Hon Chris Carter:
Speech to Federated Farmers National Council

Tom Lambie, Tony St Clair, members of the national board, ladies and gentlemen, good morning.

Thank you for the opportunity to talk to you today.

I gather you would like me to outline how my portfolios are contributing to the government's growth and innovation strategy.

I will do so with pleasure and I'd like to start with Conservation because I believe it is contributing to economic growth in unacknowledged ways in New Zealand.

I say unacknowledged because there is a tendency among some industries and economists - and I am not including farmers in this group - to characterise conservation land as locked up and economically useless.

In some respects this tendency is not surprising given the competition for land use in New Zealand.

Agriculture, horticulture and planted forestry use about 52 per cent of New Zealand's land. Conservation, whether public or private, spans about 30 percent. One nibbles at the fringes of the other, and vice versa. Tension is inevitable.

But in my view, impressions of the economic value of conservation land are changing with the generations.

As I move around the country, I am seeing a growing recognition in both rural and urban communities that protected land is a resource for social, recreational and commercial use, albeit with one caveat, that use does not unduly affect the integrity of the natural environment or protected species.

Communities reared on a culture of extraction are starting to see sustainable economic opportunities from the appeal of natural environments, primarily through the mechanisms of recreation and tourism.

Farmers are frequently at the forefront of this.

There was a fantastic example of what I am talking about in the media just last week.

In Canterbury, local communities living around Mount Somers have been gradually constructing a walkway that loops around the mountain.

The initiative sprung up after residents, caught between a decline in agriculture and improved transport, began to seek new economic opportunities for their area.

They looked at beautiful Mount Somers and its spectacular views across the Canterbury plains, and reckoned that people living in Mid-Canterbury could be encouraged into visiting the area and walking a track up and around Mount Somers.

They were right, more so than they ever expected. By working with the Department of Conservation, the community has constructed a track that is attracting up to 6,000 people from as far away as Europe and America.

The final phase of the track was opened last week, and the man who has pushed this project along is a farmer from Mayfield, David Howden.

You see this kind of scenario repeated around the country on public and private protected land.

Take the Banks Peninsula Walkway. In the late 1980s ten families on Banks Peninsula began examining ways in which they could diversify use of their land after several years of drought, falling livestock prices and economic hardship.

Their solution: New Zealand's first private tramping track traversing farmland and the Hinewai Reserve, a local conservation initiative.

Since then the committee that ran the track has grown into a company, and 2600 people now walk the track each year.

A lot of the forest surrounding it has been covenanted and a proportion of the profits from the track go towards the replanting of native species.

To me this kind of innovation makes perfect sense. Farmers have interesting stories to tell about their region that can bring it alive for visitors. In turn the income from visitor industries can create incentives to preserve environmental and historic heritage, and buffer commercial farming operations from economic conditions, such as a high dollar.

The split between agricultural or horticultural land-use and conservation creates diversity and flexibility in our rural economy.

Communities living around the Central Otago Rail Trail know this from experience. The Central Otago Rail Trail was developed despite great cynicism from some locals after the old train service from Middlemarch to Clyde closed a decade ago. That closure left many small communities along the rail line struggling.

Thanks to an innovative partnership between DoC and some outstanding community figures, nearly $1m was raised to restore the line and turn it into a trail for walkers, cyclists and horse riders.

The trail currently attracts over 10,000 visitors a year and is slowly rejuvenating little communities like Lauder and Ranfurly. Businesses in those towns are already enjoying an estimated 25 per cent increase in turnover.

Without changing its mandate - to foster conservation and recreation - DoC has, in this case, helped support the gradual regeneration of a region.

I don't think it is an overstatement to say that New Zealand's billion dollar tourism and recreation industry floats upon the foundations of New Zealand's protected landscapes.

I recently had DoC crunch a few numbers on the money being earned by thousands of businesses with concessions to operate directly on conservation land.

Interestingly, the number of tourism concessions has risen sharply in the past few years, some 25 per cent. Earnings by the businesses holding those concessions have risen by more than 100 per cent in some parts of the country.

The DoC estate is a vast recreational and economic asset. DoC maintains more than 300 campsites, 12,500km of track, 1000 backcountry huts, 2,130km of road, and 79 visitor and information centres.

Annual individual visits to conservation land in New Zealand are expected to hit 28 million this year. I repeat, 28 MILLION individual visits.

My point is the work DoC carries out and the decisions it makes in administering conservation land and advocating for environmental protection can and does play a significant role in economic growth.

The Government's strategy in Conservation has been to protect a greater proportion of New Zealand's natural environment and biodiversity through new land purchases and the implementation of the New Zealand Biodiversity Strategy.

