Goff: Address to Federated Farmers conference

Phil
GOFF
Labour Leader

Thursday, 30 June 2011 SPEECH

Address to Federated Farmers conference

Embargoed to 3pm

Good afternoon.

Thank you for the invitation to speak to you all here today.

I’m here to talk to you about the politics of courage – the readiness to make the hard decisions that need to be made.

I could stand here and try to convince you that everything’s okay.

I could pretend that New Zealand doesn’t have a massive debt problem and an economy that’s going backwards.

But that would be selling us all short.

We are in trouble. We are fighting for the future of our country. This isn’t about the election – this is about fighting to secure the long-term success of our country.

I know you might not like everything I’ve got to say.

But it is time for some tough talking and for some tough decisions to be made.

I’ll talk to you about those decisions a little later.

Firstly, times are good right across the farming sector right now.

Dairy, wool, wood and meat export prices are all up between 6 and 30% compared to last year. Our biggest markets, Australia and China, are booming. Our premium products are in high demand and MAF predicts that gross agriculture revenue will rise by 45% by 2016.

I want to emphasise that Labour is committed to working with the agricultural sector. You play a vital role in our economy and your commitment and dedication is appreciated.

But we can’t be complacent. We have to work together to make sure the agricultural sector continues to be a star performer in the New Zealand economy.

We also have to work together as a nation to dig ourselves out of the financial hole we’re in.
Let me tell you why we’re in trouble and what Labour is going to do about it. And let me tell you straight up, what we are going to do is vastly different to National.

Three years ago, we were running a surplus. National’s now racked up debt of $16.7 billion dollars this year and they’re borrowing up to $380 million a week.

Even though we’ve had great export prices and the worst of the global financial crisis is behind us, there’s been practically no growth.

That’s before we experienced the first of the devastating earthquakes which have created an even bigger economic headache.

We all feel for what Cantabrians have had to endure. And I’d like to acknowledge the support given by John Hartnell and the Farmy Army in the effort to help the region recover. It’s been a real reminder of what community really means.

Labour is committed to building strong communities and a strong economy that is smarter, high-tech, high-skill and high wage.

We are also committed to growing our exports, not just the quantity but the breadth too. That is the only way that we’re going to climb out of the hole that we’re in.

For decades, we haven’t paid our way in the world and this year’s budget projections show that five years out, the country’s debt will be higher not lower.

Not only are we facing a mountain of debt, but over the next decade, we’ve got to cover the cost of the baby boomer generation as it retires and the cost of superannuation and health care skyrockets.

National won’t explain how it’s going to meet this cost.

We’re losing our best and brightest workers too. Last month, 3300 – a record number of Kiwis – left permanently for Australia. Julia Gillard’s told me one of the pillars of the Trans-Tasman relationship is that we are a major supplier of her skilled workforce!

No wonder they’re going. Even the Finance Minister admits they get paid at least a third more and unemployment’s a third lower there.

We have to do better if we want our children to find a future here at home and we do want that!

We would have been better off if National had kept contributing to the Cullen Fund, which is worth about $18 billion and has an average rate of return of about 8%.

We would also be better off if National hadn’t undermined the KiwiSaver scheme. That won’t help us improve our appalling savings record and own our future.

National doesn’t have the answer to our problems.

It’s still giving tax cuts to the most wealthy – despite the fact we can’t afford it. It’s hacking into programmes like KiwiSaver and cutting essential services like health and education.

And it’s going to sell off our valuable assets, like our power companies, in a short-sighted attempt to pay off debt. This is economic stupidity. These assets return dividends worth hundreds of millions of dollars to our community.

Would you sell off your farm to pay off your debt and then go off and rent instead?

We are about to release some major economic policy decisions that will show you exactly how we will turn this country around.

Those decisions will be bold.

We’re not ready to reveal them right now. But rest assured, in the next few months you’ll see a clear plan from Labour.

A plan that will allow us to keep our assets, pay off our debt, up-skill our workforce, create jobs that are secure and pay well, invest in our children and grow our economy.

That is the future under Labour.

We’ll make decisions that have a real impact on the lives of New Zealanders and the success of our economy.

