Farm Debt Mediation Bill (No 2)

I move, That the Farm Debt Mediation Bill (No 2) be now read a third time.

I introduced this bill to the House on 27 June, and I’m proud to be here for its final passage today. This bill shows the Government’s commitment to the wellbeing of our farmers and their families. I hope that the Opposition doesn’t, as they’ve done before, stand up and talk about all the negatives that have been occurring, they say, because of this Government, and once again spread a negative perception of the farmers around this country. They are great people doing great work, and they need to be supported.

The bill shows our understanding of the reality and the financial stresses that face farmers after years of debt growing to now be at $63 billion. That is a huge debt, much of which grew under the National Government, under a philosophy which was to double exports. The increase in the volume that they tried to generate created pressure at every level of the farming system—

💬 Hon Dr David Clark: Did they achieve it?

—no, they didn’t achieve it—from debt at the top, all the way down through environmental pressures, pressures on families, on individuals working on the farms. The Government is now taking action in a number of areas, after nine years of neglect by the so-called “Farmers’ Party”, to provide, firstly, a safety net through this legislation to help farmers, ultimately, get more value for what they do and, if they come under pressure financially, to have a dignified way forward.

Although farmers are getting record prices at the moment, they have these high levels of debt and are under perceived pressure. They do feel—too many of them, anyway—that there’s not a clear way forward, and the banks, in their latest moves to squeeze more money from the farms, are contributing to that. Federated Farmers had a survey that they released last week saying that there were less people satisfied with their banks—

💬 SPEAKER: Fewer!

💬 Hon Tim Macindoe: Fewer!

—fewer, sorry—in a sector that has relied, traditionally, on a good partnership between banks and farmers, where a healthy provision of capital, repayment, and management of it has been the norm. This is no longer necessarily the case.

This bill shows that the Government is committed to find solutions and support for farmers. The sector groups and all the lenders support the bill, and there was a view at the start that perhaps the banks would push back against it. What we have seen in reality, through Australia and now here, is the banking sector seeing the value in a cooperative approach, a collaborative approach to work through this.

I’d like to thank the officials who have contributed to the bill’s development. I’d like to thank all the submitters who came in, and the select committee, who did, I think, a good job and worked through this, and the coalition colleagues. Can I acknowledge New Zealand First for, I guess, seizing the moment and tabling a bill that they’d had floating around for quite a number of years, and that provided an opportunity for the Government to pick up that bill, to make some adjustments, and now we have, as a coalition, run this forward.

I’d like to pay special tribute to two people. They’re not the only two people who’ve been involved, but in the early 1990s I was involved with Gray Eatwell, who had, I guess, confronted the might and power of the banking sector, and then, later, a person—Janette Walker—who had done a huge amount to help people who were in a similar situation, she being, I guess, the victim of what can be, at times, a superior and an abusive, or dominant, position by banks, who, ultimately, carry the day through their mortgage arrangements and can almost do what they like. Those two people had seen firsthand the stresses. They were staunch advocates and had contacted myself and a number of other politicians through the years to try and get something like this in place, and I have to acknowledge their efforts have now come to fruition.

We have done a lot for farmers and working in collaboration with them. I have to say we’ve gotten a recent agreement on agricultural emissions, which we hope will offer certainty, reduce stress, and allow a pathway forward for farmers. We’ve just released a skills work plan developed with the sector to try and release the pressure on trying to obtain skilled farm workers. We’ve, of course, embraced a joint programme for Mycoplasma bovis.

💬 SPEAKER: I’m waving the bill at the member and asking him to return to it.

The reason I raise these things is because the bill attempts to address a key area of pressure across the farming sector, one of finance. I’ve acknowledged that it’s not the only one, and I guess, if the other things that the Government have done to release the pressure can be acknowledged, then with this bill in place we, hopefully, will have farmers far more positive about what should be a spectacular future. The world needs more food. It needs more quality food and protein, and, in fact, we can deliver that for them.

The Farm Debt Mediation Bill (No 2) guarantees a number of things—firstly, a fair, constructive, and timely process for farmers to work through their debt problems with their lenders. The reality of an imbalance of power has meant that farmers have, at times, often felt powerless to negotiate with dignity, maybe, a better solution to what is, they will accept, often an unsustainable financial situation.

The second thing the scheme provides is for an impartial negotiation process that allows the mediator, as a neutral and independent person, to help both the farmer and the creditor to work through the debt issues in an effort to reach an agreement. Both have a lot at play, both have a lot at stake, and the mediator, who will be impartial, who will be appointed and overseen by the Ministry for Primary Industries—we believe that that impartial process will deliver a fair outcome.

The third thing is that the proposed scheme would make it compulsory for secured creditors to offer mediation to eligible farming and primary production businesses when they default on payments. So this is a voluntary and proactive way that, firstly, the creditors can offer the mediation and then farmers, of course, can also request independent mediation at any stage. So rather than, as we often do, or people tend to do, try to ignore the situation and hope it will go away, thereby prolonging the agony and often complicating the financial situation, there will be an ability for farmers, probably with a bit of advice, to seek mediation early on.

This Government does understand the importance of the farming sector—the rural sector—of their families and the rural communities. They are still at the core of our wealth creation in this country. The Farm Debt Mediation Bill (No 2) will bring some balance to what is a core part of ongoing farming operations. I hope that the Opposition, as they have expressed, will support the bill. I know that there’s been a healthy, robust debate in the Primary Production Committee. A few things have been adjusted and, I think, improved. We want to see a healthy rural environment. We want to see debt paid down. The banks want to see that. We have high commodity prices and an opportunity to do that, but ad hoc interventions by creditors or banks will lead to unfair pressure and, perhaps, foreclosures where they are not necessary.

This Farm Debt Mediation Bill (No 2), in its passage finally through the House, will be a huge step forward to create a balanced situation for finance into and out of the farming sectors, something that has been requested by individuals, needed by the whole sector, and now acknowledged by this coalition Government.

I’d like to commend the bill to the House and hope that its implementation will be seen in the spirit that it was intended—that is, a collaborative, cooperative outcome to work and assist farmers through what might be some difficult financial situations. Kia ora.

Thank you, Mr Speaker. I was going to have a very conciliatory speech, but after the temptations put by that past member, the Hon Damien O’Connor, it may change. I just want to raise one point with that member, because often members do leave after they’ve done their introductory speech, and that is that we have had an email, a genuine email, from an accounting firm around this bill. They were at a recent Chartered Accountants Australia and New Zealand rural advisory committee meeting with the Inland Revenue Department.

Now, the Minister’s smiling, so he might be aware of this issue. It’s just an issue that hasn’t been raised with us during the committee stage or any other part of the process, but we just got it on our desk yesterday. There is a tax issue that they have foreseen that they raised with the IRD at that meeting. So if the Minister would indulge the Parliament and possibly look into that issue, that would be most appreciated, because in the Primary Production Committee, all members of the committee worked their best to try and work through any issues that were raised that were genuine. This wasn’t raised—

Order! The member will resume his seat. The Government has indicated to me that it’s their intention to end urgency. The member’s speech and the debate are adjourned.

The House adjourned at 12.50 p.m. (Wednesday)