Farmers want spending to target growth

By PHILIPPA STEVENSON agricultural editor

Government policy decisions made outside the Budget are likely to have more impact on the agricultural sector than the Budget announcements.

Federated Farmers expects the most significant outcomes for the rural sector to come from the reviews of the Employment Relations Bill, transtasman shipping and the infrastructures of the electricity and telecommunications industries.

"They are the things that, if you address them well, can be far more beneficial," says policy director Catherine Petrey.

Overall, the federation is keen for the Government to target spending in areas that will encourage economic growth. This year - in a submission on the budget policy statement - it urged the Government not to exceed its 35 per cent of GDP expenditure target.

The federation believed a more appropriate long-term fiscal policy objective would be to reduce the overall level of Government expenditure over time.

Mrs Petrey said the Government's tax take was ahead of expectations because economic growth rates had been higher.

"We would be expecting the Government not to fritter away the windfall gain, rather that additional spending go into areas that are actually going to create growth and employment."

The federation had flagged four areas to scrutinise in the Budget - biosecurity, science, economic development, and health and education.

Mrs Petrey said the infestation of beehives with the bee-killing varroa mite had highlighted the contradiction between the resources spent on border control and those spent on the Environmental Risk Management Authority.

"Why spend so much on, and put in such expensive intervention in terms of risk management for, those things you deliberately choose to introduce and not have that same approach to the unintended introductions at the border?"

The varroa infection could cost New Zealand $1.4 billion a year, signalling the benefits in spending to keep out unwanted pests, rather than controlling or eradicating them.

Border control resources were insufficient. Only 23 per cent of containers were checked now, and the stakes were being raised.

Ports of Auckland intended to expand to allow in boats carrying more containers, but inspection systems had not been allowed for in the expansion plans, said Mrs Petrey.

The Government should introduce instant fines for travellers breaching importation rules, and invest in an education programme. The federation was concerned that the authority's high costs could also be an incentive for people to avoid the system altogether.

"We know of only one plant introduction that has been applied for since Erma has been in place. Similarly, the hazardous substance side of the legislation is about to come in and we are looking in trepidation at what could happen there in terms of cost."

The Government had announced a grant system for science and the federation would check the criteria and processes to be used.

The agricultural sector would want to ensure there were no significant transactional costs, or a focus on a new economy "and a failure to recognise that overcoming barriers to technology uptake in the traditional rural sector can bring high returns."

Because of the multiplier effect of downstream industry, every extra dollar earned in the pastoral sector meant $7 to $8 earned elsewhere in New Zealand.

The criteria for the Government's economic development plans would be watched to make sure it was not picking winners but investing in areas which would bring the best return.

One would be to find ways to use water on the dry east coast of both islands to open up diversification opportunities.

In health and education, the federation wants more funds directed into primary healthcare and education for rural communities.

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