At the same time, we have sought to better align tourism and conservation to enable us to deal more effectively with the issues one creates for the other. We have sought to clear out the bureaucratic blockages in the processing of concessions to use DoC land to provide for commercial use but only where it is safe for the environment.

We have sought to deal with longstanding problems with the maintenance of DoC's huts and tracks. $349m was announced in the 2002/2003 Budget to reorganise this infrastructure so it was sustainable on the long term and aligned with modern recreational and tourist usage.

And we have sought to offer private landowners more opportunity to diversify their land use into habitat protection. These opportunities include a special fund for the protection of biodiversity on private land, and significantly increased budgets for organisations like QE II and Nature Heritage Fund.

The queue of farmers wanting to covenant their land with QE II is something that as Conservation Minister I find particularly heart warming. I congratulate your industry on it.

As a final comment on conservation, I'd like to point out that I am aware of a degree of frustration with the Department of Conservation in the some quarters of the farming community.

To some extent this is inevitable given DoC's role as gatekeeper and protector of conservation land, and its statutory role as an advocate for the environment under the Resource Management Act.

In my view DoC carries out this role exceptionally well, often under very difficult circumstances. Its fair to say that sometimes the frustration you feel towards DoC is reciprocated.

If, however, you perceive a systemic problem in DoC's work please don't hesitate to let me know. I can't promise to agree with you but the least I will do is listen and investigate the issues you raise.

Which brings me to Local Government.

Local Government

Plainly local councils have a significant role in helping their regions and districts grow, particularly when it comes to the provision of infrastructure to support development.

Effective local government creates cohesive communities, which in turn create the networks that allow innovation to flourish.

As you know the Government has recently completed a major overhaul of three very outdated pieces of legislation governing the local government sector. I won't dwell on these reforms because my colleague Rick Barker outlined them at length when he spoke on my behalf to your council last year.

Suffice to say, the reforms have modernised the legislative framework that councils now work within.

Councils have more flexibility to develop innovative solutions to problems within their communities. In return, they are beholden to spend more time talking to their communities about what they are planning to do and why.

Councils are expected to take a leadership role in brokering co-operative arrangements and partnerships among public and private organisations to help achieve the priorities of their community.

There is an acknowledgement in the Act that community wellbeing is not one dimensional - financial - it is multidimensional and councils need to be aware of this.

The new legislative framework underscores the idea that local people are best placed to make local decisions, and those local people include farmers.

Now, I know there is a concern among some of you about the consultation requirements in the Local Government Act and their cost. You fear you'll end up paying a lot more for the right to be consulted. I can understand that. With change there is always some degree of uncertainty, but I think in this case it is highly unlikely that what you fear will come to pass.

The consultation requirements are in legislation to tie councils closely to communities. They are there to ensure the public, including farmers, have tangible and transparent information about what a council is doing and the opportunity to have a say.

The Government does not believe the costs of consultation will be significant for councils in the long run. Many are already meeting the kind of requirements in the Act as a matter of good practice.

We believe savings generated by the flexibility the new legislation gives councils, will offset any short-term costs that do exist. After all, the previous local government law was so restrictive it created numerous unnecessary costs of its own.

Take comfort in this. Embedded in the new legislation is a clause that requires a review in 2007. If the review finds the requirements in the law could be streamlined, this can happen.

Which leads to me to rates.

Rates

We have seen rates rises this year. My own rates in Auckland have gone up significantly. I'm not particularly pleased about it but I acknowledge that it is a reality that we will probably have to face for a while yet, particularly where I live.

Unfortunately, rates are rising in many places in New Zealand because the consequences of neglecting crucial infrastructure for more than a decade are coming home to roost.

Like it or not, infrastructure is the single biggest driver of rates, council costs are way down the list. It is not unusual for over 60% of a rural council's expenditure to go on rural roading.

We have long standing problems with infrastructure and we must fix them if our economy is going to grow in the way we want it to.

I know that with large properties you feel much of the rate burden for your area falls on you, and the bigger the burden the less you have to invest in your farms or innovation.

What can we do about that?

Well, the Government has recognised that there is a problem in rural communities with councils with small rating bases struggling with the huge costs of upgrading important infrastructure like sewerage or water systems.

We have set up a $15m a year scheme to assist councils with their sewerage schemes, and we are considering doing the same for water. We have also shown a willingness to help out individual councils with special circumstances over and above this scheme - the Grey District Council is one that leaps to mind.

Logically, the effect of this scheme will be to reduce your rates burden.

The Rating Act, passed last year, also creates the flexibility for councils to target their rates more strategically, again potentially reducing your burden.

If one part of your district is receiving a service from the council and another part isn't, then councils have the ability to recoup the cost of that service from just the area that is receiving it.

Another facet of the new Rating Act, is that councils now also have the ability to target rates based on the value of improvements to land, rather than the capital value or land value of a property.

