Cheque-ing out

Kiwibank has announced an end to cheques.

. . .“Stopping our cheque service wasn’t an easy decision to make. However, for the past five years, the use of cheques has been steadily declining. With less than one percent of Kiwibank payments now made by cheque, we’ve come to a tipping point. We’ve chosen not to invest in a shrinking service and outdated technology, instead we’re moving forward and equipping customers for a world that is increasingly digital,” said Kiwibank CEO Steve Jurkovich. . .

I can’t remember the last time I wrote a cheque.

I do remember a conversation a few years ago with some young adults who had no idea how to write one.

A voluntary organisation I chaired kept a cheque book with the requirement for two signatures as a security measure. That’s no longer necessary now  banks offer  dual verification with electronic banking.

This decision isn’t surprising and I think it won’t be long before other banks follow suit.

Rural round-up

Super grass offers huge benefits – and it’s green! Pity about the GM … – Point of Order:

Environmentalists should be encouraging NZ’s development of ryegrass with the potential to substantially increase farm production, reduce water demand and decrease methane emissions.

We are told the grass has been shown in AgResearch’s Palmerston North laboratories to grow up to 50 per cent faster than conventional ryegrass, to be able to store more energy for better animal growth, to be more resistant to drought, and to produce up to 23 per cent less methane (the largest single contributor to New Zealand’s greenhouse gas emissions) from livestock. . .

Dig deep for sheep – Annette Scott:

Confidence in sheep is at an all-time high with demand at the Temuka in-lamb ewe fair providing the real proof of industry positivity.

With record processing prices for mutton the sale was always going to be the real test for the market, PGG Wrightson livestock manager Joe Higgins said.

With just 6000 ewes offered and close to 100 registered buyers it was a sellers’ market with clearly not enough sheep to go around. . .

Wool Summit leads to greater direction:

Key players in New Zealand’s wool industry are to form a new coordinating group to better tell wool’s story, says Federated Farmers.

At this week’s Wool Summit in Wellington there was a real sense of urgency to get cooperation and momentum, says Miles Anderson, Federated Farmers Meat & Wool Industry Group Chairperson.

New Zealand wool producers have been under pressure, particularly in the last two years as prices for strong wool hit record lows. . .

Eradicating cattle disease M. bovis may be costly, even impossible, but we must try – Richard Laven:

In May this year, the New Zealand government decided that it would attempt to eradicate Mycoplasma bovis, a bacterial disease that affects cattle.

A phased eradication means that an additional 126,000 livestock will need to be culled, at an estimated cost of NZ$886 million.

Here’s what we know, what we don’t know and what’s at stake. . .

Works not an out for sick stock – TIm Fulton:

Stock transport is high on the animal welfare agenda as new regulations come into force.

Inspectors will be especially alert to badly lame stock being carted to meatworks, Ministry for Primary Industries compliance team manager Peter Hyde told a Beef + Lamb New Zealand meeting in North Canterbury. 

“Using the meat companies to sort out your lameness issues is not acceptable,” he said. . .

 

25% of our WMP sold in Middle East and Africa. Awesome team. Good margins and working in some tough environments. Starting to push the Fonterra Trusted Goodness and grass fed. #grassfed pic.twitter.com/UAHiH2UcbW

— Brent Goldsack (@goldsackagri) June 30, 2018

Kiwifruit expected to remain king of horticulture export industry – Julie Iles:

Kiwifruit exports, valued at $1.86 billion, remains New Zealand’s most valuable horticulture export. 

It’s closely followed by the value of wine exports, at $1.72b, though they were less than half the value of the kiwifruit exports in 2004. 

The latest forecasts by the Ministry for Primary Industries (MPI) predict the kiwifruit export industry will grow in value at a slightly faster pace than the wine industry over the next four years.  . .

Farmlands joins Apple and Emerites in KPMG Award –

Farmlands Cooperative has been named the New Zealand winner of KPMG’s prestigious Global Customer Experience Excellence (CEE) Award.

New Zealand’s largest rural supplies and services cooperative was presented with the award at a ceremony hosted by KPMG in Auckland this morning.

Farmlands joins 13 other winners of the award world-wide, including Singapore Airlines (Australia), Apple Store (Italy), Alipay (China) and Emirates (UAE). Following Farmlands in the top five for New Zealand were Air New Zealand, Kiwibank, New World and ASB Bank. . .

America’s cheese stockpile just hit an all-time high – Caitlin Dewey:

The United States has amassed its largest stockpile of cheese in the 100 years since regulators began keeping tabs, the result of booming domestic production of milk and consumers’ waning interest in the dairy beverage.

