Fonterra’s forecast payout has more than halved in two years, creating an $8.2b hole in the economy – which must finally be a wake-up call for National, says Labour’s Finance spokesperson Grant Robertson.
“The fall in the payout means it will be approximately just $7b, a fall from $15b two years ago. This will put real pressure on rural communities and farmers that are struggling to cope with high debt levels and three seasons of a low payout.
“It could push more farmers to the brink of bankruptcy. That will cause real damage to their communities.
“The Government has known about this for two years. But they have just sat on their hands. There is a global milk glut and no guarantee that prices will return to profit level in the medium-term.
“This shows the real danger of not diversifying the economy. National should have prepared the country for the downturn in milk prices but instead they encouraged more dairy conversions.
“Even Landcorp has finally realised there have been too many dairy conversions and the economy isn’t diversified enough. It’s time for the Government to take action.
“National needs to bring forward more infrastructure projects and diversify the economy away from dairy and the Auckland housing market to help prepare New Zealand for a challenging year.
“New Zealanders need a government that is an active partner in growing the economy and preparing for the future, not the bunch of distracted bystanders we currently have,” says Grant Robertson.