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.


More immigration isn’t what they campaigned on

September 18, 2019

The government has announced changes to immigration policy with a streamlined temporary work visa.

It’s been greeted positively by Federated Farmers:

“Our message that workforce and related problems experienced by the big cities are not necessarily those experienced in the provinces has  been taken on board – we congratulate the government,” Feds employment spokesperson Chris Lewis says.

“The changes will help ensure farmers and others can more easily employ migrants when they need them, and when the options for taking on and training suitable New Zealanders are exhausted.”

By ditching the ANZSCO skill level classifications, there is much greater scope for a migrant worker to achieve career progression on our farms.

“The changes incentivise farmers to invest in training and supporting migrant employees because there’s a greater chance of keeping them than currently exists.

It’s such a waste of time and effort to train people only to have them forced to leave the country when their visas run out.

“We also acknowledge the government for its compassionate and pragmatic approach in reinstating the family entitlement for lower skilled visa holders.  The migrant worker’s children can be educated here, and their partner can get an open work visa,” Lewis said.

“It’s a positive for rural communities to have settled and content families, not just single men who may well be sending all their money home to their family.”

It’s far better to have families together here, participating in the community, than to separate them with the worker isolated and sending money home.

The government has indicated the dairy industry is a likely early target group for one of the new sector agreements, containing specific terms and conditions for recruiting foreign workers.

“Federated Farmers looks forward to working with other Team Ag  partners and the government to help get this sector agreement right,” Lewis said.

DairyNZ and the tourism industry are among others who are pleased with the changes and I agree with them.

Unemployment levels are low throughout New Zealand and out of the main centres are down to the unemployable. It is at least difficult, and often impossible, to get locals who are capable of working on farms, orchards, hospitality and tourism in the regions.

But what do all the people who voted for the governing parties, Labour NZ First and the Green Party think?

All three parties criticised immigration levels when they were in opposition and campaigned on cutting it back.

We can be grateful that now the anti-immigration rhetoric has met the reality of worker shortages it’s the voters who believed the talk who are disappointed but businesses will find it easier to get the staff they need.


Voluntary bonding much better than free fees

August 26, 2019

A record number of mental health nurses have joined the voluntary bonding scheme:

The government’s Voluntary Bonding Scheme gives health professionals the incentive to fill gaps in hard-to-staff professions and in communities where they are needed.

This year overall, 357 people were accepted into the scheme, similar to last year.

However, a record 148 mental health nurses were accepted, up 11 percent on last year.

That included 24 from Canterbury District Health Board, 19 from Waitematā DHB and 18 from Counties Manukau DHB. . . 

The scheme was launched in 2009. It offers bonded after-tax payments to doctors, midwives, nurses, medical physicists, radiation therapists, sonographers and dentists. . . 

This was a National government scheme and it’s a far better one than Labour’s free-fees for all first year students.

The former is targeted, the latter is not. The former is for graduates, people who have successfully completed their studies, the latter is for first years who may or may not pass and if they do may or may not continue studying.

The voluntary bonding  scheme makes it more attractive for people to take up work in hard-to-staff professions, communities and/or specialties.

It makes it less difficult for employers looking for those skilled people in those places and pays more to those who take up the jobs as either top-up income or off-setting their student loans off their student loans.

It also helps retain newly graduated professionals in New Zealand.

That’s good for employers, the people who need the services the professionals provide, and the country.

Contrast that with the fee-free policy which helps students, only some of whom need it, at considerable cost to the country.


Regions lose with central control

August 2, 2019

The government is centralising vocational education, merging 16 technology institutes and polytechnics into one:

Former Tertiary Education Minister Steven Joyce warns of the risks in this move:

. .  .Leaving aside the issue of transferring the control of hundreds and hundreds of millions of assets out of regional New Zealand to Wellington, there are huge risks in the proposal. Across the Tasman, New South Wales has just done something similar, merging its 16-odd TAFEs (polytechs) into one NSW-wide TAFE, and it is a cautionary tale. The merged entity lost $30 million in its first year, blowing out to $240m in its second. It’s now in the process of further reform.

