Word of the day

03/08/2020

Paralogize – to reason falsely : to draw conclusions not warranted by the premises or given set of assumptions.


Sowell says

03/08/2020


Rural round-up

03/08/2020

Rural women survived, thrived – Kerrie Waterworth:

Poverty,  isolation, bone-chilling winters, as well as the loss of jobs, partners and family homes were some of the hardships rural women experienced and had to overcome in their daily lives in the Upper Clutha. Kerrie Waterworth reports.

Sally Battson moved from Auckland to Makarora, a town at the head of Lake Wanaka on the Haast Highway between Wanaka and the West Coast, to marry the co-owner of Wilkin jet-boats in the 1980s.

Back then, the sealed road began and ended at Dinner Creek on Lake Hawea.

“People used to say to me ‘Don’t you get lonely?’ but you can get lonely anywhere. The thing I used to say about Makarora was it was on the way to everywhere.” . . 

Water tool for farmers wins  – Sally Rae:

Dunedin tech company Tussock Innovation has received the Digital Innovation Award at this year’s virtual National Fieldays.

Covid 19 restrictions meant the event — which generated $549million in sales revenue for New Zealand businesses and injected $249million into the country’s GDP last year — was held online.

For many in the agri-business sector, the event is the biggest sales opportunity of the year and, for Tussock Innovation, it provided a tool to meet customers, gain product validation information and expand brand recognition, chief executive Jesse Teat said.

The company won the award with its Waterwatch product, which it had spent the past six months “honing” with the support of Palmerston North-based Sprout agri-tech accelerator . . 

Big career change working out well – George Clark:

Simon Kennedy sought a drastic lifestyle change.

After a 25-year history driving stock trucks around the country, and with his son getting ready to fly the coop, he felt a call to the farm.

For the last 12 months, the 45-year-old has been the sole shepherd on the 3500ha Ben Ohau Station at Twizel.

“I came with an open mind and two dogs. Increasing my team up to four dogs, I [now] do 95% of the stock work and love the challenge this property gives me every day . .

Made of clay and full of history:

Restoring two cob cottages in South Canterbury has become a labour of love for a retired Christchurch couple with lots of energy and a passion for the area.

Early settlers in at Burkes Pass made the cob walls of the cottages from clay, animal manure and chopped snow tussock.

Jane and Graham Bachelor bought their first cottage at an auction at the local hotel in 1984. 

It was originally built by a shepherd, James Keefe, in 1876 and in a sorry state of repair when they acquired it, Jane says.

“We bought the cottage at a time when the exterior cladding and windows were disintegrating in front of our eyes.” . . 

Equity partnership pathway to farm ownership:

The New Zealand primary sector faces a dilemma over funding for future expansion which has prompted Bayleys rural real estate to take the initiative on helping to solve it. An upcoming seminar aims to introduce young farmers who are keen to get a piece of their own property to investors who have the capital to help back them.

Bayleys Country has organised a farm equity partnership seminar in Havelock North on August 12 and already have over 100 registered attendees.

Bayleys national director rural Duncan Ross said that bank sourced farm finance has become increasingly difficult for farmers and investors to secure after a relatively easy period for credit from the early 2000s to 2010. . .

New president of Agcarm:

The industry association for crop protection and animal health manufacturers and distributors has appointed Gavin Kerr, Country Manager for agrichemical company Nufarm, as its president at the Agcarm annual meeting on July 23.

Kerr says that “it’s a privilege to work in agriculture and a role I don’t take for granted”.

He would like to see one important change implemented well before the end of his three-year term.

“Farmers and growers need and deserve access to the best and latest products. But New Zealand is missing out on new, more effective treatments due to delays that discourage investment in introducing these technologies. . . 

Livestock management companies for sale provide fertile opportunities for new owners:

Two livestock birth-management firms enabling New Zealand farmers to be among the most productive primary producers in the world has been placed on the market for sale.

Cattle pregnancy testing company Ultra-Scan was established in 1994 to examine the fertility rate of pregnant cows. Ultra-Scan now has 20 franchises throughout New Zealand – with 14 in the North Island and six in the South Island. The majority of the company’s North Island franchise operations are located in the Greater Waikato and King Country districts.

While initially founded to deliver cow gestation scanning services, Ultra-Scan’s service offering has subsequently gone on to include similar pregnancy tests for sheep, deer and goats, as well as the de-horning of young calves aged between four days and 10 weeks of age – in a Ministry for Primary Industry-approved practice known as ‘disbudding’ on calves – as well as DNA sampling, electronic calf tagging for identification, and teat removal. . . 


How are going to get out of this mess?

03/08/2020

Sir Bill English is warning businesses to prepare for a W-shaped downturn:

Former prime minister Sir Bill English has issued a bleak warning to businesses to prepare for the worst case scenario as “cracks” created by the economic earthquake of Covid-19 become more apparent.

Just like the damage caused to Wellington’s buildings by the Kaikoura earthquake, the true damage to the economy might not emerge immediately, he said.

Wage subsidies had “bought time for thousands of businesses” and there was a sense just from the amount of traffic on the streets of there being a “bounce”, he said.

