline. There is no such thing as a free market; there’s just a market that some people prefer over others, as I’ve said in this House before. We need rules here for discipline.

Only recently—last year—the Supreme Court found that Fonterra had abused its position and had not treated farmers fairly when they were entering into the milk supply programme. It goes to show that without scrutiny, without examination, Fonterra will break the rules. It goes without saying, as night follows day, that if someone is dominant in the market place they will use that dominance. A provider who takes the vast majority—80 percent of the milk—will necessarily use that position to enhance its profits and, more importantly, to squeeze out other competition—competition that is critical for a vibrant and growing dairy industry, one that is based not on size and power but on innovation, on nimbleness, and on new ideas. That’s the dairy industry we want to see: one that recognises the importance of sustainability, one that recognises the importance of value added and innovation. Whilst we see Fonterra doing great things in that area, it won’t do them continually without a reason, without a competitor to keep up with, and that’s why we need competition in the market.

So for the other side of this House to tell us the scaremongering that they’ve been engaging in, the absolute misrepresentation of what this bill is about, the drawing of attention away from the substance of this bill to a review that may or may not happen—that is exactly what we don’t need in this House. We need these highly skilled academics—these people who are at the height of their academic career, who left academia to benefit this House with their knowledge—

💬 Hon David Bennett: Like a loser like yourself.

Not like a failed accountant over there that keeps yapping away.

Now look, what we need is discipline, in fact, and that’s why we have the open entry and exit—so that people can move into the Fonterra scheme when they want to, and when they want to move to a different company, a more innovative company, or a company that might be growing better, might have better ideas, or might just be doing things differently, they can do that. That flexibility is critical, and if we were to do away with that, if this bill were not to be passed—as our friends on the other side know full well, which is why they’re supporting this—that would be placed at risk. In fact, New Zealand’s place on the world stage as a premier supplier of milk—of which we’re rightly proud—would also be placed at risk.

That’s why this bill must be passed. That is why this is a great piece of legislation, and the other side should have got it under way a lot earlier while the clock was ticking. That’s why we’re here today, that’s why we’re debating this bill under urgency: because it is urgent that we protect our dairy industry, we protect all players and not just one, and we have a great, innovative, competitive dairy industry. Thank you, Mr Assistant Speaker.

Thank you, Mr Assistant Speaker. It’s great to be talking on this second reading of the Dairy Industry Restructuring Amendment Bill (No 2). It’s a shame, of course, that we’re not going through a select committee process right now, but instead having the second reading under urgency when there’s no need for it. It’s a shame because there are so many aspects that could have been discussed through the select committee process. As a member of the Primary Production Committee, I would have welcomed that opportunity to open it to the broader public to give their perspective, rather than what we heard from two former speakers on the Government side tonight highlighting the arrogance on that side of the House to suggest that they know better—that they know better than the public of New Zealand.

We heard it from James Shaw, suggesting that the reason we go into urgency is so that we can have great debates and hear from these amazing speakers in the Government. Well, that is ridiculous, to suggest that they know better than the people in the industry, immersed in this industry daily. That is an outrageous claim, and we’ve just heard it again along with some ridiculous and ongoing economic terms around the need to continue to hear from the amazing speakers in this House rather than actually getting out there with the grassroots people in the industry and understanding what needs to happen.

There’s no listening from the Government, and we’ve seen that again simply by being in urgency again. As they did last year with the parental leave bill, they’ve assumed that they know better than everybody else, and we don’t need to open it up to the select committee process—let’s just make all the rules ourselves! What we saw then, as again now, is that they are missing the point. Things are falling through the gaps. They haven’t got their head around it. And look, they can’t expect to know everything—I accept that. That’s why we have this process. Use it. Don’t try and overrun this system with ridiculous urgency motions when they’re not needed. And the Green Party sit quietly every time one’s proposed—the party who have been so against urgency every time it was used previously, and now it’s a great tool, a great part of this new Government!

This is ridiculous, and what we’re seeing as well with this move to the review—I would suggest that because of the nature of what we’re hearing from the Government, we’ve seen very short calls on this, the second reading. Why aren’t they standing a little longer, sharing some more of their insight? Is it (1) because they simply don’t understand the industry and can’t talk any longer on it, or is it (2) because, actually, this bill is not the purpose—it’s all smoke and mirrors to get to the real crux of it, which is their review of the entire dairy sector. That’s what’s really going on here.

We’re seeing a broad-brush approach being taken to an overview, a total review, of the sector. We don’t know what the terms of reference are yet—we haven’t heard that, other than that it will be comprehensive. But I well suspect it will include an assessment and, I guess, new take on what the environmental aspects are. We certainly accept that dairy farming has an environmental impact, as do any number of other industries, as do the urban centres. We all need to contribute to improving that, as I’ve mentioned previously. But what we don’t need to do is have this ridiculous focus on blaming farmers, and that’s what we’ve seen through the campaign.

