Turei Metiria: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeTurei Metiria: Oral Questions — Questions to Ministers[Sitting date: 09 March 2016. Volume:711;Page:9510. Text is incorporated into the Bound Volume.]5.METIRIA TUREI (Co-Leader—Green) to the Minister of Finance: Ka tū a ia i runga i te mana o tāna tauākī mō te ahu miraka kau “is an industry that’s going to be under pressure”?[Does he stand by his statement that dairy “is an industry that’s going to be under pressure”?]Hon Member: I don’t think that’s right.Mr SPEAKER: No I listened to the translation. It was as recorded. Would the Minister of Finance like to answer?Hon BILL ENGLISH (Minister of Finance): Yes. Clearly many farmers are doing it tough and there is a lot of uncertainty about the future of milk prices. Farms with high levels of debt and high production costs will come under real pressure. Whereas 6 months ago they may have thought that they could hold on until prices had bounced back up that looks much less likely now. So it is appropriate that the dairy industry is thinking about reducing production costs adapting to capital scarcity rather than waiting for prices to rise.Metiria Turei: Does the Minister take any responsibility for the enormous pressure dairy farming families are under given that his Government has encouraged them to convert to dairy to take on more debt and to intensify their farms and now 5000 families could lose their farms because of it?Hon BILL ENGLISH: I would be very surprised if the member spoke with any of those families if their business decisions were made by what they read from press releases from the Government. These people are capable competent people who weigh up the business risks and decide what risks they take. Some of them might have overextended themselves and I would be surprised if they blamed anyone else for that.Metiria Turei: Does he accept that the Government’s goal of doubling food exports by 2025 and subsidising irrigation was an encouragement to farming families to increase their debt and intensify their farms?Hon BILL ENGLISH: No. One would only have to look at the range of debt across farms in the dairy industry or any other industry and you would find that some of them have no debt some of them have moderate debt and a few—probably a very few—have levels of debt that are now turning out to be higher than is comfortable. The Government has made no apology for supporting primary production through its investment in science and innovation its investment in biosecurity and getting alongside them in the development of large-scale irrigation schemes into which we have actually put only quite small amounts of money.Richard Prosser: Will the Minster’s Government support New Zealand First’s Receiverships (Agricultural Debt Mediation) Amendment Bill which will provide our dairy farmers with a similar level of regulated debt mediation support to that enjoyed by farmers in Australia and Canada; if not why not?Hon BILL ENGLISH: No we will not because we believe that the parties involved in that debt are capable of working their way through it. The large banks have lent money to the industry in full knowledge of all the risks and with a deep understanding and history in the industry. We believe they are committed to the long-term future of the industry—that it is in their interests that for instance the land price is maintained at reasonable levels and does not drop rapidly and therefore they and the farmers will be able to work through whatever stress there is.Metiria Turei: Has the Minister received any advice on how many families in the wider rural communities not just farm owners but farm labourers and contractors as well will have financial problems because of his Government’s failed dairy strategy?Hon BILL ENGLISH: No. It is a bit galling to hear from the Greens concern for people whom they have branded for the last decade as reckless capitalist polluters—suddenly they are very worried about them. I find it a wee bit hard to find that the Greens are serious.Richard Prosser: Given his previous answer what contingency plan does his Government have in the likely event of widespread farm foreclosures to support unsecured creditors and their staff and families in the heartland communities who support the dairy industry and rely on it—feed suppliers fencers silage and hay contractors—Mr SPEAKER: Order! Bring the question to a conclusion. [Interruption] Order! The question is too long.Hon BILL ENGLISH: There is no evidence—no good reason—to believe that there will be widespread farm foreclosures. The Government believes that the industry is resilient and the financial services sectors that support it have an interest in its ongoing success. If that member wants to do what farmers would regard as showing strong support for them then he and his party would vote for the Trans-Pacific Partnership (TPP) and vote for Resource Management Act reforms—and I am sure if they went around the regions saying that they would be welcomed with open arms.Metiria Turei: What will the Minister do to prevent more of our productive land being sold off to overseas buyers when farming families are suffering huge debt burdens and are forced to sell their farms?Hon BILL ENGLISH: Any offshore buyer who wants to buy the farms has to go through the Overseas Investment Act process which includes I think 15 separate tests. It has been subject to court action in recent years that has raised the thresholds and the Government has every intention of leaving that in place. The member needs to keep in mind that those families who do have higher levels of debt probably incurred that from paying fairly large amounts for the farm that they have moved into recently. I think the industry would expect that they have the opportunity to work through their stressful situation with the banks.Metiria Turei: Given that the Minister has no advice on how many farming families will suffer as a result of this does he think he ought to go and get that advice and does he intend to act on any advice he is given about projects or initiatives to support those farming families who will be—Mr SPEAKER: Order! Bring the question to a—[Interruption] Order! It is question time not speech time.Hon BILL ENGLISH: You do not need to get advice to know that there will be a significant number of farming families distressed. This is not a new kind of phenomenon in farming communities. I myself recall a number of years actually of fairly intensive stress in the late 1980s and early 1990s in the sheep and beef industry over the same sorts of issues. We have a lot of confidence in this farming community to be able to adapt to difficult circumstances and to get through those on the basis that the outlook for the dairy industry is quite strong in the light of ongoing global demand for protein.Rt Hon John Key: Does the Minister believe that actions speak louder than words and if that is the case would the farmers of New Zealand expect political parties that claim to be standing up for them to vote for the TPP that would reduce hundreds of millions of dollars of tariffs against them or will they see through all of this—Mr SPEAKER: Order! Again the question was too long. The first part can be addressed.Chris Hipkins: I raise a point of order Mr Speaker. I thought you would probably rule the question out of order. The Minister of Finance has no responsibilities for how other parties vote in the Parliament.Mr SPEAKER: Order! No. The first part of the question in my mind was in order in that it simply asked for—it did not talk about Opposition parties; “other political parties’ support: wouldn’t that be the best thing for farmers?”. I think in view of the circumstances of where the discussion has been that the question is in order. It can be addressed by the Minister.Hon BILL ENGLISH: I am sure that distressed farming families would take some notice of the outpouring of sympathy they are getting from Opposition parties but knowing farming people I think they would regard actions as more telling. They will be surprised to know that those expressing the strongest sympathy today have said they will vote against Resource Management Act reforms that will assist that industry and vote against the most recent free-trade agreement of which the dairy industry is the biggest beneficiary. They might be surprised having heard the words today.Metiria Turei: Can the Minister confirm that the Trans-Pacific Partnership agreement promise of a tariff reduction of just 1.3 percent by 2030 is not going to help the 5000 farming families who are facing the loss of their farms today because of his Government’s failed dairy strategies?Hon BILL ENGLISH: No I disagree with that. The dairy industry I am sure would be pleased to see any expression of real economic support from this Parliament and secondly that agreement includes significant benefits for other members of their communities—people in the beef industry and in the horticulture industry. Actually dairy farmers care about those people and they care about their communities. They would expect the Greens to change their mind and vote for the Trans-Pacific Partnership agreement.David Seymour: Does the Minister agree with the following quote from the valedictory speech of outgoing Green MP Russel Norman: “Let’s just say it—we have too many cows.”?Mr SPEAKER: Order! I do not think there is any need for that question. I am going to rule it is out of order.