Budget 2011 - Building our future

Budget 2011 builds a stronger platform for growth, sets a credible path to Budget surplus and helps lift national savings. It boosts investment in health, education, and infrastructure including irrigation, while also helping to rebuild Christchurch.

It is a responsible and balanced budget for the times. It takes steps to ensure the Government returns to Budget surplus by 2014/15, so we can start repaying debt and contributing to higher national savings.

We have taken decisions to better target spending to those most in need. This will ensure that schemes like Working for Families, KiwiSaver and interest-free student loans remain affordable and sustainable into the future.

As already announced Budget 2011 invests in a fresh water policy package.

This includes an Irrigation Acceleration Fund of $35 million supporting development of irrigation infrastructure proposals.

The Government will also consider in a future Budget investing up to $400 million of equity in water infrastructure schemes.

The package features a Fresh Start for Fresh Water Clean Up Fund to help councils with historic pollution problems – including reprioritised funding of $15 million over two years, and a total clean-up programme commitment of $264.8 million.

You can find out more about Budget 2011 by visiting the Beehive website.

Helping to clean up Hawkes Bay



The saying ‘many hands make light work’ is being put into practice in Hawkes Bay. Around 48 people, many of whom are currently on benefits, will help to clean up parts of the flood damaged region.

Approximately 120 farms in the Wairoa, Hastings, and Central Hawkes Bay have been affected by the heavy rainfall and flooding and urgently need some extra hands to help with the clean up effort.

Having seen the slips and flooding damage first-hand, I understand the scale of the problem for many of these farmers.

I am pleased that we have been able to offer further assistance to those farmers most affected. Myself and Social Development Minister Paula Bennett have approved up to $500,000 which will fund up to 48 jobseekers for 12 weeks work. This is part of Enhanced Taskforce Green which has been activated in response to the severe flooding.

Work can begin within two weeks, much of which will focus on clearing debris from fences and making repairs, as well as removing silt from properties.

A fresh start for fresh water

My colleague Nick Smith and I joined the Prime Minister yesterday in announcing the Government’s fresh water policy package which will help grow the economy while better caring for our rivers, lakes and aquifers.

The package is the result of at least two years of work by MAF and is designed to expand on the Government’s economic growth agenda.

It includes a $35 million Irrigation Acceleration Fund to support the development of irrigation infrastructure proposals to the ‘investment-ready’ prospectus stage. The Fund also supports the development of new water harvesting, storage and distribution infrastructure.

Government will later consider in a future budget, investing up to $400 million of equity in water infrastructure schemes.

I believe New Zealand’s greatest competitive advantage is its water. It’s our “liquid gold”. But to date we have not done a good enough job in using this wonderful resource.

Water quality is deteriorating in parts of New Zealand, especially in agricultural areas. And at peak times, we face water shortages.

National wants to turn this around. If we improve the way we manage our rivers, lakes, and aquifers, water will help us build the stronger economy we’re striving for.

Beefing up the sector

Great news with the red meat industry recently announcing its goal to grow the sector from $8 billion to $14 billion by 2025.

The Red Meat Sector Strategy, initiated by Beef + Lamb New Zealand and the Meat Industry Association, is a plan to lift the performance of the meat industry and give it clearer direction.

At the moment there is a real risk that current good returns could create farmer complacency about addressing the long-term issues facing the sector. As a farmer I can identify with the strategy’s clear message that we must all look at lifting our on-farm performance further.

I’d like to congratulate Beef + Lamb NZ and MIA on initiating this work. New Zealand red meat is a valuable product, prized by wealthy consumers in a range of markets. We need to continue to build on this base to restore sustainable profits to the sector.

Chatham Islands Visit

A two-day trip to the Chatham Islands gave me the chance to see firsthand the challenges facing our most isolated farmers.

And there are unique challenges - not least the need for a regular and reliable shipping service to overcome the uncertainty of getting livestock back to the mainland.

I was joined by Conservation Minister Kate Wilkinson and Rangitata MP Jo Goodhew on the trip and our hosts did a great job of ferrying us around several farms to meet with farmers.

