How rumours start

May 1, 2014

Idiot/Savant at No Right Turn posts:

And then there’s this bit:

In a statement, Prime Minister John Key says he’s accepted Mr Williamson’s resignation.

“I have been made aware that Mr Williamson contacted Police some time ago regarding their investigation of Mr Donghua Liu,” Mr Key said.

Which raises the other obvious question: why didn’t Key sack him then? . . .  Or is corrupt behaviour only punished if it becomes public? . . .

IS has mis-read the sentence.

He doesn’t allow comments so I’m correcting him here.

The sentence means that the PM knows that the contact with the police was some time ago not that he’s known for some time.

If he’d known for a while he’d have said:

 I was made aware some time ago that  . . .

This is how rumours start. Someone misreads what someone says and accuses them of doing something wrong.

The wrong in this case is in the reading, and interpretation of that, by the writer not the actions of the speaker.


Word of the day

May 1, 2014

Bruit – to spread (a report or rumour) widely; report, voice abroad; a report or rumour; a sound, especially an abnormal one, heard through a stethoscope; a murmur.


Rural round-up

May 1, 2014

China’s taste for hotpot elevates lamb flaps from offcut to prime cut, sending prices to record – Tina Morrison:

(BusinessDesk) – China’s taste for hotpot, where meat and vegetables are cooked in a broth at the dining table, has driven a four-fold increase in the price of lamb flaps, turning the offcut into a premium cut and lifting the overall return kiwi farmers can get from their animals.

Lamb flaps, the gristly ends of the ribs trimmed away when the butcher cuts racks and rib chops, used to be considered a cheap cut, retailing for about US$1.35 per kilogram as little as eight years ago. It has soared 84 percent to US$5.84/kg, overtaking shoulder at US$5.64/kg and narrowing the gap with lamb leg at US$8.12/kg, based on Agrifax data.

In China, the meat is processed into a lamb roll and sliced thinly for hotpot, the dominant cooking style for lamb and a staple of the national diet. Chinese sheepmeat imports nearly doubled to 165,300 tonnes in the 2013 export year as a growing population, higher incomes and a decline in the world’s largest sheep flock spurred demand for imported protein. . .

New Zealand companies approved for infant formula exporting to China:

Five New Zealand manufacturers have been approved for exporting infant formula to China, Primary Industries Minister Nathan Guy and Food Safety Minister Nikki Kaye have announced today.

“These manufacturers represent around 90% of our infant formula exports to China by volume,” says Mr Guy.

“New Zealand officials have been working intensively with manufacturers and Chinese officials to address corrective actions, allowing these five manufacturers to be registered as of May 1.

“We appreciate the cooperative relationship with Chinese authorities in registering these New Zealand manufacturers. The new rules signal China’s desire for greater accountability for imported infant formula from all countries.

“MPI is working with all manufacturers to ensure the new Overseas Market Access Requirement (OMAR) – issued last night – is complied with. This sets out the requirements needed to produce infant formula for export to China from 1 May,” says Mr Guy. . . .

Nutricia takeover targets Sutton Group, Gardians among first to get China registration – Suze Metherell:

(BusinessDesk) – Sutton Group and Gardians, the dairy manufacturers acquired by Danone’s Nutricia arm, are among infant formula companies to gain registration to export to China under that nation’s new food safety regulations.

Nutricia itself gained registration, as did Fonterra Cooperative Group, GMP Pharmaceuticals and Dairy Goat Cooperative (NZ). They represent about 90 percent of New Zealand’s infant formula exports to China by volume.

Other companies can be registered after the May 1 deadline although owners of infant formula brands who can’t demonstrate a close relationship with a manufacturer may struggle to meet Chinese requirements, Food Safety Minister Nikki Kaye said today. . .

Nutricia to Add Milk Drying and Packing Capacity to Existing Platform in New Zealand:

Nutricia today announces an agreement for the simultaneous acquisition of the spray dryer of Gardians, located near Balclutha, and the blending, packing and can-forming activities of the Sutton Group in Auckland.

This transaction will provide Nutricia with a large milk drying capacity, along with a long-term fresh milk supply access. It will also add an infant formula blending and packing facility to Nutricia’s existing operations platform. . . .

Dairy Herd Consultation Underway:

The Ministry for Primary Industries (MPI) has today announced consultation on the future direction of the dairy herd improvement industry.

“The government’s main objective is to ensure New Zealand’s dairy industry can benefit from genetic gain in the national dairy herd. This objective supports the National Breeding Objective to identify animals whose progeny will be the most efficient converters of feed into farmer profit, says Marianne Lukkien, Acting Director Sector Policy.

“To achieve this we need to ensure the Dairy Core Database is fit for purpose, services are accessible at competitive prices and above all farmer’s interests are protected.

“The dairy industry is preparing for the transfer of the Dairy Core Database from Livestock Improvement Corporation (LIC) to DairyNZ. . .