Agriculture is a critical part of our export economy. But it can’t do the heavy lifting on its own.

That’s why we want to develop a high-tech, high-skill, smart economy.

As an example of how it can work, look at Denmark, it’s a strong agricultural exporter but it achieves a per-capita income and living standards 36% higher than New Zealand’s by supplementing that with its clever, high-tech economy.

That’s why Labour is creating a 12.5% tax credit for research and development.

Smart, successful companies like Fisher and Paykel Healthcare endorse that proposal. And it’s clear that many farmers and business owners like the idea. A KPMG survey found 82% of farmers and businesspeople believe investing in R&D is a high priority.

Agriculture will be a key beneficiary of the tax credit. We’re a world leader in agriculture because of past investment in innovation.

It will be future investment that keeps us ahead of large scale, low-cost agricultural competitors like Brazil.

R&D tax credits will encourage more companies to develop high-value and ground-breaking products like Fonterra’s Anlene. That doesn’t come cheap. It cost Fonterra more than $50 million to develop.

Labour is committed to supporting that kind of innovation.

Our R&D policy doesn’t come cheap either. It’ll cost $800 million over 5 years.

While I know you might like the policy, many of you here have been clear you don’t want to fund it by paying for your greenhouse gas emissions.

I want to tell you straight that is exactly what will happen under Labour.

Global warming is a reality. Scientific and government opinion worldwide accepts that. We need to mitigate its impact on our environment and economy so that a huge economic and environmental burden doesn’t fall on our children and grandchildren.

Other industries are already paying their fair share under the ETS, like steel, aluminium and transport.

Agriculture will have to do the same from 2013.

And don’t forget National is planning to do exactly the same thing – just not till 2015.

In New Zealand, agriculture accounts for nearly half of all our emissions. That is why it cannot continue to be excluded.

We’re asking you to pay your fair share, nothing more, nothing less.

Agriculture, like other sectors, won’t be paying the full cost of its emissions. It’ll pay 10% of its emission level in 2005 and growth since then.

Bringing agriculture into the ETS is not just a vital incentive to find innovative ways to deal with emissions.

It will also protect us against our trading partners using environmental concerns to block our products.

Being clean and green is a vital part of New Zealand’s brand.

If we let that slip, our export markets will shrink and your incomes will fall.

Labour has already announced a series of policies that will help the agricultural sector to grow.

We will increase the range of tools available to the Reserve Bank to control inflation. The almost singular focus on interest rates did not stop the massive liquidity flows and asset bubbles that fuelled consumption pressures and inflation in recent years.

We have said we will allow the Bank to use prudential ratios to control credit growth and asset bubbles.

This, together with other changes making express reference to the interests of exporters, will ease pressure on the dollar and make its movements less volatile.

We’ll continue to promote access for our exports into other markets, as I did in the Asean and China Free Trade Agreements.

I’m told by farmers that it’s becoming increasingly difficult to attract young, skilled workers and that’s having a flow-on effect in terms of the uptake of new technology, techniques and the development of innovation.

Labour will increase the number of modern apprenticeships and industry trainee places and provide a clearer pathway for young people from school to apprenticeships and work.

Labour accepts the need for foreign investment in our country but we must not lose ownership or control of our farmland, our farming enterprises or our intellectual expertise.

We cannot lose control of our best assets. And we do not want it becoming even more difficult for young New Zealanders to buy their first farms and for New Zealanders to become tenants in their own land.

So we have a policy in place to severely restrict the sale of farmland to overseas buyers.

We’re not far off announcing other significant economic and taxation policies.

We’ve been clear that we want to remove incentives to invest in property and encourage investment in our productive sector.
I can’t give you more detail today but you will see a clear, coherent plan in the coming months.

All these policies show you just how committed Labour is to building a strong future for you all here today, your families and the wider community.

We have to do better if we want our children to have a brighter future.

We can’t simply tinker with the problems we’re facing. We have to be bold.

We can’t rely on gimmicks and spin. We need real solutions.

We can’t think short-term and flog off our valuable assets to try and pay our bills.

We have to make hard decisions that tackle the problems head on and create a better future.

We have to have the courage to do what is right for the country.

Thank you.

ENDS