Friday, March 29, 2024

ALTERNATIVE VIEW: Robertson gets it right for sector

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Federated Farmers vice-president Andrew Hoggard made the point he didn’t envy being in Grant Robertson’s shoes on Budget day. I agree. Hoggard’s wish list was for long-term solutions not short-term fixes and better broadband and provincial infrastructure. There was also the hoary chestnut of water storage.
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I have no argument with any of it.

Robertson, a former diplomat, has certainly been thrown in the deep end. 

I believe he’s done a good job and we’ve been lucky with our finance ministers.

Sir Michael Cullen faced considerable criticism paying down debt and leaving the books in good shape for Sir Bill English to borrow and get us through the global financial crisis. Now we have Grant Robertson behaving responsibly. From initially reducing debt he’s increased it. I have no problem with that.

Government debt has increased from 19% in 2019 and will reach 53.6% by 2024. It is still low by international standards and borrowing has never been cheaper.

Putting it in perspective, it takes New Zealand’s level of debt back to the early 199s. Borrowing was considerably more expensive then.

So, now we have Robertson’s Jobs Budget, borrowing and investing. His first step in a long journey to recovery.

The Budget doesn’t cut but invests with welfare strengthened. His difficult aim is to increase employment. 

To this end farming leaders will be pleased with the investment in skills and training.

We know there are jobs in the primary sector. Agriculture Minister Damien O’Connor has said there are an extra 50,000 people needed in agriculture post covid-19 with the immediate need for an extra 10,000 workers.

To that end an extra $19.3 million has been allocated to retrain people for jobs in the primary sector.

The challenge for the sector is to convince jobseekers that working on farms is well paid, secure and rewarding. It will be a major task but doable. 

O’Connor makes the point the Government will be encouraging familiarisation courses to help new workers know what to expect from farm life. We need to make sure those courses are well run and realistic.

The initiative is positive as is the $433m to create 4000 environmental jobs in the regions.

This will be a relief for farmers who have been doing the work themselves and paying for it out of farm income.

Federated Farmers issued a paper last month outlining its wish list for the primary sector. It included dropping the Official Cash Rate, increasing the threshold for provisional tax, waiving interest on late tax payments and continuing Government initiatives for maintaining and opening trade links. It will be pleased with the Budget.

Pre-Budget there was the announcement of $3.9 billion for health and I support that. The previous government ran the system down. It had to be fixed.

I also support the boost for Trade and Enterprise and research and development.

The issue with the Budget is that it was done in a hurry. Instead of taking months, as generally happens, it was put together in a few short weeks. The end result is a credit to both politicians and bureaucrats. The system does work.

There are initiatives I agree with as I’ve outlined and those I didn’t.

The tourism industry depends on discretionary dollars and is a low-wage industry employing some thousands of migrant workers.

I believe its value to the economy is overstated.

IATA tells us international air travel won’t start to come back until at least 2023 so international tourism isn’t going to recover any time soon.

As far as domestic tourism is concerned I can have a cheaper holiday in Australia than in Queenstown.

It certainly needs a complete rejig and I wish the Government luck.

Another anomaly for me is the $72.5b payment to the racing industry. Why? Who needs the industry?

Post budget there were ridiculous statements coming thick and fast.

Business NZ chief executive Kirk Hope wants international movies here and soon. Why would we want anyone from mainland America here until they’re on top of covid-19 and at the present pace that could take years. In addition, I’m over subsidising American movie moguls.

There was a lot of bleating about foreign students. Sorry, no.

Greenpeace wanted $1b for regenerative farming. You’d be better off with snake oil.

My overall view of the Budget is that it was well thought out and targeted. Amazingly so considering the time frame.

I’m pleased with the recognition and support the primary sector received, acknowledging, as it did, that the BNZ estimates primary industries will move from 54% of our export earnings to over 70%.

It all starkly contrasted with Ruth Richardson’s 1991 Mother of All Budgets, which cut welfare and health spending and created large unemployment. On the bright side it encouraged MMP, which was voted in in 1993.

Thankfully, we live in a different world today.

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