Little Andrew: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Oral Questions — Questions to Ministers[Sitting date: 16 March 2016. Volume:712;Page:9787. Text is incorporated into the Bound Volume.]1.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: What were the estimates given to him in his conversations with banks about the number of dairy farmers that are likely to go into receivership and leave the land?Rt Hon JOHN KEY (Prime Minister): I was not given a precise estimate but the sense I was left with was that it would be modest.Andrew Little: From the advice he has received how many dairy farmers does he think will be forced off the land?Rt Hon JOHN KEY: I do not know but what I do know is that the Reserve Bank has released its stress testing. What the stress testing actually shows is that even under a very dire scenario where land prices fell 40 percent the banks would be very strong and they would be in a position to continue lending to their existing borrowers—in other words finance those farmers through a difficult downturn.David Seymour: Has the Prime Minister thought of just making Fonterra put up the payout?Rt Hon JOHN KEY: Sadly that is not within my control. But I am sure the Labour Party will have that as a policy by tomorrow afternoon.Andrew Little: Does he agree with the Reserve Bank that up to 25 percent of dairy debt or almost $10 billion will be written off which means hundreds of dairy farmers will be forced off the land?Rt Hon JOHN KEY: Well I have not seen those comments by the Reserve Bank. You want to make sure that you are quoting them correctly.Hon Member: It’s quoted in the report.Rt Hon JOHN KEY: Well that is not in the press release from the Reserve Bank.Andrew Little: Is he at all concerned about the Reserve Bank’s projection that dairy land values will crash by between 25 and 40 percent which will undermine the livelihoods of thousands of Kiwis?Rt Hon JOHN KEY: That is the problem with the Leader of the Opposition—it is that you cannot take him seriously when he actually misrepresents the Reserve Bank Governor. The Reserve Bank Governor is not saying there is a projection that land prices will drop by 25 to 40 percent; he is doing a stress test to say what would happen if land prices went down. There is quite a—Grant Robertson: And that’s the scenario we’re in now.Rt Hon JOHN KEY: Well banks—reserve bankers do that all the time because their prudential requirements require them to make sure the banking system is strong. And what he is saying is even under a worst scenario like this the banking system is very strong.Andrew Little: Has the Prime Minister actually received the Reserve Bank’s report released at 2 p.m. today; if so has he read it?Rt Hon JOHN KEY: No what I have read is the release—the press release—because it came out at 2 o’clock today and I got this only 1 minute before I came here. But what the release says quite clearly is (a) the banking system is very strong (b) under its worst-case scenarios—to quote—“The test results suggested that in the shorter term banks would increase their dairy lending in order to support existing borrowers …” and it is saying that even in the worst scenario the losses could be between 3 percent and 8 percent of their total dairy exposure. Banks have considerably more exposure than just this and as the member was pointing out yesterday banks have been making pretty good money. They can afford if they have to—Mr SPEAKER: Order! Bring the answer to a conclusionRt Hon JOHN KEY: —to take some losses in that sector.Andrew Little: Does he agree with Mind Your Own Business that “approximately 100000 businesses employing upwards of one million New Zealanders are facing reducing revenue because of the dairy downturn.”?Rt Hon JOHN KEY: I do not have anything to back that up—I would need to see the analysis. But it could be as small as a business that is affectedfrom someone who sells sandwiches to someone who works in that area. There is a very large range of businesses in that sector.Andrew Little: Is it fair that our dairy farmers go bankrupt and 100000 small businesses face reduced revenue while overseas-owned banks continue to make $90 million a week and speculators circle over our farmland?Rt Hon JOHN KEY: The member is I think terribly confused about what is happening. What you have got is a scenario where dairy prices are lower and what we should be doing is supporting dairy farmers with the things that we can control. We cannot control the exchange rate and we cannot control commodity prices and we cannot control the weather. We can control free-trade agreements planning laws health and safety Resource Management Act reform and a variety of other things and on this side of the House we support helping those farmers actually in good times and in bad.