The Hive makes a more radical cull

25/05/2008

I drew up a short list of unproductive expenditure which an incoming Government could start culling. 

 The Hive  quite rightly points out my suggestions wouldn’t save much and has come up with a more radical cull backed up with figures.


Cardrona King

25/05/2008

Wanaka used to be Queenstown’s poor relation; the former was the town where New Zealand families had cribs while the latter had a larger permanent population and attracted the tourists.

 

That has now changed, and generally for the better. Wanaka may be the smaller sibling, but it has grown and developed while still retaining its character so you know you’re in New Zealand, while at the other end of the Crown Range road you could almost be in any resort in the world.

 

Wanaka was always a better summer destination with more sun and warmer water; but Queenstown had the ski fields which made it more attractive in winter. If the credit for turning Wanaka into a year-round destination could be given to one person, it is John Lee.

 

John and his wife Mary developed the Cardona Alpine Resort, bought and renovated the Cardrona Hotel; were at the forefront of the campaign to seal the Crown Range road; built the Southern Hemisphere Proving Ground on Pisa Range where motor vehicle and tyre companies test their products in winter conditions during the Northern Hemisphere summer;  built the Snow Farm  cross country skifield and lodge and developed the Snow Park all-terrain field for snow boarding in winter and mountain biking in summer.

 

A long and sometimes torturous plod through the resource consent process has just been rewarded with the granting of consent for a 3.88 km long gondola which will take people from the Cardrona Valley to the Snow Farm.

 

The Upper Clutha Valley Environment Society has been among a small minority of opponents to the Lee family’s resource applications. But the society won’t be appealing the decision because members’ energy is being directed at appealing another recently approved consent for the Parkins Bay development of a golf course and accommodation at Glendhu Bay.

 

John was profiled in the weekend ODT and because its stories don’t stay on-line long I’ll copy it in full.

 

JOHN LEE says he lives and breathes the Cardrona Valley.
‘‘It’s my life,’’ he says.
The 72-year-old’s lifelong connection to the rugged and scenic highlands surrounding the historic former gold-mining town of Cardrona is the driving force behind his mission to bring the boom times back. During the past three decades, Mr Lee has developed a range of alpine attractions designed to draw people and their all important spending habits back to the Cardrona Valley.

The former high country farmer turned alpine entrepreneur was granted resource consent this week to build a gondola to service the Lee’s family-run skifield operations on the Pisa Range.  With the gondola approved, Mr Lee, his wife Mary, and their son Sam are now pushing ahead with plans to develop a 300ha skifield and resort, with up to five chairlifts servicing the southern facing slopes above the Roaring Meg Stream.

Mr Lee originally announced his plans for a gondola and the tentatively titled Roaring Meg Resort to a small gathering of five Wanaka journalists in December 2003. Less than five years on, the Lees are readying themselves to begin construction on a 3.88km gondola, which will be capable of delivering up to 1000 people an hour to his 1500m high Pisa Range alpine playgrounds.

Mr Lee has developed a range of businesses in, around, and above the Cardrona Valley, since he decided in the 1970s that the prospects for highcountry farming were limited.  In 1964, he bought Waiorau Farm from his father and built up a 5000-strong merino flock on the Pisa Range high-country station. However, with almost 80% of the property above 1200m, winter and its accompanying snowfalls cut into the farm’s productivity.

The mechanisation of agricultural practices was forcing families and people out of the area, and Mr Lee decided a change in approach was vital if Cardrona was going to become a viable township. Mr Lee figured he needed to take his father’s greatest farming liability and turn it into an asset.  By using snow as a resource to create viable business effectively reversing the hemispheres Mr Lee was able to bring in valuable international dollars.

Mr Lee bought Mt Cardrona Station, on the western side of the valley in 1970 for $44,000, with the vague notion of developing the mountain tops for skiing despite having little interest in the sport himself.

By 1980, he had built a farm road into the upper reaches of Mt Cardrona, where helicopters then flew people up to the peaks and they skied back down to the road. A $1.5 million government development loan funded a double chair-lift a year later making Mr Lee Wanaka’s skifield pioneer.

