Act out-greening Greens

Act leader and sole MP David Seymour’s first shot at the party’s conference this weekend was to pot the Greens for hypocrisy for having the highest expenditure on flights.

The figures come from the fourth quarter parliamentary expense reports.  It excludes ministers who have a much heavier workload, for example the Ministers of Health and Education must visit hospitals and schools, and are reported separately.

In October, November, and December the average Green MP spent $8,562 on air travel.  By comparison the average Labour MP spent $7,790, the average National MP $5,933 and the average New Zealand First MP $6713. . .

“These are the MPs who regularly tell us that climate change is the crisis of our time and we must reduce our emissions.

“It is also extraordinary that they do not even have to serve electorates, as the Greens are all list MPs and have not won an electorate since 1999.  As an Auckland electorate MP I have to see constituents on Monday and be in Parliament on Tuesday, and back in the electorate Friday, practically every week.

“As list MPs the Greens have far more potential to minimise their carbon footprint by flying less, but not only have they not done so, they are the most frequent flyers.

“Co-leader James Shaw loves to tell the story about how, as a consultant, he helped companies reduce their use of air travel.  The Green Party must be his toughest client.”

He then went on to out-green them with proposal to sell  Landcorp and put the proceeds into a Sanctuary Trust for applicants who wish to operate inland sanctuaries for native wildlife.

“Landcorp is a business the Government should never have owned and which is responsible for considerable dairy conversion and deforestation.  

“The new Trust’s grants would be conditional upon the applicant reaching targets for predator exclusion, biodiversity, and community participation.  

“The model is not so very different from what ACT has done with Partnership Schools.  Invite social entrepreneurship, measure performance according to agreed targets, and get out of the way.

“Over 100 years, Sanctuary Trust would radically transform the abundance of New Zealand’s most endangered species.” . . .

Utopia has a graph showing Landcorp’s dividends paid and cash injections received from government since 2007.

As cash cows go, Landcorp has had $2.25 million more in capital injections from taxpayers than it returned to them in dividends since 2007.

image

 Source: data released by the New Zealand Treasury under the Official Information Act.

The $1.5 billion asset is a very poor investment for the taxpayer.

Keeping some of the farms as a land bank for treaty settlements has merit.

But the rest could be sold, gradually so as not to flood the market.

Using some of the proceeds for environmental projects such as Seymour proposes and some for investing in agricultural training and infrastructure, for example irrigation development, would be much better use of the money.

Concern for the environment is not the preserve of the political left.

There is a significant constituency of people who are green but not Green.

They want sound environmental policies without the radical left social and economic agenda. Some of those support National’s Blue Greens but some let their green leanings blind them to the red social and economic policies of the Greens.

Seymour is targeting them and in doing so attempting to grow the centre right share of the vote.

That’s clever politics.

He’s out-greening the Greens with environmental policy that makes economic sense.

80 Responses to Act out-greening Greens

  1. JC says:

    The Greens say they offset their travel with the likes of planting trees.. so lets have a look at that.

    The outdated recommended Govt price for CO2 was $20 per tonne, so $8562 costs of airfares divided by $20 is 428 tonnes of CO2 that must be sequestered each year by trees.

    P radiata is capable of sequestered about 30 tonnes of CO2 per year so 428 tonnes of CO2 sequestrated requires each Green to own outright some 14 hectares of P radiata.

    Native forest will sequestrate about 1.5 tonnes of CO2 per hectare per year if using species like rimu, tawa, kahikatea etc so each Green must own outright some 285 hectares of native bush to offset his air travel.

    Such ownership can easily be checked against Parliament’s lists of pecuniary assets submitted by all MPs.

    A complicating factor is that the price for CO2 is closer to $2 per tonne than $20 so the ownership requirement for trees is about 10 times higher to 140 ha P rad and 2850 ha of natives.

    The cost of planting a hectare of P rad is about $1200 in some sort of managed fund so the investment requirement is between $17,000 to $170,000. The cost of planting natives can be about 3 times the cost of P rad so that investment requirement from every Green is about $1million to 10 million dollars.

    This does not take into account the annual costs of administration, maintenance and protection or the fact there’s very little CO2 sequestered in the early years after planting.

    JC

  2. Dave Kennedy says:

    “The Greens say they offset their travel with the likes of planting trees.. so lets have a look at that.”
    JC, you are being disingenuous again because you assuming that is all they are relying on. Here was what was being done over three years ago. http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10801211

    Even if they are not offsetting all their carbon footprint they are still recognising it and doing something about it. I don’t think ACT is at all.

    Interestingly Seymour’s recent flip flop around climate change has led him to adopt the Green Party policy of a carbon tax that will be used to provide tax cuts. https://www.greens.org.nz/policy/cleaner-environment/2014-climate-protection-plan

    Remember this is a party that only exists because National allows it to and while I actually thing Seymour is actually a smart political operator his responsibility is leading Charter schools that are far costlier to run than public ones. These same schools are getting rid of all the difficult children that they were set up to support and getting paid bonuses despite the fact they haven’t achieved their targets. It sounds a little like the Serco scenario within education.

    At our policy conference this last weekend we had a presentation about Project Janzoon. This is conservation work funded by private interests and has been very successful. In reality we need a combination of public and private approaches but the huge cuts to public funding has removed lots of expertise and knowledge from DoC and many areas that were having successful outcomes have regressed under National.
    http://www.janszoon.org/

  3. Will says:

    No that just won’t do. If you truly believed and practiced what you preach you simply would not fly, indeed you would be calling for the planes to be grounded forever. And you would plant the trees anyway.

    The rest is just distraction.

  4. Dave Kennedy says:

    Will, what nonsense. the world we live in currently is carbon dependent if I stopped flying, I would have to stop driving or even riding on a bus or taxi. Our MPs are keen for New Zealand to change to a lower carbon economy but we always claim it needs a transition, too many people will lose jobs if we went cold turkey and we have to bring in alternatives. Our MPs still have to operate in the the present day realities until we can change it.

    You do say some crazy stuff 😉

  5. TraceyS says:

    “Our MPs still have to operate in the the present day realities until we can change it.”

    Leaders not.

    Apply this level of aspiration to domestic violence, for example. How about Maori underachievement in education? A transition is what we need, people…!!!

    Completely ignorant of the fact that there commonly exists a lack of alternative choices.

    “we can change it” smacks of collective action which is useless in the face of climate change (and many other challenges). We need alternatives which are currently not viable and therefore do not present as reasonable choices.

    Why don’t you choose honesty for a change? Do you not think we can see through the weasel words?

  6. TraceyS says:

    “You do say some crazy stuff”

    Dave, “crazy stuff” was your brother-in-law some time back suggesting that Daikon radishes be used to work paddocks. But it is a view which is more consistent with the Green message than what you and your MPs portray.

    You need to understand that the plebs are, at times, a little crazy.
    But they are not stupid.

  7. Dave Kennedy says:

    Tracey, I’m sorry but comparing domestic violence with the use of air travel…really? I feel another good grief coming on.

    You completely lost me with your second comment…who are the “plebs”, (yourself…)? It’s not a word I would use it but it kind of did mean stupid in earlier times. http://www.bbc.com/news/magazine-19673697

    I also don’t remember Daikon radishes being mentioned in any of our policies and you have lost me with that reference too.

    I guess you are just too clever for me…or perhaps your self description as being a pleb has significance? 😉

  8. Will says:

    I seem to remember that a jet uses more energy just taking off, than a family consumes in a year. It is perfectly possible to make extreme sacrifices to one’s religion and still get by. Look at the Amish.
    You Greens are perfectly happy to rain devastating change on other peoples’ industries, but refuse to put up with the smallest inconvenience to your own smug, self-satisfied lives. Jumbo in the room does not go far enough.

  9. TraceyS says:

    “[pleb]…It’s not a word I would use it but it kind of did mean stupid in earlier times.”

    Plenty of words had different interpretations in earlier times. Today it means ordinary/common person, and yes, I do consider that I am one of those.

    “…perhaps your self description as being a pleb has significance?”

    Yes, I think it does. It has a great deal of significance.

    “Good grief” is not a term that I would use a great deal.

    “You completely lost me…”

    I’m really not all that surprised.

