Fieldays: PM Chris Hipkins rules out fertiliser tax, acknowledges ‘oppressive’ pace of change for primary sector

Prime Minister Chris Hipkins has ruled out implementing a fertiliser tax after strong condemnation of the proposal from the primary sector.

Speaking at Fieldays in Waikato today, Hipkins reinforced his support for He Waka Eke Noa - the Government-sector partnership group tasked with developing agricultural emissions pricing - but said an “actual plan” on how individual farms could reduce emissions and receive awards for those efforts was required.

“I believe that He Waka Eke Noa can be that actual plan because it’s recognising and responding to a reality that we can’t change,” Hipkins said.

“That’s why I don’t support a broad-based tax that doesn’t provide the nuances that are inherent in He Waka Eke Noa.

“So I can confirm today that the Government will not be implementing a fertiliser tax ... we want to work hard with you to make He Waka Eke Noa work.”

The Herald reported in late May comments from Agriculture Minister Damien O’Connor that indicated the Government’s intention to have an emissions pricing plan ready before Parliament wrapped up before the last sitting day on August 31, but other interim options that would raise funds for research and development were also being considered.

He confirmed he had discussions with the sector about a fertiliser levy, which they said they did not want.

Agriculture Minister Damien O'Connor referenced the potential tax last month. Photo / File

A levy would have applied per tonne of fertiliser; farmers use more than 400,000 tonnes of fertiliser a year.

“The idea of a levy that would have contributed to money for research and development was my idea of a possible good investment,” O’Connor said in response to questions from Act’s Mark Cameron in the House in May.

“The industry leaders have come back to me and said they don’t like that.”

As the National Party proposed to delay the sector paying for its emissions until 2030, Hipkins believed He Waka Eke Noa was approaching a workable arrangement for how this could occur by the Government’s initial target of 2025.

“We’ve still got some details to work through, but I think we are very close to landing something that will work.

“While there will be disagreements along the way, it’s important that we continue to move forward.”

He accepted that some in the primary sector were being overwhelmed by day-to-day challenges whilst also grappling with long-term issues like climate change.

“I hear that the pace of change, for some, has become quite oppressive and quite a source of tension and stress and fear.”

However, he was optimistic when referencing the sector’s future prosperity as it employed more environmentally friendly practices, making New Zealand exports more attractive to global markets.

Hipkins also stated that “growing our export sector” had been at the “forefront of any international activity that I’ve done in the time that I have been Prime Minister”, referring to progress made on free trade deals with the United Kingdom and the European Union.

He did deliver a warning to sector leaders relating to RSE workers from the Pacific, saying New Zealand’s labour shortage was also being felt in other Pacific countries and it was vital to maintain goodwill and relationships.

“We can’t just assume that because we turn the tap on a bit stronger that the workers are automatically going to flow from that.

“All of the industry have a role to play in making sure that we are preserving our access to RSE workers because they are so important to our prosperity as a country.”

Speaking to reporters after the speech, Hipkins denied his decision against introducing a fertiliser tax was a U-turn, saying there was never an “official proposal” for one.

“We’ve been taking soundings from the primary sector about how we can best price emissions that come from farming for some time now and [a fertiliser tax is] one of the options that’s always been on the table as part of those discussions,” he said.

“I’ve ruled it out because we’ve heard very clearly from the farming community that they would rather that we moved ahead with He Waka Eke Noa than try something else around the fertiliser tax.”

Prime Minister Chris Hipkins says the large contingent of Labour MPs at Fieldays doesn't indicate concern within the party that its rural support is slipping. Photo / Getty Images

He said his interactions with people attending Fieldays had been “mostly positive” so far and delivered a witty jibe to National leader Christopher Luxon, who recently described New Zealand as “a very negative, wet, whiny, inward-looking country”.

“Look, I haven’t met anyone who’s wet, I haven’t met anyone who’s whiny, I haven’t met anyone who’s inward-looking, I haven’t met anyone who’s really negative - admittedly I haven’t run into Christopher Luxon yet,” Hipkins said with a grin.

He also revealed he had chatted with former deputy prime minister and current New Zealand First leader Winston Peters over lunch. They spoke largely about the weather, according to Hipkins.

Asked whether the large contingent of Labour MPs attending Fieldays signalled the party’s fear it was losing the rural vote, Hipkins said it was the Government’s role to be represented at important primary sector events and wouldn’t give a direct answer when asked whether rural voters in 2020 would do the same this year.

“Look, I’m out to get every single vote that I can, I’m not writing off any segment of the voting population.”