Fert tax idea 'ridiculous'

Over the past week or so, rumours emerged that the Government is fed up with the primary sector failing to agree how agricultural emissions should be dealt with via the He Waka Eke Noa (HWEN) collaboration between the Government and the sector. There has been talk of them unilaterally introducing a 'fert tax'.

Todd McClay says he's not sure if the idea is about reducing emissions or just a flat punitive tax on farmers, which he says will drive up food prices and put farmers out of business.

"A quick back-of-the-card assessment is that the typical dairy farmer in Canterbury will face $12,000 a year additional tax bill, and farmers in the Waikato somewhere between $5,000 and $6,000. So, all that this tax would do is put costs on farmers at a time when they need to be competitive and producing as much as they can," he told Dairy News.

According to McClay, HWEN is all but over and blames the Government for showing bad faith to the primary sector. He says government said at the start, lets join and find solutions, but in the end just walked away. He says the situation now is that Agriculture Minister Damien O'Connor is "sitting in his office dreaming up all sorts of ludicrous taxes" which farmers don't have an option to avoid or mitigate against.

"A punitive tax will not change behaviour and will simply send jobs and production overseas. I think the Government have now got themselves between a rock and hard place and there is not enough time before the election to pass the HWEN legislation. What have they decided to do is think about introducing a tax on productive farmers, which is madness," he says.

McClay says National will be coming out with its emissions policy over the next few weeks and, while he won't reveal the details in advance, he says there are some bottom lines.

One of these includes a full review of the science and targets relating to agricultural emissions and comparing that to actual warming. He says it is important because they want to ensure NZ meets its obligations under the Paris Accord, but farmers should not be forced to do more than they need to.

He says National will not agree to any proposal that sends jobs and production offshore and they want to look closely at the tools that are available to mitigate agricultural emissions.

McClay points out that farmers, foresters and tradies are being unfairly penalised by the 'ute tax' which he describes as punitive. He says, as well-meaning as Labour might be, taxes for the sake of it, will not change behaviours. He urges O'Connor to get out in the field and rebuild the trust his party has lost through its treatment of the farming sector.

"The minister just doesn't seem to understand that agriculture is an extremely important industry for NZ, and at a time when we have record levels of debt and Labour is borrowing and spending as quickly as they can. We need to back our farmers to trade our way out of this financial mess," he says.