Farm Debt Mediation Bill (No 2)

Thank you, Madam Speaker. I move, That the Farm Debt Mediation Bill (No 2) be now read a second time.

I want to thank the Primary Production Committee for their work and consideration of this bill. I thank farmers and lenders for their support of this bill and their recognition of its importance. Their input will ensure the scheme is tailored to meet the needs of New Zealand farmers.

Farm debt has grown dramatically in the last 20 years and now sits at more than $62 billion. The Government knows how important farmers, their families, and rural communities are to our economy and country, and that is why we’ve developed the farm debt mediation scheme. We want farmers and their families to be on a level playing field with creditors when it comes to talking about difficult and complex financial issues. This bill is about supporting farmer wellbeing, which the Government is committed to doing through this bill and elsewhere.

I’d also like to take the opportunity to acknowledge our coalition partners, New Zealand First, for their contribution to this significant piece of legislation.

The farm debt mediation scheme’s two key objectives are, firstly, for farmers and secured creditors to constructively and objectively explore options for business turn-around and, secondly, to provide for a timely and dignified exit for those where few other options exist.

There are three parts to the bill. Part 1 sets out the scope of the scheme and which activities, debts, and actions will be captured. Part 2 addresses restrictions for enforcement action on farm debt while setting out the mediation process. Part 3 outlines provisions relating to farm debt mediators and mediation organisations under the scheme. It is proposed that the preliminary provision set out in Part 1 of the bill and the provisions relating to approving mediation organisations and authorising mediators in Part 3 come into force in February 2020, with the rest of the bill coming into force in July 2020.

The committee has recommended that the bill proceed with a number of changes that are designed to enhance the implementation of the scheme, some of which I will cover today. I support all the changes recommended by the select committee. The Farm Debt Mediation Bill (No 2) will support a broad range of farmers and growers engaged in activities ranging from agriculture, including sharemilking, horticulture, aquaculture, viticulture, and apiculture.

The mediation process is designed to address the power imbalance between creditors and farmers. This will be aided by the use of an impartial, experienced mediator who will create an environment where parties can meet in a respectful and constructive manner. The scheme is designed so that creditors must offer mediation to farmers before they can take action on a default. The definition of “enforcement action” has been tightened to recognise the range of actions creditors take to move on a debt, and that will now trigger mediation. Farmers can request mediation as they identify the need. The bill has been strengthened to strongly encourage creditors to accept mediation requests from farmers. We know, from similar Australian schemes, that early mediation brings about discussions that maximise the chance of successful business turn-around and assists the development of lasting resolution of financial issues.

I’m pleased to report that New Zealand banks have signalled their willingness to adopt the mediation process and will strive to identify opportunities for early mediation. Minor amendments to the bill make clear that multiparty mediations will be accommodated by this scheme. The nature of farm debt means it often involves a number of creditors, guarantors, and complex ownership arrangements. Mediation may bring together spouses, business partners, and guarantors with multiple creditors to plan for the future of the farming business.

Mediator cost will be shared equally between parties until a farmer’s contribution reaches $2,000. Above that, in order to recognise the financial vulnerability and stress on farmers going through mediation, any additional mediator cost will be borne by the creditors involved in the mediation. The Ministry for Primary Industries is also exploring options available to support financially distressed farmers in meeting the cost of financial and other professional advice that they may need to prepare to ensure meaningful participation in the mediation process.

In response to a number of submissions, there will now also be an opportunity for creditors to apply to the High Court to take emergency action where there is a significant risk to animal welfare, to environmental damage or crop wastage, or destruction of property.

I believe the bill has been enhanced through the Primary Production Committee—and I once again want to thank them and their process—in a way that respects and preserves the key principles of good faith, of cooperation, and of balancing of power. These and other changes recommended by the select committee reflect a balanced and careful consideration of a wide range of comments received from submitters on this bill. The changes enhance the bill and ensure it is tailored to the needs of New Zealand farmers and the rural communities within which they live.

Just briefly, I’ll outline some of the background. This issue has been around for a long time. In the 1990s—I have to speak up for Gray Eatwell, who was an individual farmer taking on banks at that time. I’d like to mention Janette Walker, who, in the 2000s, was a person who was championing the cause for farmers and debt and stress. For a number of reasons, I guess decisions were made to leave it in the hands of the two parties involved in the transactions.

But I think we have reached a stage now with a level of debt across the agricultural sector—provided by banks, of course, two willing parties—that is creating quite a bit of stress, and we acknowledge that stress across the sector. If you are a farmer with a huge debt, then you’re unlikely to stand up and criticise, I guess, the bank that has loaned you the money. So the reality is that there’s an imbalance in discussions when it comes to a position of financial pressure. We have acknowledged that.

We’ve worked with our coalition partners, who seized on an opportunity to introduce a bill. We sat down and discussed the bill that was in the House and decided that we could put up a slightly better proposal and that it would be considered by the select committee—which they have done very, very carefully.

I think, across this House, we now have wide recognition of the pressures across the farming sector, and a way forward for, we hope, the few farmers who have to undertake a mediation process. But if they do, their families now should feel a little more secure in the knowledge that the process is laid down, I guess, protected by statue, and ensures fairness to them—families who have, I guess, been encouraged to take on debt, who have often been encouraged to increase production, and who are now, for whatever reason, facing, I guess, pressure that the creditor doesn’t see as possible to extract from.

So we’ve been left with a big challenge; we have a solution. I’d like to once again acknowledge the efforts of the Primary Production Committee made up of all parties in this House, acknowledge our coalition partners, and trust that this piece of legislation will be received in the spirit in which it is intended—that is, through cooperation we can assist the farming sector into a more secure financial position.

Thank you to the Minister of Agriculture for that introduction to the bill. He covered a number of the changes that the Primary Production Committee had proposed and were accepted. So I thank him for making those changes, because they were important to tidy up on in the bill.

The essence of this bill deals with farm debt and any mediation that may be required if a farmer gets in trouble with that debt. Now, we don’t perceive that there will be a lot of cases where this bill will actually become a reality, but it is something that is out there as a tool for farmers and banks and other financiers should such a situation arise—it has inevitably arisen in the past and will continue to arise in the future as part of the normal course of any business arrangement. However, at this point of time in the farming cycle, one can see that this bill could actually be very much needed, when we consider the Draconian legislation that is upon the farming sector now from this Government that will force many farmers to re-evaluate their financial position and force banks to re-evaluate their lending processes.

It is not something that has been caused by international markets or any failing on behalf of a farmer or any adverse biosecurity event in New Zealand that has caused that pressure on the New Zealand farming sector. The pressure on the New Zealand farming sector lies directly at the feet of one Minister—Minister O’Connor—and the New Zealand First Party that have been backing up that Minister and have been doing a series—

💬 Hon Damien O’Connor: I was so kind to you.

Hon DAVID BENNETT:—of silly and inane policies that have destroyed the backbone of New Zealand’s economy. That Minister may laugh it off, but look at forestry, for example, and the silly and inane policy of the New Zealand First Party that required an exemption from our overseas investment rules so that overseas purchasers who have come in and purchased forestry—

💬 DEPUTY SPEAKER: It’s all very interesting but we are debating the second reading of a bill that’s been reported back to the House, so stick to the bill.

Yes.

💬 Hon Damien O’Connor: Stick to your facts.

We are, and as that Minister finished his speech looking at the history and the context, we’re looking at the context now, and it’s vital that we put the other side of the context from what the Minister put forward, because he only puts forward one side of the context. If we look at the situation—

💬 Hon Damien O’Connor: I thought I was very balanced.

