Word of the day

April 3, 2014

Hoddypeak – a blockhead, fool, simpleton, noodle.


Rural round-up

April 3, 2014

Why is New Zealand’s retail milk so expensive? - Keith Woodford:

Visitors to New Zealand often ask me why our supermarket milk is so expensive compared to in their own countries. I tell them the answer is simple. First, we have little competition, with only two milk major processors (Fonterra and Goodman Fielder) and two major supermarket chains (Foodstuffs and Progressive). Also, unlike most other countries, the Government in New Zealand does tax food.   Both answers are typically received with surprise.

I am sure it will also come as a surprise to many New Zealanders to hear they pay more for their milk than the British, the Australians, the Americans and even the Canadians. So let’s do some comparisons. . .

Smoke and mirrors of business as usual? - Allan Barber:

This season shows many of the normal characteristics of the red meat sector, but it’s getting harder than ever to unravel the complexities of an industry which epitomises Winston Churchill’s 1939 quip about Russia – a riddle wrapped in a mystery inside an enigma.

In conversation with several senior industry executives, it has been possible to establish for certain only three things: first, this season is a bit easier than last and quite a lot better than two years ago, second, the trend to dairy support away from sheep and beef has gained momentum, and lastly China is extremely helpful for exports of both species.

There are conflicting views about other current issues and events. Beef is either tougher or easier than sheepmeat depending on the region or point of view, capacity must come out, but whose capacity again depends on the perspective taken, and, while some are closer than others to see the possibility, nobody is willing to predict a disaster. . . .

From farm to the boardroom - Annette Scott:

Dawn Sangster is a grassroots farmer, an Alliance Group director and is committed to making a positive contribution to the red-meat sector. She talked to Annette Scott about her fascinating journey in the rural sector.

Maniototo farmer Dawn Sangster grew up on the family farm in Paerau, Central Otago.

She attended Waitaki Girls High before graduating from Lincoln University with a Bachelor of Agricultural Commerce degree in farm management. . .

Call for organic producers to unite - Alan Williams:

Southland farmer Craig Dowden reckons organic lamb producers can do better by teaming up and demanding a better price.

He wants them to decide on a fair minimum price and tell their processors that is a bottom line for supply.

Existing prices, providing typically a 20% premium over conventionally farmed lambs, weren’t enough, Dowden said.

The premium was needed to allow for reduced stocking rates, slower growth rates, and some stock-health issues involved in running a farm without some chemical treatments, he said. . .

 

TAF ‘a blueprint for the world’ - Tim Fuulton:

Fonterra’s Trading Among Farmers (TAF) scheme is being copied in Australia and the rest of the world is likely to follow, NZX head of capital markets Aaron Jenkins says.

Jenkins joined NZX last year from a role as Fonterra’s TAF general manager.

It is 16 months since the share-trade mechanism launched in a clamour of publicity.

Australian dairy co-operative Murray Goulburn’s proposed share-trade mechanism was virtually identical to Fonterra’s TAF, except the Australians wanted to raise money externally, Jenkins told a recent function hosted by Christchurch law firm Tavendale and Partners. . .

 

Human health implications of A1 versus A2 beta-casein: theory and current evidence - Keith Woodford:

The health implications of A1 beta–casein relative to A2 beta-casein are controversial. At times the scientific debate can become clouded by the reality that milk is a commercial product. Conversion of all herds so as to replace A1 beta-casein with A2 beta-casein over one to two cow generations (4 – 12 years) is technically straight forward. Accordingly, the beta-casein issue can be presented as either a threat to, or an opportunity for, the mainstream industry, with elements of each perspective being valid.

The Key Science.

  • All bovine beta-casein was originally of the A2 type. A1 beta-casein is now produced by a considerable proportion of cows that have European bloodlines. In contrast, goats, sheep, buffalo, camels and humans produce beta-casein of the A2 type. . .

 


Thursday’s quiz

April 3, 2014

It’s your turn to ask the questions again.

You don’t have to follow the five-question model I use and anyone who stumps us all will win an electronic apple crumble.


Farming Show says no to Cunliffe

April 3, 2014

The Farming Show has interviewed the leaders of the National and labour parties each week for years.

When Jamie Mackay offered the spot to David Cunliffe he turned it down and Jamie wasn’t impressed.

