Neo-absolutism

Federated Farmers President, Don Nicolson, addresses the ACT Regional Conference at Bunnythorpe, Saturday, 18 July 2009

 

Thank you for inviting me to speak to the ACT Central North Island Conference.

 

Federated Farmers welcomes this opportunity to engage with all political parties and will be attending both National and Labour’s conferences later in the year.

 

I would like to start my speech by looking back to the mid 17th century.

 

Then a series of political false steps led to the most destructive war ever fought on British soil.

 

That being the war fought between English Parliamentarians and the Monarch, Charles I.

 

This Civil War broke out due to absolutism.

 

The European notion of the divine right of kings so desired by King Charles and his cavaliers went up against the embryonic notion of parliamentary democracy favoured by the roundheads.

 

The war was decided long before the Battle of Naseby in the Treasury.

 

The roundheads held the chequebook and the King, frankly, didn’t.

 

And now here we are, more than 358 years down the road and facing a similar predicament but from a whole new quarter.

 

The neo-Royalists now sit in their air-conditioned Wellington offices telling us what we can do, when we can do it and how we can do it.

 

Are we in an age of new absolutism whereby those who tax us display the same arrogance that led to the worst war on British soil?

 

Which brings me to an important question, who is farming exactly who in Godzone?

 

I’m of course referring to the massive, often negative impact that one farm in particular has on the entire economy.

 

This farm is among the smallest in New Zealand and is located in just one part of the country.

 

This 110 acre - or 45 hectare - farm has doubled its expenditure over the past ten years from around $39 billion to about $80 billion today.

 

That farm is called Government and it's located in Wellington. And that 110 acre block is the area of office space that Government occupies.

 

But when you take into account New Zealand’s 85 local authorities whose job it seems is to regulate every aspect of our lives, this farm swallows up much more than just 110 acres.

 

Statistics New Zealand tells us there are 57,000 people working full time in central and local government administration and thousands more in services throughout the country.

 

When almost the entire population of Rotorua is being employed in Government, it’s a sure sign something is out of control.

 

That’s exactly why Federated Farmers wants Government to move decisively on your leader, the Hon Rodney Hide's efforts on regulatory and local government reform.

 

However, while we truly believe changes to the Local Government Act are necessary, the key objective should be to change the way local government is funded.

 

At our recent National Conference in Auckland, I was pleased to hear Mr Hide say he would push to bring local government expenditure under control.

 

Too many farmers currently face huge rates bills even before this year's increases.

 

Farmers don’t bemoan paying costs where they can be absolutely defined but in most instances farmers are being farmed for their rates just because they can be.

 

Put plain and simple - something must be done to bring these costs under control, and it must be done now.

 

The total rates take across all local authorities to June 2008 was $3.5 billion.

 

Yet these local authorities still plan to keep increasing their take at the expense of both urban and rural ratepayers.

 

According to the Department of Internal Affairs, council operating expenditure is forecast to rise by 41 percent and rates revenue by 59 percent over the coming decade.

 

Even worse is the increase in local authorities' reliance on rates to fund more proposed spending.

 

Rates are forecast to rise from 55 percent of cash income to 60 percent over the next 10 years - which flies in the face of the 2007 Rates Inquiry that aimed to reduce the reliance on rates.

 

Farmers are telling us loud and clear that they are at their wits end.

 

The Federation has gained some good wins through the recent Long Term Council Community Plan submission process but local government funding remains inequitable.

 

That’s why funding reform is one of the Federation's top priorities.

 

It should also be high on Government’s list given the economy's reliance on farming and agriculture to dig New Zealand out of recession.

 

So I am gladdened to know that ACT is in our corner on that score.

 

But there’s a problem, we must ask how ACT can become more relevant to the lives of everyday Kiwis?

 

For too long, you have occupied a very tight political box.

 

You are seen, wrongly, as being the right’s version of the Alliance.

 

Prior to the election, one of your spokespeople accused me of cuddling up to a reconstructed socialist when I said, ‘good on you Jim Anderton’.

 

Why? Because he was the only political party leader to prominently talk about agriculture.

