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Neoliberalism is Eating Itself

The recent sharemarket crash has apparently triggered growing trade tensions between the US and China on one hand and the UK and Europe on the other. However, you don’t have to dig too deep to find the real cause. Increasing numbers of commentators and economists are laying the blame for the recent sharemarket wobbles squarely at the feet of neoliberalism. It is time for the business community to accept that sensible reform is needed, before we all end up with something a lot worse. 

The recent crash has been coming for some time now. It has been three years since the Brexit vote and will soon be the third anniversary of Trump’s win. 

The moment the Conservative Government in the UK gave up on the idea of a ‘soft Brexit’, it was assured of rocky economic times. These are now coming to a head. Similarly, Trump’s anti trade rhetoric is now coming back to haunt him. 

The Cause is Neoliberalism

The driver behind both Trump and Brexit is now well established: a large part of those societies feel left behind by the economic reforms of the past 30 years. The reforms have seen their standard of living stagnate or decline, while the rich grow richer. These people therefore lash out and vote in populist leaders who threaten to bring the whole house crashing down. The result is growing extremism that is heading down the road to facism, crony capitalism and/or communism. This is all before we even consider the environmental challenges the world is facing. 

Reform is clearly needed, but there is a risk of throwing the baby out with the bathwater. Capitalism has brought us many great things and hugely reduced poverty over the past hundred years. So how can we keep the best of it and solve the problems we face? The answer is to roll back neoliberalism. 

What is Neoliberalism? 

Commentators use the term “neoliberalism” in a lot of different ways. Some even use it interchangeably with capitalism. Let’s be clear about what we mean. 

Neoliberalism emerged in the 1970s and 80s. The argument was that a small state was the answer; for businesses to flourish, all government had to do was get out of their way. Getting rid of regulation was crucial, as was lowering taxes. 

This, of course, led to a growth in massively powerful corporations around the world and a growing gap between the rich and the poor. The problem is that this actually stops capitalism from working properly. This happens in two major ways: lack of competition and child poverty. 

As these corporations have grown, they have killed off their competition, which has contributed to the poor productivity growth we now see. And, as the gap between rich and poor grows, more children grow up without access to opportunities. That means society doesn’t get the best from many of its children and some become a net drain on society. 

The New Zealand Version of Neoliberalism

New Zealand has one of the better tax systems in the world in that it doesn’t leave too many loopholes for rich people to escape paying tax. The one exception we all know about is property. Our lax taxation of property has led to huge amount of speculation and some of the highest property prices in the world. This has made a lot of people very wealthy, without paying any tax. And by the way, a capital gains tax excluding the family home wouldn’t have changed that situation much. To be effective, we needed it to include the family home and to have been implemented 30 years ago. 

Income inequality has remained steady in New Zealand since the mid 90s – but for the sole exception of property. People locked out of the housing market have seen their rent grow faster than their income for the past 30 years. The cost of housing is by far the biggest cause of poverty in New Zealand. 

And where there is poverty, there are children who are not reaching their potential. We haven’t fixed the cost of housing and nor do we help children from poor households catch up with their peers when they get to school. Most poor kids turn up to school 2 years behind and never catch up. 

New Zealand also jumped on the neoliberal bandwagon with competition policy. While other countries have woken up to this failure, we still have some of the weakest competition policy in the world. This has allowed big business to continue to rip us off in many industries such as petrol, supermarkets, and building supplies. The good news is that New Zealand businesses tend to pay their fair share of tax, with the exception of the big multinationals. The Government has promised to crack down on this, which is great. 

Finally, there is an environmental component to this. New Zealand’s regulation of the environment has enabled people to make huge private profits and pass the costs on to society. The best example of this is the dairy boom in the South Island, which is now threatening fresh water supplies. 

Neoliberalism has served our elites well, but it is brewing a backlash that will hurt everyone, as we are seeing in the UK and US. We need our elites to stand for bold, progressive change or risk losing everything they have built.  

