Censured but not responsible

December 19, 2013

Auckland mayor Len Brown has been censured by his council.

The Auckland Council has agreed 15-5 to censure mayor Len Brown.

Those opposed were councillors Brewer, Cooper, Krum, Quax and Stewart. 

Mr Brown has been asked back into the meeting to respond.

He says he accepts the resolution.

The council wants him to repay the costs incurred.

The council had been debating the following motion: a “request that the mayor make full reimbursement of all remaining personal costs and also make an appropriate contribution to other costs incurred by the council.”

Councillor Cameron Brewer asked for legal costs to be added. . .

The Taxpayers’ Union responded:

If Len Brown won’t pay back the money ratepayers have been forced to fork out, councillors should explore legal channels to recover the money,” saysTaxpayers’ Union Executive Director Jordan Williams.  . .

“Though there is no legal punishment for Brown’s breaches of the Council’s code of conduct, instead of being upfront, the Council needed an independent review of the Mayor’s behaviour to get to the truth. The Council should take all steps to recover the costs to ratepayers.”

“If Mr Brown wants to be responsible for all of Auckland, the least he can do is be responsible for his own behaviour.”

It’s so much easier being responsible for a city spending other people’s money than one’s own behaviour which requires spending one’s own money.

Rural round-up

December 19, 2013

SFF implements salary freeze – Nigel Stirling:

Silver Fern Farms (SFF) is implementing a salary freeze as part of a range of measures to get the meat processor back to profitability.

The move, revealed at the company’s AGM in Dunedin today, holds all salaried employees’ remuneration at current levels for a period of 12 months.

The company last year paid wages, salaries and benefits of $315.1m, up from $290.2m the previous year.

Chief executive Keith Cooper outlined further steps to turnaround the company’s performance including land disposals and exiting some stock financing arrangements. . .

Farming – change the perception – Will Wilson:

Agriculture must tread carefully in its bid to attract new entrants to ensure it does not undervalue and trivialise the incredible amount of hard work and education required to be success in the industry.

Agriculture is such a catch all term for a huge range of very specialist professions, yet from the outside the perception is the drip fed image of the village idiot on a tractor or the floppy haired Hugh Fearnley-Whittingstall in his cable knit.

As an industry agriculture continue to pander to this image because it’s media friendly and easier than finding out and explaining the real demands of modern agriculture. . .

Financial report shows agriculture is well on track:

Federated Farmers is pleased to see the Government’s half year Economic and Fiscal Update report showing a faster growing economy, with the agriculture industry being well on its way to doubling its exports by 2025.

“We have long advocated for economic restraint, and it is great to see the $86 million surplus forecast for 2014/15 is up ever so slightly on the surplus forecast in May,” says Bruce Wills, Federated Farmers President.

“Agriculture has had a great start, with the tradable sector growing 11.1 percent since 2009 compared with non-tradeables up 6.6 percent, however resource pressures are growing and next year we will likely see a tightening of monetary policy to dampen inflation. Farmers and exporters will need the Government to keep spending and debt under control in order to take the pressure off interest rates and the exchange rate. . .

Commission releases final report on Fonterra’s milk price manual:

Issued 16 December 2013, Release No. 56

The Commerce Commission has today released its final report on its statutory review of Fonterra’s milk price manual. The manual determines how Fonterra calculates the farm gate milk price, which is the price paid by Fonterra to dairy farmers for their raw milk.

This is the first of two statutory reviews that the Commission is required to undertake each milk season under the 2012 amendments to the Dairy Industry Restructuring Act 2001 (DIRA).

The Commission has concluded the 2013/14 Milk Price Manual is largely consistent with the purpose of the DIRA milk monitoring regime. . .

MG lifts milk price to $6.25/kg :

MURRAY Goulburn (MG) has announced a third step-up in the farmgate price (excluding the NSW-Sydney region) for the 2013-14 season of $0.18 per kilogram butterfat and $0.38/kg protein.

This step-up takes MG’s weighted-average, available price to $6.25/kg milk solids.

MG has also increased its end of season forecast to a range of $6.30-$6.50/kg milk solids.

“Global demand for dairy foods remains strong and as a result prices for key dairy ingredients, such as whole milk powder, have remained at near record levels for an unprecedented period,” MG managing director Gary Helou, said. . .

Canterbury style zone committee comes to the Wairarapa:

Federated Farmers’ Wairarapa welcomes the formation of the Ruamahanga Whaitua Committee and its commitment to balance environmental and economic values for the Ruamahanga Catchment.

“The Whaitua committee makeup is well balanced to deliver sustainable and workable rules for the Catchment and the Wairarapa,” says Federated Farmers’ Wairarapa provincial president Jamie Falloon.

“We thank the people involved for putting their names forward for what will be a pretty busy two year period.

“It will be a challenging process and will require all parties to be fully involved in discussions to find outcomes that are what the community wants. . .

Workshops help dairy farmers drive better production and profit:

Farm nutrient company SealesWinslow is running a series of seminars and workshops to help dairy farmers achieve higher production, margins and profits.

SealesWinslow’s “Routes to Profitable Milk Production” roadshow, which kicked off in the Waikato in late October, has been rated highly for content and relevance by farmers attending.

