5.5 tonnes a minute

November 18, 2019

Sully Alsop gave some interesting numbers in a speech at the 50 Shades of Green march on parliament last week:

It took me about a minute to get up here to speak to you today. And something amazing happened in that one minute. Something truly remarkable that happens every minute of every hour of every day in NZ. Something that you are all a part of. In that one obscure minute NZ exported another 5 and a half tonnes of pastoral agriculutural product generating more than $100,000 for NZ.

That’s a lot of product and it earns a lot of money.

The average income in NZ is $52,000 so in less than a minute the pastoral sector generated the annual household income for one family.

The rural sector that you all work so hard in just paid for a school teacher, a policeman, a nurse, or maybe about a quarter of a politicians salary. Maybe that minute made it possible for one of those non farming households to take their family on a holiday, or get their children a better education.

And that is the message we all bring to parliament today. This isn’t just about rural communities or urban centres this is about all of NZ and protecting the way of life that we all enjoy, the way of life that the pastoral sector contributes to so significantly for all – every minute.

The export income primary produce generates starts on the farms but the benefits flow through rural communities and the regions into cities.

And that pastoral sector, that is so much the fabric of much of our country’s identity, is confronted with unprecedented change and challenges.

We are not here to push back against change, we are not laggards and do not have our heads buried in the sand. Quite the opposite, much of the change that is being proposed is not actually change at all, but a continuation of the good work carried out by our sector over the past decades well before water quality and climate change became daily talking points.

We should all be proud of the more than 100,000km of waterway fencing already undertaken. We should be proud that more than a quarter of the nation’s native bush is on our land that we protect and enhance.

Our rural communities are proactive problem solvers. I am personally very proud of what has been achieved in my neck of the woods – the Wairarapa. A cyclone in the 70’s caused huge damage on the delicate hill country. Soon after poplar and willow planting trials were undertaken and since then millions of trees have been planted for erosion control. This was not legislated, it was not compulsory, it was just motivation of farmers and some education from Regional Land Managers.

That’s right Shane Jones, if you’re still trying to work out how to plant half a billion trees, you don’t need to be up all night researching on your laptop in a hotel room, you just need to pop over the hill and ask the farmers and land managers in the Wairarapa.

We are not here to push back against change, we are here to make sure that change is done right. And what you have proposed in the Healthy Waterways legislation is not right. To be blunt, it is a lazy, unimaginative, piece of legislation that at best will be clunky, inefficient, ineffective, and demotivating. New Zealanders, all New Zealanders deserved better. We are not here to push back against intended outcomes of this legislation, but we are here to push back strongly against how you have proposed to achieve those outcomes.

Few have any argument about the goal, it’s about how to reach it, how quickly and at what cost that is debated.

The Healthy Waterways legislation gives a broad brush, one size fits all attempt at dictating terms on a national level. Landowners in this country were never consulted as to the relevance and practicalities of this plan. This is either arrogant or lazy and NZ deserves better.

How can one document cover all the different soil types, topography, and climates in this diverse country. The issues on Canterburys stony plains will be different to the high country, which will be different to the peaty soils of Waikato, to the beaches of Auckland, to the dry hills of the east coast.

If this government really wanted to show leadership in this area they would have taken the time to clearly define the issues, and work with all stakeholders to come up with a practical solution, that would work on the ground, rather than cave to public perception.

This lack of consultation showed in the 17,500 submissions highlighting the weaknesses of the legislation. Why the pastoral sector were not consulted is beyond me. What you are proposing will have massive impacts on our businesses, our families, our communities, and in turn the rest of NZ, the teachers, the nurses, the policemen that agriculture supports, every minute. It would be nice to think we were at the table and not simply on the menu.

The lack of research was evident by ideas such as grandparenting land use change and audited farm plans being included. These have been proven to be unfair and ineffective tools in regional plans throughout the country. The fact they showed up again in the Healthy Waterways legislation shows the lack of imagination and research.

It was lazy and NZers, all NZers deserved better.

It was worse than lazy, it was impractical and expensive in both economic and social terms without the scientific backing to ensure real environmental gains.

