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Farmers Face Higher Compliance Costs

Farmers Face Higher Compliance Costs
28 September 2006

The 2006 Business NZ-KPMG Compliance Cost Survey shows that compliance costs are a major expense for farm businesses, said Don Nicolson, Vice President of Federated Farmers of New Zealand.

Results specific to Federated Farmers members, reported for the first time this year, show the burden on farmers of compliance costs per full-time equivalent is greater than for all businesses.

The average total cost per employee for Federated Farmers respondents was $1,548, more than double the average for all respondents ($691). The average compliance cost per farm business was $10,018.

Tax, ACC, and employment continue to be the greatest compliance costs for all businesses, but Federated Farmers members have particular concern about the Resource Management Act, hazardous substances, and local government.

Federated Farmers’ respondents were three times more likely than all survey respondents to identify the RMA as a high priority.

According to one farmer respondent: “We have been waiting eight months for a resource consent that should have been processed in 20 working days.”

Another respondent said the “onus of proof of environmental effects is all burdened on the person applying for the consent. At the moment anybody and everybody is able to object to notifiable consents and quite often people do with no apparent possible effect to them. This causes increased costs for the consent applicant.”

Improving the RMA and its processes are the Federation’s top priority for 2006 and 2007. “The Federation is working tirelessly to persuade the Government of the need to fix the RMA, and these survey results will add weight to our arguments,” said Mr Nicolson.

The respondent’s perceived trends in compliance costs are that all cost areas are on the rise. Federated Farmers’ respondents said costs stemming from hazardous substances, local government, transport, and the RMA rose the most in the last year.

“Local and central government should take notice of these survey results. New Zealand may be easier to do business in than many other countries, but that is no justification for keeping unnecessary compliance costs, and adding more,” Mr Nicolson said.

“Business needs a regulatory framework that encourages economic growth, business confidence, and globally competitive companies. A regulatory framework with lower compliance costs will help bring these about,” Mr Nicolson said.

Don Nicolson, Vice President, 027 226 6331 or 03 216 7602

Compliance Cost Rankings:

All respondents:
1. Tax
2. Employment Relations Act
3. ACC
4. Health and Safety in Employment Act
5. Holidays Act

Federated Farmers’ Members:
1. Tax
2. ACC
3. RMA
4. Hazardous Substances and New Organisms
5. Health and Safety in Employment Act.

Other Results:
- Local Government: Federated Farmers’ respondents more than twice as likely than all respondents to identify local government as a high priority.
- RMA: Federated Farmers respondents more than three times as likely than all respondents to identify the RMA as a high priority.
- Hazardous Substances & New Organisms: Federated Farmers respondents more than five times as likely than all respondents to identify HSNO as a high priority.
- The Companies Office, MAF, IRD, and Customs Service were rated as the most helpful by both Federated Farmers respondents and all respondents.
- The Environmental Risk Management Authority, Immigration Service, Ministry of Health, and Work and Income New Zealand rated as least helpful by both Federated Farmers and all respondents.
- Department of Labour rated in top quarter by all respondents, but in bottom quarter by Federated Farmers respondents.
- Of the 80 or so percent of respondents who contacted call centres, over one-third did not receive a suitable answer.


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