Farmers furious with Labour

Labour would emasculate farmers by forcing them into the Emissions Trading Scheme two years early and the economic impact would be catastrophic, Federated Farmers says.

Labour leader Phil Goff yesterday unveiled one of his party's main policies to turn the economy around -- an $800 million research and development boost for businesses through tax credits, with the cost met by farmers who will have to start paying for their greenhouse gas emissions in 2013.

The government's entry date for the sector is 2015, and farmers don't think they should be brought into the scheme at all.

"They talk about an export-led recovery, they talk about agriculture being part of that, and they want to emasculate us," Federated Farmers president Don Nicolson told NZPA.

"Agriculture is a major part of this economy...no farmer is prepared for anything that is nonsensical and the ETS, to most people, is nonsensical."

Mr Nicolson said Mr Goff was playing games with the sector, and he accused Labour of plotting to discredit farmers.

"The announcement is entirely linked with (Labour MP) Stuart Nash's tirade last week about farmers not paying enough tax and it's all designed to discredit farmers, who have had exemplary production statistics for as long as I can remember."

Mr Nicolson said he had been fighting governments for years over the ETS.

"There's one part of me that says `let it all happen, Mr Goff, and then pick up the pieces of the economy afterwards."

Prime Minister John Key said it was a crazy policy.

"Labour has learnt absolutely nothing in two-and-a-half years," he said.

"This is the same prescription that got us into trouble -- they're proposing to raise the cost of living and have the most expensive Emissions Trading Scheme in the world."

Mr Key said forcing farmers into the ETS would increase the price of milk, meat, butter and cheese.

"And this is coming from the very people who have been telling us for the last two years they think the price of these things is too expensive."

Mr Key said under Labour's plan, New Zealand's agricultural sector would be the only one in the world under an ETS.

"The impact of that will make our biggest export earner uncompetitive -- and make New Zealand consumers pay more."

But Labour insists the tax credit scheme will have huge benefits, leading to an extra $1.5 billion a year being spent on R&D and driving New Zealand into new markets for high-tech products.

And it says farmers should pay their fair share for their emissions, something else Mr Nicolson disputes.

"Farmers are paying their fair share right now through emission levies on fuel and energy just like every other New Zealander," he said.

Other important announcements at Labour's congress were:

* A Labour government would increase the minimum wage from its current $13 an hour to $15. Mr Goff says that wouldn't cost jobs, but Mr Key says Labour Department advice is that it would quickly put 6000 people on the dole.

* There would be a Minister for Children in a Labour cabinet. Deputy leader Annette King says the government has failed to make children a priority, as it promised it would. The minister would lead a department funded by money that now goes to the Families Commission, which would be scrapped.