By Andrew Hoggard
This article first appeared in our sister publication, Dairy Farmer.
It has certainly been an interesting start to the year, but our first farm confidence survey of 2023 shows not much has changed around farmers’ confidence in the economy – it’s the lowest since we started the biannual surveys in 2009.
Our new prime minister may be preoccupied with Auckland, and concerns with flood damage are obviously justified, but he should give thought to the provinces as well. Most of the rhetoric has been focused around urban voters.
Now, I’m not some needy attention seeker; quite frankly if the government forgot there were provinces and didn’t pass rules and regulations that affect us, I’d more than happy with that outcome. However, there is a truckload of them already in the pipeline. That is what’s sparking the lack of confidence.
Chris Hipkins talks about focusing on bread and butter issues. Well, if the concern is the cost-of-living crisis, a good starting point would be the locations where that bread and butter originally comes from and the costs being forced on the people that make those staples.
The “bread and butter” reset turned out to be more of a “kick it for touch” reset in my view. Of the five policies announced, only two could be said to affect the cost of living – the biofuels rebate, which would have added to the cost of fuel, and the compulsory employment insurance, which would have taken additional money out of paypackets. The other three – hate speech laws, Three Waters and the TVNZ/RNZ merger – have nothing to do with the cost of living, and are just unpopular.
My take is that these last three and the compulsory employment insurance are just being delayed till after the election – kicking them down the road rather than ditching them.
The other big announcement was increasing the minimum wage, which in the current climate will do nothing except add costs to production, further fuelling inflation and adding more stress for struggling small businesses.
Going back to our confidence survey: government regulations ranked highly as a concern, and a good example of why business confidence and regulations matter is what we are seeing with the egg shortage. Actions have consequences and in the case of egg producers the actions of the government and then supermarkets destroyed the confidence of a number of egg producers. They perceived that the goal posts would just keep shifting on them, so they stopped investing in their businesses and exited from production.
Emissions taxes came out as a chief concern in the Feds’ survey. Not surprising given the government’s proposal back in October would have seen something like 20% of our sheep and beef industry disappear. While the government may have said it was going to dial that back in December, does the new PM hold that view? What needs to happen is a return to the original principles: that any pricing mechanism would only be there to incentivise the uptake of available mitigations, and would result in lower global emissions, not shifting them offshore. It’s also crucial to get a methane target based on what is the actual warming impact of that gas.
If the cabinet truly wanted to help those who make the bread and butter, it would revisit resource management reform and the proposed 853-page Natural and Built Environment and Spatial Planning acts. Our fear is that in its current form these Resource Management Act replacements won’t improve anything, and in fact will make things worse.
Despite numerous changes, the Essential Freshwater regulations are still riddled with issues, from the lack of approved farm plans requiring farmers to get consents, to the third failed attempt at a low slope map that is still going to require the fencing of water bodies on extensive and remote farms, where the occasional interaction with cattle and creeks has little more impact than if it was wild animals due to the low stocking rate.
Don’t get me started on the proposed changes to the National Environmental Standards for sources of human drinking water, which will force me to get a $10,000 consent to spray weeds within 100m of the edge of the river that runs on our boundary.
These are just a few examples of regulations and legislation that add costs to farm businesses – in fact all businesses – for dubious benefit. Those costs ultimately find their way to the consumer. This is the real bread and butter stuff that needs addressing.
