Farmers need less red tape, not taxpayer handouts

Farmers need less red tape, not taxpayer handouts

The Taxpayers’ Union is calling on the Government to prioritise reducing unnecessary and costly regulations for those growers, farmers and businesses affected by North Island weather events rather than providing them with taxpayer-funded handouts.

Commenting on today’s support package announced by the Government, Taxpayers’ Union Deputy Campaigns Manager, Connor Molloy, said:

“While we acknowledge that many farmers, growers and businesses have been badly affected by the recent weather events, today’s support package will significantly reduce the long-term viability of the farming sector by leading to increased costs and regulations in the future.

“Rather than playing the role of the bank, the Government should be speaking with farmers to see what red tape needs to be cut to make it easier for these businesses to do what they do best. Significant cutbacks to costly red tape would make farms more viable for the future and, in turn, would lead to an increased willingness for banks to lend right now.

“Minister McAnulty’s claim that ‘[m]any businesses severely affected by the weather events are likely to be commercially viable with the right support’ seems to espouse a view that Government is the only one who can provide support and banks are too short-sighted to look beyond the present situation. The whole purpose of a bank is to take well-informed investment decisions that look not just at the immediate term but also, in many instances, decades into the future. If these farms are likely to be commercially viable in the future, banks will recognise this and adjust their lending conditions appropriately.

“The Government may try to claim that taxpayers aren’t paying for this because much of the support is in the form of loans, or underwriting loans. For commercially viable farms, banks are already fronting up. The only loans that the Government could underwrite that a bank wouldn’t otherwise provide are those that are inherently the most high-risk. The Minister seems to think he knows more than the banks but it is ultimately taxpayers who will have to foot the bill in the event of default.

“We are concerned that this could lead to a similar situation as the leaky buildings debacle where the Government, knowing it will be expected to bail out farmers, will make even more costly and over-the-top red tape and levies for farmers to reduce the financial risk for the Government. This will only make farming harder and more costly in the future, jeopardising the long-term viability of one of our greatest industries and provide even more need for taxpayer bailouts in the future. Responsible farmers plan for events like this and should be able to work with their bank who has a vested interest in the long-term success of the business.

“If the Government really wanted to help farmers, they would start by cutting back on existing red tape that stops farmers getting on with the job and withdrawing their proposed replacement to the Resource Management Act, which would lead to even higher farming costs and even more red tape.”