Priorities

June 20, 2019

Last month’s Budget was supposed to be focussed on wellbeing, but some of its priorities suggest otherwise:

Hon Amy Adams: Why, when Budget 2019 allocated $15.2 billion of new operating spending over four years, couldn’t he find enough funding in the Budget to ensure that Pharmac’s funding at least kept pace with inflation?

Hon GRANT ROBERTSON: As has been traversed in the House last week, Pharmac did receive an increase in funding. In this Budget, in the health area, based on the evidence, mental health received a massive injection of funding after being neglected for many, many years. The overall health budget has received a significant increase. On this side of the House—as I said in answer to the last question—we can’t make up for nine years of neglect in one year or even two years, but we’re making a good start.

Hon Amy Adams: How can he say that he’s used “evidence and expert advice to tell us where we could make the greatest difference to the well-being of New Zealanders”, when the Government has chosen to pour hundreds of millions of dollars into fees-free tertiary at the expense of giving Pharmac enough money to keep pace with inflation?

Hon GRANT ROBERTSON: The premise of that member’s question is incorrect. Money that supports education, money that supports health, and money that supports housing are all part of the Budget; one is not at the expense of the other. What we’re doing is actually making up for the enormous under-investment of the previous Government.

Money spent in one area is not at the expense of money that can’t be spent in another?

It can only be spent once.

Even if you look at different categories, you can question priorities.

Extra resources for children who get to school without the necessary pre-learning skills and for those at school and failing are only two areas of much greater need, and that would make a far greater contribution to wellbeing, than fee-free tertiary education for all students, whether or not they need that assistance.

Hon Amy Adams: How does he think the refusal to even keep Pharmac funding in line with population growth has affected the well-being of New Zealanders like 14-year-old Stella Beswick, two-year-old Otis Porter, or Bella Guybay’s four-year-old daughter, who are all waiting desperately for the funding of lifesaving medicines that are funded in almost every other OECD country?

Hon GRANT ROBERTSON: As the member well knows, and as with the time she was in Government, Pharmac make those decisions. We now spend nearly a billion dollars on the Pharmac budget, and we will continue to invest in that. But we will also continue to invest in the areas which the last Government completely ignored—such as mental health—because that is what New Zealanders asked us to do.

Hon Amy Adams: How does he respond, then, to Troy Elliott, whose wife is suffering from serious breast cancer, and has said that New Zealand’s medicines funding is starting to make us look like a Third World country and that “this Government has to wake up; we’re going backwards.”?

Hon GRANT ROBERTSON: I understand that for any family that is going through a situation where they have a family member with cancer, that is traumatic. What we know in this country is that Pharmac makes the decisions about what drugs it invests in. . . 

Pharmac makes the decisions but the government allocates the funds which determine how much, or little, it can do.

Health inflation is many times greater than general inflation and this year’s Budget funding for Pharmac isn’t even keeping up with general inflation.

 

 

 


Budget inquiry must be widened

June 4, 2019

The National Party is calling for the Budget inquiry to be widened:

The Prime Minister must be open and transparent about what questions she has asked her Finance Minister since spurious allegations were made that National acquired Budget documents through criminal activity, Deputy Leader of the Opposition Paula Bennett says.

National has written to State Services Commissioner Peter Hughes requesting the SSC widen its Budget investigation into Treasury and its Secretary to address a number of serious questions about the behaviour of both the department and the Finance Minister.

“The GCSB’s National Cyber Security Centre has said publically that it told Treasury its computer system was not compromised, yet both Gabriel Makhlouf and Grant Robertson chose to issue statements implying National carried out a ‘systematic hack’,” Ms Bennett says.

“Among the many questions that still need answering is what information Treasury and the Finance Minister had at their disposal before they issued those statements.

“The SSC inquiry should also include a complete review of all communications between the Finance Minister’s office and the Prime Minister’s office under the ‘no surprises’ approach.

“It took 36 hours for Treasury to come clean that it was sitting on a lie, and the Prime Minister needs to explain why she allowed her Government to mislead the public for so long.

