Word of the day

Desenrascanco – (Portuguese) – the art of using whatever means at your disposal to extract yourself from a tricky situation;; the capacity to improvise in the most extraordinary situations possible, against all odds, resulting in a hypothetically good-enough solution; the improvisation of haphazard but completely sound solutions or plans at the last minute;  to pull a MacGyver.

iPredict – narrow Nat win

iPredict’s first update for the year is predicting a very narrow win for the incumbent government.

Key Points:

•       Election expected in Q4 2014, most probably in November
•       Growing economy expected, but with rising interest rates
•       Only National, Labour and Greens to reach 5% threshold
•       Maori, Conservative, Mana and UnitedFuture parties to win electorate seats but Act to miss out
•       Very slight advantage to John Key as head of a National/Conservative/UnitedFuture government

Commentary:

This is the first iPredict Update for the 2014 New Zealand General Election with forecasts based on trading by the more than 7000 registered iPredict traders.  As in 2011, the newsletter will be based on a market snapshot taken at a random time, initially weekly and then daily during the election campaign.

The first snapshot, which was taken at 9.32 am today, suggests a very slight advantage to incumbent prime minister John Key, most probably leading a National/Conservative/UnitedFuture government, with or without the Maori Party. . .

Of the major parties, National is expected to win 43.0% of the party vote, the Labour Party 34.5% and the Green Party 9.5%.  

No other parties are expected to reach the 5% threshold under the MMP electoral system.  The Conservative and NZ First parties are both expected to win 4.6% of the party vote, the Maori Party 1.5%, Act 1.3%, Mana 0.7%, UnitedFuture 0.6% and the Aotearoa Legalise Cannabis Party 0.3%.  

Stocks for the proposed Civilian and Kim Dotcom parties will be launched in the near future.

Based on the party vote forecasts and the electorate results above, Parliament would be as follows: National 54 MPs, Labour 44 MPs, Greens 12 MPs, the Conservative Party 6 MPs, the Maori Party 2 MPs, UnitedFuture 1 MPs and Mana 1 MP, for a total of 120 MPs.  A government would be required to have the support of 61 MPs on confidence and supply.

Under this scenario, National, the Conservative Party and UnitedFuture could form a government with 61 MPs.  Were the Maori Party involved, such a government would be supported by 63 MPs.

Were the Conservative Party not to win an electorate seat, a Labour/Green/Maori Party/Mana government could be formed with 62 MPs.

Overall, the market indicates a very narrow advantage to National, with a 53.3% probability of a National prime minister after the next election and a 45.1% probability of a Labour prime minister. . .

I’d call that too close to call which is what most polls have been saying.

 

Rural round-up

Ingredient for plastic has global potential – Cecile Meier:

It took more than 10 years for Ashburton-based LignoTech Developments to create a technology that turns organic waste material into an ingredient to make lightweight plastic, chief executive Garry Haskett explains.

This is interesting for makers of cars and trucks as they strive to produce lightweight vehicles to make them more energy-efficient, chairman John Rodwell says.

The raw material, corn residue, is worth 12 cents a pound as a stock food. After running through Lignotech’s process, it is worth more than 70c a pound.

With the corn-ethanol industry in the United States alone responsible for more than 40 million tonnes of bio-waste a year, the potential is huge, Rodwell says. . .

Ngai Tahu leads way in sustainable dairying – Howard Keene:

It’s fair to say that while Ngai Tahu has had an increasing influence in the South Island economy in recent times, its participation in the commercial agriculture boom has been minimal up to now.

However, that is changing as it converts its vast tracts of plantation forestry land in North Canterbury into dairy paddocks, which could eventually make it one of the biggest dairy farmers in the country. But more importantly it aims to be a leader in sustainable dairying.

In the 15 years or so since its $170 million Treaty of Waitangi settlement with the Crown, Ngai Tahu has successfully grown its asset base to around $1 billion, mainly through investment in property, fishing and tourism. . .

