Guy NathanHon NATHAN GUY (National—Ōtaki): Thank you very much Madam Speaker. It's a wonderful opportunity to discuss the Farm Debt Mediation Bill (No 2). The first question for the Government is: why is this bill the second bill? What happened to the first bill?Hon David Bennett: Yeah where's Darroch?Hon NATHAN GUY: We should traverse that. Yes Darroch Ball stood up and baited this side of the House when we were raising concerns about banks circling farmers as a result of the response to do with Mycoplasma bovis. We were hearing that farmers were under pressure from banks so we agreed to support the New Zealand First bill which had been around since 1999. Yet when we discovered the bill in the select committee officials came in and said Pretty much it's like an old mangy dog." and it needed to be put down. It was unworkable.So there's New Zealand First had a bill since 1999—the old mangy dog bill. It comes into the select committee; senior officials come in and say it's unworkable. That's why we find ourselves in this position now with this second farm debt mediation bill in front of the Parliament. I felt that that was a real embarrassment. Officials came in and said pretty much the select committee—the Primary Production Committee—couldn't panel-beat the bill well enough to get it in a shape so it could come back into the House so it needed to be discharged. So while we will hear speeches this afternoon from New Zealand First saying it's their idea if they'd done their homework way back in 1999 this bill could indeed have been law by now. But now we are faced with the facts of this bill.When I read this bill I think it's a hell of a lot better than the mangy dog one. This is basically the New South Wales model cut and pasted and inserted into a Government bill. Indeed the National Party have decided to support it but we want to interrogate it through the select committee process. We have got a lot of questions. How can we be convinced that it's only going to cost $6000 to go through this mediation process cut fifty-fifty between the banker and the farmer? We want to be convinced in the select committee that costs aren't going to run away on our hard-working farmers going through this process.I'm also led to believe that the Ministry for Primary Industries (MPI) think that they have the wherewithal to be able to administer this scheme. Why on earth would MPI want to be getting involved in something with the banks? You would've thought that Treasury would be the logical place to provide the advice and oversee this and run the bill. The other question that we will have to interrogate in the select committee is: what is the real definition of a farm? So yes we will support it through the first reading but we will need to be convinced in the select committee that we can make the changes that we believe are necessary to give us some certainty going forward.Also what has been mentioned by the previous speaker Jenny Salesa is the size and the quantum of farm debt. It is now about $63 billion and about $42 billion of that is held in the New Zealand dairy industry. For people listening or watching Parliament this afternoon they'll think "Well that's a horrendously big number."—and yes it is a large number. It's not as big as the national household debt but yes it is a large number. What I want to say is that that's because of the positivity that farmers and growers have in the primary sector of New Zealand. They have basically gone and borrowed to expand their business to purchase the property next door to lift their overall performance whether it's through fertility lifting their animal genetics or whether it's development more water reticulation doing the right thing for the environment fencing off and excluding stock from waterways. It's not acknowledged anywhere on that side of the House that farmers over the last five years have invested about a billion dollars in enhancing and improving the environment fencing off the distance from Wellington to Chicago and back again. A lot of riparian planting is already under way.So yes this debt number is large but we shouldn't forget that that has helped to underpin and grow the overall New Zealand economy. But right now we see ourselves in a different situation having just come off the large Fieldays event—120000 people coming through those gates over four days the largest in the Southern Hemisphere. Those farmers that I spoke to up there when they look out and they see the returns being quite profitable and healthy for the sectors they are concerned about sentiment. A lot of that sentiment is coming from the worry of this Government. We have the billion trees programme which is now causing some issues out there in rural New Zealand. No one wants to see a sea of trees and rural communities hollowed out because if that occurs that will put more pressure on banks and indeed may mean that this Farm Debt Mediation Bill is needed.Also what's occurring out there right now is a real issue with the Reserve Bank and whether they decide to make changes with the capital that individual banks need to hold therefore forcing more pressure on to farmers who have a larger amount of debt than most. If the Reserve Bank make the changes that they are talking about it's likely to cost the farmers with the most debt 25c to 30c a kilogram of milk solids. That is a massive cost off the bottom line. So right now farmers are concerned about that.They are also mindful of the fact even though they've done all of those things that I outlined before enhancing the environment they know that this Government wants to do more in terms of freshwater regulations. And if this Government goes hard on the primary sector it will indeed drive up more costs. And what will farmers do if they have more costs and more taxes like fuel taxes imposed on them? They will turn to the bank and likely say "We need more money."—so therefore more debt. So those are the things that are playing out in rural New Zealand right now. The other one that is significant is this horrendously high and unrealistic methane target. And there's a hell of a long way to play out in the select committee.In conclusion I also want to talk about dairy land sale prices being back and it depends on who you refer to but it's in the vicinity of 10 to 20 percent in the last 12 months. We know that banks are being tougher and this bill may indeed be necessary and give farmers a little bit of comfort that there is a mediation process between them and the banks. My advice to farmers is: if you get to this point where mediation is necessary you've gone too far. Farmers need to be very mindful of the fact that they need to seek professional advice and not get in this situation. It's very hard to determine the number of mortgagee sales in New Zealand. No one will really tell you because they tend to be bad in terms of reputational damage for the banks. So they are tending to be managed exits out of the industry. But I am hearing and getting more and more concerned about those numbers increasing.So I say to the House this afternoon that the National Party will support this bill through the first reading but we have some concerns and I've outlined those this afternoon and we will use the select committee process to interrogate those concerns to make sure that this bill is not like the first mangy dog bill from New Zealand First that had to be put down but that it is actually going to be workable and it's going to be practical and make a difference for our farmers."