‘Too much Govt direction’ of farming in past

Press, 16 November 1984, Page 3

‘Too much Govt direction’ of farming in past

Fann editor Farmers would not be told by the Government in what directions to diversify, said the Minister of Finance, Mr Douglas, yesterday. He told an audience of farmers, academics, and businessmen- at the Lincoln College Budget Forum that the Government would create a climate of responsible economic and fiscal management. “We will lay the choices before you, but you will have to make the decisions,” he said.

“In the past too much direction has been given, such, as towards sheepmeats production by way of the supplementary minimum prices system. “The agricultural sector has been held back for years by a mishmash of subsidies and a high inflation rate but now we will get neutrality into the system,” Mr Douglas said. He received a hearing yesterday that was at times warmly appreciative of the broad thrust of the Government’s Budget, but many speakers complained of the pain and hardship the removal of farm subsidies would bring in the short term.

Mr Douglas freely acknowledged that farmers would suffer hardship from the Budget moves. “But the Budget is aimed at raising living standards over the next decade, not holding on desperately for the next six months to what we have got,” he said. “I told the president of Federated Farmers, Mr Elworthy, that farmers would benefit more from the 1984 Budget in the longer term than any other sector.” As evidence he cited the increased access for im-

ported goods, the planned exemption from the goods and services tax for exports and the anticipated reduction of inflationary expectations and interest rates. He conceded that rural land prices would stabilise or fall but he won applause when he asserted that in future the earning capacity of farm land would become the big consideration of intending purchasers and not a factor that had been ignored as in the past Subsidies had been capitalised into the value of land, he said.

Several other speakers at the forum suggested that Mr Douglas consider the possible anomalies in the proposed goods and services tax when it came to farming inputs and sales 'of primary products. Farm production was not wholly export, and.therefore exempt from G.S.T. nor wholly domestic, he was told. A farm accountant, Mr Don Church, of Ashburton, said he could envisage the Budget and the administration of G.S.T. creating a mountain of work for him on behalf of his clients. Mr Douglas said a White Paper on the proposed tax would be circulated early next year along with draft legislation, and submissions would be sought well in advance of the planned introduction date in 1986.

Sharing the platform with Mr Douglas, the Leader of the New Zealand Party, Mr Bob Jones, congratulated the Government on the thrust of the Budget. Mr Jones complained that he had not received a good clap when he rose to speak. He claimed this was because the New Zealand Party’s policies had been plagiarised in the Budget. A very important factor in the Budget' was that

consumers would make the choices on production and “not little rotund people.” At the end of his speech, Mr Jones said that it had been claimed that he had got rid of Labour in 1975 and National in 1984. He said he was getting too old to do it again in a few years. “So I will do it now,” he said.

He pulled an antique pistol out of his briefcase and “shot” Mr Douglas, who obligingly fell on the floor. The Opposition spokesman on finance, Mr Falloon, said the social benefit measures in the Budget were “dangerous and damaging” for the future. He raised the possibility of fellow workers, on the . same job, having a difference in after-tax income of $7O a week because one man had a wife and three children and the other had a wife who did not work, but no children. Apart from breaking promises on National Superannuation, the Budget “super tax” also put older people in a situation where they might become taxavoiders. For such people it might be better to withdraw their cash and buy assets, Mr Falloon said.