Word of the day

August 14, 2012

Dubiety – a feeling of doubt that often results in wavering; a usually hesitant uncertainty that tends to cause vacillation; the condition or quality of being doubtful; a matter of doubt.


Could have been a tragedy

August 14, 2012

The truck was travelling at about 80 kilometres an hour.

As it got to a passing lane it pulled left and the bus behind it followed.

The four wheel drive vehicle behind  the bus indicated and entered the passing  lane.

When it was about half way past the bus it (the bus) pulled out and started passing the truck.

The only place for the 4WD to go was right and onto the wrong side of the road.

Had there been any on-coming traffic it could have been a tragedy almost certainly resulting in injuries and death.

As it was the road ahead was clear and the 4WD was able to get past the bus and back onto the correct side of the road safely.

But the bus driver hadn’t finished. He compounded his dangerous driving with a lack of consideration.

Instead of pulling back into the left lane once he was clear of the truck he stayed in the passing lane, meaning the cars behind couldn’t pass. I was driving one of them and was stuck behind the bus, travelling at 80 to 100 kph for several more kilometres.


Foreign ownership fears unfounded, benefits not appreciated

August 14, 2012

Fears of foreign ownership are overstated and the benefits are under appreciated.

In a speech to New Zealand Contemporary China Research Centre Finance Minister Bill English said our investment relationship with China is much smaller than our trade:

Despite our strong trading relationship, China is not a major investor in New Zealand, being New Zealand’s 11th largest investor totalling $1.8 billion in 2011.

Foreign direct investment, or FDI, is less than half this amount.

By comparison, New Zealand has NZ$52 billion of FDI from Australia and NZ$11 billion from the US. China has made investments in New Zealand forestry, manufacturing and agriculture.

China is also investing in New Zealand government bonds, contributing to the record low borrowing rates New Zealand currently enjoys. New Zealand is seen as a relatively safe haven in these difficult times and Chinese authorities want to diversify their international bond holdings.

New Zealand’s investment into China is similarly small, totalling $789 million in 2011, making China our 13th largest investment destination.

These investment figures reflect broader trends.

While New Zealand is a recipient of foreign investment in line with the OECD average, New Zealanders invest overseas at well below OECD average rates. . . .

Opponents of foreign investment play on fears, most of which are unfounded.

They take no account of the the benefits which include  supplementing domestic savings, sharing technology, and driving growth in wages, employment and economic output.

As a small country, we naturally rely on FDI to help us achieve economies of scale, and for access to ideas and consumer markets. We do not have the large stock of capital which older and wealthier countries have.

Foreign direct investment has benefits for New Zealand in three broad areas:

• First, as a source of capital to supplement New Zealand’s domestic savings.
• Second, as a driver of growth in wages, employment and output.
• And third, for the transmission of technology, skills and know-how to New Zealand and for improving our connections to valuable international markets.

New Zealand simply does not save enough to cover our investment needs.

Between 2002 and 2011, New Zealand saved just over $4 billion a year, leaving a shortfall of $9 billion a year to fund our investment. Foreign direct investment is a type of international trade in savings and helps bridge this funding gap.

Foreign investment can bring benefits that foreign borrowing does not. These benefits can be of particular value to a small economy, and include:

• FDI provides a stronger buffer against economic shock because investment comes without the fixed interest payments of debt.
• FDI produces transfers of technology and know-how, and provides access to international markets.

Recent research shows that New Zealanders working for firms with foreign investors tend to be paid more, and that firms receiving foreign investment increase employment and output.

In 2008, Treasury concluded that foreign capital flows into New Zealand lifted incomes by around $3800 per worker between 1996 and 2006 in today’s prices, and lifted wealth by $16,000 per person.[5]

Foreign investors in New Zealand do take out some profits, but between 2006 and 2011 they have also reinvested about 25 per cent of their returns on equity back into New Zealand.

New Zealanders interact with foreign-owned businesses every day. Over half of the companies larger than $100 million in New Zealand have majority foreign ownership.[6]

Many of these companies are a familiar part of our national landscape, and provide Kiwis with a huge range of products and services. They are also among our largest employers. A recent study showed about a quarter of Aucklanders work for foreign owned companies.[7]

FDI, inward or outward, does not necessarily mean acquisition of full ownership by foreigners. In many cases it can take the form of a joint venture or partnership between New Zealand and foreign owners.

And FDI is not a one shot deal. Businesses built up under foreign ownership can move or return to New Zealand ownership.

Examples of that are Shell petrol stations which are now owned by Z, Opus which was bought by Malaysians but now has significant local shareholding and several meat companies.

