Yes we can catch AustraliaMonday, 1 March =
2010, 10:07 am
Speech: Federated Farmers =
|
28 February 2010
Yes we can catch Australia
Speech by Don Nicolson, President of Federated Farmers, to the 2010 ACT =
Conference in Wellington on 27 February 2010
I would like to thank your ACT Party President, Michael Crozier, Vice =
President, Chris Simmons, your party leader, the Hon Rodney Hide MP and =
members of the party caucus for this opportunity.
For those who don’t know this, you are not the first political party =
conference Federated Farmers has spoken at in recent times. My =
Federated Farmers Dairy chair, Lachlan McKenzie, having addressed the New =
Zealand Labour Party last year.
Speaking to the Labour Party and you here today affirms that Federated =
Farmers is an apolitical body. Our members are drawn from a wide =
political spectrum but as a union of farmers, we act in the best interests of =
farmers and farmers.
We don’t care who does it, as long as someone does what we =
ask! At least, that’s the idea.
While we’re probably not on Michael Laws Christmas card list, we =
believe the interests of farming serves the future of New Zealand.
That’s why, following on from Dr Don Brash, we believe we can not =
just catch ustralia but actually, surpass it.
Yes Australia is beloved of God.
It’s sprinkled with minerals just below the desert surface that =
comprises the most arid continent on earth.
But unlike Reserve Bank Governor, Dr Alan Bollard, Federated Farmers =
doesn’t see Australia as some latter-day El Dorado. To envisage =
Australia’s future go to mining ravaged Nauru. It may take =
centuries but El Dorado, Australia is not.
The means to truly grow the economy of Godzone is physically right here =
but do we have the mental and political will to grab it?
That’s the question I pose.
Frankly, the signs have not been encouraging so if you will permit me a =
small detour, growth depends on government getting its own house in =
order. That cannot start until New Zealanders are given a say on the =
electoral system.
MMP only arose out of a sense of betrayal, first from Labour then core =
National Party supporters. The electorate responded by putting our =
politicians in handcuffs.
While First Past the Post may have been a tyranny of the majority, =
we’ve swapped that for a tail that now wags the dog.
Since 1996, New Zealand has been on an extended tea-break as MMP =
encourages government, any government, to focus on keeping 50.1 percent of =
the electorate, ‘sweet’.
Forget step change, think baby steps. But the more we tread water =
the more we go backwards. I think the term is entropy.
But to catch Australia, we need bold change and courageous political =
leadership, all built on a premise that governments can actually generate its =
own popularity. What we have instead is policy by continual polling =
based on where public opinion has been, not where we are going.
That’s looking backwards and not forwards. In my mind, =
constitutional reform is also essential.
I’m not talking about ditching our head of state either. =
That’s one of the very few areas of government that has not exploded in =
cost but which seems to work.
No, what I am talking about is a written constitution that brings clarity =
to the interrelationship between the Executive, our single chamber =
Parliament, the judiciary as well as our rights, freedoms and obligations as =
citizens.
To farmers, property law is a very hot subject. One only has to look =
at the passion around transmission lines. It’s no wonder too =
given upwards of 40 percent of all transmission assets fall on land where no =
compensation and recognition of a property right exists.
Indeed, we see our rights being eroded in the name of conservation or =
biodiversity. Councils can literally designate the land from underneath =
your feet for nothing in return.
Rights in property is a basic tenant of a market economy but since 1996, =
that right has been eroded almost as fast as Government has grown.
In the six years between 2002 and 2008, Labour’s second and third =
terms, the size of Government grew by a staggering 63 percent. 63 =
percent. From $47 billion in 2002 to just under $76 billion in =
2008. Today the figure is much higher.
I don’t say this to denigrate Labour.
That party reflected a crude political metric that to stay in power these =
days, you need to keep most of the people, mostly happy, most of the =
time. It’s a trend we see right now with the National-led =
Government you are part of.
But the trend line is unsustainable as government now represents about =
half of New Zealand’s total economic activity. Have we had =
explosive economic growth? Is New Zealand zooming up the OECD ladder at =
break-neck pace?
It’s why we applaud ACT pushing forward its Regulatory =
Responsibility Bill and in the absence of a written constitution, I believe, =
it ought to be entrenched. This is beyond politics and I urge the other =
parties to drop any jaundiced view of it. Move beyond politics. =
This is about doing the right thing. The right thing.