  10. Paranormal says:

    Hmm Dk – you’ve got that the wrong way around. The Greens have adopted Act policy regarding the Carbon Tax. Act were always saying a Carbon Tax was way better than the ETS long before the ETS was implemented: http://tvnz.co.nz/q-and-a-news/q-rodney-hide-interview-3612928 But then in politics, particularly Green politics, the truth is the first casualty isn’t it.

    As for your outright lies about Charter Schools you really have no shame. Just listen to the testimonials from students that had previously been failures in your one size fits all public schools who now have a bright future before them as achievers. Why would you want to deny them the opportunity?

    As for the cost – Charter Schools cost less to set up and operate than public schools, and the funding has not come out of the education budget – it is additional funding for the sector.

  11. Dave Kennedy says:

    “You Greens are perfectly happy to rain devastating change on other peoples’ industries”
    What nonsense, Will, name one industry. We are opposed to new coal mines but protested at Solid Energies mine closures when so many families were affected. Change should be done in a measured, responsible way.

    Paranormal, Rodney didn’t invent the carbon tax idea, it has always been seen as the most effective and transparent way to deal with emissions and give businesses more certainty. The Greens supported Labour’s ETS because it was better than nothing but the carbon tax has been our preference way before 2010.

    Rod Donald was promoting it back in 2003:
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=3541229

    Here is Jeanette supporting National’s support of a carbon tax in 2008: http://www.radionz.co.nz/news/political/29442/national-to-consider-carbon-tax

    Seymour’s sudden flip flop over the reality of climate change and attempt to capture the Green vote is pure politics, not from a position of conviction. Anyway Key has rejected his Landcorp plans.

    How do commenters here now feel about climate change when now every political party accepts man made climate change and the need to do something. I was amused that Seymours approach is that they will only start taxing carbon when people demand it. I don’t see open road speeds managed through public demand, such decisions need to be made on the evidence not popularity polls.

  12. Dave Kennedy says:

    Sorry, grammar issue 2nd para should read “Solid Energy’s”…

  13. Dave Kennedy says:

    Will, you will need to be more specific. It seems as if the farming industry, especially dairy are quite happy to destroy themselves.

    If the Greens had been in Government there would be more organic farmers (currently earning more), there would be greater investment in R&D and adding value (what Fonterra and the Government are now belatedly trying to do), the industry would have been shifting to a more sustainable level of operation (stock numbers are already dropping because of financial necessity) and there would have been greater encouragement for diversification.

    If the Greens had been in Government farming would be in a much better place. The devastating change is already happening and we had no part in it and interestingly those farmers who are Green Party members and support our approach and philosophy are all doing fairly well at the moment.

  14. Gravedodger says:

    Mr Kennedy ignoring the elephant in the room again.

    National Blue Green and now ACT MP David Seymour are highlighting a verifiable fact that is part and parcel of the Green Party 2016.
    The executive persons who are running the fraud at present are significantly to the far left of what rational people see as the current political landscape.
    In the beginnings, back in the day, the Values Party had the environment as a central driver and attracted around 5% of the national vote. Membership included a wide spectrum of voters who rated perceived threat to our environment high on their radar. Values last Leader Tony Kunowski subsequently pursued a career in banking, difficult to see that happen today.
    When Values expired from serious infighting over expanding that environmental concern to include a far left philosophy, remnants joined in the “Alliance” grouping that included communists, socialists and other extreme minority aficionados.
    Meteria Stanton Turei arrived from the McGillycuddie Serious Party,
    Keith Locke, son of long time Stalinists Elsie and Jack who were not just communists but are included as past leaders of the movement in this country.
    Sue Bradford,
    Queensland Communist Russel Norman.
    Catherine Delahunty.
    Nandor Tanzcos who revelled in Hemp and Rasta
    all moved to embrace the GP as a vehicle to advance their political ambitions, removing real green inspired persons in their quest, as discards that included veteran Mike Ward, Aunty Jeanette who actually managed to win The Coromandel Seat in a split vote, Ian Ewen Street who as third ranked list place in 1999 dropped to sixth in 2992 then crashed to fifty something.
    In 2006 Street subsequently saw the light, joined National in the belief that successfully advancing the environment could be better achieved from within the “Tent” as LBJ so eloquently and succinctly described.

    To deny that The Melon tag has truth in describing many of the leadership with their clearly red central beliefs cloaked in a green skin, is blatant mongering.

    That the current mutant Greens have secured the 5% mongs who falsely believe that there is any saving to be done above what prudent operators already believe and include, while the real world goes about creating a raising from abject poverty for that segment who daily live in it up to their necks (and that does not in any way include the unfortunate children of welfare in this country who suffer a degree of deprivation from parents making poor choices) while feeding the still growing world population in spite of the interference run by an addled bunch of anti trade, anti GMO, anti progress who ironically describe themselves as ‘progresives , say six percent, is just a cost of doing business.

    When you remove the bit of bone that gives some protection to the bits that erratically drive your being, from the lower end of your alimentary canal long enough to clear your sensory organs connected to your grey matter DK , you would come to a far different conclusion as to how the real world works from the indoctrinated politically exploitive promotions of the GP.

    Just a little bit of recent information that kicks another of the rotting bits of sapwood your beloved melons use as a foundation for its fraudulent manipulation of the NZ body politic, I note that good old Hockey Stick Mann has accepted that the AGW fraud being man made may just have paused inexplicably for nearly two decades and counting, are we about to see yet another “rebranding” of AGW, CC, Extreme weather events all included in the ‘disaster’ that continues to be perpetrated by troughers.
    Troughers so enamoured of the glorious dosh that comes from an increasingly desperate funding stream, pilfered by dreamers who are seeking new ways to tax, then redistribute the hard earned profits from wealth creators around the world.

    Oh, how is that peak oil delivering its very own disaster, apparently still plenty to power the Melon delivery people around the country and the world to spread their gospel. US $30 a barrel must make your haemorrhoids bleed.

    So the Glaciers, the polar sea ice and occasional blizzards are still here, we still cannot grow pine apples in Southland, the worlds mean income is rising, India and China are still living in a cloud of particulate, Tuvalu and the Maldives are still above sea level , 40 000 kiwis buying a sand spit and donating it to DOC didn’t consider for a moment that their very expensive bit of real estate would be submerged anytime soon, we are not all perishing from the disaster that GMOs present, and yet polls still suggest around 10% of NZ voters consider their demented choice is relevant.
    It is nice you still have company Mr Kennedy when that nice Mr Hughes flies up and down the country to make stuff up at a meeting of aficionados.
    Hell they could hire a mini bus, drive to Blenheim and meet him half way with an equally challenged bunch of locals from those who left Mr Browning’s homeopathetic (sic) remedy for Ebola unchallenged.
    Spend a rest day imbibing a little organic wine the next day before driving home again. Btw in all my years of testing I am yet to confront an inorganic wine, just saying.
    They could even have timed the trip to coincide with Friday February 19th, when crossing the Rakaia Bridge on SH1 they could have paused and viewed a mile wide flooding river carrying more water in 24 hours than irrigators use in the whole country in a year and nary an identifiable Cow Pat in sight.
    Damnation, another inconvenient truth eh Mr Kennedy.

  15. Paranormal says:

    You’ve said it yourself DK – AGW is a political reality despite a lack of evidence it is a real thing at all.

  16. Dave Kennedy says:

    Gravedodger and Paranormal, you must be feeling increasingly isolated when the number of people who support your views shrink on a daily basis as evidence and logic increasingly dominate.

    Your bitterness and blatant bigotry drip from every line, especially Paranormal (at least GD has a sense of humour) and your personal attacks seem to be what you continually resort to when rational responses evade you.

    I am impressed with GDs version of Green History. Here is a link to our magazine that celebrated our beginnings to ensure that you are better informed (although elements you mentioned have some vague truth): https://home.greens.org.nz/sites/default/files/te_awa_-_may_2015.pdf

    Here is our current issue that demonstrates the strength and diversity that currently exists in the party:
    https://home.greens.org.nz/sites/default/files/feb_2016_te_awa_web.pdf

    I can imagine there is a lot in the latest issue for you to panic and rant about…enjoy 😉

  17. TraceyS says:

    “I don’t see open road speeds managed through public demand…”

    It is very probable that the initial introduction of speed limits was due to public pressure.