So I challenge our leaders, instead of clunky, one size fits all, legislation give us the space and flexibility to come up with our own solutions taylor made to our individual land and water quality issues.

Instead of audits and box tickers that we will pay for either directly or indirectly, pour money into science. Our universities, Massey and Lincoln were so vital to the production gains made over the last 40 years can again be vital in this next stage of NZ pastoral agriculture that is less about production and more about maximising the value of that product. Give us less box tickers and more research and development.

Instead of box tickers give us support and expert advice. We will come up with great solutions that even the universities cannot if you give us support, confidence, and education where we need it.

Instead of audits give us flexibility to come up with our own solutions.

Instead of being stick wavers, be our partners. All NZers, the nurses and policemen and teachers rely on it.

The government is promoting policies that will harm not just farms, farming and farmers, but the economic and social fabric of the whole country without a single policy to mitigate the harm and replace the income.

I’m not scared of this change because it is not really change but a continuation of the good work we already do.

I’m not scared of this change because it our sector has been challenged before and we rose to that challenge and adapted.

But we cannot do it without pastoral land. We have to stop the sale of productive land into foreign ownership. We cannot meet the challenges ahead and continue to provide all NZers, the teachers, nurses, and policemen with the NZ we currently enjoy without pastoral land.

We have to stop prostituting NZ out as the dumping ground for the worlds carbon addiction.

What makes this policy worse is that the science says forests are only a short-term band-aid for offsetting fossil fuel emissions.

Our rural communities matter.

Our schools matter.

And not just for our rural communities but for all those non rural households whose incomes our exports support every minute.

These international owners don’t care about NZ’s future, they don’t care about our communities. They are simply here to dump their carbon rubbish and move on leaving our grandchildren to wonder what happened. What happened to the NZ we, their grandparents talked about, what happened to all those nurses, teachers, policemen that are no longer supported.

I know this was never the intention of this legislation. But by signing off on the first 30 year band-aid of an idea that springs to mind is short sighted, lazy, and NZ deserves better. Show true leadership. Look for long term solutions, don’t just settle for the best idea in a bad bunch. NZ relies on you doing so.

To you all thank you, and feel proud about what you do in every unremarkable minute of the day and the impact it has on this country.

It’s hard to feel proud when government policies would sabotage not just individual businesses but communities and eventually the economic and social wellbeing of the country.


GDP matters

November 4, 2019

Pew Research on the importance of GDP:

…Life satisfaction is also strongly associated with positive views about the nation’s economic situation.

In all countries originally surveyed in 1991, life satisfaction has improved, sometimes dramatically. The largest changes have occurred in Central and Eastern European countries such as Poland, where the percentage of people placing themselves as a 7 or higher on the ladder of life has increased by 44 percentage points since 1991. Whereas only 12% of Poles rated themselves highly nearly 30 years ago, now 56% do so.

Those who live in former East Germany have also experienced a considerable increase in life satisfaction. In 1991, only 15% of East Germans rated their life highly; today around six-in-ten say their life is a 7 or higher on the ladder of life. West Germans – those in pre-1990 Federal Republic of Germany – have also seen an increase in the share who rate their life highly (+12 percentage points).

In the three former Soviet republics surveyed, life satisfaction has improved, but fewer than half place themselves high on the ladder of life. Russians are 21 percentage points more likely to rate themselves highly in 2019 than in 1991. Despite this improvement, though, only around one-quarter of Russians say they are a 7 or higher on the ladder today. Russians were the only group to see a significant decline in life satisfaction from 2009 to 2019: More Russians placed themselves highly on the ladder of life in 2009 than in 2019 (35% vs. 28%)…

 

Money doesn’t buy happiness but it does give choices, and provide more opportunities and more security.


Too much of a good thing

October 9, 2019

The government has posted a $7.5 billion surplus:

The Government has unveiled a bumper $7.5 billion surplus and the lowest debt levels in almost a decade, the latest Crown accounts reveal.

That level of Government surplus has not been seen since at least 2008, just before New Zealand felt the full effect of the global financial crisis. . . 

