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Speech: Peters - Dairy Industry

2:00 PM Thursday 22 July 1999

Rt Hon Winston Peters MP, Leader of New Zealand First

[Speech to the Annual Dairy Industry Summit of the Coalition of Concerned Dairy Farmers

The Convention Centre, Palmerston North

Theme: “The Destruction of Dairying New Zealand as We Know It”

“Crucified on a Cross of Ideology”

It should not be a surprise to anyone here that many worry about this Government.

Especially about it’s tendency to throw around big figures.

Like how many millions, or billions, the merger of the old Employment Service with the old Social Welfare Service is supposed to save the taxpayer.

That is, if the new WINZ Chief Executive can be restrained from chartering a plane to go to a conference in a 5 star resort in Taupo.

Parliament this week is debating the 1999/2000 Estimates—how much of our money the Government wants to spend this financial year.

One hates to say this, because Parliament is meant to be the fundamental bastion of our democracy, but that debate is an expensive waste of time.

Those estimates confirm the saying that “there are lies, dammed lies, and statistics.”

I know because I was Treasurer in the Coalition Government that Mrs Shipley deliberately set out to collapse.

As Treasurer I followed John Maynard Keynes dictum—he loved “messing about with figures, and seeing what they meant.”

I know what this Government’s numbers mean. They mean a warehouse economy. An economy planned for importers, not as it should be, for exporters.

They mean the sucking of provincial New Zealand into the whirlpools of Auckland, Wellington and Christchurch. Take the Government’s objectives and roles as stated by Mr Luxton here today:

“maximise New Zealand’s economic welfare provide regulatory framework that facilitates wealth creation through efficient resource use internationally competitive dairy sector within that framework”

Those objectives against a background of National’s extreme monetarist policies are a joke.

The only new building on New Plymouth’s main street is literally a warehouse. On the corner of Rangitikei and Cuba Streets in Palmerston North, there is another new warehouse directly opposite vacant office buildings.

The only half way modern buildings in Greymouth are the Police Station, the Social Welfare office and the Regional Council.

Doesn’t that tell you something?

It means an economy based on cheap imports, on cheap exports, and a quaint people performing for the tourists.

Not a banana republic but a grass colony.

While our business and political elite look at the NBR Rich List and smile quietly into their gold rimmed $ 30,000 dinner sets.

There are no working dairy farmers on that list.

All this happened while your supposed political leadership blindly supported that same monetarist experiment – they had no long term vision for productive New Zealand, no aggressive investment strategy for productive New Zealand, while consumption was financed by the savings of previous generations through the sale of taxpayer assets.

All the while the Federated Farmers’ Leadership succumbed to the seductive message of the sirens of international free trade. The GATT Round was going to save us. The WTO is going to save us. The Free Market between New Zealand and the United States was going to save us until their lamb farmers bleated.

And all the while compliance costs incurred by farmers under the Resource Management Act written by bureaucrats in Wellington further restricted the quantity of rights that should go with a certificate of title to land.

In short, provincial and agricultural New Zealand has been crucified on the cross of ideology.

The very people who failed you so miserably in political terms, who now are busily trying to reconstruct themselves, are asking you to trust them to fix things up. They can’t and they won’t.

New Zealand First will reverse New Zealand’s decline from No 3 to No 27 in the world.

We will do so by supporting the productive and export oriented sector.

Our Agricultural Policy will be announced soon but let me make the following two commitments, loud and clear.

We will amend the Reserve Bank Act to include export growth, GDP growth and employment growth targets.

Let me give you three quotes from Mr Eric Roy MP from the Christchurch Press of 7/7/99. Mr Roy said “farmers were better off as a result of factors the Government had influence over”. He said the most significant cost reduction has been a substantial drop in interest rates, which was the single biggest cost that farmers faced. “Those lower interest rates were also linked to the lower value of the New Zealand Dollar. This had a positive effect on product prices”

Here is the real truth:

When Roger Douglas floated the dollar in 1985 it went from US 44 cents to a high of US 72 cents, and many farmers went straight to the wall.

A further truth:

Between 1993 and 1996 the National Party allowed the dollar to rise 26% at a time of stable commodity prices.

One thing has saved farming since then, in an era of lower commodity prices, and it happened long before the Asian Crisis. As Treasurer I changed the Reserve Bank Policy Target Agreement. We got the dollar and interest rates down, and that has been the single most beneficial influence on farming over the last fifteen years.

When New Zealand First is in government we will not let the dollar rise again.

We will establish a Development Banking Facility that will leverage private sector investment into the high growth and export oriented sectors of the economy. We will give business the tools to get the economy growing at its full potential. Let me also make New Zealand First’s position clear on the Dairy Industry Restructuring Bill currently before Parliament.

This is deregulation by stealth. Effectively dairy farmers will be required to support the mega-co-op otherwise chaos will ensue. Farmers will be forced to support the proposed structure with very little detail and under duress. Farmers simply don’t know what their leadership is letting them in for.

The only proviso is clearance from the Commerce Commission which will rubber stamp the whole process. The Commerce Commission Proviso is a Clayton’s Proviso. There is no rational reason for the House to be sitting under urgency to pass such ill considered legislation.

Haste is a characteristic of this Government and its ACT clone. The only reason is ideological. This is the last item of the Emperor’s clothes that this desperate Government can give away.

There has been little or no consultation with the farmers whom it affects, apart from some high powered sales talk.

There has been little or no consultation with the sharemilking community, which is the heart of New Zealand’s highly cost-effective dairy industry.

There has been little or no consideration of the long term consequences for New Zealand, including our social fabric which has been stretched and torn by National and Labour policies.

The New Zealand Institute of Economic Research was commissioned by Treasury to DO THE NUMBERS, and didn’t even tell the Dairy Board. Is that consultation?

WORST, it opens the door to total foreign ownership. The internally transferable share scheme proposed in the legislation should be seen for what it is—a dummy pass.

Make no mistake. Those shares will end up in foreign hands.

Make no mistake. Those foreign owners, whether they be Nestle or Kraft or Wisconsin Railroad, will not have the interests of the New Zealand producer at heart.

Why should they? It may well prove to be in their global commercial interests to get rid of a competitor.

We have seen it before. Buy in cheap, neglect the industry, starve it of the investment capital it needs, and because it is not profitable, shut the industry down.

What does this Government want us to be?

Hewers of wood and drawers of water in our own country?

I have milked cows—unlike some of the soft handed and pale faced Treasury bureaucrats that have dreamt this scheme up.

We who have been in the real world know more of that than they. We know that the real value in dairy is beyond the farm gate. It lies in the processed product. In added value.

It also lies in the strength of an industry united to take on the world.

No one objects to a corporate structure per se. That has potential efficiencies and potential benefits to all stakeholders.

But New Zealand First will not support such a fundamentally flawed and rushed legislative process as this.

We will not sell out our single biggest export earner for a groat of silver, for a ribbon to pin on a jacket, for praise of Ministers on the international cocktail circuit, while at the same time those same “free traders” conspire against New Zealand.

Let me quote ACT’s philosophical father, Adam Smith, who said that “ people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

When oh when will New Zealand ever learn

THE OPPORTUNITY TO SHARE OUR VIEWS WITH YOU IS APPRECIATED.

ENDS

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