Should New Zealand's primary sector industries be concerned about the prospect of a left-of-centre coalition in the upcoming general election?
Primary sector leaders are nervous about the outcome of the election, reports KPMG New Zealand.
This is one of the key themes of the KPMG Agribusiness Agenda, titled Facilitating Growth in an Uncertain World.
KPMG interviewed more than 150 leaders for its fifth edition. Many were concerned about the prospect of a left-of-centre coalition, and the impact it might have over issues such as water quality and infrastructure.
The primary sector was less troubled about issues such as the exchange rate, as it was "uncontrollable", and even though prices might fluctuate, demand for New Zealand products from Asia would continue to grow.
KPMG's Global Head of Agribusiness, Ian Proudfoot, said historically both National and Labour had been consistent in their policies towards the primary sector.
"It's not necessarily Labour that is causing concern, but its coalition partners. Leaders are worried about charging for natural capital, and we've had confirmation of that with the announcement of the Greens carbon tax," Proudfoot said.
A left-of-centre coalition might also take a different stance to the National-led government on the Trans-Pacific Partnership free trade agreement, and the use of overseas labour by the horticulture and wine industries.
Proudfoot said many leaders had made the point that while investment had been made in water quality and reducing pollution, "the benefits are not immediately apparent."
"There is a concern that the lack of runs on the scoreboard may result in a new coalition government increasing the regulation on the industry, and imposing charging mechanisms for the use of natural capital," the report said.
Industry leaders were also troubled about the level of support from an alternative coalition government for water storage and irrigation schemes, which the leaders regarded as "transformational" and giving producers a significant advantage over global competitors.
However some leaders interviewed for the Agenda recognised there were potential policies of an alternative government that could have appeal for the sector. "One positive expectation is that a new coalition government would take a much more active stance in promoting sustainable business - with a particular focus on increasing R&D investment into environmental issues such as greenhouse gases, nutrient leaching, and water quality," Proudfoot said.
For the fourth year in a row the issue of biosecurity headed the leaders' list of priorities. This was followed by recognition of the importance of food safety, securing high quality trade agreements and investing in water irrigation and/or storage. "Industry is keen to take a seat at the table to manage risks, although they are concerned over the potential costs. The debate has moved on to what should be included in the Government Industry Agreements (GIA), and how costs should be shared between participants," Proudfoot said.
PRIORITIES FOR 2014
2. Food safety
3. Trade agreements
4. Irrigation/water storage
5. Delivering market signals to producers
6. High speed broadband
7. Creating NZ brands
8. Innovating with customers
9. Research and development
10. Developing future leaders
- Fairfax Media