  18. TraceyS says:

    “It seems as if the farming industry, especially dairy are quite happy to destroy themselves.”

    Just the other week, Dave, you were blaming the banks (and really pushing the point too).

    Now you think that farmers are destroying themselves.

  19. TraceyS says:

    “…interestingly those farmers who are Green Party members and support our approach and philosophy are all doing fairly well at the moment.”

    Interestingly there are thousands of farmers who are following their own approach who are doing fairly well at the moment.

  20. Dave Kennedy says:

    Sorry Tracey but your last lot of comments just represent another “good grief” response.

    I would love to know your version of why 1 in 10 farmers are financially stuffed and 80% will not be profitable this year. 😉

  21. Will says:

    I have spent years developing and fine-tuning a hedged system that makes modest but reliable profits every year. I do not wish to change it. I have no interest in organics – too many health problems this far north, and the carbon tax is a headwind I won’t be able to cope with in the long term. So for me, the biggest threat I face is green politics.

  22. Dave Kennedy says:

    Will, if you are a responsible and environmentally aware farmer who tries to farm sustainably I’m sure you have nothing to fear. Your talk of the Green threat lacks specifics and is almost totally imaginary. However the real worry will be another term under National. I guess it all depends whether you want a caring society and a sustainable economy or a boom and bust, corporate welfare Government where poverty is the fault of the poor themselves and inequality continues to explode.

  23. TraceyS says:

    There are many businesses, in a range of sectors, which won’t make a profit every year.

    If you had ever been in business on your own account then you might know this.

    “1 in 10 farmers are financially stuffed”

    Absolute rubbish.

    …”Federated Farmers poll show[ed] about one in 10 dairy farmers under pressure from banks over their mortgage.”

    Under pressure does not mean stuffed.

    I recommend that you don’t ever get into business, Dave. You’ll be stuffed before you start with an attitude like yours. The pressure will have you “good griefing” continuously.

    http://www.stuff.co.nz/business/farming/dairy/76998781/farmers-look-for-exit-as-prices-crunch

    How quick you are to write off one in ten farmers. It’s very telling.

  24. TraceyS says:

    “Will…I’m sure you have nothing to fear.”

    Here Dave asks for Will’s trust before going on to insult him by calling his concerns “imaginary” and then, as if that’s not enough, dumping upon him a truck load of guilt that does not belong to Will.

    LOL

  25. Dave Kennedy says:

    Tracey, let’s have this conversation again in six months when the sales and suicides increase further. I would have thought once a farmer is under pressure from the bank there are reasonable concerns about the financial viability of the farm. ‘Stuffed’ is not a technical term but in this case is appropriate in the context of the discussion.
    http://www.stuff.co.nz/business/farming/dairy/75660782/More-than-60-dairy-farms-for-sale-in-Southland

  26. Dave Kennedy says:

    “dumping upon him a truck load of guilt that does not belong to Will.”
    It does if he voted for this current Government 😉

  27. Paranormal says:

    Sigh, “evidence and logic” DK? It’s something your faith does not rely on and that we’ve proven on this blog regularly. Where is the logic (let alone evidence) that a life gas that is 400ppm (that’s parts per MILLION), and not distributed evenly throughout the atmosphere, can have such an effect on global climate?

    As for a ‘caring(TM)’ society, it seems, in your world, a ‘caring(TM)’ society is far better than an economically sustainable society that can afford to care(TM). Those outstanding societies that you look to for leadership in ‘caring(TM)’ such as Venezuela, Cuba, North Korea and Russia really shine the light on your brand of ‘caring(TM)’.

    Sad also that you equate honesty and truth with bitterness and bigotry. Typical of the left, they’d rather shut down the conversation and denigrate the opposition with holier than thou language, than face reality and look at what is best for individuals. When you consider the people that Charter Schools are helping, interesting that the left flings claims of bigotry around. Perhaps that’s why so many of the left have beards, so they don’t have to look themselves in the mirror each morning….

  28. Will says:

    How can you say “lacks specifics” when I specifically mentioned organics and carbon taxes? Boom and bust seem to be baked in the cake with this business. I got tired of the volatility and worked to reduce it. As usual, when you reduce risk, you sacrifice some potential profit. I felt that was worth it in the long run. Didn’t see you lot coming though. I just could not believe NZ could get that crazy. Quite happy with my vote thank you. Still, at least we are not talking about Green politicians’ AIR MILES.

    I got bitten on the leg by a white-tail. Bastard. Huge infection, pain, intravenous antibiotics, grouchiness.

  29. TraceyS says:

    “It does if he voted for this current Government.”

    Better than your vote, Dave, which achieved nothing but a whole lot of pointless emissions.

  30. Dave Kennedy says:

    Paranormal, I don’t see allowing foreign buyers to buy our property and increase capital gains for high end investors and supporting higher inputs into dairying a sustainable economy. It only works when the market is peaking. Boom and bust…the dairy bubble has burst and the property one will follow.

    It is really sad when suggesting that treating people fairly is considered ‘holier than thou’ when your alternative is everyone out for themselves. No wonder corruption is on the increase and worker exploitation (especially migrant workers) is growing. I’m sorry but that wasn’t the NZ I was born into, and i don’t care for it.

    Will, sorry about the bite, it does sound painful. The air miles thing is just a red herring and already dealt with previously.

    It appears that your financial approach is the same as the Greens, good financial planning and future proofing. Can you explain to me why this Government reduced revenue streams and then increased borrowing to cover basic necessities? Can you explain why we spend less on R&D than other countries and spend billions on corporate welfare and wage and accommodation subsidies. Perhaps you can explain why our elderly earn a universal basic income and are the wealthiest retirees in the OECD and yet 31% of our children are living in relative poverty? This isn’t future proofing or building sustainability, it’s economic suicide.

    It is also interesting that we are open to have our policies independently costed by Treasury and Key isn’t interested in the same thing happing for National. Probably because most of the $13 billion Roads of National Significance couldn’t pass proper cost benefit analysis. National’s economic credibility is a facade, we need proper fiscal management and strategic planning and Ministers who actually know what they are doing.
    http://www.newshub.co.nz/politics/minister-didnt-know-park-was-in-drilling-plan-2014040817#axzz41cZuoe3O

    “I just could not believe NZ could get that crazy.”

    Surely it’s the Government’s job to limit blind greed and monitor global activity that impacts on our economy. The Government was just as guilty for getting carried away during the milk gold rush as the private sector and they are still refusing to intervene in the frenzied death dance of the property market. Real Estate companies are still promoting the easy profits and capital gains that can be achieved here overseas. Absolutely dangerous stuff and it is making good housing even more unaffordable for ordinary New Zealanders. It is not holier than thou thinking to want good housing as a basic necessity for all of our kids.

  31. Mr E says:

    Mint(y) moments:

    “It seems as if the farming industry, especially dairy are quite happy to destroy themselves.”

    “1 in 10 farmers are financially stuffed”

    “let’s have this conversation again in six months when the sales and suicides increase further”
    .

    The reality is scrutiny from the banks is a sensible step for some farmers. Scrutiny happens in good times and bad. Bad times means more scrutiny. Logically.

    By all means scrutiny is mostly support. It is often banks taking steps to ensure the farmer does not get themselves into “stuffed” situations.

    In my experience there is a long list of farmers happily farming that were once under ‘scrutiny’.

    I think Act is being very clever looking to emulate some of the Greens policies. As is evident, the Greens have a habit of saying silly things, and there will be voters out there fed up with it.

    As a voter I will be serious looking at Act. At the moment I could not seriously look at the Greens. The Greens look “stuffed” to me.

  32. Paranormal says:

    DK, you are railing against your own tax & spend, and government picking winners policies when you complain about those nasty furriners buying our land. If we were economically sustainable and weren’t so reliant on overseas capital it wouldn’t be as great an issue as you see it. Not that it is a real issue we should be concerned about.

    If we get our finances in order so that we’re not ‘eating the house’ it would mean more New Zealanders with the capital to invest in our country as well as overseas. Stopping foreign investment would be completely counterproductive.