Cunliffe has now had second thoughts:

CALLER PETER:   Good morning, Mr Cunliffe.
DAVID CUNLIFFE:             Morning.
CALLER PETER:   I was just wondering if you could explain why you’ve refused to appear on the Farming Show.
DAVID CUNLIFFE:             Actually, you know what? I’ll make an offer to you today. I’m happy to do that. I’ve changed my mind.
TIM FOOKES:     Why did you say no, though? This is…
DAVID CUNLIFFE:             Because I was told before I became leader that the particular show used to ridicule my predecessor in a way that was grossly unfair. Now, that may or may not be true, but that’s what I was told. I accepted that advice, and I declined to appear. This is…
CALLER PETER:   Russel Norman appears on it.
DAVID CUNLIFFE:             Yes, and I’ll tell you what, I’m making a commitment today: if I get a call from Jamie Mackay, invite me on, I’ll do it. There you go.
TIM FOOKES:     There you go, Peter. Look, the problem is, if you’ve said no, do you expect Jamie Mackay to come knocking on your door and saying, look, if you’ve now said yes, will you come back?
DAVID CUNLIFFE:             It’s a good offer. It’s up to him. Doesn’t worry me either way.
TIM FOOKES:     I mean, this is the thing – and I was very surprised when you said no, or when your office said no, because you need, it appears, to get out there and to get among people, especially farmers and people who want – you know, want a bit of a…
DAVID CUNLIFFE:             Yes, look, believe it or not, I actually kind of like farming. I grew up in a farming district, South Canterbury. I spent a year working on a shearing gang and on a cropping farm. And I got dirt under my fingernails. In fact, I spent a fair while mucking out pigpens as well, but that’s another story. Oh, I could tell you some stories about pigpens. But I won’t.

Mackay is a professional.

He sometimes asks tough questions and he is sometimes irreverent but I have never heard him treat a politician unfairly.

Cunliffe obviously realises he made a mistake and has had second thoughts but the Farming Show host has not.

Everyone makes mistakes and this one has come back to bite Cunliffe.

He’s missed an opportunity to speak to provincial New Zealand – and city people who tune into Radio Sport from 12 -1pm.

But worse for him, in the interests of balance and on the advice of Damien O’Connor, Mackay already invited Shane Jones to appear.


Tax cuts boost pensions

April 3, 2014

The left try to say tax cuts only help the rich which merely serves to confirm their poor grasp of economics.

One of the groups which has done better under a National-led government is pensioners and one of the reasons for that is tax cuts.

Superannuation is based on the average after-tax income.

When taxes are cut the average after-tax income increases and so do pensions.

Both Labour and the Green Party are threatening tax increases. That will reduce the average after-tax income and reduce any increase in superannuation,
Photo: A stronger economy means we can better support our seniors. From next week superannuation payments will increase by another 2.7%.

 

 


No lolly scramble from National

April 3, 2014

If you’d been through several tough years in your household or business, were getting your head back above the water and had a little extra money, what would you do?

Pay down debt and put away something for the next crisis, or splash out?

If you were sensible you’d take the first option and that’s what National will do if it’s returned to government this year.

Prime Minister John Key said that in a speech which told us there will be no election year lolly scramble.

. . . Budget forecasts will show that in the coming financial year the Government is going to post a surplus, albeit a small one.

Once that has been achieved, we can start getting our debt down.

The Budget will show that we remain on track to reduce net government debt to below 20 per cent of GDP by 2020.

At the same time – over successive budgets – we have set out on a longer-term path to repair the damage to our economy from the excessive borrowing, consumption and government spending of the mid-2000s.

That path has involved reforms like the tax switch of 2010, that significantly reduced personal income tax rates across the board, and encouraged savings and work.

As I’ve said, the worst times are now behind us and the risks of another global crisis have lessened considerably.

So the Government’s focus has moved from managing our way through a recession, with persistent budget deficits, to managing a growing economy.

Initially, growth in the economy has been driven by low interest rates, high prices for our exports, a catch-up in housing supply and the rebuilding of Christchurch.

But this momentum has now turned into a much broader recovery where consumer and business confidence has lifted, employment is rising and wages on average are increasing faster than the cost of living.

Our focus is on sustaining economic growth over the medium term, so the economy doesn’t just burn brightly for a couple of years and then run out of oxygen.

Because when we talk about the economy – about things like GDP and the balance of payments – we’re ultimately talking about people’s jobs, their wages, and the costs they face in going about their daily lives and raising their families.

