Brownlee Gerry; Rurawhe AdrianHon GERRY BROWNLEE (National—Ilam): This bill most certainly needs a huge amount of attention from a select committee because in its current state it will do very little of what the previous speaker Mark Patterson has claimed it might and I want to explain why that is.Firstly we have supported it strongly to get to this stage in the House and we'll support it going to a select committee and we'll engage at that select committee to try and get a bill that is more reasonable for the House. But we make no commitments on the bill as it's written. It may better be named as an amendment bill to the Receiverships Act 1993 because in fact all it does is put one step in front of the moment that the receivership is enacted and at that point it is too late. If someone has got so far into debt so far down the track of not being able to put together a solvent package that's going to see them successfully farm their way out of their difficulties it's too late. So for the bill while it does set out a proposal for how mediation might take place a select committee will need to consider exactly where that moment might be triggered and how it might be triggered.I was a little alarmed to hear about the cases that the member who just spoke previously raised—particularly his suggestion that there was a family caught by effectively mezzanine financing all their way through. That would tend to tell me that there was some advice that might have been taken earlier that might have helped them. I'm not being critical of that family. I understand the stress they'll have gone through but we can't pretend that this bill is an answer to that sort of problem.I think it's also worth noting the big connection between the productivity of a farming property the debt level on that property and the equity that's held in that property. And when you hear the member previously talking about the $60 billion worth of agricultural debt in this country that may not be the problem that the figure itself might suggest. If in fact that represents a reasonable percentage of the 100 percent equity in those farming properties and that equity is backed by a production percentage as well then that's just the sort of thing you would expect to happen in a dynamic and growing economy. It is not necessarily a problem.People will choose to invest more and more in their farms and if that proposition isn't accepted then look at somewhere like Marlborough where once upon a time not so long ago perhaps two decades ago—which might seem like a long time to some younger people in this House—you'd be lucky to get around about $30 an acre for sheep farming activities. But the huge investment that went into converting some of those properties from either sheep farms or in many cases orchards up to high-quality producing grape operations for the wine industry sees now the return per hectare thousands of times greater than was the case back then by any kind of adjusted measure that one might like to put on it.So I don't think it's reasonable always to assume that the debt levels in agriculture represent the problem itself. The problem is where the productive capacity of a property falls below the cost of meeting the debt servicing or the capital returns on those properties. So I think there's a whole lot for a select committee to dive into and consider. Further I think it would be reasonable to say that it is not in the interest of any lending institution in New Zealand that we have a runaway problem with farm failures in this country. So the interest for the Bankers' Association and for other banks to come along and to participate in that select committee process I think is quite high. Many of them I'm sure will tell good stories about how they do—and I don't mean that in a derogatory way; factual stories—engage with the rural communities do engage with agricultural producers to ensure that they do have access to capital at the times that they need it and that they do have a clearer understanding of cash flow management in what is effectively no matter what the operation a somewhat seasonal income picture for each of those properties.I note that it's always easy to point to the terrible cases that exist but we shouldn't also assume that if you're not a very good farmer then the huge amount of work that goes in by other farmers to meet their commitments to manage their cash flows and to organise their debt structures should be set aside for that individual on the basis that somehow mortgage payments can be optional. It's simply not the reality or realistic for people to assume that. I think in this effort to say—well if a lending institution can see someone getting into trouble early intervention and an acceptance by the party that is heading in that direction of a process is a good place for us to get to.One of the triggers for us wanting to support this bill coming into the House a little sooner than might have been the case had it languished in the members' ballot is that we do have the hugely challenging M. bovis activity that's going on in New Zealand at the moment—hugely threatening to many many farms. It will be interesting to see exactly how the Ministry for Primary Industries (MPI) eventually settle on how they should tackle it. There are farmers who've had to slaughter their stock. There are farmers who will have a limited amount of return on the slaughtered animals because of the stage at which they have to go to the works and there is a process that's being negotiated at the moment for some compensation in that area. What we were concerned about was there being nothing for farmers to turn to if they were dependent upon a financial plan on their property that meant that they in a disrupted circumstance fell into an even worse position than they might otherwise.This bill does have a high degree of merit as a concept but not as a bill itself and if anyone wants any convincing of that they need only read the explanatory note's first sentence where it says … Debt Mediation as a mandatory step before the appointment of a receiver in respect of Agricultural Debt." If it is simply a mandatory procedure a mandatory step then it's just something they do or would do prior to calling in the receivers. It may in fact work to the disadvantage of some farming operations. But having a point clearly defined where a lender is obliged to speak to their lendee in order to protect the capital that ordinary New Zealanders have invested in the bank by way of their savings or any other particular instrument they might like to use is I think a reasonable thing.We look forward to the discussions that we'll pursue in the select committee. We'll take full part in those and our agricultural team will be very very interested to see that we get the right sort of bill coming out of it. But we as it stands while voting for it to go to that select committee for that discussion could not support it through a third reading as it's currently structured because the claims that are made for it cannot be delivered by this bill.With those comments I look forward to the rest of the debate and hopefully for a number of other parties in the House—well there aren't too many are there; only one the major one—to indicate that they too have an interest in ensuring that there is a good quality bill come out of this in the end. It may even be that the Minister of Agriculture stands up this afternoon in the House and indicates that the Government has an interest in taking it over as a Government bill so that there are appropriate officials from Treasury perhaps from MPI and from the amorphous empire known as the Ministry of Business Innovation and Employment putting their stamp on it providing the best of advice available in civil service to ensure that the engagement with the financial sector in New Zealand is positive and focused on the best outcome for farmers. You know it's too easy for us all to think as city people that farmers are just people who wander around the paddocks looking after their animals and nothing more. They are complex businesses these days and the skills that are needed go well beyond just the physical skills that most of us would associate with farming. This bill could be something shaped into a serious support for their activity which is very important for this country's economy.ASSISTANT SPEAKER (Adrian Rurawhe): Just for the removal of doubt I omitted to say earlier: "The question is That the motion be agreed to.""