    But then Green economics rely on destroying the economy. What would printing money have done for us do you think?

  33. TraceyS says:

    Mr E, Dave looking forward to discussing suicides that haven’t even happened yet (and hopefully won’t) is a major turn off, don’t you think?

  34. Mr E says:

    Tracey,
    When somebodies argument is underpinned by forecasts of human deaths, I tend to cringe. Particularly when those predictions include people within their own community.

    There are many people out there working extremely hard on reducing farmer suicides. People like those spread through Rural Support Trusts, who are activated when times get tough. I wonder if Dave’s remarks are disheartening to them.

    Thinking more widely, rural communities pull together during tough times. During the 2010 snow storm in Southland/Otago, rural businesses and communities dropped tools and headed out into the gloom. Food parcels were delivered, people were assessed and help was delivered. The Government stepped in, contributing funds and resources. Random acts of kindness were rife, the front page of the paper was loaded with positive actions.

    Not one single farmer suicide occurred, and I think we can partly tribute that to how well people pulled together. The power of rural communities.

    Dave’s forecasting death and destruction, but I think he drastically underestimates rural communities and the wonderful people within.

  35. Dave Kennedy says:

    Paranormal, so you support National’s idea of cutting taxes, selling the family silver and borrowing, while still spending? Oh dear. They are cutting spending in health as a % of our GDP but spending millions on expensive consultants, bribing Saudi businessmen and flag changes. Fiscal responsibility?

    Mr E, I was actually deadly serious about farmer suicides, the farming community does rally around when people suffer misfortune, I have experienced that myself after a personal tragedy when living in a farming community. However, farming communities have become more transient and communities are not as close as they once were and farmer suicides are a growing phenomenon as you should know:
    http://www.stuff.co.nz/business/farming/71822221/suicide-rate-triples-in-rural-waikato-ministry.html
    http://www.fedfarm.org.nz/publications/media-releases/article.asp?id=1879#.VtVLWZN95hE

    I actually think Tracey’s comments about it being totally the borrowers fault if they find themselves over-extended was more callous (and a turn off) than my concern for the emotional outcomes. Friends of mine who run Love Local http://www.lovelocal.org.nz/ made sure the struggling workers mistreated by their Chinese bosses were fed when their pay cheques stopped without warning. You guys have no idea of the real ramifications of selling to off shore owners and your refusal to recognise the suicide problem is head in the sand stuff.

    The neoliberal philosophy of everyone out for themselves (and those who find themselves struggling is their own fault) is not one that builds strong communities. It is one thing when people share a natural disaster as Mr E describes, but it can be the opposite when people hit financial walls.

  36. TraceyS says:

    No, I never said that. You are deliberately misrepresenting me – and not for the first time on the same topic.

    Schoolyard tactics, Dave!

  37. TraceyS says:

    One of the great things about being a commodity producer, I think, is that you are not in direct competition with your neighbour. Maybe at times for feed when feed is short, or for the order in which the contractor visits, but not competing directly and constantly. You can’t lose a sale to your neighbour and they can’t steal your customer. That makes for a very collegial communities who lose nothing by helping each other out.

    Imagine if every farm was marketing its own brand of niche product. Then things would be very different.

  38. Dave Kennedy says:

    “You are deliberately misrepresenting me”
    Tracey, you clearly stated that it is up to the borrower to ensure that any agreement they enter into with a bank is reasonable. You strongly objected to my suggestion that the banks have a responsibility to give good advice to lenders. Misrepresentation, I think not 😉

    “Imagine if every farm was marketing its own brand of niche product. Then things would be very different.”
    Like sheep farming where farmers compete with others to get the best price for their meat and wool 😉

  39. Will says:

    No we don’t. There are schedules (price lists) which dictate values for different grades of meat or wool. You just get paid for what you supply. The only place we compete directly is in the sale-yards. (auctions) There is often a bit of resentment towards Landcorp because they have advantages the rest of us do not, but most farmers try to help each other.

  40. TraceyS says:

    There is more competition between schools than there is between farmers.

  41. Gravedodger says:

    When the ‘bitter green with envy’ is removed from a comment,
    “Like sheep farming where farmers compete with others to get the best price for their meat and wool”,
    could be rewritten as,
    Like sheep farming where farmers strive to produce the very highest quality product and enjoy the outcome when they top a sale for that product.

    As Will pointed out published schedule prices are fixed in relation to specific grades at point of slaughter and the Wool auction allows competing buyers to obtain wool at the lowest price required.

    However when viewed through melon juice stained shades, that competitive streak to be the very best, rapidly becomes greedy farmers scrambling over each other to get the best dosh.

    Makes one question why such natural competitiveness is totally discarded when someone suggests performance pay for teachers, hang on, that just might reveal an emperor sans clothes or more bluntly, dud teachers sabotaging opportunities for children passing through their one chance to be awakened to be the very best.

  42. Dave Kennedy says:

    Thanks for the explanation Will, I had been told that the procurement process for meat was messy and did result in competition between both freezing works and farmers. http://www.meatindustryexcellence.co.nz/downloads/report-march-2015/MIE_Report_March_2015.pdf

    I had also thought that farmers compete for the best wool prices at auctions too.
    https://pggwrightson.co.nz/services/wool/wool-auctions

    “There is more competition between schools than there is between farmers.”

    You may be right here, Tracey, and it will be more so when funding is becomes tied to arbitrary targets. Obviously this would be terrible for education as good ideas and useful information will not be shared between teachers and schools to maintain a competitive advantage. We will see winner schools and loser schools develop rather than seeing quality increase evenly.

  43. TraceyS says:

    “Tracey, you clearly stated that it is up to the borrower to ensure that any agreement they enter into with a bank is reasonable. You strongly objected to my suggestion that the banks have a responsibility to give good advice to lenders.”

    No I didn’t. Here is the link to the relevant comments. Please have a look through the ones I made and quote directly where I stated what you claim:

    https://homepaddock.wordpress.com/2016/02/13/one-bank-starting-to-force-farm-sales/#comments

    Loan agreements are fairly standard and I expect that there is some regulation around what they can or cannot contain as terms. Borrowers don’t get to write them of course but they should read and understand them and they have a duty not to sign them if they are uncertain about the deal or any aspect of it. There is plenty of independent professional help available if needed.

    My comments, which you definitely have misinterpreted, related to buyer awareness when borrowing money and the responsibility of the borrower to carry out their own due diligence. These are perfectly reasonable expectations of a businesses person (which a farm owner undeniably is). If the person is a company director then they have obligations under s137 of the Companies Act; “Director’s duty of care”. A farmer who is approaching a bank to borrow money is very likely to be a director of the company.

    Nowhere did I strongly object to “…[your] suggestion that the banks have a responsibility…”

    You wrote:

    “I guess if you don’t believe that bankers and financial advisors need to operate ethically then a privileged few will do all right and the rest of the population will be easy prey.”

    and I replied:

    “No, that’s not right, you are wrong again. I don’t believe that at all. Of course the desire, and expectation, is that all professionals will behave ethically…”

    You also stated:

    “I also call that fraud when money is obtained through dishonest means but this is what some would call good business and Tracey would say it’s the clients fault if they get tricked.”

    I also rebutted that because it is not true. I did not say that and never would.

    There is nothing in my comments which justified your claim of supporting fraud. In fact, quite the opposite. An expectation that business people do their homework and act in their own best interests, within the law, actually works against fraud.

    It is ironic that you would try and have a discussion about fairness and in the same breath make up stuff like “I guess…” and “Tracey would say…” and try to pass that off as fact – even repeating it on a subsequent thread after you have been corrected.

    “Would say”, really? You despicably claim to know what I would say when deliberately ignoring what I did say.

    I think this is called believing your own lies.

    Accept some advice from me. Use direct quotes when representing others’ views. Safer for you, Dave, you’re out of control and out of line.

  44. Dave Kennedy says:

    Gravedodger, back up and follow the thread, my comment was in relation to Tracey’s claim that when farmers do not have to compete against each other they allow for stronger communities. While there is some logic in that I did suggest that an element of competition does exist in farming and it hasn’t necessarily resulted in a breakdown of community. Will has since told me that I am misinformed and that there is no competition in the meat and fibre industry because of the schedules.

