Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
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Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill 
First Reading 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
 on behalf of the  
Minister of Agriculture 
: I move  
That the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill be considered by the Primary Production Committee that the committee present its final report on or before 28 February 2011 and that the committee have authority to meet at any time while the House is sitting except during questions for oral answer and during an evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
Dairy exports contributed 27 percent of the value of total merchandise exports for the year ended March 2010 and it is estimated that the dairy production and processing industries contribute approximately 2.5 percent to GDP. Given the industry size it is important to ensure its long-term growth and dynamic efficiency. The Dairy Industry Restructuring Act 2001 promotes dynamic efficiency of the New Zealand dairy industry by regulating the activities of the dominant market player Fonterra. The pro-competition provisions ensure that despite its dominant market position Fonterra operates in an environment that is contestable—that is one where it faces potential competitive pressures. This environment drives Fonterra and the wider dairy industry to improve economic performance. However the Dairy Industry Restructuring Act contains sunset clauses because this regulatory intervention is necessary only until there is sufficient competitive pressure on Fonterra to ensure efficient market outcomes without that additional regulation. The current sunset clause could be met as early as April next year in the South Island. 
A competition analysis of the New Zealand dairy industry found that without the regulatory provisions contained in the Dairy Industry Restructuring Act there is unlikely to be sufficient competition to ensure the efficient operation of the New Zealand dairy markets at the time the sunset clauses are met. Consequently in July this year Cabinet agreed on a proposal that effectively extends the pro-competition provisions of the Dairy Industry Restructuring Act. This bill therefore amends the sunset clauses in the Dairy Industry Restructuring Act by resetting the market share thresholds that have to be met in order for the pro-competition provisions to expire. 
The new market share thresholds in the North Island are that at least 20 percent of milk solids must be collected by independent processors in a season and in the South Island at least 20 percent of milk solids outside the boundaries of the West Coast Regional Council must be collected by independent processors in a season. Before allowing the pro-competition provisions to expire it is crucial to examine the extent of competitive pressure that would be applied on Fonterra and the potential impact on the long-term growth and dynamic efficiency of the dairy industry in the absence of these provisions. 
This bill therefore puts in a place a new process so that when the market share threshold is reached in either the North Island or the South Island it triggers a comprehensive competitive review of the New Zealand dairy markets. At that time the Minister of Agriculture in consultation with the Minister of Commerce would devise and publish terms of reference for that review which would be undertaken either by the Commerce Commission or by officials depending on the complexity depth of analysis and information requirements. The review would consider such things as the relative market share the number scale and location of existing competitors the barriers to entry for potential new competitors and the expected impact and application of the Commerce Act. 
On receipt of the report the Minister of Agriculture would be required to notify in the  
Gazette 
 within 90 days his or her response including any intended action. The pro-competition provisions would then lapse irrespective of that response at the end of the following season unless legislative change was made in the meantime. If the Government considered that the state of competition in the dairy industry was insufficient at the time of the review there would be time to promote a new bill in Parliament that would see the Dairy Industry Restructuring Act in full or in part extended further. In effect this creates a window between the thresholds being met and the Dairy Industry Restructuring Act expiring in order to give enough time for the Government of the day to review an amended Dairy Industry Restructuring Act if necessary to meet policy objectives at the time. 
In order for the Government to know when the thresholds have been met it has to have access to information about the collection of milk in the New Zealand dairy markets. The bill therefore includes a requirement that dairy processors keep records relating to milk collection. Processors already collect this information so this obligation does not impose any additional compliance costs on processors; it simply provides a regulatory backstop to make sure that the Minister will always have access to the necessary information. The current rate of independent processor entry and expansion indicates that it could potentially be 5 to 10 years until either one of the new thresholds would be reached and the review of the state of competition in the dairy industry undertaken. At some point the transition should be made to a dairy industry that does not need industry-specific competition law and can rely on general competition law only. However the current market structure means that additional regulation is still required to ensure the contestability of milk supply and the dynamic efficiency of New Zealand dairy markets. I commend this bill to the House. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 Although I was somewhat distracted throughout that speech from Maurice Williamson I am guessing from what I heard the Minister say that the speech was written a week or so ago probably by officials. It is somewhat redundant now because just yesterday—and the Minister may not know this—his Government announced a review of all these regulations believe it or not. 
The one thing I can say about the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill is that it proves that the Minister of Agriculture is intelligent because it has been said to me that anyone who does not change his or her mind does not have one. I can tell members that the Minister of Agriculture has changed his mind on this particular issue. A number of months ago he was saying on the advice of his officials that we had to bring this legislation into the House and extend the thresholds and time lines for dairy regulations because that is the best way to ensure that we have an efficient dairy industry. Well Fonterra got on the phone. It rang around a few people put on a bit of pressure and lo and behold yesterday the National Government announced that it will review the regulations. 
Minister Williamson has unfortunately been left to carry the baby because the Minister of Agriculture is way over in Europe at the moment. That is a shame really because he might have been able to bring some explanation to the House. I am sure that Mr Ardern will do so. He knows of the stupidity of the whole process. He knows that on the basis of the officials’ advice this legislation is being extended to guarantee the supply of milk from New Zealand farmers through their own company Fonterra to their competitors when and where they want it. It is an absolutely bizarre situation. This situation involves companies like Synlait of which Ruth Richardson was a director and Open Country Cheese of which Wyatt Creech was a director. I am not saying for a moment that any political pressure was brought to bear in this case but the fact is that those two companies in particular—Open Country Cheese and Synlait—get a guaranteed supply of milk where and when they want it almost and it is supplied by the farmer-owned company Fonterra. That is unfair. 
If we go back to the situation of why these regulations are in place we note that when Fonterra was formed it would have effectively been the monopoly supplier of milk to the whole dairy industry—with a couple of exceptions: Tatua and Westland Cooperative Dairy—for people who needed milk to manufacture milk-based products such as chocolates other cheeses other high-value products you name it. The regulations were needed so that those small purchasers of milk were able to guarantee supply and certainty for their business and their shareholders. The officials advised at that time that an amount of milk should be supplied to the industry. Those companies could ring up and get a ready reliable supply and run a business of value-added products. We want to create—and the Labour Party still supports—innovation and growth in the dairy industry. Value-added is exactly where we have to go. 