 

It’s that sort of hard rhetoric from the 1970s that does little to endear people to ACT in 21st century New Zealand.

 

But strategically under the MMP environment, ACT has an amazing opportunity.

 

The Greens tend to talk up the environment during election years. ACT’s job, however, is to offer market solutions that are green.

 

I don’t wish to undermine the efforts of those committed to this party, but currently you are far too dependent on one person in one electorate.

 

To overcome this is a big but necessary challenge. It’s about making policies that are so relevant to Kiwis that they will ‘get it’.

 

The role the market could and should play has become submerged beneath expediency.

 

Yet, if we are to climb the Organisation for Economic Co-Operation and Development (OECD) ladder, economic productivity is key.

 

Economic productivity, we agree, is the Holy Grail, yet what is being done to achieve it?

 

Parliament seems to judge itself by the volume rather than the quality of legislation it churns out.

 

The Hon. Rodney Hide’s regulatory review process must identify Acts for repeal.

 

We have very few doubts there are dozens of Acts, regulations, agencies and commissions that can be done away with.

 

Where we want those resources is back in our pockets or invested in front line services.

 

To give you an idea, look at Insecurity NZ, more commonly known as Biosecurity NZ.

 

About 93 percent of sea containers are never inspected, which explains the increasing incidences of incursions.

 

It has to be remembered, New Zealand was German Wasp free until 1945, with the European and Asian Wasps arriving in the 1970s.

 

Despite this we have a natural competitive advantage in this country and it’s too precious a thing to lose.

 

If we incur foot and mouth, the Reserve Bank of New Zealand (RBNZ) estimates the cumulative loss in nominal gross domestic product (GDP) is around $6 billion after one year, and around $10 billion after two to three years.

 

This loss will continue to increase as potential output is likely to be permanently lower.

 

I therefore have a challenge for ACT and also for the economic policy of New Zealand.

 

With deference to Sir Roger, we've tried to be the Switzerland of the South Pacific, we've even tried to develop a video game industry and even the icon, Fisher & Paykel, after taking a lot of its production off shore, has had to bring in the Chinese giant, Haier.

 

Icons and the odd success, like Weta and Rakon, seem to drive economic policy.

 

Yet, while fantastic successes, which they are, they do not make an economic strategy that will lift New Zealand up the OECD.

 

Our biggest manufacturing exporter is Tiwai Point smelter, which takes 13 percent of the national grid to generate 3 percent of all exports.

 

Put another way, that is 61 percent less than what farming did in 2008.

 

Agriculture is the way forward and farmers want to get us there.

 

But that means we need business to focus on agricultural inputs such as genomics, productivity, agrichemistry, animal remedies and banking products.

 

The Glaxo in GlaxoSmithKlein after all was started right here in Bunnythorpe near Palmerston North.

 

Our economy needs to grow Kiwi versions of Novartis, Monsanto and Rabobank.

 

All corporate counterparts to Fonterra - New Zealand’s only true multi-national.

 

This won’t happen unless we put our money where our mouth is and boost research and development (R&D).

 

New Zealand R&D has to hit 3 percent of GDP by 2029 for us to transform the economy.

 

It currently languishes below 1 percent.

 

Agricultural R&D will deliver the new environmental tools that farmers need.

 

Which brings me to that other issue we are currently grappling with - climate change.

 

We know there is a problem with climate change because fashion tells us so.

 

But these two words also invoke fear in the public arena and, I say cynically, an employment spin off for western bureaucrats.

 

But what’s the point in setting an emissions target in a country where agriculture produces 0.1 percent of global emissions, but can feed more than 1 percent of the earth’s total population?

 

Why not invest in R&D to find solutions that increase farm efficiency and productivity - a sure way to decrease emissions per unit of product.

 

Any efficiency solution certainly doesn’t lie in the farcical calculations of the ridiculous Emissions Trading Scheme (ETS).

 

The truth is that technology is where the breakthrough will occur. Not targets that will come with much political self-congratulation and no tangible means of delivery.

 

Take the recent research into gene sequencing of rumen microbes. This will hopefully give us a better understanding of how rumen function can be enhanced, giving greater input versus output efficiency.

