Roy Eric: State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill — Third Reading 
Roy Eric: State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill — Third Reading 
[Volume:640;Page:10134] 
ERIC ROY (National—Invercargill) 
: 
 The debate we are having today is the third reading of the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill. This is a bill that if passed after the conclusion of its third reading will eliminate the competition element from the assurance that we give our meat products in the international market and it will also eliminate the competition out of certain elements of pest and vector control in New Zealand. The National Party has through the course of the process of this bill—its first reading the select committee consideration and the Committee stage in this House last evening—expressed a number of serious concerns. The principal question we have asked in each case is why it is necessary to have this legislation. 
I note that the explanatory note states: “The Government wishes to prevent this competition from occurring as it considers that it would result in a net cost to the Crown …”. There are two elements of that that I wish to explore. When delving into why that was the case I found that the concern was that there could be a contingent liability about redundancy if one of these agencies took over some of the work from the other. We have been informed that in actual fact there is a contingency fund should this occur. I understand there is $12 million in that fund. [ 
Interruption 
] That is correct and I thank Mr Guy. So why does the Government see a liability when it has already acknowledged that there could be some inter-movement between two agencies in this area? I have to say that that has proven to be quite a nebulous issue. 
But does the Government have any concern about where the costs might fall if competition is removed? They fall squarely on the shoulders of the producer. At a time when the sheep industry is under some stress about the prices it is receiving should we load on to that industry another element of cost compliance by removing competition from what is a very important part of the process? 
That is the first point about this legislation. The case was not proven. The case to do this the necessity to wipe out the competition was not proven. I want to extend that a little. This legislation came into the House and has been processed but we have not been told and were not told of the process of the development of this legislation. Normally when the Government wants to do something that will advance a cause it will put out a consultation paper. It will confer with the various players in the industry. My colleague the Hon David Carter related to the House the element of surprise of the major players in terms of: “Hello? We were not consulted. We did not know.” Again it is the element of the fact that the case was not proven—that in fact it was not necessary. 
I am delighted that during the Committee stage last night our concerns about the competition element were listened to to some degree. I am not very happy about the solution the Minister put up in terms of requiring after 3 years a consideration of the competition element and having a trigger that can be effected by either the Minister of Commerce or the Meat Industry Association. That process completely eliminates the producers; they are not represented. I made the case last night that it was a little bit like the Boston Tea Party. The agency that pays for this is the producer because the cost comes off the product at the end of the line. 
There are a number of issues here that we believe are quite fundamental to the way in which we need to do business. It is interesting that a number of State-owned enterprises work in a competition model. This is really a debate about philosophy. We have a Labour-led Government that believes in regulation and we have a National Party representing the farmers which says that it believes in a competitive model. Every single element of the production the selling and the competition with other forms of protein is in itself a very very intense competition. Then we are having a regulatory approach to quite a high cost in the whole chain of processing validation and assurance of that product. 
It is of considerable concern to us in the National Party that this is going to increase costs. As I said earlier those who will be paying do not have a mechanism by which they can force the Commerce Commission to have a look at this. Why would we set up a Commerce Commission to oversee and ensure quality of spending and the best possible economic process by which these things can be done if it is eliminated from giving this some scrutiny unless there is a trigger point? 
We are concerned about the absence of consultation. We are concerned about the fact that the case that this actually needed to be done was not proven. We believe in principle in competition giving us the best possible price. Right now we have a situation in the rural community where there is a significant shift in land use because it is perceived—and at the moment it is real—that there is a much higher return from other forms of pastoral farming: namely dairying. I would have thought that this Government would have some consideration for dealing with the issues that improve the viability of an industry that is under some stress at the moment instead of loading another cost on to it. I relate to the House that although Fonterra has been reasonably coy about the number of conversions in the pipeline I am reliably informed that there will be 32 new conversions in the Southland province in this coming year and another eight considerable extensions to existing property—so some 40 properties have been— 
Darren Hughes 
: Who told you that? 
ERIC ROY 
: I can tell Mr Hughes that it is common knowledge amongst those who know that there is a significant shift. 
I just want to say that that is for this year. I was informed last night that there are 86 inquiries for the following year. If this Government is espousing concern about increased dairying in relation to greenhouse gas management climate change or whatever its notions are then it is important that there is some kind of competing tension in where land use might be because it is too late to turn back the clock at a later stage. 
I now want to address some comments made by Doug Woolerton in regard to who performs the assurance process. He claimed that no one in the world would accept anything other than a Government assurance in meat quality. But then we saw in the explanatory note of the Supplementary Order Paper that the Minister presented to the Committee last night that new Subpart 4 provides for the Crown to continue to negotiate with its international trading partners in order to allow animal material and animal products examination services to be provided by agencies other than the Crown. I repeat that the Government is negotiating to have that happen. 
So then we have to ask why it would eliminate a competitive model where others can perform while at the same time wiping out the opportunity. It is simply nonsensical. It is absolutely nonsensical that on the one hand the Government says that it will continue to chat to its trading partners about where it thinks this should go but then on the other hand it locks in by statute a nil opportunity for that to take place. 
I conclude by saying that the assurance of the products we sell is important. That has not been a question raised in this process. The question is simply the most effective and cost-efficient way that this process can be achieved. This bill is a serious cost to the producer. Therefore National will be voting against it.