Flavell Te Ururoa: Dairy Industry Restructuring Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Flavell Te Ururoa: Dairy Industry Restructuring Amendment Bill — In Committee 
[Sitting date: 17 July 2012. Volume:681;Page:3556. Text is incorporated into the Bound Volume.] 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora Mr Chairperson. Tena koe. Kia ora tatou katoa. I just want to take a brief call to make sure on the record that we speak to the amendment in my name and that we put the Maori Party case in the discussion about that amendment. I do appreciate the comments from Mr Colin King in respect of the discussion at the Primary Production Committee. Unfortunately we were unable to be there. But he would appreciate as much as probably most of us in the House that we have been lobbied pretty hard from left right and centre as a Maori party so it is incumbent on us to put a view and indeed put up amendments that we believe are acting in the interests of those people who have lobbied us as best we can. Of course we are talking about 1700 dairy industry workers farm owners farmers and farmhands who as others have said are Maori who are in this industry. So it is important that we put their case forward. 
In the bigger picture the Maori Party is focused on empowering communities whanau and hapu to develop responses to issues like these which is great. That impacts on them; it is important that they have a say. We want to invest in business and Maori communities that incentivise Maori privately and collectively owned business growth. We want to ensure that there are opportunities for partnerships joint ventures and other economic development collaborations with Maori people and tangata whenua and we also want to be committed to establishing effective strategies for engaging Maori communities and advancing Maori representation. 
These are pretty huge goals a tough ask but they do lead us to ask one question of the Government and it is this: why is it that the Government is insisting on imposing a competition policy test on the dairy industry that is different from inconsistent with and tougher than the standard that applies to every other industry in New Zealand? That is the question. For our part we want to ensure that those 1700 dairy industry workers farm owners farmers and farmhands who are Maori and those Maori industries such as Miraka stand to benefit from the same opportunities as every other industry. 
I said earlier that we have been lobbied and we have also gone the opposite way and canvassed widely including various Maori trusts and incorporations. Many of these trusts supply Fonterra directly—some do not. We have also spoken to independent milk processors who act in competition with Fonterra. Generally we accept that the interests of Maori farmers lie with the fortunes of Fonterra since most of their farms are basically with it. It is for that reason that we intend to support with amendment the Dairy Industry Restructuring Amendment Bill. But I did want to point out that we have been concerned with the lack of the definition around the term “contestability”. We have broached it with a number of the other parties and I suppose the proof will be in the pudding shortly when it comes to the vote. 
We wish to ensure that whilst supporting Fonterra to be as successful as it possibly can we are clear that we do not want to stifle the whole notion of potential competition in Aotearoa. We have therefore suggested two amendments that provide some clarity around competition in this particular sector. We are particularly proud of the efforts of Miraka and its achievements to date as we are also proud of Fonterra as it has gone about its work. And although our farms still supply to Fonterra we need to ensure that they are able to become independent milk processors also if that is indeed their journey. 
We believe these amendments will assist in that journey. The amendment in my name comprises two amendments. If I could mention them briefly: firstly an amendment to clause 5 that is a definition of the term “contestability” which is a critical term in both sections 4(f)—in other words the purpose of the bill—and section 150A the purpose of subpart 5A. The amendment reads as follows: that contestability in relation to the New Zealand market for raw milk means a market for the purchase of raw milk from farmers “in which a competitor to new co-op that is at least as efficient as new co-op could expect to earn a reasonable return on its efficient investment and contestability has a corresponding meaning.” The intent of this change is to restore a level playing field in the dairy industry by removing Fonterra’s ability to set an artificially high or stretched milk price. 
 The second amendment which is to new section 150A in clause 13 is to replace the word “while” with the word “by”. It is pretty insignificant in some senses but quite important in the bigger picture. It is intended to clarify the relationship between the two heads contained in this section—that is an efficient Fonterra and contestable markets—by stating that you get an efficient Fonterra via contestable markets rather than an officially high milk price. These are our two amendments which I suspect may not necessarily get overwhelming support but they are certainly our response to lobbying and to the information given to us by both sides. As I say we are prepared to support the bill but we hope that consideration is given to this issue of contestability in particular as it is a crucial issue that has been expressed to us by a number of people. We have placed it in front of the Parliament and I suppose we leave it for Parliament to make a decision accordingly. Kia ora tatou.