was an ominous sign when Prime Minister John Key wandered into his
weekly post-Cabinet press conference and announced, "I've got a
bit of a head cold."
very next day Labour's Grant Robertson was asking Finance Minister
Bill English about Key's observation that "when the primary
sector sneezes, the New Zealand economy catches a cold".
prompt for that was Fonterra's announcement that the milk price
forecast had dropped to $3.90 a kilo.
far National has been almost dangerously cavalier in the face of
questions on the farmers' plights. English and Key have made
reassuring noises but at times sounded almost laissez-faire about
the state of the dairy sector.
conceded the fall in the milk price has brought the dairy sector
into the "severe" forecast of Treasury. But his response
to questions about Fonterra advising its suppliers it would not pay
them for up to three months rather than one month amounted to saying
suppliers could like it or lump it, Fonterra was acting within the
or not, it was an astonishingly unsympathetic approach given the
struggle smaller suppliers now face in waiting for payment.
the apparent determination to appear zen about the price of milk,
you can bet National's feet are paddling like the clappers beneath
the surface. That is because when the farmers sneeze, National gets
a cold. That sneezing is becoming a chorus and they're certainly not
saying "bless you".
Government is almost helpless to lift the milk price. But as talk of
farmers being forced to walk off their land and farm values slumping
grows it is a fair bet National's rural MPs are copping it about the
chops from their constituent farmers.
is the traditional party of farmers but Labour has sensed blood and
Parliament has been treated to the sight of its two urban liberals,
Grant Robertson and Jacinda Ardern, taking up the cudgels on behalf
of the farmers. Robertson mocked Key for his prediction in 2014 that
dairy prices would "bottom out" soon. In return, Key
mocked Robertson for his failed leadership bids and scoffed about
him putting on a show of being "the friend of the farmer",
adding it was "not going to fool anyone."
might want to look as if he's taking it more seriously. National
will not be overly concerned Labour will run off with the farmers'
votes. The greater concern is the fate of the votes of those
downstream from the farmers. When the farmers stop spending, so does
the spending of those who service the farmers. It's a bit like the
little old lady who swallowed the spider to catch the fly. If the
farmers aren't buying tractors, the tractor sellers aren't buying
new shoes and the shoesellers aren't buying icecreams. On and on it
it comes to the farmers, a greater concern to National is that more
sinister Pied Piper, NZ First leader Winston Peters.
has spent the past year since his Northland win rolling about the
country trilling, "Help is on its way." He has seeded
himself as the guardian of the protest vote in the regions. The
current conditions are ripe compost for Peters to flower.
the Northland byelection, he doesn't even have to bother trying to
convince those rural people they're hard up any more. Admittedly the
solution Peters has put up so far is for New Zealand to recommence
free trade talks with Russia and bugger being part of the
international condemnation of Russia over the Ukraine. To that, all
Key had to say was Peters might be better off supporting the
Trans-Pacific Partnership if he wanted to help the farmers.
National is on weak ground here in several respects. Peters has made
the most of wedge politics between Auckland and the regions. If
there is a swarm of foreigners to buy up cut-price farms Peters' old
fashioned rhetoric about the evils of foreigners might sound a lot
better to rural dwellers than National's more nuanced mumbling about
foreign investment helping regional growth.
might only chip away one or two points in the polls from National.
But the stronger he gets, the more likely National will have to deal
with him if it wants to stay in Government after 2017.
a lot of head colds ahead for Key. He might want to revisit his ban
on pseudoephedrine-based cold medications.
Government's 'everything's fine' spin is wearing thin
a modern democracy, we are so used to political spin that it can be
hard to see straight at times
governments have certainly spun all sorts of negative news, and
there’s no doubt they all engage in it, but I would argue the
current government takes it to a new and almighty art form.
some ministers it seems to roll off the tongue, such as many of those
who have been telling us for a long time that everything in
Christchurch is ticking along nicely.
to the rest of New Zealand these ministers are able to explain away
the fact that five years after a set of deadly earthquakes, it is
normal to have the central city still resemble a car park and
hundreds of people living in garages, on couches and in cracked and
recently the same people tried to pull our legs by telling us that
the amount of mental health funding for the traumatised of
Christchurch was perfectly enough. This despite the fact it was less
than any other district in the country – none of which have been
recently ravaged by natural disasters.
on Valentine’s Day, minister of heath Jonathan Coleman had a
brainwave in light of another serious quake: “I was sitting up in
Auckland and thought, this is going to be big in terms of the health
sector,” he told Stuff.
kidding. But can I suggest instead what I think happened instead: the
inequity of mental health funding in Christchurch being unable to
service enough of that population, and particularly its poor little
kiddies, caused a public outcry, which prompted a rethink, which
prompted $16 million extra to service a desperate need.
Valentine’s Day earthquake simply provided cover for this political
a similar vein, we have been constantly told to “calm our farms”
about, well, farms, as many struggle to operate in a flooded global
time the dairy sector receives more bad news, the Deputy PM is
wheeled in to reassure us that all is OK, and that in the “broader
context”, all is well.
mind that the “broader context” in New Zealand is an economy very
reliant on the prosperity of dairy farmers.
to National Radio, Bill English has had to concur that a set of
extremely scary economic indicators do actually have a basis in
Fonterra is about to cut farmers incomes by $400 million due to
falling global prices.
shipments have indeed fallen 13 per cent in the last quarter. OK,
farm prices could fall by as much as 40 per cent by 2018.
farm debt has reached $38 billion, defaults on loans have increased
by almost 50 per cent, there are as many as a dozen farmer suicides
each year and thought to be rising, and huge numbers of farms have
been put up for sale.
where mere mortals might have started hyperventilating at this kind
of picture, Mr English took a much more sanguine view.
indications are it will have some impact, but it won't have such a
big impact on the broader economy as it does on the industry itself,"
he told the state broadcaster.
seems a rather rosy-hued view of the situation, to put it mildly.
it is true that the Government can’t do much about global markets,
and the saturation thereof, there are things it can do here that
would, say, more actively promote diversification, actively
disincentivise more production and/or intensification, and work more
closely with Fonterra and the banks to ensure the country’s
investment in the sector isn’t unnecessarily squandered.
best minds of the country could be called upon to come up with
answers to the challenges ahead.
the very least, a more honest conversation, without the endless
smoothing over the very jagged reality of dairy farming in the
current climate would be a great start, instead of the endless spin,
spin, spin we’re more used to.