“Did she and Grant Robertson ask the right questions of Gabriel Makhlouf, or did they take a ‘see no evil, speak no evil’ approach to all of this?

“It is concerning that even after Treasury admitted the Budget information was obtained without any hacking, its statement failed to offer an apology or take responsibility, and continued to disparage the Opposition in an entirely inappropriate way. . . 

John Armstrong isn’t waiting for an investigation he’s calling for resignations:

The chief executive of the Treasury, Gabriel Makhlouf, must resign.

It might have been Budget Day, thereby making his departure hugely inopportune for the Labour-led Government. That’s just tough. Makhlouf has to go. And forthwith. His exit on the most important date in the Treasury’s calendar may have piled humiliation on embarrassment.

It left Grant Robertson’s shiny new wellbeing budget feeling somewhat sick on its first public appearance. That’s just too bad. Makhlouf has to go. He has no choice in the matter. . .

He has to go — and for two simple reasons. Budget secrecy is sacrosanct; Budget secrecy is paramount. That is the bottom-line. It is non-negotiable. Any breach is sufficient grounds alone for heads to roll.

In Makhlouf’s case, there is another factor which should have sealed his fate — competence.

The ease with which National extracted Budget-connected information from the very heart of the (usually) most infallible branch of the Wellington bureaucracy demonstrated the shocking inadequacy of the Treasury’s cyber security.

It seems it is no exaggeration to say that the protections currently in place to guard that information have been at best lax and at worst non-existent. . . .

On top of that, the department’s handling of the aftermath of the breach of security raised further questions of competence.

The rapidity with which Makhlouf referred matters to the police following the hacking which soon enough turned out not to be hacking conveyed the impression that he believed National was responsible.

Although he endeavoured to avoid making that insinuation, in process, he veered dangerously close to soiling the Treasury’s neutrality.
While he might well be as neutral as he ever was, he is no longer seen as neutral. That is unacceptable. . . .

But this isn’t the only resignation Armstrong thinks should happen:

Should Robertson also be tending his resignation as a Cabinet minister or be sacked by the Prime Minister? The answer is an emphatic “yes”.

A breach of Budget secrecy — especially one of this week’s magnitude — is something so serious that resignation is mandatory.The applicability of ministerial responsibility demands nothing less. But it ain’t going to happen.

Robertson is exempt from having to fall on his sword. That exemption is by Labour Party decree. He is just too darned valuable.

Both he and the Prime Minister have made it very clear that they will move mountains to ensure Robertson emerges from this episode as untarnished as possible by placing responsibility for the breach fairly and squarely in the Treasury’s lap. . .

It’s been fascinating following commentary from the left which is trying to paint Simon Bridges as the wrong-doer in the botched Budget saga.

While we are mentioning Bridges, let’s deal with the bogus claims of his critics that his accessing of Budget documents was unethical, even if it was not unlawful. That is nonsense. Since the dawn of time, it has been incumbent on Opposition parties that they expose faults and failings in the policies and procedures adopted by the government of the day.

In revealing that the Treasury’s notion of what passes for Budget secrecy is screamingly flawed, Bridges has acted in the public interest.

Can his critics in Labour’s ranks put their hands on their hearts and affirm they would do things differently if they faced the same circumstances in Opposition? Of course not.

Bridges has simply been doing his job. On this week’s form, it is conceivable that he is going to be doing it a lot longer than both friend and foe have been predicting.

The machinations may be of little interest to any but political tragics but the botched Budget provided the Leader of the Opposition with an opportunity to shine in a week when the spotlight ought to have been on the Finance Minister and his leader, and shine he did.


Just when you think it can’t get worse

May 30, 2019

Treasury allowing Budget information to be found from a simple search on its own website was bad enough.

Calling it hacking and involving the police without properly investigating first was worse.

And just when the organisation ought to be showing it’s learned a lesson and taking extra care it does the opposite:

. . . 10:30am – In a major blunder, Treasury staff mistakenly handed out copies of the budget to journalists and political commentators.

Newshub’s Political Editor Tova O’Brien tweeted that she was given one of the top secret documents. When the recipients questioned whether they were supposed to see them before going into the lock-up, she says an official asked “Are you not Treasury?” before hurriedly taking the copies back. . . 

