Quotes of the Year

December 31, 2015

“It’s part of the foundation of everything we do. It forms the frame of our existence, both in business and our values in life. It’s very powerful. For us, it’s also about being part of a small community. We’re part of the Waitaki district but at the forefront of it all is our little Papakaio community. We all grew up and went to primary school here. I met my wife in primer one. A part of the responsibility of living in a small village is that you contribute to the village. We’ve all been involved in supporting the creation of the community centre, the tennis courts, the swimming pool, all those sorts of things.Ian Hurst.

“I’m getting the opportunity to indulge in stuff I really like for this and I do really like New Zealand’s native birds, and this project means I get to draw a whole lot of them, on a cow.

“At the moment I’m drawing one of our native birds that still exist [fantail], and then I will be drawing the ones that don’t.” – Joshua Drummond

It’s not that we don’t want Kiwis to achieve success, it’s that we don’t want them to change once they’ve achieved it. Or, as my colleague put it, they can be winners, but they shouldn’t be dicks. Heather du Plessis-Allan

  “I chose a nice tight turd and threw it as far as I could.” Adam Stevens  –  on his win in the cow pat throwing competition at the inaugural Hilux NZ Rural Games.

“This is obviously not a zero-hour contract. It could perhaps be better described as a zero-payment contract — . . “ Steven Joyce

” But I can no longer be bothered getting emotionally het up about people who take a different perpsective to mine. Unless, of course, they are socialists.” – Lindsay Mitchell

“I cannot pretend I am without fear. But my predominant feeling is one of gratitude. I have loved and been loved; I have been given much and I have given something in return; I have read and traveled and thought and written. I have had an intercourse with the world, the special intercourse of writers and readers.

Above all, I have been a sentient being, a thinking animal, on this beautiful planet, and that in itself has been an enormous privilege and adventure. “- Oliver Sacks, professor of neurology at the New York University School of Medicine and author, on learning he has terminal cancer.

This is a Government that believes that what works for the community is what works for the Government’s books. So every time we keep a teenager on track to stay at school long enough to get a qualification or have one more person pulled off the track of long-term welfare dependency, we get an immediate saving, of course, and an immediate benefit for those individuals and for the community, and a long-term saving in taxpayers’ money – Bill English

“The nature of by-elections is it’s a very short period of time. We devoted a couple or three weeks, as the party does, to select the candidate Bit simpler for Winston; he just looks in the nearest mirror and selects himself.” Steven Joyce.

. . .  I’ve never disliked religion. I think it has some purpose in our evolution. I don’t have much truck with the ‘religion is the cause of most of our wars’ school of thought, because in fact that’s manifestly done by mad, manipulative and power hungry men who cloak their ambition in God. – Terry Pratchett

The most important steps the Government takes are those steps that support the confidence of businesses to invest and put more capital into their business, and to therefore, in the long run, be able to pay higher wages. The Government does not influence that directly. However, we can contribute by, for instance, showing fiscal restraint and persisting with  economic reform. This enables interest rates to stay lower for longer but enables businesses to improve their competitiveness and therefore their ability to pay higher wages. – Bill English

“Schools are not there merely to teach in the old words of reading, writing and arithmetic, but they’re there to transition young people, especially at high school, into the real world,” . . . – Canterbury University dean of law Dr Chris Gallivan

“I have built a confirmation bias so strongly into my own fabric that it’s hard to imagine a fact that could wonk me,” . . . . “At some level, the news has become a vast apparatus for continually proving me right in my pre-existing prejudices about the world.” – Jesse Armstrong

 ”You can’t leave a big pig in the middle of the road – it’s a bit dangerous.” An unnamed Dunedin woman whose close encounter with a pig she tried to rescue left her nursing bruises.

“Politics is not entertainment,” he says. “That’s a mistake of people who are acute followers of politics as commentators or people from within the Westminster village.

“For the voters it’s not entertainment, it’s a serious issue, it’s a serious thing that means a great deal to their lives. It is their future.” – Lynton Crosby.