Yes, many New Zealand polytechnics are currently struggling, but that’s not unique to this country. When employment is high, vocationally-minded people tend to get into work ahead of going to polytech, and roll numbers drop. It’s been made worse here by the sudden squeeze on international enrolments caused by government immigration policy which is contributing to a perfect storm of red ink.

Interestingly however, well-run polytechnics like SIT in Southland, Otago, and the Eastern Institute of Technology in the North Island, have continued to perform and make surpluses. A few board overhauls and the odd regional merger, plus a bit more tuition funding, would do wonders for the others and retain their local focus – and be much less risky.

The government’s prescription is radical surgery when much less drastic medicine could solve the problems at a much lower cost in both money and jobs:

The Government’s polytechnic and industry announcement today will cost thousands of jobs and may be the death knell for some polytechnics, National’s spokesperson for Tertiary Education Dr Shane Reti says.

“Moving apprentices back to polytechnics and creating one mega polytechnic will cost at least 1300 jobs in industry and probably as much again in polytechnics.

“Employers are telling us they will cease to employ apprentices next year if apprentices go back to polytechnics. This is a big step backwards especially when our construction sector is crying out for apprentices.

“The Government has brutally dismissed the concerns of industry and businesses who raised serious issues with polytechnic training. Industry understands the needs of industry best and who will be the best fit for them, but Mr Hipkins is blatantly ignoring them.

“Now the Minister is turning his axe to polytechnics. Under these reforms well performing polytechnics from the Southern Institute of Technology to Otago Polytechnic will lose the very essence of their successful and innovative local decision making.

“The reforms dissolve polytechnics into hollow and meaningless ‘legacy’ polytechnics. This ideology will destroy tradition, decimate organisational knowledge and the final indignity will be the mega polytechnic spending community gifted cash and assets.

“This is devastating for polytechnics and their staff and students.

“Every aspect of the vocational education sector is under attack. Apprentices are being sent back to polytechnics, polytechnics are being amalgamated into legacy campuses, jobs are being lost, cash and community assets will be ring-fenced and regional autonomy is being stripped away.

“These reforms will be disastrous for regional education and apprenticeships. Mr Hipkins is pushing ahead with ideology over what is best for students and regional New Zealand.

“National will empower the regions to make decisions around what they teach, where they teach and how they teach. We will return polytechnic assets taken by Labour and give them back to communities. We will return apprentices to industry.

“National supports apprentices and regional polytechnics and we will fight for their voice and autonomy in these ideological educational reforms.”

Invercargill mayor Tim Shadbolt said the city will fight to save The Southern Institute of Technology:

Invercargill leaders have vowed to fight a Government decision to centralise the Southern Institute of Technology [SIT] with 15 other polytechnics and training institutes nationwide.

Mayor Tim Shadbolt said he was in “absolute disbelief they could do such a terrible thing to our city” and said legal action would be taken against the decision.

“They have really ripped the heart out of Invercargill with this announcement.”

The proposal also threatens the future of Telford Farm Training Institute:

Clutha-Southland MP Hamish Walker said the announcement was incredibly disappointing and raised uncertainty for Telford’s future.

“Today’s announcement of the Government’s reform of vocational education through the centralisation of polytechs is another blow to rural and regional New Zealand. 

“It is the people in regions who know the needs of their people best, not a long list of public servants in Wellington.”

Community assets would be taken away, decision-making powers would be lost and as a result, Telford would be disadvantaged, he said.

“Telford’s long-term proposal was turned down because of this reform which will now cause further damage to Clutha-Southland and its workforce.”

“This creates further uncertainty for staff and students at Telford who have already been through enough.” . . 

Successful organisations like SIT and Otago Polytech could have been used as a model for other institutions that were floundering.

Instead the successful are being sacrificed because of others’ failures and the regions lose autonomy to central control.


