GVT: Speech to National Council, Federated Farmers NZ

[Ministerial Announcements]

Wednesday 21 November 2001

Speech Notes - Hon S Lee

Speech to National Council, Federated Farmers NZ

Thank you for inviting me here this morning.

No doubt your Council like the Labour-Alliance coalition will be working
through all the implications of the World Trade Organisation ministerial
meeting that ended last week at Doha, in Qatar, with the decision to launch
a new trade round.

New Zealand's delegation, led by my cabinet colleague, Hon Jim Sutton, was
in the forefront to write a commitment into the declaration's text on
agriculture for the phasing out of export subsidies.

No doubt you will be discussing the observations of your president Alistair
Polson who was also in Doha and saw the break-through emerge from hours of
tortuous negotiations.

The government recognises that the exchange of goods and services with
other nations is critical to help our own country to create jobs and raise
income levels.

While the Alliance believes that trade is fundamental to New Zealand's
economic development, we make a distinction between fair trade, which we do
support, and free trade, which we have strong reservations about.

As the third most deregulated country in the world, it is difficult for
those who market our unsubsidised agricultural goods and services
throughout the world to have competitors from other countries who receive
export subsidies. But the Alliance will be taking a hard look at what
benefits the next trade round delivers to working people.

The Alliance believes that there have to be checks and balances, and these
should take into account the social, economic, and environmental outcomes
of free trade deals.

Our own economic development is undermined if trade agreements result in a
reduced standard of living for significant numbers of New Zealanders, or
compromises our natural environment.

We would not want to sanction any bilateral or multilateral trade agreement
that resulted in the same consequences for the workers and the environment
of our trading partners.

As a matter of principle, we believe that minimum employment and
environmental standards should be written into trade agreements.

In practice, this would mean the provision for improvement in minimum
standards would be built into both bilateral and multilateral agreements,
for example, the development of a minimum wage standard and its steady
improvement; or the use of environmental measurements and a commitment to
improve environmental outcomes.

The spectre of child labour especially is a serious concern.

In these matters, the Alliance is staunch.

Where nations have a competitive advantage based on the exploitation of
their workers, or of children, or the exploitation of the environment, we
do not believe that is a fair competitive trading edge and we will not
support any trade agreement dependant on these factors.

The last round of world trade negotiations was launched in 1986. Even the
significant moves last week towards the launch of a new trade round won't
be sufficiently timely to mitigate the immediate impact of the current
global economic downturn.

There is no doubt now that the September 11 terrorist attacks in the United
States have had a major impact on the world.

The start of the downturn may have originated before the attacks but it
seems to have become much more pronounced since then.

The International Labour Organisation said recently it feared that a
job-loss tidal wave is on the move and that it would wash up on everyone's
shores. The ILO's concern is that the world economy could be plunged into
such a stunning reversal that up to 24 million jobs could be lost by the
end of next year.

As you would expect, we take note of such dire predictions but the Reserve
Bank last week indicated that while the world economy was looking "kind of
gloomy out there" (in Don Brash's words), New Zealand was entering the
global turndown in pretty good shape.

Unemployment remains at a 13-year low, exporters are getting good prices
supported by a low New Zealand dollar, and the property market is well
ahead of last year.
But as Dr Brash said, the international environment seems more threatening
than at any time in more than a decade and if things turn out worse than we
expect, the Reserve Bank might have to reduce interest rates further.

Treasury is undertaking its own careful assessment to ensure that our
response will be appropriate to our particular circumstances.

The government and indeed the country are looking forward to the release of
Treasury's prognosis for our economy, the December Economic and Fiscal
Update due out on December 18.

This government is determined not to repeat the mistakes of the last
administration. It cut spending in response to the expected slow-down
associated with the 1997 Asian economic crisis, but that only worsened the
negative impact on New Zealand of what was happening overseas.

I have taken a few minutes to touch on the WTO talks and the post-September
11 global economic outlook because they are going to have a huge impact on
the farming sector in the short term.

Despite the uncertainty, the government is determined that the core values
that underpin the Labour-Alliance coalition will remain firmly in place.

· We are determined to keep alive the promise of a better future for all
New Zealanders, urban and rural.

· We will continue to reject the free market vision that demands that
the community should pull out of everything, sell everything, and let the
market rule.
The folly of that path can be seen in the anorexic state of our passenger
railway services, and the parlous state of our national airline.