. . . outside politicised bubbles, most do not think in terms of “left” and “right”. Outside the political world, most think in terms of issues to be addressed in a way that is convincing, coherent, and communicated in a language that people understand. Statistics and facts won’t win the support of millions; we’re human beings, we think in terms of empathy. Stories are more persuasive, because they speak to us emotionally. . . – Owen Jones

In the animal world there’s a miracle every day, it’s the same with humans if you just give them a chance.Dot Smith.

I sometimes feel that ‘my’ is a word that blocks love… if we thought of our children, our dog, our world, our dying oceans, our disappearing elephants, perhaps we would be able to change our mind set and work with each other to save lives, share happiness, and even save our world from the sixth great extinction which scientists fear is imminent. – Valerie Davies

I believe in smaller government.

I also believe the best way to achieve smaller government is to deliver better government. – Bill English

. . . My problem with such people is twofold. First, they believe that the perfect society is attainable only through the intervention of the state, and that this justifies laws that impinge heavily on individual choice. And second (which is closely related), they have no trust in the wisdom of ordinary people. They seem incapable of accepting that most of us are capable of behaving sensibly and in our own best interests without coercion or interference by governments and bureaucrats.  – Karl du Fresne

. . . this Government has always given credit for the stronger economy to New Zealand households and businesses, which, in the face of a recession and an earthquake, rearranged the way they operated, became more efficient and leaner, and got themselves through a very difficult period. We have always attributed the strength of the economy to the people who are the economy. – Bill English

The real test is not whether people have an opinion, it is whether they are willing to put the money up. –  Bill English

Tree and sea-changers may love the rolling hills and open spaces, but they can’t then object to the dust, smell and noise that are part of everyday life in the farming zone. – Victorian Farmers Federation president Peter Tuohey

If a trade deal threatened to wipe out a million dollar regulatory asset you owned, you’d fight it too. Just like the mafia didn’t want the end of prohibition.Eric Crampton

. . . And when we say ugly, we mean ugly from each perspective – it doesn’t mean ‘I’ve got to swallow a dead rat and you’re swallowing foie gras.’ It means both of us are swallowing dead rats on three or four issues to get this deal across the line. Tim Groser

I’ve always said worry is a wasted emotion. You have to plan for some of these things. We knew we could possibly have someone in the bin at some stage, so it’s just a matter of making sure you have everyone knowing what they have to do – Steve Hansen

“I want to enjoy this success: how could you get enough of this? We will worry about that afterwards. I just want to have a good time with a great bunch of men having played in a wonderful World Cup final. I am really proud of this team and being able to wear the jersey. If you get moments like this, why would you ever call it a day?Richie McCaw

“To think that Darren Weir has given me a go and it’s such a chauvinistic sport, I know some of the owners were keen to kick me off, and John Richards and Darren stuck strongly with me, and I put in all the effort I could and galloped him all I could because I thought he had what it takes to win the Melbourne Cup and I can’t say how grateful I am to them,” Payne told Channel Seven after the race. “I want to say to everyone else, get stuffed, because women can do anything and we can beat the world.

“This is everybody’s dream as a jockey in Australia and now probably the world. And I dreamt about it from when I was five years old and there is an interview from my school friends, they were teasing me about, when I was about seven, and I said, “I’m going to win the Melbourne Cup” and they always give me a bit of grief about it and I can’t believe we’ve done it.  . . .Michelle Payne

“We have just come 11,000 miles to congratulate the best rugby team in the world. But ladies and gentlemen, what the hell am I going to say to the Aussies next week?” Prince Charles

Here’s the thing — none of us get out of life alive. So be gallant, be great, be gracious, and be grateful for the opportunities that you have. Jake Bailey

nzherald.co.nz's photo.

 


December 30 in history

December 30, 2015

39  Titus, Roman emperor was born  (d. 81).

1066 Granada massacre: A Muslim mob stormed the royal palace in Granada, crucified Jewish vizier Joseph ibn Naghrela and massacred most of the Jewish population of the city.

1460  Wars of the Roses: Battle of Wakefield.

1835 Charles Darwin left New Zealand after a nine day visit.

Charles Darwin leaves NZ after 9-day visitThis red gurnard was collected by Charles Darwin when the Beagle visited the Bay of Islands.

1865 – Rudyard Kipling, English writer, Nobel laureate, was born (d. 1936).