  Water storage vital in changing climate – James Houghton:

Now most of you will be back from a well rested break, having indulged yourselves silly and feeling a little guilty perhaps? Well just thought you might like to know, like most farmers, I have been kept busy as farming is a 365 day a year job. Thankfully, summer has been kind to us so far and the ever increasing drought has been kept at bay.

Looking to the year ahead, I am hoping we will see an improvement in people and organisations being accountable for their actions and learning from their mistakes. Last year, we saw some disappointing performances in the biosecurity area and animal welfare. We also seem to be struggling with the ever increasing reality that we need a reliable source of water to maintain a sustainable primary industry and our economic independence. When corporates make a mistake, they need to do what is right and not solely focus on the dollar.

My hope is that this year we learn from past experiences and make changes for the better. If we do not learn from them, how are we meant to protect ourselves from risk or make progress and develop ourselves? The climate and water debate paint this picture well, time and time again. . .

Increase in stock thefts over summer – Abby Brown:

Federated Farmers are warning that stock thefts increase over summer.

“There is normally a pre-Christmas binge and then it’s ongoing for the rest of summer,” their rural security spokeswoman Katie Milne said.

The warmer weather made it easier for thieves to get around farms, as they did not have to contend with winter rain and mud.

Christmas visitors often put pressure on family food supplies and so there would be a spike in the black market for meat.

She said there were commonsense ways for farmers to prevent themselves becoming a target of stock theft. . . .

Why farming brings out the best of us – Willy Leferink:

The great thing about the Christmas/New Year break has been the absence of phone calls.  I don’t know if my sharemilkers and farm managers have appreciated having the boss around a lot more than usual, but it’s been great to be among the girls.

I’m not being sexist or implying that I only employ women.  I am of course talking about my cows.  Given my team, cows included, have been going full tilt our ‘Christmas holidays’ will come mid-year at the end of this season.  Right now it’s pretty full on.

The absence of media calls has given me a chance to catch up on some programmes I recorded, like TV One’s NZ Story.  Several have stood out for me given the way farming has shaped their lives for the better. . . .

Average value NZ lamb cuts exported to China, YTD vs last 4 years. Still climbing pic.twitter.com/AJCCFm43mj

— Aaron Meikle (@AaronJMeikle) January 14, 2014

Average value NZ lamb exports to Great Britain, YTD. Expect lots of grateful tweets from sheep farmers there now. pic.twitter.com/EcT9SvssW0

— Aaron Meikle (@AaronJMeikle) January 14, 2014

Saving cents still doesn’t make sense to Labour

Boat builders are upset that the government has awarded an $8 million ferry contract to a Bangladesh company rather than locals.

Economic development minister Steven Joyce told the Herald the difference between the New Zealand tenders and the successful Bangladesh bid was around $14 million.

“The numbers here were just too big to bridge, whatever way you want to cut it. If we were to prefer New Zealand suppliers at any cost, it would be a recipe for economic disaster,” Joyce said.

Saving that many cents make good sense but Labour still doesn’t care about that:

.@AndrewLittleMP @matuashane want 2 spend 2x or 3x the price on a ferry as a way to prosperity. Startng 2014 as incoherent as every other yr

— Steven Joyce (@stevenljoyce) January 14, 2014

Over at Keeping Stock, Gosman points out that the boat building industry is doing well without public subsidies:

. . . The turnover in the industry as in 2012 was around 1.7 billion dollars. Just to put it in to perspective for you if this contract had been awarded for 23 million dollars it would have been worth around one percent of total turnover. The industry doesn’t need government money to survive so why demand they get special treatment than firms from other nations? . . .

Labour wants subsidies for an industry that’s doing very well without them.

Once more it shows it’s not learned from its mistakes and still isn’t concerned about wasting taxpayers’ money.

