Higher spending, tax, debt

November 16, 2017

Economists are warning that the Labour-led government’d Debt will be billions more than planned.

. . . In Opposition Labour laid out a fiscal plan which would borrow around $11 billion more than National had proposed, but still cut debt as a share of the total economic output from 24 per cent to 20 per cent by 2022.

The plan formed a major point of contention during the election campaign, as National finance spokesman Steven Joyce was widely mocked for his claim that Robertson’s plan had a major “fiscal hole”.

This is a very good argument for independent costing of party policies before an election.

But bank economists, who monitor the likely issuance of government bonds, are warning of pressure for Treasury to borrow billions more than Labour had signalled because of new spending promises.

ANZ has forecast that Labour will borrow $13 billion more than Treasury’s pre-election fiscal update maintained the former Government would over the next four years, although around $3b of that would go to the NZ Super Fund.

Borrowing to contribute to the super fund is as reckless as borrowing to play the share market instead of paying off a mortgage.

This would see net Crown debt at 23 per cent of gross domestic product, 3 percentage points higher than Labour’s plan.

Outgoing ANZ chief economist Cameron Bagrie said the estimates for new spending were “conservative”, including an assumption that the new $1b a year regional development fund would come entirely from existing budgets. . . 

BNZ senior economist Craig Ebert said the figures were hard to determine so early in the term, but borrowing “could amount to a number of billion dollars” more than Labour had outlined. . . 

During question time in Parliament on Tuesday, Robertson maintained that the Government was sticking to its pre-election debt plan.

“But what we’re not prepared to put up with is a situation where we do not have enough affordable homes, where we have not made contributions to the [NZ] Super Fund, and where an enormous social deficit is growing,” Robertson said.

“In those circumstances a slower debt repayment track is totally appropriate.”

A much more disciplined approach to spending would be wiser.

National took office when the kitty was empty and Treasury was forecasting a decade of deficits.

In spite of the GFC and natural and financial disasters, it returned the books to surplus without a slash and burn approach to social spending.

This government has taken over with plenty of money in the kitty and forecasts of continuing surpluses.

With careful management, it should be able to

Labour and many on the left talk about the “failed policies of the 80s”.

They never look at the cause of the problems which precipitated those radical policies – higher spending, higher taxes and higher borrowing.

Those were the failed policies.

Unless the new government takes a much more careful approach, it will take path New Zealand down that path again.


Snow good but . . .

May 26, 2015

Ski fields didn’t have as much snow as they’d like last year and it wasn’t just the ski season that was affected.

Less snow on the mountains meant less snow melt to feed rivers and underground aquifers.

That combined with drought over summer and into autumn to put a lot of farms under severe pressure.

Good dumpings of snow a couple of weeks ago and the follow up in the last two days is good for ski fields, aquifers, rivers and farming.

But it’s not all good news. Met Service is forecasting the return of El Niño that could dent agricultural production:

. . .The El Nino weather pattern that meteorological forecasters are predicting this year is likely to reduce New Zealand’s agricultural output, based on historic data, economists at Bank of New Zealand say.

Historic data compiled by BNZ suggests a positive co-relation between New Zealand’s agricultural growth and the Southern Oscillation Index, a standardised index of sea level pressure differences between Tahiti and Darwin that is used to determine whether El Nino or La Nina is present.

The index dropped below 15 in May, a level that indicates the coming of El Nino. The Australian Bureau of Meteorology confirmed this month that the Pacific Ocean has officially entered into an El Nino pattern that has a 70 percent chance to last through the southern winter and spring.

El Nino typically increases the likelihood of drought in the east of New Zealand as a result of the strong frequent winds it brings from the west and south west, BNZ said. . .

Winters are supposed to be cold but cold weather continuing into spring holds back growth and  a continuation of drought will hit farms and those who depend on them hard.

Most farms and businesses can get through one season of drought but a second one or a continuation of the first puts even the best under a lot of pressure.

 

 


Rural round-up

November 27, 2014

New agriculture centre of excellence meets key barrier to growth in sector – BNZ CEO:

BNZ chief executive, Anthony Healy says the Centre of Excellence for Agricultural Science and Business programme, launched today at St Paul’s Collegiate School in Hamilton addresses a significant and ongoing issue with the talent pipeline in one of New Zealand’s most important growth industries.