1875 – A.H. (Sir Alfred Hamish) Reed, publisher, author, entrepreneur, and walker and mountaineer,  was born (d. 1975).

Alfred Hamish Reed, 1958

1916 The last coronation in Hungary was performed for King Charles IVand Queen Zita.

1919 – Lincoln’s Inn in London admitted its first female bar student.

1922  Union of Soviet Socialist Republics was formed.

1924 Edwin Hubble announced the existence of other galaxies.

1927  The Ginza Line, the first subway line in Asia, opened in Tokyo, Japan.

1928 – Bo Diddley, American singer and musician, was born (d. 2008).

1931  Skeeter Davis, American singer, was born  (d. 2004) .

1937 –  Noel Paul Stookey, American folk singer (Peter, Paul & Mary), was born.

1940 California opened its first freeway the Arroyo Seco Parkway.

1942 – Michael Nesmith, American singer and musician (The Monkees) was born.

1944 King George II of Greece declared a regency, leaving the throne vacant.

1945  Davy Jones, English singer (The Monkees), was born (d. 2012).

1947 King Michael of Romania was forced to abdicate by the Soviet-backed Communist government of Romania.

1947 Jeff Lynne, English musician (ELO), was born.

1948  The Cole Porter Broadway musical, Kiss Me, Kate (1,077 performances), opened at the New Century Theatre and was the first show to win the Best Musical Tony Award.

1950 Bjarne Stroustrup, Danish computer scientist, creator of C++, was born.

1953 The first ever NTSC colour television sets went on sale for about USD at $1,175 each from RCA.

1959 Tracey Ullman, English actress and singer, was born.

1961 – Bill English, New Zealand’s Deputy Prime Minister, was born.

1965  Ferdinand Marcos became President of the Philippines.

1975 Tiger Woods, American golfer, was born.

1993  Israel and the Vatican established diplomatic relations.

2004 A fire in the República Cromagnon nightclub in Buenos Aires, Argentina killed 194.

2005  Tropical Storm Zeta formed in the open Atlantic Ocean.

2006  Madrid’s Barajas International Airport was bombed.

2006 Deposed President of Iraq Saddam Hussein, convicted of the executions of 148 Iraqi Shiites, was executed.

2009 – The last roll of Kodachrome film was developed by Dwayne’s Photo, the only remaining Kodachrome processor at the time, concluding the film’s 74-year run as a photography icon.

2011  – Owing to a change of time zone the day was skipped in Samoaand Tokelau.

2013 – More than 100 people were killed when anti-government forces attacked key buildings in Kinshasa, Democratic Republic of the Congo.

Sourced from NZ History Online, Te Ara, Encyclopedia of NZ & Wikipedia.


All jobs not equal

November 9, 2015

Labour’s proposal to use the government’s $40 billion in buying power to create jobs and back local businesses by requiring suppliers to make job creation in New Zealand a determining factor for contracts might be good politics but it’s bad policy.

The government, like any other entity, should be guided by price and quality when buying goods and services.

Unless businesses can adding job creation while competing on both of those factors, the requirement is a subsidy by another name.

If a future Labour-led government pays more, or accepts lower quality, to purchase from a business which creates more jobs it will not be not using public money wisely.

It will  be spending more than it needs to and to do that it has to take more tax, some of which will come from businesses with which those subsidised might be competing.

It could also lead the businesses which get the subsidies into difficulty when the government funding runs out and they find themselves with more staff than they can afford.

All jobs aren’t equal. Those created by government requirement are more expensive and less sustainable than ones created by businesses through their own efforts.

As Bill English said:

“We wouldn’t be chasing around the unemployment number [every] three months to three months – what we want to do is reinforce and encourage the industries that are doing well to invest, employ more people and grow.”

English said it was “not that easy” for the Government to create jobs, and any intervention would be unlikely to get value for money. . .”

The Wellington Chamber of Commerce is taking legal action against the City Council over its decision to require contractors to pay their staff the so-called living wage.

Labour’s policy is in the same feel-good- theory, bad-policy-in-practice territory.

The best thing a government can do for employment is keep a tight rein on its spending and enact policies which enable businesses to prosper which will give them the confidence to employ more people without a subsidy.


