The Chief Executive: What is needed for recovery?

What is needed for recovery?

It is just over a year since the whole of New Zealand went into Level 4 lockdown. At the time, the apple harvest was well underway and kiwifruit was building up to peak harvest, with other fruit and vegetables in the throes of either planting, harvest or pruning. Level 4 lockdown requirements markedly increased production costs and reduced the outlets where produce could be sold.

By Mike Chapman Chief Executive : HortNZ

One of the most notable issues at that time in 2020 was the lack of both permanent and seasonal labour. The horticulture industry – NZ Apples & Pears, NZ Kiwifruit Growers Inc, Summerfruit NZ, NZ Wine, Master Contractors and HortNZ – therefore started campaigns to find labour for the 2020–2021 season. This group has to this day kept pushing the government for enabling border policies, worker support and immigration changes so that the horticulture and wine sectors can continue to be productive. We have had some success but the end result has not been what horticulture has needed.

During the first lockdown in March–April 2020, the government started paying wage subsidies to support businesses and workers. The wage subsidies were not aligned or available to our sector as despite increased costs and a struggle finding workers, we kept operating. To date $16.6 billion of taxpayers’ money has been paid out in wage subsidies. The wage subsidies have propped up businesses that in these Covid-19 days are not operating and are not in a position to contribute to the much-needed economic recovery of New Zealand. As a result, I am reaching the view that this is money that has not been well spent. It is delaying inevitable job losses and an economic downturn, while taking workers away from industries like horticulture that are performing and contributing to New Zealand’s economic recovery. As the government works on policy and immigration settings for workers for the next 2021–2022 season, I believe that settings such as the wage subsidy need to be reviewed so that perverse economic outcomes are not perpetuated. Border and immigration settings, especially with vaccine-enabled travel, also need to be reviewed so that what has happened in 2020 is not repeated in 2021. New Zealand needs a new set of policies for the immediate future, which is what the horticulture and wine collective is pursuing with the government right now. There are also some clear wins that can be actioned that do not take money or complicated reviews. One of those wins is the timely enactment of the Organics Bill and rapid creation of the regulatory framework under that Bill, which will enable an increase in both the volume and value of organic exports. The Bill is going to its second reading in Parliament, having been through the Select Committee phase. It is not perfect but once in place, will enable a rapid increase in organic exports by allowing for the New Zealand organic certification system to be recognised in the countries where we send our exports. At present this is not possible. The regulations to be created under the Bill can also be tailored to make as cost effective and efficient a national certification system as possible. Industry is ready to work with the government to achieve this outcome, the end result being an enhancement to our ability to earn valuable overseas returns, to keep our rural economies running. We are at the crossroads when it comes to our economic recovery and the contribution that horticulture can make to it. As I’ve set out, if we are enabled with smart and appropriate policy settings, horticulture will continue to contribute, otherwise horticulture and our rural economies will further suffer.