As you know, just over 6 weeks ago New Zealanders had the opportunity to
vote in the local authority elections.

Preliminary analysis from Local Government New Zealand and my Department
indicate that the level of voter participation is marginally lower than the
1998 figures with an average of 56 percent.

Election statistics collated so far indicate that most of the large
councils had little turnover of elected members (excluding mayors). But in
smaller councils, turnover was greater.

The following trends have emerged from my department's preliminary analysis
of the provisional results:

§ City council elections attracted a lower percentage of electors than
district council elections;
§ There was lower participation when there was no Mayoral contest; and,
§ Participation in district elections increases from north to south
through the country.

While I would have liked to have seen higher turnouts at elections of all
types, the bottom line is that you cannot make people exercise their
rights.

The Labour-Alliance coalition came into office two years ago with wads of
carefully constructed policy including new directions for my portfolio
areas.

We conducted three inter-related reviews that aimed to make local
government more responsive to community needs and more accountable to
communities.

Less than two years after taking office, we have
· A new Local Electoral Act 2001;
· A Local Government (Rating) Bill that we hope to pass into law by
Christmas; and
· A new Local Government Bill to replace the present comprehensive Local
Government Act, which we hope to introduce to Parliament before Christmas.

The Labour-Alliance coalition considers that local government is an
integral part of our system of democratic government.

The Government sees a more enabling law as a necessity if local government
is to be more responsive to the needs of its diverse communities,
delivering sustainable social, economic, cultural and environmental local
development.

The antiquated traditional style of local government law-that lists in
great detail the particular things councils are allowed to do and how they
are allowed to do them-is no longer realistic. It was modelled on outdated
19th century UK legislation and is outmoded, incomprehensible in parts, and
causes incessant litigation.

A "general power of competence" for councils, being promoted by government,
provides for a general expression of the range of things councils can do
with limits on them.

But our empowerment proposals are not about providing the council with an
open book to do anything they wish.

Transparency and accountability issues have formed an integral part of the
review. As I have stated very clearly in the past to the local government
sector: with power must go responsibility and more accountability back to
the community.

Our consultation process was extensive.

It included:

· The distribution of 20,000 copies of the consultation document; and
· 66 meetings throughout New Zealand on the review, including three
specific meetings with members of Federated Farmers in Amberley, Tauranga
and Paihiatua. And yes, also a teleconference was undertaken for South
Island members.

Over 650 submissions were received by Internal Affairs on the review, and
it attracted 8 written submissions from your organisation.

From the submissions, it appears that many farmers and other rural property
owners feel:
· that larger land holdings such as farms are paying a
disproportionately high level of rates, as valuations are based on
unimproved land values; and

· that they are cross subsidising facilities and services in towns which
they do not have the opportunity to use.

Another major concern in the submissions to Internal Affairs is that the
proposed powers of general competence will allow councils to expand into
the provision of social and cultural services, which will potentially
increase the rates burden of farmers.

In response, I would point out that general empowerment will be underpinned
by mandatory requirements for far higher standards of transparency and
accountability.

I cannot stress this enough. If local authorities are to have greater
flexibility to act on behalf of their communities we must be sure that the
electors and ratepayers have the capacity to involve themselves fully in
the decision making process.
The balance between empowerment and decision making processes is critical.

It is also important to understand that it is not proposed that local
government be given unfettered power to do whatever it wants.

The general powers would have to be exercised in a way consistent with the
overall object of the new Act, AND

· there will be specific limiting provisions in the new Act, AND

· other Acts would continue to apply to local government. For example,
the power to tax will be covered by the Local Government (Rating) Act, AND

· we propose to create further requirements for council decisions to be
made openly, for activities to be properly planned for, including
strengthened rights for the public to be consulted on important decisions.

As you know a review of the Rating Powers Act has also taken place and has
culminated in a Local Government (Rating) Bill. This Bill is currently
before the Local Government and Environment Select Committee for its
consideration and report back by 3 December.

The general objective of the Bill is to update and simplify existing rating
powers and responsibilities to meet modern needs of councils.

I cannot comment on what the Select Committee will recommend to Parliament
about the Bill. I wait, just as you do, to see what will be reported back
to the House.

I can however talk about the policy decisions that the Bill is based on, in
relation to a couple of the key concerns outlined in Federated Farmers
submissions.

I understand that you may be unhappy that this Bill is proceeding ahead of
the outcome of the Review of the Local Government Act.