It’s a simple human error but given the lead-up it shouldn’t have happened.

So will heads roll?

Treasury bungled badly and Finance Minister Grant Robertson and Winston Peters made baseless accusations against Simon Bridges.

Will there be resignations or even apologies?

Don’t hold your breath.


There are three kinds of people in the world . . .

May 24, 2019

There are three kinds of people in the world, those who can count and those who can’t . . .

It’s more than a little concerning that this exchange in parliament on Wednesday shows the Minister of Finance appears to be in the second group.

. . .Hon Paul Goldsmith: To the nearest billion dollars, what is an additional 1 percent GDP growth worth to New Zealand?

Hon GRANT ROBERTSON: I believe it’s about $800 million.

Hon Paul Goldsmith: $800 million?

Hon GRANT ROBERTSON: About that.

Hon Paul Goldsmith: Does he think that the people of New Zealand would expect their Minister of Finance to know that 1 percent of GDP is about $3 billion and that’s the amount of money that we’ve missed out on given the sharp decline in growth in the past year? . . .

Even those who struggle with numbers would recognise that there is a significant difference between $800 million and $3 billion.

We should also be concerned that the Minister has conceded defeat on Budget responsibility rules:

Finance Minister Grant Robertson has today thrown in the towel by scrapping his self-imposed debt target, National’s Finance Spokesperson Amy Adams says.

“Grant Robertson has been backed into a corner by allowing the economy to slow, over promising and making poor spending choices. Now, instead of a fixed target Grant Robertson has lifted the debt limit by 5 per cent. That loosens the purse strings by tens of billions of dollars.

“This is a blunt admission the Government can’t manage the books properly, it is not wriggle-room. This makes the fiscal hole look like a puddle.

“You can almost guarantee that means debt at the upper end of the range of 25 per cent. This is an admission of defeat from a Finance Minister who has repeatedly used these rules to give himself the appearance of being fiscally responsible.

“This decision will mean billions of dollars more debt because the Government can’t manage the books properly and wants to spend up on big wasteful promises in election year.

“This will pay for things like Shane Jones’ slush fund, fees-free tertiary and KiwiBuild – in other words, it’s wasteful spending.

“Debt isn’t free. It will have to be paid for by higher taxes in the future. . . 

The economy is slowing and its poor policies are, at least in part, responsible for that.

Reducing wasteful spending should come before more borrowing.

If the government had concentrated on value for money, measured success by the quality of its spending rather than the quantity and enacted policies which promoted growth it wouldn’t have to even contemplate more debt.


Rural round-up

March 1, 2019

Govt warned over loaning WMP $10m :

The Government was warned that loaning Westland Milk Products $10 million may set a precedent to other companies that they could turn to the Government when they could not get a loan from the bank.

In a briefing to Finance Minister Grant Robertson in September last year, released on the Treasury’s website this afternoon, Treasury officials said the decision to loan Westland the money should be deferred.

Despite this, two months later Regional Economic Development Minister Shane Jones announced that $9.9 million would be allocated to the South Island dairy co-op. . .

Fund farmers for the public benefits that come from their land – Mike Foley:

 Imagine if Australia’s private landholders, who manage half the country’s landmass, were investing significant funds into climate change reduction and environmental improvements.

That’s the scenario a cross-industry coalition of agricultural, forestry and environment groups are working towards, using the lead-up to the federal election to argue for policy change which could reimburse farmers for the public benefits delivered by their land management outcomes. . .

Fonterra’s milk-price news is soured by chairman’s critique of the company’s earning performance  – Point of Order:

At last a ray of sunlight into the country’s cowsheds: giant dairy co-op Fonterra has lifted its forecast farmgate milk price to $6.30-$6.60kg/MS, up from $6-$6.30, on the back of strong global demand.

The good news extends to next season, with ANZ economists predicting – because dairy commodity prices are improving more quickly than expected – the forecast for 2019-20 could go as high as $7.30kg/MS.