The 1.39 billion-pound stockpile, tallied by the Agriculture Department last week, represents a 6 percent increase over this time last year and a 16 percent increase since an earlier surplus prompted a federal cheese buy-up in 2016. . .

It's #NationalMeadowsDay I've been protecting my meadows here for eighteen years. The result is so beautiful for sheep and Shepherdess. @NFUCountryside @yorkshire_dales pic.twitter.com/i7cvwAMggp

— Shepherdess (@woolismybread) July 7, 2018

 

Rural round-up

It’s a demographic time-bomb: dairy farms in crisis as youngsters shun milk because health professionals ‘treat it as an enemy’  – Dave Burke:

• Consumption of dairy products has dropped among young people
• A new ‘three-a-day’ campaign is due to be launched to promote the nutritional benefits of milk, butter and cheese
• The warning was sounded by David Dobbin, chief executive of United Dairy Farmers
• He said health professionals are largely to blame for the slump

Britain’s dairy farmers are facing a crisis due to falling demand – because health professionals are treating milk and dairy products ‘as the enemy’, an expert has warned.

David Dobbin, chief executive of United Dairy Farmers – a co-operative group of producers – said younger generations are drinking far less milk than their parents and grandparents did. . . 

Predator Free 2050 vision supported by DOC-Kiwibank partnership:

Conservation Minister Maggie Barry has welcomed a new partnership between DOC and Kiwibank which will contribute towards New Zealand’s goal of becoming predator free by 2050.

The partnership announced today focuses on DOC’s conservation dog programme and the remarkable canines using their unique noses to tackle predators and help our native species.

“Specially-trained dogs are truly one of conservation’s best friends, and they will play a crucial role in our plans to make New Zealand predator free by 2050,” Ms Barry says.

“My own North Shore electorate often sees the popular Pai and Piri, two terriers who are excellent ratters, working at our ferry terminals. . . 

Changes to commercial fishing limits:

Primary Industries Minister Nathan Guy has announced changes to management controls for 25 fish stocks as part of the regular twice yearly fisheries sustainability review.

“All these decisions make the best possible use of the latest scientific information to ensure sustainable stocks whilst maximising the benefits for all users – customary, recreational and commercial,” says Mr Guy.

A key change is a significant increase to the catch limit for Snapper 7 (covering the top and west coast of the South Island) with recreational catch increasing from 90 to 250 tonnes, and commercial from 200 to 250 tonnes. . . 

Environment Commissioner congratulates Minister on strong decision for longfin eels:

The Parliamentary Commissioner for the Environment has congratulated the Minister for Primary Industries, Hon Nathan Guy, on his decision to make big reductions in the catch limits for longfin eels in the South Island.

“It’s great to see the Minister making this very positive move towards ensuring the long-term sustainability of the longfin eel,” said Dr Jan Wright.

New catch limits announced by the Minister today effectively amount to a suspension of commercial fishing for longfins in four of the six management areas in the South Island, and a reduction of the allowable catch in the remaining two. . . 

DWN joins forces with Deosan:

Dairy Women’s Network has signed on a new dairying partner in Waikato-based company Deosan this month.

Dairy Women’s Network chief executive Zelda de Villiers says the Network is thrilled to work alongside Deosan, a New Zealand owned business specialising in udder health, dairy hygiene and liquid mineral products, to offer its 9300 members market-leading advice and education in the space.

In the coming months, Deosan will be presenting a series of free educational workshops on udder health and mastitis prevention to DWN members in key regions throughout the country as part of their agreement with the Network. . .

Global experts set to share selenium wisdom:

New Zealand farmers, producers and animal health professionals (veterinarians, nutritionists, feed companies), are being urged to take advantage of a free one-day seminar to help boost animal health and productivity.

Focusing on the essential key mineral, selenium, the seminar presents world-renowned experts, Professor Peter Surai and Dr. Kevin Liu, sharing the latest global research and developments in selenium nutrition and supplementation.

Attendees will learn first-hand about the importance of selenium as an antioxidant in modern New Zealand intensive animal production.  . . 

Hamilton farm girl’s on-line search for love – Ryan Bridge:

If you’re looking for love but lead a busy life then you’ll be able to relate to Marcella Bakker.

Ms Bakker’s a farmer and all-round good sort from Hamilton who’s become quite famous online thanks to her search for a man.

She posted a message on the NZ Farming website asking for men to contact her if they were interested in a date and Story went to answer the call. . . 