The programme, which is a joint venture between St Paul’s Collegiate and the private sector, including BNZ, will develop and roll out a national secondary school level agribusiness programme as well as serving as a venue for profiling agribusiness as an exciting career choice.

Healy says that while 60 per cent of all the money New Zealand earns through exports comes from agriculture there is currently no structured programme at secondary school level to encourage students to take up careers in agricultural science and business, resulting in a lack of students undertaking training in one of New Zealand’s most significant industries. . .

 

Methane consuming microbes combat climate change:

A Lincoln University scientist is thinking small to help solve a big problem—climate change.

Dr Sally Price, a senior researcher at the Faculty of Agriculture and Life Sciences, is looking to raise funds so she can develop a set of guidelines for farmers to encourage the growth of naturally occurring methane-consuming soil microbes, called methanotrophs.

Methane is expelled by cows and other ruminant livestock through flatulence, and is a potent greenhouse gas which contributes to climate change.

She has been undertaking periodic research over the last 15 years into the role the microbes play, and has found the root systems of trees and shrubs help to break up the soil and allow the methane to travel down to the microbes. . .

Lincoln finds new partner in China:

 Exploring innovative technologies for improving processing, manufacturing and quality assurance in dairy across the whole value chain is the overarching goal of a Memorandum of Understanding (MoU) signed this week between Lincoln University and Yili Industrial Group.

The MoU is the first step in a business relationship considered to be of notable value to both parties, its significance reflected in the document having been witnessed by China’s President Xi Jinping at the Agri-Tech Industry Showcase in Auckland today.

Yili is one of China’s largest processers and manufacturers of dairy products. The company has previously entered into a similar relationship with Wageninigen University in the Netherlands, which has since advanced to include the establishment of a research and development centre on the Dutch University’s campus. . .

NZ Racing Board Appoints John Allen as New CEO:

The NZ Racing Board has appointed experienced Chief Executive Officer John Allen as its new CEO.

Allen is currently CEO at the Ministry of Foreign Affairs and Trade and prior to that held the top job at New Zealand Post. He is also an experienced company director.

NZ Racing Board Chair Glenda Hughes says this is an outstanding appointment for the organisation and indeed the wider racing and sports industries. . .

 

Westland Milk Products Annual Meeting – Director elections and appointments

Westland Milk Products shareholders re-elected two long standing directors (including chair Matt O’Regan), voted in a new director for a casual vacancy and ratified the appointments of two independent directors at their company’s annual meeting today.

Existing directors O’Regan and Frank Dooley were re-elected for a four year term. Hugh Little was elected for one year to fill the casual vacancy left by the resignation of director Mike Havill. . .

Ballance farmers elect von Dadelszen for Ward B:

Ballance Agri-Nutrients farmer shareholders have elected Sarah von Dadelszen as their new Ward B director.

Mrs von Dadelszen brings a wealth of agricultural knowledge to the role with a mix of practical farming experience and specialist education and training.

David Peacocke, Ballance Chairman said he was pleased to have von Dadelszen join the board of directors.

“We had a record number of candidates for the Ward B election and the solid voter turnout shows that the co-op is in good heart, with farmers taking an active role in who represents them on the board.” . .

 


Breaking debt cycle

August 15, 2014

Social Development Minister Paula Bennett has launched a Community Finance pilot scheme  which will give people a safe alternative to loan sharks:

“Community Finance will help people with borrowing for assets they need for employment, education and a better quality of life,” says Mrs Bennett.

“This is another way we are helping families to help themselves become financially independent, by offering sustainable borrowing that avoids spiralling debt.”

“Community Finance is an excellent public-private partnership between the Bank of New Zealand, Good Shepherd New Zealand, The Salvation Army, and the Ministry of Social Development.

“Together, our aim is to help low-income families and individuals build up their asset base and achieve greater financial knowledge and skills.  Too many people on low incomes feel they have no other option but to borrow from unethical lenders who overinflate their prices and charge exorbitant interest.

“The first Community Finance product is StepUP loans for cars and other goods and services, which are now available to people on low incomes in Manukau City and Waitakere.

“The Bank of New Zealand-backed loans offer good discounts from market interest rates.  They are also free of traps such as fees (often hidden in the small print) and savage penalties which other, less ethical, lenders charge.

