Word of the day

May 3, 2013

Militate – to have force or influence; bring about an effect or a change; have weight or substantial effect; argue against; to cast doubt on.


LabourGreen can’t win this one

May 3, 2013

The Mighty River Power float closes at 5pm today.

An experienced investor told me he’d written to David Shearer and Russel Norman thanking them.

Their power play was likely to depress the price so he’d get more shares.

Peter Sherwin at the NBR thinks the price is likely to be lower too:

Potential investors may now hold back because of confusion about the future of the power industry, uncertainty whether MRP will stag at a higher price and a fear the price will go down upon listing.

The lack of take up will dampen the listing price, which is more likely to be at the lower end of the scale, around $2.25 rather than the expected $2.80.

The Greens and Labour may have scored political points, but effectively they have slashed the government’s cash investment to fund health, education and infrastructure programmes. . .

So who pays the price for the opposition’s political gain? Every Kiwi, even those they claim to champion.

Professional and institutional investors will not be daunted by any of this and are making big offers, but with fewer “mum and dad” buyers they may not have to go to the market for as many shares when they are listed on May 10. . .

The investor I spoke to said much the same thing.

The LabourGreen power play was putting off first-time and small investors who had been planning to dip their toes in the water but now have cold feet.

The Hey Clint clip shows that Green MP Gareth Hughes thinks it’s funny. But Patrick Gower points out it’s not:

Now I know a lot of people watch “Hey Clint!” and find it funny.

But to me it showed much more than a bit of humour. It showed what we know – the Greens, like Labour, are trying to act like they are not gleeful that the policy is screwing with the MRP float.

In fact, it looked like Gareth Hughes was stoked. It was in the public interest to run it. No question.

It busted spin, in fact, it blew the spin apart.

It showed that the Greens, like Labour, are trying to come up with ‘lines’ to pretend that it’s not about wrecking the float.

And that’s fair enough; the Greens want to emphasise what they see as the good parts of the policy.

But, thanks to Gareth’s indiscretion, we could show what they really feel. . .

Putting politics before people isn’t the picture LabourGreen wish to portray.

They forgot that what’s good for the economy is good for people and their power play isn’t.

They can’t win on this one.

Support the policy or not, it’s in New Zealand’s best interest for the shares to sell for the best price.

If the float goes well their many attempts – most at the public’s expense – to counter the policy will have failed.

If it doesn’t, they’ll have cost the country millions of dollars.

Either way, they lose.


Rural round-up

May 3, 2013

Challenge goal to boost NZ export earnings – Hugh Stringleman:

Four of the government’s selected 10 National Science Challenges are connected with the primary sector and have potential to boost export earnings, Science and Innovation Minister Steven Joyce says.

However, the need to expand export earnings to the government’s target of 40% of GDP by 2025 was not a specific criterion for selection of the challenges.

Prime Minister John Key’s chief science adviser, Professor Sir Peter Gluckman, drew attention to challenge four, called high-value nutrition – developing high-value foods with validated health benefits – as an obvious area where commodities would be enhanced to earn much more. . .

Why only a small number of people will consider working on a dairy farm – Milking on the Moove:

There are 60 new dairy conversions going into Canterbury this year. In This video I discuss how this equates to an extra 250 dairy staff been required, and why most “townies” won’t even consider a job on a dairy farm.

I’m surprised by the extra staff required, but the numbers seem to be logical. . .

60 new dairy conversions in Canterbury for 2013 season

Hey, well I want to talk about dairy farm employment issues. So staffing, of all the issues that the dairy industry face, finding people to milk the cows is the biggest issue. So I was talking to a cow shed manufacturer. He said there’s 60 dairy conversions going into Canterbury this year; and those are new dairy conversions.

60 conversions x 750 cows (cant avg) = 45,000 extra cows into Canterbury 2013

Now the average herd size in Canterbury is 750 cows, so 60 times 750 equals 45,000 extra cows coming into Canterbury this year alone. That’s not including Southland or the rest of the South Island; 45, 000 new cows into Canterbury. . .</>

No PKE from dodgy mills says MPI:

Malaysian officials have confirmed no palm kernel expeller (PKE) has been exported to New Zealand from the processing mill that Federated Farmers has reported concerns about.