What did you say, Minister? Balanced? There was no balance in the Minister’s speech at all. And, if we look at that situation in forestry, another great shining example of the economic genius of the New Zealand First Party was to stop foreign investment, and that is actually—

💬 DEPUTY SPEAKER: Excuse me, but stick to the bill without all those accompaniments. I appreciate that you are able to put some context around it, but you should actually be focusing on the bill as reported back. This is the second reading, where the House is accepting the bill as it’s reported back from the select committee. I’ve just checked the report from the select committee. There is nothing in there that gives that wider context. So that’s why I’m narrowing it for you.

Well, when we look at that wider context, it’s a farm debt mediation bill, and the need for such a bill would be because of the policies that you’ve seen in recent years from this Government—

💬 DEPUTY SPEAKER: Don’t bring the Speaker into the debate.

Hon DAVID BENNETT:—and that is the context that we’re looking at in that regard. The members across the other side may like to ignore that, but the reality is that the policies that they have engaged in have put farmers in a predicament where they may have to use this bill.

💬 Marja Lubeck: I feel a third warning coming up.

Did you say something over there? No, I didn’t think so. One of the big things that we had to look at in the select committee was the definition of “farm”, because, in many cases, farming businesses are partnerships and they are more than just the physical farmer; they could be a husband-and-wife partnership where one of the parties may be working in a different environment, like in the town or in another off-farm income. So we wanted to make sure that those kinds of situation were adequately captured by the bill, and that was one of the changes that are in the bill.

Another change was in regard to security interest, and that is in clause 6. There was a little bit of divergence between the parties in this regard. The National Party felt that the security interest that had been enabled in this bill to kick it off, effectively, is a bit wider than what is needed, in the sense that it could include a hire purchase and something like that, whereas we would rather have seen the clause actually be ad certum de minimus in the sense that a certain type of security interest would be the reason to set it off rather than just to have necessarily a hire purchase type of arrangement as setting off that farm debt mediation. So that was one point, and the National Party made it clear in the report that there is a point of difference there between the National members of the committee and other members of the committee.

In regard to the previous point I talked about, with the definition of “farmer”, we did come to agreement between the parties on that, and all the parties that were in the select committee did agree on that wider definition. I think Amy Adams needs to take a lot of credit for that. She really raised the issue and pushed it through within the committee.

There’s another issue that was a big part of it. That was the cost of mediation. Now, some of the members of the banking community and financiers and accountants raised the issue that the cost of mediation could be prohibitive for actual mediation to occur. There was a lot of debate within the committee around that because, theoretically, if you’re in a position where you need mediation, then potentially you won’t have the disposable income or the cash flow to pay for the costs of specialists’ advice for that very such mediation. So one of the changes that was made in this bill—and it was agreed by all parties—was in regard to the capping of the farmer’s contribution of $2,000 to the mediation costs. We had a variation of estimates of what that cost could be. Some believe that it might be well in excess of that, and some felt that that was just the actual mediation-on-the-day costs. But, effectively, it gives a little bit of comfort to farmers so that they can progress through this process not feeling that the cost of the mediation is something that would be detrimental to them undertaking the process.

So those were some of the big issues that were raised at the committee. Effectively, this bill is based on Australian legislation that the New Zealand First Party had seen and wanted to push through, and the Government of the day has picked it up. It’s not going to be a fundamental change to the banking policies in New Zealand. It won’t be a major change to the relationship between farmers and bankers. It will be, potentially, a tool that could be used in certain circumstances. But, in circumstances like we have now, with very strong international payments and prices coming to New Zealand primary producers, one would not see the need for this to the extent that we will see the need, because on the other side of the balance sheet for farmers is the high costs that are coming to them because of Government legislation and silly Government policies.

So this bill will probably be used more than it is needed, and that will be required because of the silly policies that we’ve seen come from New Zealand First that the Minister of Agriculture has promoted and pushed through this Parliament. So another bill that could be for the use of farmers and the financing community is not needed to the extent it will be because of the situation that farmers have been put into by the many policies that they are seeing that are attacking them across the board at this time. Thank you, Madam Speaker.

Thank you, Madam Speaker. It is with great pleasure that I rise on behalf of New Zealand First for the second reading of the Farm Debt Mediation Bill (No 2). It is actually a pity that I’ve had to follow such a begrudging speech which seeks to characterise this bill in a way that is not as intended. This is a bill that is there to support our farmers through a range of conditions, and to try to sheet that home to specific Government policies of the day—this is actually a long-standing issue. This goes back, from New Zealand First, back to 1999, with Doug Woolerton introducing a member’s bill. It was subsequently carried on by Ron Mark and, more latterly, by myself, but I’d like to thank the Minister, Minister O’Connor, for allowing this to be picked up as a Government bill. It is a substantive piece of policy that did deserve the full weight of Government support and the Public Service behind it.

In terms of the context of the bill, of course the primary sector is a significant contributor to our economy—another record last year despite the grim protestations across the $446.5 billion record income. But that does sit over $63 billion of debt that has accumulated, and quite rapidly, over the past decade. That is even recognised by the Governor of the Reserve Bank as a risk to the New Zealand economy. In fact, that $63 billion is not actually that far out of line with what the net Crown debt is, and this debt is only carried by 20,000-odd farming families, of which about 20 percent carry most of that debt. So it does show how top-heavy it is and how vulnerable some of our farming businesses are to all manner of challenges.

There are so many challenges in agriculture and horticulture etc. that are beyond control: weather, climate risk, and, of course, with climate change, we’re seeing more of that. We only have to look across the Tasman at the moment to see an example of that. In Otago the other day and Tasman we’ve seen fires, which is something that is forecast to grow. We’ve got the M. bovis outbreak and the recent Psa outbreak in the kiwifruit industry to look on. We’ve got volatility in markets and the trade wars that are happening at the moment. And, of course, we’ve got the Reserve Bank, independent of the Government, making capital requirements on the banking sector that they are looking to extract from their customers, essentially, to not penalise their shareholders. And that is disproportionately, potentially, going to weigh on our farming sector in terms of margins they may have to pay. So there is a range of factors beyond individual farmers’ control.

And, of course, the other thing with farming is—

💬 DEPUTY SPEAKER: I think we’re sort of one-all now, so if we could just come back to the bill.

So if we look at the power imbalance that this bill seeks to address, we heard some very good submissions before the select committee. Rural Women New Zealand’s Angie McLeod outlined some of these real-life examples of banks obfuscating on their responsibilities and not coming to the table in good faith. I myself have seen that through my office since taking up this bill. There have been a number of farmers come forward and outline very substandard practices, not only from the banks, I might say, but particularly there’s a second- and third-tier level of lenders that are, essentially, bottom feeders—predatory lending. This bill will bring them under the auspices and make them come to the table in a mediation sense and give some certainty to farmers and some relief that that power imbalance that does exist will be evened up somewhat.

Of course, this bill does rely on the New South Wales legislation primarily, and that has been extraordinarily successful. Of course, a lot of our banks operate on both sides of the Tasman, and they had been reluctant to engage in this and, essentially, wanted voluntary codes of conduct. The Government has, to our credit, not been prepared to wear that. They’ve brought forward that there’s only nine or ten, on average, mortgagee sales a year in agriculture, but if you look at the Federated Farmers banking survey, they’re showing about 16 percent of farmers feeling under pressure from their banks in May of this year, and that is up from 11 percent in November of last year. So it is something that is worth keeping a weather eye on. This piece of legislation could be something that those 16 percent of farmers can call upon when it goes through.

I’d like to commend the Primary Production Committee. It was actually a very good example of how select committees should work, notwithstanding the aforementioned fairly ordinary speech from the chair of that select committee, David Bennett. He did have some uncharacteristic and hitherto unseen outbreaks of reasonableness and decorum and did oversee a select committee that worked very constructively to bring this bill into shape, and we’ve made a number of recommendations. I would also like to acknowledge the Hon Amy Adams, who brought her considerable legal mind to this bill and was a very valuable contributor.

