Foundation for sustainable social dividends

John Key's photo.

As a country, we will never get wealthy, build a strong and growing economy, and create jobs but selling to ourselves. Trade is our lifeblood. – Prime Minister John Key.

He is right about why we need trade.

But it’s not just that trade is the way we earn our way in the world, it’s what the money we earn enables us to do – get wealthier as a country so we build a strong and growing economy and create jobs.

Trade is the foundation from which we get sustainable social dividends.

And trade with fewer tariffs and quotas which we will get under the Trans pacific Partnerhsip (TPP) is better than what we have now.

60 Responses to Foundation for sustainable social dividends

  1. Andrei says:

    Agree with this post except for the TPP bit

    We have the MoT and the Ministry of Foreign Affairs to negotiate trade deals and we should not subject ourselves to a Trade Block with its rules, regulations etc which are not necessarily created to benefit us but the interests more powerful actors

  2. Gravedodger says:

    Gee that is great Molotov, so we stand back from something that started as a NZ initiated bi-lateral and then suddenly grew wheels and wings until even a number of power brokers in the US didn’t want to be left on the bleechers and with Japan the other seriously anti free trade newby, both suddenly wanted in.

    So called sovereignty is always under threat in any international deal , think The United Nations who having appointed Saudi Arabia to chair a committee to allegedly further human rights tells us we have to be more sensitive to their warped views.
    Or they will do what?

    Did you miss the bit where a moronic government can apply with notice to leave the TPP, and the prospects of that are exactly what?

  3. Andrei says:

    Well Ribbentrop bi lateral actually means two…..

    Bi Lateral trade agreements are all good

    Actually that is spin that the TPP has its origins in a New Zealand initiated bi lateral agreement – see my friend there is an analogous European agreement TTIP (TransAtlantic Trade and Investment Partnership) with the same issues and controversies – that tale the the origins of these agreements are a (insert name of nation) initiated bi-lateral deal will be spun in whatever nation the people are raising questions

    We are at a point where there is a tectonic shift in human affairs underway these agreements are an attempt to stop or at least slow that shift

    I am fairly sure we are witnessing the end of Western civilization as we have known it

    We know that China has the biggest manufacturing economy in the world and the largest GDP

    Russia has just overtaken the USA as the biggest exporter of food, grain crops, and India is not very far behind – not many people know that

    And Russia of course has the worlds largest hydrocarbon reserves

    I actually think this will lead to a global war – China in particular could collapse the USA’s economy because of the debt owed to China. the reason why it doesn’t is because its own economy is dependent on the USA and a collapse of the US’s economy would be disastrous for China’s so they prop it up by buying Government bonds they hold about $2 trillion worth currently

    But something will break eventually

    I wouldn’t want to be the next POTUS and that’s for sure – my theory is that nobody with any brains would which is why the current field is so appalling

  4. Dave Kennedy says:

    This National Government will go down in history as one of the worst economic managers in the history of our country. This Government has increased debt and sent the wrong signals to local industry that has caused a growth in production in areas that have lead to dead ends. We now lack the income to support essential services. GDP growth has depended on property sales, the Christchurch rebuild and commodity exports. The Christchurch rebuild has past the peak, commodity markets are too unreliable and we are expecting the property bubble to burst at any time. James Shaw sums it up:

    http://www.inthehouse.co.nz/video/41343

    The TPPA is no silver bullet, it is just another National Government mirage, most of it isn’t even a trade deal. Tariff cuts will make a minimal difference as the main impediment to our exports are agricultural subsidies and these haven’t been addressed.

    The simplistic view that “we need trade” therefore any trade deal must be good is naive in the extreme.

    Here is a well written reality check on the TPPA: http://www.stuff.co.nz/business/opinion-analysis/76580827/rod-oram-tppa-honesty-pays

  5. Will says:

    God, you’re like a broken record with this. Get over it!
    We are probably entering the worst global recession in living memory, I don’t think you can pin all that on the government. Jim Rose has the best summary of the TPPA I’ve seen yet, in today’s NZ Herald.

  6. Andrei says:

    What you never seem to grasp Dave Kennedy is that New Zealand is one of the wealthiest and most prosperous places on the planet.

    It is unbelievable to me just how materially well off we are – our poverty is in other things

  7. Dave Kennedy says:

    The recession is largely of this Government’s making. It started in 2008 wanting to emulate Australia by becoming a coal exporter (Brownlee’s “sexy coal” promotion) and that idea crashed in a screaming billion dollar heap. The $30 million mothballed lignite briquetting plant near Mataura is a wonderful shiny monument to stupidity.

    The next big thing was mineral extraction from National Parks (stopped after massive protests) but that didn’t discourage Simon Bridges from opening up our other parts of our conservation estate for mining with a total disregard of what he was signing off:
    http://www.newshub.co.nz/politics/minister-didnt-know-park-was-in-drilling-plan-2014040817#axzz3zitUhJKB

    Oil exploration was the next dumb idea with oil companies being subsidised to explore in our territorial waters. This dream of becoming a fossil fuel champion was a back to the future one that was well past its use by date as oil prices plummeted and clean energy is now the growing industry.
    https://www.iea.org/newsroomandevents/pressreleases/2015/october/renewables-to-lead-world-power-market-growth-to-2020.html

    Becoming a bulk supplier of powdered milk was the next bandwagon for the Government to leap on with millions spent on irrigation schemes and farmers encouraged to expand their herds. The market crashed and we now have massive environmental costs to clean our rivers and lakes and deal with the 13% rise in greenhouse gas emissions.