Cosy deal continuing to end of year

The Taxpayers’ Union blew the whistle on the $19m wasted on contracts for workplace safety training:

Material released by the Taxpayers’ Union show a cosy deal between Business New Zealand, the Council of Trade Unions (“CTU”) and ACC has cost ACC-levy payers $19 million since 2003.

The documents, available and summarised below show ACC knew that millions paid to Business NZ and the CTU to provide health and safety training did little, if anything, to reduce workplace accidents.

Recent ACC analysis concludes that, even with optimistic assumptions, for every dollar spent on the training 84 cents is wasted. 

A 2013 briefing to the Minister for ACC, Judith Collins, states that the CTU has found it “challenging” to meet its performance obligations even though it has been contracted for service since 2003. 

The documents show that Business NZ and the CTU worked together with ACC to create the venture and doubts about the value of the scheme have existed since at least 2008.

It appears that Business NZ and the CTU have created a nice little earner for themselves. But we think it’s a disgraceful example of big corporate and union welfare chewing through taxpayer cash. We think members of Business NZ and the CTU should be asking hard questions of their respective management teams.

Even the report in 2008 shows that that whole scheme was achieving little more than ‘engagement’. While ACC, Business NZ and the CTU must have known the scheme was worthless, they all allowed further millions to be spent.

This is the worst example of government waste the Taxpayers’ Union has seen to date. It involves two quasi-political organisations from the left and the right complacent in receiving taxpayer funds, likely knowing that the benefit was a small fraction of the amount being spent.

The Taxpayers’ Union is calling on Ms Collins to put an end to this hand out to Business NZ and the CTU.

ACC Minister Judith Collins says this has all the markings of a taxpayer rort:

. . . Ms Collins told Radio New Zealand’s Summer Report programme on Wednesday the scheme is clearly not working and she does not intend to waste more money on it by taking further action, since the contracts are unlikely to be renewed.

The minister said the programme looked like a very cosy deal set up in 2003, leaving the people it aimed to help with nothing.

“I think it’s pretty clear what happened and the review that’s been undertaken by ACC has already shown that it has been a waste of money,” she said.

“I actually think it has all the hallmarks of a rort.” . . .

There’s nothing new in cosy deals which give unions public funds for programmes which may or may not be value for money.

Business New Zealand members should be asking very serious questions of the organisation to find out why it too has been wasting money in this way.

Yesterday it looked like ACC was canning the scheme but today the Taxpayers’ Union says the schemes have been extended to the end of this year.

Despite the ACC telling media yesterday that it decided ‘late last year’ to can the programme, we learned this morning that the contracts were renewed in December. The end date is now 31 December 2014.

It appears that ACC only changed its tune since the Taxpayers’ Union publicly exposed the rort.

Remember, it’s not the Taxpayers’ Union who labelled the training scheme a waste of money, it’s ACC’s own experts. Telling the public that they will scrap the scheme but waiting for the new contracts to expire is not good enough. They conveniently failed to mention that the contracts have just been renewed…

The Taxpayers’ Union is also backing the Minister for ACC’s reported comments that Business NZ and the CTU should pay the wasted money back to ACC. With such clear evidence that the money did little if anything to improve workplace safety, we think Business NZ and the CTU are morally obliged to stop wasting this money and compensate ACC levy payers.

ACC fees are being reduced for most workers and businesses.

If it wasn’t wasting money on useless training it might be able to make further cuts.

Workplace safety is a serious business, it shouldn’t be a vehicle for a rort by unions and the group which is supposed to work in businesses’ best interests.

Poor policies add up to recession

Economic Development Minister Steven Joyce shows how poor policies add up to recession:

@economicsNZ High govt spending + stifled private sector = high interest rates & high forex rate = recession. Labour recipe circa 2008

— Steven Joyce (@stevenljoyce) January 14, 2014

Wrong again @JulieAnneGenter. Current account deficit half of 08. Economy now growing faster than rest of developed world. Exact opposite 08

— Steven Joyce (@stevenljoyce) January 14, 2014

Nothing like it was @JulieAnneGenter . If I were u I'd pick another topic. U r starting to sound as forgetful of your record as David Parker

— Steven Joyce (@stevenljoyce) January 14, 2014

It’s important to remember that in 2008 New Zealand was already in recession, thanks to the Labour-led government’s mismanagement.