He bought the historic Cardrona Hotel in the 1970s as a holding operation, renovated it, then sold the business for $12,000. The hotel has since gone on to establish itself as an ‘‘iconic’’ Southern watering hole, thanks in no small part to its association with a Speights advertising campaign.

Mr Lee sold Cardrona skifield in the late 1980s for a ‘‘couple of million’’ and turned his attention back to the Pisa Range and Waiorau. He was granted a recreational permit for the area despite opposition from the Federated Mountain Clubs of New Zealand, which was against any commercial development on land above 1200m.

Ironically, the one thing which helped him to gain consent to develop the Pisa Range highlands at the time a 13.5km mountain road has become an ‘‘outmoded’’ means of transport and will be replaced by the $16.6 million gondola.

Mr Lee has established three multimillion-dollar developments on the Pisa Range, with one the Southern Hemisphere Proving Ground (SHPG) a straight business operation sold off in 2004 to a Christchurch group for $20 million.

SHPG is a vehicle cold testing facility, used by multinational car and tyre companies, such as Toyota and Dunlop, to test their products in snow, ice, and winter conditions during the northern hemisphere summer. It is the only one of its kind in the southern hemisphere.

For the past 17 years, Mr Lee and his wife Mary have put their efforts into developing the Snow Farm as a nordic skiing operation.  It has since branched out to include summer-time activities and is used as a high-altitude training destination for triathletes, and occasionally professional rugby teams.

Sam Lee has managed the operations at Snow Park for the past five years and has quickly grown the terrain park into the southern hemisphere’s foremost alpine freestyle skiing and snowboarding resort. It includes a 50-bed backpacker lodge, and luxury apartments, alongside a bar, restaurant, and cafe. During summer, the Snow Park is reconfigured to the Dirt Park, with mountain-bikers replacing snowboarders and skiers.

The proposed Roaring Meg Resort will complete what John Lee calls his ‘‘Alpine Disneyland’’, and the long-term vision is about providing a destination, where everyone not only the skiers and snow junkies can enjoy the environment.

However, for the short term, the Lee family’s focus remains on ‘‘our catalyst for everything’’ the gondola. Construction is expected to take two years. Mr Lee says it will get around tourists’ hatred of New Zealand’s skifield roads.

‘‘This gondola will help raise the international rating of our skifield operations and it will bring more visitors to Wanaka and Cardrona,’’ he said.

Visitors, like their host, will be able to live and breathe the Cardrona Valley even if it is only for a short while.


Second Hand Wedding first rate film

25/05/2008

A film in which a yellow mini has a cameo role? No, it’s not an update of Goodbye Pork Pie, but Second Hand Wedding is directed by Paul Murphy, whose father Geoff directed Pork Pie and I’d give it four stars.

 

It’s a gentle story about life, love, family and a mother with a penchant for garage sales. It may not make anyone think but it made me laugh and there were also moments when my eyes got moist – the reason for the latter escaped my farmer who was watching it with me, but he said he enjoyed it too.

 

Don’t rush away as soon as the credits roll, there’s a vignette among them to ensure you walk out of the theatre with a grin.

 

[Update: Poneke  gives a fuller and more fulsome review.


Let’s look at more than right to remain silent

24/05/2008

The acquittal of Chris Kahui who was accused of murdering his twin sons has resulted in calls for a re-examination of people’s right to remain silent.

 

 

 Law Commissioner Sir Geoffrey Palmer says the time could be right to re-examine the right of people accused of crimes to remain silent in the face of police questioning.

 

His suggestion comes amid mounting anger that the killer or killers of twin babies Chris and Cru Kahui may never be brought to justice.

In the early days of the investigation into the deaths, police were hampered when the twins’ family refused to talk to them.

The twins’ father, Chris Kahui, was found not guilty this week, and police say no one else will face charges related to the killings.

Napier Labour MP and former criminal defence lawyer Russell Fairbrother yesterday called for a review of the right to silence of criminal suspects or those charged with a criminal offence.

He did not know whether Mr Kahui was “truly innocent”, or had received the benefit of the doubt in a case rife with uncertainties.

“But I do know that someone in that house truly knows what happened. It cannot be right that a guilty person is avoiding criminal sanction for this most heinous of crimes.”