    We do have a great reputation for money laundering and an open door policy for foreign property investors. Tourism may also help us as it helps other small pacific nations with few other income streams. It is a low wage industry, however.
    http://theregister.co.nz/property/2015/11/offshore-interest-retail-property-continues-climb?page=134

    What is growing well is debt: Government debt ($55 billion), student debt ($16 billion), and we will see more farm debt being managed by selling up to more off shore investors. Tax revenue is dropping and the bill for superannuation grows by over $1 billion a year ($12 billion budgeted for this financial year and the cost predicted to be over $20 billion by 2030).

    The TPPA will see at best a 0.9% increase in GDP, but ordinary people will mainly experience negatives with changes to copyright law and medicine charges.

    With all of this and our sudden drop in our corruption ranking…banana republic here we come!

  8. Dave Kennedy says:

    Andrei, prosperous for some:
    http://www.stuff.co.nz/business/money/70674093/graeme-hart-tops-nbrs-2015-rich-list

    While 10% of NZ have captured 50% of our county’s wealth the bottom 50% have 5% of our wealth to share:
    http://www.nzdoctor.co.nz/news/2014/july-2014/30/take-a-look-at%E2%80%A6a-documentary-on-social-inequality.aspx

    New Zealand has the fastest growing inequality in the OECD. We should be amazingly wealthy overall but have squandered opportunities.
    http://www.stuff.co.nz/dominion-post/comment/70028600/Despite-what-you-hear-inequality-has-risen-in-New-Zealand

  9. Mr E says:

    We have Andrei foretelling global wars.
    And we have Dave foretelling economic doom.

    I know you guys hate laughter at your remarks, but it is hilarious to watch your negativity.

    All this when all economic reports of the TPPA are positive.

    This trade deal is not vastly different from others we have. The others are working – but this one will lead to the end of the world!!!

    I foretell the increase in Monofoil shares.

    To prove my point though – Dave Kennedy filled up the towns rubbish bins with flyers containing a claim that the TPPA would cost us $79M in removed tariffs. Sounds drastic and dire and the cockroaches in the rubbish bins would be shuddering in fear. But the balance ignored and missing on the dead tree remains (flyer), is that $2.7billion of benefits are claimed in the economic assessment that recognised the $79m lost. But Dave seems to like to ignoring the positives, and only spin the negatives.

    And we have Andrei. Now Andrei, the world is ending. Relax a little. Have a cuppa tea. Chin up chap.

    https://www.tpp.mfat.govt.nz/assets/docs/Trans-Pacific%20Partnership%20National%20Interest%20Analysis,%2025Jan2016.pdf

    https://www.tpp.mfat.govt.nz/assets/docs/TPP%20-%20CGE%20Analysis%20of%20Impact%20on%20New%20Zealand,%20explanatory%20cover%20note.pdf

  10. Mr E says:

    Dave,
    There are a number of ironies arising from your posting of the Rich list.

    1. Most of those on the Rich list have got there through international trade.

    2. Graeme Hart – top of the rich list, started as a tow truck driver.

    3. Graeme Hart – makes tin foil. I guess that means you helped make him rich? 😉

  11. Andrei says:

    Ah models Mr E, models telling us how rich we will be – do you think they will be as predictive as Dave Kennedy’s beloved climate models?

  12. Dave Kennedy says:

    “All this when all economic reports of the TPPA are positive.”
    Then you haven’t been reading all my links to numerous economic commentators who have a different view.

    The reports you linked to were commissioned from MFAT and despite the Government being keen to promote the benefits of the TPPA they could only come up with very moderate economic gains. If this describes the best outcomes then the reality will be somewhat less. Hardly a reason to compromise in so many areas for such little gain. Our economy would improve dramatically by just addressing inequality and child poverty ($15+ billion gain).

    You obviously don’t actually read the NBR Rich List publication. Property investment dominates (count the exporters?):
    Here are the top 15:

    1) Graeme Hart: Packaging
    2) Richard Chandler: Investment/healthcare
    3) Todd Family: Energy/Investment/Property
    4) Erceg Family: Liquor/Property
    5) Michael Friedlander: Property
    6) Christopher Chandler: Investment
    7) Goodman Family: Property
    8) Stephen Jennings: Real Estate development/Property
    9) Sir Douglas Myers: Investment
    10) Fay & Richwite: Merchant banking
    11) Peter Cooper: Property
    12) Spencer family: Investment/liquor
    13) Sir Peter Jackson: Film
    14) Sir Robert Jones: Property
    15) Rod Duke: Retail Property

    The richest New Zealanders have seen their wealth increase by over 10% each year for the last five or more years and a good deal is thanks to our uncontrolled property boom. According to the NBR:

    ” As politicians and economists struggle to think of ways to contain the Auckland housing bubble, commercial property investors continue to make hay while the sun shines.”

    The Total return for the New Zealand Property market was 11.7% for the March 2015 year and 11.3% for 2014 (above the long term average of 10.6%).

    The majority of investment isn’t into productive industries or jobs but capital gain.

    “Graeme Hart – makes tin foil.”

    Good grief! That one bizarre statement sums up your argument, in reality tin foil doesn’t exist (it’s actually aluminium) and Milk cartons, water bottles and paper are probably bigger earners for Hart than foil anyway.

  13. Name Withheld says:

    “Graeme Hart – makes tin foil.”
    Good grief!

    I’m afraid once again that one has soared over his head Mr E.
    The politics of envy are alive and well though.

  14. TraceyS says:

    Property riches are, of course, easy to enumerate. How many wealthy people do you suppose the rich list doesn’t capture, Dave?

    Do you think that people are chaffing at the bit to appear on the rich list?

    If you do then you don’t understand successful kiwis at all.

