Nash Stuart: New Zealand Horticulture Export Authority Amendment Bill — First ReadingText is incorporated into the Bound VolumeNash Stuart: New Zealand Horticulture Export Authority Amendment Bill — First Reading[Sitting date: 29 March 2016. Volume:712;Page:9979. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): I rise to speak to the New Zealand Horticulture Export Authority Amendment Bill with pleasure actually and I have not said that recently. There have been a number of bills that have gone through this House that I do not think have been particularly good for New Zealand but this is a step forward.There are a couple of points that the last speaker Barbara Kuriger made that I would just like to elaborate on. She talked about promoting the ”New Zealand Inc.” brand. I think that is vitally important but the problem we have got is exactly the problem that Dr Nick Smith alluded to in the House today in question time. We have a real problem around Brand New Zealand or the “clean green” 100% Pure New Zealand” brand because it is what we go to the world with. This started out as a tourism brand and it was so successful that it sort of morphed into our unique selling proposition and our global competitive advantage. But it does not matter what this bill—the New Zealand Horticulture Export Authority Amendment Bill—does or what it achieves or how it drives efficiencies because if we do not live our brand globally then our ability to claim a premium off anything grown here especially in horticulture is greatly diminished.I would argue that one of the things that this Government has done very poorly is actually manage our global brand. I would say that we have got about 5 years to get this right. What we cannot have is another exposé that was done by I think the Financial Times or one of these big broadsheets overseas which actually sent people over here and blew this “clean green” “100% Pure New Zealand” brand out of the water. Luckily it did not get much resonance. The Prime Minister was quizzed on it on Letterman—he made a little bit of a fool of himself but that is not unusual so anyway—and it died a death. That should have been a wake-up call to us. It should have been a wake-up call that said: “Do you know what? If we don’t get this right then we will turn into just another small economy selling commodities into a growing global economy.”I suppose one of the issues I have is—you know we say that we can feed the world. We cannot. We can feed about 40 million people—that is the estimate that I have heard. It could be slightly more or it could be slightly less but it is around about 40 million people. We should be aiming for that ultra-premium end of the market—the Chinese market the American market the European market. Brand New Zealand has to stand for something and if it does not stand for something—if we cannot get a premium off this—then why would people buy it?The last speaker talked about how this bill and the amendments in this bill will help reduce costs. Well this is amending quite an old piece of legislation—1987 it has been alluded to—so there will have been a number of efficiencies already gained by our growers. But the thing for me is that we still live at the bottom of the world. Our transport costs are high whether we airfreight or sea freight and usually the sorts of products we are talking about require airfreight or they require quite expensive refrigerated containers for sea freight. It is still expensive just getting things into the market so if we cannot get a premium on that then why would people buy Brand New Zealand?I say this with a fair amount of skin in the game—70 percent of apples grown in New Zealand come from Hawke’s Bay. Hawke’s Bay at this point in time is absolutely booming because apples are doing well the grapes are doing well and our horticulture is going great guns. We have had a great summer—you know one of those summers where the rain falls but not too hard. There is enough warmth in the soil the grass grows and there is a lot of hay around. It is fantastic. But if we do not get our brand right then there will be no markets to sell this to or if there are markets to sell this to it will be just another commodity where our brand means absolutely nothing.The last speaker was right in saying that we do need to be smarter in how we go to the world. Let me give you one example. We have the New Zealand - China free-trade agreement. It is worth a substantial amount of money to our exporters. But—Hon Nathan Guy: What about TPP Stuart?STUART NASH: Well we have not got the Trans-Pacific Partnership at all Mr Guy—you should know that—at the moment. We have the Chinese free-trade agreement which is a fantastic agreement because it works for both countries unlike some of the others that are out there at the moment. But what I am saying with regard to this bill is that taking a grower out of New Zealand and putting him or her into a market where the culture is different the language is different and the customs are different—let alone the supply chains—is like taking a New Zealand company and putting it on Mars. It is so different. So what we need to be able to do is aggregate supply and go to these markets with a certain offering.We know in some areas like—for example wine is a classic case. If a winery cannot supply enough wine for 12 months of the year then it does not matter how good it is because you will not get these high-end American restaurants for example buying it. And it is the same with our products. That is why the ability to aggregate supply is vital. Keep in mind that this is a voluntary body—there is nothing compulsory about this at all—so if growers do not see value in this then of course they will not be part of it.I will tell you one thing that I will be interested in seeing and that is who submits and on what they submit. I note from the departmental disclosure statement that there has been a fair amount of external consultation including obviously all the relevant Government departments—which have been consulted as is always the case—but I do note that in 2012 and early 2013 there was a discussion paper released and workshops in Mount Maunganui and Wellington. These have been endorsed by the growers so it will be interesting to see the sort of feedback that comes in. It may be one of those bills where the work has been done there is nothing more to add you will get the officials coming in from the various departments and saying “This is fantastic.” and it goes through like that. I would not be surprised and what I think we will see—and I do not sit on the Primary Production Committee I must admit. But what I think we will see is a number of growers coming in and using this as an opportunity to send a message to the Government that we do need to do these things better.We are an export-led economy we are a primary industries - based economy and it is important that we get things right. And this is just one of those steps—it is why we are very supportive of it. As Damien O’Connor alluded to—well most of the speakers have actually alluded to it—the legislation has been around since 1987 but the world has changed significantly since 1987. We know this and that is why we need the mechanisms to be a lot more sophisticated a lot smarter and a lot more engaged in the way we do things.Channel to market is a classic case. You aggregate supply—this has happened well in the timber industry; not so much in the log industry which is a bit of a disaster at the moment. But in the timber industry there is the classic case of a company where what it does is it goes around the various sawmills it aggregates supply and it meets demand so we are basically talking about a trade here. Trade has been around since you know the ancient Greeks and beforehand but this is about doing it smarter. And what it is also recognising is that certain growers and manufacturers have a core competency and that core competency is not necessarily international market development or international marketing. I think that is fair enough because as I mentioned it costs a lot of money for example for even a large grower to have an office in China or to hire an international market development manager or an international marketing manager let alone understand supply chains and all those various things that it takes to actually get product into market.So this bill is timely. It perhaps should have been done a couple of years earlier but that is OK—this is what we are dealing with now. But as mentioned it will be very interesting to see what the submitters do and how this piece of legislation comes back to the House after the select committee process.The one takeaway that I would like to leave is that I would just like to really reiterate that we have got to get our global brand offering sorted. We have got to start living this brand because if we do not and if what we are taking to the market is exposed as a falsehood—and I am not going to say “a lie” but certainly “a falsehood”—then we run the very real risk of not only damaging our global competitive advantage but also destroying it and we simply cannot afford to have that happen. I wonder whether any of the submitters are going to be talking about that because I would urge them to do this. They can digress slightly. Select committees allow them to do that and I am sure the chair would allow this as well.But we do support this bill. It is a timely piece of legislation—bring it on. Let us hope it is in place before too long because this is the sort of thing we need to see. Thank you very much.Bill read a first time.Bill referred to the Primary Production Committee.