It’s taking all that money yet failing to deliver on its promises.

Surpluses are good, but $7.5 billion looks like too much of a good thing.

The government is either taking too much, spending too little, or both.

National’s Economic Development spokesman Todd McLay says:

“The Government should be looking to stimulate the economy by letting New Zealanders keep more of what they earn.

“Instead, it has piled on more and more taxes to the point where Grant Robertson is sitting on a big surplus while those living outside Wellington’s beltway struggle with rising living costs.

“One of the reasons debt is lower than forecast is because the Government is failing to invest in the infrastructure New Zealand needs.

“It has cancelled or delayed a dozen major new roading projects right across the country and replaced them with projects that weren’t ready, and won’t be ready for some time yet.

This isn’t just taking more tax and doing less with it. Stalling new roading work risks a loss of skilled people who will head overseas if there’s a gap between current projects finishing and new ones starting.

“Meanwhile, the Government has been piling on taxes. It has legislated to milk an extra $1.7 billion from motorists through fuel tax hikes and extra GST, while its misguided housing policies have pushed up rents and burdened landlords with extra costs and regulation.

“National legislated for tax relief that would have put more than $1000 a year extra into the back pockets of New Zealanders. This Government cancelled that. 

“We will index tax thresholds to inflation so that New Zealanders aren’t taxed more by stealth every year because of the rising cost of living.”

Sound economic management requires much more than creating surpluses.

The government must take enough, but not too much, and it must scrutinise all its decisions to ensure its spending effectively and prudently.

The large surplus suggests the government could be investing more in infrastructure and filling some of the gaping holes in the health system.

It also shows it is taking far more than it needs and it could be leaving us all with a little more of our own money by way of tax cuts.


3/5s of not very much

September 23, 2019

Steven Joyce gives the government some much-needed advice:

It was confirmed this week that New Zealand is now running at little more than half speed.

From growing at rates of 3½ to 4 per cent three years ago our economy at the end of June was only 2.1 per cent larger than it was the previous June.

That’s a problem firstly because our population is growing at about 1.6 per cent a year, so if our economy grows at 2 per cent then the amount of additional wellbeing per person (to coin a phrase) is three fifths of not very much.

Not very much is far less than we need for economic, environmental and cultural wellbeing.

The second problem is that our terms of trade (the prices of our exports versus our imports) are still very strong so we should still be cranking along. It’s a problem if we are slowing down when the world really wants to buy what we are selling. What happens if the world actually falls out of bed?

What happens is recession and maybe even depression.

The government has been quick to blame the world economy for our lower growth rate this week, but our terms of trade put the lie to that.

The third problem is that there is no sign of anything on the horizon that will lead to much of an upturn, and in fact all the signs are that we are going to slow further. Our businesses are in a funk because of what is known as regulatory overhang. In short, they are too fearful to invest because the government is making lots of rule changes that could mean they don’t get much of a return for the risk they take.

It’s not just farmers, other businesses are too scared to invest.

The government for its part seems inclined to shrug its shoulders and say “nothing to see here”. They observe we are still growing (slightly) faster than Australia so what’s the problem? That story is likely to change in the next six months as Australia’s tax cuts come through and their housing market picks up. Anyway weren’t we trying to grow a lot faster than Australia so we could close the income gap with our cousins across the Tasman – what happened to that ambition?

This government has no ambition for growth, only for regulate, tax and spend.

The fourth problem is that lower growth means less to go around. If we were still growing as fast as we were then in real terms our economy would be around $5 billion bigger this year than it is. That means more money for higher pay and more jobs, and of course about 30 per cent of it goes into the government coffers – which would pay for a lot more cancer drugs, teachers or electric vehicle subsidies.

How hard is it to join the dots between higher growth and more for essential services and infrastructure?

So what to do? Well if I could offer some gratuitous advice to the Finance Minister I think he should be working on baking a bigger cake, and I think the recipe is pretty straightforward. Its time to rein in some of his ministerial colleagues who are wreaking havoc with business confidence.

