Woods MeganNEW ZEALAND HORTICULTURE EXPORT AUTHORITY AMENDMENT BILLSecond ReadingDebate resumed from 13 October.Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to take a call on this piece of legislation which Labour is supporting. This is a piece of legislation that amends the 1987 piece of legislation that was brought in by the then Labour Government. What it does is make this legislation fit for purpose for the 21st century and it makes a number of minor amendments that none the less do make it more modern and more forward facing.The piece of legislation that was brought in in 1987 was quite groundbreaking in itself. It developed a system and a set of rules whereby a group of growers of various horticultural products could come together and agree on a strategy; they could come together and agree on how they were going to act and how they were going to operate in particular markets. What they were empowered to do under this 1987 legislation was something that is only usually reserved for Parliament and that was to effectively tax. It was to issue a levy so that there were some resources that allowed grower groups to go in and do market development.We can look at the evidence: in 1988 around the time this legislation was put into place New Zealand had approximately $50 million worth of horticultural exports going out around the world. Last year in 2015 that figure was $300 million and the horticultural sector of course has ambition to get that even higher. To date there are nine horticultural groups that have placed themselves under the regime that is governed by this piece of legislation and around 54 exporters.What this amendment does is bring the legislation up to speed: to realise that actually we might need our horticultural groups to develop more nuanced strategies; that it might need to be a little bit more geographically specific; and that the products might need to be differentiated into different markets. It may be for entry into some of the high-value Asian markets that emphasising the health benefits of particular cultivars and particular varietals of particular horticultural products will be the best way to achieve premium for those exporters or it may be that it is more of a commodity strategy in other markets.This does allow grower groups to move beyond a one-size-fits-all strategy and be much more flexible and much more able to maximise what it is that they can get as a return for their products in that market. It also clarifies the requirements that are imposed on these product groups to enter into or exit from the export framework established by the Act. Having these rules crystal clear is obviously really important when we are giving the authority through a piece of legislation to another group to effectively tax. This is quite a unique ability that we are bestowing through this legislation and that of course has to be clearly governed.One of the reasons for bringing this legislation in in 1987 was that we had a number of single operators who were thinking about getting one shipment across a particular border and were not thinking about developing that market and what the long-term plan for either that product or that market was. One of the ideas in the legislation was to put the rules around that and what this legislation does is bring up the penalty system that is contained under the authority to make it so that anyone who does flout the rules anyone who does not act in the best interests of New Zealand Inc." and who does not act in the best interests of a particular product group and the particular market development opportunity that exists for a particular product actually gets the penalties that are there.What we also see is that there is the ability for information sharing which is established under this Act and that information sharing between the authority—so that is the Horticultural Export Authority—and the Ministry for Primary Industries and the New Zealand Customs Service makes sense in many ways. No one is disputing that. But what we have to do is have good rules around the formalisation of that information sharing between the authority and the various other agencies so that we can make sure that we do have the right rules that govern that and do not put anything at risk.What we do need to do is make sure that we are always looking for ways for us to get a premium for our products in export markets. Our horticultural products are seen around the world as premium in many instances. We have many examples that we can point to where we have seen these collective efforts that have gone in and not only developed particular markets but also done that around particular products.No greater example can exist than that of Zespri. Zespri has not only developed the story around the kiwifruit but also through the fact of acting collectively as a group invested very heavily in research and development as well. The fact that this was a grower group that was well poised to respond to the Psa bacterium when it attacked the kiwifruit plant is in no small part a credit to the fact that there was a very large germplasm collection that could be looked back on to see what remedies lay within other cultivars and other types of plants that were there that could be more responsive to that.What we see is that when we have industries that work in a collective manner when we have industries that band together and not only develop collective research and development strategies that are around industry good but invest in the public-good science that lies behind that and when we also have industry groups that are focused on putting together market strategies and market entry strategies that are vitally important for our horticultural products then we do see the kind of growth that we have seen since the establishment of this authority in 1987: from that $50 million to $300 million.The legislation does need updating. We do need the ability for our grower groups to have the flexibility to respond differently around different products and in different markets and I think that is something that we fully support and it is the reason that Labour is supporting this piece of legislation."