  15. Mr E says:

    Andrei,
    My point was not one that was designed to endorse any model. It was one to show how unbalanced, misrepresenting Dave’s tactics are.
    Dave’s come out endorsing one negative from the model and ignored the positives that swamp his claim.

    Dave, I am pretty sure I have read all your links and all of them refer to economic assessments that are overall positive.

    “You obviously don’t actually read the NBR Rich List publication. Property investment dominates (count the exporters?):”

    You obviously didn’t comprehend my remark. I didn’t say they exporters. I said international trade. Comprehension Dave, it is not that hard.

    Im also pleased the rich have got richer. Helps them to counter inflation you know?
    You may not want the rich to get richer. I can imagine the sort of economic doom you want. You could print money and stuff everyone.

    Tin foil doesn’t exist???? I refer to aluminium foil as tin foil, a commonly used name for it, and you claim it doesn’t exist???

    More over to claim a relic of the past no longer exists when museum collections still hold the stuff, is bizarre.

    It seems you were trying to sound smart but have come out sounding silly in the process.

    Nothing
    New

  16. Dave Kennedy says:

    NW, so no dispute or evidence based arguments just the regular trot out of set responses:
    “The politics of envy are alive and well though.”

    You are obviously referring to me and yet nothing I have stated even hints at envy, that is such a lame response.

    Mr E’s assumption that New Zealand’s collective wealth is dependent on exports is just ignorant. Exports are an important part of our economy but more than half the wealth in our country is generated out of owning property and getting a return from buying in to the efforts of others, not actually producing stuff. Capital gains returns are much more profitable than honest work and industry.

    You obviously haven’t read Piketty:
    http://www.theguardian.com/books/2014/apr/28/thomas-piketty-capital-surprise-bestseller

  17. TraceyS says:

    “Exports are an important part of our economy but more than half the wealth in our country is generated out of owning property and getting a return from buying in to the efforts of others…”

    Actually a lot of capital gains are generated by home owners buying and holding property (often the family home) over very long periods of time. Are you in that camp Dave?

    Would you like to clarify what you mean by “buying in to the efforts of others”?

  18. Dave Kennedy says:

    “I didn’t say they exporters. I said international trade.”
    Fails on both counts Mr E, investing in local property is hardly international trade (imports and exports) 😛

    Mr E, I exposed your argument as nonsense and all you can do is justify your antiquated name for foil. it was you who was trying to be smart and I just exposed the nonsense in your thinking. How many of the fifteen richest NZrs could be considered international traders 😉

    That 62 people are now as wealthy as half the worlds population is something to celebrate? Really?

    http://www.theguardian.com/business/2016/jan/18/richest-62-billionaires-wealthy-half-world-population-combined

  19. Paranormal says:

    You just don’t / won’t / can’t see it can you DK
    “getting a return from buying in to the efforts of others,” – politics of envy sure enough.

    Tell us DK, what do you think the rent payers were doing in those commercial buildings provided to meet a need? Do you understand the division of labour thing? And perhaps how that might relate to the use of capital?

    As for your beloved Piketty:
    http://www.ft.com/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz3zkYf7m00
    And there’s plenty more out there that shows just how wrong and biased he is.

  20. Mr E says:

    Dave,
    I think that is why your arguments so regularly fail. They are built on silly assumptions or comprehensions.

    Take Graeme Hart,
    He has property investments and importantly packaging businesses. The latter is referred to as his global packaging empire. Doesn’t sound like international trade to you?

    And like many other property investors he has sold land to foreign interests.

    It is strange to hear you moan about the Auckland housing market being impacted by foreign investment then claim property investors are not getting wealthy from international trade.

    Sadly, in my eyes you fail again.

  21. Mr E says:

    Dave,
    By the way:

    “Mr E’s assumption that New Zealand’s collective wealth is dependent on exports is just ignorant.”

    I never made any such assumption. Again you have egg on your face.

  22. Dave Kennedy says:

    So what are your assumptions, Mr E?

    “Most of those on the Rich list have got there through international trade.”

    Given that the richest 10% own 50% of our collective wealth then it is clear that was what you were saying.

    You also suggesting that property investors are selling a significant amount of property to overseas investors (to make them international traders)…you are really digging a hole for your self when our economy is supposed to be partly dependent on selling off our property to foreigners 😉

    Paranormal, you really need to read your links properly, some have indeed felt uncomfortable with what Piketty’s thorough research revealed and, like climate change and the tobacco industry. However as the link you provided also said:

    “Nobel Prize-winning economists have heaped praised on Mr Piketty’s work. Professor Paul Krugman of Princeton University said it was safe to say the book “will be the most important economics book of the year – and maybe of the decade”.”

    “Professor Joseph Stiglitz of Columbia University said Prof Piketty’s “fundamental contribution” was the provision of data on the distribution of wealth. It was the subject of laudatory reviews in the FT and other publications.”

    Oh dear 😉

  23. Mr E says:

    Dave,

    Did you fail economics 101? Foreign investors, buy, and sometimes only bid on properties, and it drives prices up. Other property owners don’t need to sell to foreign interest to get the benefit, although some do. The mere presence of foreign investors in the market affect prices. Demand and supply – 101.

    “you are really digging a hole for your self when our economy is supposed to be partly dependent on selling off our property to foreigners”

    Ummm Dave….. we call it trade. It is very similar to tourism, primary export, goods export etc. Provided it is done on an win win basis it is generally good. The good thing about property sales, is the property don’t go anywhere. And when foreigners venure here, to utilise the property, it adds a lot to cultural diversity. Considering your interest in the arts you seem very uncultured.

    It appears that from your statement above you are against trading with foreigners. That is not a trait I seek in a political leader. I doubt many others are interested in that either.

