Bennett DavidHon DAVID BENNETT (National—Hamilton East): Thank you Mr Chair. When we look at Part 1 of the bill it repeals the provisions that basically relate to the South Island provision in the legislation that was triggered in 2015 as a number of speakers have said because the South Island milk flow was over 20 percent that went to non-Fonterra factories so the 80 per cent threshold was met and therefore that triggered the ability for the Dairy Industry Restructuring Act regulations not to apply in the South Island.Now this bill in Part 1 talks about how it intends to enable those provisions to still apply even though the legislation has triggered itself in the original Dairy Industry Restructuring Act. Now the original Act the Labour Party has taken a lot of credit for tonight saying that they did that a number of years ago. That is true and we acknowledge that but at that time they set a threshold for the South Island. That is a threshold that has been met and now they are trying to change the threshold that they set earlier. If they were so right in what they did many years ago why do they need to change it again now? That is something I'd like the Minister to answer as to why they actually need to change that threshold now. If that is because they don't believe there is enough competition in the South Island then I need the Minister to say that because some of his colleagues have said to that effect and their words were: wildly monopolistic player" that "needs discipline". The member from Christchurch the new member said that about Fonterra that it was a "wildly monopolistic player" and needed discipline. So that side of the House obviously has it in for Fonterra. That was that member's exact words. He saw this legislation and the review that will accompany it as a direct attempt to attack Fonterra. If you ever needed proof of that just ask that member who said those comments on the Labour side.Now there are some parts of the legislation that have been removed from the original Act that was taken to this House some time ago and one of those was the ability to take milk from new conversions. That was something that had been agreed upon between the parties involved and I want to hear from the Minister why he decided that clause had to be removed from this bill. What was so offensive to the current Minister that he felt that he couldn't have that in this bill now? That clause effectively enabled Fonterra to say no to new conversions that would increase their requirement to have stainless steel provision at a time when they didn't actually need to do it and it would actually mean that you would achieve the opposite goal.What we've heard from the Labour Green and New Zealand First members tonight is they're talking about trying to build a value-add industry. That is the whole mantra that we have heard tonight. The provision of extra stainless steel for anybody that decides they want to do a new conversion and join Fonterra means that Fonterra actually has to provide a lot more infrastructure especially in a fast-growing area like the South Island than it actually needs for the production of its product. So naturally that means that that extra infrastructure goes into very commodity-type products like milk powder rather than the value-add products that the Minister has said he wants to see happen in the industry.So I want to know from the Minister why he took that clause out because that clause actually would include an incentive for Fonterra to actually work on the value-add and not provide more provision for stainless steel just as a backup. And if you want to get that in the terminology of Fonterra shareholders for example if you look at Fonterra Shareholders' Council chairman Duncan Coull he has said this about open entry "Open entry leaves Fonterra and its farmers as guarantors for the industry underwriting risk for competitors forcing us to potentially build more capacity than needed and making it harder for us to invest in the highest returning manufacturing assets." Those are the direct words of the Fonterra Shareholders' Council chair. That open-entry policy which the Minister has taken out of this bill directly conflicts with his desire to see a more value-added industry. The problem Fonterra finds is that because it has to be open to any potential milk supply especially in the South then it has to provide a lot more plant and that plant is traditionally commodity-based rather than the value-added that we all in this House seek to see from the industry. So I just can't understand why the Minister has taken that clause out when it actually and effectively achieves the purpose he seeks to see in the industry going forward. There's no reason why he would take it out. It's not something that needs to be debated in this House. He's made it very clear to the House that that is his goal and there would be no opposition from this side of House to that goal being achieved either because everybody wants to see a higher value-add to Fonterra in its distribution of the products that it makes it. Fonterra itself wants that as well and Fonterra has made those kinds of commitments in its investments in recent years where it can but it is also hamstrung by that need to provide that stainless steel and to provide that capacity because of that open-entry clause.In the South Island there is significant competition. The original threshold that was set of the 80 percent has been met and there is competition beyond that point. There are new companies starting up in that area all the time. There's a new company starting in the North Island. For example if you look at Ōtorohanga it recently had an announcement of a new company there. There is a very competitive milk market out there and Fonterra is being hamstrung by this legislation. The Minister had an opportunity to do two or three things that were in the legislation that the previous Minister had put forward that would enable us to achieve some of those value-added processes and he has declined to do that. So I want the Minister to explain why he is taking that out why he doesn't believe that leaving that in there would assist in the value-add process that he has come to this House to seek.If we look at Fonterra itself their response to the Commerce Commission's review said "The requirement to accept all milk acts as a disincentive to Fonterra to invest in the right kind of assets and undermines the industry's ability to grow value-add business and maximise returns to NZ farmers as we are all committed to do." Why then does the Minister take that clause out? If he genuinely wanted to see a value-add industry the industry itself has met the threshold test that was set to it a number of years ago. The industry itself has said that it is willing to invest in that kind of infrastructure and yet this Minister feels that he can make an executive decision that is bigger than the industry. That's the danger that we will find in this review. We've heard it from the people in the Opposition in this Chamber here tonight. They all believe that they know better for Fonterra and for New Zealand farmers than what Fonterra itself knows. They all say that. The Greens are saying "We want water quality. We want to look at environmental land use." The Labour Party is looking at exactly the same. They want labour rights. They're looking at the contracting provisions of Fonterra in regard to supplies. Those parties are dictating to New Zealand's business the very decisions that a business makes. I don't see any of them being qualified to be the CEO of Fonterra. I don't see any of them being qualified to be elected to the board of Fonterra. All I see is a group of Labour - Green - New Zealand First politicians that want to go after that industry and this is their mechanism to do it.Hon Dr David Clark: What a load of rubbish!Hon DAVID BENNETT: That member over there says "load of rubbish". This is true. This is what is happening in this room here tonight because otherwise you would just pass the legislation as it is otherwise there's no point in going into urgency otherwise there's no point in going to a review. Why do you want to do the review? It is because it has to be a wider purpose. [Bell rung]"