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Flawed policies will bite future growth

Flawed policies will bite future growth, Federated Farmers warns

Before giving thought to splurging funds from the surplus, Finance Minister Grant Robertson should check on the effects some of his colleagues’ policies are having on the economy, Federated Farmers says.

"The warning signs are there as growth in provincial economies slows - predominantly because of a significant drop in farmer confidence, not any fall in product prices. As any economist knows, a drop in provincial growth will flow through to hit national growth," Feds commerce and trade spokesperson Andrew Hoggard says.

There have been media reports that the sharp fall in log prices is hitting employment in regions such as Northland and the East Coast and sentiment in key dairy regions such as the Waikato, Taranaki, Manawatu and Southland is fragile due to concerns about government policy.

"Proposed new freshwater regulations have added a deep chill to the already cooling business confidence in rural New Zealand," Hoggard says.

The coalition government’s pro-forestry policies, including the ‘streamlined test’ for overseas investors, the One Billion Trees subsidies, and flawed climate change targets - are ending up pushing the wrong tree in the wrong place, threatening the long term viability of rural communities and the economy.

"Forestry is a big earner, and a valuable land use option. However, it is by no means a panacea for the chunks likely to be torn out of productive pastoral farming."

Overstatements in a New Zealand wood advertising campaign of forestry’s employment benefits compared to livestock, amended after a complaint by former Feds Ruapehu President Lyn Neeson to the Advertising Standards Authority, underlines the point that more and more land is being purchased for carbon farming and a large percentage of logs currently being harvested are not further processed.

"Treasury needs to do the sums - there will be minimal provincial income, minimal tax paid and stuff-all jobs generated from farmland planted in trees after they are planted - for 25 years or potentially ever if the trees are never felled," Hoggard says.


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