Unemployment increase > Oamaru’s population

July 24, 2019

Job-seeker beneficiaries have increased by more than 15,000 since the Labour-led government took office:

An increase of 15,500 people on jobseeker benefits under the Labour-led Government shows that they are not motivated to help New Zealanders into work, National’s Social Development spokesperson Louise Upston says.

“The Government proudly announced last June that new policies had led to a 23 per cent daily drop in sanctions. They now say that they have not changed Work and Income’s policies.

“What they claim not to see is the direct link between the removal of work obligations and the rise in people receiving benefits.

A benefit provides temporary assistance for some people when for a variety of reasons they find themselves without work.

But removing work obligations has made it too easy for others for whom a benefit is preferable to a job.

“If the Minister isn’t going to encourage people into work and more fulfilling lives, she should rename the Jobseeker Support benefit, because its recipients are no longer obliged to look for jobs.

“The Government lacks ambition for young people, with 17 per cent more 18 to 24-year-olds claiming Jobseeker Support in the past year. This is clear evidence that this Government isn’t investing in helping young people improve their lives.

The younger people become beneficiaries the longer they are likely to stay dependent on the state with the increased risks of poorer health and likelihood of committing crime that go with that.

“The Government also says it wants to end poverty. If that’s the case, they should be making every effort to reduce the number of benefit-dependent households.

“Benefits are an important safety net, but 8000 more Kiwis were dependent on Jobseeker Support for more than 12 months this June than in September 2017. Benefits are becoming a long-term trap.

“National supports New Zealanders to be aspirational. We believe the best way out of poverty is through work. 

“That this Government is responsible for such a large rise in the number of people on a jobseekers’ benefit while employers are crying out for workers shows its claims of kindness and care to be hollow words.”

The increase of 15,500 on job seeker benefits is a couple of thousand more people than the total population of Oamaru.

That isn’t good for them, nor is it good for the country.

Every dollar spent on a benefit and the associated costs of delivering it to people who could be in work is a dollar taken from tax and not available to provide better social services and infrastructure.

This government is more than half way through its term and is failing to deliver policies that would make a positive difference to the country and its people.

Instead it’s spent more than $300 million on working groups:

The Government’s constant outsourcing of work has left taxpayers with a $317 million bill, Leader of the Opposition Simon Bridges says.

“Over the past 21 months, there have been 279 working groups created or reviews launched. That’s a working group every two days since the Labour-led Government has been in office.

“The Government has used working groups as an excuse to stall on doing any work while the coalition squabbles in the background.

“It shipped off work to the Tax Working Group, the Welfare Expert Advisory Group, the Business Advisory Group and the Fair Pay Working Group. All of these groups reported back with recommendations but the Government has done little or nothing with them.

“New Zealanders will be scratching their heads wondering why their hard-earned taxpayer dollars are being spent on working groups when the work isn’t even being used. They’ll be asking themselves, what is the point of this Government? 

“The Government has broken many promises it made leading into the 2017 election, like $20 million for rare disorders, $10 cheaper GP fees to all New Zealanders and free annual health and eye checks for seniors.

“Not every review is wasteful. We support the Government in calling for a Royal Commission of Inquiry into the Christchurch terrorist attacks, but the constant outsourcing of work takes the focus off the important reviews that really matter. Over the same time period when we were in Government, we had 113 reviews, less than 40 per cent of what this Government has called for.

“The Government has no plans for growing the strong economy it inherited, or for improving the lives of New Zealanders. Rather than having a plan and a vision for New Zealand it’s focused on keeping the coalition together and treading water.

As well as wasting money of working groups whose recommendations it ignores, the government is wasting money on poor policies.

“On top of all the working groups, the Government is making poor spending decisions, including more than $2 billion for fees-free tertiary, which has resulted in fewer students, $3 billion for Shane Jones’ slush fund and $2 billion on KiwiBuild, which has resulted in next to no houses.  