Where councils choose to use this option, there is potential for farmers to benefit because the incidence of rates can be shifted from the rural sector to urban areas. As you know, the great share of a farm's capital value is land value rather than the value of improvements.

Shared Services

In an environment where we know rates are going to have to rise to cover infrastructure costs, I believe it is important that the local government sector is looking for greater efficiency. That cannot be achieved just by legislative refinements.

We have a lot of councils in New Zealand, 86 in total.

If we are to maintain the number we have - and ultimately that is down to the communities of which you are part to decide - then we must ensure that those 86 councils work together for their communities in the most prudent way possible.

Throughout the 1990s, efficiency became synonymous with axing jobs, selling assets and closing things. It doesn't have to be.

Efficiency can be derived from co-operation, particularly in the local government sector.

The new Local Government Act specifically states that a local authority should collaborate and co-operate with other local authorities and bodies to promote or achieve its priorities and desired outcomes, and make efficient use of resources.

This provision is as plain as day - local authorities should be involved in co-operative arrangements with neighbouring councils to reduce the cost of their activities to their ratepayers.

It is an idea that many in the local government sector are developing rapidly. Some of the best examples are actually in your own small, rural councils.

Three of Southlands councils have joined up to buy the same IT system from the same vendor, using the same IT trainers on the same premises. The councils are then going to run all the software on the same set of computer servers.

The move has saved ratepayers in Southland around $200,000 per council. It is thought to be the first time in Australasia that three councils have teamed up to buy a computer system, and you have to ask why?

Intriguingly, when the councils got together down there to share the provision of a rural fire service, they found that together they had more monsoon buckets than there were helicopters in the region to fly them.

I think that gives us all some idea of the scope that sharing services among councils has to expose and resolve inefficiency.

I believe we can have separate representation for different communities but there are many ways in which the services underneath elected councils can be jointly run.

Interestingly, many councils around the country are now talking of teaming up to undertake jointly the consultative processes in the new Local Government Act.

I have asked my officials to get a better picture of the extent of co-operation among councils, and the extent that it can be improved. I hope to have this information by the middle of next year, and I intend to promote the idea aggressively.

I would urge you to use your position of influence in your community to encourage your council to consider sharing the provision of services with other councils, if it is not already doing so.

After all, the influence of farmers on councils is second to none - some thing like 25 per cent of all councillors in New Zealand are farmers. You play a big role in local government.

Dogs

Before finishing, I would like to make a quick comment about dogs because it is an issue that has arisen between some of us in the past few days.

My intention in putting together the Dog Control Amendment Bill was to create a basket of options for councils to tackle roaming dogs, unregistered dogs, menacing dogs and risks to children, all with the aim of improving public safety.

For 20 years we've agonised as a society over what to do with pitbulls and other fighting breeds. Well, this Government has stopped agonising and done something about it. In the process we have sought to look to the future as well, and that is where microchipping comes in.

To me the microchipping of dogs was always just a small part of a much wider package but somehow it has become a political issue.

We do have a problem with dog identification and record keeping in New Zealand that is complicating dog control.

At present 74 councils all separately maintain and administer 74 dog databases holding the details of registrations and attacks in their area. These databases all cost and vary wildly in their quality. Many of them don't talk to each other meaning crucial details about the violent history of a dog are frequently lost as it moves around the country.

The system is wasteful and to some degree useless. It is actually impossible to say with any certainty how many registered dogs we even have in New Zealand.

Given the growing number of dogs, and the growing density in which people are living, it seemed to the Government sensible to take some steps to solve this problem now instead of having to do so in the future.

We have introduced a national dog database alongside the gradual introduction of microchipping with that in mind. Microchipping is there because there is little point in having great records if there is nothing to attach them to a particular dog.

Again there are significant problems with dog identification. The use of dog tags are wide open to abuse. They can be lost, swapped, and taken off, and this is occurring regularly, ask dog control officers.

Microchipping is simply a safe, permanent means of identification already in use in New Zealand, and already compulsory for dogs in parts of Australia. We are introducing it in a mandatory way here as gradually as we can. It won't come in for three years, and then only for new puppies or those dogs deemed dangerous or menacing, or caught roaming.

We are introducing it in such a way that it won't be necessary to go to a vet to get the chips inserted. Councils will be able to hold clinics where specially trained dog control officers will be able to conduct the procedure for what I believe will be a minimal cost.

I know some of your representatives disagree with me about the cost. We could argue about it all day, suffice to say that if I thought for one minute a farmer was going to have to go out and pay $100 - 115 to have a dog microchipped, I would not have put the idea forward.

All of the expert advice I have received suggests the cost will be nowhere near that.

Thank you to those farmers who have offered support on this issue. I appreciate it.

Thank you again for the invitation to speak to you. I am happy to answer your questions.

ends

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