For example he should suggest the Minister of Immigration sort out his portfolio so that horticulturists can find seasonal workers and the international education sector can get up off its knees. He should tell the Minister for the Environment to come up with a more reasonable plan for water quality improvements and methane emissions reductions so farmers step back from the cliff edge, and the Minister of Education to stop stuffing about with the apprenticeship system.

He should encourage the Reserve Bank Governor to be less heroic on bank capital requirements, persuade his colleagues to do a backtrack on gas exploration now it is proven the ban is simply value destroying and does nothing for climate change, overrule the Greens to permit some gold mining, and stop taxing tourists more so the tourism sector starts growing again. He should cancel the return to industry-wide pay bargaining given that NZ First are never going to vote for it anyway, tell the Transport Minister to get on with building at least some of the stalled roading projects, particularly given that light rail is years away, and reverse at least one of the petrol tax increases.

Then he could watch the economy recover and start thinking about how he’s going to allocate the increased government revenues. And New Zealand will be in much better shape if the world economy does get worse. . .

He won’t of course and nor will he see that it’s the poor and the struggling middle that will be hurt the hardest by policies which hamper growth.


Another sign of softening economy

September 3, 2019

Fewer new vehicles are being sold:

For the fourth month in a row, fewer new vehicles were sold in August compared to the same month last year confirming that the overall market for the year will be down on 2018.

Motor Industry Association Chief Executive David Crawford says that for the month of August the number of new vehicle sales were 4.5% lower than August last year.

He says overall year-to-date sales were down by 5.1% percent on the first eight months of 2018, a reduction of just over 5,400 fewer vehicles sold in 2019 to date.

“Growth has disappeared from the 2019 market and we are expecting an out turn for 2019 at about 6% below 2018 levels.” . . 

 Commercial vehicle registrations of 4,101 were down 10.1%,  which is 460 vehicles compared with sales last August. That is another sign the economy is softening and confirms surveys showing business confidence is low.

The anti-car brigade might be pleased with this news, but it’s not fewer vehicles in total, it’s fewer new ones.

This means people are buying second-hand or keeping older vehicles longer rather than buying new more fuel-efficient and safer ones.

 


Business blues deepen

August 30, 2019

Business confidence has fallen to the lowest point since the global financial crisis a decade ago:

The further collapse in businesses’ confidence and in expectations of their own activity is an indictment on the Ardern Government’s economic management, National’s Finance spokesperson Paul Goldsmith says.

“The most recent ANZ Business Outlook survey shows a net negative 52 per cent of businesses are pessimistic about the economy under the bad economic management of the current Government.

“To make it worse, businesses’ expectations of their own activity have fallen to a net negative for the first time since 2009 when the New Zealand economy was in the midst of the Global Financial Crisis. . . 

“When businesses lack confidence in the economy, as they do under the current Government, they are less likely to expand, invest in new staff or lift wages.

Reluctance to expand, invest or lift wages is even more likely when businesses’ expectations of their own activity are so gloomy.

“There has been a sharp decline in the New Zealand economy under this Government. Economic growth has decreased from around 4 per cent down to 2.5 per cent, per-person growth is amongst the worst in the OECD and business investment has fallen from 5 per cent a year under National to just 0.6 per cent under Labour.

“New Zealand should be doing well. The prices for goods we export are near historical highs meaning any effects from global uncertainty and trade tensions haven’t affected our exporters as of yet.

In spite of that farmers are in a similar frame of mind to that during the ag-sag of the 1980s. Uncertainty and  lack of trust in the government are compounded by fear of what it is going through inflict on the farming sector.

The ANZ survey shows the business blues have deepened in towns and cities too.

“Sadly the current Government’s bad economic management have hurt our economy.

“The Government have added costs to businesses and families with higher taxes and more regulations, they’ve created massive uncertainty and they’ve demonstrated incompetence, most famously with KiwiBuild and their woeful infrastructure policies.

“National will restore business confidence and revive our economy so that we can lift our aspirations, both in what we can earn and in what social challenges we can overcome.”

A thriving economy isn’t just about businesses doing well, it’s about job security, export income and the ability to invest in solutions for social problems.