It left office forecasting a decade of deficits before most of the rest of the world went into recession.

National has turned that around in spite of the natural and economic disasters it’s had to deal with.

The importance of homework

Last year in the same week a Bill passed its third reading in parliament and another didn’t make it to its first.

The Bill which did pass was the Conservation (Natural Heritage Protection) Bill, sponsored by Waitaki MP Jacqui Dean who had done all the homework necessary to get unanimous support for it.

The next day a Bill sponsored by Labour’s Jacinda Ardern was rejected by the House because she didn’t do enough  homework to get it past first base.

SCOTT SIMPSON (National—Coromandel) : The sponsor of this Care of Children Law Reform Bill, Jacinda Ardern, has nominated the Justice and Electoral Committee to scrutinise the bill should it pass this first reading. Therefore, as chairman of the committee it falls to me to have a first go at what can really be described only as a very sloppy and lazy member’s bill by this member. . .

This bill is a very light piece of work. Essentially, it requires the Minister to ask the Law Commission to review the law relating to the care of children and update its September 2000 report on adoption. It requires the Law Commission to report within 12 months with a report, recommendations, and, indeed, a draft piece of legislation, and, further, it requires the Minister of Justice to introduce that bill as drafted by the Law Commission without amendment within 7 days—without amendment within 7 days. So there are significant constitutional flaws in this member’s bill. There are absolutely shabby constitutional issues that the member clearly has not addressed or even thought about. . .

So the problem is that the member sponsoring this bill is essentially trying to use her member’s bill to get the Law Commission to write her bill for her. That is sloppy. That is lazy. It is a lazy approach. It is politically lazy—it is politically lazy—and it is intellectually lazy. . . .

You’d think that would be a very good lesson on the importance of doing homework, but she’s done, or more to the point, not done it, again.

This time over the issue of prisoners flying on commercial flights.

It was nothing more than union grandstanding and Cameron Slater did the homework that the journalists who broke the old news should have to expose that.

That didn’t stop Jacinda Ardern rushing to get in the news – but the Waikato Times knows a tempest in a prison teacup when it sees one and opines:

. . . The Corrections Association was not so reticent, accusing Corrections of putting public safety at risk with what it called “secret” flights. Association president Beven Hanlon said repeated inquiries among prison officers found no one who had been aware of the flights until late last year. In his 16 years as an officer and a decade as head of the union, he had never heard of a maximum security prisoner being put on a plane with the public. He was shocked.

Really? But he had commented publicly about a raft of recommendations in an Ombudsman’s report on an inquiry into the transportation of prisoners in 2007. The report said transporting prisoners by air was common and both charter flights and scheduled public flights were used. The numbers of escort officers were increased for maximum security prisoners. The report found no systemic problems with prisoner transport by air and made no recommendations about them. “Few incidents occur during air transport, and we were given no reason to believe that any systemic problems exist,” it said. Labour’s Jacinda Ardern, now demanding answers to the union’s claims, should first have taken time out to read the Ombudsman’s report (tabled in Parliament under a Labour government). Kicking up a fuss would be in order only after she was sure that Corrections practices, indeed, are endangering public safety.

It’s not uncommon in election year for unions to chase headlines in the hope of helping their Labour friends.

But MPs need to do their homework before joining them otherwise they just add to the picture of an opposition which hasn’t yet got its act together rather than the government in waiting it wants to be.

How to keeping growing

Business confidence is at a 20 year high lifting jobs, profits and investment:

New Zealand business confidence climbed to a 20-year high in the fourth quarter, lifting expectations for profits, hiring and investments, and raising the prospects for inflation to start to accelerate.

