Patterson MarkMARK PATTERSON (NZ First): Thank you Madam Speaker. It is with great pleasure that I rise on behalf of New Zealand First for the second reading of the Farm Debt Mediation Bill (No 2). It is actually a pity that I've had to follow such a begrudging speech which seeks to characterise this bill in a way that is not as intended. This is a bill that is there to support our farmers through a range of conditions and to try to sheet that home to specific Government policies of the day—this is actually a long-standing issue. This goes back from New Zealand First back to 1999 with Doug Woolerton introducing a member's bill. It was subsequently carried on by Ron Mark and more latterly by myself but I'd like to thank the Minister Minister O'Connor for allowing this to be picked up as a Government bill. It is a substantive piece of policy that did deserve the full weight of Government support and the Public Service behind it.In terms of the context of the bill of course the primary sector is a significant contributor to our economy—another record last year despite the grim protestations across the $446.5 billion record income. But that does sit over $63 billion of debt that has accumulated and quite rapidly over the past decade. That is even recognised by the Governor of the Reserve Bank as a risk to the New Zealand economy. In fact that $63 billion is not actually that far out of line with what the net Crown debt is and this debt is only carried by 20000-odd farming families of which about 20 percent carry most of that debt. So it does show how top-heavy it is and how vulnerable some of our farming businesses are to all manner of challenges.There are so many challenges in agriculture and horticulture etc. that are beyond control: weather climate risk and of course with climate change we're seeing more of that. We only have to look across the Tasman at the moment to see an example of that. In Otago the other day and Tasman we've seen fires which is something that is forecast to grow. We've got the M. bovis outbreak and the recent Psa outbreak in the kiwifruit industry to look on. We've got volatility in markets and the trade wars that are happening at the moment. And of course we've got the Reserve Bank independent of the Government making capital requirements on the banking sector that they are looking to extract from their customers essentially to not penalise their shareholders. And that is disproportionately potentially going to weigh on our farming sector in terms of margins they may have to pay. So there is a range of factors beyond individual farmers' control.And of course the other thing with farming is—DEPUTY SPEAKER: I think we're sort of one-all now so if we could just come back to the bill.MARK PATTERSON: So if we look at the power imbalance that this bill seeks to address we heard some very good submissions before the select committee. Rural Women New Zealand's Angie McLeod outlined some of these real-life examples of banks obfuscating on their responsibilities and not coming to the table in good faith. I myself have seen that through my office since taking up this bill. There have been a number of farmers come forward and outline very substandard practices not only from the banks I might say but particularly there's a second- and third-tier level of lenders that are essentially bottom feeders—predatory lending. This bill will bring them under the auspices and make them come to the table in a mediation sense and give some certainty to farmers and some relief that that power imbalance that does exist will be evened up somewhat.Of course this bill does rely on the New South Wales legislation primarily and that has been extraordinarily successful. Of course a lot of our banks operate on both sides of the Tasman and they had been reluctant to engage in this and essentially wanted voluntary codes of conduct. The Government has to our credit not been prepared to wear that. They've brought forward that there's only nine or ten on average mortgagee sales a year in agriculture but if you look at the Federated Farmers banking survey they're showing about 16 percent of farmers feeling under pressure from their banks in May of this year and that is up from 11 percent in November of last year. So it is something that is worth keeping a weather eye on. This piece of legislation could be something that those 16 percent of farmers can call upon when it goes through.I'd like to commend the Primary Production Committee. It was actually a very good example of how select committees should work notwithstanding the aforementioned fairly ordinary speech from the chair of that select committee David Bennett. He did have some uncharacteristic and hitherto unseen outbreaks of reasonableness and decorum and did oversee a select committee that worked very constructively to bring this bill into shape and we've made a number of recommendations. I would also like to acknowledge the Hon Amy Adams who brought her considerable legal mind to this bill and was a very valuable contributor.I think in terms of select committees and the value of them we had 37-odd submissions and we made a number of changes based on those recommendations. So it does show that submitters coming before select committees are listened to. A number of the changes that we made were to the definition of a farmer" and a "primary production operation." And over and above the easily recognised agriculture horticulture and aquaculture we brought in the likes of apiculture—bee-keeping—which had been sitting in sort of an ambiguous place outside the bill. So we brought that in.We've also brought sharemilkers specifically into the bill and I would commend Richard McIntyre the Federated Farmers sharemilking chairman who made a strong presentation to the select committee. One of the issues that we picked up was on the cost to farmers and we've put a cap on that at $2000. It was estimated that the average cost of a mediation is about $6000 based off the New South Wales experience but we felt that even though the farmer was only obliged to cover half of that cost Richard pointed out that for sharemilkers in vulnerable positions against a very powerful financial institution even that figure may have been too much and dissuaded farmers from trying to trigger this mediation process. The select committee were unanimous in thinking that the very intent the actual core of this bill was to get mediation up and running and we did not want cost to be a factor because it's not only the cost of the mediation; it's the cost of the advisors and the like that need to come along with this as part of that process as well.There's also been a widening and clarification of the scope and definitions of things like guarantor allowing for multiparty mediation sharefarming trusts partnerships and where there are multi-lender or family circumstances. So that's been clarified and improved. We've allowed the banks to apply to the High Court to trigger a mediation in regard to things like animal welfare or maybe if the crops are under threat of not being harvested or the like. So there is a counterbalance I guess there for the banks to not allow this process to diminish the asset value and that has to go through the High Court so there's a threshold there. It also strengthens the wording to encourage creditors to accept mediation so that it can be the fence at the top of the cliff rather than the ambulance at the bottom which is the absolute intent of this bill—to get creditors and farmers sitting around a table earlier to get a better outcome in the end. We did look at a de minimis figure but we dismissed that as we felt that was self-policing to a point. You're not going to trigger a mediation at some cost for a small amount. We did talk about an upper cap but some of these debts are significant.So New Zealand First is delighted with the way the bill's come out of the select committee and we continue to look forward to shepherding this longstanding policy towards legislation in the third reading. Thank you."