    Your inferences on my meaning is pure exaggerated nonsense. Competition provides a very healthy element in markets, it improves service, forces businesses to become more efficient, encourages innovation and provides a mechanism to ensure reasonable pricing.

    Competition doesn’t work in the health and education sectors because it stops professionals from sharing useful information and those that work within it are less likely to be open about mistakes or errors. Health and education professionals work collegially and under codes of ethics and practice where they are expected to work together in the interests of of those they serve. Research has shown that when schools compete, standards drop because the good ideas and information that should be shared isn’t and all do not progress as fast as they could.

    Often schools end up competing in things like National Standards which shifts the focus away from the broader needs of the child to narrow targets that are not always in the child’s best interests. It also means that children with high needs become a liability and Charter Schools especially get rid of poor performing children like hot potatoes because they want to keep attainment levels high. This has already happened with our own Charter Schools where expulsion rates are extraordinary high. Public schools are forced to retain high needs children with limited support, then criticised when average attainment levels are low.

    Competition within a commodity or product market is easier to define but the targets for competition between schools is more complicated. Should it just be about numeracy and literacy attainment or is socialisation and problem solving important? Are cooperative skills useful and are building leadership skills and being a responsible citizen helpful? Why are numeracy and literacy given priority and science and technology not supported? Why has PE and promoting a healthy lifestyle become less of a priority when obesity levels are rising and the costs to the country will be huge. Is developing a good work ethic important or should we just celebrate those who are naturally good at writing and maths?

    Gravedodger, your black and white world is a little simplistic and your attempts to label me as an anti-competition communist is nonsense.

  45. Dave Kennedy says:

    Tracey, the whole thread that you are trying to repeat came about when I suggested that banks have a responsibility to provide good advice and that they are partly to blame for encouraging the current high debt in the industry (almost $40 billion and mainly to Australian banks). If you agreed with me why an earth did you put so much energy into defending the banks and claiming that providing advice is not their job? You definitely asserted that the main responsibility lies with the borrower.

    Your desperate need to disagree with everything I say saw you run down a rabbit hole 😉

  46. Will says:

    Generally procurement competition refers to competition between meat companies, which can be cut-throat. (heh) All auctions are competitive by their very nature, but we have yet to find a better way to establish price. Although they can be gamed and I avoid them where possible. My wool goes direct to Cavalier if I can get it good enough. They only take the best.

    The real competition for us comes from foreign farmers selling in the global market. That’s what I mean about ‘headwinds.’ We face transport costs and tariffs they don’t have. What they do have is huge subsidies. This why I’m always going on about the ruminant tax. It’s the last straw, taking away any chance of footing it against our un-taxed colleagues.

  47. TraceyS says:

    “Tracey, the whole thread that you are trying to repeat…”

    No, that’s incorrect (again). I asked you, very reasonably, to back up your statement with direct quotes.

    Let’s try again, Dave, shall we?

    Please have a look through the comments I made and quote directly where I stated what you claim:

    https://homepaddock.wordpress.com/2016/02/13/one-bank-starting-to-force-farm-sales/#comments

    Since you’re so sure of yourself it should be easy for you.

  48. Dave Kennedy says:

    Will, again thanks for the explanation. When I attended a local wool and fibre meeting there was a suggestion that local sheep farmers could form a cooperative of farms that could then use their collective power to bring some farmer control back to the freezing works procurement process.

    I totally agree with you about the issues of tariffs and subsidies and the reason why the TPPA will deliver little for farmers is because it still hasn’t dealt with the high level of subsidisation that occurs elswhere. It also opens the door of off shore ownership of our farms and production which is another story.

    What Gravedodger doesn’t appreciate is that the Green Party actually understand the importance of competition but where that competition occurs is also important. MP David Clendon is our spokesperson for SMEs and he often promotes the business model of several smaller businesses forming a collective. Small businesses struggle to compete with bigger ones when they do not have the cost efficiencies that bigger enterprises enjoy and do not produce the volumes that can access bigger markets. Farm cooperatives can save costs by sharing expensive equipment and can collectively produce a volume of supply that can enter more lucrative market niches.

    The problem with the meat and fibre industry in NZ, apparently, is that competition occurs in the wrong places and actually reduces the potential income for farmers and causes a lack of co-ordination that will allow us to better respond to new markets. Freezing works often compete for supply and farmers are forced to shop around for the best price and sometimes just anywhere that will accept their lambs (capacity is inconsistent). The cost of transport to a more distant works then impacts on earnings. It’s a mess.

    While Fonterra has been a very successful cooperative its size has also ended up as an impediment as it isn’t as nimble as as smaller cooperatives.

  49. Will says:

    It’s true about meat company procurement. When you get a good year (widespread rain) farmers hold onto stock, going for weight and companies are forced to pay really high prices for market share. Then you get a widespread drought, and they make it up by slashing the schedules. That’s probably what they mean by competition between farmers and meat companies. The answer is to commit to contracts but some guys just won’t do it. I’m contracted to AFFCO, certain numbers of lambs at certain dates. In return I get a loyalty premium and guaranteed space. (means you don’t have to wait in a queue to get them killed. On average it works pretty well.

    I doubt the Fonterra model would work for meat. Dairy farming is pretty homogeneous, and they all produce exactly the same stuff. There are so many different ways of drystock farming, and different types of produce. It’s what makes it interesting, but it doesn’t lend itself to collectivism.

  50. Dave Kennedy says:

    Oh dear, Tracey you seem to be objecting to me being overly simplistic and manipulative in my response to your objection to mine. Do you not get the irony in that 😉

    When I suggested that both banks and the Government need to take some responsibility for the collapse of the dairy industry you said:

    “But you can’t blame the government for that and you can’t blame the banks.”

    You then went to great length to explain that the borrower must hold the responsibility for what they borrow and should be skeptical about anything a bank advises. You ignore the fact that many banks would only lend if farmers were increasing production or expanded their herds (even if that stretched sustainable levels). Many farmers found themselves obliged to follow the advice of banks if they wanted access to funds. This has led to increasing the costs of inputs to maintain larger herds and when the price dropped the higher inputs couldn’t be sustained.

    I stand by my argument that the Government and banks must share responsibility for the dairy crisis and your efforts to dump the responsibility all on the farmer doesn’t make sense. Are you saying that you agree with me now, or are you still saying that it is ultimately the responsibility of the borrower? No wonder the suicide rate is growing.

  51. TraceyS says:

    Dave,

    I said you can’t blame the banks or the government.

    You replied:

    “But I do, you obviously don’t understand…”

    However, you later said “[i]t is not about blame it is about taking responsibility and expecting ethical behaviour”.

    It definitely is about blame with you, Dave. That is why when I said you can’t blame X you automatically assumed that I meant the blame lay with Y. Because the blame must be appointed to someone eh?

    I understand why people feel the need to appoint blame. Doing so is supposed to protect us from the same problem recurring. I simply prefer to take responsibility for my own decisions and encourage others to do so too. It is a good policy, and in my view, the best form of insurance.

    Having paid careful attention to your comments both past and present, I have noticed that you tend to assign blame to whomever makes your political argument work.

    Compare your comment on this thread:

    “It seems as if the farming industry, especially dairy are quite happy to destroy themselves.”

    With your comments on the banking thread where you squarely blamed the Government and banks for throwing “caution to the wind” and not having their eye on the ball.

    If in any doubt, return to the top of my comment and re-read the first couple of quotes. See?

    Now I have done right by you by quoting you directly. I ask again that you please back up your assertions about what I have said with direct quotes also.

    That would be decent of you.

    Thanks in advance.

  52. TraceyS says:

    When I suggested that both banks and the Government need to take some responsibility for the collapse of the dairy industry you said:

    “But you can’t blame the government for that and you can’t blame the banks.”

    No Dave. That is another misrepresentation.

    THIS is the true order of the conversation:

    You: “…many did not calculate the possibility of a drop in commodity prices when leaping into the industry and banks were often happy to lend…”

    Me: “That’s the bank’s role. They don’t force anyone to borrow money. People are free to “leap” into ventures if they decide to and I wouldn’t want it any other way. But you can’t blame the government for that and you can’t blame the banks.”