Image by Gerd Altmann from Pixabay 


It’s in our DNA

New Zealand prides itself on being a nation of problem solvers.

Of number 8 wire innovators.

Of DIY-ers.

When our little island nation puts its mind to it, it can achieve incredible things. From conquering the highest mountains like Everest, to socio-political mountains like Women's suffrage - Kiwis never seem to shy away from a good challenge. Our world champion sporting teams and world-renowned businesses have always punched above their weight on the global stage, and we’re proud of that. At the bottom of the south pacific, tucked out of the way, we’ve built up a can-do attitude.

Skin deep.

However, scratch the surface of our country and you’ll find that that success is not being shared among our most vulnerable population, children. A large proportion of with our smallest voices are being left behind. When housing costs are included, more than 250,000 kiwi kids live in households with less than half the median disposable income (less than $24,500 /year). Almost a quarter of our future problem solvers and leaders, are spending their “DIY DNA” on trying to afford food, healthcare and shelter. Adding insult to injury, significant disease of poverty, like Rheumatic Fever (eradicated in most developed countries) continue to cause lifelong disability and premature death at increasing rates of Maori and Pacific children.

Recently, some ambitious claims have been made about turning these embarrassing statistics around, and of course, we all agree in sentiment. Unfortunately here I’m reminded of the adage, if you ask someone what they value, they will tell you, but if you want to know what they truly value - take a look at their bank account. In other words, it’s the actions we take which define our priorities, and with a self-imposed stifling spending limit, a persisting dehumanising welfare system and substandard unaffordable housing - this pattern is set to continue. Indexing benefits isn't enough when you still can't afford healthy food and rent is outpacing wages.

A version of “Maslow's hierarchy of needs” is, while not perfect, an interesting psychological theory to keep in mind here. It offers a look at how basic needs are a foundation and need to be met before self-fulfillment can be achieved. Essentially, if you don't have a decent safe shelter, secure food and water, it’s very difficult to look after others, yourself or aspire to your own potential. The number 8 wire approach is just focused on survival.

Our big ideas need to be backed up with execution - think Rocket lab. There is a vast difference between saying you’ll put something in space and actually doing it (about 100km worth of difference). It takes an unrelenting collective commitment to the goal, one that looks at what works rather than the same political punditry. The status quo of inequality is unacceptable. Both the current and historic tinkering at the edges is getting us nowhere.

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A pretty big job.

To start, an evidence-based approach to reforming our tax system will make housing more affordable, and unlock investment into productive assets (like businesses) and in-turn create jobs. By rebuilding the tenancy act, kiwi kids would grow up in a secure healthy home that helps them thrive. A dignified basic income could do away with a punishingly inefficient welfare system that traps people in a cycle of poverty. Think of it, Aoteraora could be a place where we allow all kiwis to live with a decent foundation. We could afford some of our unsung, unpaid, childcare heros, to continue to look after our next generation.

So let’s get serious about all Kiwi kids having a fair shake at this world and use some of that world-beating ambition to focus on what matters most. Let’s think different and commit to real change. If we can split the atom and touch space with our rockets, we can turn New Zealand into that “slice of heaven” we all like to sing about.


Coal Should be Goneburger. Here’s How.

Extinction Rebellion’s latest protest involved blocking rail lines used to transport coal in the South Island. Despite 19 arrests, it has promised that this is only the start of a campaign against coal

This stance against coal is fair enough. Coal is the dirtiest of all fuels in terms of environmental impact for the amount of energy generated. And that energy includes carbon dioxide – which contributes to climate change – and other pollutants that are harmful to humans, like PM10.  

While many motorists currently don’t have any choice but to drive their cars and use petrol, most coal users do have an alternative. With the exception of Glenbrook Steel Mill, coal burnt for heat can be fairly simply replaced by biomass or electricity. 

The only reason that coal continues to be used for heat is because it is cheap. Thankfully, we have a way to make it more expensive: the Emissions Trading Scheme (ETS).