Quote of the day

October 1, 2015

. . . A strong focus of our policy is to make sure our markets work.

And over the last 30 years New Zealand has done a reasonable job of this.

Over the last seven years our labour market has been tested.

It has accommodated a significant recession in 2008, and a pickup in demand particularly in Christchurch following the earthquakes.

The labour market was able to respond quickly to those shifts in supply and demand conditions.

Today New Zealand’s proportion of the working-age population in employment is among the highest in the OECD.

Another area that is now working well is the energy market.

For a long time, New Zealand energy markets were over-regulated and poorly-regulated.

Extensive government ownership further stunted price signals.

For instance, water management in the hydro-electricity system was, compared to today, very poor.

And advertising campaigns to urge the public to restrict their energy use were more frequent.

In the last few months there have been a number of decisions in the energy industry which indicate a working market.

We’re shutting down excess capacity, and excess capital is being withdrawn and returned to the owners of that capital.

After years of litigation and legal contest over the rules, the energy market is now starting to work.

Which brings me to the housing market.

This is probably the largest market in New Zealand where the rules need to be reshaped.

The most evident indication of a problem is Auckland house prices.

I’m yet to find a housing market anywhere in the world where prices go up at over 20 per cent a year without stopping and then starting to come down again.

It may be that we are unique – but that seems unlikely.

So we’re concerned about the housing market.

Because it’s a large asset on the New Zealand balance sheet, worth around $600 billion.

And because what happens in our housing markets has a profound effect on every household.

I want to go through a number of the reasons why the Government worries about housing, why it matters to the economy, and some of the key issues around the way that market is regulated.

We have a better understanding of the significance of the planning process than we did in the past.

The process probably looks unexciting to most people – something busy-bodies and councils do.

But actually it’s the process by which one of our largest and most significant markets is regulated. And therefore we need to understand it.

As a group of young people, it is critical for you as potential future home buyers that we get this right.

There are three reasons why the Government is focused on planning – and each of these matter for you.

The first is that a housing market that is not properly functioning can have a significant effect on the macro-economy.

Over the last five years, the Auckland housing market has been the single biggest imbalance in our macro-economic system.

It takes around eight years for the housing market to respond to a shock to demand.

In part that is because changes to council plans can take years, in some cases over a decade.

Resource consents on a housing development regularly take 18 months, including pre-application times excluded from the official statistics.

When combined, those very real delays can exceed the length of the house price cycle.

The point is that when the supply of housing is relatively fixed, shocks to demand – like migration flows increasing sharply as they have recently – are absorbed through higher prices rather than the supply of more houses.

Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle.

And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed.

The resulting excess supply could produce a price crash.

This has been borne out by extensive studies in the United States following the Global Financial Crisis.

What they’ve found is that, across different markets subject to rules which vary by state, more-intense regulation of urban development is associated with higher house price volatility.

That is, the steepest price increases and the sharpest falls are in areas where regulation is strongest. 

The effects of planning rules can extend to the macro-economy.

Cities are one of the extraordinary inventions of the human race.

Studies have shown that cities are an engine room of growth. Incomes in cities are higher than elsewhere. That is one explanation for high rates of urbanisation.

Research indicates that when planning rules prevent workers shifting to higher-productivity locations, then there is a cost in terms of foregone GDP.

It’s only relatively recently that economists and politicians have understood the scale of those effects.

So when we’re talking about something as apparently dry as the Auckland Unitary Plan, we’re talking about a set of rules that will have a major impact on the city, on current and future residents – but also on the wider economy.

The second reason we focus on planning and its consequences is that poor planning drives inequality.

In my view, poor urban planning is one of the significant drivers of inequality.

Poor regulation of housing has the largest proportionate effect on the lowest quartile of housing costs and rents.

So when we’re having the debate about whether there is sufficient land available, we have to recognise that the people who lose the most from getting that decision wrong – and who stand the most to gain from fixing those decisions – are those on the lowest incomes.

Income inequality in New Zealand has been flat for 20 years, but the gap between incomes measured before housing costs and after housing costs is growing.

Housing costs are becoming a larger proportion of incomes – and that matters the most at the bottom end of incomes among people who have few choices.

And there are other measures of the effects on low-income households.

