Exporters Irked by Nat’s Monetary Policy Stance

July 8, 2008

The NZ Manufacturers and Exporters Association is not impressed by National’s support for the current monetary policy.

The party’s defence of the current system failed to acknowledge the damage the policy had caused to New Zealand’s tradeable sector, association chief executive John Walley said.

The approach used interest rates dictated by the Reserve Bank’s official cash rate to curb demand and influence inflation.

That approach had seen exports dropping from 33% of GDP in 2001 to 22% in 2007.

“What we are seeing at the moment is increasing fuel and commodity prices driving inflation which in turn is holding up interest rates and exchange rates.

“These forces are unlikely to stop any time soon so we need to break the link between inflation and the exchange rate,” he said.

He’s right about the problems but I’m not convinced playing politics with monetary policy is the solution.

Associate Finance Minister Trevor Mallard last week announced that the Government was open to looking at alternative monetary policy settings.

National finance spokesman Bill English said now was not the time to start tinkering with a monetary framework.

The Reserve Bank recognised the effect that international oil and food prices were having and the central bank was not going to strangle the economy because of imported inflation.

“It has been well recognised by government officials and commentators that increases in government spending, poor quality spending and increases in government charges are also stoking inflation domestically,” Mr English said.

“Trevor Mallard would be well advised to focus on these inflation factors, rather than signalling a drastic rethink on monetary policy,” Mr English said.

Quite. I have never been able to understand Labour’s belief that their spending of public money is not inflationary but allowing us to keep more of what we earn would be.

Mr Walley hoped National was making a typical election-year response.

Unless policy changes were made, all that could be expected was more of the same as the trade balance deteriorated and the economic situation worsened, he said.

A more responsible approach to the spending of public money might make a difference without the need to make monetary policy a party political issue.


Clark says EFA undemocratic

July 8, 2008

No, Helen Clark hasn’t seen the light. It’s Linda Clark and a Chapman Tripp colleague Andy Nicholls who point out the many defects in the Electoral Finance Act in The Listener.

…The EFA’s dampening effect on the current election campaign is so serious, it is anti-democratic.

I blogged about it here  when the magazine came out a couple of weeks ago and the whole article is now on-line here.


Double-Crews Desirable for Ambulances

July 8, 2008

The health select committee has called for all city ambulances to have two crew on board within three years and those in large towns to be double-crewed within four years.

The MPs said single crew call outs should stop, but it would take time for more staff to be put in place. It said all cities and towns of more than 15,000 people should have them within four years.

The Order of St John, which is the largest ambulance service provider covering 86 per cent of the population, estimated it would require $53 million more a year to double-crew all its callouts.

The majority of this money ($40 million) would be needed to increase its frontline staff from 800 to 1200.

The Health Ministry said the large number of volunteers saved about $33 million a year and it estimated double crewing would cost $18 million a year.

That’s expensive but still leaves a lot of the country with single-person crews, Oamaru for example has fewer than 13000 people so wouldn’t be included in the new policy.

Then there are places like Wanaka with a permanent population of around 4000 people, but it can have up to five times that many people at New Year.

Events at other times of year also attract large crowds, putting added pressure on ambulance services which are dependent on a dwindling number of colunteers. The Upper Clutha A & P show brings thousands of people in to Wanaka over the second weekend in March and for the last few years it has coincided with the Mototapu Challenge which attracts hundreds of entrants plus supporters. The Saturday night of show weekend this year the St John ambulance had just one crew member on duty, covering all the Upper Clutha.

MPs said funding to ambulance services through the Ministry of Health and ACC was complicated and confusing.

For instance, all callouts created costs, but ambulance services were only paid if a live person was transported to hospital for treatment after a traffic accident.

The night we called our GP because our baby was having fits he summoned an ambulance to take us down to Dunedin. When it arrived there was a discussion about how it would be better to go the long way via Oamaru Hopsital because hospital-to hospital transfers were paid for but home to hospital trips were not.

It shouldn’t matter where patients come from and go to, nor what caused their need for an ambualnce. If they need the service they need it so payment shouldn’t be determined by arbitary rules; and the ambulances which come to their aid should be double-crewed when possible so paramedics aren’t torn between treating the ill or injured and driving them to hospital.


Mt Iron

July 8, 2008

Last night’s starry sky brought the promised frosty morning and it was -2 when we started up Mt Iron at about 8am.

This hill on the outskirts of Wanaka is one of the town’s many assets. In summer hundreds of people walk up it each day, this morning we passed just four.

It’s very easy to laze around when we come over here so if we tackle Mt Iron every morning we can have a clear conscience if we do nothing more energetic for the rest of the day.

We take the longer and steeper route up the eastern side, because it’s better exercise and then we get the glorious views over the town and lake as we come down the other side.

I time myself from the carpark to the top and when we were here for a couple of weeks in summer I managed a personal best of 28 minutes & 2 seconds. But winter sloth has eroded my fitness and this morning I was back to 31:10. To put that in perspective, some people can run up and down the hill in less time than that.


Consent Appeal Off Track

July 8, 2008

While debate rages over KiwiRail nationwide, North Otago has a local argument over whether a disused line should be re-opened to allow trains to run at all.

A branch line used to run from the limeworks on the outskirts of Weston to Oamaru. It was closed in 1997 and the lines were lifted a couple of years later but its owner, then NZ Railways, retained ownership in case it was needed for a cement plant.