We’ve heard it from New Zealand First; we’ve heard it from the Labour Party—about how we’re trying to drive this wedge on this side of the House, which is absolutely ridiculous.

💬 Hon Tracey Martin: Oh, come on.

They’ve mentioned it again and again through the campaign—Barbara Stewart might suggest that’s not the case, but we’re hearing that again and again. The protest in Morrinsville was another fine example of that, where New Zealand First turned up, pretending to be friends of the farmers, and the Rt Hon Winston Peters was booed off the stage.

💬 Hon Member: Oh, was he?

He certainly was. They had no time for him there.

💬 SPEAKER: Order! The member will resume his seat. I’m going to remind the member. I, unfortunately, have not been monitoring the debate throughout and have just recently come in, and I’m not sure what the precedent has been tonight. But I have been in the Chair now for three minutes, and the member has not come close to mentioning the bill. While the second reading is quite a broad debate, the member has to at least circuit around the bill and come back to it—and pretty soon.

Thank you, Mr Speaker. I was just about to get there. Can I assure you that my contribution has been much more restrained than some we’ve heard.

Now, with regards to the bill in particular, there are some elements in there that we really need to see raised, and we’re not seeing that detail in here at the moment. We’re seeing a very narrow lack of detail around trying to allow the Dairy Industry Restructuring Act (DIRA) to continue functioning as it has, but in reality this was triggered two years ago. The Minister’s had months now to make a call on it if he wanted to, and yet all we’re hearing is “Let’s repeal Subparts 5 and 5A of Part 2 to make some changes so we can carry on at 31 May and continue with our broader review.” What we need to see is an inclusion, or an assessment, an understanding, and some more consultation around some of those other aspects that we’re hearing are a major concern for the Government but, in reality, aren’t actually up for debate—areas such as farmers being concerned about not being able to supply any more—well, that’s just simply not the case.

The previous Government’s proposed bill did not suggest that would be happening at all. It wouldn’t be taking away the right for people to supply Fonterra. Any existing supplier can continue to supply. And I would encourage the Government to actually read the detail to understand that. Again, we’re seeing a complete lack of understanding from the Government speakers on this bill around how the agricultural sector operates. We hear about how they don’t want foreign-owned businesses, and yet there’s no sign of a clause to constrain the foreign-owned processors in the dairy sector. So where is that? Why aren’t we seeing those sorts of items included in this? There’s such a lack of detail; a flimsy couple of pages is all we have. If we’d gone to select committee process, we would have had the opportunity to discuss this in a lot more detail, to review some of those aspects that had already been assessed through the Commerce Commission’s report, and to get a clear plan forward that was best for the industry.

So what I would say is that it is extremely disappointing that all the hard work that was done by the previous Government—it was triggered in 2015; we passed that 20 percent threshold in the South Island for milk supply, which required the Minister to go out to seek consultation, a report on the state of the industry. We received that from the Commerce Commission, which had a number of recommendations. Submissions were made; 105 were received. We’ve seen a lot of work go into this, and that’s all been scrapped now. We’re back to the drawing board. This new bill suggests that we actually need to go back and just put in whatever rules we like, because we’re not going to follow the process. We’ll go through urgency and just talk as we see fit.

The review is a concern for me, and I believe that is the crux of what we’re really discussing here today. There are some underlying issues that this Government is going to be stirring up around land-use change that will stifle innovation. We hear so much in the speakers’ contributions tonight about how the Government is trying to give the industry certainty, give them confidence that they can go forward. We’re seeing none of that. All this does is hang a great big cloud over the heads of Fonterra and all the dairy farmers in New Zealand with this massive review with no detail around the terms of reference. How can they have confidence to invest in the industry, to continue to grow their export markets, to expand and benefit the economy of New Zealand when there is so much uncertainty around what is happening in this review and, indeed, the time line? Is it the end of this year; is it 12 months; is it 31 March? These are some of the questions that we need to see answered by the Minister, and I’d certainly encourage him to clarify that for the sake of our industry, so that they can have confidence going forward from this point.

Now, there was a comment earlier on around the water-quality aspect. For me, that is an area that is not covered by DIRA whatsoever. It should not come into this review. I suspect it may well do; we heard a lot through the campaign around taxes and water-quality issues and, indeed, cow numbers. So are we expecting to see a capping on the stocking rate on dairy farms off the back of this review as well?

At the end of the day, we don’t have detail. We don’t have confidence, the industry doesn’t have confidence, and farmers can’t have confidence without that clarity. We hear, already, the dropping confidence in the business sector, and, if this continues, we’ll be seeing that happening in the rural sector as well. So I would urge the Government to give us some confidence, some clarity, around what this review’s going to include, so that the industry can move forward with a clear plan in place. Thank you.