Twenty-five years ago, around 30 per cent of new homes coming into the market were priced in the lowest quartile. Another 30 per cent of new homes were priced in the upper quartile.

Today, only 5 per cent of new homes are priced in the lowest quartile. Nearly 60 per cent of new homes are priced in the upper quartile.

The new supply of lower-priced, affordable housing has dried up.

There are parts of Auckland where no new houses are entering the market priced at the affordable end of the market.

It is not surprising to see prices and rents rising disproportionately at the bottom end given this lack of supply.

Planning is often seen a public good activity that must address the needs of those who are most-vulnerable and have the lowest income.

In fact there is a strong argument to say it does exactly the opposite.

Poor planning favours “insiders” – homeowners – on high incomes and who have relatively high wealth.

Developers have told me that in Auckland they need to build a house worth $600,000 to make a development commercially viable.

That’s because it is difficult to build cheap housing on expensive land – particularly in view of the planning rules.

Those rules include urban limits, minimum lot sizes which prevent subdivision below a certain size, and maximum site coverage rules which prevent a house covering more than a certain proportion of the lot.

Working in combination, these rules reduce opportunities to develop affordable homes.

Now that planners are recognising these consequences, they are now creating even more rules to offset these effects; for example by requiring some developments to include up to 20 per cent affordable housing.

That is implicit recognition that planning rules have driven the costs up so much that another rule is required to offset it.

The impact of these rules on inequality, and on household incomes, leads to a third reason for why the Government is focused on the housing market.

That is the fiscal cost to Government.

As households have the proportion of their income spent on housing grow, the political pressure goes on governments to fill the gaps.

Today we spend $2 billion each year on accommodation subsidies. 60 per cent of all rentals in New Zealand are subsidised by the Government.

The state owns around $21 billion worth of houses.

One house in every 16 in Auckland is a Housing New Zealand property.

Many of these are three bedroom houses on quarter-acre sections only a few kilometres from the CBD – a massive misuse of scarce land. And all at the taxpayer’s expense.

So these are the reasons why the Government pays attention to the housing market and issues stemming from poor planning. . . 

As we get more information about what actually happens, often we find planning doesn’t achieve what people think it is achieving.

Planners and councils have a very difficult job in planning our urban areas.

Cities are incredibly complex systems. They are the product of millions of individual choices.

The idea that a small group of people could understand what choices we’re making is asking too much of them.

Not because they are in any way incapable. But because the task is overwhelming.

The Auckland Unitary Plan is 3,000 pages long.

It’s trying to regulate everything from the size of bedrooms to biodiversity in the Waitakere Ranges. No one person could possibly understand all the trade-offs in that plan.

Which means many of its effects will be certainly be unintended.

Planners can’t know everything – so of course they can’t be perfect in making trade-offs on our behalf.

Successful planning requires an understanding of its own limitations.

One of the things that needs to change is extra accountability and transparency.

Your prospects of being able to buy a house are directly related to the decisions made by planning officials about the availability of land, the environmental standards they apply to building, and the way infrastructure is allocated.

It’s very difficult to understand how planners do that, even though the consequences for the community and the economy are significant.

Central government has had the opportunity to sit alongside councils to understand how they make their decisions.

Some of those decisions appear quite arbitrary.

They can be driven by the tastes of individuals who have the power to make decisions.

Some decisions are contradictory within one planning system. Decisions might not fit together. Urban designers, for example, don’t always see things the same way as a council’s engineers.

First home buyers will be subject to rules which are not transparent and cannot be known in advance.

One of the areas this is most apparent is infrastructure.

Like central government, councils have historically made decisions on substantial long-term infrastructure projects with a minimal understanding of costs and benefits, and how the infrastructure will be supported over time.

Like central government, councils do not always know a lot about their infrastructure. And therefore they don’t know how to price it.

Pricing infrastructure is difficult. The nature of the asset makes it difficult to price. How do you price a stormwater system?

But that pricing matters. One of the big issues for getting a more-flexible supply of land is connecting the financing of the next piece of infrastructure with the value of the land it services.

Land is made more valuable when it is serviced by infrastructure. Infrastructure financing may sound a rather dry topic – but it is fundamental to allowing a city to grow.