But the return in consumer confidence would not last and businesses are “reluctant to deal with the fact” that the economy might drop back again, he told a webinar hosted by accounting firm BDO. . . 

Businesses might find by the middle of next year that they had 20 per cent less revenue as a “W”-shaped downturn took shape, and needed to ask if they could survive on that, English said.

“This is going to be marathon not a sprint. It could be really tough.” . . 

Job losses are already piling up:

Today’s troubling revelation that another 1500 Kiwis lost their jobs this week highlights the need for a sound economic plan to get us through the current jobs crisis, National’s Finance spokesperson Paul Goldsmith says.

The number of people receiving unemployment benefits is now up to 212,000 – an increase of 67,000 since New Zealand went into lockdown.

This week alone, 1500 more people went on the dole. Another 450,000 Kiwis are also in the precarious position of relying on the wage subsidy scheme that will run out on September 1.

“New Zealand is facing its worst economic downturn in 160 years,” Mr Goldsmith says.

“This incompetent Government’s big idea is simply to increase government spending, which will just lump the country with more debt for future generations to repay through higher taxes. . . 

The government’s response so far is not going to help the economy:

Massive debt-fuelled spending and keeping the border tight are necessary but insufficient to restore our economy and create jobs, National’s Finance spokesperson Paul Goldsmith says.

Mr Goldsmith was reacting to Grant Robertson’s “Q & A” interview this morning, where the Minister played down projected job-losses when the wage subsidy ends and emphasised more government spending and tight border as the government’s primary economic response.

“The reality is that the spending has not always been well targeted or effective and the so-called tight border of Labour has been shown to have holes.

“The missing piece in the job creation story – the third trick – is bold moves to enable private sector investment,” Mr Goldsmith says.

“The government can buy temporary jobs, such as it is with its $1.1 billion programme to hunt possums and plant flax bushes, but it is the free enterprise economy that creates the most sustainable jobs.

“We need to be making it easier for firms to hire workers and expand their business.

“As well as its JobStart and BusinessStart programmes, which help businesses hire additional workers and redundant workers start a business, National has announced substantial tax changes to encourage businesses to invest. Firms will be able to write off $150,000 per new asset immediately.

“National would also extend 90 day trials to all firms – making it easier for companies to take a chance on new employees, and reverse recent further restrictions on inward investment.

“The government, meantime, is still in the mind-set of adding costs and regulations to business, such as last week’s higher waste levy charges,” Mr Goldsmith says.

Debt will increase whichever parties are in government after next month’s election.

A responsible one needs a plan to minimise  the borrowing and to pay it back.

Without that, Damien Grant says, the Government’s Covid-19 spending will be an economic albatross for decades:

 The true extent of the intergenerational crime that is being committed is becoming clear.

Today’s young are being robbed of opportunities and may be the first generation in our nation’s history to be significantly poorer than their parents.

Let’s start with the easy part: government debt. We spent $12 billion on the wage subsidy, the vast majority going to boomer-owned businesses to ensure they did not have to pay the full cost of their firms being shuttered.

Think about this for a moment. Almost every firm that got the money would have survived. This was a freebie to the capital-owning class; paid for with borrowed money that will not be re-paid by them, as their tax-paying days are coming to a close in the next decade. . . 

Whether or not most firms would have survived is debatable, as is the question of whether they were in trouble before the lockdown.

Wellington has decided, with overwhelming community support, to smash our economy in order to temporarily eliminate what has proved to be a virus with a far lower level of mortality than first advertised.

Fine. This isn’t something that I support, but OK. Let’s do this. However, if you are going to destroy tourism, damage hospitality and cripple construction, we need to be honest with ourselves; we are going to have to get by with less.

But we don’t want to do that. There is a collective refusal to accept that we are considerably poorer today than we were in January. There is an illusion of economic normality being created by enough ink to re-hydrate the Red Sea. . . 

National Party finance spokesman and putative post-election leader Paul Goldsmith estimates the projected $140b of future borrowings is equal to $80,000 per household.

Yet, no one seems to care. We’re in a panic over the fairness of charging people $3000 to cover the costs of an enforced stay in a quarantine hotel and the antics of school kids playing at being Nazis, but were heading off the edge of a fiscal cliff and … nothing.

The cost of borrowing will be paid for in two ways. Not only will this money need to be paid back; either through higher taxes, reduced government services or by the pernicious and economically destructive hidden tax of inflation, there is the opportunity cost of lost growth.

When you borrow to maintain consumption you are stripping resources from the economy that could have been deployed elsewhere for more productive activity; investment, primarily.

People wanting to borrow find they cannot get access to capital because the state is sucking up all available cash.

It isn’t just the cash available for lending either. It is the physical and human resources that entrepreneurs require to trade that are being diverted by the states’ uncontrolled spending. . . 

This government thinks it’s better at spending our money than we are and it’s spending is making it more difficult for private enterprise to flourish.

The lockdown produced a very good health response but the government response to the economic crisis will make it worse.

The problem isn’t just that sooner or later the debt will have to be repaid. It’s that every cent needed to repay it is a cent not available for essential services and infrastructure unless the economy starts growing, and growing well, again and there is no sign of anything from the government that will help us get out of this mess.


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