There was a reconsideration of that process and consideration of another process of supplying the milk because the analysis said that the supply was not only reliable and regular but also underpriced so a subsidy was going to the competitors of Fonterra. We recommended in Government that there be an auction system; I acknowledge the Hon Jim Anderton’s consideration of this issue. We arrived at the position that we needed a proper auction system and that we would move towards that system but we did not get there quickly enough and an extension was needed. However this bill lifts the threshold. The bill in the House at the moment is effectively redundant given the announcement yesterday. We are wasting the House’s time but never mind that; the National Government has wasted the House’s time on most of its legislation and we will have to fix up the mess when we come back into Government. 
On this particular issue the alarming thing about this bill is that the Government has effectively said that Fonterra should be at maximum 80 percent of the market in this country—Mr Ardern knows this—down from about 95 percent. Some say that dominance is a monopoly control while others say that the strength to negotiate with supermarkets around the world has made for the success of the dairy industry in the past. If the National Government is determined to reduce the size of Fonterra to 80 percent of the market and it is determined—or was; I am not too sure now given yesterday’s announcement—under this legislation that Fonterra will continue to supply milk on demand to Synlait Open Country Cheese Cadbury’s and other worthwhile users of milk then clearly there is some unfairness. Many many questions will be asked in the select committee. 
It is perhaps good that the Minister has changed his mind because one of the things that has emerged more recently is that with the changing international market place for funds flowing around New Zealand has a sound economy because of good management by the previous Labour Government. People appreciate that if they invest in New Zealand then they are likely to get a return on that investment. They will get their investment back. That has not occurred around the world in all areas of investment I have to say. We are a good bet and we are a good place to invest in so the funds floating around at the moment are likely to consider New Zealand for investment purposes. 
In fact just a couple of days ago the Government allowed the single biggest sale of farmland in this country ever—the single biggest sale—to occur without a murmur. There was not a murmur. Federated Farmers—no doubt prompted by their chief executive Conor English—came out and said something. They did not have to. Why a farmer organisation would come out and endorse at first announcement the sale of the Maniototo farm is beyond me. Why would they endorse it? It means that their farmer members will have to pay more for farmland into the future and it will make the viability of the operations less and less certain. It is bizarre that Federated Farmers should have said anything about it. They came out in my view because they had to support their Tory mates in Government on a sale that should have been intervened on. This was the single biggest sale ever less than a month after the insincere John Key said he would toughen up in this area. Yes right! 
Bill English has said that he is quite happy to have a sale go to anyone anywhere for any price; John Key said that he was not quite so sure. Then the Crafar farms situation came along and he said that we do not want to be tenants in our own land. The National Government has just shown that it has two faces on this issue. Mr Ardern who should have been Minister of Agriculture knows the truth in my argument. There is real concern about what is happening. 
This bill is a waste of time because the National Government announced a review into all of these regulations yesterday—the day before it brought this legislation to the House. What a waste of time. 
Hon Maurice Williamson 
: Not all of them. The member is wrong. 
Hon DAMIEN O’CONNOR 
: Mr Williamson got up and made a speech on behalf of a Minister who is swanning around in Europe or Japan. He knows it was a crock. He knows that what was announced yesterday makes this bill redundant. What a bizarre situation. The National Government has made a mockery of this House. 
We need to show more consistent oversight for the dairy industry and the primary production sectors into the future. Those sectors need to know whether there will be massive foreign investment. Will Fonterra be allowed to thrive or will it have to keep supplying its competitors? What is the situation? If the Minister is not prepared to ask the questions then I assure members that the select committee will be. I know that the chairman of the select committee will allow those questions. He knows they have to be asked. His ministerial colleagues have been too afraid to do so because they do not know what they think about foreign investment and they do not know what they think about Fonterra—who should own it and how big it should get. Until those questions are answered our economy is under threat. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 It is always interesting to follow the previous member for West Coast - Tasman Damien O’Connor particularly on dairy industry issues. In fact the member was chair of the Primary Production Committee at the time that the Dairy Industry Restructuring Act 2001 passed through that committee so I know that he knows a little bit about the detail. I also congratulate Minister Williamson on his fine contribution to the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. I know his history is in the dairy industry as well. He grew up on a dairy farm which I know he does not really want advertised much in the heart of the Waikato and has a history there. 
The Fonterra debate is interesting and has been occurring since the time that Fonterra was formed. Fonterra is only part of the dairy industry. There are now 20 exporting companies in the industry but Fonterra is by far the most dominant player. It is responsible for 84 percent of product exported out of New Zealand—84 percent. We hear all these figures bandied around. Sometimes it is useful to have a few facts injected into the debate. Eighty-four percent of dairy product is exported out of New Zealand which is around 91 to 92 percent of total milk processed in the country. That includes the regulated milk which this legislation covers. 
The debate on raw milk is only part of the equation. The review that was announced yesterday will look at the eligibility of competitors for raw milk. That will be the interesting part of the equation going forward I guess. There is a debate and it is a legitimate one about who should be eligible to receive up to 50 million litres of raw milk delivered to their processing site in a Fonterra tanker. It is a legitimate debate. I look forward to the submission process in the Primary Production Committee when it takes place. 
Going forward if we do not protect the critical mass that Fonterra has then we are in danger of fracturing it as we see in the meat and wool industry and we are in danger of losing value. There is no doubt about that. I do not know why it is difficult to understand in this country; when we play the Springboks in rugby we send the All Blacks who are a total monopoly. There is no competition within New Zealand with the All Blacks. But when we sell cheese meat wool or products like those then we need to send the Taranaki team to sell them. That part of it is something that I have been challenged by and there has been vigorous debate over the whole time that I have been involved in this process. 
The select committee process looked at the change in the principle Act that we made recently of the farm-gate price plus 10c and a whole lot of interesting issues came up about how some of the very small entrepreneurial and sometimes unique companies in the world can be protected. This bill is designed to try to get a balance in how we provide milk to these small cottage industries although some of them are not so small. Some of them provide a very very diverse dynamic within the private capacity of their companies and also within the New Zealand dairy industry as a whole. How do we protect them so they do not get run over by a large performer and player like Fonterra at the same time as we allow Fonterra to go forth and export to 150 countries and continue to maintain a strong market branding and a strong market position? To strike that balance is challenging. 