    The irony of this all – if I am judging the complexion of your skin correctly, you are riddled with genes that were once considered foreign. And here you are – owning land.

    When you wake up in the morning, face the mirror, comb your brows, do you ever feel self contempt?

    What are my assumptions…. With regard too???

  24. Dave Kennedy says:

    Mr E, I’m surprised that you support selling New Zealand properties to foreign investors. New Zealand is a small country with a limited pool of housing. By opening our property market to the world it also opens us to the considerable wealth of overseas investors, because of the steady growth of property values, and no capital gains tax to speak of, our property is in high demand. No wonder far fewer New Zealanders can afford to by a home in their own country. This isn’t real trade it is stupidity!

    You are obviously very confused about the difference between useful foreign investment and foreign ownership. Heaven knows where you got your economic knowledge (I would ask for a refund) 😉

    I totally support cultural diversity and this is what Mai Chen is promoting with her Super Diversity Stocktake, but this is in regards to New Zealand residents:
    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11531147

    “When you wake up in the morning, face the mirror, comb your brows, do you ever feel self contempt?”

    Good grief! You really do get desperate when you start pinhead dancing 😉

    And the TPPA doesn’t restrict offshore investors in our property but actually doubles the threshold that requires a review. Yet another TPPA fail!
    http://www.interest.co.nz/property/78005/mfat-says-tpp-effectively-prevents-future-ban-foreign-buying-property-tpp-rules-also

  25. Dave Kennedy says:

    I struggle to believe that this Government is actually really determined to lift exports, the TPPA won’t do it to any great extent and exports have dropped from being 31% of our total GDP to 28% over the past 8 years.

    Largely unprocessed primary products dominate our remaining exports and manufactured goods are a smaller percentage than before.

    By spending less than half of the average on R&D than other OECD countries, it is clear that value added exports are not a priority.

    Treading water is not a long term strategy.

  26. Will says:

    If those big spending OECD countries are such a success, why are they all broke, and why do they have to subsidise their farmers? Doesn’t seem much to aspire to.

  27. Dave Kennedy says:

    Will, I thought we were talking about exports and trade, New Zealand now has a profile that is more in keeping with a third world economy. Under national our manufacturing sector has shrunk and we are even more dependent on tourism and commodities.

    Our country should have been in a far better position than most because the impact of the GFC affected us less. Our success as an economy was actually just smoke and mirrors because our GDP growth was based around the Christchurch rebuild, an upswing in commodity prices and a property market bubble (all not sustainable)

    Despite the Government crowing about our successful economy we actually had the fastest growing inequality, the quality of our housing is deteriorating, 31% of our children are now living in relative poverty, we have one of the highest rates of imprisonment in the OECD and one of the highest rates of under-employment.

    If you look at all the areas where we once led the world, whether it be education (now as low as 23rd and our Universities are dropping in rankings), health (poor cancer survival rates and worst in obesity and diabetes growth), it is clear that we are following downward trends. Much of this is because we now spend less as a portion of our GDP on these areas than we did.

    Government spin is hiding a lot and it is hard to get a handle on how bad we really are because in so many areas the Government refuses to measure the problem or refuses to share the information. When I do Google searches for a lot of Government statistics now I get the message “this information is no longer available”.

    You are supporting a facade that has little substance behind it and we seem to have become a follower of out of date and failed trends (oil exploration, Charter Schools) then leading the world in innovation as we once did. Key wants us to be a fast follower, in reality we have become slow learners.

  28. Mr E says:

    “By opening our property market to the world it also opens us to the considerable wealth of overseas investor”

    Ah – its open Dave….. We have an Overseas Investment Office to manage the sale of sensitive land, $100M sales (shifted to $200M) or fishing quota.
    But the rest is open. Has been for a long time. I doubt I would be here if the country was not so open. My parents would not have existed without the openness of this country. Would you have been here?

    If the answer is no – your mere existence has relied on foreign trade/investment. How could you be against it.

    “You are obviously very confused about the difference between useful foreign investment and foreign ownership”

    Nope. Investment rarely occurs without ownership.

    “I totally support cultural diversity”

    You just seem to want it halted.

    “Good grief!”

    We all know you avoid answering questions by “good griefing”. Still we are left wondering if your hold your foreign DNA in contempt.

    “And the TPPA doesn’t restrict offshore investors”

    It’s called a free trade agreement for a reason. It is designed to remove unfair restrictions. Most of the OIO provisions mentioned above, stay the same. The only one that changes is the $100M threshold goes to $200M.

    The $100M was set in 2005 and I think was due for a review anyway.

    But thinking about if being a reciprocal agreement, NZers can equally invest in other parts of the Globe now. If China joins, we could buy parts of China. Imagine that…..

  29. Mr E says:

    Dave,

    “New Zealand now has a profile that is more in keeping with a third world economy”

    You are wasting peoples time with stupid remarks like this.

  30. Dave Kennedy says:

    Mr E, you are obviously unaware of what our open property market has done to the affordability of houses and farms for ordinary New Zealanders.

    I do not share the same blind support of the corporatisation of farming in new Zealand that you do. For me an economy should work for the majority of the population and not pander to an elite few. When I first taught in rural areas in the early 80s, most farms were owned and managed by families but this is no longer the norm.

    Despite the growth in dairying there are actually fewer dairy farms then there was. In 1994 there were almost 17,000 dairy farms, by 2005 that had dropped to around 13,000 and a recent study estimates that there will be only 5,000 in the next 10 years. Around 3,000 farms are now managed by absentee investors.

    Most rural schools suffer from a high level of transience (up to 1/3 moving on on Gypsy Day).
    http://www.stuff.co.nz/business/farming/advice/67560953/Is-it-time-to-move-on-from-Gypsy-Day

    The industrialisation and corporatisation of farming and the fact that more and more New Zealanders are tenants is a change in culture that is not essential to the success of our economy, but the capture of our economy by wealthy elite because of few checks and balances.

