Farmers dig in on gas tax

By LIAM DANN

Federated Farmers president Tom Lambie says the Government could be forced to back down on its proposed "flatulence tax" if it cannot find a way to collect it.

Farmers clashed with Agriculture Minister Jim Sutton at the federation's national conference in Auckland yesterday.

Despite being confronted with placards and howls of protest from the floor, Sutton remained adamant.

"The issue now is not whether there will be a levy - that decision has already been made," he told the conference. "It is how it will be collected, who will administer it and how it will be spent."

In response, the federation passed a resolution directing agriculture industry bodies not to collect the levy on the Government's behalf.

If no workable way were found to collect the $8.4 million levy for animal emissions research, the Government could be forced back to the drawing board, Lambie said.

The most practical way to collect the levy is through industry bodies such as Meat New Zealand and Sheepco, which already collect money for industry research.

Those organisations are effectively owned by farmers and now look unlikely to co-operate.

"We've made it loud and clear that we don't intend to collect the levy on behalf of the Government," said Mike Petersen, chairman of the new wool body Sheepco.



The Government could pass legislation forcing it to collect it, he said.

But that could put the restructuring of the industry in doubt.

The Meat and Wool Boards have been disestablished, and farmers vote next month on whether they want a new single organisation to raise and administer the levies.

If farmers thought the flatulence tax was being tacked on to the new framework, they might vote "no" in the referendum, leaving no one to collect any levies.

That would be disastrous, Petersen said.

The Government might also force meat companies to collect the levy.

Affco chief executive Tony Egan said the company did not support the levy, but would have no choice but to collect it if required by law.

A spokeswoman for Sutton's office said officials were reviewing collection options after consultation meetings on the issue this month.

They had not yet been put to the minister so it was too early to comment on them, she said.

Yesterday's meeting highlighted the gulf between farmer opinion and Government policy.

Invited to formally open proceedings Sutton took the opportunity to plough through a point by point primer on the Kyoto Protocol and New Zealand's responsibility to lower greenhouse gas emissions.

His argument did not convince delegates from around the country, many of whom expressed scepticism about global warming. Farmers had been exempted from the full costs of Kyoto, Sutton said.

The emission charge to an average New Zealand pastoral farmer could have been up to $40,000.

He told farmers they were not being singled out for special attention and other industries would be called upon to do their bit.

This has raised the concern of Auckland Chamber of Commerce chief executive Michael Barnett.

"The question is, what next?" he said. The levy might seem relatively small, but it was part of a disturbing trend towards more taxes on business.

"When they are all bundled together they represent a significant cost to productivity."

Sutton said the frustration at the tough economic conditions farmers faced might be adding to their anger over the issue.



But although the levy was unpopular, farmers had a responsibility that needed to be met, Sutton said.

"By gum, we're going to meet it if I have anything to do with it."

Act MP and Federated Farmers member Gerry Eckhoff started a petition opposing the levy at the end of yesterday's debate.

Sutton did not stay to hear the details, leaving while Eckoff was speaking to the conference.