I think, in terms of select committees and the value of them, we had 37-odd submissions, and we made a number of changes based on those recommendations. So it does show that submitters coming before select committees are listened to. A number of the changes that we made were to the definition of a “farmer” and a “primary production operation.” And over and above the easily recognised agriculture, horticulture, and aquaculture, we brought in the likes of apiculture—bee-keeping—which had been sitting in sort of an ambiguous place outside the bill. So we brought that in.

We’ve also brought sharemilkers specifically into the bill, and I would commend Richard McIntyre, the Federated Farmers sharemilking chairman, who made a strong presentation to the select committee. One of the issues that we picked up was on the cost to farmers, and we’ve put a cap on that at $2,000. It was estimated that the average cost of a mediation is about $6,000, based off the New South Wales experience, but we felt that even though the farmer was only obliged to cover half of that cost, Richard pointed out that for sharemilkers in vulnerable positions against a very powerful financial institution, even that figure may have been too much and dissuaded farmers from trying to trigger this mediation process. The select committee were unanimous in thinking that the very intent, the actual core, of this bill was to get mediation up and running, and we did not want cost to be a factor, because it’s not only the cost of the mediation; it’s the cost of the advisors and the like that need to come along with this as part of that process as well.

There’s also been a widening and clarification of the scope and definitions of things like guarantor, allowing for multiparty mediation, sharefarming trusts, partnerships, and where there are multi-lender or family circumstances. So that’s been clarified and improved. We’ve allowed the banks to apply to the High Court to trigger a mediation in regard to things like animal welfare, or maybe if the crops are under threat of not being harvested or the like. So there is a counterbalance, I guess, there for the banks to not allow this process to diminish the asset value, and that has to go through the High Court, so there’s a threshold there. It also strengthens the wording to encourage creditors to accept mediation so that it can be the fence at the top of the cliff rather than the ambulance at the bottom, which is the absolute intent of this bill—to get creditors and farmers sitting around a table earlier to get a better outcome in the end. We did look at a de minimis figure, but we dismissed that as we felt that was self-policing, to a point. You’re not going to trigger a mediation at some cost for a small amount. We did talk about an upper cap, but some of these debts are significant.

So New Zealand First is delighted with the way the bill’s come out of the select committee, and we continue to look forward to shepherding this longstanding policy towards legislation in the third reading. Thank you.

I just want to talk a bit about the history—the why, the what, and how this bill’s going to work. This bill has been around for some 20 or 30 years. I believe it was first raised by New Zealand First back in the 1990s twice, and it was pulled from the ballot, I believe, last year under the name of Darroch Ball, and transferred over to Mark Patterson. The Primary Production Committee had a bit of a dabble with the bill. The member in charge of the bill tried to, basically, base it off similar legislation that’s currently in place over in Queensland. Full credit to the Minister of Agriculture, Damien O’Connor. He lifted the bill and, basically, cut and pasted the New South Wales model, which seems to be the way to go. Looking at the numbers in New South Wales, how many have actually used this type of legislation, it’s very few, but I think it’s needed now.

If you look at the amount of debt that farmers have taken on over the last 20 years, it’s gone up from about $12 billion or $13 billion up to $62 billion, and you have to look: why is that? One of the main reasons why debt’s increased so much is the nine years of a strong, stable National Government, a party that backed farmers, a party that was founded by farmers for farmers. We backed farmers. That’s why there was so much confidence. You had farmer confidence—highest levels in three decades. Now it’s dropped to the lowest. The reason why you had such high farmer confidence is you had a party that was backing farmers and an environment where farmers actually had money to invest into things like the environment, like over a billion dollars invested into waterways, and 30-odd catchment groups formed in Southland to improve waterways. They actually had the capital to invest back into the business and grow their businesses.

That confidence has been very quickly undermined by a range of the current Government’s policies. A number of them—for example, the proposed water policies—are causing a huge amount of fear across the rural community in New Zealand. I was talking to a farmer yesterday—it’s going to cost their operation in northern Southland, in the beautiful electorate of Clutha-Southland, $2.5 million to fence 45 kilometres of water, amongst a few other things—$2.5 million. Now, this is a couple in their mid-40s. He’s been working on minimum wage for the last 25 years, recently invested into the business, and their only option, if the water policy goes through as planned, is to sell the farm, and they’ll be left with hundreds of thousands of dollars of debt. That’s because you’ve got a Government who have proposed water policies that are absolutely going to cripple farmers. This is why this legislation is needed.

You’ve got the ludicrous overseas investment carve-out for forestry. I was in the Catlins yesterday—if you haven’t been there, I highly recommend you go down there—in South Otago. This is a small community. It used to have 35 families back in the early 1990s—farming families. They participate in a range of voluntary organisations. The school had a roll of 35. They had businesses. In the early 1990s, those farms were planted out in trees. Now you’ve got a school with six kids. You’ve only got four or five families. It’s actually quite devastating to see.

This is why this bill is needed. You’ve got the lowest farm confidence in 20 years, a range of Government policies—for example, research and development’s halved, funding’s halved for the primary sector industry. You’ve got banks circling. You’ve got banks putting more pressure on farmers now than ever before. Why is that? About seven or eight months into this Government’s term, the banks could see the writing on the wall. They had meetings. Why would the banks want to back farmers when you’ve got all these negative policies affecting rural New Zealand at the moment? Banks have a huge amount of data. They’ve seen the writing on the wall, and that’s why you’ve got the banks circling. This is the reason why National’s supporting this bill. We know it’s needed more than ever right now, and that’s perhaps the reason why it hasn’t come into play now—because of all the negative policies from the Government.

Take Southland, for example. You’ve got families now who can’t even birth in their local community. You’ve got a rescue helicopter in Te Ānau that is on 24/7.

💬 DEPUTY SPEAKER: I think we now are getting really broad. Come back to the bill.

OK, Madam Speaker. I was just—yeah, I’ll come back to the bill. We’ve also had the Mycoplasma bovis outbreak: another reason why the banks are winning.

💬 Kiritapu Allan: Now you’re on to M. bovis. What’s this got to do with the bill, mate?

National supports this bill because of the three or four negative policies outlined—

💬 DEPUTY SPEAKER: Actually, I decide the interventions, OK?

That’s the reason why National supports this bill. I commend it to the House.

We’ve just had to endure five minutes of a member of the Opposition. Not once did he actually turn to the substance of this bill. In this Chamber, the purpose of the role of each of us that holds a position in this House is to give every piece of legislation that comes into this House the due consideration that it deserves. Now, that last speech was an absolute disgrace to those farmers that we are actually trying to work and stand alongside. Now, I know that the Opposition are getting a bit terse. They are getting a bit grumpy because they know that on this side of the House, we’re actually working hand in hand with the primary sector. I know that that’s a bit disconcerting for that member Hamish Walker. It’s a little bit disconcerting, so he, just like the chair of the Primary Production Committee, David Bennett, for the majority of his speech just spieled off negativity after negativity after negativity.

One of the most frustrating things about sitting on this side of the House, particularly when you sit on the Primary Production Committee—and we have pretty good, amicable relationships in that committee—is we have to listen to the absolute garbage that comes out of people that purport to be leaders of our rural communities on that side of the House. It is misinformation, it’s disingenuous, and I strongly appeal to our rural communities to do some fact-checking on those members that get up from that side of the House and speak to things that are, actually, really fundamentally important.