What would happen if New Zealand could not access foreign investment?

One outcome is that the cost of capital would increase. This would constrain businesses’ ability to grow, and would reduce employment opportunities and household incomes.

Treasury has estimated that a permanent one percentage point change in interest rates (say, from 5 per cent to 6 per cent) would lower the level of GDP by about 2 per cent over a period of time.[9] New Zealand’s standard of living would be lower without access to foreign investment.

FDI can have its costs. The quality of foreign investment matters, and New Zealanders care that investment goes to productive capital, and that it supports jobs and higher incomes.

But fears of foreign ownership are frequently overstated. While it is true that the returns from foreign financing contribute to New Zealand’s current account deficit, it’s also important to consider the bigger picture.

The outcome for the economy is positive overall when foreign capital raises worker productivity and national income increases by more than the return on the investment.
FDI is profitable precisely because it introduces ideas and brings new capital to countries.

Foreign investment is a vote of confidence in the quality of New Zealand’s institutions and the quality of its workforce.

New Zealand welcomes foreign investment.

Firms that are successful enough to be international investors tend to have developed the skills and deep specialisation New Zealand needs.

These skills produce higher wages for New Zealanders working in those firms, and skills tend to spill over.

As employees come and go from foreign owned firms, they take what they learn and apply it to new ventures. Foreign investment helps bring these advantages to New Zealand.

FDI has other benefits. It helps link New Zealand into opportunities for export and to tap in to international supply chains.

Foreign investors bring knowledge of international markets and access to established networks that are hard to develop from this far away.

FDI has been instrumental in the global shift towards international production networks in which steps on the production process occur across borders. Economies that have experienced the largest FDI inflows have on average also seen the largest expansion in merchandise exports.[10]

The benefits don’t negate the need for checks and balances.

A recent OECD study has rated New Zealand among the most restrictive overseas investment regimes in the OECD.[11] The study focuses on our regulations rather than how many foreign investments we turn away.

But there can be no serious suggestion that New Zealand lacks appropriate controls.

Our constraint on growth is not the size of the opportunity. It is our ability to access capital, knowledge, and people, and we get to decide this in part through policy.

New Zealand has not moved rapidly to reach out overseas to find new ideas and access new capital. This is something we must learn to do.

We sit on the doorstep of the fastest growing economies in the world.

There will be many more people in the Asia Pacific region with growing incomes who want more of New Zealand’s products.

Our trading partners, led by China, have opened the door for us.

Our challenge is to assemble enough capital, people and market knowledge to take advantage of this opportunity. How we go about that will define our economic success in the next generation.

The xenophobes have unfounded fears about the costs of foreign investment but we would have far more to fear if we didn’t have the benefits of overseas capital and expertise.


Is this what no-change voters wanted?

August 14, 2012

The Electoral Commission is recommending small changes to MMP :

The one electorate seat threshold for the allocation of list seats should be abolished.

• The party vote threshold for the allocation of list seats should be lowered to 4%.

• Candidates should continue to be able to stand both in an electorate and on a party list at general elections.

• List MPs should continue to be able to contest by-elections.

• Political parties should continue to have responsibility for the composition and ranking of candidates on their party lists.

• The provision for overhang seats should be abolished for parties that do not cross the party vote threshold.

• On the basis of current information it would be prudent to identify 76 electorate seats (in a 120 seat Parliament) as the point at which the risk to proportionality from insufficient list seats becomes unacceptable. New Zealand is unlikely to reach that point before 2026.

• The gradual erosion of list seats relative to electorate seats risks undermining the diversity of representation in Parliament. Parliament should review this matter.

The lower threshold would make it easier for smaller parties to enter parliament without winning an electorate.

Proponents of this will argue that it makes parliament more representative. However, I question how representative a group which requires only 500 members before it can register as a party really is.

Lowering the threshold also increases the tail-wagging-dog ability and increase the possibility of less stable governments.

Taking away the ability for parties which win a seat to bring in other MPs in proportion to their vote decreases proportionality. However, as this is one aspect of MMP which most people object to, it is likely to be one of the most popular recommendations.

Removing the provision for overhang seats caps the size of parliament at 120, reducing the number of list MPs if a party wins more electorates than it’s entitled to by its party vote.

These are small changes which won’t bring big improvements to MMP.

Justice Minister Judith Collins is encouraging people to comment on the proposed changes.

Submissions on the Proposals Paper close at 5pm on 7 September.

The Electoral Commission will then consider this feedback and report back to the Government by 31 October 2012 with final recommendations on whether any changes to MMP are necessary or desirable.