The right to remain silent is definitely worth examining but why stop there? The Scottish law which enables a verdict of “not proven” is also worth considering.

 

So too is whether an inquisitorial system such as is used in France may be better than our adversarial one. The former aims to get to the truth, the latter depends on the prosecution’s ability to prove guilt beyond reasonable doubt and the defence’s ability to establish that doubt.


Hopkins cuts to the quick

23/05/2008

Jim Hopkins’ column in the Herald is worth reading in full:

 We interrupt this column to bring you a News flash. There are unconfirmed reports that the New Zealand Economy has died. For more, we cross now to the Beehive Hospice, where our Qantas Award-winning Health Reporter, Fiscall Creepe, is standing by. 

 

 

 

 

 

Thank you, Dialogue Page. And, yes, you’re right. It is a sad day in Wellington where, as you can see, the New Zealand flag above the Inland Revenue building is already at half mast which suggests these tragic reports are true although I stress there has been, as yet, no official confirmation.

Our highly trained team of 18-year-old Polytechnic graduates understands that Mr Goff will be doing a topless interview with Alt TV soon and more may emerge then.

Meanwhile, we are getting some grim eyewitness accounts. One inexplicably cheerful Wellington taxpayer told me he’s seen several hundred newly appointed policy analysts flinging themselves out of their recently redecorated 10th floor offices.

And while that won’t affect productivity much, we must assume they know something we don’t or they wouldn’t risk doing some very serious damage to the roofs of those beautiful new Ministerial BMWs when they land.

So it appears the reports of a demisement are true and if that is the case then it may come as no surprise. Harold readers are well aware that The Economy, which was admitted to Parliament yesterday for a routine Budgetectomy, has been showing signs of weakness for some time although most of us didn’t appreciate how critical things really were.

However, there were a few people who did, including the visibly shaken Dr Michael Cullen, who may or may not have been at The Economy’s bedside when the end finally came.

“We did our best,” was Dr Cullen’s terse comment earlier today, when asked if it was true that The Economy had actually expired. “I did make it clear,” he added, “just before we performed the Budgetectomy, that there are always risks with these procedures, especially in an election year. I’m confident The Economy understood that. There was certainly a smile on its innocent little face when I made my first tax cuts.”

Dr Cullen said those cuts had been made “prudently” with a view to alleviating “key areas of political inflammation”. The former history lecturer insists this is “precisely what a doctor does in election year if they want to keep operating”.

“I know some critics allege it’s nothing more than cosmetic surgery but that’s irrelevant. It’s all taxpayer funded and therefore essential.” Dr Cullen says it’s long been his view that “anything we can do to make The Economy feel better is worth tinkering with”. He points out that “spendorphins have always improved Electile Dysfunction in the past” so there’s no reason to think they won’t do so again.

“Most voters still haven’t worked out it’s their own money we’re giving back to them,” he says. “That’s why it never occurred to me, before yesterday’s operation, that a university here or a boost in Super there would do The Economy any harm at all.”

While refusing to comment on The Economy’s health, he did reveal he’d “spoken to the family – The Property Market, Job Prospects, Interest Rates and Export Earnings – and told them to expect bad news”.

“They know the vital signs are very weak, perhaps even terminal,” says Dr Cullen who, for the past eight years, has been treating The Economy with an exotic mixture of conventional and alternative therapies.

“I explained to them how we’ve used leeches to bleed The Economy for all of that time, partly because my diagnosis has always been that we know how to spend other people’s money better than they do and also because I’m aware that when we spend it, it’s not inflationary but when they do, it is.

“But I did advise The Economy’s family that this has caused severe constipation in the lower polls which is why this year’s Budgetectomy involved major infusions. I thought these would improve The Economy’s circulation although there was always a risk the dollar would drop sharply, meaning everyone would pay even more for luxuries like petrol, food and new railway trains.

“But when The Economy’s health and your own longevity are inextricably linked, that’s a risk you’ve got to take.”