    Five days later came your comment (on February 19) about banks and the Government taking responsibility:

    “This is not a resilient industry and the Government and banks need to share some of the responsibility for how this has come about.”

    “https://homepaddock.wordpress.com/2016/02/13/one-bank-starting-to-force-farm-sales/#comment-339032

    You will see that I didn’t reply to that comment at all.

    So you’ve got things a wee bit befuddled there Dave.

    I give you a “D” for homework.

  53. Dave Kennedy says:

    Will, I appreciate your reasonable responses to my comments as it allows for an actual discussion and sharing of ideas. I accept that your knowledge of the industry is greater than mine but I also believe that I am no idiot and have accumulated some understanding of the industry through wide reading and conversations with people involved in the industry.

    I find it frustrating and unproductive when others here just object to what I say on principle and feel challenged (to the point of personal attacks) to alternative views.

    One of the faults of adversarial styles of Government is that good ideas are often not taken up because they have been presented by the “opposition”. I feel this happens here too. The Green Party is held up as an enemy of farmers and anything that comes from the party must be strongly opposed and discredited.

    Clearly things have gone badly wrong in the dairy industry (despite what the Government claims, recovery is not an immediate possibility) and the meat and fibre industry has missed opportunities through mismanagement and lack of coordination at different levels.

    It is in the interests of all farmers and our economy to have an open mind about solutions and yet I detect within this blog huge support for the status quo when it clearly hasn’t delivered the best outcomes. Continually doing the same thing, when it isn’t working, is madness.

    One of the things i feel that the Green party does well is taking a more holistic approach to the economy. Many here claim that farmers know best and we should leave the industry to get on with it without interference. I believe that silo thinking is dangerous and cooperation and connections outside an industry can be beneficial. This Government has cut back its investment to research and often refuses to engage with scientists and academics who do not support their agenda. Blind ideology and narrow targets are problematic when new ideas and approaches are vital for developing a sustainable and resilient economy.

    New Zealand was once known for its innovative pasture based farming industry we have shifted too far from that model according to many knowledgeable farming commentators. We used to be competitive because our externally sourced inputs were minimal and we had a useful clean green reputation. Our current account deficit is partly caused by our industry reliance on imported phosphate, fuel and feed. We can be more competitive if we can reduce imports and be more self sufficient.

    Farmers struggle to find workers from within New Zealand so there is clearly issues with our education system and promotion of farming as a career. The gutting of rural services and infrastructure hasn’t worked well for many rural communities and population based funding for roads is a nonsense. Foreign ownership of our farms and production is already causing problems and the costs of compliance for dealing with the environmental impacts of farming is an issue for many. New Zealand consumers cannot understand why we pay more for our meat and dairy products than consumers overseas.

    Farming doesn’t operate in isolation and many Green policies actually would benefit the industry and help it be more resilient and sustainable. I completely understand that compromise is part of any pragmatic way forward and all ideas should be debated. It is really concerning when all policies of our party are rejected outright. This is clearly hypercritical because National escapes robust scrutiny when so much that it does is clearly concerning. The Saudi bribe and the lack of protection from foreign interests are two that should ring huge alarm bells.

  54. Dave Kennedy says:

    “They don’t force anyone to borrow money. People are free to “leap” into ventures if they decide to”

    Only this was a naive statement. Farmers often have to borrow to maintain the business and often feel forced to accept the terms and follow the advice provided to access funds. It isn’t as easy as you suggest to walk away from a lending agreement if the survival of the farm is on the line. They do not have the freedom that you suggest.

    You had a simplistic view of the lending relationship and banks and Governments should share the responsibility of what has happened.

    Your need for self-justification is becoming tedious, you were clearly wrong, just accept it and move on. Will pointed out where I was wrong in a previous thread and I apologised and withdrew a statement.

  55. TraceyS says:

    What was I wrong about, Dave? Which statement should I withdraw?

    And, for the third time, please quote me directly and point out where you think the error was. This is just a common courtesy – one that I have extended you but which appears you don’t have the good manners to return.

  56. TraceyS says:

    “You had a simplistic view of the lending relationship…”

    LOL

    I work in an extremely capital intensive industry, Dave, and have signed dozens of loan documents over nearly three decades.

    Your self-confessed book based and third hand knowledge is no match for hands on experience.

    But then the likelihood of you admitting that is almost nil.

  57. Dave Kennedy says:

    Tracey, I feel I am dealing with shifting sand. This is all about whether banks should be responsible (in part) to the $40 billion or so of farm debt and the over-investment in dairy and you disagreed. Your belief that banks lend and farmers borrow at their own risk, and are free not to, is something I find too simplistic. It is the farmer who ultimately suffers the consequences as you say, but that means that banks have no responsibility in providing good advice (as you said their job is just to lend) and everything must therefore be dumped on the farmer. Let us just leave it at that that we agree to disagree as I am tired of this debate and I’m sure others are too.

  58. TraceyS says:

    “This is all about whether banks should be responsible (in part) to the $40 billion or so of farm debt and the over-investment in dairy and you disagreed.”

    Where did I? (for the fourth time, I ask for a direct quote)

    I said you can’t blame the banks for lending money.

    You do know the difference between blame and responsibility don’t you?

    “Your belief that banks lend and farmers borrow at their own risk, and are free not to, is something I find too simplistic.”

    The truth is like that sometimes Dave. Simple.

  59. TraceyS says:

    For the record, of course banks will take some of the responsibility. Some of the debt that is owed to them probably won’t be repaid. That’s taking responsibility. But they shouldn’t be blamed broad-brush for people defaulting on loans. Not getting all of the money back is surely punishment enough.

    I strongly believe that people should always repay their debts. But sometimes they can’t. The banks have to suck it up and I don’t disagree with that (because that’s their responsibility) provided the borrower did their utmost best to repay and genuinely couldn’t.

  60. Dave Kennedy says:

    “For the record, of course banks will take some of the responsibility.”
    Whew, finally got there. 🙂 But you could have acknowledged the responsibility of banks to lend responsibly in the first place. Lending money to a business when the loss of equity is a possibility is very unwise and there were lots of indicators that the high price for milk wasn’t sustainable.

  61. TraceyS says:

    Actually “got there” much earlier, Dave. You obviously missed my several references to moral hazard on the banking thread.

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

    “…there were lots of indicators that the high price for milk wasn’t sustainable.”

    But it was freely available information. It wasn’t hidden away from borrowers.

    “Lending money to a business when the loss of equity is a possibility is very unwise.”

    Not as a rule. But in some cases, eg. where equity in thin to begin with, it could be. Businesses with a good amount of equity can suffer a reduction on paper with no ill effects at all. This happens in any business in years when they make losses. Imagine if they all panicked and rushed out of business. It’s wrong to say that lending money to them would be categorically unwise. What you have said actually represents an extremely conservative point of view. Soon you’ll be switching parties!

    Can you now acknowledge that responsibility on both sides of lending/borrowing is crucial? In fact, in light of the potential for moral hazard to occur, the more balanced the responsibilities are the better. By pampering and excusing either side you are weakening them and leading them to repeat past mistakes.

  62. Dave Kennedy says:

    “Can you now acknowledge that responsibility on both sides of lending/borrowing is crucial?”
    Chuckle…certainly can, Tracey, as that was my position from the beginning. I didn’t want the Government or the banks escape their own responsibility for the $17 billion debacle.

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

    The Government’s solution is tax cuts…which deserves a humungous “Good Grief!”

    I actually think it is you who should be switching parties, the $600 million hole left by the demise of Solid Energy was bad enough when everyone one could see the price of coal was poised to fall and now we have to deal with $17 billion we can ill-afford. When people are dying of Melanoma because of a poorly funded Pharmac it is obvious any increase in funding is going to be minimal when tax cuts are on the agenda as Government income is falling. We also all know who will enjoy the tax cuts…those who can afford to pay for cancer treatments if Pharmac can’t. 😛

  63. TraceyS says:

    Can you now acknowledge that responsibility on both sides of lending/borrowing is crucial?

    “Chuckle…certainly can…”

    Having a very public wee chuckle at the expense of troubled borrowers I see.