The review that the Minister of Agriculture announced yesterday is I think very timely. It is certainly something I have pushed for for a long time. I know that those who are shareholders of Fonterra—bear in mind that there are only 10300 shareholders in Fonterra of which I am one and I declare an interest in that—at this point in time are keen to see the detail on how that raw milk competition can be fairly regulated so that they are not disadvantaged at the same time as providing that raw milk which is so necessary to some of those small companies. 
I look forward to the bill coming before the Primary Production Committee. I know most of the players who will submit to that committee and I look forward to seeing them there. I also know that the Labour Opposition is basically in support of the concept despite some of the rhetoric that we have heard from the other side of the House. I am sure that at the end of that process a sensible pragmatic approach will be found and the bill will pass through Parliament in a timely way. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 It is a pleasure to speak on the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill this afternoon. The original Dairy Industry Restructuring Bill was introduced by the then Minister of Agriculture Jim Sutton to facilitate the amalgamation of New Zealand’s two largest dairy cooperatives New Zealand Dairy Group and Kiwi Cooperative Dairies Ltd and the absorption of the New Zealand Dairy Board by the new cooperative Fonterra. The provisions that we are amending and discussing today were to ensure that such a large cooperative a potential monopoly would not stifle competition within the industry. We believe that regulation to support and ensure competition is an important part of a developing and strong free-market economy so the Opposition supports this bill. We support the amendment of the sunset clause to increase the market threshold after which Fonterra no longer has to provide 5 percent of its dairy solids at a regulated price. 
We do so because we agree with the Government’s concern that the current thresholds may not be sufficient to adequately support a thriving competitive market but we question why we are debating this bill the day after the Government announced its review. We wonder whether we will be back in a short period of time to debate the same issues again and amend the bill one more time. It mirrors the larger issue of the increasing sale of farmland to foreign investors. This risks pushing Kiwis off their own farms and handing over shareholding rights in Fonterra to offshore investors and offshore owners. That is a larger debate that needs to be had. Although this bill is necessary and Labour will support it we wonder whether the timing is a little bit odd when there is that larger debate that needs to be had. 
Whilst I am on my feet I add that Palmerston North takes a strong interest in Fonterra’s activities. We have the Fonterra Research Centre located within our city; therefore the way it operates within the market and its strength as an international player is of extreme interest to my electorate. We appreciate the fact that Fonterra brings a lot of money into the country through its innovation and the creation of products like savoury products with reduced salt probiotic products that assist in gut health and the immune system a product called Anlene which assists with bone health and the reduction of osteoporosis and low-calorie high-protein chocolate bars and other such products. 
Interestingly very few of those products are available in New Zealand which I suppose is a sad thing but our market is so small that a player like Fonterra has to be in the international market. That means it is bringing money into New Zealand. A lot of those products promote good health within the population and it is a little bit sad that products like that are not available within New Zealand. But that is just an aside to note that Palmerston North appreciates the presence of Fonterra within our community and within our economy and the fact that it provides a large number of jobs to graduates of Massey University who go on to work at Fonterra and at a number of the nearby Crown research institutes as well. 
I am interested to see what the ACT Party’s position is on this bill—I see Mr Ardern is nodding—because as I said this is necessary regulation to ensure a healthy and competitive market. I know that is something that the ACT Party is interested in but sometimes it worries about the introduction of regulation and red tape. I will be very interested to see where the ACT Party comes down on this because Federated Farmers’ initial response has not been too positive about this bill. It has expressed some concerns and I know that Lachlan McKenzie who is the federation’s dairy chairman has suggested that the Government is missing an open goal to ensure real farm-gate competition in prolonging its bias towards independence. I suppose that Federated Farmers expresses some of the concerns that we in the Opposition have expressed as well about subsidies to foreign-owned milk processors and the continuing support they are receiving. 
Although we support this framework and the need to enhance competition within the market we know that those subsidies cannot go on for ever. At some point in time those milk processing companies will have to stand on their own feet. We share the Government’s concern that they are not at that point yet and that continued regulation is important to ensure that the market can be developed further. 
It goes without saying that the Opposition supports this bill. We look forward to rigorous debate at the select committee to receiving plenty of submissions—no doubt Federated Farmers will be among them—and to the continued progress of this bill. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 The Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill extends the subsidies from New Zealand farmers to overseas owners of competing dairy companies. Its purpose is to move money from New Zealand dairy farmers and give it to the overseas owners of Fonterra’s competitors in New Zealand. In fact paradoxically one of the effects of this bill will be that New Zealand dairy farmers will be subsidising the Communist Party of China. It seems extraordinary but it is true. The reason it is true is that Synlait one of the competitors of Fonterra has just been bought by Bright Dairy and Food Co. Ltd. Bright Dairy is in fact fully owned by a combination of the Shanghai provincial government and the Chinese central government. They are the two parties that own Bright Dairy. Bright Dairy is now buying Synlait. Synlait through this legislation which is being extended here today is subsidised by Fonterra’s shareholders. So Fonterra’s shareholders are in reality not even in a metaphorical sense but in a literal sense subsidising the Communist Party of China. If this Parliament thinks it is a good idea for Fonterra’s shareholders to subsidise the Communist Party of China then it will vote for this bill. 
I hear National and Labour members saying they have lots of concerns about the bill but they will still vote for it. They will still have their ideological burp “Oh we must do this and vote for this bill.” But why should Fonterra’s shareholders subsidise the Communist Party of China? That is the question. Why would the New Zealand Parliament pass legislation to extend subsidies to the Communist Party of China which are due to expire some time next year? We already have a special law to subsidise Fonterra’s competitors. That law will expire probably some time next year once Fonterra’s competitors reach a certain size of the market some time next year. We are now shifting the goalposts on poor old Fonterra’s shareholders and saying that originally we had this law that said it had only to subsidise its competitors until they reached a certain size. But now we are shifting the goalposts and Fonterra has to subsidise its competitors so they can become even larger and Fonterra will continue to subsidise them well into the future—possibly for ever—if they do not get large enough. 
