van de Molen TimTIM VAN DE MOLEN (National—Waikato): Thank you Madam Speaker. That was brief but enthusiastic. So look here we are on the Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Bill second reading. I think it's quite interesting to reflect first and foremost if I can on some of the contributions made through the select committee process. We had a variety of different submitters and we saw some quire strong views at one end in terms of Fonterra's position that the proposals being put forward by the Government were in a number of regards a significant overreach and then we had at the other end a number of competitors' views that the impositions or the conditions being put in place—Fonterra would call them impositions—were insufficient and actually needed to go further. So of course that then creates the challenge for the Primary Production Committee to try and bring that together and find a workable solution within that.Now as I said in the first reading the proposal put forward by the Government at that stage was actually somewhat different to what had been proposed by Fonterra. Fonterra noted that in their submission as well—that we had seen a bit of overreach. And this Government is never one to miss the opportunity to put its sticky fingers all over something that doesn't need additional Government control. Yet this was a prime candidate for them and so they said Right we'll bring in an independent chair and we'll put in an additional person on the milk price panel and of course we'll give the Commerce Commission directive powers to require Fonterra to enact the change proposed by the Commerce Commission even though it may be that Fonterra and the milk price panel retains the expertise more so than the Commerce Commission." But that aside we went through the select committee process and we heard the different views on the appropriateness or not of that and indeed whether those needed to all be done in conjunction or whether one or the other could affect a similar outcome to what had been intended by the Government when drafting this legislation. I think for me the key highlight is if we're giving the Commerce Commission the power to direct Fonterra to make changes—obviously off the back of their view that the process has not been followed appropriately in terms of setting that milk price or some aspect of the process that they have reviewed was found insufficient—then surely that is a reasonable backstop without the need for therefore having as well as that both an independent chair and an additional person on the milk price panel given that the majority as proposed under the legislation still falls in favour of Fonterra and that milk price panel anyway. Ultimately we landed at the position that those proposals would continue to remain in place but I am relieved that we did manage to see some change through; particularly the risk of direct legal action that Mr Muller referred to as well—clause 27 I believe it was—that enabled the Commerce Commission or any other person to take legal action against Fonterra. The risk there being that we could end up with an industry bound up with numerous legal challenges additional costs ultimately farmers bearing the brunt of that and there being some risk around whether that was done potentially for commercial gain around the sensitivity of information that might have to be released through that process. So I think it was an appropriate step to take that back out of the legislation because it certainly wasn't the original intent to enable that to occur. The other one that was I think an important consideration for me was around the additional liabilities that were being potentially placed on the members of the milk price panel—the director's liability as it were around them therefore being more liable for their own personal penalties than they had been previously. So again a carve-out there enabling them to have a reasonable reliance on information or again anything that was beyond their control and both of those scenarios for them to be exempt from prosecution themselves as well. That aligns with standard clauses in the Companies Act for directors of other companies such as that they should have the ability to rely on information that they believe has been provided to them in a manner appropriate with the duties of the person providing it and at a level sufficient for them to be able to make decisions etc. and so therefore that being a reasonable defence against liability. So on that basis I think it's appropriate that we've landed where we have.Now there was one concern raised by a few submitters that it would be more difficult for Fonterra to compete given that the overall milk pool is not expected to grow significantly and indeed may potentially shrink—that by requiring farmers to share up fully as has previously been the case it would make them uncompetitive. And so this part of the proposal that Fonterra put forward was allowing them to share up to only the one-third level rather than the full shareholding. Whilst I have some support for that at the same time I would note that actually the structure that they operate under is quite different and I don't think it's reasonable to say that you would be comparing apples with apples in the scenario where open country for example as a privately owned company brings on board a dairy farmer a supplier who supplies milk but does not have a shareholding in the company and therefore does not have a say in how that company is run. That's quite different than Fonterra as a share—or coming in as a supplier you are a shareholder you buy shares in the company you therefore are a part-owner of the company and have a say in how that company runs. So I don't think it's reasonable to say that they should be able to compete at an exact level playing field when actually the structures of the entities are quite different. That was one area that I think came through showing that there wasn't quite a good understanding or a clear understanding necessarily amongst submitters around the different entity structures that can prevail in the industry and the different rights and responsibilities that go alongside that for a potential supplier or for the dairy farmer in whichever case it may be. But broadly I think we've landed in a reasonable space where I think no submitter will be entirely happy with us. So it's probably a reasonable balance on the face of it and we'll now go through the remaining stages to see whether we can get this through or whether there needs to be any further amendment at the committee of the whole House stage. But on this basis we do support it at this stage and look forward to the continued progression of this bill. Thank you."