Angrily rejecting suggestions his Budgetectomy was merely palliative care, Dr Cullen said he didn’t need to explain his decisions to the media – or Phil Goff. “If people don’t like it, they can always go to Australia,” he snapped. “And good luck to them. What matters is that we’ve successfully got another group on the fiscal drip – last election it was students, this time it could be Grey Power – so our prognosis is better. Of course my heart goes out to The Economy but we’ve got our own health to worry about.

“As I said to my anaesthetist, Mr Winston Peters yesterday, just before the operation, when the going gets stuffed, the stuffed get going.

“And that’s what we’ve done.”

 

 


Time for a cull

23/05/2008

When feed is getting short, sensible farmers do a bit of culling. In light of comments by Fran O, Sullivan, Colin James, John Armstrong, and Rod Emmerson’s cartoon that Cullen is leaving the paddock bare, where should an incoming Government, in whatever form that might take, start its cull?

 

National has said it will not increase the number of core bureaucrats. I’d go further and get rid of the Ministry of Women’s Affairs and Families Commission altogether.

 

Welfare may be the only way to assist low income families but it’s ridiculous to turn those on the upper tax rate into beneficiaries so Working for Families would be adjusted.

 

 Oh, and any position which has a job description in anything but the plainest of English  would go too.

But of course I’m not trying to get elected nor am I courting coalition partners.


Happy Birthday

23/05/2008

It’s the anniversary of the launch of Monty Python’s Flying Circus according to Paul Henry on Breakfast. He must have meant in NZ becasue various websites inclduing Wikipedia say the first episode was recorded on September 7, 1969 and broadcast on October 5. Favourite skits? The dead parrot and argument clinic.


Grey Greens might be better than red Greens

22/05/2008

Chris Trotter’s column in The Independent (which I’ve been unable to find on-line) addresses the greying of the Greens.

 

Nine years ago, when Rod Donald and his “Magnificent Seven” cantered up the steps of Parliament like a herd of eager, old-order destroying centaurs, their public image was one of youthful exuberance, reckless idealism and what might almost be called political gaiety. It was a mirage. Even then, most of the Green Party caucus were well into their 40s and 50s. Their most youthful member, Nandor Tanczos, was 33.

 

Nine years on, the youngest member of the Green caucus (and likely to remain so) is the 38 year-old Metiria Turei. Robbed of the ever-youthful personality of the late rod Donald the Greens have taken on a distinctly middle-aged appearance. … The average of the top 12 placeholders on the party list is a bracing (and very baby-boomerish) 52 years.

 

…I had foolishly assumed the Greens would be offering the electorate a party list chock full of candidates under 40: people whose best years were still in front of them and whose political lives would be dominated by climate change and peak oil, not Vietnam and the Springbok tour.

 

Setting aside the ageist comment that at an average 52 their best years are behind them, it is interesting Trotter should define the Green MPs and candidates, not by environmental issues by social ones.  And that is water-melon factor (green on the outside, red in the middle) which explains why the Greens have failed to gain much traction.

 

Had they been moderate on social and economic issues they would be the one party in the middle of the political spectrum which actually stood for something; and their ability to coalesce with either Labour or National would have ensured they achieved at least some of it.

 

Instead they are in the perpetual wilderness to the left of Labour so in spite of the cosy photo-ops of Helen Clark and Jeanette Fitzsimmons before the 2005 elections the Greens were left out of coalition talks at the behest of NZ First and United. The few achievements they are remembered for are not environmental but social – like the smacking ban, or socialist – buy NZ made. And while achieving little or nothing of note environmentally they have continued to support, or at least abstain on confidence and supply, a Labour-led Government which has overseen the worst deforestation in decades and an alarming increase in carbon emissions.

 

…Another 7% result would, however, be enough to bring ninth-ranked Kennedy Graham into parliament. A highly experienced and successful diplomat, lawyer and academic, Graham will bring an aura of upper-middle-class respectability to the Greens.

 

“It’s fair to say that, at 62, Graham (who is Sir Douglas Graham’s younger brother) is unlikely to attract a very big chunk of the youth vote.

 

But he might attract some of the middle-aged and older people who have the time and money to worry about saving the world.

 

Respectability would appear to be the watchword these days in the Green party…Departing from the parliamentary scene is of course …Nandor Tanczos.