Now I want to turn to the Farm Debt Mediation Bill (No 2). Why has this bill come about? This bill has come about because the previous Government let banks go rampant. They let corporate banks, owned by Australians, by and large, go rampant and milk our rural communities for all they’ve got. So when the sun was shining, those banks absolutely targeted our rural communities—they targeted our farmers. When the milk was flowing and the white gold was there, there were no barriers to letting these Australian, by and large, multinational corporate bankers come in to the homes, the beds, the lives of our rural communities. Where were the backstops then from the self-purported Opposition to be the champions of the regions? They were nowhere to be seen. So what happened in 2016—

💬 DEPUTY SPEAKER: All right. So I now ask the member—I’ve given the member the—

Absolutely, I’m going to turn to this bill, because this is the context for this bill—

💬 DEPUTY SPEAKER: Would you let me finish and not speak over me? I’ve tried to give everyone a fair go at the start, but if you come to the bill please.

Five minutes I had to endure listening to that previous speaker, Hamish Walker, not once turn his mind or his words—

💬 DEPUTY SPEAKER: Are you arguing with me? Is that member arguing with me?

I’m not arguing with you.

💬 DEPUTY SPEAKER: Sit down. Are you arguing with me? I’m saying that you are now to come to the bill. I’ve given everyone a bit of a go about the context. I’m now asking you to come to the bill.

So, turning to this bill, this bill has been called upon by members of our rural communities and has been championed for many years by our friends, our coalition friends, New Zealand First. I want to applaud the member Mark Patterson, as a first-term member of Parliament, a sheep and beef farmer from Lawrence. I want to applaud the work that he has done alongside those members and our rural constituents, alongside those members that have really felt the heat of, I guess, inaction by the previous Government in this area, to ensure that some of our most vulnerable farmers—and it’s not the big farmers that this bill goes to protect; it’s our sharemilkers. It’s our little guys. It’s our family farmers. After the milk price crashed in 2016, it was it was estimated that about 25 percent of farms were going to fail. Nothing was done. But I want to commend Mark Patterson. I also want to commend the Hon Ron Mark, Darroch Ball, all who in some way, shape, or form put their hand to the tiller to try and ensure that this bill got before the House.

But the real credit—alongside those members—must go to our Minister of Agriculture, the Hon Damien O’Connor, who has been a constant bastion for the little-guy farmers and has ensured that this bill has come before this House in a way that really does get to the core purpose of what we’re trying to achieve.

So what does this bill do? This bill requires or provides a mechanism to ensure that the farmers that are under some stress have a mechanism to require banks to go to mediation. Articulating the words of the submission from Rural Women New Zealand, they say, “Calling up farm debt has had a devastating effect on the rural families involved because it can result in the farmers and their families leaving their home, families, friends, land, livestock, place of work, and community, all at the same time. This can be a traumatic event for all concerned. Although it is probable that banks will call up loans on farms where the borrowers default due to not being able to meet their commitments—it is the process, timing, and manner in which this happens that often determines the amount of stress and trauma an individual or family will suffer.”

Now, what our farmers were saying to us—and, you know, it was probably well-articulated. I know that the member Mark Patterson has already applauded him, but it was Richard McIntyre and his submission on behalf of the sharemilkers sector of Federated Farmers, which said that when those families are struggling and the pump is on—I’m paraphrasing him now, but he’s spoken a number of times on this issue. But he said when that foot is on the jugular and it feels like they’ve got nowhere else to go, there was no mechanism to be able to ensure that there was some parity to get those people around the table. The banks had the power and those farmers were under an enormous amount of strain. They couldn’t get them around the table, and so what he said is that in those situations, a struggling farm business did not end in a bank taking action; it ended because the farmer just sold up after the bank put pressure on them about an overdraft. Now, with this bill, in cases like this, mediation is extremely beneficial. He said previously it would only happen if the banks agreed to it, but this creates a mechanism to compel those banks to get around the table.

So, look, in the Primary Production Committee, despite all the, sometimes, rubbish that gets said in this House post factum—in the actual committee it has been a really good, thorough process. We’ve heard, I don’t know, probably around 70-odd submissions on this bill from bankers through to farmers, through to the rural women’s network, who really spoke a lot to the mental health implications of financial burdens and strains in the family home when the pressure gets a little bit too much.

Now, there is a whole range of substantive amendments that our select committee put forward, and my colleague spoke prior to this, but one of them was around that wider definition of “farmer.” We had a really in-depth discussion around our select committee to ensure that it’s not just the person with their name who does the work day in and day out on the farm; there may be a spouse and a partnership; there might be a spouse whose primary work is doing something else—it might be, I don’t know, something in town. But that couple, they bear the burden of that financial stress. The purpose of broadening out that definition of “farmer” was to ensure that spouses were included, so that they could also have a right to trigger this mechanism to compulsory mediation, if that could be said.

What’s been spoken a lot about too—is that there was a lot of debate about how much mediation actually costs. I think one of the figures that we heard was up to around $20,000. I think that there was some consensus that it was around about $6,000 to get both parties around the table, depending on whether parties took advice, and so on and so forth. Now, I mean, this has been traversed, but it was important for us that we could, I guess, get rid of the barriers to participation to mediation for all of those concerned. So we’ve kept the farmer’s contribution to mediation costs to about $2,000. Now, as a former commercial lawyer myself, I know that that’s an extremely low cost, but it was very important for us to ensure that equitable access to justice, if you will. We rejected a de minimis requirement; my colleague Mark Patterson covered this off just prior. We also set down criteria as to what could be evidence of bad faith when it came to mediation and rejecting a mediation request was one of those mechanisms that our committee determined would be evidence of bad faith.

There are a range of positive aspects to this bill, particularly for our smaller farmers who have been struggling financially, and it’s with absolute pleasure that I commend this bill to the House.

Thank you, Madam Speaker. I think it’s nice to see that the last speaker, Kiritapu Allan, did calm down somewhat by the end of her contribution. It was a rather fiery and farcical start, to be honest. The claim that the last Government let Aussie banks run rampant, as though there’d never been an Australian bank in this country prior to 2008, and that that has led to catastrophe across the sector is absolutely ludicrous. And actually, off the back of that, Mr Patterson’s claim earlier that any second- or third-tier lenders were bottom feeders is, I think, a little bit of a harsh way to describe any number of people in the agricultural sector who provide a bit of support and assistance to people getting into, potentially, their first farm. It’s a bit of a rough claim to call them bottom feeders, in that instance, I’d suggest, Mr Patterson.

Now, this bill is around trying to provide a platform to mediation. And I think the key opportunity here is for those non-bank lenders. Now, having spent a number of years in the rural banking space, I can absolutely give confidence that banks will do whatever they can to avoid getting in a situation where they’re having to sell up a client. That is the worst outcome for both parties. No one wants that and banks will work closely with their clients to try and find any other solution that might avoid that situation. Sometimes that means an early exit for the farmer if cash flow suggests that the equity will continue to be eroded by remaining in business. But alternatively, it might mean providing additional support if the cash flow and forward projections show a strong enough position—that, actually, they can work their way through that and rebuild equity over time.

So it’s a matter of taking those aspects into consideration and, of course, the people—that’s the third part of it. So it’s the cash flow, the collateral, and the character. You’ve got to have a clear understanding of those three considerations in any lending situation. And banks have entire departments that work closely with their clients to try and minimise the impact of getting into this situation, and then the impact of what that might be on the farmers, in the first instance, but actually on the bank’s position, of course, as well.

So this bill provides a good mechanism for those non-mainstream banks to have the ability to work with the farmers or, conversely, the farmer to instigate mediation with some of those lenders who may be second- or third-tier lenders, but often are family connections. It may be parents or relatives that have lent some money to those farmers to enable them to get into business, to get into a farming business they would not otherwise have been able to. And so it’s important that we’re aware of that. It’s not always big banks or rich people lending money to vulnerable farmers.