What Price Will Kill Coal? 

The answer to this question varies depending on where you are in the country. The biggest coal users other than Glenbrook are Fonterra (for its milk driers) and Huntly Power Station (which also uses gas). 

Fonterra’s milk factories are dotted all over the landscape. Some are close to electricity lines, so coal could be fairly easily replaced. It also appears that the electricity grid could cope with the change relatively easily, since the factories operate mostly in spring and summer, whereas electricity demand peaks in winter. 

The factories that are further away from electricity would require biomass (plant stuff) for fuel. Again, location matters. Some have forests nearby and could burn waste wood. Others would need biomass grown specifically for burning. 

A carbon price of between $50 and $75 per tonne would probably get rid of most coal use in New Zealand. This would remove the need for Huntly to use coal, except perhaps in dry years. It would also convince most Fonterra factories to switch to electricity or biomass. 

How Do We Get There? 

This is the difficult bit, although a carbon price that high is not unheard of. The price under the European ETS currently hovers around NZ$50 per tonne. The “true” cost of carbon (if we accounted for all of the costs of emitting carbon dioxide) has also been calculated as within the $50–75 range – and rising.

As I’ve discussed in previous blogs, several key reforms of the ETS are needed to achieve this price rise:

  1. Remove the price cap right now. This is a no-brainer. 
  2. Limit or remove forestry from the ETS. No other country in the world has unlimited forestry offsets for fossil fuel emissions. The Parliamentary Commissioner for the Environment has suggested using forestry as an offset for agriculture only. This would enable the price for fossil fuel emissions to rise. 
  3. To deal with the equity impacts, we should give the money raised through the increased carbon price back to people in the form of tax cuts or a carbon dividend – effectively a UBI (unconditional basic income).

These changes would see the price of carbon rise markedly, at least for fossil fuel use. Coal would be goneburgers, and rightly so. 

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Results of Board Member Election

I’m proud to announce the results of our Board member election, which was announced at the AGM today.

I'm sure you will agree that all the Board candidates put forward for the election were first rate and I would happily work with any of them. They bring a depth and breadth of experience that will set TOP in good stead for 2020 and beyond.

This new Board faces a number of challenges and opportunities. I am sure they are up to it. 

Remember that we were looking to elect three Board members out of four nominees. In order to ensure each member elected had broad support, we asked members to rank the candidates. We received a total of 254 votes. 

Candidate 1 - Shai Navot: 132 votes (removed, votes re-allocated)

Candidate 2 - Matt Zwartz: 72 at the start, and then 134 after re-allocation of candidate 1's vote

Candidate 3 - Antony Dixon: 36 at the start, and then 92 after re-allocation of candidate 2's vote.

Congratulations to the new Board members and thanks to the fourth nominee Nickolas Ashford who missed out by a very narrow margin.

Thanks again to Horizon State for assisting with the election process through their secure, transparent online voting platform. We are proud to support Kiwi start ups that are taking on the world and trying to change it for the better in the process. 

 


Re-energised TOP Targets Environmental Vote for 2020 Election

TOP is gearing up to contest the 2020 election with plans for a rebrand and a renewed focus on the environment. 

Our Focus for 2020

TOP’s Annual General Meeting was held on the weekend. During my speech I unveiled our Campaign Strategy. At our core TOP stays the same: we are about real change that offers hope to New Zealanders. This means thinking long term, and being prepared to do what works, instead of what gets us the most votes. TOP will never succumb to the compromise and butt-covering that is so coveted by career politicians. We are in politics to do ourselves out of a job.

TOP’s policies are best practice, but there are too many to effectively communicate all of them to people. We confused a lot of people in 2017, and they weren’t sure what we stood for. That is why I announced that the environment would be our prime focus for the 2020 election. 

Some say we are in a Climate Crisis. Given our challenges with deteriorating water quality and loss of native species, I believe we are really in an Environmental Crisis. Many young people are now forgoing their right to have children because of the future they would be born into. We have to build a clean and clever economy, and we have to do it now.