Because if planners believe infrastructure supporting growth is too expensive, they’ll be too reluctant to release land for development – up or out.

That’s not a criticism – it’s an observation.

The funding base for councils is increasingly people on low fixed incomes. That is a product of an ageing population.

So you can understand why councils are under pressure not to expand if they think an expanding city is going to push up rates for existing ratepayers.

Councils need clear funding models so that development worth having can occur and future homeowners and current renters who might want to buy are taken into account.

So that’s a brief overview of how important it is that housing is regulated in a way that enables flexible supply, and I hope some indication of the progress we’re making.

That progress is necessarily slow, because these issues are complex.

If we better understand the economics of what is happening we can make better choices about housing regulation.

And that depends on one of the most important parts of public policy, which is the institutional arrangements by which those decisions are made.

That means looking at the incentives confronting an individual sitting in a council when making a decision about whether to allow a new subdivision.

We need to understand the incentives councils are reacting to. 

Next month the Productivity Commission will produce a further report on the regulation of land supply. It will be another input into further, ongoing improvements in this area.

And we are seeing new thinking on a range of issues affecting housing, including from councils.

Often politicians are accused of being focused on the short term. That’s one of the reasons this issue has never been dealt with properly in the past.

The Government is taking a long term view.

All of the things I’ve talked about today will take 10 to 15 years to sort out.

So it’s important that a broad group of people understand our single-biggest asset class – the most-important asset most of us will own – how is valued, how it is regulated, and how it can contribute to our general welfare.Bill English


Quote of the day

September 10, 2015

“But fundamentally that is a choice for the shareholders of the company. So the owners who are the farmer shareholders have had quite some time to look at the issue, various attempts to raise the capital.

“The New Zealand farmers who are shareholders have total control over that business now, and it is in their power to keep control over it, so we can’t really force them to own a business if they don’t want to own it.”

English said some of the company’s owners believed the business was a strategic asset and one that should remain in New Zealand hands, but for that to happen the necessary capital needed to be found.

“The real test is not whether people have an opinion, it is whether they are willing to put the money up.” –  Bill English on the suggestion the government should interfere in the ownership of Silver Fern Farms and that it should not be sold to overseas interests.


Rural round-up

September 9, 2015

Bright Foods tipped as Silver Fern bidder – Fran O’Sullivan:

Chinese Government backed Bright Food is understood to be the party which has been in negotiations with Silver Fern to take a stake in the NZ meat company.

Bright is a wholly Government-owned State Owned Enterprise.

But the negotiating vehicle is understood to one of Bright’s four listed subsidiaries. One of those subsidiaries – Bright Dairy & Food – took a majority stake in Canterbury milk processor Synlait Milk for $82 million in 2010.

Late last week speculation suggested the proposed deal would be announced today by Silver Fern Farms. . .

Waikato farmer wearing undies and gumboots chases burgler – Florence Kerr:

An attempted robbery was thwarted by an angry Waikato farmer who chased down the not-so-clever burglars wearing his undies and his gumboots.

Fed-up with continued thefts from his and neighbouring farms, Ohaupo farmer Arnold Reekers was forced into action in the early hours of Sunday morning when he heard his quad bike beeping as the thieves attempted to hot-wire the vehicle.

And despite having a knife pulled on him by the would-be thieves, Reekers wouldn’t hesitate to do it again saying continued thefts would drive farmers to take up arms despite pleas from the police for people not to take matters into their own hands.  . . 

Agility to drive value – Hugh Stringleman:

Fonterra chairman John Wilson has hit back at repeated criticism the huge co-operative has lost its way or not delivered on the promise it once held.

“I do sense the frustration of farmers with critics who come out of their holes when global milk prices are low,” he said ahead of the annual results release on September 24.

Wilson is one of three farmer-directors who retire by rotation this year to face the farmers’ vote in October. . .

New Zealand sheepmeat – maximising the cut:

Softer overseas demand for New Zealand sheepmeat – particularly out of China – which has curtailed New Zealand sheepmeat producers’ returns in recent months, has largely been driven by decline in demand for the forequarter portion of the carcase, says agribusiness specialist Rabobank in a recently-released report.

