Hon Jim Sutton speech to public meeting in Palmerston North

29 October
2004
Ladies and Gentlemen: I am delighted to be here, addressing you as Minister of Rural Affairs, Agriculture, Forestry, Biosecurity, and Trade Negotiations.

I am proud to be part of this Labour-led Government, so ably led by Prime Minister Helen Clark, surely one of the best prime ministers this country has ever seen.

In the past five years, we've seen a turnaround in this country's fortunes. Thanks to the Labour-Progressive Government's partnerships with industries and with regions, we're seeing a flourishing in the heartland of New Zealand. Places such as Palmerston North are doing well. The benefits are not confined to tycoons and academics. They flow through to working families in the form of more jobs, higher-paying jobs, and wider opportunities.

Ladies and Gentlemen: today I want to focus on what the Labour-led Governnment has done for the heartland of New Zealand, and why rural and provincial New Zealand is Labour's territory, not anyone else's.

Analysis of voting figures is quite clear ? even electoratates that voted in MPs from other parties voted with their party votes for Labour to be Government.

Since the Labour-led Government was elected in November 1999, we have focused our efforts on returning services to the rural community.

We have established the Heartland Services Centres, returning essential government agencies back to rural and provincial areas. I want to pay special tribute to Steve Maharey in this connection. He is an unsung hero of rural New Zealand.

We've provided extra funding to help retain and recruit GPs in isolated rural areas, providing for a rural premium, a Rural Locum Support Scheme and the Rural Practice Support Scheme. We have funded mobile surgical units to reinforce services in rural areas.

We have also introduced a scheme for paid parental leave, and have extended that scheme to seasonal workers who have been in work for at least 6 months, a measure assisting particularly meatworkers. I am hopeful that we can ultimately extend that to the self-employed, so that farming families will be able to get assistance as well.

There is the Sustainable Farming Fund, which has funded more than 300 projects around the country, including world-leading research. This fund works with community funding as well, but would not have been possible without the Government's funding.

Independent research estimates that the potential benefits flowing from those projects will be around $300 million to $500 million per year ? not bad for an investment of $10 million of taxpayers' money!

On the business side, we're helping extend broadband internet access to people wherever they live, something that will improve rural young people's education, but also the efficiency of farm businesses. ACC is developing programmes specifically for rural customers, and is promoting the Farmsafe education scheme in order to reduce the appalling number of farm bike and ATV accidents.

This is really significant because that is where the costs are. Our opponents have published a wee brochure recently claiming that ACC charges have increased 89 per cent in the past two years despite accidents and fatality numbers decreasing.

Apart from getting their figures wrong, it also ignores why the increase in ACC levies is occurring - the cost of farmers' claims relative to their earnings has almost doubled in the past three years. The cost of weekly compensation is the major driver of claim costs and this has increased substantially over time as farmer's earnings have increased; and the average duration or total time on claim has almost doubled since 1996/97.

Now, you could avoid costs going up and causing premium increases ? reduce the amount people can claim, and cut the amount of time people can spend on ACC. But I don't think that actually helps anyone.

Rather, ACC has designed programmes for rural people to take into account their particular business structures, and is actively promoting practical courses people can take to ensure their safety as much as possible. Unfortunately, a lot of farmers have yet to take these courses ? including, I hear, the whole national council of Federated Farmers. I trust Charlie Pedersen is recovering well from his recent kick in the face by a cow.

ACC are now working on a system where farmers who do take these courses get a benefit from it. Whether it's lower premiums or what, is still being worked out.

Since Labour became government in December 1999, we have often provided money to help farmers deal with the adverse effects of climate on their businesses, as you'll well know in this region.

We've facilitated farmer-supported statutory restructuring in the dairy, wool, meat, and wine kiwifruit, and hops industries.

There are many other things this Government has done that help rural people, at the same time as helping urban people too.

Why has the Labour-led Government done these things specifically for rural people?