Cleaning up our rivers and lakes in particular are the key focus for TOP in any negotiations post the next election. This issue cuts to the heart of how we use land in New Zealand, and taking strong action on this would also bring benefits in terms of lower greenhouse gas emissions and helping our native species. 

Naturally the environment is also a key focus for the Green Party, however last week the Green Party ruled out working with National. This means they will remain shackled to Labour’s left flank, with no bargaining power, and their focus muddied by identity politics. This is not good enough for anyone that cares about our environment. The environment needs to be represented at the table no matter what shade of government we have. As a country and planet we simply don’t have time for tribal politics. 

Other Priorities

The Opportunities Party will continue to use social media for engagement on the important issues. Our engagement rates have always been incredibly high and we have maintained those rates through the transition period.  Our volunteer base is well over 1,000 and we have boots on the ground in every region in Aotearoa and several overseas regional co-ordinators. 

Other priorities for the party include affordable, quality housing and being prepared to seize the opportunities that will come from disruptive technologies. The party already has policies that will deliver these goals including tax reform, rental reform, UBI (Unconditional Basic Income), gene editing, and has more on the way. 

Board and Policy Committee Changes and Next Steps

At the AGM lawyer Shai Navot, Creative Director Matt Zwartz and serial IT entrepreneur Antony Dixon were welcomed onto the Board. Their range of skills will serve the party well in the run up to next year’s election. On Monday 12th August, Donna Pokere-Phillips departed the Board. 

The newly-formed board has met already and approved the proposed re-brand. 

We also welcomed two new members to the Policy Committee: innovation specialist Anne French and Resource Management specialist Helen Marr. TOP’s Policy Committee is run by experts and oversees our policy. They are independent of the Board which manages the political side of the organisation. This split is to ensure that policy remains best practice, rather than becoming compromised by public opinion as it does in every other political party. 

This is a fresh start for TOP. Our members present were inspired by the re-brand, which will be rolled out in October. We are now united and completely focused on getting 10% of the vote in 2020.


Abortion Law Reform - What Does the Evidence Say?

While TOP doesn’t have a detailed position on abortion, the evidence suggests that the Government’s proposals are a sensible way forward. If anything they could go further.

Abortion is a can of worms that has remained stubbornly closed since the Contraception, Abortion and Sterilisation Act was passed in 1977. This current law effectively makes abortion a crime, unless it meets certain tests. A draft abortion law reform bill was approved by Cabinet yesterday and its first reading will be on Thursday. 

Whether or not abortions should be allowed is a pretty hot topic for some, with lots of value judgements mixed in. But if we stick to the facts what does the evidence say?

The Current Approach

At present pregnant people have to jump through a series of costly, time-consuming, often demeaning, medically-unnecessary hoops to get an abortion. The cumulative effect of these hoops are that:

  1. the vast majority of people getting abortions are forced to lie about their mental health,
  2. abortions are delayed by an average of 25 days, and
  3. poor people and those in remote areas find it hard to access abortion services. 

We can probably all agree that where abortions do happen they should happen as early and as safely as possible. The overseas evidence shows that if we want to reduce abortions that improving access to long-acting reliable contraception is the best way to do it. Banning them doesn't work. And in delaying those abortions that do happen, the current approach is clearly a failure. 

Proposed Changes

The proposed new law would remove any statutory test for someone under 20 weeks’ pregnant. That means abortions before 20 weeks will be like other health procedures: someone sees a health provider and they together work out the best course of action.

For someone more than 20 weeks’ pregnant, a heath practitioner will have to approve that the abortion is appropriate with regard to the pregnant person’s physical and mental health, and wellbeing.

This new model is an improvement on the current system, as it will reduce the issues raised above. The concern from some is no doubt that it will increase the rate of abortions, but from the Canadian experience that hasn’t been the case.