Therefore, it’s hugely important to continue the progress we’ve recently been making.

Over the past year, for example, 66,000 more people have got a job.

Average weekly wages have gone up 2.8 per cent, compared to inflation of only 1.6 per cent.

And the economy as a whole has grown 3.1 per cent – one of the faster growth rates in the developed world.

The Budget will show that this employment growth is forecast to continue and the unemployment rate is expected to fall.

Wages are forecast to continue rising faster than inflation.

And economic growth is forecast to continue.

So we are setting out to manage the growing economy with a five- to 10-year view in mind.

Our task is to take the opportunity of a reasonable growth outlook to deepen investment, upgrade skills, intensify and diversify our export base and become more competitive.

Firstly, on the Government’s fiscal strategy:

We have had an on-going commitment to discipline around government spending and that will continue this year, next year and for as long as we lead the Government.

One way to illustrate our approach is this – in the last five years of the previous Labour government, new operating spending each budget averaged $2.7 billion a year.

But in the five budgets of our government, new operating spending has averaged only $250 million a year.

So that’s less than a tenth of the rate of new spending under Labour.

In the last five years of Labour, government spending in total went up 50 per cent.

Bill English often describes that period as a kind of experiment to determine if indiscriminately spending large amounts of money would solve social problems.

Turns out it didn’t.

Spending more doesn’t necessarily get better results.

In contrast, we’ve had a different approach, which is to focus on what is really driving social outcomes like crime, welfare dependency and underachievement at school, and address those underlying causes.

That approach is delivering real results, without breaking the bank. In fact, over the longer term it saves money.

In prisons, for example, we have focused very strongly on literacy and numeracy, skills training, treatment for drug and alcohol addiction, working prisons and reintegration of ex-prisoners into the community.

That is giving offenders the opportunity to turn their lives around and stay away from crime.

Already this approach has reduced reoffending by 12.6 per cent, which is halfway to the target we’ve set ourselves of a 25 per cent drop.

So far, it has meant around 2,300 fewer offenders and 9,300 fewer victims of crime each year.

In welfare, we have focused on getting people off benefits and into work, because that is the best way to lift people and their families out of poverty.

This has involved an upfront investment in case management and support, but it’s expected to have a considerable pay-off as people leave life on a benefit to get established in full-time work.

Addressing these and other issues hasn’t meant big increases in spending.

In fact, we’ve found that the possibility of more spending can be a distraction from a growing focus in the public sector on solving complex problems rather than throwing money at them.

Government spending has actually been declining as a proportion of the economy, at the same time as we have been achieving these results.

In 2008/09, government spending came to 34.5 per cent of GDP. In the coming year it’s forecast to be 30.6 per cent before going under 30 per cent and staying there.

That is hugely important when the economy is on an upswing because – as the Reserve Bank regularly points out – on-going spending restraint from the Government helps to dampen the interest rate cycle.

The Reserve Bank has already begun to raise interest rates from the historically low levels they’ve been at, towards more neutral levels that aren’t going to over-stimulate the economy.

But keeping government spending under control means that, over the course of the cycle, interest rates will be lower than they otherwise would have to be, and for longer.

In turn, that helps to keep the exchange rate lower than it would be, which is important for the overall competitiveness of the economy.

If you want a real live example of the relationship between government spending and interest rates, think about what happened in the mid-2000s, when the Labour government was putting large cash injections into the economy.

Government spending overheated the economy so much that the Reserve Bank was forced to keep putting up rates, higher and higher, to get on top of it.

By 2008, households faced mortgage rates of almost 11 per cent. Business lending rates were also very high.

In the end, the country went into recession in 2008, well before the global financial crisis.

The National-led Government will avoid repeating the glaring mistakes made in the previous economic cycle.

While some increase in interest rates is an inevitable consequence of a healthy and growing economy, we need to do everything we can to help keep rate rises to a minimum.

And we believe we have the support of New Zealanders who can remember the dashed hopes of debt-fuelled growth and floating mortgage rates above 10 per cent.

So there is not going to be a lolly scramble in this year’s Budget. And we also won’t be doing that in the election campaign later this year.

In this year’s Budget we will be sticking to our new spending allowance of $1 billion.

Together with some sensible savings, this allows us to focus new spending mainly on health and education – which are always at the heart of our budgets – and on families and children.

And sticking to the allowance will enable us to post a small budget surplus in 2014/15, which we have long promised.

