Winning the paper war: Promises hot air, say farmers

TOM LAMBIE, president of Federated Farmers, says the Government needs to pay more than lip service to rural sector concerns.

Last year Federated Farmers launched a campaign to Fight Against Ridiculous Taxes (Fart).

Some might assume that the federation ended the campaign when it succeeded in forcing a Government backdown on the hugely unpopular flatulence tax. But that is not the case. The federation has continued to campaign to remove unnecessary taxes, levies, charges and other imposts. Similarly it has ongoing battles to stop or cut the swathes of red tape that strangle business.

In recent months there have been at least two new examples of unnecessary charges: another massive hike in fuel taxes and a $20 million border security tax. Both will add to the cost of doing business, and therefore result in less income for farming families for no apparent gain.

Since the removal of subsidies in the 1980s, New Zealand farmers have become more business-focussed. To compete with highly subsidised producers in the global market, farmers work to ensure their inputs are carefully calculated and driven by cost-effectiveness. Production is guided by the demands of consumers.

While the stronger exchange rate and worse climate have combined to reduce revenue, farm and animal productivity is well ahead of the early 1990s due to better technology and management. While the slow-down may take some time to fully impact on our economy, it is vital the Government takes a long-term strategic view that helps the nation's wealth creators and increases the sustainable growth rate.

This means reducing regulatory burdens. The best places to start are the Resource Management Act, Occupational Safety and Health rules, local government restraints and blockages to private-sector investment in areas such as electricity.

The Government must promote an environment that encourages New Zealanders to be innovative and enterprising, rewarding those who risk their capital to make profit, and ensure protection of private property rights and give confidence in the rule of law.

The reality is in the past two years the Government has:

* Tried to force farmers to pay for research to reduce agricultural greenhouse gas emissions with limited likelihood of beneficial impact and which no one else in the world is bothering with.

* Introduced a taxpayer-funded paid parental leave scheme that creates significant inequities for self-employed and casual employees and will do little to enhance work opportunities of women and parents.

* Implemented new laws covering the transfer of agricultural chemicals resulting in widespread storage and handling requirements.

* Changed dog laws to force owners to microchip farm dogs, which will do nothing to improve safety.

* Passed the RMA Amendment Bill containing new heritage provisions likely to require consents for many normal farming activities.

* Passed new local government rules that let councils do projects for "grief groups" at the expense of all ratepayers, but particularly those with a heavy rates burden such as farmers.

* Proposed regulation that will result in power-generation capacity lying idle for 59 out of 60 years just in case of another "electricity crisis", when the market provides a workable solution.

* Raised ACC costs so a self-employed person on $50,000 a year has faced an 89 per cent increase in levies in two years.

* Used taxpayers' money to subsidise Government-friendly unions.

* Provided trainees with minimum wage entitlements, which have risen for the third year in a row.

Some of the more recent imposts have included another hike in petrol taxes - the second since December 1999 - to help fix a problem unrelated to farmers, Auckland's transport problems.

And last month the Government said fuel taxes raised for land transport projects would be indexed to inflation.

The Government's Building Bill - designed to fix Auckland's leaky home problem - looks set to add to construction costs of farm buildings.

It has added to the cost of running a business by putting up the minimum wage and giving employees another week's holiday.

And the border security tax will charge all exporters $8 million for Customs to comply with stricter import rules to one market, the US.

Farmers just want a level playing field, the ability to remain competitive, and a business environment that encourages diversity and innovation. We can confidently say this is the greatest country in the world. And farmers want to continue to contribute to that success. But the mountains of paperwork and creeping costs of running a business subtract from our ability to do so.

So far the Government has paid lip service only to cutting compliance costs. Until it realises it is the key player in that process, incomes of all New Zealanders will be less than they could.