 

He takes with him much of the party’s heart and spirit: that indefinable quality that distinguishes the Green ideology from mere environmentalism…What he was prepared to do was lead the fight to end the Green’s unhealthy passive-aggressive relationship with the Labour Party.

 

It was time he told me to reinvent the old Green slogan: “Not of the Left, not of the right but in front” with renewed meaning.

 

Fearing this could lead the party to enter into a coalition with the National party, the econ-socialist wing of the Greens organised hard and successfully to ensure the ex-pat Australian political scientist (Russell) Norman defeated Tanczos in the race for the party’s co-leadership.

 

…In 2008 however, it is the words of Virginia Horrock, No 19 on the Green Party list, that resonate most disturbingly. “I want to persuade my generation to face up to what has happened to the earth under our watch, I am keen to encourage grandparents/baby boomers to make the earth their final gift to the next generations. Green voters are predominantly over 55, like me, so I feel I can appeal to them as people with the same concerns.”

 

Noble sentiments, Virginia, but revolutions are not made by people who are “predominantly over 55”.

 

No, but they are more likely to vote and appealing to them with sound environmental policy without scaring them with a radical social and economic agenda would give them a powerful position in the centre, where the power of MMP politics lies.


Tremain on Cullen’s budget prayer

22/05/2008


Budget medicine

22/05/2008

The first Budget I remember listening to (yes, listening on the radio in the evening because – as Poneke reminded me – that was how you first received the news and when Budgets were delivered) was in 1975, my first year at university.

 

I was hoping for increased help for students. That we already got our fees paid; a living away from home allowance if our course necessitated moving from home to study; A or B Bursaries of $150 and $100 respectively (when weekly rents were about $7); anyone who had a vague notion that they might one day entertain the possible thought of teaching applied for and almost always received a studentship; and that people on pretty modest incomes were paying 60% taxes in part to fund all this largesse, was irrelevant.

 

I’ve forgotten what, if anything students received which supports the contention that we don’t appreciate what Government’s give us; and I don’t recall anything about subsequent Budgets until Roger Douglas’s first in 1984. That was the one was brought farmers kicking and screaming in to the real world by removing subsidies.

 

The sudden removal would have been difficult enough but the impact was worsened by raging inflation, high interest rates, a relatively high dollar and low commodity prices. While we had to face the real world, the labour market was still strictly regulated and there were tariffs on imports so while our incomes went down costs did not. The damage was compounded in North Otago where we were also facing another of the recurring droughts which dogged the district.

 

The economic and social deterioration of the ag-sag compounded as inflation and interest rates climbed, buoyed mostly by city property prices and the share market. Meanwhile farm prices plummeted and many of us found we’d gone from having reasonable equity to theoretical bankruptcy as our debts became greater than the value of what we owned.

 

Perhaps we were fortunate there was safety in numbers. Stock and station firms and banks to whom we owed so much knew that if they pushed a few they might start a landslide which would only aggravate the situation. By the end of 1987 the share market crash meant it was no longer just farmers and rural communities which were in financial disarray.

 

It took years to recover but the changes Douglas, and subsequently Ruth Richardson, made helped contribute to that recovery. So while we didn’t like Douglas’s medicine at the time and could argue about the method and timing of its delivery, few would disagree that farming and New Zealand are economically healthier because of it.

 

 

 


Cowley wins chidlren’s book awards

22/05/2008

There is no such thing as a good children’s book, a good book is a good book.

 

I may not have the quote word for word and I’m not sure to whom I should attribute it (possibly Tolkien?). But regardless of the exact wording and who said it first, it is a sentiment I wholeheartedly agree with.

 

The only bit of advice I proffer uninvited to new parents is to read any book given to their baby and put it away until the child is able to read it for her/himself if they don’t like it. This comes from experience because when children take a shine to a book they want it read umpteen times; and if I didn’t like it the first time I liked it even less on the umpteenth reading.

 

That never happend with books by Joy Cowley whose books were relished no matter how many times they were requested. This has been recognised by many literary prizes and she picked up two more last night. Snake and Lizard, illustrated by Gavin Bishop won the Junior Fiction category and Book of the Year at the NZ Post Book Awards  .