Actually, these can be pensioners, parents of those farmers, who may not have strong cash flow themselves but do have some equity and are able to either borrow against that from the bank and on-lend it to their children, or they may provide a guarantee to support the security requirements of the farmers. And so we need to be mindful of that as well. And that would just be one aspect that I would raise around the $2,000 cap that has been mentioned in terms of the maximum charge for farmers, because if the other party is not a mainstream bank and may be also significantly cash-flow constrained, it can be challenging for them to be looking at the situation where they may have to stump up significant mediation costs but may not actually be able to do so themselves.

And of course, the other aspect around the definition of “farmer”, which crosses over both lines, potentially, is in a number of instances where you may have an equity partnership, for example, and one of those parties in that equity partnership may also be a lender to that partnership. So they are classified as both a partner by being a farmer in the sense of the definition in this bill but also a lender or a creditor to that entity as well. So that creates another line of confusion—that on glancing through this, I haven’t seen clarified—as to how that would play out in a mediation situation. So I’d be interested to see that.

But, of course, we have seen an increasing amount of pressure being placed on farming businesses. And one aspect that I’d touch on as well is the Reserve Bank’s current consideration around what’s an appropriate level of capital to be required to be held by the banks. And of course, whenever a mainstream bank hears that, of course, they’re going to start reassessing where their risk appetite is sitting in a particular industry. And we’re hearing across the board now that banks are being somewhat more cautious in their approach to additional lending. And actually, the existing lending requirements—there’s encouragement in a lot of spaces to start repaying capital, not just interest costs, and so that has implications as well.

And, of course, we’d heard already about the aspect of whether hire purchases and other unnecessary debts are potentially caught up under this as well. But at the end of the day, it comes back to providing a platform, giving a little bit more support whilst already, I think, there’s a broadly appropriate platform in place in most instances for banks—granted there are some exceptions. This really is, I think, a good opportunity to enable a better process to be established around those non-mainstream lenders. And so on that basis, I do commend the bill to the House.

Kia ora, Madam Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise on behalf of the Green Party to support this legislation. Farm debt’s risen to $62.8 billion; this is a huge issue. It has grown fast over recent years. We’ve all seen the stories—probably many of us have talked to farmers about the mental health issues and the pressures that arise from that large debt burden. We’ve heard from the member Mark Patterson that it’s that small tail of farmers that carry that massive amount of debt around their shoulders, their neck, but it’s an important issue and I’m glad that Parliament is working in a cross-party fashion again when it comes to this issue, to support it.

Now, many people listening might ask, “Well, why farms? Why single them out in particular? Why not other businesses? Shouldn’t they benefit from statutory protections when it comes to mediation?” The fact is that farmers, I think, do have a particular set of circumstances. They are particularly vulnerable to the weather. You know, my thoughts and prayers go to our cousins across the Ditch in Australia that are facing these massive bush fires—I understand there is a catastrophic rating in New South Wales at the moment around Sydney. We are going to see this getting worse and worse when it comes to the effects of climate change. We need to prepare and adapt.

Of course, there is vulnerability to fluctuating prices; biosecurity incursions, which are no surprise to New Zealand as we’ve battled Mycoplasma bovis; but I think also there is the particular issue of the intergenerational nature of farms. Many New Zealand farms are literally where these farmers—their parents, their grandparents, sometimes even earlier—were born, so it’s important that when you do come to servicing that debt, potential default, and bankruptcy, this step is put in place.

I’d like to thank the Primary Production Committee for their consideration. I understand there were 31 written and 17 oral submissions. The Green Party, unfortunately, this Parliament, doesn’t have a seat on the Primary Production Committee so I wasn’t able to participate. But I would like to thank the committee because there are four big substantive improvements, where they’ve amended this legislation, that I’d like to highlight and single out.

Firstly, the original legislation said that a creditor had to offer mediation when the farmer was in default. Now, I hear the argument submitters made that that was coming too late in the piece. Once you get to default, things have already advanced to such a level that, really, you could have fixed it earlier on. I like the phrase of Mark Patterson, which is, “We’d rather have a mediator at the top than an ambulance at the bottom of the cliff.” So I note new clause 16A to allow earlier intervention, where the farmer can request it earlier on. We know from international evidence that the earlier you can intervene, the better the outcomes for all parties involved, so I’d like to acknowledge that positive amendment.

The committee’s clarified the definition of “farmer”. Things such as hobby farms, lifestyle blocks, aren’t included and I think that’s entirely reasonable, and what they’ve done in clause 6 is deleted the words “solely” and “principally” from the definition of “farmer”. But they’ve also expanded those who are engaged in the business—so trustees, spouses, partners also come under that definition of “farmer”.

I’d also like to acknowledge the work of capping the costs. We’ve heard the international evidence—well, the evidence from Australia—that mediation costs around $6,000. Originally, those costs were envisioned to be split 50:50 between the creditor and the debtor. However, I think when you realise the fact that you’re only invoking the situation when the farmer is in some debt—is in an onerous debt situation—you know, they are particularly vulnerable. So $2,000 still is a significant sum and we think the committee’s actually got about the right number in terms of the farmers’ costs.

Lastly, and this I think is important from an animal welfare perspective, is an application to the High Court in situations of urgency. We’ve heard other members today talk about the situation where the value of the farm might degrade over time if, say, there are 60 to 90 days for mediation. But there is also the scenario where you’ve got stock on a farm which might not be well cared for, from an animal welfare perspective, while that 60 day mediation process is under way. So we do acknowledge this; we do support this amendment to include an application to the High Court.

I’d like to take this opportunity to thank New Zealand First. This is clearly something they’ve worked on for a long, long time. I guess it’s a good example of persistence pays off in politics, so I acknowledge the member who’s ushered this through, Mark Patterson.

National, I think, were trying to make politics out of this. It’s not something our farmers deserve at this point in time. They’re facing a number of pressures, and I think if we’re going to talk about the issues facing farmers many of the problems can be laid at the floor of that Government that had nine years to sort it out. But, instead, what they did is they chased volume over value, they saw this rapid increase in debt. They didn’t act with the most severe environmental crisis facing our local environment, which is the degradation of our waterways. In fact, we’ve seen that nitrous oxide concentrations—the amount of nitrogen we’re applying to our farms—have increased, I think, 650 percent since 1990, much of that under the tenure of the previous Government. I still remember in this House when they were blaming birds and volcanoes for the problems of our water quality crisis and the fact you can’t swim in two-thirds of our streams and rivers. They didn’t face up to it. This Government is acting, unlike that previous Government. So I think it’s wrong, it’s unfair, and giving our farmers a disservice when they’re trying to blame the Government for dealing with the problems that they left.

The Green Party vision—which we’re seeing from this Government—is supporting our farmers into more sustainable practices. And, ultimately, that is going to make our farms more economically sustainable, because we can’t keep chasing volume; we need to chase value. We can’t just keep cramming more cows in our paddocks. We need to embrace sustainable farming practices, which was included in the last Budget. We need to be embracing regenerative farming and organic agriculture, which we know is going great guns in this country. This ultimately is going to see a more sustainable farming system that is more sustainable economically, and continue that social licence. Kia ora koutou.

Thank you, Madam Speaker, for the opportunity to make a contribution on the Farm Debt Mediation Bill (No 2).