“National would cut the waste and invest taxpayer dollars in more considered and targeted ways. Savings from these reviews alone could fund the Roxburgh children’s village for the next 90 years, fund 5,600 cochlear implants, restore and maintain full facilities at the Lumsden Maternity Clinic for more than a hundred years, or axe the regional fuel tax.

“National is doing the work in Opposition so we’re ready should we earn the right to govern in 2020. We have already released three comprehensive discussion documents and there are six more to come. Our polices will be in place and our legislation will be ready to go in time for 2020.” 

Labour was unprepared for government and we’re paying the price for that.


Rural round-up

July 12, 2019

Rotten reality: Apples still on trees in July a visual reminder of Hawke’s Bay picking struggles :

Fruit hanging on trees well into a cold and frosty Hawke’s Bay winter provides a visual reminder of the struggle growers had finding pickers over the last season.

New Zealand Apples and Pears CEO Alan Pollard said it was the third year in a row a labour shortage had been declared in Hawke’s Bay, and it was time to have a conversation about solving the issue.

“We can’t continue to have an annual conversation which is what we’ve been doing in the past, we’ve got to have much more long-term solutions. . .

Winston Peters wonders why he doesn’t get a thank you from farmers – Hamish Rutherford:

No one provides a defence of the New Zealand Government quite like Deputy Prime Minister Winston Peters.

Over the course of nearly two years in Government, senior Labour Party Ministers have adopted an increasingly conciliatory approach to critics, while, if anything, Peters becomes more cantankerous.  . . .

Sheep and beef on farm inflation reaches 3 percent:

Sheep and beef farm input prices rose twice as fast as consumer price inflation in the year to March 2019 with on-farm inflation at 3.0 percent, according to the latest Beef + Lamb New Zealand (B+LNZ) Economic Service Sheep and Beef On-Farm Inflation Report.

The report identifies annual changes in the prices of goods and services purchased by New Zealand sheep and beef farms. The overall on-farm inflation rate is determined by weighting the changes in prices for individual input categories by their proportion of total farm expenditure.

B+LNZ Economic Service’s Chief Economist Andrew Burtt says the biggest three expenditure categories – shearing expenses; fertiliser, lime, and seeds; and council rates – contributed substantially to the 3.0 percent rate of on-farm inflation. . .

ANZCO confident no repeat of horror year – Allan Barber:

ANZCO’s 2018 pre-tax loss of $38 million was the worst result in the company’s history. The exporter has traditionally posted a profit, even in difficult years for the meat industry which has always had a chequered history, so it is critical to assess what went wrong and, more important, how to make sure it doesn’t happen again.

None of the largest meat companies that publish their annual results, Silver Fern Farms, Alliance and ANZCO, enjoyed a great year, but contrary to its previous performances relative to its competitors, ANZCO had the worst of it by a considerable margin. Analysis of the figures shows record income more than offset by expenses and finance costs; the obvious questions for CEO Peter Conley are what is going to change and how is 2019 tracking? . . .

Alternative protein startups: let’s get the facts straight about livestock’s carbon footprint – Lauren Manning:

The impact of the meat industry on the environment, particularly relating to greenhouse gas emissions, has become common knowledge among consumers and is increasingly a feature of mainstream media headlines today.

Arguably starting when the Food and Agriculture Organization released a paper entitled Livestock’s Long Shadow in 2006, the anti-meat movement moved on from focusing on concerns about the humane treatment of animals to its environmental footprint. . . 

Inaugural Ground Spread Awards recognise  innovation, skill and excellence:

The inaugural winners of the New Zealand Groundspread Fertilisers Association (NZGFA) awards were announced this week at the organisation’s 63rd annual conference, ‘Technology the Enabler’, in Taupo.

The NZGFA Innovation Award (sponsored by Trucks & Trailers) was presented to Canterbury’s Ron Smith of R&R Haulage Ltd for his detailed research into testing bout widths against product quality. . .