IMF urges tax cut caution

21/05/2008

A B- in Stage I Economics 30 years ago does not qualify me to argue against the IMF.

 

But surely tax cuts which allow people to keep a little more of their own money, some of which will be used to pay off debt and increase productivity are less inflationary than the over-taxation and redistribution which we’ve had for the last nine years.

 

 

 


Headlines Helen Will Hate

21/05/2008

These wouldn’t be welcome at the best of times but in budget week, when the Government is supposed to be setting the agenda with positive news and  following a dreadful poll for Labour these headlines are even worse.

 

Goff Drops leadership denials.

 

Goff Switches on the Clobbering Machine


Tax thresholds might be lifted

20/05/2008

 

Michael Cullen  has hinted that tax thresholds might be lifted in Thursday’s budget.

 

Finance Minister Cullen has ruled out a number of options for his tax cuts package, but today suggested there could be an across the board lift in the thresholds at which people pay more tax.

Answering questions from independent MP Gordon Copeland about why he had not cuts personal taxes over the last nine years, Dr Cullen said he had good news for the MP.

“On Thursday I will be announcing such cuts. I look forward to his support for those which are consistent with the views he has expressed over many years,” Dr Cullen said.

 

Thresholds would be a good place to start because people on lower earnings have also found the benefit of normal inflation-based wage rises partially negated because they’ve put them into the next tax bracket. When the top tax rate was lifted to 39c it was only supposed to catch 5% of tax payers but now gets more than twice and it is ridiculous that many of these so called rich people are also eligible for Welfare for Families payments.

 

Dr Cullen announced in 2005 that from the beginning of the 2008 tax year tax thresholds would have inflation indexing built in. They were mocked as the “chewing gum” tax cuts and last year Dr Cullen axed them and instead made KiwiSaver more attractive.

Parliament will go in to urgency to ensure any tax cuts announced in the budget are enshrined in legislation to forestall accusations from the Opposition that the promised cuts won’t happen.

Dr Cullen’s comments today suggest that he could be reintroducing some form of indexation to the thresholds as part of his package, though it is also possible that he was just teasing Mr Copeland.

Most speculation around Parliament is that Dr Cullen will cut the tax rate at the lower end of the scale as the centrepiece of the tax cuts. This would meet his self-set test of fairness and equity, as it would deliver something to everyone – even if it is very expensive.

Revenue would fall by around $1 billion for every $10 a week put into taxpayers pockets.

Dr Cullen has already ruled out the creation of a tax free income bracket and cuts to GST. Yesterday he indicated there would be less money to deliver cuts but they were less likely to be inflationary given tougher economic times. He also ruled out a lump sum dividend payment saying there was “no basis” for speculation about one.

The simplicity of a tax-free income bracket is attractive and it is one way to help everyone, where a straight rate cut helps those who earn more most because of course they also pay most.

 

It’s interesting that tax cuts are almost always referred to as giving something as if it’s some sort of Government largesse, rather than as allowing people to keep more of what they earn.


Goff admits Labour might lose

20/05/2008

Phil Goff has admitted Labour might not win the election.

 

Ben Thomas writes in the NBR this is the first time a senior minister has acknowledged this possibility and that he might seek the leadership if Helen Clark stood aside,

 

Mr Goff made the comments in an interview with Oliver Driver for the Alt TV show Let’s Be Frank two weeks ago. The interview will air tonight at 9.30 pm.

Trade minister Mr Goff said he would look at the leadership in the event of an election loss “If I felt that I was the best one [candidate] in that position and that Helen had stood aside

Pressed on whether he felt he was the best candidate, Mr Goff demurred.

“Well, I don’t know yet. I don’t know who’s going to put their hand up,” he said. “And I’m not going to think in a defeatist way about the next election.”

“Sure there’s a prospect of defeat,” he said when asked about polling between the parties. But, he said, “I’m not thinking about the future.”

 The comments were made before a weekend poll which showed Labour’s support at 29 per cent, a low during its time in government. That poll result has re-ignited speculation from commentators about the future leadership of the Labour party.
Privately, most within Labour believe the party will win fewer seats than the opposition National party, but hope that Labour will be able to deal better in post-election talks with coalition partners and remain in government.