Kia ora, Mr Speaker. I’m very pleased to make a contribution to round off the second reading of this bill. As the only member of this House whose electorate spans the entire South Island, I believe I have some interest in this legislation and I do commend Minister O’Connor for bringing this to the House.

We’ve heard a range of wild contributions from the other side right throughout this debate. I know we’re under urgency, and I guess there is leeway, but the bulk of the contributions from the other side are concerning a comprehensive review, which we will be undertaking, but that review has absolutely nothing to do with this bill. There is not one word in the bill under consideration that actually mentions anything about a review. So I do want to acknowledge my colleagues Dr Webb and Dr Liz Craig, who actually were bringing this debate back to what we are supposed to be doing, which is actually considering the bill at hand—and that is we are preventing the expiry of the Dairy Industry Restructuring Act (DIRA) provisions across the South Island.

That is a major and urgent piece of action that’s required, because had we let these provisions lapse, it would just place the whole dairy sector in the South Island into disarray. That is why the members opposite are supporting this legislation, because they know that it’s required. They know that it’s required, so all the talk, all the bluster about a so-called review, and all the scaremongering that’s been going on is totally irrelevant to the bill at hand. So I do support this bill because what we are doing is providing certainty for the dairy farmers and dairy processors right across the South Island that the DIRA regulation will continue. That is vitally important.

Yes, we know that there are many farmers in the South Island. I know, going up and down my electorate, the importance of the dairy industry and the dairy sector to the people of not only the South but Aotearoa. But we’ve also seen the emergence of new processors, as well, whether it’s Synlait in Canterbury, Oceania, Open Country, Westland—we’ve got a lot of new processors that have entered the game, all as a result of DIRA regulation. And so that is a good thing.

And then we’ve also got the dominant, monopolistic, major player—three-quarters of the milk supply in the South—in Fonterra. So, yes, there are going to be some difficult and some complex issues that we will be talking to the industry about to progressively chart the way forward for the industry right across Aotearoa. All we are doing now with this bill is we are keeping the status quo. We are letting farmers know that, hey, we’re not changing anything; things will continue as they are. We will still have open entry and exit. We’ll still have milk price monitoring. There’ll still be the 20 percent rule for farmers in terms of their supply to other processors. Nothing is going to change. That will continue.

And why are we doing this? Well, because the Commerce Commission in its report, in looking at the competitiveness of the industry, said that it’s not required. They wanted to raise the threshold to 30 percent. Sure, it’s about 24 percent now in terms of the milk supply that is going to other processors, but they thought that 30 percent is a fair threshold. So what we are doing now under this legislation is we’re just getting rid of all of the triggers that were activated under this legislation. We have to pass this legislation under urgency so we can put a stop to all of those triggers. This is a very sensible way forward, and we’re using urgency to make sure that we can get it through in an expeditious manner so we can provide that certainty for the farmers and for the processors, particularly in the South Island, so they know what arrangements they are going to be operating under for the coming season. I do commend Minister O’Connor for his—

💬 Hon Meka Whaitiri: Leadership.

—leadership, yes, in bringing this bill to the House.

I know that we’ve heard talk about going on to farms. Māori are big players in dairy in the South—or emerging, I should say. Ngāi Tahu farms in Eyrewell have got mighty big operations there, which I’ve had a good look around over the years. Likewise, my own whānau over in Mawhera, on the West Coast, have got our little operations happening over there. And, you know, if we look up in the North Island we’ve got Miraka, just in terms of a new processor that’s doing some outstanding things. [Mr Speaker holds up bill] I’m just saying, sir, that this legislation is very important to the industry as a whole. It’s providing certainty. It’s providing certainty that that Dairy Industry Restructuring Act (DIRA) regulation will remain in place, because the Commerce Commission also said that taking away that deregulation far outweighs leaving that regulation in place. I think we need to take heed of what the Commerce Commission has been saying.

We also know that the next phase from here in is to undertake a comprehensive review to look at all of the issues and give a proper consideration with all stakeholders to ensure that there is a pathway forward, whether it means that regulation will stay in place or whether it will mean that there is a pathway to deregulation. And I think that’s what we’re looking at. We’re looking at a pathway to deregulation to ensure that processors, the dairy sector, and dairy farmers in general have some certainty as to how they will conduct their operations and how they will be able to make their investments, make their business decisions, to ensure that they can get an optimal return from their assets, from their businesses.

That’s all this legislation does. It’s very straightforward. All this talk about moving goalposts, scaremongering, and goodness knows what other concerns have been raised on the other side, they’re totally unjustified—totally unjustified. When looking at this bill in itself, it’s very, very simple, it’s very, very clear, and I commend it to the House.

Bill read a second time.

In Committee

Part 1 Repeal of provisions that provide for expiry of subparts 5 and 5A of Part 2