    As for our third world profile, here are the facts again:
    -We have growing inequality and inequality is more prevalent in 3rd world economies.
    -Our economy is reliant on exporting commodities and tourism, similar to most 3rd world economies.
    -We have chronic housing issues and overcrowding that is causing third world health issues: http://www.scoop.co.nz/stories/GE1602/S00031/bronchiectasis-in-nz-the-growing-problem-that-goes-unnoticed.htm

    We obviously aren’t a 3rd world economy but it seems that is where this government is taking us…and we are on the cusp of a massive collapse:

    http://www.stuff.co.nz/national/politics/76705329/prime-minister-john-key-outlines-the-governments-priorities-for-the-year

    A $17 billion dollar hole in our economy and Key is talking about tax cuts…and you don’t see the flaws in our current economic policies?

    Good grief!

  31. Will says:

    I hate the way you pose questions but when asked back you shoot off on another tangent. You say we need to spend more on R and D like other countries, but won’t admit our farming system is stronger.

    Never mind. Tax cuts are a good idea right now, business could really use a break. What if we were to cut the OCR as well, and impose a bank levy. It seems to me that all the money is rushing out of the economy as interest.

  32. Paranormal says:

    DK, how do you feel being one of those evil types (in your opinion) that get “a return from buying in to the efforts of others…”?

    Or did you not realise that’s what your Super scheme does…

    As we’ve previously discussed, you don’t do irony either. Krugman, seriously?

    If you want more:
    http://www.forbes.com/sites/timworstall/2015/03/20/yes-thomas-piketty-was-wrong-on-wealth/#6e7ad1ab5485
    http://www.telegraph.co.uk/finance/economics/11845711/Picketty-was-wrong.-Seizing-from-the-rich-to-help-the-poor-wont-solve-inequality.html
    And there is plenty more where that came from. But of course you won’t see that because it goes against your preference for wealth redistribution that has a chillingly negative effect on the economy & growth.

    But if you want real change in poverty, when you see the how international trade has lifted people out of poverty globally, you have to wonder why you are so dead set against it. Or is it you see a finite lifetime for your brand of politics with improving conditions globally?

  33. Dave Kennedy says:

    “but won’t admit our farming system is stronger.”
    Say that to all our dairy farmers who are struggling at present. As you will be aware farmers have to operate within the market forces that exist and when there were incentives to intensify and increase production, that was where they went. As Farmerbraun would explain to you, it wasn’t a sustainable model and many have been seriously burnt.

    We are also locked into being a commodity supplier and there are widely held concerns that the TPPA will trap us into those export markets (with wildly fluctuating values) and limit our ability to move up the value chain where prices are more stable.

    Also be aware that the traditional family pastural farm model that was the foundation of farming in NZ is dramatically shifting to a more industrial approach with corporate farms run by managers and using an imported workforce.

    You also forget that tax provides the infrastructure of our country that in turn supports the economy. Reducing tax (which is already low for top end earners) means that our roads, rail networks and telecommunication systems etc suffer.

    I agree with you about our banks, Australian Banks do better per capita from us than in Australia and their charges appear to be profiteering and we already know about their efforts to avoid tax.

    Paranormal, again you didn’t actually read your links, the article was critical of one of Piketty’s solutions but the they don’t criticise his research on the economic cycles and the causes of inequality. I actually support the solutions described in the Telegraph article as they too are about addressing the problems of poorly regulated financial systems and markets and reducing inequality.

    You continue to lie about my position regarding international trade, I have never been against it.

    Read the background to the demise of Dick Smith and you understand the danger of big investors and how they can prey on profitable companies and destroy them for quick profits.
    https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/

    New Zealand Rail was also almost destroyed by a similar approach. Off shore investors have no loyalty to our country or reason to continue their investment in our local economy.

    You seem to want to protect our economy they way it is operating at the moment and it is clearly taking us in a direction that is a worrying one.

  34. Will says:

    Dave, dairy farmers all over the world are struggling at the moment. Ours do it without direct subsidies or subsidised grain. Usually paying tariffs. And significant freight costs. There is no comparison.

    I can’t see why TPPA locks us into commodities, you’ve never explained why that is.

    If the family farm is going then so what? It may have a romantic appeal from the outside, but believe me, it’s not as easy as you think. I won’t push it on my kids. Family farms only survive because we work ourselves at levels that aren’t even legal now. Not sure that’s such a good thing.

  35. Dave Kennedy says:

    “I can’t see why TPPA locks us into commodities, you’ve never explained why that is.”

    I took this from Rod Oram’s assessment. Apparently the TPPA protects existing businesses:

    “The TPPA will likely reinforce our position as a commodity producer and hinder our progress up the value chain where greater economic prosperity lies,” says Rod Oram, who authored the sections on value chains and the 21st Century agreement.

    “Moreover, the TPPA reads very much like a charter for incumbent businesses, with US companies to the fore, that are attempting to hold back the tides of economic change the world needs.”

    http://itsourfuture.org.nz/research-paper-the-economics-of-the-tppa/

    “If the family farm is going then so what?”
    I personal view is that a holistic approach to farming that respects the land and has a focus on sustainable development is the best. Corporate farming has a different approach that has different goals that are generally focussed on short term profits and returning dividends. Environmental considerations are managed rather addressed with a longer view (considering following generations).

    There can often be an ongoing turnover of managers and staff and the farmers involved with the Waituna Landcare Group have told me that on corporate farms there needs to be a constant education process to support new managers into the local culture and farm management that supports the work of their group.