    Poor form Dave. 😦

  64. Paranormal says:

    DK providing more comedy gold: “Blind ideology and narrow targets are problematic when new ideas and approaches are vital..”

    What do you think happens when government of any flavour gets involved in the private sector? GFC anyone?

  65. Dave Kennedy says:

    Paranormal, I have linked you to numerous explanations from the Economist etc that have described the causes of the GFC and by far the largest contributing factor was private greed. The same cause for the exploding property prices here and the collapse of the dairy industry.

    You also forget who bailed out the US banks and SCF here…the taxpayer. And what did the banks do when they were bailed out?…they paid themselves bonuses.
    http://www.businessinsider.com/2009/1/75-of-latest-bank-of-america-bailout-paid-merrill-lynch-bonuses-bac

    You really do live on a different planet from many of us. If it is John Key’s planet, good luck with the lack of toilets 😉

    And for the umpteenth time here is that shocking communist rag (please note the sarcasm) the Economist with the explanation of what caused the GFC:
    http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-years-article

    Heaven knows where you got your information from.

  66. Will says:

    Settle down Dave, those are pretty wild arguments that don’t really prove anything. They can and have been dealt with, but it takes screeds of boring text and you never learn from it.

    Right now, banks are asking many businesses to reduce their debt. But debt can only be repaid from profits. If those profits are being taxed too highly, the debt reduction process slows dramatically. And if you can no longer rely on inflation to help reduce your debt/equity balance, it may well be impossible.
    So a reduction in company tax is a legitimate suggestion to help the NZ economy. There is more to it than “looking after their rich mates” which is how the sages of Stuff will see it. It would come with both positive and negative consequences, and we could argue both sides, but not if it’s reduced to silly stuff about melanoma.

    About the Economist. It was for many, many years a highly respected publication, set up to promote Classical Liberalism. But things have moved on now, new people run it, different ideas are promulgated…in short they are unrepentant Keynesians who just don’t seem to be able to grasp the situation we are in. Keep talking about “anomalies” etc. It’s a bit sad, they are widely considered to be a bit of a joke now.

  67. Dave Kennedy says:

    Will, you say the problem is company tax when New Zealand currently taxes less than most. We have a simple flat tax of 28%, Australia is 28.5% and in the US federal tax on companies is as high as 39%.

    One of the important things about debt is maintaining equity and if lots of farms end up being forced to sell then property prices will drop and so will equity for many more farmers. I would have thought that an interim debt management agreement across banks would be the most sensible solution so that there isn’t a flood of foreclosures, which will only begin a downward spiral.

    As for the Economist, it is interesting to hear that you think that it has become too Keynesian, I wonder if that is because the Milton Friedman and the Chicago School approach to economics have now been discredited (because of the GFC) and austerity measures are failing where they have been introduced.

    Every time we have had a global economic collapse in modern times (last 100 years) the most resilient countries economically are social democracies. We should learn the lessons of history.

  68. Mr E says:

    Dave,

    “and if lots of farms end up being forced to sell then property prices will drop”

    No body want’s that situation Dave. That is why your connection between Banks scrutiny and Farmers being (stuffed) seems ridiculous.

    Whilst the potential risk for your doom predictions exist, I view that potential as very very low.

    We know prices are volatile. Fonterra reminds farmers regularly. Currently there is a low demand of product in part caused by Russia sanctions and China stock piling. But also there is a high supply with great growing season in the US, high prices last year driving up supply, and removal of EU quotas (amongst other things)

    But those situations are rapidly changing. If farmers are feeling the pinch here, you know they are feeling a slap overseas.

    Some UK commentators are estimating 20% of their farmers will go.
    The strong US dollar is expected to reduce their exports, and who knows what their growing season will bring next year.
    Chinas stock plies have diminished and demand is expected to go up from them.
    Russia on the other hand… Their potential as a customer still seems low with the devaluing of their currency, and problems of reliability.

    The point is, there are many positive signs out there. The banks are currently largely supportive.

    So often you seem so very negative and I can’t help but wonder if it is driven by your political goals.

  69. Will says:

    US tax is misleading. They appear to pay high taxes but there are myriad loop-holes they have to exploit. It has become a mess, and political deadlock has made reform near impossible. They need a simpler system more like ours to be honest. I believe Ted Cruz wants a flat tax, Roger Douglas’ old policy, but I doubt you will see it. Would be fascinating though.

    But I did not say the problem is company Tax, just that it’s something the govt. could do to help. You may be over-reacting a bit. My brother is dairying, I have two dairy clients (grazing) and several dairy farming friends. None of them are panicking, just grimly resigned to a long haul in survival mode. The highly indebted ten percent or so will probably be swept away and that is unfortunate, but that is the risk. When people are indulging in the national pastime of farmer bashing they tend to forget how much risk we deal with. Hopefully in future they will be a little less resentful of the good years. (yeah right)

    I think Neo-Liberalism (deficits don’t matter, remember that?) and Keynes are just two sides of the same dodgy coin. Just a different opinion on who should spend money that does not exist. Freidman’s main interest was tax efficiency, he hated the cost of collecting it. I believe GST was his idea, taxpayers collect it gratis. Nice one Milton! I am more a fan of Hayek but we did not take that route and the consequences are upon us. Debts that can’t be paid, won’t be paid and the world is choked with debt. One way or another, a lot of it will be written off and you can’t expect to do that without serious effects.

  70. Dave Kennedy says:

    Will, I’m not panicking just repeating what people in the industry are saying, 1 in ten farms are actually a lot of farms and could have an immediate effect on farm prices. A lot depends on whether banks start to panic and feel that they have to get what they can before a potential collapse. Only they will potentially cause it as they have to some extent in Australia (remember we are dealing with the same banks here).

    http://www.theland.com.au/story/3377976/farm-foreclosure-focus-for-inquiry/

    “When people are indulging in the national pastime of farmer bashing…”

    Don’t feel as if you are the only ones being singled out, teacher bashing is alive and well, the police are subjected to regular attacks and talk to anyone earning the minimum wage and they feel everyone is against them.

    When farming is earning well people see farmers driving around in new 4WDs, mansions being built on farms (or for retired farmers) and fancy tractors heading out of showrooms like hot cakes.

    Hayek wouldn’t have have bailed out the banks which I agree with, the idea of being “too big to fail” is a dangerous concept because no lessons are learned. Donald Trump wouldn’t still believe he is invincible if his Casinos etc were allowed to fail through his mismanagement.

    I don’t agree with the money supply being controlled by private interests as that leads to inevitable corruption. People criticise quantitative easing but banks essentially print money (where else does it come from every time they lend) and Savage used a form of quantitative easing to build all the state houses.

    I support a range of economists, Axelrod’s theory of competition and cooperation has merit. The Nordic Model (a form of the social market economy) has proven successful for numerous recessions and Ropke and Armack support variations of this. The pursuit of endless growth on a finite planet with finite resources is problematic and Tim Jackson’s thinking has been influential recently in promoting the idea of “Prosperity Without Growth”.

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

    We do need to rein in the overly dominant corporations and numerous global monopolies now. Commodity markets that deal in minerals (the mining industry) and food are being dominated by major players that manipulate supply to maximise profits, this has been increasing over time as amalgamations and takeovers have resulted in a reduction of real competition. We need to remember that even Adam Smith supported capitalism because he felt it would end up with social benefits if markets were fair.

    I agree with you about the world being choked with debt, but while the majority of people are lumbered with debt 62 people are as wealthy as half the world’s population and trillions of dollars are sitting in tax havens.
    http://www.theguardian.com/business/2016/jan/18/richest-62-billionaires-wealthy-half-world-population-combined

  71. Will says:

    They say the cure to low prices is high prices, and vice versa. Recent events do show the truth of that. Sometimes you just have to let it play out. I don’t think enormous wealth is a problem as long as you provide the rich plenty to spend it on. Those mansions and 4wd’s etc provide employment and wealth creating opportunities for other other people, as do Leonardo di Capri’s mansions, jets, and visits to space.

    I know other professions are targets too. Doesn’t make it right, especially when ruthless politicians try to stir up such stuff for their own ends.”Polluters must pay.”