I was reflecting, listening to the speeches this afternoon, back on to the 1980s and indeed the late Collis Blake, who was a farmer in Levin. He, effectively, stopped mortgagee sales in the 1980s by blocking access onto farmers’ driveways with tractors and trucks, and then went and negotiated singlehandedly with banks. I must say, the relationship with farmers and banks has come a long way since the 1980s, but I fear, even more than ever, that we are heading back into a situation like those farmers in the 1980s found themselves in. Because the fear that I have is that Government policy is creating a lot of uncertainty in rural communities. I think that this bill—and that’s partly the reason why the National Party is supporting this bill—is necessary, because when you have a look at the confidence in farmers and if you look across the whole range of business confidence surveys, whether it’s Federated Farmers, whether it’s Rabobank, whether it’s ANZ, and the list goes on, farmers’ confidence is at an all-time low.

Now, why is that? Because their prices are very good, apart from wool. Beef prices: good. Dairy prices: good. Horticulture prices: gangbusters. The list goes on—forestry prices: looking good. But why is it that farmer confidence and sentiment is extremely low, the lowest it’s been in decades, right through, even beyond the global financial crisis? And the reason has to be because they are facing an onslaught of Government policies. I don’t want to spend all of my contribution talking about the onslaught of those Government policies that are causing a negative reaction in rural communities. I could, but I don’t want to because that would be seen as negative, and the list would go on and then the bell would go, and I’d be asking to extend my contribution because the list is as long as both of my arms.

This bill is important right now for not only what’s happening with Government policies but we have also the Reserve Bank of New Zealand Act potential changes, and that is also reverberating around rural communities, right now, with banks who are turning up and sitting around the kitchen table and saying to farmers, “Right, you have been paying off interest, OK, thank you very much. But now we want you to pay off principal as well.” Not all debt in agriculture, in the primary sector, is bad. And I’ve heard from a variety of speakers this afternoon alluding to the fact that farmers are out there with their chequebook spending willy-nilly and they’ve caused this demise of ratcheting up debt on themselves. Well, I want to defend farmers and say, actually, in a lot of cases they have been investing in lifting the overall performance and viability of their individual farms, particularly around environmental policies that they have made. And all of those decisions: fencing their waterways, 24,000 kilometres from here in Wellington to Chicago and back, riparian planting—look at the Waihopai River. It got the supreme award last week. That’s a river near Invercargill, surrounded in farmland—it got the supreme award for water quality improvements, and that is because they work collectively together.

The reason that this bill is necessary is—I’ve talked about Government policies, I’ve talked about the Reserve Bank of New Zealand Act changes—is also that we know that the family home is on the parcel of land that is a working farming business. So it’s different, isn’t it? It’s a bit like a dairy owner. Quite often the dairy owner lives in the business. Farmers live in the family home that is on the particular property, so when farmers find themselves being rounded on by the banks—that’s starting to happen right now—it means the family home is very, very vulnerable. So this bill is necessary for that reason as well. I’m pleased to see that the Primary Production Committee has capped the mediation costs that farmers will pay, up to $2,000. I think that’s also very, very important. And another note is that it means that farmers will be able to go to their bank and say they want early intervention.

So I support this bill. I think it’s necessary right now; there’s a flood of farms on the market. Some of them are choosing to exit because of Government policies; some are choosing to exit because of the pressure that they’re being put under by their banks. That’s why I support this bill.

This is a split call.

Thank you, Madam Speaker. So the context of this bill is that this is a Government that’s tackling the long-term challenges. Our economy is in really good shape. It’s growing faster than most similar countries. Interest rates, unemployment, and debt are all low. We’ve had the highest annual wage growth in a decade. We’re not afraid of tackling the big issues, and that’s the context. We know that farming is vital to New Zealand’s growth and wellbeing, and it accounts for something like, I think, $46 billion in exports last year. We also know that there is growing debt in the farming sector and that farmers are especially vulnerable to business downturns as a result of conditions that are often outside their control. You’ve heard quite a lot of talk about that this afternoon, which is why this Government—as I said, not afraid of tackling the long-term issues—is actually addressing it.

It started off with a member’s bill—I acknowledge Mark Patterson for that member’s bill—which the Government then sensibly decided should be a wider Government bill. And, thankfully, the Opposition, the National Party, decided that it would support it. It sounds to me as if there was quite a lot of good work done in the Primary Production Committee with 31 written submissions and 17 oral submissions from farmers, banks, and mediation organisations. But this is one of those examples where good work gets done in the select committee and a lot of blather happens in the House from the National Party in Opposition that is looking for a way to justify its nine years of doing nothing in this area. We’ve heard that in 2019—this year—there is $62.8 billion of debt, up from $49 billion in 2009. So one asks oneself what the previous Government was doing during that period. Why didn’t they introduce legislation to bring in a fair farm mediation scheme that was going to guarantee that fair, constructive, and timely process for farmers to work through debt problems with their lenders?

I heard the previous speaker talk about blocking driveways to get banks to negotiate with farmers, but there’s just a great big, glaring gap, and you’ve got to ask yourself what was missing during that period. Was it that the banks were seen as too powerful for the previous National Government to actually take on? Actually, you’ve got to look and see—well, what’s the previous Prime Minister doing now? He’s the chair of one of those banks.

So here we have a Government—

💬 DEPUTY SPEAKER: I think the member needs to be a bit careful.

Hon CLARE CURRAN:—that is actually introducing a fair scheme—

💬 DEPUTY SPEAKER: I think the member needs to be a bit careful.

Hon CLARE CURRAN:—for the farming community to have a structured, confidential, and impartial negotiation process that allows for the mediator to be a neutral and independent person to help both the farmer and creditor work through their debt issues in an effort to reach agreement. So fairness is actually what this Government is about. It is tackling the hard issues and getting the economy working properly, but introducing fairness for all parts of the community. A big thankyou to Minister Damien O’Connor for taking this issue on.

This is why it’s so hard for the Opposition to argue a position. Even though they’re supporting the bill, it’s really hard for them to argue their position because they didn’t get on and do this themselves in that nine long years of neglect period. Instead, it’s this Government that’s been left to pick up the pieces after we’ve had a system where farmers are dependent on capital gains on land and not productive profit. We’ve had growing farm debt and no recognition of the building pressure on farmers.

This is the Government that’s delivering. They’re delivering for all parts of this sector, and we’re doing it alongside all of the other joined-up policies that are making this country a better place.

Thank you. It’s a pleasure to talk on the Farm Debt Mediation Bill (No 2), a bill established to help with creditors and farmers. Clare Curran, the previous speaker—I think she might be going into the fertiliser business when she retires from Parliament, because she produces it on an industrial scale.

We’re supporting this bill. We support this bill. The original bill was brought in by New Zealand First and it was a dog of a bill. They should have just cut and pasted the New South Wales version, and I see that this current bill is, essentially, a copy of that, so the Government had to rescue it.

I see that there were 30-plus submitters and 18 oral submitters, and it was supported by Federated Farmers and the New Zealand Bankers’ Association. We’re talking about $62.8 billion worth of debt, which was, what, $49 billion in 2009. So it’s not a massive increase, but it is still a significant amount of debt for us to carry, and it’s acknowledged that early intervention in these cases rather than forced disclosures is a good method, so we support that.

I’m a farmer myself, and we’re vulnerable—farmers. We are subject to weather, the markets, diseases, and Governments that don’t know what they’re doing introducing all kinds of legislation that puts pressure on farmers, and the farming community, at this point in time, have never been more under load. They’re more under siege than ever before, and this is at a time when they should be jumping from the rooftops because the prices are good, earnings are good, and the weather’s been reasonable. But they’re not. They’re pretty sad. In fact, I’ve got a hill-country farm, and I struggle to make a living off that farm. The fertiliser, the weed control bill, the fencing—if I did it as to best practice, I would spend my entire farm income on that.