    Many rural communities have suffered because of the transient nature of dairy farming. Strong communities are important for farmers undergoing stressful times and for many farm managers or share milkers they often don’t spend long enough in a community to establish useful support networks.

    It’s not so much keeping farms in families that I think was the crucial element but having farmers who own their farms and have a real personal connection with the land and the local community. I guess I have old fashioned values.

  36. Will says:

    I read Oram’s sentence – it did not contain a ‘because.’ I’m none the wiser. Why does the TPPA lock us into commodities? How does it favour existing businesses in ways the status quo does not?

  37. Paranormal says:

    And Oram uses the cliched “up the value chain where greater economic prosperity lies,” which is not necessarily true.

    As for Piketty, his data has been proven to be flawed and his policy prescription based more on ideology than reality. The key points are summarised:

  38. Will says:

    I could demolish the argument that farmers who own their farms are more sustainable and connected to the land by digging up a few who have been prosecuted, but I think I would prefer to let that delusion stand.

  39. Dave Kennedy says:

    Will, the TPPA protects many existing markets and business interests (60 corporates had a major influence in the contents of the agreement). I admit that I am basing my concerns on the concerns of those who have researched the document in greater depth than I and therefore suggest you question Rod Oram on the basis for his concerns. I do know that the IT industry in NZ are particularly appalled about the extent of the copyright elements that will severely restrict IT growth in NZ and developing innovation. This will presumably have implications for any innovation and attempts to add value.
    https://www.eff.org/issues/tpps-copyright-trap

    Paranormal, you copy and paste the table as if it is an authoritative review of Piketty’s work, I note you don’t have a link to the source.

    Here is a Nobel winning economist’s review:
    https://newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed

    Anyway I have already supported Piketty’s claims with what is happening in NZ. The richest New Zealanders are capturing the wealth of New Zealand through property investment and capital gain. Inheritance then ensures wealth continues to be held by a few. It is less and less likely for someone from a poor family to end up owning their own home and be financially secure. There is no level playing field and the already rich have things tipped in their favour in multiple ways. This is not envy, just plain fact:

    http://www.stuff.co.nz/national/education/8830344/Private-schools-snare-special-needs-cash

    Your enthusiasm in supporting inequity is actually counter to the past New Zealand culture of giving everyone a fair go.

  40. Dave Kennedy says:

    “I could demolish the argument that farmers who own their farms are more sustainable and connected to the land by digging up a few who have been prosecuted, but I think I would prefer to let that delusion stand.”
    Oh dear, I can’t believe that you are actually saying that a large % of farmers who own their own farms are farming unsustainably and are no better than corporate employed managers. Really?

    Please do challenge my “delusion” that owner farmers generally do a better job of farming sustainably. Perhaps Landcorp is a better model than owner farmers? What a hole you have just dug for yourself.

  41. Mr E says:

    Will says, “a few”

    Dave says “you are actually saying that a large % of farmers ”

    Mr E says “Childish!”

  42. Will says:

    If the IT industry in NZ actually develops something of their own, extended copyright would benefit them. In theory this should stimulate innovation, make it more worthwhile.

    It is just not good enough to repeat others’ arguments without understanding them. Especially when they make no sense.

    Dave, I farm the place I was born in. I doubt you could get more ‘connected’ than that but I don’t get all mystical about it. Sometimes I get the impression people like you think we are so in love with what we do, we will endure anything, pay any tax, work for nothing, anything to keep on farming. It’s not true.

  43. Dave Kennedy says:

    Mr E, when talking in general terms identifying “a few” farmers who are not farming sustainable proves what? The naming of your comment was apt 😉

    “It is just not good enough to repeat others’ arguments without understanding them. Especially when they make no sense.”

    It may make no sense to you, Will, and i do note that you speak with even less understanding of the agreement as you just enthusiastically repeat Government spin. You demand evidence of me yet produce none of your own. Blind faith and membership of the National Party fan club is not an argument I’m afraid.

    If copyright and patent rights are extended then it captures the ownership of old ideas and makes it expensive to use them to scaffold new ones. It is logical then that any new innovations that extend old ones will have costly restrictions applied. This added bureaucracy may indeed trap us into remain a commodity supplier and stifle our ability to add value.

    Given that much of our new farming innovations involve IT this quote from my earlier link may help you understand what i am saying:

    “One of the defining battles in the Trans-Pacific Partnership (TPP) negotiations is whether its signatory countries will standardize copyright terms lengths to a minimum term of the life of the author plus 70 years. This would effectively set the maximum duration of copyright holders’ monopoly rights to over 140 years. This is the demand from rightsholder groups such as the RIAA and MPAA who advise the U.S. Trade Representative (USTR). A precedent for such a provision has been set in previous Free Trade Agreements with countries like Australia and Singapore.”

    “But the world’s leading economists agree that such an extraordinary long copyright term makes no sense. It provides no further incentive for creation and provides little additional income to creators or their families—except for a very small, successful minority.”

    This makes perfect sense to me, I don’t understand why you have struggled with it.

  44. Mr E says:

    ““a few” farmers who are not farming sustainable proves what”

    It proves that farm owners as well as corporate farmers are capable of mistakes and breaching rules. (can’t believe I had to spell that out)

    Sometimes if you are kind, welcoming and seeking solutions, you find yourself in strife.

    https://farmersweekly.co.nz/article/farmers-kindness-ends-in-court?p=42

    Talk about sustainable social dividends! Quite the opposite.

  45. Name Withheld says:

    I don’t understand why you have struggled with it.

    The only one”struggling” here, is you Mr Kennedy.
    Your continuing tactic of relentless negativity has you appearing, as always, a “frothing” loon.
    Everybody else commenting here seems quite relaxed and calm in their views.
    You should try it.