The Ministry for Primary Industries (MPI) is taking the concerns about post-production handling of PKE very seriously, says director plants, food and environment Peter Thomson.

“There are stringent safeguards in place that ensure PKE is safe for use, and MPI is requiring full assurance that these safeguards have not been breached,” Thomson says. . .

O’Connor leaves DINZ in good heart – Annette Scott:

If Mark O’Connor has done something right in his 13 years as chief executive of Deer Industry New Zealand (DINZ), it has been employing good people.

He will officially leave his position after the industry’s annual conference later this month and he makes no secret he will miss the people.

“It is a wonderful industry in terms of people – they are a unique bunch. I will certainly miss them. It has been nothing but a joy,” O’Connor said. . .

Irrigator ruts causing accidents:

Centre-pivot irrigator ruts are contributing to the high accident rate amongst groundspreaders.</>

The New Zealand Groundspread Fertilisers’ Association, (NZGFA) would like to see a reduction in recent accident rates amongst groundspreaders.

NZGFA president Stuart Barwood says “we are aiming to make farmers aware of the dangers to groundspread fertiliser drivers and trucks. Centrepivot ruts are a major accident waiting to happen. . .

National Science Challenges are the new black:

Federated Farmers is delighted that New Zealand’s primary industries are well represented in New Zealand’s fiscally upsized National Science Challenges, announced yesterday by Prime Minister John Key and the Minister for Science and Innovation, the Hon Steven Joyce.

“This is significant because we hear talk of creating a technological future and the National Science Challenges are about inspiring this to happen,” says Dr William Rolleston, Federated Farmers Vice-President.

“Significantly, the Government has increased its funding by $73.5 million taking the investment to $133.5 million. In an age of constrained spending this deserves praise for its foresight.

“When taken in conjunction with AgResearch’s major investment announcement earlier this week, the National Science Challenges are another tool to break down institutional barriers and foster scientific collaboration and endeavour. . .

Photo: Dam fecking right!


Friday’s answers

May 3, 2013

Thursday’s questions were:

1. Who said: All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.

2. What are the final two lines of this: eight hours work, eight hours play . . . . “?

3. It’s travailler in French, lavoro in Italian, trabajar in Spanish and mahi in Maori, what is it in English?

4. How many statutory days holiday does a New Zealand worker have?

5. What’s your dream job?

Points for answers:

Andrei got 2 1/2 (sleep was right but you left out the pay) with a bonus for extra information.

Tiffany would have got one – you don’t have to be first.

Grant got 2 1.2 with a bonus for high flying dreams.

Rob got 3 right with a  bonus 1/2 for the nationality of the one who made the quote – though spelling labor without a u was a pretty big hint that he was from the USA.

Tracey got 3 with a  bonus 1/2 for the nationality too.

Alwyn wins an electronic batch of biscuits with five right.

Gravedodger got four and a bonus for humour.

Answers follow the break:

Read the rest of this entry »


Can’t change one rolll without changing other

May 3, 2013

The Electoral Commission wants to allow Maori voters to change between the general and Maori rolls more often.

Current law allows Maori to opt for the general or Maori roll every five years, after the census.

The results could increase, or decrease, the number of Maori seats. A change could also have an impact on the number of people in general seats – increasing or decreasing the population.

Boundaries are considered after every census. The South island population is divided by 16 to get the number of people in each electorate, plus or minus 5%.

That includes the number of people in Maori seats.

There is always some change between censuses which could put seats under or over the 5% tolerance. Enabling Maori to opt for one roll or the other in isolation from consideration of all electorates could exacerbate that.

It could also allow Maori more of a say – being able to move from one roll to the other for a by-election then back for the general election, for example.

I think Maori seats have outlived their usefulness and would definitely not be in favour of allowing people to opt for a different roll any more often than every five years when the boundaries for all seats are set.