So it’s a common misconception that farmers are rolling in dough, because they’re not. Most farmers I know will be lucky to retire with a bit of a nest egg after a lifetime of working seven days a week, so farming is really hard. It’s hard on people, it’s hard on farmers—it’s hard on their bodies—and it’s no wonder they’re struggling. So we need this farm debt mediation bill, because I can see that a lot of farmers, especially with what’s coming down the line, are going to be struggling. There are going to be some farmers who are going to have to walk off their land. Hopefully, a National Government will get back in and change things around, and we can carry on.

On my farm, I could—

💬 DEPUTY SPEAKER: Are you actually going to address the bill?

Oh, yep. I’m talking about farm debt. The banks can be villains at times. They can be villains at times. You hear this story about bank bosses foreclosing on farmers and making them pay back capital right at crunch times, and this definitely goes on. We know that this goes on.

This farm debt mediation bill, in my view, is a mechanism to keep bankers honest. So I commend the bill to the House.

This is one of those situations where I haven’t sat on the select committee. I have been aware of this bill and read bits about it, but, as people in the House will know, unless you’re actually directly involved, the nuances of the bill often escape you. Having been requested by my whip to present on this bill, I’ve had the opportunity for the last 10 minutes to read through it, and I’m incredibly impressed by this bill.

What have we actually got here? We’ve got a bill that says that if your business gets in trouble, you will have compulsory mediation—well, not “compulsory”, but highly advised mediation. You’ve got a system that will ensure that before the creditors move in, before you are kicked off your farm, before—and we can go back to any stage in history, which has been littered with opportunities or instances where people have been, basically, kicked off their land. Well, at any stage in history, I’m sure any farmer or anyone involved in agriculture would have loved to have a piece of legislation like this to be able to refer to.

I’m from a family that arrived in New Zealand in the 1840s from Ireland as a result of the Irish famine, when the land became exhausted and when farmers didn’t have access to any such thing. They, basically, starved or they left, and that was probably a very typical example of what happens in the dog-eat-dog of farming—the dog-eat-dog of farming which exists, generally, around the world.

The dog-eat-dog of farming has actually existed largely in New Zealand. One only has to drive around New Zealand, and you’ll still see the skeletons of old dairy factories and you’ll still see the skeletons of old dairy farms. The farm that I grew up on previously is now three farms, and, typically, I’m sure that those involved in farming here and on the opposite benches will know that the piece of land that they now occupy, generally, was probably about at least three or four farms before it became the economic unit it is today. So that is an evolving process.

History doesn’t stop. What we’ll actually see is that the lands that are farmed now that may be an economic unit of maybe 2,000 stock units may in the future become an uneconomic unit unless there is policy around which farming can actually survive at that level. It is inevitable that in a business like farming, there are good businessmen and businesswomen, and there are bad businessmen and businesswomen, there are good farmers and bad farmers, and there are unfortunate farmers and there are unlucky farmers. For whatever reason, anyone who is in business or anyone who is out there contesting the dollar may find themselves in trouble.

So, coming back to this bill, I see that, ultimately, it settles around the role of a mediator. When the raw forces of capitalism—and, let’s face it, across the aisle, are the so-called champions of the raw forces of capitalism—are applied to agriculture, as they are applied to any business, in fact, there will be a protection given by this bill. Having just read the bill—and a member of my own family from that family that arrived in the 1840s from Ireland is the current Minister of Agriculture—I’m actually very proud, I have to say, that around the family dinner table at Christmas, it will be spoken of as a very good piece of legislation. Even those relations of ours that are still on farms, if they should happen to bring up—not that they ever will—that there are any problems on the farm, it will be something to be able to remind them of, which is that this year, this fine Government that I am proud to be part of has actually brought in a piece of protection that no one else in New Zealand really has got. So the businessmen and businesswomen who make up our farmers now should back—they are getting good dairy prices, better than for a long time.

Basically, the thing is that the members opposite when in Government were very fortunate post-2008 and post-2012 when dairy prices were through the roof. We’ve survived that. So there wasn’t the need for farm remediation. There wasn’t the need for the bankers. In fact, at that very time, what were the bankers doing? The very reason this bill is required—the bankers were out there. And what is the definition of “banker”? A banker will lend you his or her umbrella when it’s fine, but will come and take that umbrella back as soon as it’s raining. Well, it is still fine at the moment in farming because we do have high dairy prices. We do have high land prices. We do have high beef prices.

💬 DEPUTY SPEAKER: Come back to the bill. You started well; you’ve just deviated slightly.

But this is why it is so wise, Madam Speaker, that we are bringing this bill in right now, because it is in anticipation that the very famine that has beset every one of us, wherever we came from around the world, whether we came in 1200—

💬 DEPUTY SPEAKER: I do think it is a long stretch to compare this bill to the Irish Famine, but could we come to debate about the bill?

Well, I like to provide context, Madam Speaker, but I will come back. Let’s just have a look at some of the provisions.

💬 DEPUTY SPEAKER: That would be good.

What are the benefits of this mediation? Mediation is a key word in this bill—a key word: this mediation that will be allowed for those businessmen and women who occupy farmland today, that will generally be denied to most other businessmen and women in New Zealand. It provides a safe environment for farmers to work constructively, with creditors, through debt problems. That really is the key to the bill. While mediation may not save the farm business, it can help facilitate a dignified exit for farmers if necessary, or alternatively, it can allow the farmers to explore options for turning it around. History has shown that the earlier mediation comes and the earlier someone who is in any business—in this case, the agriculture business—does seek help and advice, then the chances of actually turning the financial problem around is increased considerably.

But let’s go back to some of the other provisions of the bill. Who’s going to pay for this scheme? Actually, again, as I read through this, it is unusual to read through a cost and set up of any scheme—one generally expects to see lots of zeros. In fact, the estimated cost to set up the scheme is about $350,000. The estimated annual cost for administering the scheme is about $250,000 to $300,000, met from the Minister for Primary Industries’ existing baseline. The cost of each mediation is expected to cost about $6,000, split between the creditor, of course, and the farmer—of course, limited—and the agricultural business person who is in the business of agriculture, their contribution will be limited to $2,000.

Again, I hail this piece of legislation. It is recognition of the financial vulnerability and stress on the farmer who will be going through this mediation. So I can’t speak highly enough of this piece of legislation and I’m just ashamed that I wasn’t on the select committee, and around the family I should have been briefed on this, perhaps by the family member myself.

Also, important in this legislation—because the other thing we all know is that what we so often need, when anyone gets into financial issues, is time. Once this mediation is initiated, farmers and creditors will have up to 60 days to complete the mediation process.

I daren’t mention Ireland again for fear of upsetting the Speaker, but any business, anywhere, that’s got itself in trouble, certainly in the agriculture business, I’m sure would be only too happy to have had that 60 days—to know that they had 60 days of a cushion to ensure that they did have time for the heat to go out of the business, the heat to go out of the problem, and perhaps, to get that money together. In the bill here is this 60 working days—that’s 60 working days, I might add; not just 60 days to complete the mediation process.

So what is the mediation agreement? Again, going back to the bill, the mediation agreement is produced at the end of the mediation process and it sets out those agreed actions for future arrangement of the debt. Again, any business person would actually be ecstatic to have that sort of fall-back position.

We come, again, back to the bill. What if the farmers did not want to take part in the mediation? Well, the creditors can then apply for an enforcement certificate which would allow for the creditor to proceed. So I doubt very much that the wise men and women who make up our farming industry will decline such an offer. I also ask you, what if the lenders don’t want to take part in the mediation? Again, a threat, particularly when we look at the financial sector—perhaps they’re under pressure to call in the debts. The creditors will be encouraged to accept this mediation. I commend this bill.