There was some frank and open discussion - and some very welcome hospitality - and we came away from the Chathams with no doubt about the issues they're dealing with.

I am calling a meeting of several senior Ministers to work through the matters raised, and to report back.

It's important that people living in the Chathams know that they have a voice in Wellington.

A good day for NZ pigs

The use of sow stalls on New Zealand pig farms will be banned by the end of 2015.

Today I released the Animal Welfare (Pigs) Code of Welfare 2010. The practice of sow stalls is now limited to four weeks after mating in 2012, and prohibited by the end of 2015.

The growing unease of many New Zealanders about the use of sow stalls made it clear that change was necessary.

Worldwide there’s increasing opposition to highly intensive systems of pig farming.

Sow stalls are currently used in most countries, including USA, Canada and most of the European Union. The Australian pork industry is voluntarily phasing out sow stalls by 2017.

A five-year time frame on phasing out sow stalls will allow New Zealand farmers to change their production systems and train staff in new management skills so that the long-term sustainability of our pig industry is not put at risk.

The new code also places new limits on the use of farrowing crates.

While the National Animal Welfare Advisory Committee believes that the use of farrowing crates should also be phased out, it recognises this can only happen when alternative management systems are in place.

These must take the welfare of sows and piglets into account, and must also allow our pork producers to remain competitive.

Kiwifruit

New Zealand kiwifruit growers are facing challenging times as some battle with the kiwifruit vine disease, Psa.

It is a very serious situation for New Zealand’s billion dollar kiwifruit industry as we know Psa has devastated crops overseas, especially in Italy.

A programme of aggressive containment is the immediate action and the key to this is a collaborative approach between Government and industry.

I’ve been in the Bay of Plenty in recent weeks with the MAF Biosecurity response team and Zespri who are working very closely with growers on the issue.

The Government is fully committed to working with industry and all necessary resources are being made available to fight the disease.

The response is likely to require a significant financial commitment from both Government and industry, and we stand ready to deliver this commitment as needed.

Right royal rendezvous

Prince Charles and I have a meeting at Balmoral Estate in Scotland next week where we’ll discuss wool.

The Prince is a champion of the efforts of Commonwealth farmers to grow wool and restore profitability to the sector.

His “Wool Project” mirrors New Zealand’s campaign to get our strong wool industry back on track.

I look forward to discussing with the Prince how to increase demand for wool as a naturally renewable and sustainable product.

Pocket money

National’s 1 October tax cuts will support our rural communities, local businesses, and the economic recovery.

The tax package is designed to enhance economic growth. It seeks to rebalance the economy towards earnings, savings, and investing, and away from the unsustainable borrowing, consumption, and over-investment in housing of the past decade.

The tax cuts on 1 October will leave the vast majority of people better off even after the GST rise. Most sole traders – such as farmers, agricultural contractors, and the vital small businesses that support our primary sector – will have more money in their pockets.

It’s important to remember they are also about providing the right incentives. They are the next step in National’s programme to encourage exports and investment.

Together – with the upcoming reduction in company tax – the tax cuts will allow rural enterprises to reduce debt, invest in their staff and plant, and support growth.

Canterbury Earthquake

One thing the devastating Canterbury earthquake has shown us is that in the worst of times, you see the best of New Zealand. I have spent as much time as possible in the area since the earthquake hit, and the generosity of people pitching in to help their neighbours has been overwhelming.

In true Kiwi spirit, Canterbury farmers have not only been dealing with damage to their own properties, but also helping out their mates. Within hours of the quake, dairy farms were sharing generators to get cows milked and I heard of one shed designed for 400 cows milking 2000 over 24 hours.

There is a lot to do before life is back to normal for many Cantabrians, but they are not alone - the whole of New Zealand is behind them. Special legislation has been passed giving the Government powers to get the region back on its feet as soon as possible. In rural Canterbury, we have appointed an experienced rural emergency coordinator to oversee recovery efforts on farm properties, working with the newly-established Regional Rural Recovery Group.

It will take a long time to work through the damage caused by the earthquake. But everyone involved in the emergency response is doing a fantastic job. The Government is committed to rebuilding Canterbury and we will get the job done.