Fonterra will have to provide milk at a guaranteed price on a guaranteed time in its trucks and to its competitors such as Synlait Open Country Cheese and New Zealand Dairy Group all of which have very significant overseas ownership. In fact some of them are totally overseas owned and controlled. Fonterra will have to do that possibly for ever. Fonterra is our most important single company a cooperative no less and is one of the world’s great cooperative companies—a producers’ cooperative. Surely this is one of the great things we aspire to and it demonstrates the fantastic nature of cooperation as opposed to competition. Fonterra—a great New Zealand cooperative—will have to subsidise the Communist Party of China competitor called Synlait. So Synlait is the competitor to Fonterra in New Zealand and as a result of the vote this afternoon to extend these subsidies because National and Labour will vote for this stupid bill New Zealand dairy farmers will be punished. The dairy farmers have cooperated which makes a lot of sense—cooperation is a really valuable thing—and have been so effective at building the New Zealand dairy industry into an international giant and they will be punished because we have some ideological position that says we must subsidise Fonterra’s competitors in New Zealand. These overseas-owned competitors are trying to buy up New Zealand’s processing facilities and are trying to buy up New Zealand dairy land so that they can undercut Fonterra and slowly take over the New Zealand dairy sector but National and Labour say: “No Fonterra you must subsidise the Communist Party of China.” Well that is really brainy is it not! The New Zealand Parliament says that Fonterra’s shareholders have to subsidise the Communist Party of China competitor called Synlait in New Zealand which is fully owned by the Communist Party of China. That is pretty daft. 
One would have to be a fairly hard-right ideological kind of person to think that we should continue with this set of rules. When we set them up Fonterra had a certain set of goals. We said that once there was a certain amount of competition in the system then Fonterra would not have to subsidise its competitors any more. That will happen probably some time next year. Now we are saying that is not good enough any more. Now that there is this level of competition in the sector we will move the goalposts and Fonterra will have to subsidise those companies more and more until they are big enough. When they get big enough who knows? National and Labour might vote for another rule change. It seems that Fonterra is to be punished for ever for being successful. Fonterra and all the dairy farmers who own Fonterra producers’ cooperatives are to be further punished for being so successful at building the New Zealand dairy sector. 
The Green Party thinks this is a stupid idea. The Green Party has its disagreements with Fonterra. The way it treats rivers is terrible; there is no question about it. We have put enormous pressure on Fonterra to clean up its act and it would be great if it did. But the idea of a producers’ cooperative getting together presenting one face to the world for the New Zealand dairy sector is a really clever idea. It was invented by a bunch of dairy farmers in New Zealand a long time ago and they were right. Do members remember that dairy farmers were the ones whom everyone looked down on? It used to be that sheep farmers were the aristocracy and those “filthy old dairy farmers” had to go out at 5 o’clock in the morning and do the milking and everyone looked down on them. Well dairy farmers are the ones who are having the last laugh now because they got together and formed a cooperative—unlike the meat industry and the sheep-wool industry. The dairy farmers formed a cooperative and they have been incredibly efficient. So now National and Labour are getting together and saying that we cannot have that. They have been too successful; they have to be punished for another few years. 
The Green Party certainly thinks that we want a set of rules in place that protect New Zealand producers particularly the small specialist producers so that they can access milk. But we can establish such a set of rules. We do not have to provide massive subsidies to these foreign-owned competitors to Fonterra in order to make sure that we have adequate milk supplies at an affordable price to New Zealand - owned processors operating in our country. We do not have to have a whole set of special rules that say there have to be massive subsidies running from Fonterra to its overseas-owned competitors. 
We have to ask whether this is a perversion of the original Dairy Industry Restructuring Act. When the Act was originally established nobody imagined that Synlait owned by the Communist Party of China would be undercutting and undermining Fonterra in New Zealand. Nobody imagined that we would have a global land grab which is under way at the moment whereby countries are seeking to buy up land in other countries. We have seen it particularly from China which is actively buying up land all over the planet and we have seen it from South Korea and other places. Those countries have an active global land strategy and it makes perfect sense for China. They also have a strategy of gaining access to resources—in particular food and minerals. So the strategy in New Zealand for the Communist Party of China is very simple: it wants to get vertical integration from land through processing facilities and export the product back to China in order to guarantee food supply and security in China. It makes a lot of sense for the Communist Party of China to do that and it is pretty organised and a bit smarter than this Parliament. But it is not acting in New Zealand’s best interests. 
It might shock members to know this but the Communist Party of China does not have the best interests of New Zealand in its heart of hearts. So when we pass legislation that benefits the Communist Party of China which will result in extra costs on Fonterra shareholders it is not really acting in the best interests of New Zealand. Some would call it a bit of economic treachery. Why we would pass a law that states that Fonterra shareholders have to subsidise the Communist Party of China is hard to fathom because it does not have the best interests of New Zealand at its heart; believe it or not. So why would we pass a law that requires Fonterra shareholders through its success to subsidise Synlait which is fully owned by Bright Dairy and owned by the Communist Party of China? The New Zealand Parliament says yes it will pass that law and it will extend the special subsidies for however many years we like because that is what this legislation states. That there is no sunset clause any more is really beyond the pale. 
The Green Party will not vote for this legislation; it is daft. This is not acting in New Zealand’s national interests. If we were to act in our national interests we would look after Fonterra. We would also look after the New Zealand processors in our country. We would present one face to the world so that we can maximise the benefit to the New Zealand dairy sector. This is stupid law. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I applaud the speeches from the excellent Minister the right honourable Hon Maurice Williamson and the excellent chair of the Primary Production Committee Shane Ardern—they gave excellent addresses on this Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. I have to say that Fonterra is a fantastic company for New Zealand and provides a large majority of its income from its exports and the hard work of its farmers. The farmers do an extraordinary job so I would like to acknowledge them. National has a proud history of supporting New Zealand farmers quite contrary to the Opposition and I find it interesting that we have a communist bagging another communist. This year we announced— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I do not know whether you were focusing on the comments that the member just made but they have been ruled out of order on a number of occasions and although it might not be the grievous insult that it was some years ago to describe a member in that way it is something I think he would take offence at. Certainly it has been ruled out by Speaker after Speaker. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I was listening very carefully and I recall the words very carefully. The member referring to the bagging of one by another did not identify a person in particular so it was indirect in its reference. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The member said that it was the member she had just been listening to. Only one person spoke before her. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I did not recall what she said in that way. I heard her say that it was interesting to hear a communist bag a communist. Whether or not it was the person who spoke immediately before the only person who made the connection directly was the member sitting here. I say to the person speaking that I will not rule it out but the point has been well made by Mr Mallard that she should not bring people into disrepute in this House and that is a term that has been taken as offensive before. The member sailed very close to the wind but not over it. I invite her to heed the warning and carry on. 