Green’s not for growth

May 3, 2013

The Green party is soliciting funds for its election campaign with an email that says:

 . . . National’s policies of more mining, weakening environmental protections, poor economic management and growing inequality are not the recipe for a fair society and a better future.

 In contrast to National, we have the ideas to deliver a richer New Zealand. . .

Green is supposed to be the colour of growth but these Greens are really reds promoting the policies that have failed in the past.

Take their plan to bring down the exchange rate. Prime Minister John Key says currency intervention and printing money won’t work:

. . . “It didn’t work very well for Argentina, or Venezuela or Zimbabwe and it could never be done in New Zealand at the sort of magnitude we’ve seen in the United States,” said Key.

As for the New Zealand dollar versus its United States counterpart, Key used a seesaw analogy.

“It’s a bit like being a seesaw and if I weigh 85 kilos and you weigh 170 kilos, I’m going to go up when you sit on the seesaw and you’re going to go down. And that’s really the situation we’ve got at the moment.”

“We kind of weigh 85 kilos and the United States weights 850 tonnes. Right up to this point it (the US) has been very unwell. It has got everything from aids to bird flu. It has really been pretty unwell so the market’s just massively adjusting what they’re doing.”

When people say the Reserve Bank should be printing money, Key said you wouldn’t do that with base rates – the Official Cash Rate – at 2.5%.

“All you do is cut interest rates for a start off. The second thing was even if you printed money, it’s never going to work. I think they’ve printed US$5.5 trillion in the US. I mean it’s massive. So what would we print? NZ$50 billion or something? It wouldn’t make an iota of difference.”

“So my view would be I know we want to get the exchange rate down and I know it’s hurting a lot of companies. But it’s a cycle you’re going to have to ride through and all the Government can do is control the things that are in our control. So get out there and reform the Resource Management Act, make sure we don’t spend too much money, make sure we keep pressure off interest rates, manage the place well,” Key said. . . .

The reds want to increase the burden of government, their policies will lead to higher interest rates and they haven’t a clue about good economic management.

. . . Furthermore, he said intervention in the currency markets never works.

Here Key cited an example from his previous career at Merrill Lynch, where at one time he was head of global foreign exchange. One of Merrill Lynch’s biggest clients was the Bank of Japan, which used to intervene in the currency markets through Merrill Lynch.

“To tell you how bad it got, one night we were sitting there and the Bank of Japan rang up and the US$-yen was about 90 or something and they didn’t want it to go down lower. And the guy said to me ‘I want you to start buying dollars at 90’. And I said ‘how many do you want me to buy’, and he said ‘well, I’m going out for three hours so I’ll give you a yell when I get home.’ And I said ‘yeah, but how many do you want me to buy?’ And he said ‘I’m going out for three hours, don’t you understand the conversation?’

“I bought US$4.5 billion in three hours. He said ‘where is it (the US dollar-yen exchange rate)’ and I said ‘it’s 90, you bought US$4.5 billion. And he said ‘ah, well I’m off to bed now give me a ring in the morning’,” said Key.

“It never worked, it just never worked. I don’t know how much money they lost on intervention but it was massive.” . . .

Who do you believe – someone who has worked in international finance and has managed the country through the global financial crisis or people who want to print money and whose power policy would have a chilling effect on on private investment? Rob Hosking writes:

. . . There is something essentially frivolous about anyone who would cheerfully rip up the value of some of the country’s largest firms, and the value of the investment in those firms, simply for a political positioning exercise.

This is why the exchange caught by TV3 between Green energy spokesman Gareth Hughes and party spin zambuck Clint Smith was so telling.

For those who missed it, Mr Hughes was asked if the party was pleased at the reaction: Mr Hughes paused, turned to Mr Smith and asked “Hey, Clint – are we pleased?”

It was telling that he even had to ask.

But the almost palpable glee coming out of the Green and Labour camps at the destructive impact of their policy is highly revealing. 

It underlines – not for the first time – the problem with the makeup of both parties. They are dominated at the MP and the staff level by the sub-genus homo politicus.

That is, they are full of people who have done nothing in their lives apart from politics. All parties have a complement of this group, but with Labour and the Greens the group has reached critical mass.

