One of the important aspects of farming is that farmers get to walk around outside with few distractions during their farming routine and get to think deeply about issues affecting their farms and the world in general.
Front and centre at the moment is the imposition of a ute tax from the beginning of 2022, to discourage the purchasing of high-polluting vehicles.
Something that has been absent from public comments about the ute tax is the fact that for some years now we have been paying a carbon tax as a component of our petrol and diesel costs, which is supposed to be put to planting new trees to offset our carbon emissions. The purpose of this is to make our fleet of vehicles carbon neutral. In addition to a carbon tax, we also pay Road User Charges to fund the roading network.
With a tax on large petrol and diesel light vehicles, we will essentially be paying twice: through a carbon tax on fuel and through a tax at the time of registering a vehicle.
The Prime Minister said that the ute charge is a “levy” not a “tax”, as we have a choice to buy it or not.
I disagree with that statement.
When we go into any shop in the country and exercise our choice to buy essentials such as bread, milk or medicine, we pay a goods and services tax (GST), not a goods and services levy. There is very little choice involved in buying essentials, and farmers and tradies have the same lack of choice in buying their essential vehicles.
The Government has not applied the emissions tax on heavy goods vehicles such as large trucks, presumably because there are currently no alternative electric or hydrogen-powered equivalent vehicles available – so why then apply the tax on utes, which also currently have no alternative electric or hydrogen alternatives available?
The stated purpose of imposing the ute tax on vehicles is to provide funds to subsidise the sale of electric vehicles. In addition to receiving a subsidy from other road users, the electric car owners pay no road user charges, they therefore have free use of our roads. How equitable is that?
Local government rates increase, reducing farm incomes – the inflation rate in New Zealand for 2021 is forecast to be 1.83%.
In my local area, the district council is putting rates up by 9.5% this year, and the regional council is putting rates up by 8.4%. This is in the region of five times the rate of inflation. These are not one-off increases, they are reflective of increases exceeding the inflation rate by a large margin in most years.
While increases are passed on to all ratepayers, farmers are typically impacted to a greater degree because of the size and capital value of their properties. They also typically have a public transport cost component in their rates, despite not having access to public transport.
Pastoral farmers find themselves in a unique position in that they have to absorb large rates increases, as well as general inflation of other costs and are being asked by central and regional governments to reduce their stocking rates to lower their farm emissions. This is despite NZ farms typically being the most efficient pastoral farms in the world.
Under the Paris Agreement on Climate Change, agriculture as a sector is specifically excluded from penalties as it is so important to humanity. In NZ the Government does not acknowledge what is obvious to the world community.
Pastoral farmers are in practice facing a rising tide of cost increases and a sinking lid on farm incomes.
Many small to medium-sized farms in NZ are in survival mode and under threat of becoming economically unviable.
Better strategies for the future of farming need to be developed. We need wide-ranging expert debate on the challenges we face and practical solutions, not a rising tide of costs and a sinking lid on incomes.
