Clouds on the horizon
Last week’s Tax Working Group report proposes eight new taxes — on capital gains, vacant residential land, agriculture tax, water, fertiliser, environmental footprint, natural capital and waste. Capital gains tax will apply to every small business owner, every farmer and every KiwiSaver account, but not multimillion-dollar art collections, superyachts or luxury cars.
With the government announcing any decisions on new taxes delayed until April, I will comment when we have more certainty on where they are going with it.
On the rural front, the MPI’s recent Situation Outlook report for primary producers looks promising across most sectors, but grey clouds are gathering on the horizon. In the 18 months since the election the Labour-led government has shown its true colours by introducing many anti-farming policies. Government support for irrigation has dried up, research and development funding for the primary sector has almost halved, and petrol excise taxes are hurting farmers and growers. A wideranging review of the dairy industry is also under way, and that’s making many farmers nervous.
I acknowledge the government agreeing with industry to fund the phased eradication of Mycoplasma bovis. The response is now progressing well, and we all hope it can be eradicated over time. However, more government policies being developed are likely to create strong headwinds for rural New Zealand.
It seems that greater union access to farms will be granted. Restricting cropping on hill country and regulating winter grazing are the direction David Parker has given his officials to clean up waterways, and are likely to be in place by 2020.
Farmers are well aware of the importance of looking after the environment, and are continuing to make practical improvements to preserve it for future generations to enjoy. Ninety-eight per cent of waterways are fenced off from livestock, riparian planting is being implemented, and there is more strategic grazing of crops. Water quality is improving (despite critics continuing to blame farmers) through farmer’s diligence rather than government regulation.
The other unknown aspect following the Climate Change Bill next year is whether animal emissions will be included in the Emissions Trading Scheme. This tax will make our farmers less competitive internationally.
It’s clear there are many challenges ahead for farmers and growers. Damien O’Connor’s Primary Sector Council, pulled together months ago to give him advice, is already disillusioned with more than half the council members not bothering to turn up.
National holds every rural seat in Parliament bar one. We are proud to represent Rural New Zealand. We’re committed to pragmatic, science-based solutions that support rural communities rather than slapping on more taxes. I’m keen to hear your ideas on how we can help rural communities grow and succeed. Please go to www.national.org.nz/rural_nz and fill out our survey.
" In the 18 months since the election the Labour-led government has shown its true colours by introducing many anti-farming policies. "