O’Connor for Tamaki

October 26, 2011

National’s Tamaki electorate has selected SImon O’Connor as the party’s candidate.

A media release from electorate chair Andrew Hunt says:

A shortened selection process was conducted after Tamaki MP Allan Peachey announced his decision to stand aside at the election.

Simon is an active member of the National Party. He has held numerous offices, and managed
a variety of projects for the Party. Among them, he has been a Deputy Regional Chair, an Electorate Chair, Campaign Manager, and strategist, and a list candidate in 2008.

He is currently a Contracts Manager for Southern Cross Health Society, negotiating agreements with medical specialists and hospitals around the country. He recently completed a Masters in Political Studies at the University of Auckland with First Class Honours. He holds three other degrees and trained for several years to be a Catholic Priest. Though he completed his training, he did not seek ordination. Instead, he sought wider involvement in the community to make
a practical, hands-on difference.

 


Domestic milk prices likely to fall

October 26, 2011

Fonterra chair Sir Henry van der Heyden says domestic milk prices are likely to fall.

That reflects a fall in the price on international markets which is the major influence on domestic prices.

The news comes a day after the company announced a reduction in the forecast payout for the current season.

Do the people who want subsidies for consumers when prices rise also want subsidies for farmers now they’re falling?


Gas returning to essential services including dairy processing

October 26, 2011

Hospitals and other essential services, including most dairy factories in the upper North Island, are getting gas supplies returned after the break in the Maui gas pipeline.

As coordinator of the gas emergency, Auckland-based network operator Vector said the company was working methodically to excavate at the site of the pipeline break, at a site north of New Plymouth, near White Cliffs.

The work was “methodical” and proceeding in 300 millimetre increments to ensure the safety of workers at the site, and to prevent any further damage to the pipe.

The cause of the weld break is unknown at this stage. Replacement pipe is already at the site, ready for installation once the pipe is exposed.

The return of supply to affected customers is unlikely to be immediate, as systems need to be repressurised where they have been bled of gas that was in the pipe before yesterday’s“curtailment” notice to all gas users other than households.

Fonterra warned yesterday it would have to dump about 30 million litres of milk a day at a cost of around $20m after the gas outage forced it to close 15 of its 17 factories.

This couldn’t happen at a worse time as most herds are at or near peak supply in a season of high production.

There is also concern about the environmental impact from dumping all that milk.

Attention now must focus on fixing the pipeline and restoring supplies.

When that’s done some questions need to be asked over security of supply, quality of infrastructure and the need for a Plan B when normal supply is interrupted.


7/10

October 26, 2011

7/10 in NZ History Online’s weekly quiz.

The answer to the question on when diesel engines largely replaced steam surprised me because there were still lots of them when I was a child.

I grew up close to one of the South Island’s steepest sections of railway line.

The sight and sound of steam engines building up steam before they began the ascent is one of my abiding childhood memories.


National to tighten bail laws

October 26, 2011

Justice Minister Simon Power has announced a series of changes to bail laws aimed at improving public safety.

The changes build on work the Government achieved in its first 100 days in office to reverse Labour’s 2007 decision which made it
easier for defendants to get bail.

“This announcement fulfils the other half of our 2008 election promise to review aspects of the bail system,” Mr Power said.

The changes were canvassed in a public consultation document released in March which was open to public submissions.

“These changes are designed to achieve the right balance between public safety and a defendant’s right to be considered innocent
until proven guilty, and to not be arbitrarily detained.”

If National is relected the proposals will be included in a Bail Amendment Bill to be introduced to Parliament early next year.

They include:

Reversing the burden of proof to target defendants arrested for the worst crimes and those at highest risk of offending while on bail:

  • Defendants charged with murder  or serious class A drug offences will have to prove they don’t pose a risk to the public or their trial in order to be granted bail, as opposed to the prosecution having to prove a defendant poses a risk of absconding, interfering with witnesses or evidence, or offending while on bail. The reverse burden for murder recognises the seriousness of the offence while
    for class A drug offences it recognises that a third of defendants offend while on bail.
  • Widening the list of violent and sexual offences where the reverse burden of proof applies to those with a history of such offending to include sexual conduct with a young  person under 16, kidnapping, aggravated burglary, and assault with intent to rob. This focuses on defendants with the highest risk of committing serious offences while on bail, rather than those with the highest rates  of offending on bail (which may include non-serious or trivial offences).

Improving the integrity of the bail system:

  • To confirm current practice,  making it clear in legislation that bail will not be granted in return for  information. Public safety and a fair trial must be the primary concern when deciding whether to grant bail. Bail should not be used as a bargaining chip in return for information from the criminal underworld.
  • Increasing the penalty for failure to answer Police bail so that the offence is punishable by up to three months’ imprisonment, in addition to the existing penalty of a fine of up to $1000.
  • Reducing the number of  situations where a defendant is “bailable as of right” because some of these offences can cause serious harm to others (e.g. abandoning children, injury by an unlawful act, and failing to provide the necessaries of life).
  • Putting the electronically monitored bail regime into legislation to ensure it is administered consistently and effectively.

