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Cunliffe on DIRA

Written By: - Date published: 11:09 am, April 4th, 2012 - 31 comments
Categories: david cunliffe, exports, privatisation - Tags:

Against the will of the Fonterra farmer Shareholder’s Association, National is trying to destroy Fonterra’s cooperative model on vague grounds about access to capital. The end result will be the one world-leading, world-scale company we have, which brings in 20% of our export earnings, will start sending it profits offshore. David Cunliffe makes the case passionately and eloquently.

31 comments on “Cunliffe on DIRA”

  1. Craig Glen Eden 1

    The Tories are even prepared to sellout Farmers for their Corporate mates. Why Farmers blindly follow these idiots I dont know. Nice job David Cunliffe.

    • McFlock 1.1

      Kansas City shuffle. National electorate mps do what they can to let farmers soil our waterways or treat workers like shit, and they don’t realise that the same people are working to shaft them in Wellington.

  2. tc 2

    Nothing’s safe with shonkeys mob, the bankers are after everything that makes a buck and those generational nat supporting farmers have been duped like alot of NZ into thinking their interests are being served.

    DIRA is a response to the smarmy weldon, van der heyden and co not getting their way on the last couple of attempts to list Fonterra and line their own and mates pockets.

  3. bad12 3

    ”The future end result of such Legislation will simply result in the farmers milking their cows being milked by share owning speculative capitalists from an office in the CBD of either Wellington or Auckland”

    Why do we pay through the nose for dairy products,simply because Fonterra allowed and were allowed to have Speculative Capitalists clip the ticket on the dairy products between Fonterra and the various retailers via the use of ”forward contracts”,

    Simply put such ”forward contracts” just add another level of cost to the products produced by the dairy farmers , and Fonterra can hardly hide behind any claim that it is a production company and not a marketing organization…

  4. aerobubble 4

    What I don’t understand is how the executive of Fonterra can push for a law change that is more like the one rejected by farmers. And secondly, how National MPs will retain their seats when farmers spit their guts. How does National win anything, how does the board of Fonterra?

    • Jim Nald 4.1

      What would it take for all who are still awake in Aotearoa to band together and stop this donkey juggernaut from helping his crony speculators and corrupt bankers to dismantle our economy and society and turn us into New Sale-land?

      • Dr Terry 4.1.1

        Jim, you ask wisely, “What would it take . . . ?” I think I can guess, but dare not answer!

        Labour failed to make Cunliffe, the former Diplomat, its Leader? A bit late now for regrets! What a brilliant speaker (even if the House was empty).

        • LynW 4.1.1.1

          What would it take? Strong leadership and People Power! Let’s start a list of ideas….

      • Shaz 4.1.2

        When the Trams Pacific Partnership Agreement is passed by the Cabinet ( for which this Bill and other legislation is arguably an enabler) will the Labour Party dare to withdraw when it is next in power. Saying that it is better for trade to be governed by rules rather than being governed by none which has been their position is to cede Labour values to free market ideology.
        That is the real issue here I suspect. http://tppwatch.org/what-is-tppa/

  5. Bill 5

    Gee. Wouldn’t it have been nice to hear some signpost on a mechanism whereby communities could have a say? All very well having the producers own the company. But the producers are trashing the environment. Our environment.

    As Cunliffe said “money talks”. He didn’t seem to savour that reality. Let’s face it, money talks in pusuit of more money. Period. Surely, that is one aspect of Fonterra that should be subject to dilution so that local communities can ensure the ongoing integrity of local environments.

    Or for Labour, is it not so much an aversion to ‘money talking’, but simply an aversion to some particular person or institution behind the money?

    Putting Fonterra on some pedestal and worshipping ‘NZ sovereignty’ (a flow of cash in other words) doesn’t save lakes and rivers. And (as an aside) it ain’t going to stop indebted sharemilkers going down the tubes due to Fonterra purchasing land and dairy interests in S. America or China and effectively locating off shore in cheaper production locales.

  6. bad12 6

    Future law changes will be (a)a legislative change to either allow or force the shares of Fonterra to be listed on the NZ Stock Exchange,and (b),legislation that allows dairy farmers to supply milk to Fonterra without also being share-holders in that company,

    The ticket as we said above is already being clipped by Speculative Capitalists holding ”future contracts” which allows the ticket between Fonterra and the retailers to be clipped,(and us to pay the cost of that every time we buy a couple of litres of milk),

    Once the Fonterra shares are forced onto the open market the ticket will again be clipped by those who will eventually end up as the share-holding owners of Fonterra,

    How will the ”force” be applied to the present owners of the shares in an effort to have them sell their shares???those supplying the capital to the present share-holders,the dairy farmers,will simply incentivize such by increasing the cost of that capital via interest rates,

    Slippery of course has placated the rural vote thus far by coming out with quotes like,”not wanting to see farmers as tenants in their own lands”, We can only take that to mean that He wont be present in the country when this finally occurs and in all probability will be basking in the sun on a island in the Pacific counting His 30 pieces of silver for a job He considers well done…

    • tc 6.1

      ”not wanting to see farmers as tenants in their own land” could still occur however they’ll have given up their co-op for a foreign owned entity that will drive their price/kg down to line their own pockets.
      There’s already massive waste in the Fonterra co-op model with the corporate middle layer, massive IT costs that aren’t value for money and profiteering supermarkets.
      They could be doing a shed load better now if they took a greater interest in how Fonterra actually operated, reduced the waste and give the kiwi consumer a better deal all in one move.
      Farmers I talk to vote nat because they always have, little thought goes into it.

