Norman Russel William: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
Norman Russel William: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
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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.