  46. Dave Kennedy says:

    Mr E, away on another tangent I see. You have presented that sad story of that farmer before and I was just as concerned as you, he sounds like a great guy who was badly treated by inflexible bureauracy. How is this related to the TPPA?

    Are you actually supporting Will with the idea that there is no difference between corporate employed managers and owner farmers in their commitment to the land? I didn’t realize that you were such a corporate lackey and so keen to end the dreams of young farmers to own their own farm.

    NW, you obviously don’t read my enthusiastic support of positive solutions and progressive governance. Someone needs to counter the blind faith you have in this Government that has no plan. I notice that few challenge my facts and arguments (mainly questioning my right to speak).

    I like Jeanette Fitzsimon’s analogy of this Government, it is driving a bus past numerous warning signs towards a precipice while supporters debate which forward gear we should be in. I am just sharing the warning signs while you guys promote a heavier foot on the accelerator pedal 😉

  47. Will says:

    I don’t have to prove anything Dave, I’m not the one telling the story. I am certainly not repeating govt. spin as I don’t know what it is. I don’t read their stuff much. MY opinion is that it is better to be in this huge trading block than out. Isolation will be a disaster for us. The argument over copyright law has been going on for some time and is not unique to this deal.

  48. Mr E says:

    “How is this related to the TPPA?”

    Who would have thought the point was beyond you???

    Corporate farms are often different from the family run enterprise, but not different in a bad way.

  49. Dave Kennedy says:

    “MY opinion is that it is better to be in this huge trading block than out. Isolation will be a disaster for us.”

    But that is just incredibly simplistic and is a repeat of what the Government is claiming. Isolation from this agreement may actually be a far better option if what it locks us into gives too much away. The Government’s own optimistic figures on the value of signing are actually minimal. Normal fluctuations in commodity prices actually amount to much more than 0.9 % increase in GDP by 2030.

    Even in the US opposition is broad.
    http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11525448
    http://learningenglish.voanews.com/content/trade-obama-trump-pacific-partnership-clinton-sanders/3032839.html
    http://www.cornucopia.org/2016/01/over-1500-organizations-urge-opposition-to-the-tpp/

  50. Name Withheld says:

    Someone needs to counter the blind faith you have in this Government
    Your supreme arrogance betrays you again. You have absolutely no idea where any faith I may have would lay.

    I notice that few challenge my facts and arguments (mainly questioning my right to speak).
    Your imagination is running wild again. Lots of people would like you to shut up or post something positive for a change, but I have seen nobody questioning your “rights.” Try and get more sleep.
    My response to your “facts” and arguments are best expressed by miming a rhythmic wrist movement.

  51. Will says:

    I never said there was no difference between owner/farmers and corporates. There are important differences, but they have more in common than not. In my experience the big outfits have better economies of scale and plenty of advisors, machines, money and teams of staff. Although, when they get in trouble, it’s not pretty.
    Owner/operators are often all alone, poorly equipped, stressed and exhausted, struggling with increasing paperwork. That said, it’s still the way I prefer it, less financial risk, less overheads, the satisfaction of planning, constructing and utilising a project all by yourself. But I’ve seen some things that would make your hair stand on end, eg aging crackpots with weird ideas conducting bizarre experiments in the back paddock. Or someone trying to carry on with an injury that would have an office worker in hospital.

    I’ve taken the odd day off this summer, just seem to get tired these days. It’s amazing how quickly you fall behind. Beginning to have doubts about the whole thing.

  52. Dave Kennedy says:

    “Lots of people would like you to shut up”

    NW, then why don’t you produce a convincing argument or solid evidence to support your sweeping statements 😉

    “In my experience the big outfits have better economies of scale and plenty of advisors, machines, money and teams of staff.”

    http://localbodies-bsprout.blogspot.co.nz/2011/09/landcorp-leads-sustainable-farming.html

    Will, you seem to support the Landcorp model and yet that is virtually state controlled farming.

    You sound like someone who would support Green policies as we think that there needs to be more supports for SMEs that include simplified tax law, more Government spending on R&D to assist farmers and the ability to get tax credits for your own efforts to be innovative.

    I have huge respect for commitment and energy needed to manage a successful farm and think that there are more incentives to ramp up production unsustainably and less support for the realities of day to day management.
    https://home.greens.org.nz/goodfarmstories

  53. TraceyS says:

    “I like Jeanette Fitzsimon’s analogy of this Government, it is driving a bus past numerous warning signs towards a precipice while supporters debate which forward gear we should be in. I am just sharing the warning signs while you guys promote a heavier foot on the accelerator pedal…”

    Of course you do, Dave, but it was actually a car rather than a bus (and a really fast one at that). No matter though, you often exaggerate to make your point, and the image of a bus heading over a cliff is much more dramatic and effective at getting noticed eh Dave?

    Here’s Jeanette’s version:

    “Look, it’s like we are in a very fast car, we are heading towards a cliff, which is getting really close, and we are arguing whether to change from fifth to fourth gear.” (Source: Q+A)

    So what was this analogy in relation to? Climate change, that’s what.

    You argue that the economic growth arising from the TPP will prove to be insignificant. Therefore the chosen analogy, taken in the context in which it was meant, doesn’t fit.

    Rather, I think your use of it reveals something different. It reveals your true fears and your underlying motivations.

    You fear that free trade agreements like the TPPA will lead to increased growth which you (and certainly Jeanette) see as bad for the planet. And you are motivated to prevent this by using any defence you can muster even if it means that, in the process of making your argument, you shoot your foot up real bad.

    Think about it. If there’s no great growth arising from the TPP (your argument) then we’re not racing towards anything are we?