A new generation of tools for the primary sector:

The primary sector is facing a major evolution in how they operate their businesses. Whether its satellite imagery of plantation forests, GPS tracking and real-time scheduling of transport and logistics, soil management through wireless sensor monitoring and automated tractor or irrigation systems, our primary sector businesses have a lot to benefit from improved mobile technologies.

Some of the best minds in New Zealand and Australia came together last year in Wellington for this region’s inaugural MobileTECH Summit 2013, an event designed to discuss and showcase new mobile technologies best suited to increase productivity for the primary sector. Building on this momentum, MobileTECH 2014 will be running this year in Brisbane, Australia and again, in Auckland, New Zealand in August. . .

Chinese buy five vineyards

Hong Kong-owned QWIL and Accolade Wines have been given the go ahead by the Overseas Investment Office to buy five vineyards from Mud House Wines.

The deal for $46.4 million involves the acquisition by QWIL of a freehold interest in five vineyards – Woolshed Vineyard in Marlborough, Home, Mound and Deans Vineyards in Canterbury, and Claim Vineyard in Otago.

The land comprises about 596ha. . . .

 


Thursday’s quiz

May 1, 2014

1. Who said: “The only time to eat diet food is while you’re waiting for the steak to cook.”  ?

2. Who wrote The Grapes of Wrath?

3. It’s chou in French, cavolo in Italian,  repollo in Spanish and kāpeti in Maori – what is it in English?

4. What is a  mangelwurzel?

5. If you could eat only one fruit and one vegetable which would they be?


Mike Moore resigning

May 1, 2014

Mike Moore, New Zealand’s ambassador tot he USA is stepping down:

NZ’s premier political weekly Trans-Tasman has revealed Mike Moore, NZ’s ambassador to the US in Washington DC, is to stand down shortly, ending an extraordinary career in political and public life spanning more than 40 years. Moore lives politics and global business. He entered Parliament with the 1972 Norman Kirk Labour Govt and rose through the ranks from back-bencher to cabinet Minister and somewhat-briefly, Prime Minister.

Trans Tasman’s Editors note Moore earned the respect of hard-nosed National Ministers, including John Key and Foreign Minister Murray McCully, who recognised his international reputation and negotiating skills, scarcely acknowledged in NZ, had gained wide respect in world capitals, not least in Washington. Hence his appointment to the NZ Embassy in Observatory Circle in Washington when McCully shrewdly recognised his Labour credentials would add weight to the drive to secure a raft of international trade agreements with a Democratic president in the White House.

Trans Tasman says McCully is considering appointing a career diplomat to succeed Moore, in part because his skill-set is difficult to replace and also because of the constraints of the general election.

Mike Moore gained the title Minister for Lamburgers for his efforts to promote lamb when he was an MP.

He worked hard for free trade as director-general of the World Trade Organisation, earning cross-party admiration for doing so.

He has been our USA ambassador since 2010.


Maurice Williamson resigns as Minister

May 1, 2014

Prime Minister John Key has accepted Maurice Williamson’s resignation from Cabinet:

 “I have been made aware that Mr Williamson contacted Police some time ago regarding their investigation of Mr Donghua Liu,” Mr Key says.

“Mr Williamson has assured me that he did not in any way intend to influence the Police investigation.

“However, Mr Williamson’s decision to discuss the investigation with Police was a significant error of judgement.

“The independence of Police investigations is a fundamental part of our country’s legal framework.

“Mr Williamson’s actions have been very unwise as they have the potential to bring that independence into question.

“I have advised the Governor General to accept Mr Williamson’s resignation as a Minister.

Mr Key said he will appoint a new Minister outside Cabinet early next week and in the meantime, Nick Smith will act in the Building and Construction portfolio, Nathan Guy in Land Information, and Simon Bridges in Customs and Statistics.

The Minister has done the right thing by resigning from Cabinet for this error of judgement.

The resignation is as a minister, he is still the MP for Pakuranga.


Case for fewer restrictions on foreign investment

May 1, 2014

The New Zealand Initiative wants fewer restrictions on foreign direct investment:

New Zealand affords itself the luxury of treating overseas investment as a privilege rather than as a necessary and desirable means of better integrating ourselves with the world, so as to make the most of what it has to offer.

That blinkered attitude permeates our regulatory regime, which the Organisation of Economic Co-operation and Development assesses to be more restrictive than the regimes of 47 other countries out of a total of 53 countries.

This a a strong contradiction of the oppositions parties’ stance that our regimes aren’t restrictive enough.

Before international investors can deploy their capital they must find out if their planned investment concerns assets deemed sensitive.

Prior approval is required for such investments and the definition of a sensitive asset is very broad indeed.

For example, every parcel of non-urban land greater than 5 hectares is deemed to be sensitive, no matter how swampy, erosion prone, or barren, and perhaps 99% of New Zealand’s land cover is non-urban.