Only through legislation like this will Government be paired back into =
shape. We farmers know what it’s like to operate on a budget and while =
challenging, it also drives innovation. Yet government increasingly has =
an infinite expectation on what is a finite pile of cash.
Government is complicit in building these dependencies borne out of =
perceived political necessity.
This power to take, undermines the entrepreneurial number eight wire =
mentality that bred Joseph Nathan, Lord Rutherford, Richard Pearse or Colin =
Murdoch. These are four great Kiwis who share a farming heritage and =
who share another trait, they left a lasting legacy in commerce, science and =
industry.
If the current approach of government was around in their day, I =
ask you, would it have aided or hindered them? Ponder that.
But to grow the New Zealand economy by 2025 demands our winners be fully =
backed.
While we farmers applaud Weta and hail Sir Peter Jackson as a truly great =
Kiwi, what they do is only made possible by having a solid economic =
foundation. They’re the icing on the cake but that cake, If we =
have the will, is the biological economy backed by sensible minerals =
exploitation.
If New Zealand is the tortoise to Australia’s hare, we’ve got =
something Australia lacks. Lots of water.
Water is a necessity of life and dovetails with the traditional strength =
of New Zealand, which is primary food and fibre production. Whether its =
mohair fibre to stunning Central Otago pinot noir, we need security of water =
to grow and go forward economically. The potential is immense.
If we take just Canterbury, there is enough water storage potential there =
to irrigate a land area larger than Samoa. That, by the way, will take =
just 12 percent of the water in Canterbury that currently runs out to =
sea. This is water that falls from the heavens onto our land and not =
across the Tasman.
The award winning Opuha Dam proves that water storage works commercially =
with an economic payback of 8:1. More water, more productive land, more =
exports. It’s a simple equation that demands a mind shift in =
Government from passive to active.
Why, I ask, does the Government see the building of roads through a Crown =
entity as a core function but the building of water storage is not? We =
need an agency for agricultural infrastructure like what the Land Transport =
Agency does for transport infrastructure; water is at the top of a list, =
which also includes broadband.
Water storage is about future proofing the economy and making the most of =
what ought to be, our most productive seasons.
One prominent commentator claimed last year that New Zealand had =
effectively run out of productive land. We haven’t as the Mackenzie =
Basin applications now show. That’s why it’s a real test of =
economic development and this government’s resolve to grow this =
economy. It’s about more productive land. More so, as the =
global population will grow by billions over the next four decades =
alone. They will need what we can produce – food.
We are in the right part of the world at the right point in history if we =
can grab the opportunity. So while Australia digs itself up, we can =
literally green ours.
Yet I can almost hear the greens belting at their keyboards about =
agriculture’s environmental impacts. Frankly what comes off our =
farms pales to the environmental impact of New Zealand’s third most =
numerous large mammal – that’s you and I. Cows and sheep =
don’t use detergents, they don’t drive cars, they don’t =
shop at The Warehouse and they don’t need landfill either. We =
humans, individually, will also generate some 99,000 litres of wastewater in =
a single year and there are 4.3 million of us.
So while water is one side of the primary coin, pasture renewal is the =
other. Modelling by BERL for the Pasture Renewal Charitable Trust, =
indicates that regular refurbishment of farm pasture has potential to our =
direct contribution to GDP by $800 million and total GDP by a jaw dropping =
$2.2 billion.
What I am saying is that water storage, policy reform and work inside the =
farm gate by farmers, could expand pastoral agriculture’s contribution =
to the economy by upwards of a third – that’s well over $5 =
billion more each and every year.
If we can get a global movement away from wearing plastic, putting plastic =
on our floors or putting plastic in our houses as insulation, wool could well =
comeback from the brink. It’s a market conundrum that the most =
ecologically friendly of fibres is performing the worst in this age of green =
consciousness.
Perhaps that shows we are not as green as we are led to =
believe.
The insulation subsidy, there’s a word isn’t, subsidy, has =
been great for Fletcher Building but a damp squib to the manufacturers of =
wool insulation, let alone me as a sheep farmer. Any country with =
silica can make a pink batts type product, but only New Zealand can generate =
such an ecological and renewable product, which Kiwi wool is. We are =
unique so what comes off our sheep is also unique.
