Improved national wellbeing won’t happen unless there is a strong economy to support growth and help struggling farmers.
In a submission to the Finance & Expenditure Select Committee on the Budget Policy Statement (BPS), Federated Farmers argued that the government should focus on policies that help deliver a strong economy which is productive and competitive.
‘This means a market-based economy that is open to the world and is not crippled by excessive and poor-quality regulation or high taxes. Fiscal policy should be prudent and responsible, with spending growth contained and focused on delivering strong value for money,’ read the submission.
Feds is also concerned about the ongoing impacts of acute labour shortages on the primary industries and on individual farmers and their families. This is where their physical and mental health is being compromised by having to take on more work themselves just to keep their farms operating.
‘This at a time when farm input costs have been surging and commodity prices slipping (so combining to erode profitability), while government policy and regulation is adding much uncertainty and anxiety. The combination of these factors has seen a dramatic loss of farmer confidence and higher levels of stress,’ noted the submission.
Feds also called for broader pressures on farms and other businesses that are increasing costs and harming confidence to be addressed. This requires not only action from monetary and fiscal policy, but also an urgent need to revisit recent and proposed regulatory changes, especially where they are impractical and unworkable such as Essential Freshwater regulations, reform to the Resource Management Act, and proposals for pricing agricultural greenhouse gas emissions.
Feds acknowledged the government’s priority for and emphasis on wellbeing, including the four capitals from Treasury’s Living Standards Framework (human capital, natural capital, social capital, and financial/physical capital).
It also highlighted the government’s response to labour shortages by making changes to immigration settings to ease workforce pressures in the most affected sectors and its commitment to developing a locally trained workforce. But other policy in the employment space will not help, such as the Income Insurance Scheme, Fair Pay Agreements, and the succession of large increases to the Minimum Wage.
The government’s economic plans include keeping NZ safe from Covid-19, accelerating rebuild and recovery from Covid-19 and laying the foundations for the future.
The government has also identified four ‘policy areas for focus’ for Budget 2023:
• Supporting Kiwi families and households with cost-of-living pressures.
• Careful and balanced fiscal policy, including returning to surplus in the 2024/25 year.
• Getting the basics right.
And delivering on an economic plan, including through investment in infrastructure that drives growth, productivity, and reduces emissions.
Federated Farmers has supported fiscal responsibility in successive BPS submissions. ‘We support 2023 BPS’s stronger wording contained in its Policy Areas for Focus, but much will depend on whether the stronger wording translates to actions and results,’ read the submission. While some helpful changes have been made to the Fiscal Strategy, its wording on expenses needs to be significantly strengthened. The very large $4.5 billion operating allowance for Budget 2023 should also be reduced, said Feds.