In future budgets, we will be posting consistent and larger surpluses. Those surpluses will allow us to begin reducing debt as a proportion of GDP.

This is what sensible and responsible fiscal policy is all about.

In difficult times, governments run deficits and built up debt, to support the economy and jobs. In good times, they run surpluses and pay down that debt. . .

Labour did use some of the tax windfall of the noughties to reduce debt but it also increased spending unsustainably.

Policies it’s announced so far show it hasn’t learned from that mistake.

This gives voters a very real choice in the election – fiscal prudence and responsibility from National or higher taxes and higher spending from Labour and its fellow travellers on the left.


April 3 in history

April 3, 2014

1043 Edward the Confessor was crowned King of England.

1077 The first Parliament of Friuli was created.

1559 The Peace of Cateau-Cambrésis treaty is signed, ending the Italian Wars.

1593  George Herbert, English poet and orator, was born  (d. 1633).

1834 The generals in the Greek War of Independence stood trial for treason.

1860 The first successful United States Pony Express run from Saint Joseph, Missouri to Sacramento, California began.

1865 American Civil War: Union forces captured Richmond, Virginia the capital of the Confederate States of America.

1882 Jesse James was killed by Robert Ford.

1885 Gottlieb Daimler was granted a German patent for his engine design.

1895  Trial of the libel case instigated by Oscar Wilde began, eventually resulting in his imprisonment on charges of homosexuality.

1915 Piet de Jong, Dutch politician, Prime Minister of the Netherlands from 1967 until 1971, was born.

1917 Vladimir Lenin arrived in Russia from exile, marking the beginning of Bolshevik leadership in the Russian Revolution.

1922 Doris Day, American actress and singer, was born.

1922 Joseph Stalin became the first General Secretary of the Communist Party of the Soviet Union.

1924 Marlon Brando, American actor, was born  (d. 2004).

1934 Jane Goodall, English zoologist, was born.

1936 Bruno Richard Hauptmann was executed for the kidnapping and death of Charles Augustus Lindbergh II, the baby son of pilot Charles Lindbergh.

1943 – The Battle of Manners Street between soldiers and civilians.

'Battle of Manners Street'

1944 Tony Orlando, American musician, was born.

1946  Japanese Lt. General Masaharu Homma was executed in the Philippines for leading the Bataan Death March.

1948  Carlos Salinas, former President of Mexico, was born.

1948 President Harry S. Truman signed the Marshall Plan, authorizing $5 billion in aid for 16 countries.

1948  The Jeju massacre began.

1956 Hudsonville-Standale Tornado: The western half of the Lower Peninsula of Michigan was struck by a deadly F5 tornado.

1961 Eddie Murphy, American actor and comedian, was born.

1968 Martin Luther King Jr. delivered his “I’ve Been to the Mountaintop” speech.

1973 The first portable cell phone call was made in New York City.

1974 – The Super Outbreak occured, the biggest tornado outbreak in recorded history. The death toll was 315, with nearly 5,500 injured.

1975 Bobby Fischer refused to play in a chess match against Anatoly Karpov, giving Karpov the title of World Champion by default.

1982 The United Kingdom sent a naval task force to the south Atlantic to reclaim the disputed Malvinas/Falkland Islands from Argentina.

1996 Suspected “Unabomber” Theodore Kaczynski was arrested.

1996 A United States Air Force airplane carrying United States Secretary of Commerce Ron Brown crashed in Croatia, killing all 35 on board.

1997 The Thalit massacre began in Algeria; all but 1 of the 53 inhabitants of Thalit were killed by guerrillas.

2000 United States v. Microsoft: Microsoft was ruled to have violated United States antitrust laws by keeping “an oppressive thumb” on its competitors.

2004  Islamic terrorists involved in the 11 March 2004 Madrid attacks were trapped by the police in their apartment and killed themselves.

2007  Conventional-Train World Speed Record: a French TGV train on the LGV Est high speed line set an official new world speed record.

2008 ATA Airlines, once one of the 10 largest U.S. passenger airlines and largest charter airline, filed for bankruptcy for the second time in 5 years and ceases all operations.

2009  Australia formally adopted the United Nations Declaration on the Rights of Indigenous Peoples.

2013 – More than 50 people died in floods resulting from record-breaking rainfall in La Plata and Buenos Aires, Argentina.

Sourced from NZ History Online & Wikipedia


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