Hon David Carter
Minister for Primary Industries

28 June 2012

Speech to Federated Farmers National Conference

I would like to acknowledge your President Bruce Wills, Vice-President William Rolleston, Chief Executive Conor English, provincial presidents and delegates.

I am going to touch on topics across both my Primary Industries and Local Government portfolios and I am happy to take questions from you shortly.

I know you’ve just had a session on Local Government but I’d like to explain briefly what’s driving the reforms from the Government’s point of view.

New Zealand’s 78 local authorities are a significant component of the New Zealand economy.

They make up 4% of GDP, spend $7.5 billion per year of ratepayer money, and manage $100 billion worth of public assets. They deliver a wide range of critical regulatory functions and services that directly impact on the lives of New Zealanders every day

Over the past four years, we have seen central government impose on itself extreme fiscal constraints in our bid to rein in spending and strengthen our economy.

The logical question has then arisen – could local government undergo the same discipline? The short answer is yes.

The Better Local Government Reform programme will improve the operation of local government in New Zealand. It will focus local authorities on operating more efficiently and effectively by doing things that only they can do.

It will deliver settings that will encourage local authorities to reduce red tape and compliance, minimise rates for households and businesses, control their debt, and provide high quality infrastructure at the least possible cost.

Other parts of the reform will facilitate more amalgamation amongst councils.

The current legislation makes this extremely difficult. In fact, no amalgamation has occurred under the existing rules.

Unlike the 1989 Reforms, what I’m proposing is that communities determine what will best suit their purposes – drive it from the bottom-up, make it an easier process to get proposals before the Local Government Commission, and give the Commission the power to modify proposals, and present back to the community the best possible streamlined position.

The reforms also set out the establishment of financial prudence requirements for local authorities.

In line with central government and every household and business in New Zealand, councils must restrain spending, keep costs down and run as efficiently and effectively as possible.

A seven per cent average increase in rates each year over the past decade suggests there is plenty of room for constraint.

By getting local government to work in tandem with central government, we can drive a better economy for New Zealand.

In this regard, the most important aspect driving our economy forward is our primary sector.

Let’s reflect on the important contribution that farming has made – and continues to make – to the New Zealand economy.

And I want to underline the Government’s continued support to enable the primary sector to achieve its potential.

The healthy performance across most of the primary sectors has enabled our economy to weather the storms of the global financial crisis and, locally, the Canterbury earthquakes.

Unlike some previous governments, the National-led Government is acutely aware of the vital contribution agriculture makes to our economy.

No one in this audience will need reminding that New Zealand relies heavily on its primary industries for its economic stability.

We all want to see a more productive New Zealand.

The primary sector now makes up 71 per cent of New Zealand’s total merchandise export trade – but not to the countries we once relied on.

The EU, the world’s largest economic trading bloc, faces major challenges as it deals with countries like Greece, Italy and Spain.

The United States, the world’s biggest economy, can at best be described as subdued.

In the past, this would have had a huge impact on New Zealand.

After all, these were once our main export markets.

Though such markets are still very important to us, we are fortunate to have repositioned ourselves so significantly to Asia.

China is now our second largest trading partner, with exports growing by nearly 40 per cent in the last financial year, a stunning example of the success of our Free Trade Agreement.

According to the latest Situation and Outlook for Primary Industries report, released by the Ministry for Primary Industries, China is the number one buyer of our forest products, the biggest buyer of our wool, and seafood, and comes in a very close second as a purchaser of New Zealand dairy products.

We are well on the way to realising the Prime Minister’s ambition, which is shared by China’s leaders, to double our bilateral trade to $20 billion by 2015.

The Government’s trade agenda, led by Tim Groser, has the potential to deliver more opportunities to primary producers and exporters.

We are in talks with the eight other Trans-Pacific Partnership countries and just recently Mexico and Canada have joined the TPP discussions.

Add to the list Russia, India, South Korea and the Gulf States and you sense the size of the potential prize.