Animal nutrition expert for SealesWinslow, James Hague, has been demonstrating how farmers can master the art of balancing the diet to fully feed the herd and benefit from better production from grass, higher production per cow and per hectare, higher margins and more profit. . . .

Greens biggest threat

December 19, 2013

Jamie Mackay asked Prime Minister John Key 20 quick-fire questions on the Farming Show today.

Asked about New Zealand’s greatest strength and/or opportunity, he said agriculture.

To the question of our biggest weakness or threat he answered the Green Party.

The questions and answers were mostly light-hearted but I think these last two were serious and he’s right about both.

The Santa Brand

December 19, 2013

The clever people at the Quiet Room have come up with a Santa brandbook:

You need to pop over there to see it properly, but here’s a taste.

santa 3







santa 1










The plan is working

December 19, 2013

The Opposition spin is that the government doesn’t have a plan.

It does and it’s working:
Photo: National’s plan for the economy is working.

Confidence levels soar

December 19, 2013

The good news keeps coming with confidence in agriculture at a 19-year high; manufacturing at a 15-year high and service at their highest level in 14 years:

New Zealand business confidence rose to its highest in almost 15 years this month, adding to evidence the economy is picking up pace.

A net 64.1 percent of firms are optimistic about general business conditions, up from 60.5 percent last month, according to the December ANZ Business Outlook survey. Firms seeing a pickup in their own business activity rose to a 19-year high of 53.5 percent from 47.1 percent last month.

ANZ’s composite indicator of business and consumer confidence indicates the two sides of the production-spending equation are in alignment, with the potential for annual economic growth to accelerate by more than 5 percent over the first part of 2014.

“That augers well for an economic expansion with real legs, said ANZ New Zealand chief economist Cameron Bagrie.

Confidence in the agriculture sector surged to a 19-year high of 54.5 percent, while manufacturing confidence hit a 15-year high of 56.1 percent and services reached the highest reading in 14 years of 68.5 percent. Sentiment in the construction sector at 66.7 percent and retailing at 65.4 percent remained “extremely elevated”, ANZ said.

The survey results are “incredibly strong” with firms’ profit expectations pushed beyond last month’s 19-year high to 39.7 percent from 37.3 percent. Employment intentions are the strongest in 19 years at 24.7 percent while residential construction intentions at 66.7 percent are the highest in almost 24 years and commercial construction intentions are robust at 41.2 percent.

Bagrie said the last time the survey recorded such high readings in 1994 and 1999, the economy was in full swing with GDP growth of more than 5 percent and the latest survey results “portend a booming economy”.

“All this momentum is occurring despite headwinds from an elevated New Zealand dollar and overwhelming expectations interest rates are going to be moving up,” Bagrie said. A net 71 percent of survey respondents expect higher interest rates over the year ahead and a net 31 percent of firms expect to raise prices.

One of the biggest challenges over the coming year will be ensuring supply can meet demand so inflation remains in check, Bagrie said. . .

The full report is here

  Survey results portend a booming economy. Many readings resemble 1994 and 1999 – years of incredibly strong growth.
  Our composite indicator, incorporating both business and consumer confidence, is signalling the potential for annual economic growth of around 5
percent by mid-2014.
  One of the economy’s biggest challenges over the coming year will be building available supply-side capacity and driving productivity growth to ensure the inflation genie doesn’t escape out of the bottle. . .

The last time we saw these sort of readings (in 1994 and 1999) an  economic upswing was in full swing.GDP growth was in excess of 5 percent, as flagged by this survey: who says business confidence surveys don’t matter!

Surfeit capacity was being eaten up too. There are similarities. Strong growth can follow extended periods of weakness or deep slumps. Recoil and pro-cyclicality
kicks in. Success breeds and feeds more success.

Throw together some localised one-offs: a city rebuild; plans to address housing shortages in the nation’s largest city; and a 40-year peak in the terms of trade,
and the growth picture takes on “tiger” as opposed to “tabby” characteristics. Suddenly the economic baton has been passed to this side of the
Tasman: yes, New Zealand can outperform Australia over the years ahead.

Challenges remain. The NZD is high; it will remain so. We’ll continue to see more flip-flops across the global economy than in all the footwear stores in Bondi
Beach. New Zealand’s balance sheet is weak. Candy is dandy but sadly NZ’s fiscal lolly jar has a distinctly empty rattle to it.

Despite these mitigating elements, the demand picture still looks remarkably assured. So assured that the question is not whether opportunities exist, but how successfully they can be seized. The emerging story across the economy will be matching demand with available supply. There will be frictions.

There is no silver bullet to easing such frictions. People and resources need to be mobilised. Get the right incentives and you’ll drive the right behaviours. At a
time when all and sundry are talking about the macroeconomic picture, there is another area of economics that deserves more attention. It’s the small stuff; what
happens at the firm and individual level. It’s microeconomics. Get the microeconomic story right and the macroeconomic one has more punch. Get it wrong, and the Reserve Bank will be forced to remove the “punch-bowl” as exuberance gets out of control. We don’t want popping champagne corks to switch to also popping the cork in the genie’s inflation bottle. . . 


Confidence matters not just to businesses but to the wider economy and to people.

Confident businesses are more likely to take the risk to invest more, produce more, employ more and pay more.

All of that means more tax which will help the government on its track back to surplus.

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