“The scheme has begun with a one-year pilot in South and West Auckland with the Ministry of Social Development contributing to the running costs of the not-for-profit organisations that provide the backbone and borrower support roles.  No Government capital will be loaned directly to borrowers.

“People can apply for the loans through the two local branches of The Salvation Army and borrowers will be supported over the lifetime of the loans with financial education,” says Mrs Bennett.

Even the best budgeters can be faced with unexpected expenses and the poorer you are the more difficult it is to cope with them.

This makes poor people vulnerable to loan sharks to exploit those least able to cope with the exorbitant interest rates they charge.

StepUP loans and the support that comes with them will help those in most need without saddling them with high interest rates.


Rural round-up

May 20, 2014

10,000 reasons to remain ambitious – Diane Bishop:

Producing 10,000 lambs a year is an ambitious goal.

But it’s one that the Lawson family hope to achieve on their East Otago hill country property.

Jim Lawson and his sons Rob and Willy farm 5500 Romney- Perendale first-cross breeding ewes and 1350 ewe hogget replacements on their 2336-hectare property Moana Farm, south of Waikouaiti.

Their main focus is lamb production and cattle, which have currently taken the place of a modern tractor, and are used as a pasture management tool. . .

Farm plantings help snare top award -Jill Galloway:

Winners of the Ballance Farm Environment Awards in the Horizons Regional Council area Mary and Justin Vennell have planted 57,000 trees since 2007 on their Rewa sheep and beef farm.

They hosted more than 100 people, mainly farmers, but some academics and rural business people, at a farm field day they held as supreme winners of the awards.

Ballance Farm Environment Awards (BFEA), which give awards for protection and enhancement of the environment on farms in the Horizons Regional Council area, celebrated its 10th year.

Fourteen farms – seven sheep and beef and seven dairy farms – entered this year’s event. . .

Irrigation schemes require professional input:

Increasingly complex water regulations mean directors and managers of irrigation schemes need to take their professional responsibilities even more seriously, says IrrigationNZ.

Irrigators need to adapt to new environmental requirements and those governing and managing irrigation schemes must have the necessary skills to manage the transition, says IrrigationNZ CEO Andrew Curtis.

To help the industry rise to the challenge, IrrigationNZ will hold a one-day ‘Governance Essentials’ workshop next month in Christchurch sponsored by KPMG, BNZ and Tavendale&Partners. The 12th June workshop will cover the separation between management and governance as well as governance principles and responsibilities. The workshop is aimed at both directors and managers of irrigation schemes, as well as irrigators wishing to learn more about governance fundamentals. 

IrrigationNZ CEO Andrew Curtis says with increasing regulation, poor decision making by irrigation schemes can result in severe consequences. . . .

NZ bees battle devastating disease – Sophie Lowery:

New Zealand’s beekeepers have launched a mission to rid honey bees of a potentially devastating disease.

American foulbrood can’t be treated and if left uncontrolled it could damage exports and ultimately wipe out the honey bee population.

If beekeepers can succeed in eliminating the disease it would be a world first.

Around 80 of Hamilton City’s hives were inspected today for signs of the contagious disease, with some samples sent to a lab.

One team came across healthy looking hives, but also found some examples of the deadly disease. . .

Michigan Urban Farming Initiative produces food, change in North End   – Marney Rich Keenan:

It is the height of irony that Tyson Gersh is shy a handful of credits until he graduates from the University of Michigan-Dearborn.

At 24, the president of one the fastest-growing, most successful Detroit nonprofits that hardly anybody (over 30 years old anyway) has ever heard of, is short a French class and another class he could probably teach blindfolded.

“Yeah I know,” the collegiate rower and triathlete says, head down, in a rare display of self consciousness. “I failed ‘Urban Entrepreneurship: Doing Business in Detroit.’ ”

Judging from the speed at which Michigan Urban Farming Initiative has taken off, Gersh was likely doing business in Detroit during class time. . . Hat tip: A.E. Ideas

Rural Women NZ celebrates Road Safety Week with good news from 20K school bus signs trial:

A year-long school bus safety trial in Ashburton has shown that illuminated 20K signs on buses can have a big impact on driver behaviour.