And there is something else Fonterra suppliers might get a bit of a glow from: the recognition by Fonterra’s top brass that the co-op has not been performing anywhere near where it should be. They’ll be looking for a sharp improvement, even if the co-op has a long way to go to match the achievements of smaller outfits like A2 Milk and Synlait. . . 

Fonterra Fund units hit record low – Rebecca Howard:

(BusinessDesk) – Units in the Fonterra Shareholders’ Fund hit a record low after the dairy cooperative cut its forecast earnings and said it won’t pay an interim dividend.

Fonterra downgraded its earnings forecast to 15-25 cents per share from a previous forecast of 25-35 cents per share, blaming the increased milk price which saw it hike the farmgate price to its supplier-shareholders.

The downgrade implies annual earnings of between $242-403 million in the year ending July, compared to the earlier projection of $403-564 million. . .

Fonterra to explore opportunities in complementary nutrition:

Fonterra has taken a stake in Motif Ingredients, a US-based food ingredients company that develops and commercialises bio-engineered animal and food ingredients. 

Fonterra joins Ginkgo Bioworks, Breakthrough Energy Ventures, Louis Dreyfus Companies and Viking Global Investors.

Judith Swales, head of Fonterra’s Global Consumer and Foodservice business, says the move is part of the Co-operative’s commitment to its farmer-owners to stay at the forefront of innovation to understand and meet the changing preferences of consumers. While the terms will not be disclosed, Fonterra’s investment represents a minority stake in the business. . . 

Ngāti Hine Forestry Trust Launches “Ngā Māhuri o Ngāti Hine”:

Twenty young men from Kaikohe and Moerewa are set to start their journey in the Forestry Industry as trainees on the new Ngā Māhuri o Ngāti Hine Mānuka Plantation Training Program.

This is the first part of a 2yr program funded by the Billion Tree fund through Te Uru Rākau and supported by the Ministry for Primary Industries Economic Development Unit. Ngāti Hine Forestry Trust is partnering with Johnson Contractors LTD to deliver a “learn while you earn” approach to L2 Forestry Training.

Ngāti Hine Forestry Trust Chair, Pita Tipene says “Ngā Māhuri o Ngāti Hine means the saplings of Ngāti Hine; this is an industry training program which embodies the kaupapa of Ngāti Hine Forestry Trust Mission – He Ringa Ahuwhenua, He Hanga Mahi, to actively grow our assets. These akonga (learners) are our hapū and community assets”. . . 


Hunter Downs irrigation scheme down

October 10, 2018
The Hunter Downs irrigation scheme hasn’t got enough support to go ahead.

Hunter Downs Water Ltd announced yesterday it did not have enough buy-in from landowners in its command area between the Waitaki River and Timaru.

The company owns resource consent to use up to 20.5 cumecs of Waitaki River water.

The irrigation proposition was launched in 2006.

In March last year, shares were offered in a $195million scheme to irrigate 21,000 ha and a government development funding grant of $1.37million had been made. By June 2017, the design was shrunk to 12,000 ha.

At the end of last year, South Canterbury rich-lister Gary Rooney’s offer to buy “dry shares” saved the project from being scrapped then.

In April, Finance Minister Grant Robertson announced Crown Irrigation Investments Ltd’s $70million term debt funding would no longer be available to the scheme. So the company released a new funding proposal in August, asking all prospective investors to reconfirm their commitment.

Not enough did.

Chairman Andrew Fraser said yesterday “a significant drop-off in support” meant the scheme could not proceed.

It was not all about intensifying land use and converting to dairying, but rather relieving pressure on existing water takes, decreasing reliance on surface water extractions, and using the plentiful Waitaki River resource, he said. . .

These schemes have to have the support of farmers. But without debt funding from Crown Irrigation, the cost would have been too high for too many. IrrigationNZ rightly calls it a lost opportunity for South Canterbury.

The scheme had the potential to significantly boost the Waimate economy, create jobs, improve people’s standard of living and help resolve water quality problems,” says Andrew Curtis, Chief Executive of IrrigationNZ.

“It’s disappointing that a scheme with wide reaching community benefits won’t proceed.”