SANDRA GOUDIE 
: Thank you Mr Assistant Speaker Barker and I will keep sailing. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I am doing this reluctantly because as you know I do not like arguing with you but that was not a marginal case—or one close to the line. That was a member indicating that another member of this House was a communist. I was not the only one who made that connection. I think it is fair to say that the co-leader of the Green Party made that connection as well. I indicated that I would take the point of order. It was absolutely blatant and it was I think offensive. It has been so for a long time. I know I am relitigating a ruling and I know that that is not a healthy thing to do in this House but I ask you to reflect on the ruling. Just because the comment was made by a relatively junior member whom members do not take seriously does not mean that you should not rule in the same way you would if the Hon—the right honourable as she described him—Maurice Williamson had made the comments. 
Hon John Carter 
: I have a number of points. Firstly your ruling has been challenged. You have already made your ruling. Secondly a member cannot take offence on behalf of another member. Thirdly if the co-leader of the Green Party had taken offence she was quite capable of making that point herself. Quite honestly the member did not refer to anyone directly. I was sitting right beside her and heard what she said. She did not state it as the member has said; she just talked about one person to another. The matter should lie as you have ruled. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: There are several points I want to make about this to the Hon Trevor Mallard. Once a matter is ruled it is ruled and that is it; there is no going back. Whether the ruling is right or wrong that is the end of the matter. If I have made a mistake in that ruling I just have to live with it. Having said to the member that I am not going to require her to withdraw and apologise I am not then going to turn round and say that she has to withdraw and apologise. It is just like in sport: if a referee awards a try the try stands and that is the end of the matter. The matter is closed—game set and match. 
The second element is that the Hon John Carter makes the point that members can take offence only on behalf of themselves; they cannot take offence on behalf of someone else. That rule has been longstanding in this House. I do not want to go over and relitigate this matter any more but the third point I make is that I thought on balance the member made the comment and I did not hear—had I heard the member make a reference to a person’s name and the accusation I would have seen it in a different light. She did not. One had to make the connection—to be here and listen to the whole debate and make all the connections. It was not so easy. But I have chided the member and made it clear to her that those sorts of references and that style are unacceptable and if the member makes them either in this speech or in a subsequent speech I will tell her that she is to withdraw and apologise. That is her final warning. The matter is closed. 
SANDRA GOUDIE 
: I shall continue to laud the excellence of our dairy farmers in New Zealand—in fact of all the agricultural sector—and recognise the hard work they do. Of course I was one of those hard-working dairy farmers and I understand what it takes to produce their export product for the benefit of New Zealand and I applaud them all for that. 
This year in support of the agricultural sector we announced hundreds of millions of dollars for research and development in the rural sector. We are driving the Primary Growth Partnership to boost our rural sectors and the Global Research Alliance on Agricultural Greenhouse Gases to find ways to make our farming sector more efficient productive and environmentally friendly. So we are committed to delivering growth to ensure prosperity for all New Zealanders. A huge part of that is through our agricultural sector and that is why it is so important that we support our agricultural sector. 
I will cover a few specific points in the bill. Concerns have been raised about the eligibility criteria for access by independent processors to the regulated raw milk made available under the Dairy Industry Restructuring Act. The Government shares many of those concerns about the current eligibility criteria and that is why we have committed to reviewing them so that all concerns can be considered in full. And we know that we have the support of the majority of the House for that. The Dairy Industry Restructuring Act 2001 promotes efficiency and the pro-competition provisions ensure that Fonterra operates in an environment that is contestable and where it faces potential competitive pressure. This environment drives Fonterra and the wider dairy industry to improve economic performance. We are looking to have a good discussion around this issue we are pleased that the bill is going forward and we welcome the opportunity to have that discussion. 
SUE MORONEY (Labour) 
: 
 It is indeed a great pleasure to take a call on the first reading of the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. Of course in reality this is not the first time this legislation has been before the House; this bill simply extends very good legislation that was initially brought before this House by a Labour Government. 
Just following on from the last speech made by Sandra Goudie I note that the sector the member was referring to is actually deeply disappointed in the current Government. That sector has worked out—and Federated Farmers has worked out—that this Government does not have a plan. This bill demonstrates that the Government has simply picked up what the previous Labour Government had put in place and is extending those provisions. That is simply what this bill does. The Government picked up what Labour did and decided to do it for a bit longer. I think that demonstrates once again that this Government really does not have any fresh ideas. It does not have a clue about what to do for this sector. 
I was surprised that the previous speaker chose to speak about research and development investment in this sector because that is an area where this Government has performed woefully. One of the first things National did upon taking office was to cancel the Fast Forward Fund. The Fast Forward Fund was brought in by Labour. The dairy industry in particular thoroughly endorsed it because it knew that having large amounts of funding guaranteed going forward for 10 or 15 years was the way of the future. That fund was going to do something comprehensive and yes for the future—not just the here and now which this Government likes to focus on fiddling around with tax swaps and those types of short-term measures. The Fast Forward Fund was actually going to deliver something tangible in terms of research going forward for that sector. 
The dairy sector is the backbone of New Zealand but it can be so much better. It is my belief that the dairy industry sector will really excel—it does pretty well now but it will really excel. Our place in the sun is to produce niche products. That is our place in the sun. We are a food producer and we will do best when we are smart and are ahead of the pack. That is why the Fast Forward Fund was so important. It was going to deliver this country and that industry the ability to be smart and to be ahead of the pack. 
We will not win by producing just more and more volume. Our competitors in the markets that are opening up worldwide for the products the New Zealand dairy industry produces are so much larger and so much closer to those markets and they can produce products much more cheaply. We will not win the race by trying to produce more and more volume more and more cheaply. We will win because we are smarter we have niche products we market them well and we are at the top of the pack not at the bottom of the pack. We will not be going for the low-value high-volume product but the very niche market. 
