Federated Farmers has been crunching the numbers and says this season’s record dairy payout will have phenomenal downstream benefits for New Zealand.

Federation dairy spokesman Lachlan McKenzie says Fonterra’s $8 plus payout means not only will the average dairy farmer will be receiving $996,000 but that the sector’s unprecedented success will generate 4000 extra jobs in the wider economy.

Mr McKenzie told Country99TV on Wednesday that the increased payout will also generate a lot more revenue for the government in tax.

“We’ve had a good milk production season, it gives us confidence, and there’ll be a smile on the face of the Inland Revenue Minister, just because of the extra money that’s going to be coming in.

“There’ll be well over 300 million dollars of extra tax coming in this year, the comments we’ve seen recently that farmers don’t pay tax are basically false.”

At the same time, he says many farmers are deeply in debt and will be using their returns to get debt down to manageable levels.