O'Connor Damien: Supplementary Estimates Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill — Second ReadingText is incorporated into the Bound VolumeO'Connor Damien: Supplementary Estimates Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill — Second Reading[Sitting date: 26 June 2013. Volume:691;Page:11351. Text is incorporated into the Bound Volume.]Supplementary EstimatesHon DAMIEN O’CONNOR (Labour—West Coast - Tasman):It is outrageous that the Tories over there can dare mention the words “fair” and “taxation” in the same sentence. This bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill does change some taxation provisions—I accept that. But let us not forget that this Government came into office and changed the taxation regimefirstly to cut taxes lower taxes reduce taxes—call it what you like—for the most wealthy in this country or for the wealthy who pay tax because many do not anyway. The second thing the Government did was increase GST which is the most regressive tax we have. That is the poorer people of this country pay the most GST relative to their incomes. This bill is an attempt the best National Government attempt the best Tory attempt to bring fairness to the taxation system.We have heard about the different technical provisions in the bill. As Labour spokesman on primary industries I guess it is only fair that I talk about the livestock valuation parts of this bill. I accept that the technical amendments there will probably bring some more consistency. There will be some farmers who might be aggrieved. There have been exceptions made on the back of advice from the Finance and Expenditure Committee and I think the bill is an improvement in that way.What I would like to do because it is relevant is raise deadstock issues not livestock issues. This Government has been embroiled with incompetence a lack of oversight and a lack of direction by the Minister on deadstock issues for some time. The first is meat which is the result of deadstock. Most farmers try their best to manage that process—not to have it come around too early—so that they can provide the livestock to become deadstock and then to become meat for export. But the National Government in a blind ideological approach to Government services has thrown the responsibility for farming for forestry for fishing for food safety for biosecurity and for food certification—all of these things—into one incompetent agency the Ministry for Primary Industries which has been shown over the last few weeks to be unable to do the job that it should be doing or that the separate agencies should be doing. I do not blame it. There has been major upheaval. Unlike the Minister over there the Minister for Primary Industries who dumped on his officials I do not blame them. I blame the Government for throwing them all into one agency and then saying: “Carry on as you were.” The deadstock management issues in this country are hopeless both going out—David Bennett: What a load of crap.Hon DAMIEN O’CONNOR: Well the member over there jokes about it. If you want to talk to people in the meat industry Mr Bennett they will tell you that they do not trust the Minister’s explanation as to what happened at the Chinese border. In fact the Minister’s explanation is somewhat contrary and contradictory about when he was informed. When did he first know about this? When was the Ministry for Primary Industries notified about this?David Bennett: What about the bill?Hon DAMIEN O’CONNOR: We will find out. Do not worry Mr Bennett. We will find out the truth of that because it is absolutely important that the response to not only the livestock taxation issues but the deadstock management issues by this Government is appropriate.Can I say there is another issue not about the export of deadstock but about the import of deadstock. On 12 May—that goes back some weeks almost 6 weeks—a farmer in the Bay of Plenty identified a limb in palm kernel expeller. One and a half million tonnes of this comes in. It is a by-product of the palm oil industry and it is brought into this country to help the livestock so they do not become deadstock. The Labour Government originally allowed about 80000 tonnes of this in total during a period of drought in the early 2000s. That trade has now grown to 1.5 million tonnes. There is a dependency on it by the dairy industry and others to keep livestock from becoming deadstock when there are feed shortages and also to boost production. The dependency is somewhat dangerous given the reality that the new Ministry for Primary Industries overseen by an incompetent Minister and an incompetent Government hasbeen unable to provide the security through the biosecurity pathway and we saw a limb of an animal come into this country.It took effectively from 12 May until 17 June for the Ministry for Primary Industries to identify the limb—to take it away and test it and then to announce that it was a cloven-hoofed animal. A cloven-hoofed animal means that it has two bits of hoof like this. I say this for the city slickers you included Mr Assistant Speaker Robertson maybe although I know that you do know these things. Cloven-hoofed animals are the ones that are affected by foot-and-mouth disease. They are the ones that can possibly carry that coming from countries where foot-and-mouth is endemic—Malaysia or Indonesia. But the Ministry for Primary Industries could not tell us where that palm kernel expeller came from. Its systems of oversight for the importation of palm kernel expeller are totally inadequate.Two farmers went to Malaysia off their own bat went on an official tour and then took a side tour. They thought they would take the initiative to really investigate what was going on. They wrote a report and delivered it to the Ministry for Primary Industries last November and the Minister and the Government sent officials over only just in the last month or so to check out the claims in the report. They came back and said no there is low risk and there are very safe systems for the most part. In fact if you read the report carefully it does leave a few gaps there. I will not say that the report was untruthful; I will say that the Minister should have taken his rose-tinted glasses off when he read the report. Clearly in it there were signals that there are major gaps in the system and the discovery of an animal limb in palm kernel expeller on a Bay of Plenty farm is a major concern for primary sectors in this country.Let us go back to the point about the systems that the Ministry for Primary Industries uses to check. On 12 May it got the limb on 17 June it said it was not a sheep or a New Zealand animal and then today—and I find it quite frankly unbelievable and will be following up on it—it said no it was a sheep. Well if it takes that long to work out what a leg of a sheep is in this country how good are the systems that we are relying on?This bill here makes some attempt to make some adjustments to implement a National Government taxation system that is fair they say. It addresses some issues for livestock taxation but what I say in this House tonight is that this Government has ignored deadstock meat industry and biosecurity issues that are of huge significance to our economy. The Minister of Revenue over there might think that we are broadening the scope of the bill. The taxation gathered through these measures goes to pay for core Government services. If this incompetent Government allows foot-and-mouth disease into this country because it has not run a proper biosecurity system we will not have livestock taxation issues.This Government cut funding for biosecurity. It has had warning after warning that we are at risk particularly through palm kernel expeller yet did it in the last Budget increase funding? No it did not. Did it cut funding? Well yes it did. The Minister for Primary Industries says: “Oh there was a carry-over.” I do not believe the Minister that there was a carry-over. I believe there was a cut to front-line funding. When you ask people in the biosecurity system they say they are demoralised they are concerned and they are alarmed with what is going on.I say here in this House: if this incompetent Government allows in such a disease our economy will be on its knees the farming sector will be on its knees and we will not have to worry about livestock valuation issues because we will have hundreds of thousands of deadstock. That is not what we need in this economy and it is about time the National Government got on and focused on the real issues like biosecurity protection for our primary sectors.