If their planned investment is deemed to be in a sensitive asset we absurdly subject foreign investors to tests of character, relevant business experience and acumen and financial commitment.

These are not tests that politicians are known for applying to themselves when investing taxpayers’ money, and neither are they tests that apply to local investors.

Regardless, one would have thought that the intention to invest real money buying the asset in question was in itself proof of financial commitment.

The intention to invest is proof of financial commitment but there is a place for tests of character and relevant business experience too. We don’t, for example, want to import the proceeds of crime.

As the Treasury has repeatedly pointed out, if the concern is with how the asset might be used, then this is a use question, not an ownership question, and all overseas investors must comply with exactly the same rules and regulations that apply to any asset use in New Zealand anyway.

All investors should comply with the same rules.

The Overseas Investment does ask a lot more of foreign investors for example granting public access through farmland that a domestic investor wouldn’t have to do.

That can result in public good, it could also put off foreign investors who would take their money elsewhere.

Our regime is at its most absurd when the investment is in so-called sensitive land and the investor does not intend to live in New Zealand indefinitely. In this case, the law requires the relevant minister or ministers to be satisfied that the overseas investment will benefit New Zealand. The catch is that the primary benefit – the sale proceeds to a New Zealand vendor, are not counted as a benefit. Yet, if securing that benefit was not the prime reason for selling, what was?

This regime is not only bureaucratic overkill; it actually harms New Zealand.

The world’s best companies and innovators do not have to invest in New Zealand. If we put hurdles in their way, they can simply shrug their shoulders and invest elsewhere. That makes our international links weaker, our assets worth less, and our country more of a global backwater. This is the core message of our newly released report Open for Business – Removing the barriers to international investment.

In very limited, particular cases there may be good reasons to be careful about foreign investment, but reasons based on emotional, anti-foreigner sentiment do not make the cut.

After all, most New Zealanders are the descendants of immigrants.

National security issues are widely regarded internationally as a good reason, yet New Zealand’s regulatory regime has little or nothing to do with national security.

Reciprocity is a further reason for why the Overseas Investment Act needs to be reformed. Few would want to see New Zealanders treated unfairly when trying to buy a property or business overseas, so why do the same at home?

We are hypocritically applying double-standards when we believe we should be freely able to invest overseas, yet put obstacles in foreign investors’ ways.

As we highlighted in our previous report Capital Doldrums, New Zealand also stands out unfavourably internationally for the slump in its ranking for investment attractiveness.

New Zealand ranks highly in most international comparisons but falls short in this important one.

A regime that is hostile to investment is a threat to New Zealanders’ future living standards.

Our standard of living depends on being competitive in world markets for goods and capital. We can exploit economies of scale through world trade, and we can maintain competitiveness and improve productivity if we continually tap into the technology and expertise of the world’s best firms. If we do that well, New Zealanders can enjoy the best the world has to offer and great job prospects – without emigrating.

Certainly, there is no case for gloom. We rank very highly on some measures of international competitiveness, and we are still attracting overseas investors. A Treasury working paper has estimated that imported capital between 1996 and 2006 cumulatively raised our incomes by $2,600 per worker and wealth per capita by $14,000 in 2007 prices.

Nevertheless, we need to excel in policy settings across the board if we are to offset the disadvantages of size and distance.

In our new report, we examine New Zealand’s regime in considerable depth, drawing heavily on Treasury’s far-ranging review of the regime’s shortcomings and policy options in 2009–10. The picture that emerges from their and our research is a disturbing anti-investment bias in our legislation – without actually offering any good public policy reasons for its main features.

An anti-investment bias without good public policy is stupid.

After more than two years of research on this issue, our conclusion is this: New Zealand’s regime represents a muddled, overly bureaucratic response to an ill-identified problem.

We believe that the starting presumption for a fit-for-purpose regime should be that asset transactions between a willing buyer and a willing seller should proceed unless there is a good public interest reason otherwise.

If an otherwise legitimate transaction is to be stopped for the benefit of the public at large, the costs of achieving that benefit should not fall unfairly or unduly on the asset owner. This means respecting the would-be vendor’s property rights and addressing the issue of compensation, if appropriate.

Those opposing foreign investment never take into account the vendors and what good they can then do with the money they receive. Nor do they think of the cost delaying or prohibiting a sale might impose on them.

We believe that the onus of proof for keeping our highly regulated FDI regime is on those who want to keep it.

If other countries can do well with much lower levels of regulation, we are also capable of doing the same.

This means that we should be treating domestic and foreign direct investors the same – and we should be treating foreign investors in the same way we wish to be treated as investors abroad.

New Zealand should be open for business. We need to remove the barriers to foreign investors. We have nothing to lose from such openness but much to gain.

Oversight of foreign investment is sensible and I am not averse to some restrictions.

But restrictions which cause problems for no good reason are detrimental to individuals and the economy.

 


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