  7. Majella 7

    This is such an important issue that Labour’s bench is all but empty….

  8. ad 8

    The last sections of Cunliffe’s speech show why he is the only person inside Labour right now who could credibly take Key apart. No-one else comes close to showing passion and policy insight with rhetorical precision like that, anywhere in Parliament.

    David’s point about losing effective control of a company well before the 25% ownership mark should not be lost in the State Owned Enterprise debate, where bitter experience will show that 51% means so little when it comes to real control of the strategic direction of the company.

    It’s amazing the number of governance problems New Zealand is experiencing, even with 100% control. The setup of public governance in Auckland is now so absurdly corporatised, that even 100% effective control of the Ports of Auckland is not enough to alter the course of management decisions. Corporatisation doesn’t work – ask every minority sharehodler in a property development company over the last 5 years.

    Indeed without effective control of the electricity generators, we also lose the ability to use the massive farms that they own, together with the Landcorp dairy farms, as a strong voice on the Fonterra Shareholder Council.

    The lack of Shareholder Council support for the legislation is pretty damn bad – it’s the most direct instrument farmers have to alter Fonterra’s direction. If only dairy farmers know of this loss of direct control.

    The current government signalled their partisanship on Fonterra in 2008 when they first got into power and scrapped the Fast Forward Fund, whhich was a massive billion-plus joint research effort between Crown Research Institutes and Fonterra and other pastoral sector players.

    I can see Labour changing to agree to the original Greens position of the NZSuper Fund being required to source local investments over and above international ones. If only they were given the chance to get in there. Fonterra is the next prize for international money, and we must fight against Fonterra’s corporatisation.

    • bad12 8.1

      Oh we were talking with Southland farmers about ”control” a decade ago,at least some of them fully understand the ramifications and will see the present legislation for what it is,incremental movement toward having the Fonterra shares publicly listed,

      This particular piece of legislation isnt as the saying goes ”end-game” more another try at an opening gambit in the game of ”lets ransack Fonterra there,s plenty of cash there”,

      We may yet see the game morph into something completely different called ”lets rip National asunder into its town and country components”

      The look,demeanour and behaviour of many within the ranks of National in the last couple of weeks would tend to suggest that ”the game” has already entered that morphing phase…

      • ad 8.1.1

        Don’t hold your breath waiting for national to implode further. Key will not lose another Minister on his watch by resignation. He will lock that place down like never before. Firing of course he will still keep up his sleeve.

        It will be so easy to link this legislative story with the impending Crafer-Penxin decision due out in the next few days.

        Talking to farmers a decade ago may well have been instructive at the time, but the debate has shifted now. Ownership of land by citizens or at least Residents, particularly farmland, is a huge story in provincial New Zealand. Moreso than it has been for many decades.

        If there really is a growing difference between National’s supporters between urban and rural centres, then Labour should be turning its leadership to farmers not in a “get to know you” tour across the country, but with the same aggression, patriotism and communicative clarity that New Zealand First does. ie. SO not-Shearer.

        That 6% is out there for someone to take in the 2014 election, if someone in Labour is prepared to be a better Winston: populist, patriotic, but also constructive and prepared to show what success looks like for a whole country.

        • bad12 8.1.1.1

          Did someone in Slippery,s Government resign???are you sure that behind the scenes the particular Minister you and most others believe as having resigned wasnt given the broadest of hints,

          Something along the lines of Slippery,s stalking the corridors with a blunt axe muttering something about Smith,letters and pushing people under moving buses if they dare to show their faces in the Cabinet room again,

          We are not about to spend too much time disputing with you where the debate in the rural heartland has its focus at the moment,we can assure you tho that while the media,(someone pointed out that Weldon and Co had been instrumental in a towny speculative capitalist buy-out of the rural media),might be focusing the debate upon foreign land ownership the issue of ownership and control of Fonterra is as relevant today,and as much discussed behind closed doors,as it was a decade ago…

        • bad12 8.1.1.2

          It sounds hugely Machiavallian doesnt it,Weldon ”the owner” of the New Zealand stock exchange fronting the buy up of the rural press so as to have the means to attempt to foster the perception of what rural NZ is thinking about,(or more to the point what Weldon and Co want it to think about),

          This is big bucks tho,not just the sale of a few farms,(even tho those mere few farms equate in monetary terms to 200+ million dollars),We are talking here of who controls the 100s of billions of dollars that will pass through Fonterra,s bank accounts in the decades ahead, the Productive Capitalists in the form of the rural Dairy Farming shareholding owners of Fonterra,