However Family Planning, the APGANZ, Abortion Providers Group Aotearoa NZ, and ALRANZ, Abortion Rights Aotearoa recommend going further. They all agree that the Law Commission’s Model A, where abortion is covered by generic healthcare laws and doesn’t need a statutory test would be the best model. Model A aligns with the Canadian example discussed above.

What is the advantage of a more liberal model? In New Zealand 0.7% of abortions happen after 20 weeks. These are cases of wanted pregnancies, where the parents have either received devastating news about the health of the foetus or where the pregnant person’s health is seriously compromised. These are cases where the parents have been picking out baby names, getting baby clothes together, and have told their other children and their wider families how excited they are to welcome a new baby into their lives. The last thing these families need is to jump through medically-unnecessary hoops. 


Green Party Throws Away Sole Bargaining Chip for 2020

More than one year out from the next election, James Shaw has thrown away the Green Party’s best and only bargaining chip. With it goes any chance for them to leverage real change. National may have been flip-flopping on climate change issues lately but, like Labour, what they want above all is to be in government. Given that we are in a climate emergency – an environmental emergency – the environment should be at the centre of all negotiations to form a government. 

The Importance of Bargaining Power

If this term of government has taught us one thing, it’s the importance of bargaining power. In the 2017 election, New Zealand First and the Green Party won a similar number of votes. However, by being willing to work with both Labour and National, NZ First had the ability to negotiate a far better deal. Look no further than the $3b Provincial Growth Fund. 

Is the Coalition Government Delivering for the Environment? 

Meanwhile, because the Green Party only wanted to work with Labour, it managed to negotiate little more progress on the environment than what Labour had already promised in its own manifesto. Let’s take a look at what the Greens have been able to deliver for the environment in government: 

  • Climate change: 
    • The Zero Carbon Bill is great progress, but let’s remember that it was in Labour’s manifesto and NZ First’s. 
    • Banning offshore drilling for oil was a popular move with environmentalists, but raising the carbon price would achieve the same outcome, without the potential for perverse consequences (like running out of gas and having to import coal). 
    • The car feebate scheme and efficiency regulations are tangible steps forward. 
  • Waste: Progress has been token at best. The main change so far has been the plastic bag ban. Further policy changes have been signalled, but we’ve heard no details yet. 
  • Water quality: Still a work in progress. A Working Group has been established but the release of its findings has been delayed. Farming interests are likely to water down any real change, as they did for agricultural emissions. 
  • Marine protection: Progress has been very slow, presumably due to the strength of commercial fishing interests in Labour and NZ First. 

In short, the Coalition Government’s progress on environmental issues can hardly be described as transformational. 

National’s Climate Wobbles

The Greens point to National’s recent stalling tactics as their reason for not being able to work with them. It’s fair to say that National Party leader Simon Bridges has equivocated on climate change action lately. This may be due to the recent electoral success of the Liberal-National coalition in Australia. 

The fact remains that both establishment parties, National and Labour, want to be in power above all else. If strong action on the environment is what it takes, that is what they will do. 

Climate Emergency

We are in a climate emergency. Urgent action is needed to both reduce emissions and start adapting to climate change. Given the challenges we face on water quality and loss of native species, we are actually in an environmental emergency. 

An emergency requires action that is different from business as usual. This includes moving beyond the old-fashioned tribes of “left” and “right”, “red” and “blue”. Aotearoa New Zealand and our environment need parties that are willing to work with either major party, because right now we don’t have time to play political games. Refusing to work with anyone will not help us meet the many challenges headed our way.

 

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Seven Things We Could Do With a $3b Fund for the Environment

Seven Things We Could Do With a $3b Fund for the Environment

Being willing to work with either National or Labour enabled New Zealand First to negotiate the best possible coalition deal. By contrast, with almost the same number of votes, the Green Party was able to negotiate little more than was already in the Labour Party manifesto. That is because it had no bargaining power, as it was only prepared to work with Labour. 

