Hon Jim Sutton Speech Notes

30 June

Meat Board Restructuring Bill third reading,

Parliament
Mr Speaker, I move that the Meat Board [Restructuring] Bill be now read a third time.

This Bill was introduced into the House on 2 December 2003. It had its first reading on 17 February 2004 and was referred to the Primary Production Committee on that day with the instruction that it present its final report on or before 27 May. The Select Committee reported the Bill back to the House on 27 May 2004. The Bill has now had its second reading and passed through the Committee stage.

The meat industry makes a significant contribution to the New Zealand economy, in terms of contributions to New Zealand's gross domestic product, employment and export earnings. In the year ended June 2003, $4.2 billion worth of meat products were exported, which accounted for around 15 percent of the total value of merchandise exports from New Zealand.

This Bill was sought by the meat industry. In a referendum of livestock farmers during August 2003, conducted by the Meat Board, farmers voted overwhelmingly in favour of a proposal to restructure the New Zealand Meat Board. The proposal was to retain in legislation the Board's quota management functions and management of the Board's reserves, and remove the Board's levying powers and industry-good functions so that they could be brought under the provisions of the Commodity Levies Act 1990. The Bill provides for this.

The Commodity Levies Act has a higher level of accountability to levy payers than the levying provisions in the Meat Board Act 1997. With the dissolution of the New Zealand Wool Board in 2003 and the consequential removal of the Wool Board's levying powers, livestock farmers have seen an opportunity to reconsider how the meat and wool industry-good functions are funded and managed. In the August 2003 referendum, livestock farmers voted overwhelmingly in support of a proposal to bring the meat and wool industry-good functions under one organisation, funded under the Commodity Levies Act.

In April this year the Commodity Levies (Meat) Order was made. That levy order will commence upon the commencement of this Bill or on 1 October 2004, which ever occurs earlier.

The Bill retains the Meat Board's meat export quota management functions. Quota access is of significant value to the industry and to the economy, and to capture the returns from these quota markets, New Zealand must allocate the access among New Zealand exporters. Having quota administered by a statutory body reflects the regulatory nature of quota management and the fact that quota rights are owned by the Crown.

The Bill provides for the Meat Board to continue as a statutory entity, with a clear focus on managing meat export quotas.

The Bill provides for the Board to maintain a policy with respect to the management of its reserves, to consult farmers on that policy, and to make the policy statement available to farmers. This is consistent with farmers' ultimate ownership of the reserves.

The Bill includes provisions to deal with the taxation consequences of the restructuring. As far as possible normal tax rules will apply, and the tax issues are handled in similar way to previous producer board reforms.

Mr Speaker, this Bill has wide support from the meat industry and livestock farmers. A recent press statement on the Bill from the New Zealand Meat Board, said "This is another example of the industry and Government working together to get a positive outcome".

I wish to compliment those in the industry who have fronted on the Bill, notably Jeff Grant and Mike Petersen. Their energy and leadership has served the industry well.

I wish the new Meat Board well in its reduced but more focused role of managing the meat export quota markets and the Board's reserves. I also wish the new combined meat and wool industry-good organisation, Meat and Wool New Zealand Limited, well in its role of funding and managing industry-good activities under the provisions of the Commodity Levies Act 1990.

Most of all I wish New Zealand livestock farmers and the wider industry well, under the new industry structures.

I commend this Bill to the House.

ENDS

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