“For years Rural Women NZ has called for clear signage on school buses to indicate the 20K speed limit in both directions when passing a bus that’s stopped to let children on or off. This is great news and a perfect way to celebrate Road Safety Week,” says Rural Women NZ vice president, Kerry Maw.

“Every day motorists speeding past school buses on rural roads put children’s lives at risk.”

During the ‘Either Way It’s 20K’ trial in Ashburton there was a marked drop in speeds when the 20K signs were in operation, with many motorists slowing to between 25 and 35 km/h. . . .


Rural round-up

October 21, 2012
Landcorp pursues dairy growth:
 
Landcorp Farming expects substantial further growth in last year’s record dairy production, through the joint venture with Shanghai Pengxin of China and enlargement of established dairy complexes including Wairakei Estate in the central North Island.

Subject to the outcome of legal proceedings in the Supreme Court, Landcorp and Shanghai Pengxin intend forming a joint venture company, Milk New Zealand Farm Management Ltd, to operate the farms and explore other opportunities for growth in dairy production in this country. . .

BNZ Appointment Reflects Growing Importance of Irrigation Projects:
 

Guy Ensor is on a mission to support some of the most critical infrastructure developments New Zealand will see this decade. He has been appointed BNZ’s first national manager, water and irrigation. The position has been established in recognition of the growing significance of the national freshwater resource.“Our long-standing relationship with the agricultural sector has made us acutely aware that the sustainable management of New Zealand’s freshwater resource is absolutely critical to New Zealand’s future,” says head of agribusiness, Richard Bowman.

“All New Zealanders have a common interest in ensuring the country’s freshwater lakes, rivers, aquifers and wetlands are managed wisely. Guy’s specific combination of experience will ensure BNZ contributes to that,” he says. . .

 
Research unit going 50 years: Annette Scott:
The Lincoln University-based Agribusiness and Economics Research Unit (AERU) was established in 1962. Its key objective was to better integrate research in respect to the place of agriculture in New Zealand. The core mission of the AERU is to exercise leadership in research for sustainable well-being with researchers working together to produce and deliver new knowledge.AERU operates as a semi-autonomous research centre at Lincoln University providing research expertise to a wide range of organisations in the public and private sectors.

Research is focused on economic, resource, environmental and social issues with the unit also co-ordinating some of the external research undertaken by academic staff from other Lincoln University faculties. . .

 
A country a day for Peterson:
 
BLNZ CHAIRMAN Mike Petersen is in Europe this week on a whistle-stop visit to farming leaders in seven countries in just eight days.

It’s an annual event, meeting officials from the European Commission in Brussels, and farming leaders in Ireland, England, Scotland, Wales, France and Germany.

“Europe is such an important market for sheepmeat and increasingly for beef. I will meet EU officials to talk about our expectations of the sheepmeat quota. It’s no secret we’ll be well under with quota – about the 80% mark – well below where were three years ago when we were 98%,” he says.

 
Woman survives ramming by 650kg steer: Caroline King:
 
A woman repeatedly rammed by a 650-kilogram steer walked away from the attack with no broken bones after the heroic actions of her boss.Tania Kiely was tagging steers at a farm at Decanter Bay, Banks Peninsula, about 12.30pm on Monday when the steer attacked.

Kiely, 40, was only a couple of metres away from the animal when it charged.

“I was pushing them up into the race at the time.

“I remember it looking at me,” she said.

“It put its head down and ran at me. . .

 

The social impacts on snow on farmers – Terri Russell:

Making new friends is one way Southland farmers can cope with the stress of snowstorms, new research says.

Farmers were hit hard during the September 2010 snowstorm when about one million lambs died in the south and milk production was disrupted.

A research team from the University of Canterbury and Lincoln University have looked at ways that Southland farmers can better prepare for a similar event.

Lead researcher Zachary Whitman said findings so far showed a significant social impact on farmers. . .


$2.2b Christmas present

December 24, 2009

The four banks – ANZ, ASB, BNZ, Westpac-  which were judged to be in debt to Inland Revenue have agreed to pay $2.2b.

That’s a very pleasant turn around from most of the news stories of the year which have recorded falling tax revenue in the wake of the recession.

Just the Christmas present Finance Minsiter Bill English needs.


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