The report, New Zealand Sheepmeat: Maximising the Cut – Breaking It All Down, says it is important for producers to understand the breakdown of the animal and market demand for specific products as it ultimately determines the farmgate price. 

“While farmers are paid on a per head or per kilogramme basis, the price they receive is calculated from the summation of all the products derived from the animal – from the extensive array of cuts, to the offal, co-products, skin and wool,” says report author and animal protein analyst, Matthew Costello. . .

 

Foreign investment decisions could be fast-tracked – Brook Sabin:

The Government is considering speeding up foreign investment decisions, but Finance Minister Bill English is giving a cast-iron guarantee the rules won’t be watered down.

The Overseas Investment Office (OIO) considers whether to approve high-value and sensitive land investments from overseas buyers. It then makes a recommendation to the Government, which ultimately decides whether the sale can proceed.

The most high-profile sale currently before the OIO is the 14,000ha Lochinver Station, which China’s Shanghai Pengxin wants to buy. The application has been held up for more than a year, but the Government is finally close to deciding whether it will go ahead. . .

Investment reduces AsureQuality profit:

AsureQuality posted a 9% drop in 2015 annual profit and expects a further decline in 2016 as the state-owned food safety company steps up investment for future growth.

Profit fell to $11.4 million in the 12 months ended June 30, from $12.5m a year earlier, the Auckland-based state-owned enterprise said in a statement posted on the Treasury website. It expects profit to decline further to $10.6m in 2016 before increasing to $12m in 2017, according to its 2015-2018 statement of corporate intent. . .

Organic farming is actually worse for climate change than conventional farming –  Deena Shanker:

Organic food is booming right now, as more and more people choose what they perceive to be healthier, more environmentally friendly food.

But a new study published in the June issue of Agriculture and Human Values suggests that organic farming, as it currently stands, is not as sustainable as it could be, and when done on a large scale, even produces more greenhouse gases (“GHGs” are heat-trapping compounds that contribute to climate change) than its conventional counterpart.

To determine the difference in emissions of organic agriculture versus conventional, University of Oregon researcher Julius McGee used state-level data, available through the United States Department of Agriculture and the Environmental Protection Agency, that showed agricultural GHG emissions from 49 states from 2000 to 2008. . .  Hat tip: Utopia

Biofilms in the Dairy Industry:

Recent high-profile contamination scares within the international food industry have highlighted the need for best practice when it comes to dairy manufacturing. After 15 years of research into dairy biofilms, there is now a cornerstone publication for a better understanding of the current science, and ways to reduce the occurrence of biofilms associated with dairy manufacturing.

Biofilms in the Dairy Industry provides a comprehensive overview of biofilm-related issues currently facing the New Zealand and international dairy sector. . . 


$1.6b better invested elsewhere

August 19, 2015

Stuff reports that the partial privatisation of Landcorp is on the cards because Finance Minister Bill English is concerned about its level of debt.

. . . English indicated Landcorp may sell farms to improve its balance sheet, but while he would not rule out partial privatisation he said the Government was not at that stage yet. The Landcorp board had looked at ways to raise capital, but not a float or big sell-offs.

“We are not ruling anything in or anything out because we aren’t actually dealing with propositions at the moment.”

But there had been discussions to ensure it was sustainable. He said he had confidence in the board.

He said he “would expect Landcorp to sell off farms if that’s part of maintaining the sustainability of their business”. . . 

Selling the company as a whole would be difficult if not impossible, given its value.

The management arm could be sold separately and farms gradually sold off until the company disappeared but that would be politically unpalatable which is unfortunate.

Think of the good $1.6 billion could do if invested in research and development, infrastructure, education, health, reducing debt  . . .

Now think about the benefits of tying that amount of public money up in farm land.

The only one I can come up with is as a land bank for treaty settlements but I don’t think settling all those still unresolved requires 137 farms covering 158,394 hectares spread throughout New Zealand.

The company made an operating profit of just $1 million in the first six months of this financial year which is an abysmal return on investment.

Even in good years, the return on investment is modest which is not unusual for even the best farmers.

Landcorp farms are well run. They have a good record for staff training, environmental protection and enhancement, and genetics.

But that still doesn’t justify tying up $1.6 billion which could provide much better value if invested elsewhere.


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