I do not want to give the impression that Labour is not supporting this bill because of course it is; it is our own piece of work. This Government has run out of ideas and the only thing it can bring forward now is to just extend legislation that the previous Labour Government put in place. 
The bill seeks to extend the period of time that Fonterra must provide fixed-price dairy solids to other dairy processors in order to foster competition in the domestic industry. I will focus on that element for a little bit in this first reading. It is quite interesting to think about fostering competition when we look at the players in the industry. Of course we have Fonterra but we have other competitors such as Open Country Cheese. One of the things I ask the Government to consider is whether it would regulate on that basis so that Fonterra has to have certain obligations towards other players. Is it prepared also to regulate to ensure that competitors like Open Country Cheese have to pay the same wages as Fonterra does for processing milk solids? 
If our memories are not too short I think that we can all remember that about this time last year a major dispute happened in the Waikato in Waharoa. It is a wee community that I happen to know pretty well. It is where my mother was born and raised. In fact the dispute happened right next door to her family farm. That dispute was over the workers of Open Country Cheese—a processor that will benefit from this legislation—being paid significantly less than workers processing milk for Fonterra. I do not think that is fair and I would like the Government to have a good think about this while it considers this bill. 
Why do we not look at having the same wages set within industries? With this bill we are regulating to say that Fonterra must do things to foster competition but on one side of the equation that is a little bit unfair. Fonterra has a collective employment agreement that it negotiated in good faith with the Dairy Workers Union. That collective agreement requires Fonterra to pay decent wages to the people who work in its factories. But Open Country Cheese does not have to pay those same wages. Fonterra has to give Open Country Cheese the dairy solids at a fixed price but can we fix the price for wages in the factories where they will be processed? That is a question that I would really like to hear a Government MP respond to. 
If we are going to have this legislation there is other legislation that needs to be considered also in order to make it fair right across the board so that the same processing costs exist in terms of labour costs. Not only is that fair but also it is good for improving wages but the Government seems to have no clue about that. As we have seen recently wages in this country have been stagnating if not going backwards. It would be good to see some regulations in the dairy processing industry that make it fair and lift wages across the board. I think that would be a really fine thing to see. 
The other issue that this bill causes us to think about is the issue of overseas investment. As we know some of Fonterra’s competitors are owned by foreign interests. Fonterra is a very good example of a cooperative. It is owned by New Zealanders and it competes against companies some of which are owned by foreign investors. That causes me to think about what the Government is doing in reviewing overseas investment which is one of the things it has done recently. But that is not even a half-hearted effort to protect New Zealand against increasing foreign ownership of land. 
Foreigners with access to cheaper capital find the prospect of tax-free capital gains from buying New Zealand land very very attractive but there is no benefit to New Zealand in that. Labour’s position on that issue will be much clearer and stronger. This review makes it even more apparent that Labour is the only party that can be trusted to keep New Zealand in Kiwi hands. 
Hon Maurice Williamson 
: Did Labour allow the sale of land to foreigners? 
SUE MORONEY 
: Maurice Williamson has something to say about this but at question time today the only thing he could tell the House was that he had denied zero land purchases by overseas investors. In fact the Government has been just tinkering around the edges and what it has done does not make any difference. 
National has polled itself to a standstill on that issue. It knows that it is unpopular to sell more land but it has no idea what to do about it. It started off by saying that the review would liberalise overseas investment in New Zealand land. Then the Minister of Finance Bill English said the strategic asset test was a nonsense that it was too confusing and too difficult. So what did the Government do? It kept the same strategic asset test and it added some more confusion to it. That has resulted in the Minister for Land Information Maurice Williamson approving all of the purchases that have come before him. He has not denied approval for any of them because the Government has done nothing real to protect New Zealand’s investment in that regard. 
I conclude by reiterating that Labour is supporting this bill. Why would we not; it was our approach in the first place. This Government has run out of ideas and this bill is an example of that. The only thing that the Government can think to do for dairy industry restructuring is simply extend the time frame of very good legislation that Labour put in place in the first instance. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou e te Whare. I say from the outset that the Maori Party will be supporting the first reading of the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. We do so as we usually do: in order for the debate to be taken outside to the community to allow the nation to have a say about the legislation. Clearly from the view of the Greens through to that of the major bigger parties there is a difference in opinion so we will be supporting the notion of allowing the bill to have some air across the country. 
If I can cut to the chase this bill is designed with the intent of increasing the operating efficiency of the dairy markets in New Zealand by regulating the activities of Fonterra. Its purpose is to ensure that New Zealand markets for dairy goods and services are contestable. Just to put some history to the debate I am not too sure about all of the detail but as far as I can understand it when the Dairy Industry Restructuring Act 2001 came into being it allowed the merger of New Zealand’s two largest dairy cooperatives and the New Zealand Dairy Board to form one single cooperative company—namely Fonterra. At its establishment Fonterra collected approximately 96 percent of New Zealand’s milk production. Given this dominant market position the Government decided to regulate the behaviour of Fonterra in relation to its suppliers and potential competitors to ensure the efficient operation of dairy markets in Aotearoa New Zealand; hence there is the notion of a contestable market. Even if there is only one seller in this case Fonterra the seller may be forced to act as though there were many more sellers. 
What does this bill mean for tangata whenua? I want to state the case just for the record that this nation recognises the enormous contribution that Maori dairy farmers make to our community and our export markets farming as I understand it an effective area of around 720000 hectares. Worth an estimated $7.5 billion Maori are the largest natural grouping of pastoral farmers in New Zealand. Given the collective nature of our landholdings and the number of shareholders they support there is also a strong case for saying they are the most sustainable farmers in New Zealand. 
Maori dairy farmers own an estimated 10 million shares in Fonterra with some of the major players in the sector being large incorporations like the 2006 dairy competition winner Parininihi ki Waitotara Incorporation which has an estimated $50 million of farming interests in Taranaki. Another big player is Wairarapa Moana Inc. which owns two dairy units milking a combined total of about 7200 cows and producing 2.3 million kilograms of milk solids annually. The group also claims assets of around $150 million. The Maori proportion of shares in Fonterra I am led to believe is around 8.3 percent. 
