Effect of Budget on farms and freight

Waimarino Bulletin, Volume 2, Issue 27, 3 December 1984, Page 9

Effect of Budget on farms and freight

Peter Hammond, President of the Ohakune Growers' Association is appalled at how the new Labour Government has treated market gardeners in the 1984 Budget announced by Finance Minister, Roger Douglas, in Parliament on thursday 8 November. He believes that there will be an increase of 50-60% in freight charges which could signal a return to the use of Railways to transport vegetables to the markets in Auckland and Wellington. "The big hike in transport costs along with the lifting of subsidies for machinery and fertilisers means that it is now the survival of the fittest," concluded Mr Hammond. The Budget also removed a riumber of subsidies and other farm assistance schemes. These moves were foreshadowed at the time of devaluation and the total effect of the package is a projected fiscal saving of $233 million and $433 million for 1985/6 and 1986/7 respectively. There has been considerable publicity about the likely impact on farm incomes, and it is inevitable that there will be a drop in farm expenditure. $233 million is equal to only 6% of the turnover for Dalgety Crown and Fletchers' rural activities, but added to this will be higher transport costs and a substantial increase in farm input costs as a result of devaluation. The changes will further reinforce the shift away from traditional sheep and livestock farming into horticulture.

Overall, companies operating within the agricultural sector are not expected to benefit from budget changes in the short term. Other local businessmen specifically those involved in road haulage, were doing their best to ignore the Budget but most admitted that "it was certainly going to make a difference." Most see the increase in the road users' tax as being their biggest problem. It has

been estimated by some major freight companies in New Zealand that the net result is expected to be a need for 15% to 20% increase in charges. Competition both within the industry and from the railways will mean that charges will not be increased in all cases. Devaluation has made New Zealand holidays more attractive for overseas visitors and, throughout the

country, operators have reported a strong demand. With the Turoa skifield recently completing a successful season, the future looks bright for the touristrelated businesses in the Ruapehu region. The Bulletin has already reported that the Winstone Samsung Pulp Mill at Karioi will face an increase in electricity charges of $3-4 million.