The Coalition sought to reassure farmers this week with the announcement that it would introduce the Farm Debt Mediation Bill.
At the same time, too, it responded to criticism that its one billion trees programme was forcing the wholesale conversion of farms into forests.
The week in politics also looks at the debate about the alleged budget hack – and whether the public cares – and Christopher Luxon’s resignation as chief executive of Air New Zealand. What impact might he have on the National Party?
Firstly, though, the National Party has signalled it will support legislation to help indebted farmers negotiate with their banks.
National’s agriculture spokesperson, Nathan Guy, said the Reserve Bank’s intention to lift capital requirements for banks would force the banks to come down harder on indebted farmers. Dairy farmers held about $42 billion of debt while debt across all farming was $62b.
“If the Reserve Bank goes hard that’s going to make it harder for farmers who have high levels of debt and they’re going to be looking for this safeguard in terms of the mediation, so I think right now the world has changed a bit in the last few years and it’s important we do support it through the first reading,” Guy said.
Political commentator Bryce Edwards said an argument could be made that mediation would help farmers by preventing banks from moving quickly to wind them up when they were struggling to repay debt.
“But mostly, yes, this is gesture politics. This is a sense of politicians trying to come up with a solution that doesn’t really involve them spending any money. It doesn’t really involve hurting the banks too much, so everyone agrees with it.”
Edwards said the banks had to play along with the proposal because they faced a great deal of public mistrust about their conduct and performance.
Fifty shades
While the government might be winning kudos in the rural sector for that move, new lobby group Fifty Shades of Green has raised concerns that the one billion trees programme is leading to the wholesale conversion of farms to forests. It argued changes to the Overseas Investment Act to encourage more investment in forestry are putting more pressure on New Zealand farmers.
Guy said while the government had made it tougher for foreigners to buy residential property and farms, the encouragement to forestry had opened up a “bit of a loophole” for foreign investors.
Edwards said he was not sure the planting of trees would lead to the sorts of problems outlined by Fifty Shades of Green but the government had to be open to the debate.
Meanwhile, National has continued to criticise the government and the Treasury over its handling of the botch-up, which led to National accessing parts of the budget before budget day.
Treasury secretary Gabriel Makhlouf called it a hack and referred it to police but it soon became obvious National had accessed the information because of problems with the Treasury website’s search tool.
But does the public care?
Amy Adams thinks both the hack and the content of the budget are relevant and that people do care.
“I think what they care about is two things – competence and honesty –and this is an issue that touches on both of those things, so yes the content of the budget is important, and we’ve been discussing that as well. But, actually, if the government and the systems it is running, and I mean the government in the wider sense, if it's not competent and if it's not honest those two things are incredibly important and I think the public does care about the calibre of people running this country.”
'Outrageous' hack
Edwards agreed it was in the public interest, even if the public was not interested in it, and said National was right to go hard on it.
“I think it was outrageous that, whatever happened, we had the situation where the police were being brought into politics, the opposition was being linked with this crime and, yeah, it was unfairly tarnished.”
But he thinks National took it too far and probably did itself a disservice by talking about it for too long.
“It really speaks to the fact National doesn’t really have any strong ways of combating this budget. Firstly, because National doesn’t really have an alternative vision at the moment that will show up this government as being in the wrong.”
He said that, as well, the budget was pretty mediocre so National was left with nothing to really strongly attack.
If National is struggling, then is outgoing Air New Zealand chief executive Christopher Luxon the man to save it?
Bryce Edwards thinks so but Adams has this warning for Luxon.
“In my experience the people who come into Parliament with huge, you know, 'reps' around them tend to have the hardest road. And, if I think back over the time I’ve been here, people who’ve come in here with this big media interest in how this person is going to be the second coming often tend to perform on the downside,” Adams said.
Edwards said Luxon did want to be a National MP, its leader and eventually prime minister. The plan would be to enter Parliament after the 2020 election, take over the leadership of National and then after the 2023 election become prime minister.
Is this bad for National Party leader Simon Bridges?
“I don’t think it’s bad for Bridges because he’s just focused on the next 12 months trying to stay leader and trying to win the next election whereas Christopher Luxon is going to be post the 2020 election. So, yes, this might change things for Judith Collins, so therefore maybe it changes things for Bridges too because it may speed up Collins’ plans,” Edwards said.