The centrepiece of NZ First’s coalition deal was a $3b Provincial Growth Fund. But it has been an exercise in making it up as they go along, because it wasn’t part of NZ First’s manifesto and the party never had a very clear idea of what it was trying to achieve. It is a purely political showpiece to enable Shane Jones to proclaim himself the “First Citizen of the Provinces”. 

What could a well-thought through $3b environmental fund achieve? Here are seven ideas, many of which would still benefit the provinces:

1. Riparian Planting 

Planting riverbanks is really important for improving water quality. It won’t solve everything, but it really helps. Unfortunately this sort of planting is too small to count for carbon forestry. Farmers should get help with doing this planting, provided that it meets certain specifications.

2. Restoring Wetlands and Other Natural Infrastructure

In recent years, we have realised how important wetlands are and what a problem it is to have drained 90% of them. Wetlands are natural infrastructure – just like pipes and roads. They regulate flooding, clean our water, and provide food for animals. Now we should invest in them the same way that we do other infrastructure, both in cities and in the country. 

3. Silviculture

The Billion Trees Programme isn’t a terrible idea, but subsidising pine is. How about investing in silviculture, which involves planting erosion-prone hillsides with poplars that can stabilise the land, but still enable sheep and cattle to graze? We can reap the benefits of locking up carbon and saving the soil, but also keep the industries that are so important to rural communities. 

4. Making Money from Native Forest

We have three million hectares of erosion-prone land in New Zealand, depending on your definition. This land absolutely needs to be converted to forest. Silviculture and commercial pine forests may be suitable on some sites, but most Kiwis would prefer to see more native forest. This raises the question of how landowners can make money from it. 

Of course, the Emissions Trading Scheme provides some income, but more research is needed to determine accurate carbon estimates for native forests. The honey industry is also promising, but currently operates like the Wild West and landowners often don’t get their fair share. And finally, we need to look much more closely at selective logging as a potential income source. 

5. A Revolving Land Fund

How about setting up a fund that buys farms in environmentally sensitive areas, reforms them to be sustainably run, and sells them on? In most cases, the changes could be made with little impact on profit, but pay big environmental dividends. For example, farms could be destocked and then switched to organic or biological farming, or a completely different land use such as wine, nuts, or pipfruit. Wetlands can be restored, riparian margins planted, and marginal land returned to forest. These farms could accelerate the uptake of good practice throughout the country. 

6. Renewable Generation in the North

Moving towards a 100% renewable electricity system is likely to push up power bills in the north of the North Island, which is furthest away from cheap hydro power. More thought needs to go into micro grids in remote areas and consenting more wind and geothermal generation in the Far North. 

7. Research into Regenerative Agriculture

Regenerative agriculture has the potential to reduce the impact on water quality and store more carbon in our soils. The problem is that there are no corporate backers to invest in the research needed to validate this approach to agriculture so that farmers can be rewarded for their work. A $3b environment fund could help finance this research.  

The important thing is to set clear criteria for such a fund, e.g. to reduce emissions, improve water quality, and transition to a circular economy. These are just seven ideas that it could get behind. And I’m sure there are many more!

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National’s Cancer Policy Only Half The Story

Like most ideas from career politicians, National’s cancer announcement contained enough truth to be credible. But the proposed solutions (like Labour’s at the last election) are pure politics and owe more to internal polling and focus groups than what actually works. Our health system isn’t perfect and much could be done better, but National’s proposal is definitely a step in the wrong direction. 

Postcode Lottery

There are variances in hospital treatment across the country that can’t be explained by ‘local choices’. For example, rural areas don’t have the same access to some healthcare services – particularly highly intensive, tertiary services. But on the flip side, some rural areas have far higher rates of minor operations than major centres. 

What is the reason for these differences? Essentially, it is due to the District Health Board (DHB) model Labour implemented in 2000. We effectively have 20 different health systems around the country, each with a unique offering. The offering is partly determined by the local population, e.g. Counties Manukau has much higher rates of diabetes, and by what the DHB can provide with the staff and kit that they have. As a result, smaller DHBs have to ship people off to the big cities for serious conditions, like cancer, but have far higher rates of routine operations, e.g. for hips and knees. 