There is always a possibility of this and Clark’s strength as a campaigner can not be underestimated.

 

However, while polls are a snapshot in time and no one poll is significant by itself, the trend is clear. National is well ahead and the longer that continues the more the prospect grows that Labour may find themselves where National was in 2002. As Labour’s support slips, voters will go from them to the wee parties in the hope they’ll be able to form a coalition with National.


Is it just an ad for a ute?

20/05/2008

A couple of farmers are driving across a paddock in a red ute. There’s a bump, they stop, get out and realise they’ve hit a bull.

 

The driver turns to his mate and says, “Should ‘ve got a blue one.”

 

The mate grins and nods.

 

It’s an ad for Ford courier. But is there a subliminal political message there – and if so is it contravening the EFA?

 

 


Two works down…

19/05/2008

There are no surprises in today’s announcement that PPCS is closing its Burnside venison plant in Dunedin with the loss of 138 jobs.

 

The age of the plant was one of the factors counting against it and PP chief executive Keith Cooper said it had been losing millions of dollars.

“Tightening New Zealand and European food safety regulations make the continued operation of export meat processing facilities at Burnside increasingly problematic as all areas on site, even those not used for food processing, must be maintained to specified standards,” Mr Cooper said.

“In addition, the modern blast freezers used for venison processing require a large section of now-obsolete conventional cold storage to be frozen down, which incurs significant ongoing electricity costs.”

Mr Cooper said sheep and lamb numbers were expected to drop by two million in the South Island next year and national deer numbers were forecast to drop from 736,000 to around 500,000.

“The forecast seriously impacts on the ongoing viability of the venison and (lamb and deer) skin processing operations at Burnside,” he said.

It’s been a horror month for employment in Dunedin with 430 jobs lost through Fisher and Paykal’s closure of its Mosgiel plant and a further 50 jobs lost with the closure of Tamahine knitwear.  

The announcement will also be making staff at other freezing works nervous. PP announced the closure of its Orinigi works with the loss of 446 jobs last week  and there may be more to come.

Owen Hembry points out that PP with 24 plants, including Orinigi, has as many plants as Alliance with 8,  Affco (10) and ANZCo Foods (7) combined.

In fact Alliance and Affco, which has previously restructured, have both said they have no plans to rationalise.

So the pain is going to fall mainly on PPCS but as the saying goes, no pain no gain – and what comes out the other end will undoubtedly be a leaner, fitter company.

The cost of redundancies at Oringi – which employs 466 people with an opportunity for about 100 to be relocated within the company – will be about $14 million to $15 million with operating cost savings of about $15 million a year.

A fitter PPCS will have another card to play – a good geographic and product spread.

One of the reasons Alliance didn’t want to merge with PP was the overcapacity of PP works. These closures will change that, but PP may also feel that having bitten the bullet it is in the best interests of the company to continue on its own.


When will it be?

19/05/2008

In the last few days I’ve received a couple of emails asking me to note dates in my diary for November. I’ve replied to both saying yes, subject to the date not being election day.

 

It is the Government’s prerogative to name the date for an election; not surprisingly it chooses a day which suits it best, keeps that to itself as long as possible to maximise its advantage and isn’t concerned that it might interfere with other plans people may have made.

 

There is a possibility that if the polls don’t improve for Labour they could call an early election. But there is a danger that will be seen as desperate opportunism and count against them. Besides winter campaigning isn’t much fun and farmers and retired people often go overseas for a sunshine fix at that time of year, although Labour may consider that advantages them.

The Herald on Sunday suggests October 18

Commentator Bill Ralston said the election would have to be kept away from the Beijing Olympics, between August 8 and August 24.

Claving and lambing are in full swing at that time too.

October has not been a popular month for elections but Ralston said Labour governments usually plumped for warmer election days after midwinter.

should be well into spring, with daylight saving restarting on September 28.

Schools would have finished the first week of term 4 and people would be positive about the Labour Day weekend starting on Saturday, October 25.

The Hive  agrees that October 18 is a possibility but so too are November 1 or November 15.

 

November 14 is Canterbury Anniversary Day which coincides with Christchurch Show and makes it a long weekend so that is unlikely because too many people would be away from home.