    Pointless arguing economics, we followed the rabbit so far down the hole, the only way out is forward. I’ve never found the ‘finite planet’ argument convincing. Growth in economic terms does not automatically mean consuming more resources. It could mean less. And I don’t see why we should always be stuck on this planet. Plenty of resources out there. Andrei’s quiz was bout Moby Dick – harvesting oil by harpooning whales in dinghies, from a sailing ship. Pretty basic, and not very long ago. Astounding progress if you care to see it.

    I have to go harvest some wool. Not much progress there.

  72. Dave Kennedy says:

    Will, the problem with wealth being captured by a few is that they don’t actually buy a lot. A wealthy family can only eat the same amount as a poor family and there is a limit to how many cars they can own. Henry Ford paid his workers well because he wanted someone to buy his cars. The domestic economy would be much more buoyant if ordinary workers had more discretionary income. Inequality actually has economic and social ramifications.

    Remember at the time of selling the treaty, more Maori were literate than Europeans, they owned ships and were trading overseas and also owned all the flour mills in the country. When their best land was removed from them and they were blocked from borrowing money because they didn’t have single titles to their land, they were forced to into labouring work and poverty. Now they make up over 50% of our prison population and are a huge drain on health resources. Poverty comes at an economic and social cost.

    I agree that there has been astounding progress in the world but a good number of families haven’t benefited that much when they still live in houses that are over 70 years old and need to work longer hours and more than one job to keep head above water.

    “Among dual-earner couples with dependent children, 29% (or 98,466) worked 80 or more hours between them, while 27,063 (or 8%) worked more than 100 combined hours. Of the couples who worked 100 or more hours between them, there were 12,963 couples with dependent children where both partners worked 50 or more hours each. The literature suggests that long hours of work can have a variety of impacts on family wellbeing, including providing greater income but also negatively affecting time available for family members.”

    https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/journals-and-magazines/social-policy-journal/spj35/35-parents-long-work-hours.html

    It is not unusual now for infants to be placed in care for 40 hours a week or more so that parents can earn enough to cover living costs. Quality of life for over 50% of families is in decline.

  73. Dave Kennedy says:

    oops, should be “signing the treaty” not selling in second para.

  74. Will says:

    I’m pretty sure it was more than just Ford’s employees buying his cars. Henry had some strange ideas. You are actually demonstrating one of the great flaws in modern economics, the idea that production comes from demand. It’s the other way around. Production stimulates demand. People bought his cars because they wanted them, pretty soon they could not do without them. Whole new wealth- creating industries came into being.

    I think you are drawing a long bow equating Maori poverty with the Treaty. Firstly, most are not poor. And as far as I am aware the mills and ships story relates to Tainui, not Maori generally. But individual property rights are the key to prosperity. Sure some people were dispossessed, but I see tribalism as a fatal flaw, stifling individual enterprise everywhere you find it. My people came to this country with virtually nothing, part of the Irish Diaspora. And compare the prosperity of North America with South America. The North was settled by indentured labourers (mostly) who won their freedom and a land title with their indenture. In the South they tried to re-create the feudal system of Spain with the results you see today. Both continents are blessed with resources so that does not explain it. Property rights! If equality brought prosperity, communism would have succeeded.

    It takes more than just numbers to measure wealth and happiness. Even the poor have access to high grade medicines, entertainment, transport, Welfare, etc. I know that I have had to work much harder than my father did, and for relatively less, but I have cool toys (machines) to help me. But look at the larger picture. The world is becoming more equal, hundreds of millions of people in India, China and elsewhere attaining first world lifestyles. Inevitably our prosperity indices are going to decline a bit, some of it is at our expense. A small price to pay.

  75. Dave Kennedy says:

    “Production stimulates demand”
    Hmm, try using our housing situation as an analogy to support that statement 😉

    Will, the demand has to exist before the production starts in earnest, surely. If you have a dodgy product, producing heaps of it is hardly going to create a demand.

    “And as far as I am aware the mills and ships story relates to Tainui, not Maori generally.”

    Your knowledge is limited even Tuhawaiki way down here in the south was a successful businessman and trader.
    http://www.teara.govt.nz/en/biographies/1t110/tuhawaiki-hone

    Trading was common for all iwi until they lost their land and tradable resources.
    http://www.teara.govt.nz/en/te-maori-i-te-ohanga-maori-in-the-economy/page-3

    The Treaty didn’t cause Maori poverty it was the lack of honouring the Treaty that caused it. In the Maori version (that Maori signed up to) they saw Europeans as just another tribe that would be self-governing and in control of their own resources (as each iwi was) but the settlers saw otherwise. Interestingly we are seeing a gradual recolonisation of New Zealand and something similar to what happened to Maori is happening to all of us. We are becoming tenants of our own land and many of us will end up working for foreign interests.
    http://localbodies-bsprout.blogspot.co.nz/2015/02/the-tppa-and-recolonisation-of-aotearoa.html

  76. Dave Kennedy says:

    The world is becoming more equal, hundreds of millions of people in India, China and elsewhere attaining first world lifestyles.

    I agree that material wealth is growing in many 3rd world countries but in the already developed nations inequality is growing and most especially amongst the Five Eyes nations where a small minority are growing extremely wealthy, the middle class is shrinking and those barely surviving are growing as a percentage. Child poverty has grown as the purchasing value of incomes in the bottom two quintiles In the UK, Australia, NZ, the US and Canada falls.

    http://www.theguardian.com/society/2015/jun/20/child-poverty-rise-uk-halts-progress-charities-claim

    http://www.abc.net.au/news/2014-10-12/poverty-levels-among-australians-on-the-rise-acoss-report-abs/5807624

    http://www.alternet.org/economy/numbers-are-staggering-us-world-leader-child-poverty

    Having so many children growing up in poor homes where the stress of poverty causes instability and violence will just perpetuate a cycle of dysfunction and huge costs to welfare, health and justice systems.

    Of course you could always continue to blame the poor for their circumstances and allow employers to continue to keep wages low (despite productivity increases) and remove job security through increases in casualistion.

  77. Dave Kennedy says:

    Sorry, first sentence above should have quotation marks.

  78. Will says:

    I find it difficult to reply well to multiple arguments, but I’ll do my best.

    Again, you make the point for me. Our ‘housing situation’ is largely because we ‘aren’t’ producing enough houses to match demand. I can see I’m not getting the idea across. Central banks are trying to ‘goose’ the global economy by flooding it with credit. If people have easy access to cash they will spend it on stuff which will create demand. Jobs will follow, taxes will be paid, a bright future beckons. But it isn’t working, we have asset bubbles, flat-lining growth, debt mountains, surplus commodities.

    Where was demand for cell-phones in the 70’s, microwaves in the 60’s, dish-washers in the 50’s? There was none because they hadn’t been invented and no amount of stimulus could change that. Production creates its own demand (Say’s law I think) so we need to focus on what we can do to encourage innovation. I would suggest…

    Lower taxes, robust copyright laws, (I don’t care what modern economists say, China invents practically nothing because it’s not worth it, someone will steal your idea the moment you get it to market.) Red Tape…bureaucracy can prove terribly discouraging to budding entrepreneurs, all that OSH type compliance crap that gums the wheels for little gain, other people will have more suggestions.

    Often people ARE poor because of the choices they make, and welfare can contribute to perpetuating that situation. I’m not saying it’s always true, but these days I find it usually is. You must understand there is a limit to what can be achieved with minimum wages before entry level jobs disappear. I won’t pay less than $19 per hour for hard work, but that is why I don’t have help very often.

    The shrinking middle class of western economies is a symptom of decline. I think we both see the danger, just disagree about the solution. The West can’t afford its governments and you want to make them bigger. I say simplify the tax system and try to divest ourselves of those burdensome bureaucracies that are such a waste of time and talent.

    All I can do now, have to get the stock moving before it gets too hot.

  79. TraceyS says:

    Dave says:

    “Henry Ford paid his workers well because he wanted someone to buy his cars.”

    Ford actually increased wages because he had a major retention problem:

    “In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.”

    http://www.forbes.com/sites/timworstall/2012/03/04/the-story-of-henry-fords-5-a-day-wages-its-not-what-you-think/#eae94ce1c96d

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