So yes, there is a postcode lottery, and it works both ways. City slickers get much better care for life-threatening conditions, while country bumpkins are more likely to get routine treatment that improves their quality of life. 

Why Focus on Cancer

But why focus on cancer? What about heart disease, diabetes, or strokes? Or even better, why not focus on the myriad of ways to prevent all these health problems? 

Our health system will never have enough money to treat everything. Demand for healthcare is basically limitless, so trade-offs will always be necessary. Just look at the United States, which spends twice as much money as we do, but somehow has worse health outcomes. Once we realise this, if we increase funding for one condition, another part of the health system misses out. 

So why has National focussed on cancer? I’m betting this decision isn’t based on evidence or the best return for our health dollar, but rather a cynical decision based on polling. This may not seem so bad, until you think through the implications. Who votes, and who votes for National in particular? Generally speaking: older, richer people who already live long lives. It should be no surprise that these are the people who get cancer. 

So what about people who don’t vote, such as younger, poorer people? These people are more affected by diseases like rheumatic fever or diabetes. It is noticeable that National’s announcement doesn’t address these diseases. 

This announcement may be good politics, but it also illustrates why the gaps in our society are widening rather than narrowing. 

Where Should we Spend our Health Dollars? 

There needs to be some room to customise services for the local population and the issues they face but, beyond that, people should have access to similar treatments wherever they are. The question is which treatments should we fund? 

Generally speaking, our health dollars should go where they have the best impact. Then our health system would focus much more on prevention. After all, an ounce of prevention is better than a pound of cure. Or as the evidence says, every dollar invested in prevention has the same benefit as four dollars invested in treatment. What is more, a focus on prevention would particularly benefit younger, poorer people. 

The only part of our health sector that spends money according to the best returns is Pharmac. And yet, National’s cancer announcement would take this power away from Pharmac. Much like its Roads of National Significance policy, National would force Pharmac to spend a certain amount of money on cancer. And while $50m a year for cancer drugs sounds great, how much good could Pharmac do by spending that money where the evidence says it is needed? How many lives could be saved from other diseases? 

The rest of the health system needs to operate more like Pharmac, not less. While National is right to draw attention to the postcode lottery, its solutions are simply another case of politicians tinkering with the health system. Above all, National should keep its mitts off Pharmac. 


What Do we Want Farming to Look Like in 2050?

What Do we Want Farming to Look Like in 2050?

There is an increasing recognition that we have pushed farming beyond environmental limits. The Government has announced that agriculture will come into the Emissions Trading Scheme in 2025, with reviews of regulations for water quality and biodiversity also underway. We want trees planted, but what kinds and where? What do we expect farmers to do, especially if they are buried under mountains of debt? This is a conversation we need to have as a country. 

Some others have contributed to this conversation including Rod Oram, the Environmental Defence SocietyDavid Hall from AUT and Dame Anne Salmond. This blog sets out my thoughts. I will first address a few red herrings, and then look at the pressures from different environmental problems and how we might reasonably expect farmers to respond. 

Red Herring One: Vegan Utopia 

Some vegans want animal farming to be shut down completely. I don’t think this will happen – for a variety of reasons. 

While most people in the developed world should eat less meat for environmental and health reasons, they will be eating it for some time yet. If anything, the world’s middle class is growing. New Zealand farmers are relatively cheap and environmentally friendly producers, even taking account of transport costs and emissions. So it makes sense for us to continue animal farming for the foreseeable future. 

Sure, synthetic meat and milk will make inroads into the market, particularly at the low-cost end. But the market for premium pasture-fed meat and milk is likely to be around until 2050. 

Finally, I haven’t yet seen a form of regenerative agriculture that works without animals. 