Here’s the undiscovered country. Wool in dollar terms, to have =
parity with 1980 returns, ought to be a $2.8 billion export. Yet today =
it’s a shadow of that at just under $600 million. We don’t =
need a handout but we do need to get control of distribution as the last time =
I checked, the price of carpet hasn’t fallen by over 80 percent. =
Wool is in farmers hands to fix but fix it we must.
Yet =
it’s not all about the land but our waters too.
20 percent of the diet for 2.6 billion people is fish. Yet going out =
to sea with nets cannot cope with the demands a growing world population will =
place upon wild capture. According to Ernst & Young, aquaculture =
could be worth up to $2.2 billion to the New Zealand economy.
That could be conservative.
Norway exports $4.5 billion worth of salmon and trout each year and =
effectively controls production out of Scotland and Chile. Aquaculture =
is to Chile what sheep are to New Zealand – nigh on a $3 billion dollar =
industry – or ten Avatars each and every year. What aquaculture =
needs are direct policy support and research and development.
Indeed, what farmers of all types need, is a bipartisan commitment to =
research and development to achieve a sustained spend of three percent of GDP =
by 2029.
Yet in aquaculture trout presents itself as another economic test. =
Here’s a fish that isn’t native and is farmed everywhere except =
here. Moreover it can be farmed in saltwater or fresh yet removing it =
from the Conservation Act is akin to changing the name of New Zealand.
Protecting the interests of Fish & Game is denying New Zealand an =
industry that could be worth $US50 million in five years and much more after =
that. That’s only the tip of an iceberg when you factor in =
several freshwater crayfish farms, the farming of eel, whitebait and our =
other fish species. It’s time for the Government to send some =
pro-business signals and when you have Sanford, who would start farming trout =
tomorrow, it’s bizarre we are not making the most of our natural and =
introduced species.
Yet catching the lucky country means rapidly unleashing our considerable =
minerals wealth.
On land, our mineral reserves are estimated at $140 billion – if we =
have the political will to extract it. In Southland, for instance, =
there is a 650-year supply of lignite that has the potential of turning New =
Zealand from a urea importer into an exporter – generating the =
equivalent of $1.5 billion in export equivalent income each year.
Yet few are aware of just how vast New Zealand really is. We =
‘own’ 5.7 million square kms of seafloor - equivalent to =
two-thirds the size of Australia. The estimated mineral wealth in just =
4 million square kms of that area has been estimated by Canterbury =
University at half a trillion dollars.
The technologies for deep sea mining, embryonic as they are, exist. =
New Zealand ought to be at the vanguard of developing this technology because =
what’s on the land will most likely be on the seafloor too.
Yet I wonder what would happen if instead of Kuwait we came across =
billions of dollars worth of uranium ore instead. Would New Zealand =
ignore it? Pretend its not there on the basis we are ‘clean and =
green?’ Or would pragmatism prevail?
At this juncture we need to see the signals that will enable us to take =
advantage of our natural assets. Signals could be as diverse as =
domesticating and farming Weka, farming Rainbow Trout and tapping into our =
considerable minerals wealth. What we need is for the Government to stand up =
and show us that they are for exporters. That starts by removing the =
barriers to trade while allowing us to retain more of our hard earned money.
As farmers, we collectively retained just 6.2 cents inside the farm gate =
out of every dollar we generated for New Zealand Inc. Given that =
includes dairy, we arable and sheep and beef farmers, will be staring at some =
pretty red ink. Given New Zealand Inc takes much of the other 93.8 =
cents for, well, stuff, you can understand why we want to see real change and =
a real direction. Sadly, our electoral system cannot deliver that and =
that means it has to change.
So Australia only became the lucky country off the back of China’s =
appetite for minerals. It needs them. Australia has them. =
But Australia has ridden the commodities boom led by coal – its largest =
but most unsexy export. Yet New Zealand has three things that give us a =
unique competitive advantage over the so-called ‘lucky country’ =
– water, grass and dirt.
It’s over to you politicians to give us the tools and means to =
harvest them responsibly and ethically.
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As I see it
Those that are involved with the Atlantic salmon fish farms should be = barred from this enquiry. They have no interest in survival of any wild = salmon, as these wild salmon are in direct competition with what they = market.
Whether the results of this enquiry impact the fish farms future existence = is irrelevant as they are the ones encroaching on the sockeye salmon's = natural habitat, as well as other species of marine life.
We'll know soon enough if the fix is in or not by who is allowed to be = heard.