Strengthening bail for young offenders: 

  • Making defendants aged 17 to 19 years old who have previously served a prison sentence subject to the standard (adult) tests for bail, rather than the strong presumption in favour of bail that currently applies (a court may remand a defendant of this age in custody only if it is satisfied there is no other course of  action acceptable in the circumstances, or if the reverse burden of proof  applies). Between 2004/09 more than half of young defendants in this category offended while on bail.
  • Enabling the court to detain defendants under 17 years of age who significantly or repetitively breach bail conditions. Currently, unless it is a particularly serious breach of bail conditions there is little police can do to immediately act on a breach.
  • Enabling police to uplift young defendants found in breach of court-imposed curfews, and return them home or to a place where they will comply with the curfew.

“New Zealanders have a right to feel safe in their homes and their communities and these changes reinforce that.

“These changes will improve public confidence in the bail system and ensure that bail will be harder to get in marginal cases where the court would previously have had no choice but to release a defendant on bail.”

The changes will result in some increased costs, such as additional costs for legal aid, and costs resulting from more defendants spending time in prison pending trial. The estimated cost for this is up to $4.5 million which will come from existing baselines.

There is a large grey area between the rights of accused people and public safety. These proposals are tough and err on the side of safety.


Payout forecast down, milk to be dumped

October 26, 2011

Dairy has been New Zealand’s good economic news story but yesterday brought a double dose of and news.

Fonterra’s payout forecast was revised down and farmers in the North Island will have to dump milk after a gas leak shut down processing plants.

The revised payout forecast is for $6.70 to $6.80 for fully shared up farmers, 45 cents lower than the opening forecast made in May.

Fonterra Chairman Sir Henry van der Heyden said the lower Farmgate Milk Price forecast reflected a continued softness in commodity prices and a stronger New Zealand dollar.

“This softness of commodity prices has been reflected on Fonterra’s online trading platform Global Dairy Trade (GDT), which has experienced eight successive price falls – and one uptick – since May,” said Sir Henry. 

Overall, the GDT-Trade Weighted Index is down 15.7% since May 3 when the opening forecast of $6.75 per kgMS was announced.

Coupled with ongoing foreign exchange volatility and overall global economic uncertainty, the Board had revised down the Fonterra Farmgate Milk Price forecast.

Sir Henry said the opening forecast had anticipated an initial softening of international dairy prices, followed by a recovery.

“We aren’t yet seeing the recovery of international dairy prices we initially anticipated and we are also dealing with a much stronger New Zealand dollar.

“Higher prices often lead to increased supply into global markets from our global competitors, as well as reduced demand.  We are seeing this and it is impacting prices.”

The Board does its best to provide accurate forecasts to ensure farmers can adjust budgets where necessary.

This downwards revision is a reminder of the need to budget conservatively and confirms the wisdom of using last season’s record payout to decrease debt.

The announcement was followed by news that Fonterra will have to waste $20m of milk a day after a break in the Maui gas pipeline north of New Plymouth forced it to close 15 of its 17 processing sites in the upper North Island.

The news from Fonterra isn’t all bad, the season has started well.

Good weather has boosted pasture growth and contributed to record production in most of the country, although that will be cold comfort to those who have more milk to dump.


Trade is the key – first steps to FTA with Chinese Taipei

October 26, 2011

Quote of the day:

Trade is about specialization. Specialization is the heart and soul of productivity growth, which in turn is the key to the elimination of absolute poverty –  Trade Minister, Tim Groser in his addres for the annual Ralph Hanan Memorial Lecture.

This contradicts the widely held view many on the left harbour about the advantages of protection and trade barriers.

The address incldues other gems:

More and more people and communities on the planet have discovered that the competition for resources does not need to involve war, but is better organized through mutually profitable exchange, buttressed by the rule of law, both domestic and international.

What has changed is not human nature, but technology. Because of technology, the opportunities for trade are now extraordinary. It is rapidly falling transport and communication costs that have created the phenomenon of the global supply chain . . .

When transport was expensive, trade had to be in highly priced goods to justify the expense of getting them to market. Now transport costs are relatively low it is cost effective to send low price goods within and between countries.

The industrial model of vertically integrated production – you try to make everything – is almost certainly the wrong model. “100% made in New Zealand”, while a crowd pleaser as a slogan, is absolutely the wrong slogan for higher real wages and a prosperous future.

There will be honourable exceptions – goods that are from top to bottom nearly 100% NZ value added and yet remain internationally competitive in the process. Further, given our extraordinary primary resource strengths, there may be rather more such successful examples in New Zealand’s future than would be the case in most developed countries. But by and large, we need to move beyond this idea of “100% made in New Zealand” to embrace the extraordinary opportunities of the global supply chain.