Because pastoral agriculture, forestry, horticulture, the whole primary production sector is vital to us and to New Zealand as a whole. To ensure that rural economy is sustainable, we deploy the resources of Government to support the sustainability of the rural environment and social services.

Rural citizens are important citizens to Labour. We're not ignoring the backbone of the economy the way previous Governments and other parties have.

But we're not doing the things we're doing just because rural people make money for our country: we're doing them because rural people help keep our country the way we like it.

When people think New Zealand, they think of sheep, of green hills, and clean, wide open spaces. If we're lucky, they'll go on to think about the innovative things we do as well ? the high value-added primary products we produce, the exciting arts, literature, and films we create, and our sporting triumphs. Exciting high tech initiatives as diverse as super-yachts and special effect films.

This is the New Zealand the Labour Party is working to preserve in our policies.

Not a country that doesn't care about environmental standards or one where workers are abused and exploited, where the almighty dollar rules alone.

No, our New Zealand is one where all are included. One where we can work hard, and enjoy the fruits of our labour; one in where we can adapt new technology and profit from our innovation, but also respect that other people can be affected by our choices and work to ensure they can be accommodated. A country where we can balance productive and satisfying work with an enjoyable lifestyle in a glorious environment.

Labour is working for that.

Ladies and Gentlemen: as I said before, we are implementing policies to ensure that people can stay in rural communities, but still enjoy services that urban dwellers take for granted.

Heartland Services Centres, Project Probe's broadband internet access, mobile surgical buses, medical schemes, subsidies for upgrading sewerage schemes: the list goes on.

My counterparts in other countries call this desire to have people remain in rural communities "multifunctionality" and use it to justify the outrageous subsidy schemes they operate for their farmers. My argument has always been to tell them that if they want "nice white painted fences and well-trimmed hedges" ? some of the things they tell me they need rural people for ? then, pay those people to paint fences and clip hedges, don't subsidise them to produce lamb, beef, and dairy products your consumers don't want that are then dumped on international markets and collapsing the prices for honest, unsubsidized farmers.

Since being elected, this Government has made it clear that its main international trade priority is the World Trade Organisation's multilateral round of negotiations. We worked hard to ensure the Doha Round was started three years ago, and we worked hard, albeit unrewarded, for a result at the Cancun meeting last year.

We have maintained that effort this year, playing a significant role at the Geneva meeting, which saw negotiations frameworks established that for the first time recognise that export subsidies will be eliminated.

We have significant interests at stake in the WTO negotiations.

Sometimes trade negotiations seem quite remote to real life back here in New Zealand. Change seems to happen at a glacial rate, and it's not obvious the effect it has on people here, in Manawatu, in South Canterbury, and other parts of our country.

But I can assure you that nothing else has quite the same impact on your livelihoods as progress in international trade.

Research carried out by MAF on the quantitative benefits of the last big round of international trade negotiations, the Uruguay Round, showed in the single year of 2000 (the year that many of the gains of the Uruguay Round kicked in) the beef, sheepmeat, and dairy sectors gained about $590 million from product price and volume increases in the major markets of the United States and European Union.

That works out to an average increase in earnings for each sheep, beef, or dairy farmer of $11,500 a year. And that was from changes in our trade with just two of the 146 members of the WTO.

Combined MAF and MFAT research assessed the overall benefits from the Uruguay Round as at least $9 billion over the 10-year implementation period of Uruguay Round changes, and about 17,600 jobs throughout our economy, including 2000 in agriculture in particular.

But the Uruguay Round was only a toe in the door, for agriculture, which is still one of the most heavily protected sectors in the world.

The Doha Development Round has even greater potential.

So that's our main priority, our Plan A. However, it's not our only priority.

The Government is also putting significant effort into bilateral trade negotiations ? our Plan B.