A net 52 percent of businesses were optimistic in the December quarter, seasonally adjusted, the highest since June 1994 and up from 33 percent three months earlier, which was itself the highest in more than three years, according to the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion.

Domestic trading activity, which is closely aligned with economic growth, climbed to the strongest since March 2005, with a seasonally adjusted net 15 percent of firms experiencing a pickup in their own activity. Expectations for the coming quarter rose to 32 percent from 24 percent.

“This quarter every region in our survey was doing better,” said Shamubeel Eaqub, principal economist at NZIER. “Until recently much of the recovery was concentrated in Canterbury. This has now broadened to most regions across New Zealand, which points towards a more sustainable and stable recovery.” . . .

Sustainable and stable are very reassuring words, much better than boom and bust which have been used, and experienced, too many times before.

How to build on this and ensure the good times grow is the challenge, as Economic Development Minister Steven Joyce points out:

The top independent world economic brains in the OECD and IMF expect us to continue to outstrip most developed countries in the next couple of years.

At last, we have the potential to make a serious move up that fabled OECD ladder. Net migration to Australia has also dropped sharply. At around 1000 a month, it’s about a quarter of what it was, and close to its lowest point over the past decade.

There are risks – the world remains in economically uncharted waters. However, if we remain cautious and conservative in our approach, we should do better than most.

And, of course, one or two good years do not change the fortunes of a country. We need many years of higher growth to provide better opportunities for Kiwis and their families. . .

The dairy trade, particularly with China, and the Christchurch rebuild are contributing to the growing economy but they are only aprt of the story.

What’s most encouraging is that a range of our companies across a number of industries are successfully selling their goods and services around the world, despite tough economic times.

In industries like ICT, high-tech and medium high-tech manufacturing, engineering services, tourism, international education, wine and other food and beverages, New Zealand firms have got leaner and more savvy in the past few years and all that work is starting to pay off.

The big thing driving the success of our entrepreneurs is their commitment to innovation; to developing products that allow them to demand a premium price in world markets. It’s that which determines their long-term success. . . .

The government has helped by removing road blocks that discourage investment.

A lot of work has been done and laws have been changed to ensure New Zealand is more welcoming of new investment while protecting against the risks. You need constant new investment to replace some of the old industries that become obsolete as a result of revolutionary technologies such as the internet.

So how do we keep growth happening? How do we lift New Zealand’s longer term growth rate so that we add more jobs, reach our potential, and become a true “Pacific Tiger” rather than just a short-term success story? I think there are several key things:

1. Keep opening our markets and building strong people to people relationships. The lesson of the China FTA is obvious. If we can get a good TPP deal, then we should grab it – along with other FTA and trade opportunities.

2. Innovate, innovate and innovate. The National-led Government is putting a lot of taxpayers’ money into assisting firms and their ideas. As a country we are starting to see the power of innovation in our industries but we need to keep lifting private sector investment in research and development to international norms.

3. Keep building the skills of a successful and innovative trading nation. Encourage more of our young people into the careers that breed innovation, like engineering, ICT, and science.

4. Encourage more capital to invest in New Zealand. The mixed ownership programme has helped set up a stellar year for our stock exchange. We need to build on that. Capital investment in competitive industries creates sustainable jobs.

5. We need to keep removing red tape and provide certainty to investors, especially in resource industries. That means making decisions quickly and effectively, while also working to improve environmental outcomes.

6. We need to keep building infrastructure to support a growth-oriented country. Great progress has been made in electricity transmission and ultra-fast broadband. Those projects need to be finished. And we need to keep investing in our transport systems for safety and efficiency. That means high-quality four-lane roads in and out of our main centres, resilient highways elsewhere, and quality public transport that people want to use.

Finally – and above all – we need to make responsible fiscal and economic decisions that keep the tax burden low and pay off debt. We need to keep rewarding New Zealanders with efficient public services and lower income taxes than elsewhere. It’s talented, hard-working Kiwis who get out of bed every day that make all this happen. Kiwis strive and succeed because they see the benefits of their hard work. If politicians keep remembering that then New Zealand will truly become a Pacific Tiger.