However, when the Waitaki district plan was reviewed in 1993 the designation wasn’t properly recorded. OnTrack now needs it redesignated because it’s the best means of transport for Holcim NZ  if its plans for a new cement plant in the Waiareka Valley come to fruition.

The new plant would be a $400m investment for Holcim but its plans have not been greeted with universal enthusiasm and the Waiareka Valley Preservation Society  was set up to oppose the proposal.

Resource consent was granted in February but both Holcim and the WVPS have lodged appeals – the former over some of the conditions, that latter over the approval.

OnTrack’s application to redesignate the line came in the middle of all this and the WVPS submitted against it. Independent commissioner Allan Cubitt recommended that approval be given and because OnTrack is a requiring authority under the Resource Management Act it makes the final decision. Not surprisingly it accepted the commissioner’s recommendation but now the WVPS, which submitted against the application, is appealing that consent too. Their appeal will be considered with the others on Holcim’s proposal in the Environment Court.

We farm next to the site for Holcim’s plant and another of our properties neighbours the company’s sand pit, which will be used if the cement works go ahead. 

I submitted in support of Holcim’s proposal at the resource consent hearings. I’ll cover the details in a future blog, but the short argument is that there would be substantial economic and social benefits for the district if the cement works go ahead; and RMA conditions will safeguard the environment.

As for the railway line, I crossed it several times a week when it was open before and can’t recall any problems then. People who have built beside the rail corridor since the track closed will have concerns; but once they get used to them they’ll hardly notice a few trains a day – and they will not run at night.

I think the WVPS objections have more to do with the society’s opposition to Holcim than the reopening of the railway line. And that’s one of the frustrations with the RMA – it allows people objecting to one thing to object to another in the hope of stopping the first.


Labour’s Next Leader

July 8, 2008

Dene Mackenzine looks at the people who could be the next Labour leader:

The contest to replace Prime Minister Helen Clark might be less brutal and more clear cut than previous leadership challenges, depending on the outcome of the election this year.

Less brutal leadership change? Now there’s an oxymoron.

If, as Miss Clark continues to believe, Labour can cobble together a coalition government, then she remains safe and can leave in her own time, having taken Labour to a historic fourth-term win.

But if Labour loses and the election result is close, party sources believe Trade Minister Phil Goff is the principal candidate for the job.

He is seen as a safe replacement who would not shift Labour markedly away from its centre-left position.

Although he is tainted with having been an MP in the Rogernomics era, many of Labour’s supporters are too young to remember Sir Roger Douglas and his ideas in the David Lange-led government.

If a week is a long time in politics, two decades is ancient history.

Police Minister Annette King is seen as the logical deputy leader for Mr Goff, to give the party a gender balance and an Auckland-Wellington split.

Pity about the mess she created in health, the EFA and last week’s Road User Charge debacle. And let’s not forget blaming crime on the full moon and sunny weather.

The last four opinion polls published show National’s support at more than 50% and its lead over Labour at more than 20 points.

If the polls hold up, Labour could lose up to 18 MPs, including electorate members.

Polls usually tighten before an election – although this time Labour might be where National was in 2002.

If the defeat is not too broad, Mr Goff will be challenged by Health Minister David Cunliffe and Labour Minister Trevor Mallard.

Both would bring with them an image problem.

Mr Cunliffe was identified early in his career as a potential leader, but has earned the disdain of some colleagues for his “superior” attitude.

That has mellowed somewhat and as health minister, and also as communications minister, he has shown a preparedness to take a hands-on approach to his portfolios.

But over at Craig Foss we see that those hands haven’t always done the right thing.

However, that’s another story so back to the ODT:

Mr Mallard was demoted for punching National Party MP Tau Henare, but retains strong friendships in the Labour caucus and is deputy finance minister.

As a former chief whip, he knows how to gather the numbers for a close vote.

A decimation of Labour will see other candidates chancing their arm in the belief that it will take Labour six years, or two terms, to win office.

Energy Minister David Parker and Immigration Minister Clayton Cosgrove will mount challenges.

Neither is particularly popular with colleagues, and Mr Cosgrove will be a fiercer competitor than Mr Parker.

Mr Cosgrove has been a member of the party since he was 14, and is a protege of former prime minister Mike Moore.

Mr Parker is seen more in the mould of former prime minister Sir Wallace (Bill) Rowling, and would offer a leadership style out of step with modern politics.

That’s the one who looked more surprised than anyone else when he won Otago in 2002 and few were surprised when he lost it to Jacqui Dean three years later.

Also in the mix at this level will be Building and Construction Minister Shane Jones, a Maori MP of whom was expected great things.

He is said to be “hugely bright” but pompous and obviously ambitious.

Not a good combination if you’re trying to win a leaderhsip contest.

Clark successors?

•Labour wins: Helen Clark stays as prime minister.

•Labour loses narrowly: Phil Goff takes over early next year.

•Labour loses moderately: Mr Goff, David Cunliffe and Trevor Mallard fight it out.

•Labour thumped: Free for all, with David Parker, Clayton Cosgrove and Shane Jones fancying their chances.

All very interesting, but the really fascinating point is that this discussion is being had at all. A few months ago leadership change woudn’t have been on anyone’s radar.


Tui Truth

July 8, 2008

Yesterday’s drive through Southland provided a tale of two countries.

Radio news was telling us that New Zealand is in recession but our eyes were seeing another story. The wee towns we passed through were bustling, growing for the first time since the wool boom of the 1950s; and new houses are springing up everywhere.

A sign on the outskirts of Winton provided the explanation: No-one wants to be a dairy farmer. Yeah right.


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