 

That’s why Federated Farmers is taking the courageous step of asking Government to avoid setting a target to reduce New Zealand greenhouse emissions.

 

We should, instead, be asking all developed countries to put a percentage of GDP into low carbon initiatives through research and development.

 

That's where New Zealand ought to be a global leader but instead we are like collective lemmings running off the same cliff.

 

Take Greenpeace’s Sign-On campaign, which calls for a 40 percent reduction in New Zealand’s greenhouse emissions by 2020.

 

Now, almost two months after it began, the number of registrations has just hit the 70,000 mark.

 

Despite their best efforts, this merry band of acolytes has only managed to convince 56 percent of the people who voted Green in the 2008 general election to actually sign-on.

 

Now what does that tell us?

 

Could it be that people don’t warm easily to sanctimonious hypocrisy?

 

Stephen Tindall made his many millions importing cheap Chinese goods into New Zealand and flogging them to hard working Kiwis who wanted inexpensive, modern consumer goods.

 

Mr Tindall imported many goods from China, where cheap labour and coal fired electricity plants are in abundance.

 

Our future will not come from signing up to faux targets such as that suggested by Greenpeace, but from technology.

 

Given the global population will hit 10 billion by 2050, New Zealand needs to be a world leader in research that makes our continued existence compatible with the planet we all share.

 

The heroes are not the false prophets who tell us how to live, but the scientists and farmers who will enable us to live and prosper.

 

Farmers back the forces of light, reason and progress against the prophets of a Malthusian catastrophe.

 

As you can tell, Federated Farmers is not scared to speak out strongly about the issues that affect farmers.

 

A big issue for us is property rights and in this we turn again back to the Civil War.

 

Neo-absolutism is now appropriating our property, our income and our future without consultation or compensation.

 

Wasn’t the American War of Independence fought on that pretext?

 

Even Sir Geoffrey Palmer, a former Prime Minister and noted jurist in his own right, has expressed concern over the proliferation of poorly drafted Acts.

 

Parliament should be known more for the legislation it does not pass.

 

I think the MPs assembled here today will not mind me saying that Parliament increasingly cannot see the order paper from the Hansard.

 

There is room here for ACT to impose its will on legislation that should not be passed.

 

Society is naturally self-correcting and a fetish of Parliament is to seep into every pore of New Zealand life.

 

There’s one Act that both Federated Farmers and Mr Hide, in his role as Minister of Regulatory Reform, hold up to close scrutiny.

 

I’m talking about the Resource Management Act (RMA) and the need to introduce provision for compensation for the taking of property.

 

New Zealand has the weakest protection of private rights in the OECD, a history of confiscation of private property rights and a long-standing failure to recognise the protection of the basic human right to property rights.

 

Federated Farmers believes the economic performance of the New Zealand economy will be greatly enhanced when Government moves to fill that gap in the basic human rights enjoyed by all New Zealanders.

 

It can do so by providing individuals with market compensation should their property rights be appropriated by the state or by local government.

 

We have it in the Public Works Act for physical acquisition but not for the rights that a change in policy can do away with.

 

As Minister of Regulatory Reform, Mr Hide has some influence over regulation under the RMA and related legislation such as the Building Act through to drinking water standards.

 

But we also need a better framework for decision-making and far better analysis of the costs and benefits of regulation.

 

This is why we fully support Mr Hide’s Regulatory Responsibility Bill, currently being considered by an expert taskforce.

 

Bills such as this help to put an end to what I call ‘the meddlers’.

 

We, the people of New Zealand, delivered the very same message to Government last year, but in a different way.

 

We told the former Labour-led Government that enough is enough - its ‘meddling’ had gone too far.

 

Just as King Charles had done before the Civil War, Labour took on the appearance of absolutism that emboldened the public service to act in that same fashion.

 

The challenge for ACT in this Parliament is to return it to that most trampled on word, freedom.

 

Freedom is needed in New Zealand so that we as a nation can prosper.

 

We have the world's most intelligent and productive farmers who, if given the chance, will spearhead New Zealand’s charge to the top of the economic ladder.

 

As a result, all New Zealanders will benefit from the higher living standards that improving efficiency and productivity bring.