I have just returned from Russia where we are progressing free trade negotiations which began in 2010.

Two-way trade is currently worth about $700 million – but if a deal is reached, it will be Russia’s first international trade deal and our exports will grow significantly.

One of the things that was reinforced to me during my trip was how highly regarded New Zealand is internationally.

We are renowned as producers of some of the best food in the world, at a time when food security is the world’s greatest challenge.

The overarching challenge for New Zealand is to protect its reputation as a quality producer.

As a nation whose economy depends on the powerhouse of our primary industries, New Zealand’s global focus must remain on maximising our reputation for producing high quality products, backed by integrity.

This is why biosecurity is, and always will be, the highest priority.

Biosecurity is the greatest risk to the New Zealand economy.

It’s critical to a small trading nation like ours. A staggering 175,000 items come across our border each day – and even with a carefully protected border, some new threats will get through.

The challenge is that we must continue to get the right balance between facilitating tourism and trade while keeping New Zealand safe from pests and diseases.

To do this we counter biosecurity risk at three levels.

Firstly offshore – making sure that imports such as tomatoes from Queensland are treated before the fruit is freighted to New Zealand.

The next level is at the border. It’s the part that most of us are familiar with as we arrive at an international terminal.

But also at our ports – inspecting bulk bins of those tomatoes, physically looking for any infestation, such as a small hole indicating the possible presence of Fruit Fly larvae.

The final level of the system is surveillance and detection. The recent Queensland Fruit Fly discovery in Auckland was an example of the surveillance system at work.

The Government certainly has a clear role in managing our biosecurity system, but every New Zealander has an important role, too.

The overarching challenge for New Zealand is to protect its reputation as a quality producer.

We need to play to our strengths and protect the brand that sets us apart from our competitors.

Talking about playing to our strengths – we can’t go past our abundance of water or New Zealand’s ‘liquid gold’.

Water is possibly the biggest opportunity to grow the productive part of our economy.

Despite difficult fiscal conditions we have fronted with $35 million of Government money for the Irrigation Acceleration Fund to 50:50 fund the feasibility studies of schemes around New Zealand.

The Government’s also committed $400 million through the Future Investment Fund to invest as a cornerstone shareholder in large water storage and irrigation schemes.

We are making progress, particularly in Hawkes Bay, Canterbury and Otago – but achieving consensus of all the various stakeholders means progress is slower than I would like.

Another significant government investment is rural broadband.

I spoke yesterday to Amy Adams, Minister in charge of the Rural Broadband Initiative, which is concluding its first year of rollout.

Aimed initially at schools and medical centres in our rural communities, this is a five-year project and she assures me the programme is progressing well.

While we know fibre won’t be the solution to much of rural New Zealand, wireless speeds are a considerable improvement on current access.

If we couple this with exciting new wireless technology delivering speeds comparable to fibre, the outlook for rapid broadband access for much of rural New Zealand is bright indeed.

Before I conclude today, I want to use this occasion to launch an important document – The Farmer Representatives Animal Welfare Toolkit.

This is an expansion of the toolkit that MAF, Federated Farmers and NZPork put together in 2006.

The updated version reflects the collaborative approach set out in the Safeguarding our Animals, Safeguarding our Reputation programme that government and industry are taking to encourage responsibility for animal welfare.

It aims to provide support and advice to farmer leaders, community leaders and industry representatives who may be faced with helping to manage an animal welfare situation.

New Zealand is renowned for having one of the most robust animal welfare systems in the world, but we are always looking for improvement.

This toolkit is a good example of this – and I encourage you to take a look at the document.

I want to conclude today by reaffirming the Government’s commitment to ensuring New Zealand farmers stay at the top of the global game.

Our country’s future, like its past, will continue to rely on primary production, and this Government understands and appreciates this.

I encourage you to always look ahead and take advantage of the opportunities that will make New Zealand farming even more successful into the future.

ends

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