Red Herring Two: Peasant Farming Utopia  

Others want to move away from large-scale farming back to small family farms, or even get us all out there tilling the land. It’s a nice idea for city slickers to daydream about, but the realities are quite different. Farming is bloody hard work and I doubt most hipsters would survive a week in the fields. Good luck with that one. 

Greenhouse Gas Emissions

Claims that agriculture causes half of our emissions are overstated. There is a lot of confusion about the impacts of animal agriculture, which is largely due to how we discuss methane. Because methane is a short-lived gas, we don’t need to get emissions to zero. They need to be reduced, but there is debate about by how much. 

So what do we want farmers to do about greenhouse gas emissions? 

We definitely want them to innovate to reduce emissions and become more efficient producers. The trend of increasing volume therefore needs to end and the focus needs to shift to value and profit. 

We want to prevent any significant increases to our national herd and have the existing herd managed as efficiently as possible. We don’t necessarily want to reduce the herd for climate reasons, as that meat and milk could well end up being produced overseas by less cost-effective producers. 

Lastly regenerative agriculture could be the big winner here – if we improve the science around farming’s ability to sequester carbon in our soil. The potential for land to be used in a way that creates value for both humans and the environment is massive. 

Planting Trees

We certainly want to see our erosion-prone land planted with permanent forests as soon as possible. Native trees should be the end game, but exotics might be a temporary help because they soak up carbon more quickly. If farmers want to keep using this land for grazing, it should still be planted, for example with deciduous trees (silviculture). 

However, the prospect of converting large tracts of productive land to forestry to offset our fossil-fuel emissions is concerning. Fossil-fuel emissions stay in the atmosphere indefinitely; forests only soak them up for a limited time, while productive land stays locked up forever.

As the Parliamentary Commissioner for the Environment points out, we could use trees to offset agricultural emissions. However we should aim to get fossil-fuel emissions to zero as soon as we can and not use trees to buy ourselves time.  

Water Quality

This is the issue that should really be driving land-use change. The Government needs to set tougher bottom lines to ensure that our rivers and lakes are swimmable and ground water is drinkable. And that would mean some serious changes in land use. Again, we need to right historical wrongs by planting up erosion-prone land but also enable farmers to make some money off that land. 

Recent water-quality problems are mostly down to intensive farming – usually dairy. In most parts of the country, we could rectify this by simply easing back a bit. Stocking rates and input costs can be lowered, leaving farms just as profitable as before but with a much better environmental footprint. We have to get all farms to this point ASAP. 

But in some parts of the country, such as Canterbury, parts of Otago, and Southland, this won’t be enough. The soil is just too porous for intensive dairy farming. Even intensive beef and sheep operations might be difficult to sustain. This points to the need to diversify land use and try other high-value crops, e.g. seeds, stonefruit, wine, or nuts. 

The question is: how would the heavily indebted Canterbury farmers who bet everything on converting to dairy fund a transition? That is where prices on nitrogen and water come in. These might enable farmers to make some money from switching land uses and selling their allocations to other farmers. 

If intensive agriculture is to continue, it needs appropriate mitigation. At the moment, that would mean keeping cows in sheds to capture their methane, urine, and poo. That seems unlikely to be economically sustainable for most farmers in New Zealand at current commodity prices. 

Biodiversity 

What do we expect farmers to do to help save our native species?

Existing stands of native bush, rivers, and wetlands need to be fenced off from cattle. And no further wetlands should be destroyed. 

Farmers should be encouraged to restore wetlands and plant erosion-prone land. The long-term plan must be to transition this to native forest, although again exotics might tide us over. There should also be rewards for farmers who control pests in any stands of native bush. 

Turning Expectations into Regulations

The conversation about what we expect farmers to do is extremely broad. It encompasses other conversations about what farmers should be paid for, and what they should be penalised for not doing. 

Once we have clarity on these questions, it will be much easier to sit down with farmers and work out appropriate regulations to make it all happen. Otherwise, we risk losing the wood for the trees.

 

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