“Much of Environment Canterbury’s plans for improving water quality in the South Canterbury coastal area rely on the development of the irrigation scheme to reduce pressure on groundwater and augment the Lake Wainono Lagoon. Hunter Downs still wants to use its consent to augment the Lake Wainono Lagoon, but the other environmental impacts of the scheme not proceeding will need to be worked through.”

The scheme wouldn’t just have drought-proofed farms, it would have    had environmental benefits in improved water quality and lagoon enhancement.

“While farmers benefit from irrigation development, so do local communities. Irrigation projects are difficult to get off the ground if farmers are the sole funders of major infrastructure projects. There have now been numerous studies completed of New Zealand irrigation schemes and all demonstrate that irrigation have significant benefits for local communities and create substantial new tax income for the government,” says Mr Curtis.

“Other countries are increasing their investment in water storage to recognise that their communities and economies need access to a secure water supply in a changing climate. New Zealand needs to keep making similar investments to future-proof our water resources and food production, and secure our export income.”

On the south of the Waitaki River the economic, environmental and social benefits of irrigation are obvious. Those on the other side of the river will miss out on all of that without the scheme.

PM there and here

September 27, 2018

Happy headlines are following Jacinda Ardern in New York.

Back home the media are looking past the stardust to the continuing saga over Derek Handley and the position of Chief Technology Officer he was appointed to then disappointed from.

NZ Herald opines:

There can be no doubt the Derek Handley saga is a train wreck that is now threatening to derail confidence in the Government.

Prime Minister Jacinda Ardern may have been hoping she could leave the domestic turmoil of the past few weeks behind her, while she – with partner Clarke Gayford and baby Neve – wows world leaders and their delegations at the United Nations in New York.

But she clearly wasn’t banking on tech entrepreneur Derek Handley yesterday releasing his text and email communications with her and former Minister for Government Digital Services Clare Curran, and speaking further about the whole sorry saga – including bemoaning his lack of apology or explanation in the matter of the bungled chief technology officer recruitment process.

Possibly Ardern thought sacking Curran from that ministerial post – and Curran’s subsequent resignation from all her ministerial portfolios – was enough to put the incident to rest.

However, yesterday the PM found herself having to fend off accusations she had misled Parliament over her own communications with Handley, Finance Minister Grant Robertson was forced to correct his answer in Parliament over emails between Handley and Curran, and new Digital Services Minister Megan Woods was clearly forced to finally call Handley to apologise for the “impact this has had on him and his family”. She also had to retract her statement there had been a confidentiality agreement with Handley over his financial settlement.

What a shemozzle.

It still doesn’t feel like a satisfying conclusion for anyone – if indeed this end of the matter. . .

This is a serious black mark for the Government. The overall unease around communication, competency and transparency over this issue is now raising questions about the PM’s leadership and the Government’s integrity in general. . .

Audrey Young writes:

It is becoming a habit – for the second time in three weeks, National leader Simon Bridges has accused Prime Minister Jacinda Ardern of misleading the public.

This time she has also been accused of misleading Parliament as well as the public and Bridges has demanded she correct her statements.

Ardern put up a strenuous defence on both counts that there was no need for corrections. . .

But Kiwiblog quotes Hansard: and shows on the 18th and 19th of September in answer to questions from National leader SImon Bridges that taking the most generous view of what she said, she was at the very least economical with the truth.

Back to Young:

Until now, the fiasco, mainly over an undisclosed meeting, had reflected badly on Curran but the contagion has spread to Ardern and made the Government look amateurish.

Grant Robertson had to correct an answer in the House today he gave last week on Clare Curran’s emails to Handley and Woods had to retract a suggestion that the severance contract with Handley may have been subject to a confidentiality clause.

Acting Prime Minister Winston Peters swore blind Ardern was blameless of anything and everything.

True, she will not have to correct any answers she has given to Parliament.

But that is almost irrelevant because even if she did, it would not undo the damage she has done to herself.

A train wreck, a schemozzle,  a fiasco. These aren’t adjectives any government wants applied to them.

But nearly a year into office, the one that explains the mess is amateurish.

 


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