Our negotiators recently completed the third round of negotiations with Thailand. Following this, we saw the need for ministerial involvement. This took me to Bangkok for a round of talks with Prime Minister Thaksin, trade and agriculture ministers, business and academic opinion leaders, and, critically, leaders of the influential and royally-sponsored Thai dairy industry.

We are still aiming for completion of the substantive negotiation by the APEC Leaders meeting in Chile in November this year, although that is a tough deadline to meet. This negotiation presents some very difficult issues.

Earlier this month, we hosted the latest round of Pacific Three negotiations with Chile and Singapore, after a break in the process from late last year. We are aiming to conclude negotiations by April next year. Again, dairy is a key sector.

I attended an ASEAN meeting in Jakarta at the beginning of this month, and economic ministers there endorsed a recommendation for leaders to initiate a trade agreement between the ASEAN countries and Australia and New Zealand in November. I am extremely pleased with this as it's something New Zealand has been working patiently and persistently towards for several years now.

While I was in Jakarta, I also reached agreement with the veteran trade minister Rafidah Aziz that New Zealand and Malaysia would undertake parallel studies with a view to deciding on the merits of a bilateral trade agreement negotiation next year.

On China, we are presently completing a joint study. Both sides are still aiming to haveFTA negotiations proper underway in the new year.

Even closer to home, we have the prospects of negotiations with our Pacific Island neighbours. The Pacific Agreement on Closer Economic Relations ( PACER) contains a provision under which we and Australia can enter into consultations leading to negotiations for a trade agreement, to match any similar moves by the Pacific Island countries with other partners.

In the meantime, the Pacific Island countries have a FTA between themselves, and free access one-way to Australia and New Zealand. Trade is better than aid, although there is aid as well.

We are continuing to work with Mexico on the possibilities for a bilateral agreement, and talks with Hong Kong are still alive, although stationary until we know the outcome of our China negotiations. Other partners are in the wings. For example, we have had a delegation in Egypt, which is interested in ensuring a competitive market in dairy supplies for their 70 million people, once the European Union is obliged to stop subsidizing their surplus exports.

The United States is top of our list of other objectives. We have made clear our strong interest in negotiations on a trade agreement, and are continuing work to build our constituency in the US. But we recognise that any decisions on the part of the US Administration will have to await the result of the presidential and congressional elections in a few days' time. We hold ourselves poised to take advantage of any opportunity.

Ladies and Gentlemen: I said before that the livelihoods of all of us in New Zealand, rural and urban, depended on being able to sell our products in the markets of other nations.

More than 80 per cent of the meat, dairy products, wool, and other products from our land-based industry are exported.

So having access to overseas markets is vital to us.

That access isn't a right. It's a privilege and we have to work constantly to maintain it, let alone enhance it.

This week, I wrote to California to Governor Schwarzenegger to thank him for his decision to veto proposed forestry legislation which would have required any Californian state agency which was contracting for, or acquiring, lumber or other wood products to give preferential treatment to wood products harvested by environmentally sustainable practices from within California.

California is a significant market for New Zealand timber, particularly with home development DIY chains. On its own, it's one of the larger economies in the world.

Officials had made strong representations to the California State Legislature and to Governor Schwarzenegger that this bill would exclude New Zealand timber, despite our sustainable forestry practices.

Earlier this month, Governor Schwarzenegger wrote to the California State Assembly to veto the bill, saying the bill would take the state in the opposite direction of the general trend for free and open trade in a global economy.

Rather, Governor Schwarzenegger encouraged all Californians to buy voluntarily Californian-grown products, when all other specifications are equal. This is the appropriate way to do things, so that consumers have the choice.

Ladies and Gentlemen: this Government is committed to improving the lives of all our citizens. We're doing that in a number of ways: working in partnership to provide growth, jobs, and opportunities in our regions, as well as working hard overseas to maintain and enhance market access for the high-quality goods and services our farmers, growers, foresters, manufacturers, educators, tourist operators, and other exporters provide.

Thank you.

ENDS

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