Given this background how will this bill enable Fonterra to be a successful and innovative dairy company and still remain a low-cost commodity producer? How does regulation enable Fonterra to weather any volatility in the market without necessarily sacrificing milk payouts at the expense of farmers? We know that the Fonterra payout is increasingly a barometer for our domestic economic conditions since dairy farmers’ incomes and investment plans are closely tied to international dairy product price movements. It is of fundamental importance to Maori and indeed to the nation that this bill provides certainty in the market although also keeping a strong relationship between New Zealand dairy markets and the Government’s policy direction. 
The key way that this is to be achieved is that the bill sets out the market share thresholds that if met would bring about the expiry of Subpart 5 of Part 2 of the current Dairy Industry Restructuring Act 2001. Subpart 5 provides for effective regulation and transparency of Fonterra’s activities within the dairy industry. Subpart 5 also deals with the expiry of these regulations on a certain condition when the dairy market share threshold is met. Currently if independent processors collect 12.5 percent or more of milk solids within a season the market share threshold is met. Let us remember that Fonterra collected approximately 96 percent of New Zealand’s milk production so there has never been much room for independent operators outside it. The new legislation provides for a more detailed approach in determining when the threshold is actually met and increases that threshold to 20 percent. However the new legislation is very specific in defining the process of determining the threshold and it effectively empowers the Minister of Agriculture to forcibly enact the expiry of this subpart in the event that the threshold is met. 
From our reading of the bill the apparent increase in the power of Government intervention would worry us. In essence this bill affects approximately 1700 dairy industry workers farm owners farmers and farmhands who are Maori. We will be very interested in their views obviously and we would like to hear from them and from the Federation of Maori Authorities. We know that the Federation of Maori Authorities’ dairy cluster has long battled for better Maori representation in relation to Fonterra but has been told that sector representation at a board level cannot happen. We will be interested to hear just how involved the federation has been in the negotiations around changing the threshold. 
As the proud member for Waiariki I will be looking out in particular for the advice of those involved in the Maori-owned Miraka Ltd which I know wants to build a milk processing plant at Mokai about 30 kilometres north-west of Taupo. 
Louise Upston 
: It’s looking great. 
TE URUROA FLAVELL 
: It is looking great. The Miraka partners Wairarapa Moana Inc. and Tuaropaki Ltd have been doing some great work in that particular area. Already dairy farmers in the region are running about 10000 cows between them. The proposed plant is located in the catchment around the Taupo area and it could also take Maori-supplied milk from further north around Rotorua and from other Tuwharetoa-owned land in the region. I suggest that this bill will be very high on Miraka’s agenda in terms of its initiative in establishing an independent plant for the processing and marketing of milk. I want to share with the House the comments of PGG Wrightson’s Maori agribusiness manager Clinton Hemana about the excitement associated with Miraka Ltd. He said: “Maori have been seen as a sleeping giant for some time and this is them coming to life it is the next step forward to pursuing their own path.” 
We welcome all of these views and as I said we will support this bill in its first reading to make sure that we can capture the views across the nation. Kia ora tatou. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 It is my pleasure to speak on the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. The dairy industry is the largest industry in this country. There are 10500 dairy farmers who produce a huge amount of milk and we are the largest exporter of milk and milk products in the world. We are very proud of the quality of products we sell overseas. When one travels overseas one sees the products from New Zealand and feels proud of the quality that is being exported. Anything we do in terms of improving the efficiency of our system and the quality and standards of our products is always welcome. 
I am proud to stand in this House to support the bill because it is intended to improve the dairy industry particularly in its restructuring. The bill sets up new sunset provisions in this restructuring. Along with Government members particularly those on the Primary Production Committee—and I am sure this bill will be coming to that committee—I will be very happy to scrutinise it further. 
The purpose of this bill is very clear. It amends the threshold sunset clause in the Dairy Industry Restructuring Act to increase the market threshold after which Fonterra no longer has to provide 5 percent of the dairy solids at a regulated price. The threshold is currently set at a 12.5 percent market share of the collected raw milk for independent processors in the North Island and at a 10 percent market share in the South Island. These thresholds will likely be reached in May 2011 and 2012 respectively but a more recent analysis of the dairy market suggests that at this stage the independent dairy processor will not be sufficiently developed to operate effectively and provide adequate competition to Fonterra in the domestic dairy processing market. So it is important that we advance the date further into next year and the year after. 
Although we support the bill at the first reading we have some reservations about supporting it further because we want to make sure that when the bill comes to the Primary Production Committee the submissions from various groups in the dairy industry will be taken into account. We also want to make sure that the dairy industry is competitive and that dairy farms and the dairy industry are not taken over by foreign people particularly in relation to the fact raised earlier with regard to what this Government is doing in terms of selling our farms overseas. I know that thousands of hectares of land have been sold into overseas hands in recent times. I was reading the other day that some farms have been sold to universities in America and it will be interesting to see what the Minister Maurice Williamson will do. 
Hon Maurice Williamson 
: We’ve hardly sold anything compared to you lot. I’m ashamed of how little we’ve sold compared to you lot. 
Dr ASHRAF CHOUDHARY 
: I am watching actually; I ask Mr Williamson what he is going to do about those farms being sold to the Chinese. I wonder whether he will sell those farms into Chinese hands. That will be a real test. I have heard the comments that he has been making in recent times about foreigners but it will be very interesting to see what he does about that potential sale to Chinese buyers. I think that that is an issue for all New Zealanders. 
We want to make sure that our land particularly our productive land is kept in our hands and not sold to foreign enterprises. There are people who have a lot of money who want to buy into our farms. It is important that this Government should take cognisance of what New Zealanders are saying in terms of sales to foreigners. 
Labour supports the extension of the threshold at this time but we note that dairy processing companies should not expect this treatment for ever as New Zealanders’ farms could not afford to subsidise them indefinitely. It is both interesting and confusing that this bill is being read just a day after the Minister announced a review of Fonterra’s obligation to supply milk to independent dairy processors. It is interesting that the Minister on one day is saying one thing but today we have the bill coming through. I suppose it has taken some time to prepare the bill but clearly there is a bit of confusion in the Minister’s mind. 