          Or,

          The Speculative Capitalists ensconced in the halls of power,in the tower blocks of Auckland and Wellington whose involvement thus far in the dairy giant Fonterra is peripheral with a few of the more cunning operators having managed early on in the game to secure highly secret ”forward contracts” with Fonterra over milk supply thus being able to insert themselves between Fonterra and the retailers as a largely hidden added cost factor to the end use consumers of these products,you and me…

        • bad12 8.1.1.3

          Hell if we keep this up we will have everyone scurrying for the tin-foil hats seeing conspiracy at every turn,

          But really???what is a supposed capitalist Government doing introducing legislation into the Parliament which controls the price of the product paid for at the farm gate by the production company,Fonterra,that those producing the product on the other side of the farm gate actually own,

          Add to that the arch-Neo Capitalist,the ultimate little speculative Capitalist Weldon and co,s buy up of the organs of rural press and We all could be forgiven the odd exclamation of what the fuck.,

          Joseph Stalin would be in awe of such master moves in sleight of hand seizure of the means of distribution and moves to put the means of production into a position of subjugation,

          Of course the label for having accomplished such an audacious seizure has been labelled Communism when it is supposedly carried out in the name of the common people,

          What then should the term be that we apply should the monied class of our society with what we assume is the spiritual and monetary backing of their international brethren if they are successful in such an endeavour of seizure…

  9. Ant 9

    It depends, Fonterra needs money to expand ie: buy up land/get foot holds in developing markets before they get their shit together and crush us.

    Don’t know if this is the right way to go about it…

    • Colonial Viper 9.1

      It depends, Fonterra needs money to expand ie: buy up land/get foot holds in developing markets before they get their shit together and crush us.

      Then they should sell the Government a NZ based stake holding in exchange for that new capital.

      The NZ Govt could also give Fonterra (and Kiwibank, while we are at it) very low interest loans.

      Plus, the NZ Govt could print the money requited to fund those actions.

      • ad 9.1.1

        Labour might want to revisit the Greens’ original NZSuper policy about giving preference to investing in New Zealand.

        The public funds that we have that could come to the rescue of any major asset that lists on the sharemarket, are:
        – ACC
        – EQC
        – NZSuperFund
        – Parliamentary pensions
        – Depositors in Kiwibank

        You would need all of them working together to even get the electricity generator companies back, let alone a future listed Fonterra.

        I wonder if any party will come out with a policy about our collective public purchasing power, such as aggregating the investment intentions of these funds towards sovereign ends?

        We are turning into such a weak country, it makes me despair.

      • Ant 9.1.2

        @CV

        We already cover their externalities, a government stake holding could reflect that :p

    • ghostwhowalksnz 9.2

      Money to expand ?.
      They can do it the way every other business does it. Retained earnings and some borrowing.

      Since it became private has Telecom ever gone back and asked shareholders for more money ?

      • Ant 9.2.1

        Most of the farmer shareholders want to keep their payouts and a lot require them to keep the bank manager at bay. One of Fonterra’s biggest problems has been the resistance of farmer shareholders to retaining earnings for investment.

  10. Labour’s complaints are meaningless unless they say now that they will reverse this legislation and take a state share in Fonterra to defend its cooperative ownership, recognising that Labour came into existence on the backs of workers and working farmers against the rural gentry and their Tory lifestyle on the unearned increment.

    • ad 10.1

      A state “share” can already be found in the vast dairy holdings of LandCorp. You have to be a farmer to be a voting shoareholder in Fonterra – that’s the whole point of the bill before the House.

      Cunliffe made specific recommendations within his speech to amend the legislation.

      Otherwise, the public funds New Zealand has (see post above) are the best way to buy into farms and hence raise the shareholding.

    • Now’s the time for Fonterra to issue shares to farm workers and its dairy factory workers. I would suggest that the shares could not be sold outside Fonterra . This would make Fonterra a true Co-Operative,All its workers would benefit plus farmers would have workers who would want vto make sure the farm had a high production.

  11. prism 11

    Dairy Industry Restructuring Amendment Bill or, as we see it quite clearly, Diarrhoea (a frequent and copious discharge of abnormally liquid faeces). The stuff that comes out of the mouths of NACTs not the nether regions. I don’t think this is too strong or an unreasonable analogy for what we have to put up with from these F-team pollies.

    Good on David Cunliffe for making a strong case against it. It’s another case of damage from the changeling meddle class that has spread over our land.

    And links in with the Michael Moore comment that joe90 put up at 4.1 on Open Mike today.
    Discusses the march of the black cloud of the greedies over USA and little us.

  12. Hami Shearlie 12

    That performance from David Cunliffe should finally show everyone why he should be the leader of the Labour Party. He sure knows his stuff. Shearer was known as a great negotiator, but the Westminster system of our government is naturally an adversarial one. So I’m afraid Shearer’s style just won’t work! Just my opinion!

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