 

So when will it be? Labour secretary Mike Smith  said the Party’s moderating committee is due to meet at the end of June to decide when the ranking will take place. That will be as close as possible to election day to ensure MPs and candidates keep working hard for a place and leave as little time as possible for those who miss out on good places to do any damage.


Labour rushing ETS for politics

19/05/2008

Matthew Hooton pointed out on Nine to Noon Politics  that Labour’s motivation for pushing ahead with the ETS in spite of growing concerns: it’s political not environmental.

 

The Ministry of the Environment has a budget of $14 million to spend promoting Government’s climate change initiatives and it can hardly spend that saying how wonderful they are but they haven’t actually done anything yet.


Key differences in tax cuts & ETS

19/05/2008

John Key and National have neutralised a lot of the issues which Labour might have used to attack them. To avoid the accusation of being Labour-lite they need some key (no pun intended) policies to clearly differentiate the party and they’ve got two in tax cuts and the Emissions Trading Scheme.

 

Tracy Watkins says National will trump Labour with a tax cut worth at least $50 for the average worker.

 

Accountants report sheep farmers are facing losses of up to $200,000 in the past financial year so they won’t be worrying about paying tax but many dairy and cropping farmers will. And regardless of individual balance sheets, everyone will gain from tax cuts if they take a bit of pressure off wages.

 

Critics of tax cuts always say they’ll have to be matched by spending cuts, but the tax take doesn’t necessarily mirror the tax rate. The tax take can go up when the rate goes down because there is an increase in productivity.

Key’s announcement yesterday that National’s support for the ETS will depend on six conditions has gained support from business although the Government is not being swayed.

The Herald reports on the conditions and Climate Change Minister David Parker’s response to them:

ONE
Key: The ETS must strike a balance between New Zealand’s environmental and economic interests. It should not try to make New Zealand a world leader on climate change; Kiwis can’t afford to pay the price for that particular experiment.
Parker: The ETS is designed to balance environmental and economic interests. The Government’s recent delay of the entry of the fuel sector until 2011, and extension of the phase-out of free allocation until 2018, are examples of balancing economic imperatives with the environment.

TWO
Key: The ETS should be fiscally neutral rather than providing billions of dollars in windfall gains to the government accounts at the expense of businesses and consumers. National does not think it is responsible for the Government to use green initiatives to swell the Crown coffers at the expense of Kiwis’ wallets.
Parker: The ETS would not result in a surplus of credits for the Government in the short term, and any surplus that might result later depends on New Zealand’s target under future international agreements. The five-yearly reviews of the scheme are the way to take account of that.

THREE
Key: The ETS should be as closely aligned as possible with the planned Australian scheme, with common compliance regimes and tradability. In my second speech as National Party leader, I called for close co-operation with our biggest trading partner on this, and I continue to call for it. Given the Australian timetable for developing an ETS, I believe it’s still possible.
Parker: New Zealand officials are in close contact with Australian officials as both sides develop their schemes. They are very likely to be compatible, but New Zealand’s priority is to design a scheme that is best suited to our strengths and weaknesses, not Australia’s.

FOUR
Key: The ETS should encourage the use of technologies that improve efficiency and reduce emissions intensity, rather than encourage an exodus of industries and their skilled staff to other countries.
Parker: The select committee and the Government are already considering intensity-based allocation within a cap.

FIVE
Key: The ETS needs to recognise the importance to New Zealand of small and medium enterprises, and not discriminate against them in allocating emission permits.
Parker: This matter is under consideration by the select committee.

SIX
Key: The ETS should have the flexibility to respond to progress in international negotiations rather than setting a rigid schedule. This way, industry obligations can be kept in line with those of foreign competitors.
Parker: This has already been achieved, by way of a five-yearly review that is proposed on the phase-out of free allocation.

 David Farrar answers Parker on Kiwiblog.

 

He’s right and Labour has got it wrong. There is nothing to be gained by New Zealand being world leaders on this. We’ll only risk losing businesses to other countries with less rigorous requirements which will have a huge economic and social impact here while at best doing nothing for the environment and potentially making emissions worse.


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