Labour expounds rural policies as 'smart way' to drive economy

20:42, Apr 28 2014
Damien O’Connor
PRIMARY SHAKEUP: Labour MP and primary industries spokesman Damien O’Connor is on a two-day tour of Waikato and Coromandel talking to industry groups.

A capital gains tax on farmland, stringent environmental practices and a revamp of the meat sector are up for consideration as the Labour Party makes a play for the rural vote.

Their policy position is still in development but the party's primary industries spokesman, Damien O'Connor, was in Hamilton yesterday to gauge reaction on proposals in two days of meetings with sector groups and party faithful in Waikato and Coromandel.

He said farmers would be opposed to a capital gains tax at first but it was necessary to halt "rampant" price increases and to keep land productive.

"People buying farmland should do so on the basis of its productive-return capacity, not on some expectation of a capital gain that effectively makes it more difficult for the next farmer to make a living," he said.

O'Connor said the Auckland and Christchurch housing markets were running red-hot. This was behind the Reserve Bank's decision to introduce loan-to-value ratio (LVR) lending restrictions and interest rate hikes.

"The whole productive economy is suffering through higher interest rates driven by the Reserve Bank and a higher dollar off the back of that, on the basis that Christchurch has an earthquake and Auckland has a need for more houses. It's not the smart way to drive an economy that is still dependent upon primary production exports."


O'Connor said the drought-like conditions in Waikato hit the region hard but the weather had always been a challenge in farming.

He said the National-led Government had allocated tens of millions of dollars for research and assistance but had got it wrong - the focus should have been on environmental management.

"The levels of intensification of dairying across the country are so much greater now that it's getting increasingly harder for farmers to maintain production," O'Connor said.

The meat industry was in deep trouble, he said, and needed to be transformed to offer more security to farm workers, businesses and freezing workers. "At the moment there is so much uncertainty, a shrinking base of the number of sheep.

"The only reason beef production has been maintained is because of dairy production." Labour's finance spokesman, David Parker, was due to announce monetary policy to "better support exports" and a "more realistic exchange rate", O'Connor said.

He is in Coromandel today to speak to groups about commercial and recreational fishing.

Waikato Times