I wonder if the public would have voted against change had they known this was what they were likely to get?


Gold for Adams

August 14, 2012

Valerie Adams has been awarded the shot put gold medal after Nadzeya Ostapchuk, who was initially awarded first place, failed a drugs test.

A win is a win and a gold is a gold. Adams was obviously disappointed by her second placing and it is wonderful that she has now successfully defended the first place she got in Beijing.

But it is unfortunate that this gold comes without the extra excitement and thrill which she would have experienced at the awards ceremony had she been declared the winner on the day.

And only Ostapchuk can explain why she risked drugs when the chances of being found out were so high.

New Zealand now finishes 15th on the medal table with six gold, two silver and five bronze.


August 14 in history

August 14, 2012

1183  Taira no Munemori and the Taira clan took the young Emperor Antoku and the three sacred treasures and fled to western Japan to escape pursuit by the Minamoto clan.

1385 – Portuguese Crisis of 1383–1385: Battle of Aljubarrota – Portuguese forces commanded by King João I and his general Nuno Álvares Pereira defeated the Castilian army of King Juan I.

1598  Nine Years War: Battle of the Yellow Ford – Irish forces under Hugh O’Neill, Earl of Tyrone, defeated an English expeditionary force under Henry Bagenal.

1842 Indian Wars: Second Seminole War ended.

1846  The Cape Girardeau meteorite, a 2.3 kg chondrite-type meteorite struck near in Cape Girardeau County, Missouri.

1867 John Galsworthy, English novelist and Nobel Prize Laureate, was born (d. 1933).

1880  Construction of Cologne Cathedral was completed.

1885  Japan’s first patent was issued to the inventor of a rust-proof paint.

1888  A recording of English composer Arthur Sullivan’s The Lost Chord, one of the first recordings of music ever made, was played during a press conference introducing Thomas Edison’s phonograph in London.

1891 Petitions organised by the Women’s Christian Temperance Union (WCTU) seeking women’s suffrage and signed by a total of 9000 women were presented to New Zealand’s Parliament.

Women's vote petitions presented to Parliament

1893  France introduced motor vehicle registration.

1900  A joint European-Japanese-United States force (Eight-Nation Alliance) occupied Beijing, in a campaign to end the Boxer Rebellion.

1901  The first claimed powered flight, by Gustave Whitehead in his Number 21.

1908  The first beauty contest was held in Folkestone.

1912  United States Marines invaded Nicaragua to support the U.S.-backed government.

1921  Tannu Tuva, later Tuvinian People’s Republic was established as a completely independent country.

1933  Loggers caused a forest fire in the Coast Range of Oregon – the first forest fire of the Tillamook Burn.

1935  United States Social Security Act passes, creating a government pension system for the retired.

1936 Rainey Bethea was hanged in Owensboro, Kentucky in the last public execution in the United States.

1937 Chinese Air Force Day: The beginning of air-to-air combat of the Second Sino-Japanese War and World War II in general, when 6 Imperial Japanese Mitsubishi G3M bombers were shot down by the Nationalist Chinese Air Force.

1941 David Crosby, American musician, was born.

1941 Winston Churchill and Franklin D. Roosevelt signed the Atlantic Charter of war stating postwar aims.

1945  Steve Martin, American actor and comedian, was born.

1945 Japan accepted the Allied terms of surrender  and the Emperor recorded the Imperial Rescript on Surrender.

1946 Susan Saint James, American actress, was born.

1947  Pakistan and India gained Independence from the British Indian Empire and joined the British Commonwealth.

1948  Don Bradman, widely regarded as the best cricket batsman in history, makes a duck in his final Test innings.

1950  Gary Larson, American cartoonist (The Far Side), was born.

1967  UK Marine Broadcasting Offences Act declared participation in offshore pirate radio illegal.

1969 British troops were deployed in Northern Ireland.

1972  An East German Ilyushin Il-62 crashed during takeoff from East Berlin, killing 156.

1980  Lech Wałęsa led strikes at the Gdańsk shipyards.

1987  All the children held at Kia Lama, a rural property on Lake Eildon, Australia, run by the Santiniketan Park Association, were released after a police raid.

1994 Ilich Ramírez Sánchez, the terrorist known as “Carlos the Jackal“, was captured.

2003  Widescale power blackout in the northeast United States and Canada.

2006  Chencholai bombing – 61 Tamil girls were killed in Sri Lankan Airforce bombing.

2007   Kahtaniya bombings killed at least 400 people.

2010 –  2010 Summer Youth Olympic Games, first ever Youth Olympics, officially started in Singapore.

Sourced from NZ History Online & Wikipedia


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