Tuesday, March 19, 2024

Don’t stress weakening economy

Neal Wallace
Economist Cameron Bagrie is joining a chorus of calls for the Government to delay introducing policy imposing new environmental rules and costs on a rapidly weakening economy. Bagrie says Government borrowing as a percentage of gross domestic product has doubled from 20% to 40% in the last few weeks as it tries to protect jobs and businesses from the impact of measures to control the covid-19 virus pandemic.
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He expects Government borrowing will increase further and warns now is not the time to introduce more costs on businesses in freshwater regulations and the new minimum wage, which applies from April 1.

“Farming has been unloved and beaten up by the Government for the last two or three years but the Government is going to need farmers for the next few years.”

The ASB says the Government’s response to the outbreak has been a substantial $12.1 billion package worth 4% of GDP and has signalled it is prepared to significantly leverage off the Crown balance sheet to support the economy further.

New Zealand First MP Shane Jones was reported as saying the Government should not now be introducing new environmental laws for the rural sector.

When Farmers Weekly asked him for an interview he supplied a statement.

“NZ First MPs are operating from home and caucus will be in regular contact but it is not planning to deal with any new environmental regulation proposals for provincial NZ.”

Clarification is being sought but it is understood the Government intends announcing some decisions on its freshwater policy in the next few months though that is expected to be delayed by the covid-19 crisis.

Federated Farmers president Katie Milne has also called on the Government to defer a range of policy and regulatory impositions, saying they will harm the economy at the worst possible time.

Her list includes policies on freshwater management, climate change, biodiversity, Resource Management Act reform, the minimum wage, immigration and the Emissions Trading Scheme Amendment Bill, which could double the price of greenhouse gas emissions.

“What’s needed is policy certainty to give the primary sector and the business community generally a much-needed boost in confidence to keep operating, keep staff employed and keep investing.”

Bagrie says despite the North Island drought, disrupted shipping schedules and container shortages caused by China’s response to the virus, the farming sector has a relatively bright future.

The fact commodity prices have remained relatively steady is a sign global supplies are low while there has been some insulation from the drought and supply chain issues by an easing in the value of the NZ dollar.

Bagrie says implementing new regulations and their associated costs should be delayed for at least a year and the Government should instead prioritise keeping people in jobs.

Lobby group Choose Clean Water spokeswoman Marnie Prickett has labelled calls to delay freshwater policies irresponsible, dishonest and opportunistic exploitation of the covid-19 crisis to push political agendas.

She says the call by Federated Farmers is a continuation of an agenda it has been pushing and, while not naming names, describes opportunistic politicians who appear to be promoting themselves in an election year.

“It is particularly irresponsible to be arguing against the protection of the country’s fresh water at this time,” Prickett says.

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