Meat Board restructuring bill first reading speech

Jim Sutton: Speech Notes|

First reading of the Meat Board Restructuring Bill Parliament Mr Speaker, I move that the Meat Board Restructuring Bill now be read a first time. At the appropriate time I intend to move that the Bill be referred to the Primary Production Committee for consideration, and that the Committee present its final report on or before 27 May 2004.

I also intend to move that the Committee have the authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the house, and outside the Wellington region on a day the house is sitting despite Standing Orders 193, 195(a) and 196(1)(b) and (c).

The Meat Board Restructuring Bill restructures the New Zealand Meat Board and replaces the Meat Board Act 1997. That current Act provides the Board with statutory powers to allocate and manage access to meat export quota markets, and to collect levies from livestock farmers for industry-good activities, such as research. The Board does not trade in meat or meat products.

The Bill provides for the Meat Board to focus on its quota management role. It will continue to allocate, monitor and manage access to markets where New Zealand has access for specified quantities of meat at zero or concessional tariff rates. The Bill also provides for the Meat Board to retain the livestock industry's reserves, and enables the meat industry to join with the wool industry to fund industry-good activities under the Commodity Levies Act.

The impetus for this reform arises from the meat and wool industries' desire to combine their industry-good functions into one entity. They would like to do this when the transitional levy on wool under the Wool Industry Restructuring Act expires on 30 June 2004. The desire for a single meat and wool organisation was demonstrated in a referendum of meat and wool farmers in August 2003, in which farmers strongly supported the proposal to bring the meat and wool industry-good functions into one entity funded under the Commodity Levies Act.

Bringing together meat and wool industry-good activities will assist the two industries to achieve synergies and cost efficiencies. The industries will also benefit from the better accountability provisions in the Commodity Levies Act, particularly the requirement to seek a levy-payer mandate every six years for the continuation of a levy.

The Bill retains and enhances the Board's powers to allocate, monitor and enforce access rights and conditions in relation to meat export quota markets. These markets are of significant value to the New Zealand meat industry and to the economy, and access to them must be safeguarded. Given that quota administration is a regulatory activity and the fact that quota rights are owned by the Crown, it is appropriate that quota functions remain with a statutory body like the Meat Board.

The Bill contains new provisions for compliance audits of the Board's quota management systems, set against the yardstick of New Zealand's international treaty obligations relating to meat export quota management. The audits will increase the Board's accountability to the Government for its role in ensuring compliance with international obligations relating to quota market access.

Like the current five-yearly performance and efficiency audits, which the Bill discontinues, the compliance audits will be funded by the Board. The Board will have the power to recover the costs of its quota management systems, including the costs of audits, from meat exporters to whom the Board allocates quota.

The Meat Board holds around $100 million in reserves. These reserves ultimately belong to livestock farmers. Livestock farmers have voted in support of retaining the reserves in the Meat Board.

The Bill strengthens the provisions around the spending of reserves, and provides for the Board to hold the industry's reserves for three key purposes to assist the meat industry in responding to any major industry crisis; to safeguard quota markets and the integrity of its export quota management systems; and to fund specific industry-good projects.

The Bill provides for the Board to maintain and make available its reserves policy, and to consult farmers on any changes to this policy.

The Meat Board will have a board of directors comprising eight or nine directors who will also be directors of the meat and wool industry-good body, plus another two independent directors appointed by the Minister.

The two Ministerial appointees will ensure that the Board has directors with in-depth expertise in the international meat trade, quota management, and international trade relations. Six of the eight or nine directors coming from the industry-good body will be elected by meat and wool farmers.

The Bill applies normal tax rules as far as is possible. This treatment of tax issues is largely consistent with how tax issues were handled in previous producer board reforms. The key difference relates to the meat industry's desire for the Meat Board to hold the industry's reserves but enable the industry-good body to spend reserves on specific projects.

To facilitate this, the two entities will be consolidated for tax purposes. This means that any movement of funds between the Meat Board and the industry-good body will have no income tax, gift duty or GST consequences.

This Bill has a high level of industry support, as demonstrated in the farmer referendum in August last year. The Bill will enable greater safeguarding of the benefits flowing from access to quota markets, greater accountability to levy payers, and the capture of synergies and cost efficiencies in joint delivery of meat and wool industry-good functions.

The government would like to see the Bill enacted by 30 June 2004 to enable the meat and wool industries to jointly commence their levying and industry-good functions under the Commodity Levies Act on 1 July 2004. I commend this Bill to the House.

I move that the Meat Board Restructuring Bill be referred to the Primary Production Committee for consideration and that the Committee report the Bill by 27 May [or 14 June] 2004.

I also move that the Committee have the authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the house, and outside the Welling ton region on a day the house is sitting despite Standing Orders 193, 195(a) and 196(1)(b) and (c).

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