We support the review of Fonterra’s obligation to supply milk to competitors as it is of concern to see companies such as Synlait which is owned by offshore interests being subsidised by New Zealand farmers. That really just mirrors a larger issue whereby the increasing sale of farmland to foreign investors risks pushing Kiwis off farms shareholder rights are being handed over to Fonterra our largest company and our profits from this $20 billion industry are being funnelled offshore. That would be really unfortunate. 
As a scientist with a farming background I can see the potential particularly in Asia. There is huge potential coming up not just for the Chinese market but for the Indian market and the wider Asian and Middle Eastern markets. There is huge potential for milk products. We have to make sure that there is enough competition in the market and that we do the right thing in terms of exporting our products. 
Only a few minutes ago before I came to the House I was speaking with Mr Graeme Peters from the New Zealand Association for Animal Health and Crop Protection. He was telling me about some of the potential issues that could be coming in terms of residues for example in our soils and crops and in the use of chemicals in New Zealand. I think that those issues are concerning New Zealanders as well. We have to make sure that on one hand we have the right products but at the same time we ensure that those products do not carry any residues particularly pesticides in the products we export. There will be pressures particularly of a competitive nature coming from overseas where people want to have products that do not have any residues particularly from chemicals. It is important that as we delve further into the Asian market the products we have not only from our dairying industry but also from the rest of the farming industry are produced to the standards required by customers—and we do that in the EU now and in the American markets. 
Once again I say that Labour supports the bill and we are looking forward to submissions in the Primary Production Committee where we hope to scrutinise this bill further. With those words I support the bill. 
CRAIG FOSS (National—Tukituki) 
: 
 In relation to the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill 2010 there are a couple of points I need to clarify. I notice for the record that previous speakers particularly those from the Opposition are supporting the bill at this stage. The bill is only five-odd pages long so quite how they have managed to fill up 10 minutes on all other topics I do not know. I must also take issue with Mr Russel Norman the co-leader of the Greens. Yes he made an interesting speech but you know he was taking one plus one to equal 36 or something. Actually the bill is five pages long and it simply extends the balance and the competitive pressures that we are putting into the New Zealand dairy industry whilst other reviews are going on and other changes are under way—as other members have spoken about. It is actually as simple as that. There are all sorts of conspiracy theories running around the House but it is very very simple. 
For the record I must address one fact. The previous speaker Dr Ashraf Choudhary and one or two Labour member who spoke before him spoke about sales of New Zealand land to foreign entities. I point out because I have checked with the Minister concerned that this year a grand total of 8000 hectares of farmland have been sold from New Zealanders to offshore players whomever they might be. Some may argue that even that amount may be too much; some may argue it is too small. But we must put everything into context. In the year 2006 when Labour was in Government just in that single year a total of 384000 hectares were sold offshore—384000 hectares were sold in 2006 under the previous Labour Government. That Government followed due process just as the current Government is following due process around such sales. I am not making a judgment about whether that is right or wrong; all I am saying is that when we hear these loud speeches from the other side we must put things in context and work the numbers out. If we do so we will see that in 1 year under this National Government—this year—8000 hectares have been sold offshore and in 2006 384000 hectares of New Zealand land were sold to entities offshore under the previous Labour Government which was supported by the Green Party at that time. I needed to make that clear. 
I am very very proud of the New Zealand dairy industry—very proud. It has made some mistakes on the way but I am hugely bullish in respect of where the industry is going and its upside. Like many of the entities in that sector there is a growing awareness of the need for environmental integrity in relation to the products that are produced and sold. We fully acknowledge that and I fully acknowledge the steps that the industry has taken. But I resent it when some members tar all farmers—or all dairy farmers in this instance—with the same brush. Most farmers I know are hugely concerned about looking after the environment and being custodians of it for their children and the next generation. 
I say very quickly that some of the commentators have missed one of the key points of the need for this bill. For Fonterra and the New Zealand dairy industry to compete and to gain access to markets offshore they must have domestic competitive pressures within New Zealand. Otherwise they will come up with trade issues within the jurisdictions where they are trying to maintain quota. So that is a key point. That is why in conjunction with other measures such as the review announced yesterday it is relatively harmless but very significant that this bill is in place today. I look forward to working on it at the Primary Production Committee with other members. The review that was announced yesterday will address many of the concerns that members have raised in this House. Thank you. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to have the last word so to speak on the first reading of the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. As I do so I reiterate those fine words that have been uttered today about the success of the dairy industry. 
But I will touch on a subject that is fairly close to my heart. I can remember dairy farming when we used to put our milk into 10-gallon or 45-litre cans and we would lug those around. Technology has certainly been applied to the dairy industry and it is that innovation that has created a range of products today that certainly meet the needs of a modern society. We are living in a global economy. We have a globally competitive organisation called Fonterra; it is incredibly successful. That having been said I tell members that we do lumber it with some pretty balancing sorts of requirements and one of those is to pick up milk no matter where the milk is produced in New Zealand. We certainly do expect an enormous amount of vigour and enthusiasm from Fonterra’s management and the 10000-odd farmers who are its shareholders. 
When we look at dairy farming in the context of what it has meant to New Zealand over the last hundred-odd years we see that it has been an opportunity for many families to get on to farms and that is one thing that the National Party is very very proud of. Down in Marlborough down in Canterbury in the Waikato in the Manawatu in Northland and all over New Zealand in places like that we have seen very large properties cut up and farming practices change to milking cows and to harvesting the product from growing grass. So when we look at the context of where we have got to today with the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill we can see that we are just critiquing the provisions to the extent that we are enhancing them as we move forward. We are giving certainty to the industry certainty to the banking fraternity and confidence in the dairy industry. 
One thing that would be appropriate to mention at this time is the tax cuts—the switch in the balance of the economy on 1 October that occurred courtesy of Budget 2010. It will do a great deal for those dairy farmers. It will enable them to continue investing in their properties investing in the provinces investing in training and investing in research and development. This bill is an excellent bill and I look forward to working on it in the Primary Production Committee. 
A party vote was called for on the question  
That the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill be now read a first time. 
Ayes 112 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a first time. 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
 on behalf of the  
Minister of Agriculture 
: I move  
That the Primary Production Committee consider the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill 
 that the committee report finally to the House on or before 28 February 2011 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
Motion agreed to.