While the Local Government (Rating) Bill is part of the same government
programme to reform local government legislation as the Review of the Local
Government Act, the Rating Bill is not directly linked to, or predicated
on, that other review.

The objective of the Local Government (Rating) Bill is to provide a
legislative framework of modern and flexible rating mechanisms that can
operate with, and complement, the current provisions of the Local
Government Act.
There is special emphasis on the funding policy process and associated
financial management provisions enacted in 1996.

The Bill has been developed in tandem with the Local Government Act review
and care has been taken to avoid inconsistencies with the direction and
policies guiding that review.

One of the other measures that I understand that you advocate is the
itemisation of rates demands in relation to public good activities that are
funded by general rates.

As I understand it, what you are asking for is for the inclusion of a wider
set of information, and greater transparency, so that you know what you are
being asked to pay for.

I can only reiterate that the Review of the Local Government Act was about
ensuring that councils are more accountable to the community that they
serve. And that their decisions are made within a transparent setting.

Hence decisions on the council's funding policy, which in the end will set
the picture for the contents of the rates assessment, will be much
improved.

What is proposed will provide you with enhanced rights to be consulted on
the funding policy and strengthened rights to make submissions, and have
those submissions responded to.

The reforms of local government legislation currently underway are very
much about evolution rather than revolution. All-in-all, we want councils
and communities to be working collaboratively together. Developing better
and effective working relationships and partnerships.

It is critical to New Zealand's long-term interest both economically and
socially to rebuild our local communities and regions.

The sustainable management and development of our country's resources is,
of course, the key principle driving the Resource Management Act that came
into force a decade ago. In terms of the tensions that its processes have
generated, it is useful to remind ourselves of what it is we are trying to
achieve.

This single Act, with broad political support, set out to shape the future
with its presumption of the sustainable management of physical and natural
resources, its setting out environmental bottom lines and national
priorities, to be achieved-in part-through devolution to local communities.

National's Simon Upton hailed it when he put it through as a "one stop
shop". It still stands as a tremendous achievement when compared with the
fragmented and often conflicting regimes of the whole host of Acts that it
replaced. Most of the criticisms of it are about methods not ends. And it
was poorly resourced at the start.

Nearly two thirds of plans are now through and what I find interesting is
that while the process has worked reasonably productively in many areas, it
has become controversial in a few regions.

Nobody seems to have done a useful analysis, yet, on why the same Act has
been successful in some areas but not in others.

Good process is obviously a key factor, and essential to the successful
implementation of plans.

I emphasise that the Department of Conservation is not a decision-maker in
these land-based plans. It is merely an interested party.

When DOC or any other department appeals to the Environment Court, they
must have a strong case or the courts will sharply criticise any party they
think is being frivolous with the court's time.

The whole regime of resource consents does not mean that a project will be
refused but simply that the community or its representatives can have a
say.

To keep things in perspective here, I am advised that last year less than
one percent of all resource consent applications were declined, only one
percent were appealed, and just five percent of all resource consents were
publicly notified.

Local authorities process about 48,000 consents every year, and hardly any
of these strike problems.

Setting up the regime has been a costly process, and I note Federated
Farmers' estimate of $200 million.

It is not clear to me or to my officials how this figure has been derived.
More importantly, it is also not clear whether the cost of plans has in
fact been new money raised from hard-pressed ratepayers, or whether-as it
should have been-it has come from a refocusing of priorities within
councils as they get to grips with their new responsibilities.

One of the most interesting aspects of the RMA debates has been the issue
of rules and regulations.

I am advised that farmers often feel very frustrated their good intentions
towards conservation are seen by some as so unworthy of trust that they
still require regulation.

My approach is that positive and voluntary initiatives are tremendous, and
this government has backed them with the money required to make such
schemes work.

But I still believe we need the reinforcement of regulation, not to punish
the good and the well intentioned, but to make sure the high standards set
by the positive people, are also adhered to by those who don't share that
vision.

I should also make mention of the National Policy Statement on Biodiversity
which is currently having its terms of reference finalised along with
membership of the related Board of Inquiry.

I agree with my colleague the Minister for Environment Marion Hobbs when
she says:

"The policy has to mean something. There is no point in writing a national
policy statement that is so woolly that nobody has any idea what to do with
it.