Thank you, Madam Speaker. I stand to take a brief call on the Farm Debt Mediation Bill (No 2) in its second reading. We are farmers as well. I’m pleased to see a bill like this come into the House. Farmers have been under a lot of stress and they will continue to be under a lot of stress, financially, especially. We have seen too many of our farming colleagues take their lives because of the burden of debt. So without any further ado, I commend the bill to the House.

I, unlike the previous speaker, am delighted to speak on this bill. I am sure the House will be pleased to know that I will not be speaking for 30 seconds on something so important; I will be taking this opportunity to share with the people of New Zealand why this, the Farm Debt Mediation Bill (No 2), is so important.

This bill is about supporting the wellbeing of farmers, which this Government is committed to through this bill and a number of other measures that we have introduced. We are committed to working with farmers to move away from a volume-focused approach to one that focuses on value. This bill sits directly alongside that. In his contribution before, the Hon Nathan Guy asked a very interesting question. “Why is it” he asked, “that farmer confidence, despite being in a situation where prices are at an all-time high, is so low?” I have an inkling. It is because if farmers were to listen to the party that is supposed to—if you listen to them—represent rural areas, you would think that there is nothing but gloom and doom on the horizon. How on earth could farmers be confident about the future when those MPs that represent those electorates tell them that there is no hope? How can they have confidence when they tell the farmers that there is no point staying in the industry?

What this Government says through this bill, and through the many other measures like the $229 million Sustainable Farming Fund, which boosts farm extensions, advisory services, and tools like OVERSEER to help on the farm decision-making and practice, is that this a Government that stands up for farmers.

What we hear on the other side is no vision—a total lack of vision and a desire to stick with the status quo. I think that is why, in the nine years of the previous National Government, there was no bill like this, the Farm Debt Mediation Bill (No 2). They have stood up, but not for long: David Bennett was the only one to do a full call. It was an appalling speech, but at least it was the full allotment. We had Hamish Walker for five minutes; Tim van de Molen for three; and Nathan Guy, a former Minister, was another short call. We had Matt King for three minutes; and, of course, the best of the lot was Joanne Hayes—for 30 seconds. At no point did they talk about in their contributions—in the nine years of the previous Government—

💬 DEPUTY SPEAKER: The member has now had the obligatory three minutes rant, so could the member now come to the bill. I’ve been fair.

Madam Speaker, I take exception—

💬 DEPUTY SPEAKER: I’ve been fair.

I raise a point of order, Madam Speaker. I take exception to my speech—which is countering some of the others—being described as a rant.

💬 DEPUTY SPEAKER: No, I’m saying to the member that he will now come to the bill, because he’s had—as I’ve given to many others—three minutes which are not about the bill but are about politics. So he will now come to the bill.

💬 Hon David Bennett: Yeah come on, get to the bill. He hasn’t read it.

💬 DEPUTY SPEAKER: Thank you, I’m quite capable.

This bill’s great. This bill is what has long been needed, and, in my view, should have been introduced a long, long time ago. This bill, as I said earlier, is about supporting the wellbeing, because the fact is that there is a power imbalance in the relationship with farmers and the banks. That is nothing new. That has been the case for a long time. I ask the very relevant question—relevant to the discussion today, and certainly relevant to this bill—as farm debt increased to record highs of $62.8 billion: where was the last Government? This Government has come forward, under the initial leadership of New Zealand First. I want to acknowledge the original sponsor of this bill, who took it on, in Mark Patterson—the true voice of Clutha-Southland—who brought this bill in its original form to this House. This Government took it on because it was so important and it deserved the resources and the oversight that a Government bill gets over a member’s bill.

What that bill said to the people of New Zealand is that New Zealand First and Labour and the Greens take this issue seriously. We’ve heard complaints on the other side.

💬 DEPUTY SPEAKER: Oh come on, come on now. The speaker knows very well that a second reading speech is when the bill, as it comes back from the select committee, is accepted by the House. So at some stage in their speech they do need to refer to perhaps what’s happened in the select committee, to perhaps some of the changes, some of the detail of the bill. So would the member please do the House the service of focusing on the elements of the bill?

I’d be delighted, Madam Speaker, and I appreciate the opportunity. In fact, it was the next part on my notes here—as I’m sure you’ll understand and appreciate.

Despite having an appalling chair in David Bennett, the Primary Production Committee worked together very well on this bill—Nathan Guy, up to the point that he left, replaced by Todd Muller and Amy Adams. They worked constructively.

💬 Hon David Bennett: How much are you going lose by next year?

I believe I’ve hit a nerve, because this is the most David Bennett’s had to say all day.

We have worked constructively, and I know that my colleague and friend Mark Patterson has appreciated the contribution, particularly from Amy Adams, in amending this bill and recommending some changes. Indeed, the Minister himself acknowledged the work that the select committee did to bring forward some welcome changes that were needed to make sure that this bill was fit for purpose.

We heard some submissions. There were three that stood out in particular. One was from Rural Women New Zealand, as my friend Kiritapu Allan mentioned. The other was from those that are actually in the game: the mediators, the ones that came along to the select committee and told stories of this power imbalance that this bill seeks to address.

There was a question raised previously in another contribution that, again, is completely relevant to this conversation. Tim van de Molen, the representative from Waikato, said that banks work at every opportunity to avoid default with farmers. The question I pose is that either he can’t have either been listening or he didn’t understand the submissions that were brought forward at the select committee process, because submitter after submitter after submitter, often in tears, told us of circumstances where the bank wasn’t working with them to save their farm.

It is regrettable that this bill or something similar was not introduced earlier, because those guys would have been able to have the opportunity to mediate. I won’t go as far, because it would be unfair, to suggest that their farms would have been saved. That is not what we’re suggesting that this bill will do. But what this bill will do is introduce mediation into the process.

There is one particular gentleman from Wairarapa whom I have been dealing with directly. His story is deeply saddening. It has touched me. I won’t use his name because of his privacy, but I guarantee he’ll be watching today. I wish that there was compulsory mediation in place when he lost his farm. It is something that has affected him and his family deeply, and I was sorry that the options available to me as a member of Parliament, resident in Wairarapa and representing Wairarapa, along with two others—

💬 Hon David Bennett: You don’t represent Wairarapa.

Along with two others there.

The fact is that the other side might take the opportunity to have a crack and have a go, but I’m talking about something very serious here. I’m actually using the opportunity—the 10 minutes allotted to me—to talk about a real story. This bill would have introduced compulsory mediation into that process. He would have had the opportunity to address the serious and genuine concerns that he had with the process that he faced. He doesn’t have a farm now, and I fear that the only option available to him is through the courts.

But, nevertheless, we must remain positive. We must look forward, because this bill will bring in the provisions that too many farmers didn’t have available to them at the time. Of course, we could just simply say that mediation should be a compulsory mechanism in this process and leave them to it, but we on this side of the House believe in fair intervention. We might not leave it to the market like the National Party traditionally do, but we say that mediator costs will be shared equally between parties until a farmer’s contribution reaches a fair amount. Above that, in order to recognise the financial vulnerability and stress on farmers going through mediation, any additional mediator costs will be borne by the creditors involved in the mediation. That is fair, and that is a provision that came out of the select committee.

I acknowledge those members that worked constructively with us: Amy Adams worked constructively; Nathan Guy and Todd Muller worked constructively; Hamish Walker, when he was there, worked constructively. This is an example to the people of New Zealand that, actually, when there are things that are important to rural New Zealand, this Parliament comes together. The examples under the last two years of this Government are countless. Time and time again I have made this point when I’ve spoken up to speak on a bill that is relevant to rural New Zealand. It will be welcomed by the areas that many of us live in. It will be welcomed by those that have come into our electorate offices and told us of the sad stories of when they lost their family farm. For them and for those that will face those situations in the future, I proudly commend this bill to the House.

Bill read a second time.