Local production and independence have their place but they are not always the right model.

This is where New Zealand needs to position itself – as a small, diverse and sophisticated producer of ‘bits’ in the global supply chain. Trade in intermediate goods is now some 60% of world trade; trade in intermediate services is even higher, according to OECD definitions.

The examples he gives is aircraft. We can’t make and export them but we can, and do, manufacture some of the parts which are needed to make them in other places.

The address also highlighted the inefficiency, high costs and general stupidity of the way our economy used to operate:

Through rigid import licensing and massive tariff barriers, we force-fed vertically integrated production in New Zealand for the domestic market. I remember that when we started to scope out the CER negotiation, our exports of manufactured goods were some pitifully small percentage of total NZ exports.

If we could not make it 100% in New Zealand, we had a simple solution: we sent officials and business people to Tokyo or Detroit and said: “pull your TV, Sony-san, to bits and export the bits to New Zealand where we will re-assemble them. And while you are at it, Mitsubishi-san and Mr Ford, send us bits of your cars so we can re-assemble them here in NZ”.

It was a money-go-round and subsidy racket made possible only by having a highly successful mono-cultural agricultural export economy with unlimited access to the middle class of what had been the most powerful country in the world – Great Britain. The moment the UK joined the then EEC, the skids were under us. It was the start of a massive challenge to NZ to build new political, business and trade policy platforms.

It’s hard to believe that some political parties would take us back to days.

If you sit down and ask yourself why have we not made a faster adjustment to this new trading world, and why all those OECD comparative charts have us flat-lining from the mid 1970s you may be underestimating the gulf between the reality of NZ trade strategy yesterday and today.

But ladies and gentlemen, don’t throw in the towel yet on this small but fascinating country of ours. We have engineered a revolution, if you are allowed to use that term to describe something that has required a quarter of a century. And this lies at the heart of my deep belief, that New Zealand is now poised to enter a new period of highly successful wealth creation over the next quarter of a century.

As with our earlier success, if we make it happen, it will be based around superior export performance, and again to the middle class of the world’s most important economies as it was in the early 20th Century. It is just that the power has shifted and we have needed to shift with it.

He then gives the case for rational optimism:

All the ingredients are there and we just need to put them together, piece by piece. I have concentrated tonight on our future as a niche manufacturing and services exporter, not agriculture. Nothing alters my view that agriculture is going to play as large a part in our future as it has in our past and our relationship with the emerging economies lies at the heart of that judgment. I think Sir Graeme Harrison, Chairman and founder of ANZCO, is absolutely right with his metaphor: agriculture is New Zealand’s Silicon Valley. The choice was never agriculture or non-agriculture. We need superior exporting performance from all sides of our economy to build our future.

Quite – agriculture is one of our strengths and given our natural advantages in converting grass to protein for a hungry world, it will continue to be so. But we shouldn’t have all our eggs in the agricultural basket.

Of course we need to see our way through this current deeply difficult international situation in the developed world, and we will. And of course we will need consistently sophisticated leadership from our political, business, farming and technology leaders to build successfully on this new trading platform. These leaders need to be looking through the front windscreen to where we are going as a country, not the rear-vision mirror at where we have been.

Central to this new trading platform are our trading relationships with the emerging economies. The bedrock here is our relationship with Australia, the CER and the wider economic relationship around the CER.

The next most important trading partner is China.

We are uniquely well placed to build that economic relationship, because we are the only developed country in the world to have a comprehensive FTA with the world’s second largest economy.

But we also, intriguingly, are the only country in the world to have a matching comprehensive FTA with the second element in the wider Chinese economic area – our FTA with Hong Kong, which we signed in 2009. And tonight I am delighted by the news that we have initiated the first step that may lead us in a year or so being the first economy in the world, other than China itself of course, to join the three points in the Chinese economic triangle together.

Tonight I have issued a brief press statement welcoming a sparsely worded press release from the New Zealand Commerce and Industry Office in Taipei (NZCIO) and the Taipei Economic and Cultural Office in Wellington announcing that they had agreed to explore the feasibility of an economic cooperation agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei).

To use its WTO nomenclature, Chinese Taipei is an important trading partner for New Zealand and even after its WTO accession maintains a number of high barriers to our exports.

New Zealand signed a FTA with China in 2008 and a Closer Economic Partnership with Hong Kong in 2009. The FTA with China has been spectacularly successful.

I am hopeful that any eventual economic cooperation agreement with Chinese Taipei will see substantial growth in exports to this important economy. It is not just important for our goods exporters. It is an important source of tourists, students and investment as well.

This is both a trade and diplomatic coup. Relations between Beijing and Taipei are at best delicate and talking to one has in the past required ignoring the other.

That our FTA with China has been so successful and that we are now taking the first, albeit tentative, steps towards economic co-operation with Chinese Taipei is internationally significant.


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