Rural round-up

May 31, 2019

Employment model tipped on head – Richard Rennie:

As dairy farmers struggle to hire and keep staff Woodville farmer and DairyNZ director Ben Allomes has tipped his farm employment model on its head. 

He and wife Nicky aim to attract and retain people in an environment that recognises effort and nurtures potential while recognising a work-life balance.

The challenges in attracting and retaining good people and a need to restructure their business two years ago presented the Allomes with a chance to look at how they employ people on their 750-cow operation.

“It also came from a realisation that if I was in this industry for the long haul and was relying upon key people then I had a duty to make it work for them.  . . 

Wellbeing Budget should have worked with farmers on conservation:

The 2019 Budget has left Federated Farmers questioning why the Government’s first Wellbeing budget has left a critical gap in its commitment to conservation.

There is no additional funding for the QEII National Trust or the Ngā Whenua Rāhui Fund. Plus, woefully inadequate funding for the control of wilding conifers, Feds Arable and Biosecurity spokesperson Karen Williams says.

The extremely modest increase in funding for the National Wilding Conifer Control Programme means its work will be going backwards in terms of managing this out-of-control pest.  

“We hoped to see the wilding conifer programme receive more like $25 million per year.  . . 

Farmers milk new technologies – Luke Chivers:

Winton dairy farmers Billy and Sharn Roskam believe tapping into modern technologies is the key to an efficient dairy operation. They spoke to Luke Chivers.

It is 7am.

As daylight breaks on the Southland Plains, Winton dairy farmers Billy and Sharn Roskam’s morning milking is well under way.

Their 36-bail rotary is filled with the steady hum of modern machinery – from automated cup removers to automated teat sprayers and heat patches. 

“It’s all about labour and efficiency,” Sharn says.  . . 

Taieri couple can stay and seek residency – Sally Rae:

A Taieri couple’s future in New Zealand is looking much more certain after they were told they can apply for residency.

Last year, nurse Pawan Chander faced deportation to India after her application for a work visa was declined by Immigration New Zealand, as her husband Harrie’s employment as herd manager on a Woodside was deemed “lower skilled”.

Following publicity about the couple’s plight, Mrs Chander was granted a 12-month visitor visa to line up with Mr Chander’s work visa, which expired this month. . . 

Innovation rewarded – Yvonne O’Hara:

John Falconer’s hydraulic, remote-controlled deer crush, which he designed, was one of the reasons he and wife Mary won the Gallagher Technology and Innovation Award at the 2019 Deer Industry Environmental Awards last week.

“The crush has been a game-changer for us,” Mr Falconer said.

Mr and Mrs Falconer, of Clachanburn Station, Puketoi, won the award for their use of “farming technologies to improve productivity and manage resources”.

They also won the Duncan New Zealand Award for “vision and innovation while mastering a demanding environment”. . . 

Costs up as farmers reinvest back into business:

DairyNZ’s newly-released Economic Survey 2017-18 shows farmers have taken advantage of increased milk income to catch up on deferred farm maintenance and revisit capital expenditure, previously delayed due to lower milk prices.

DairyNZ senior economist Matthew Newman said the annual farmer survey shows the largest increases in spend during 2017-18 (1 June 2017 to 31 May 2018) were on feed, repairs, maintenance and labour. But, it is likely expenditure has increased further in 2018-19.

“The 2017-18 season was difficult due to a dry spring/early summer for all regions. That affected pasture growth and peak milk production. It’s also the season that Mycoplasma bovis was discovered,” said Matthew. . .

Living off the grid for almost 80 years – Ciara Colhoun:

Margaret Gallagher has lived off-grid for almost 80 years.

When she was was born – near the Irish border in County Fermanagh in 1942 – it was not unusual for families to live without electricity and running water.

Margaret’s neighbours only began to update their homes in the late 1940s and 1950s.

But her family missed the opportunity to join the trend due to her mother’s death, when Margaret was 10, and her father’s ill health. . . 


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