Prosser Richard: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeProsser Richard: Oral Questions — Questions to Ministers[Sitting date: 10 March 2016. Volume:711;Page:9600. Text is incorporated into the Bound Volume.]6.RICHARD PROSSER (NZ First) to the Minister of Finance: Does he stand by his statement that “there is no evidence—no good reason—to believe that there will be widespread farm foreclosures”?Hon BILL ENGLISH (Minister of Finance): Yes. Clearly many farmers will be under pressure. There is a lot of uncertainty about the forward path for milk prices but this is a resilient and adaptive industry and it has a supportive banking sector. Although there will almost certainly be some real difficulty for farmers we are yet to see just how widespread that would be. It is certainly our view that because there is long-term confidence in the future of the dairy industry the banking sector and the farmer sector will stick together because it is in their mutual interest not to have widespread farming foreclosures.Richard Prosser: How does he reconcile that belief with the fact that 35 farms in Southland—his old electorate—have been told by one bank that they will have to sell at the end of the season because the bank is pulling its funding?Hon BILL ENGLISH: I suspect that will not be the first such rumour. Any bank contemplating that action would have to consider the impact of putting 35 farms on the market in Southland because they may find that that would have a significant impact on the security of their debt held in hundreds of other farms and I suspect they will be giving that matter that sort of consideration.Richard Prosser: Is he aware that both the Australian Prudential Regulatory Authority and the Reserve Bank of Australia are concerned about the level of exposure to New Zealand’s dairy industry on the part of Australian banks; if so is he also aware that those banks are likely to come under instruction to reduce that exposure?Hon BILL ENGLISH: I am aware of the regulatory authority’s concern and I think that the Reserve Bank of New Zealand has done a good job actually of describing its concerns over the last 12 or 18 months. As to what Australian banks instruct New Zealand banks to do I do not know but I would just say what I said before and that is that it is in the interests of the banking sector and the farming sector to stick together through these tough times.Richard Prosser: I seek leave to table a document prepared by the Parliamentary Library outlining concerns held by Australian—[Interruption]Mr SPEAKER: There is objection. Well I will put the leave. Leave is sought to table that document. There is objection.Richard Prosser: Is he concerned that decent hard-working salt-of-the-earth Kiwi farmers and their families will be evicted and forced off their land making them homeless by banks and receivers; if not why not?Hon BILL ENGLISH: Yes I am concerned but I have to say that even in Southland it will not be the first time. I can recall all those sorts of things actually happening in the late 1980s in the sheep and beef industry but what I also know is that those same farming families are resilient. They took commercial risks knowing what those risks were and they borrowed money from responsible financial institutions. If they all stick together then most of them will get through.Richard Prosser: I seek leave to table an email from the lawyer representing the South Wairarapa farmer who is going to be evicted off his farm the week after next by Rabobank-appointed receivers for no reason other than that they can.Mr SPEAKER: Before I put the leave are there any privacy issues that the member has covered off within that email?Richard Prosser: They are all taken care of.Mr SPEAKER: Leave is sought to table that particular email. Is there any objection? There is.Richard Prosser: Does the Minister believe that there are sufficient New Zealand - resident farmers in a financial position to purchase large numbers of foreclosed farms at current and forecast payout rates or will the banks and the receivers attempt to sell these farms to foreigners instead?Hon BILL ENGLISH: I do not think I have any ministerial responsibility for that. What we are responsible for is the Overseas Investment Act which was largely written by New Zealand First back in the early 2000s. Any application to buy farms will have to pass through that Act. The thresholds are pretty high as a result of the court case over the Crafar farms and Shanghai Pengxin.