Sage Eugenie: Debate on Budget Policy StatementText is incorporated into the Bound VolumeSage Eugenie: Debate on Budget Policy Statement[Sitting date: 09 March 2016. Volume:711;Page:9538. Text is incorporated into the Bound Volume.]EUGENIE SAGE (Green): Tēnā koe Mr Assistant Speaker. National’s economic strategy is looking increasingly tattered and this year’s Budget will be against a very different backdrop from recent years. National can no longer crow about a brighter future for New Zealand because even in its rural heartland things are looking increasingly grim. It is all because the National Government and Bill English have bet the farm on dairy expansion and the problems with that apology for an economic strategy are becoming increasingly clear.We have had a goal set by the Government to double primary sector exports by 2025 and it certainly encouraged the dairy industry to be the major player there. That of course as the Green Party has been saying for some time has had huge environmental impacts in terms of water quality—it is doing enormous harm to our rivers lakes and aquifers—and major damage with greenhouse gas emissions increasing and the climate pollution that is associated with that.But now we are seeing the economic and social consequences for farming and rural businesses of that failure to diversify of that focus on the primary sector and particularly dairying. Just recently Fonterra’s move to extend its payment date to 90 days asking suppliers to slash their costs and the crash in dairy payout prices shows the real strain that the sector is under. It is the Government’s strategy of focusing on one product to one market—milk—and its failure to commit to sufficient investment in innovation to diversify our export base that is the major cause of the problems we are having today. The Government has sat on the sidelines while manufacturing has struggled with a high dollar and it has just failed to invest in innovation.And now we have got heartbreak for a lot of farming families. It was distressing listening to Northland farmer Ben Smith on Radio New Zealand National this morning talking about selling his stock and half his land. I have met Ben Smith. He is an innovative farmer. He featured on Country Calendar for the way he was using surplus fruit and vegetables to feed his stock. He cares about the state of his local rivers and now he is being forced into this position because National has led farmers like Ben up the garden path.It has pushed dairying as the route to economic success both for individual farm businesses and for New Zealand Inc. It has focused on production production production—increasing production rather than adding value rather than diversifying and rather than investing in innovation. It has not cared enough about the profitability for individual farmers nor has it cared enough about the economic and environmental cost of that focus on dairy.So now when milk is no longer the white gold that National thought it was when the payout prices have crashed and there is no sign of a sharp pick-up any time soon because of the glut in milk and because of the reduced demand from China and Russia we would expect the Government to have a plan. Yet what did we hear from Bill English this morning? He hopes that farmers will “get through”. And again in question time today he recognises that there will be a number of farming families that are distressed but he just hopes that they will adapt and get through. There has been a total failure by the Government to recognise that we are not like the rest of the OECD. New Zealand invests roughly half of what other countries in the OECD do in research and development and significantly less than other small advanced economies.So instead of investing more in innovation we have had the Government tag $400 million for subsidised handouts to irrigation and $120 million going to Crown Irrigation Investments. Those sorts of subsidies—the Government’s handouts to the Ruataniwha Water Storage Scheme to Hawke’s Bay Regional Investment Company to Central Plains Water—mean that farmers are encouraged to convert from dryland farming to dairy to expand dairying on to lands that are inappropriate because they are drought prone and to think that dairy farming can happen anywhere. Those sorts of handouts have encouraged farmers to intensify to move to much more expensive high-capital-cost models where we are importing feed and there are high costs for production. That means there is no buffer no resilience when dairy payouts fall. So it is a spendthrift model that the Government is applying across the country. Thank you.