Lees-Galloway Iain: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
Lees-Galloway Iain: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
[Volume:667;Page:14509] 
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.