Wednesday, February 21, 2024

No fertiliser tax in offing, PM confirms

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HWEN alive and well, Hipkins tells Fieldays event.
The prime minister confirmed at Mystery Creek Fieldays that a fertiliser tax is not coming into play. Photo: Richard Rennie
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By Richard Rennie and Gerald Piddock

Prime Minister Chris Hipkins has confirmed the government will not be committing to a fertiliser tax, quashing speculation from the sector that this would become a broad-based tool for dealing with agricultural emissions.

Addressing the KPMG Agribusiness Agenda event at this year’s Mystery Creek Fieldays, the PM doubled down on the government’s commitment to He Waka Eke Noa (HWEN), maintaining that other than some details to tie down the plan was still very much alive.

The confirmation comes after several weeks of apparent inertia on the plan, fuelling speculation a tax on nitrogen fertiliser may be adopted as part of an alternative approach to deal with emissions. As early as late May the government had not ruled out using a funding measure while the sector determined how best to price emissions.

Meantime the clock is ticking on He Waka Eke Noa (HWEN), with Parliament’s final sitting prior to the election run-up being August 31.

Hipkins said working on a farm-by-farm basis to reward farmers to reduce emissions is important.

“It requires a plan and I believe HWEN can be that plan. This is not an exercise in ideology, far from it,” he said.

Hipkins said he believes a solution can be reached regarding the emissions pricing plan.

“I think we can get a way forward. I don’t think we are that far apart.

“We want to make progress faster. I don’t think it’s fair on New Zealanders or on our primary industries to kick the can down the road and say we are not going to deal with this until the next decade.”

He said he would be meeting with sector leaders at Fieldays to further discuss HWEN.

He pointed to increasing consumer awareness about sustainability and the risk they turn away from food not produced sustainably. He mentioned Tesco’s intention to be carbon neutral by 2050.

“We have to make sure we keep up with that or we will lose export markets vital to NZ.”
He also took the opportunity to stress that the government had not forgotten a sector severely damaged by recent storm events.

The $1 billion in flood and cyclone recovery allowance was only the first instalment, with plans for further grants in coming years. This includes $100 million in flood protection investments. 

There is a further $6bn committed to “building back better” for infrastructure projects, many of them in rural areas.

However, he echoed his finance minister’s note that there is a difficult balance to achieve between government investment and how much private and business sectors will be compelled to spend.

“We are looking at various funding options that could support growers, and will have more details to come.”

One option mooted by the horticultural sector has been the provision of low- or zero-interest loans to growers to help with the significant re-establishment costs they face in orchards.

Hipkins acknowledged the problems the sector has had with staff shortages, and pointed to the increase in the RSE cap from 11,000 workers to 19,000 this year. 

However, he cautioned the industry that the islands from which the workers come are also feeling the pinch from low labour supplies.

“We will continue to back you with the RSE programme but you need to continue to maintain goodwill with these countries. We cannot just assume because we turn the tap on further they will continue to come.”

Later in the day at Fieldays, Hipkins said the conversations he has had with farmers have been “mostly positive” and “constructive” and the large volume of Labour ministers and MPs at the event is a sign they are governing for all New Zealanders.

“I haven’t had any negativity and I think people are looking to the future and are looking to the future with optimism.”

Questioned about the likelihood of retaining rural voters who voted for Labour in the last election he said: “I’m looking to get every single vote that I can.”

Hipkins agreed with the KPMG report’s findings about the level of anxiety in the rural sector.

“It’s been a really uncertain time right across New Zealand. The primary sector, rural communities, are really feeling that uncertainty the same as many other New Zealanders have had.”

Weather events, a global pandemic and a deteriorating global economy are all adding to that pressure, he said.

“I acknowledge that it has added a huge amount of pressure within the primary sector. That is a message the government has well and truly heard.”

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