That of course requires a National-led government.

Any alternatives are focussed on taxing and spending, on redistributing rather than growing, and appealing to envy rather than aspiration.

January 15 in history

588 BC – Nebuchadnezzar II of Babylon laid siege to Jerusalem under Zedekiah’s reign.

69 – Otho seized power in Rome, proclaiming himself Emperor of Rome, but rules for only three months before committing suicide.

1493 – Christopher Columbus set sail for Spain from Hispaniola, ending his first voyage to the New World.

1559 Elizabeth I was crowned queen of England in Westminster Abbey.

1622  Molière, (Jean-Baptiste Poquelin) French playwright, was born (d. 1673).

1759 The British Museum opened.

1842 Blessed Mary McKillop, Australian  saint, was born (d. 1909)

1870  A political cartoon for the first time symbolised the United States Democratic Party with a donkey (“A Live Jackass Kicking a Dead Lion” by Thomas Nast for Harper’s Weekly).

1889 The Coca-Cola Company, then known as the Pemberton Medicine Company, was originally incorporated in Atlanta

1892 James Naismith published the rules of basketball.

1893  Ivor Novello, Welsh composer and actor, was born (d. 1951).

1902  King Saud of Saudi Arabia, was born (d. 1969).

1906 Aristotle Onassis, Greek shipping magnate, was born  (d. 1975).

1909 Jean Bugatti, German-born automobile designer, was born  (d. 1939).

1913  Lloyd Bridges, American actor, was born (d. 1998).

1914 Hugh Trevor-Roper, English historian, was born (d. 2003).

1919  Maurice Herzog, French mountaineer, first to ascend an 8000m peak, Annapurna in 1950, was born (d. 2012).

1919 – Boston Molasses Disaster: A large molasses tank in Boston burst and a wave of molasses poured through the streets, killing 21 people and injuring 150 others.

1929 Martin Luther King, Jr., American civil rights leader, recipient of the Nobel Peace Prize, was born (d. 1968).

1936 The first building to be completely covered in glass was completed in Toledo, Ohio ( built for the Owens-Illinois Glass Company).

1943 – The world’s largest office building, The Pentagon, was dedicated in Arlington, Virginia.

1966  The government of Abubakar Tafawa Balewa in Nigeria was overthrown in a military coup d’état.

1969 The Soviet Union launched Soyuz 5.

1970 After a 32-month fight for independence from Nigeria, Biafra surrendered.

1970 United States Vice-President Spiro Agnew’s three-day visit to New Zealand sparked some of the most violent anti-Vietnam War demonstrations seen in this country.

 

1970 – Muammar al-Qaddafi was proclaimed premier of Libya.

1973 Citing progress in peace negotiations, President Richard Nixon announced the suspension of offensive action in North Vietnam.

1977  The Kälvesta air disaster killed 22 people, the worst air crash in Sweden‘s history.

1986 The Living Seas opened at EPCOT Center in Walt Disney World, Florida.

1991  The United Nations’ deadline for the withdrawal of Iraqi forces from occupied Kuwait expired, preparing the way for the start of Operation Desert Storm.

1992  The international community recognised the independence of Slovenia and Croatia from the Socialist Federal Republic of Yugoslavia.

1993  Salvatore Riina, the Mafia boss known as ‘The Beast’, was arrested in Sicily after three decades as a fugitive.

2001 Wikipedia, a free Wiki content encyclopedia, went online.

2005 – ESA’s SMART-1 lunar orbiter discovered elements including calcium, aluminum, silicon, iron, and other surface elements on the moon.

2009 US Airways Flight 1549 made an emergency landing into the Hudson River shortly after takeoff from LaGuardia Airport in New York City. All passengers and crew members survived.

Sourced from NZ History Online & Wikipedia.