"By definition national policy statements are the top of a hierarchy of
policy documents prepared by central and regional governments under the
RMA. The words have to be clear and direct and strong. Local authorities
must know what it is they are required to turn their attention to."

Federated Farmers have been involved in the National Policy Statement
process, and I am confident that there will be strong rural representation
on the Board of Inquiry.

The other issue on resource management you have asked me to speak briefly
on is the Fish and Game "clean waterway" campaign, or dirty dairying as it
has been dubbed by some critics.

The current $14 billion expansion of the dairy industry has created
environmental pressures and caused a polarisation of attitudes between many
in the rural community and those whose primary interest is the health of
our lowland waterways.

I have been told of your concern about Fish and Game levies being dedicated
to their clean waterways campaign. The advice from my officials is that the
process followed in determining the recent Fish and Game fishing licence
fees was scrutinised earlier this month by Parliament's Regulations Review
Committee.

It found no points of concern to raise at this time.

My officials also advise that Fish and Game do have a statutory advocacy
function for ecosystems and habitat protection in particular.

The wider community does have a legitimate expectation that our lowland
waterways will be fit to swim in, fit for stock to drink, and support
healthy aquatic ecosystems.

The intensification of farming, sedimentation from roading and subdivision,
industrial pollution and in some cases sewage contamination have all
contributed to the poor quality of many waterways.

They are problems that must be faced up to and resolved.

The best practices in riparian protection and management in the farming
community need to be maintained across all farmlands.

Protection of indigenous biodiversity is one of the most important elements
on the conservation agenda and the involvement and commitment of the rural
community is critical to halt the further loss of biodiversity.

We have much in common when it comes to effective pest and predator
management. The simple truth is that this government has committed far
more, in cold hard cash, than any other previous administration.

We are contributing an extra $30 million on the farm fringes alone to see
if we really can eradicate the scourge of TB and this money, which is
matched of course by your own contributions, should have a massive spin-off
for conservation as well.

The department is spending around $100 million per annum on the management
of protected areas and protected species.

This will be significantly increased over the next three years as $57
million in extra funding comes on stream from the massive Biodiversity
Strategy package which totals $187 million to be spent over five years.

DOC's current threat management programmes are carefully targeted on the
"priority place-critical pest" model developed by Landcare scientists.

Places with the highest conservation values are identified and the focus is
placed on managing the pests which directly threaten those conservation
values.

Sometimes that will benefit individual farmers and sometimes it will not.

But farmers do benefit hugely from the massive pest and predator control
programmes that are carried out on the public conservation estate.

The State of the Environment Report four years ago showed that our
environmental bottom lines are being trampled on, whether we look at urban
environments, coastal forest protection, freshwater or in stemming
biodiversity loss.

That is why the $187 million allocated by the Labour-Alliance coalition to
implement the Biodiversity Strategy is so important and why we have to be
partners in conservation.

One of the most significant elements in this package has been the dramatic
commitment of government support for the protection of biodiversity on
private land.

The government is providing $37 million over five years for the three major
funds, Nature Heritage Fund, Nga Whenua Rahui and QEII National Trust. This
compares with $40 million provided to the Nature Heritage Fund and its
predecessor during the past 10 years.

There is significant provision in the various funds for the setting up of
covenants to allow farmers to retain land ownership but manage covenants
with an agreed objective of protecting high value biodiversity.

A portion of this funding is already being spent by the three funds
mentioned so it is probably coming to a venue in your district right now!

Just as valuable is the provision of specific funding targeted at providing
biodiversity advice to landowners and assisting with pest and weed control
on private land.

Committees are being set up to make sure this funding is well managed and
projects should get under way next year.

Finally, can I touch on aspects of the government's conservation programme
for the coming year.

2002 is the International Year of the Mountain.

While the lead agency in New Zealand for the year is the Ministry of
Agriculture and Forestry, DOC will be providing enthusiastic support, with
my blessing and that of the Prime Minister who is a keen mountaineer.

You can also expect that next year's Conservation Week theme will probably
focus on some aspect of the International Year of the Mountain.

I expect to unveil new Marine Reserves legislation early in 2002, following
the comprehensive review undertaken this year.

And there will be record sums in the 2002 Budget allocated to the
Department of Conservation for the implementation of the New Zealand
Biodiversity Strategy.

Thank you for inviting me to address you this morning.

We may not always agree but I believe we have much in common that will
enable us to build a constructive working relationship in the future.

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