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Access News A Highlight

18 October 2005

Access News A Highlight

Federated Farmers has welcomed some key policy announcements by the new government, but is concerned about the possibility of a spending blow out undermining the economy.

"The good news is that the government has finally abandoned the legislated right to impose access over private land. It will instead pursue non-statutory proposals that will involve negotiation with land owners to improve access," said Charlie Pedersen, President of Federated Farmers of New Zealand.

Federated Farmers has been fighting for nearly three years to convince the government to abandon its access legislation. "This is indeed a red letter day for farmers," he said. "We will be taking a very keen interest in the framework for negotiating right of access."

Farmers will also be pleased that the government will conduct a cost-benefit analysis of the proposal to introduce a new carbon tax.

"The carbon tax will increase costs for farms, businesses and consumers. It will damage New Zealand's international competitiveness and have no discernible impact on greenhouse gas emissions or climate change. The carbon tax simply doesn't stack up - except as yet another revenue grab," Mr Pedersen said.

Farmers also welcome a government pledge to review business taxation. "The review must recognise that a significant proportion of rural business operates as sole traders or in partnership and are taxed on the basis of personal income tax. The government must not forget that much of New Zealand's wealth relies on the investment decisions of some 80,000 farm businesses.

Finally, there are parts of the deals announced yesterday which cause concern, in particular increased spending. "The government already spends one in every three dollars generated in New Zealand. This level must come down, but it won't happen while government continues to pull out the cheque book without thinking through the consequences.

"Increased spending means the government risks adding costs to the country's wealth-creating industries and people. While some sectors can pass on these costs, the effect on exporters is a cut in their international competitiveness. The government has to be firmly focussed on policies that don't undermine wealth-creating businesses, and must recognise the fundamental role of small business and farmers in the economy," Mr Pedersen said.

ENDS

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