    Maybe it’s your imagination which is doing the racing? Foot flat in reverse! That must be sore…holes and all.

    🙂

  54. Dave Kennedy says:

    Tracey, i admit I took liberties, but wow that was good research, I’m impressed 😉

    You are right about something else too, trade could be used as a powerful tool to limit GHGs, but it isn’t addressed in the TPPA. The growth of emissions is bad (13% under this government).

    However the big mistake that you make is attributing the concerns about to the TPPA just to me. Look at all my links and you will see a long list of notable individuals and groups who this this agreement has few positives but a hell of a lot of worrying aspects.

    “If there’s no great growth arising from the TPP (your argument) then we’re not racing towards anything are we?”

    Recolonisation, my dear Tracey, recolonisation:
    http://localbodies-bsprout.blogspot.co.nz/2015/02/the-tppa-and-recolonisation-of-aotearoa.html

    Before we really realise our banks will be mainly foreign owned, many of our farms will be owned by Chinese, German or Canadian corporates and a good % of our housing stock will have offshore owners. Some economic illiterates will claim that this is just good investment…until they realise that we have become mere tenants in our own country with outside interests dictating economic, social and environmental decisions.

    And actually, it is already happening.

  55. Mr E says:

    Tracey,
    You have a great way of stepping back and seeing the issue for what it is. Based on Dave’s reponse you nailed it!

    Dave,
    You are singling out the Chinese and German races in a negative way. I think that could be racism.

    Who would have thought you and Winston Peters had so much in common.

    I noted James Shaw, was recently commenting about how the relationship with Winston has strengthened. I can see why.

    There was a time when the Greens stood up for the down trodden. Now it seems you are the treader.

    My my – what a shocking slide.

  56. TraceyS says:

    “However the big mistake that you make is attributing the concerns about to the TPPA just to me.”

    No, that’s not right, I certainly didn’t. But it is true that you are talking about a minority.

    While you are busy looking in your rear view mirror, not noticing the dearth of passengers on the back seat, you miss a reduction in “sovereignty” going on at the local level. If your car wasn’t jammed in reverse you might be able to see it.

    This loss occurs where local government officials, many of them from overseas places such as the UK, are writing rules by the thousands. The public (in the vast majority) are uninformed, disempowered, or just don’t have the time or resources to fully understand the implications and local elected representatives are asleep at the wheel (or don’t see it as their role to advocate for those whom they represent). Worse, some representatives are there because of a personal, or broader than local, agenda.

    Before we know it the rules about what we can, or can’t, do on our own private property have changed. These usually won’t be changed back without an irrational commitment of both time and money.

    I cannot think of a greater or more concerning loss of sovereignty and we are just sitting by and letting it happen.

    For God’s sake, Dave, turn around and look to the front!

  57. TraceyS says:

    “You have a great way of stepping back and seeing the issue for what it is.”

    Thanks Mr E. That comes from my “naivety”, as Andrei likes to call it, which I have maintained on purpose. If you can get through a life rich with experiences (of all sorts) without having your hope for the future completely corrupted then it is easier to look into the guts of things.

    Dave’s hope is definitely corrupted. 😦

  58. Dave Kennedy says:

    Oh dear, Mr E, the racist argument (what desperate nonsense), I listed Chinese, German and Canadian because they are amongst the leading foreign owners of our farms and businesses. No racism, just fact. German interests are the biggest foreign owners of Southland farms, Canadians are supposedly dominating foreign investment here and the Chinese are currently becoming the biggest buyers of our property.

    You would have also seen the news about the Prime Meats debacle in Southland that have left all their workers stranded with no work and no information. The offshore Chinese owners can’t be contacted to find out what is happening and even local significant shareholders haven’t a clue.

    There are a number of properties around the country with foreign owners who have neglected upkeep and have a “lean, mean” approach to management.

    http://www.stuff.co.nz/business/money/72149091/Apartment-owners-face-maintenance-timebomb

    i have no issue with the countries that foreign buyers come from, but nonresident owners are often detached from their investments and tend to make decisions that are purely economic and have less concern for social and environmental consequences. They are also sucking profits off shore and the money isn’t reinvested in this country. It seems we still haven’t learned the lessons of Trans Rail:

    “Tranz Rail won the Roger Award for The Worst Transnational Corporation operating in New Zealand on three occasions: 2000, 2001 and 2002, and was the first corporation inducted into the “hall of shame”. The Awards came amidst critical reports of lax safety standards, inadequate maintenance, asset stripping and insider trading.[23] Toll NZ has been a finalist for the Roger Award twice.”

    https://en.wikipedia.org/wiki/Tranz_Rail

    And our Australian owned banks who control most of our debt and avoided $3 billion in tax that the IRD had to spend millions to recover:

    “The “structured finance” transactions targeted by the IRD used a mechanism originally set up by the Government to make New Zealand a more attractive base for international business deals.”

    “The “conduit” rules said that if an overseas-owned company in NZ invested in another overseas entity, it would pay only 15 per cent withholding tax on the distribution of profits or dividends from the transaction.”

    “With debt of up to 97 per cent on their balance sheets, the banks could write off huge interest costs from raising debt overseas while qualifying for a reduced tax liability on the income created by the deals.”

    “The return on the investment would be treated by the banks as exempt from tax because the profits were paid from the overseas company to its parent company, also overseas.”

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10585198

    Foreign ownership and the TPPA have been promoted as good for our economy but we don’t learn the lessons from the past.

    Do you still think our CER with Australia is working well?

  59. Mr E says:

    Dave,
    You continually single out certain races to make derogatory degrading remarks.

    I’d say it is a new low. But I don’t think that is true.

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