This group has been involved in politics at university, moved from there to various political/union offices and then into parliament. 

There is little real world experience and everything is viewed through a very narrow prism of political advantage.

It’s the sort of attitude which means the value destruction seen this week can be just laughed off.

There will, unless we are careful, be more such frivolous policies to come.

I would use a far stronger word than frivolous and the business community certainly isn’t taking it lightly.

In an open letter to LabourGreen they say the policy would harm jobs, growth and investment, causing interest rates to rise, reducing KiwiSaver retirement savings and making people less well off.

. . .Business shares your concerns about constantly rising power prices and their impact on our global competitiveness. Businesses and consumers work hard every day to minimise their spending on electricity in order to stay in business and

to make their household budgets stretch further.
However, we do not think that electricity policies based on subsidies and greater state control are the right answers. Such policies have been tried in the past and have been shown to be incapable of meeting the challenges of a modern economy
with a complex, real-time electricity market.
 
Putting aside the sheer complexity of their implementation, policies that protect businesses from the full costs of the inputs they use ultimately dull the incentive to innovate and make them less, not more internationally competitive. Reducing retail
prices below the full marginal cost of production encourages households to use more than they should.
Of particular concern with the policies announced is their chilling effect on investment across the entire economy.
 
We are especially concerned at investment analyst reports noting the potential for $1.4 billion of shareholder value to be wiped off the books of the private power companies. A similar amount, if not more, will come off the value of the public power companies.
 
 
Capital destruction on such a scale will severely undermine business confidence.
It sends signals to investors, on whom the New Zealand economy relies, that their wealth and the benefits it provides are not welcome.
 
Investment plans and job creation opportunities are foregone.
 
Rather than remote and intangible, this dampening of investment intentions will have a direct and real economic impact on those of all walks of life who seek to accumulate wealth by working hard to save, invest and grow. It causes interest rates
to rise, depletes retirement savings held in KiwiSaver accounts and means that other economic opportunities such as first homes are foregone and new business ventures as savings are unexpectedly reduced.
 
Individuals are less well-off as a result.
 
With the good of all New Zealanders in mind we ask you to withdraw these damaging policies. We offer to work with you in increasing public understanding of the operation of the electricity market and in ensuring consumers, both small and large,
have better choice from one of the increasingly competitive electricity markets in the world.
 
Yours sincerely,
 
 Phil O’Reilly Chief Executive BusinessNZ
 
Ken Shirley Chief Executive Officer Road Transport Forum
 
Catherine Beard Executive Director Manufacturing NZ
 
Ralph Matthes Executive Director Major Electricity Users Group
Chris Baker Chief Executive Straterra

John Scandrett Chief Executive Officer Otago Southland  Employers’ Association

Raewyn Bleakley Chief Executive  Business Central–Wellington

Kim Campbell Chief Executive EMA

Peter Townsend Chief Executive CECC

Michael Barnett Director  New Zealand Chambers of Commerce

These people represent people who employ people, the ones who need certainty and confidence to make investment that creates jobs, earn export income and pay taxes.

These are people who work in the real world.

They know there’s nothing funny about bad policy that would take the country backwards, cost jobs and make us all poorer.

They know that Green isn’t for growth and it doesn’t mean go.

Green economic policy is bright red and it will mean stop to economic growth and job creation.


Real guns aren’t toys

May 3, 2013

A five year-old boy shot his two year-old sister with a gun marketed for children and given to him by his parents.

Caroline Starks, two, was killed after her brother accidentally shot her while playing with his own .22-calibre gun – called My First Rifle. . .

The young boy had been playing with a Crickett gun, specially designed for kids, which was given to him last year.

Crickett guns are manufactured for kids by the Keystone Sporting Arms firm on a web page that boasts of their “child-friendly” rifles. . .

Coroner Mr White later admitted the incident would be ruled as an accident, saying: “It’s just one of those crazy accidents.”

One of those crazy accidents?
Crazy is making and marketing real guns to children too young to understand that playing with them could lead to real death.
Real guns aren’t toys.

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