Ardern Shane: Dairy Industry Restructuring Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Ardern Shane: Dairy Industry Restructuring Amendment Bill — Second Reading 
[Sitting date: 14 June 2012. Volume:680;Page:3032. Text is incorporated into the Bound Volume.] 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 It is a pleasure to rise in this debate on the Dairy Industry Restructuring Amendment Bill. Before I start my discussion I need to declare an interest as I through a family trust am a shareholder in Fonterra. I want to thank the Primary Production Committee members and the officials—the long-suffering officials—who were taken round and round the paddock many times. Mr Deputy Speaker I am sure you are pretty aware with the close eye you were keeping on proceedings there of just how much that was the case. I will not make mention of the membership of the committee entirely because I fear I might be in breach of Standing Orders but the wisdom that was brought to the job by a number of members on that committee was well appreciated.  
As the Minister for Primary Industries said we received 99 submissions and we heard 43. The importance of this decision on “New Zealand Inc.”—and the previous speaker Shane Jones touched on that a number of times—I do not think can be overstated. Fonterra is the largest company in New Zealand. It is the biggest exporter in New Zealand. The industry itself as a whole including the independents is by far the biggest part of the New Zealand export industry. So getting this right is hugely important to “New Zealand Inc.” and not putting up any barriers or other such things that might stand in the way of that type of growth is absolutely essential.  
I guess the question is why is the legislation needed and where it came from. I think it is worth reminding those who might be listening to the debate that it actually came from the industry itself. Fonterra over a number of years had a look at its capital structure identified that it potentially had a substantial redemption risk and came to the Government seeking some kind of redress through the legislation that is before us to introduce what it describes as a permanent capital model. That is where the concept of Trading Among Farmers was born. As the Minister rightly stated—and there is confusion amongst some of the shareholders of Fonterra and the farming sector at large—this legislation is enabling. It does not require TAF. If the farmers themselves decide and the board of directors itself decides on 25 June—this month—not to proceed with TAF then it will not proceed.  
In the view of the committee we worked tirelessly to achieve a structure that would allow the company to carry out that wish if that is the majority view of those who are part of that decision making. The legislation should not be a political football and I was heartened by the fact that there is still some hope of getting Labour across the line in the Committee stage. I was disappointed to hear the Hon Shane Jones say that he would not be supporting the legislation at this stage because I think it would be much more enduring if we could enjoy cross-party support for this legislation. I look forward to the amendments that may come forward from the member or from the Labour Opposition in this regard and we on this side of the House will certainly be seriously looking at those amendments and taking them into consideration.  
I am aware that all members of the select committee and many members of Parliament were lobbied very heavily by all interest groups in the industry—all the stakeholders—and there was some interesting debate around what model might or might not work and why the State may need to intervene or otherwise in this general process. The only comment that I would make there is that sometimes you need to look at the evidence of what has happened. You also need to ask I guess the basic philosophical question of where the State stops and where the State starts. Obviously in the case of Fonterra it was a construct of legislation. Those of us who have been part of the industry for our whole entire lives as in my case—and I certainly was here at the time when the first bill was passed and debated—understand absolutely that this was a construct of legislation and that because of that there are going to be some regulations placed on what was at the time of its formation about 90 percent of New Zealand’s total milk processing. Now I understand it is about 86 percent of farm-gate collection of milk. It gives the entity Fonterra known as a new co-op at the time a very substantial stake in the total industry. So from that of course there is going to be some regulation. It should be widely acknowledged that that is going to be necessary and I think by most it is. It is just a question of how much and where that stops and starts.  
So the process that the select committee went through was to try to set those parameters and I think the recommendations the committee made back to the Minister which have by and large been accepted and the officials’ support were certainly well and truly tested. I think they have ended us in a position where the compromise—which it overwhelmingly is and I think we have to accept that it is a compromise—is about right.  
We look forward with some enthusiasm to the process going through Parliament. I would certainly like those out there in dairy industry land who are considering this proposal now to seriously read all of the information that has been provided to them by Fonterra. I would like them not to make a rushed decision but to ask the questions of their industry leaders that they want answered and to satisfy themselves. I am confident that they will. Certainly the industry over the years has demonstrated that it has the ability to do that. Nothing is without risk but doing nothing also carries its own risks. So I urge you to consider all the options that are before you before you make that call. But at the end of the day make the call and move on.  
I certainly want to recognise the substantial contribution to the select committee that was made by those who submitted to it. We had a range of submitters including Fonterra of course and others who gave us specialist advice from outside. We had an independent adviser. I do not know what else could have been done to be frank that would have given this process more scrutiny. There was suggestion by some that this was a truncated process. Well the select committee met during adjournment and it met during extended hours. I thank the Opposition members who were part of the select committee for their leave for that process to take place. The members of the committee at times threw their hands up in the air and said: “We’ve had enough.” That would indicate to me that we were not denying anyone the opportunity to work through the concerns that they may have. As I said at the beginning sometimes we went round in circles a few times. That was as far as I was concerned designed to allow everyone who had questions the opportunity to ask them and to have them satisfactorily answered.  
I look forward to the passage of this bill. I am certainly curious to see what might come out of the Committee stage. I hope that members on the other side will eventually get to the point where we can get cross-party support for such an important piece of legislation for “New Zealand Inc.” and that this bill will progress. Thank you.