The government has gone quiet on wellbeing with good reason. Businesses without the confidence to expand, invest and lift wages are a symptom of economic illness and that makes a very shaky foundation for wellbeing.


Labour pains National delivers

July 31, 2019

Is this how the National Party and its supporters are seen from the outside?

This is not the kind of stuff to you would expect to get the National Party faithful standing and applauding. It’s not a law and order policy or tax cut or a primary sector subsidy – it’s new health spending. This is the kind of thing Labour does.

Is it any wonder National is perceived as having a good head but too often not credited for having a heart if this is how a political commentator thinks?

Compassionate and effective social policy is what any good government does and it’s what motivates most members of any political party – making the country better for people.

National usually gets credit for economic management but, as the above comment show the reason that matters and what it is able to do and does do with the money it carefully manages, is lost.

A growing economy, and the policies that contribute to that are important not as an end but as the means to pay for the social policies and infrastructure that makes life better for people.

This government would have us believe it’s the first government to care about wellbeing.

Every New Zealand government in my memory has cared about wellbeing and done its best to improve it, albeit with varying success.

Making life better for people was the aim of Bill English’s social investment initiatives. They aimed to not only make life better for the people who were helped into independence, but better for us all by reducing the long term financial and social costs of benefit dependence.

Under this policy the number of people on benefits, and the long term cost of that, were dropping. Under this government both are increasing.

The big difference between this government and the last one, is that National understands the difference between the quality of spending and quantity and that sustainable wellbeing depends on a foundation of a strong and growing economy.

By contrast, the current government thinks more spending is better spending regardless of the results and the cost to those who pay.

National governs with head and heart, the Labour-led one puts feeling ahead of thinking.

That’s why National is able to deliver but in the long term Labour only pains.

National Finance Spokesman Paul Goldsmith explained the link between the economy and services in his speech to the party’s annual conference.

You will have noticed a strong economic theme to the start of the conference.

It’s true, we in the National Party do bang on a lot about the economy.

It makes me think of my old Nana, who always said, ‘money isn’t everything’.

Of course it isn’t.

As one of the richest men in the world, Warren Buffett, put it, ‘it doesn’t matter how much money you’ve got, if you’re not loved by the people you want to love you, life is a disaster’.

It’s similar with countries. Good government is just as much about preserving and enhancing what is special about this country.

That, to me, is the quality of our environment, our social cohesion, our relatively high trust and low corruption traditions, our commitment to the rule of law, freedom and tolerance of different views, our sense of security.

All these things are incredibly important and should never be taken for granted.

So the economy is not everything, but it is important.

Not because we revere the great machine for itself – it’s simply a means to an end.

The economy is about people. It’s about you, me, our families and our neighbourhoods.

To me, the point of a strong economy is to enable New Zealanders to do the most basic things in life well.

A strong economy improves our chances of finding satisfying and well-paying work so that we can look after ourselves and our families – the most fundamental task each of us have.

A society based on the assumption that its average citizen can’t or shouldn’t be expected to look after themselves and their families is doomed.   

That’s not what we believe.

Work itself, in its countless varieties, brings the opportunity to make a contribution to our world and the people in it, whether we’re providing someone with a new hip, a new app, or a cup of coffee with a smile.

And third, if we do well, we can afford to have some fun in our leisure time, and maybe if we have some energy left do something in the neighbourhood; on the barbecue for the school committee, or whatever.

That, to me, is the good life to which we aspire. 

As well as generating work and opportunities, good economic management and a strong economy enables the country to have better public services that improve our lives – a quality education, access to world-class healthcare when we need it, decent transport infrastructure so we can get home on time, the reassurance of superannuation when we’re old.

There are times in everyone’s life when we need help. At certain times of their lives some people can’t look after themselves and their families; the stronger our economy is, the more we can help.

Now, good economic management is not just about spending money, it’s about generating it. . . 

What’s the goal? To deliver a strong economy and world-class public services that enable Kiwis to look after themselves and their families, to find satisfying work, and to lead full lives.


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