‘Modern day farm chick’ puts face to agriculture – Ray Mueller:

“Don’t expect to change the world but at least change the world for one person.”

That’s the vision which inspires Annaliese Wegner, who has dubbed herself “modern day farm chick,” for her social media blogs in which she tries to counter and correct “the bad and false information” about dairying and agriculture that “consumers eat up.”

Wegner posts on Facebook, Instragram and Twitter and participates in the AgChat Foundation in order to “share our story.” That story is rooted in her experiences at the 550 Holstein cow herd near Ettrick in Trempealeau County, where she and her husband Tom and his parents Jeff and Betty Wegner are the partners in Wegnerlann Dairy LLC. The younger Wegners met when they were students at the University of Wisconsin-River Falls. . . 

Wool market subdued:

New Zealand Wool Services International Ltd’s C.E.O John Dawson reports that the South Island auction offering a wide range of microns and types, saw varied interest as a resurgent New Zealand dollar and limited overseas buying combined to undermine local price levels.

The weighted indicator for the main trading currencies lifted 2.69 percent compare to last week.

Of the 10454 bales on offer only 55 percent sold with many growers not prepared to accept current price levels.

Mr Dawson advises that compared to the last South Island offering on 25th August. . .

 

Too little and too much

Oh Dear.

Labour leader Andrew Little still wants to stiff-arm banks:

. . . ‘I stand by the stance I took, which is to get very heavy-handed with the banks. Because the truth is when the banks fail to follow the signal that the Reserve Bank is sending, that’s keeping money out of the back pockets of ordinary Kiwis, and I will always fight for their interests and for their rights. If the banks don’t want to play ball when it comes to the way we run our monetary policy, actually, there’s only one outfit that can really take them on, and that’s the government.’. . .

The Reserve Bank is independent because it’s not the government’s role to set interest rates.

Retail banks are independent businesses and it’s not the government’s role to tell them what interest rates they should charge.

Interest rates are at historically low levels. They are higher in New Zealand than in many other countries which is partly a reflection on overseas investors’ perception of our economic and political stability.

That would be threatened by any stiff-arming of banks by government.

State intervention would also make business more risky for banks, the lenders and their borrowers.

Little’s not the only politician on the left who wants the government to get involved in banking.

Green co-leader James Shaw wants it to give $100m to Kiwibank which Prime Minister John Key described as dangerous:

He told Morning Report he did not support the idea, as the bank would be asked to make “non-commercial loans” – putting it in a weak position.

He said the Greens were using a state-owned enterprise (SOE) to bring about a policy goal.

“But to do that would be highly dangerous, because what you will end up doing is being in a position where you’re effectively asking them to make non-commercial loans, and potentially non-commercial returns.”

Mr Key said that would be “very poor public policy” and could lead you to a situation where the bank had to be bailed out. . . 

Jim Rose at Utopia points out other flaws:

Note well that the $100 million capital injection is to expand in to commercial banking. More aggressive passing on of interest rate cuts may jeopardise credit ratings if this lowers the profitability of KiwiBank. KiwiBank has an A- rating. . .

KiwiBank is minnow in the mortgage market and a pimple in commercial lending. Rapid business expansion is risky in any market, much less in banking. . . 

The proposal to use KiwiBank to lower mortgage rates does not add up. KiwiBank does not pay much in the way of dividends to fund such a foray.  KiwiBank is already far more leveraged than any other New Zealand major bank. 

Rob Hosking points out that while the policy might have political appeal it is bad economics:

Somewhat lost in all this is the risk of a policy that will encourage New Zealanders to take on more debt. . . 

 

New Zealand’s current account deficit has been there since 1974 and although it is now lower than the peak it reached a decade ago, it is still firmly in the red.

The Scandinavian and North European countries might be running larger household debts on their balance sheets, but these are internally funded: Norway and the Netherlands, for example, are running current account surpluses of  around 10% of GDP as opposed to New Zealand’s 3% of GDP deficit.

So they can afford to run up those debts.

New Zealand cannot. And a drive to push interest rates down – a taxpayer-funded drive no less – sounds more than a little foolish given New Zealand’s long-standing economic and financial vulnerabilities. . . 

Shaw’s suggestion of $100m sounds like a lot of money and it is far too much for taxpayers but it wouldn’t be enough to help many people.

Besides, if people can’t borrow money at the current very low rates, it would be a dangerous move for them, the banks, any other creditors and the wider economy, to try to make it easier.

When Labour was in power in the 1980s interest rates were higher than 20%. When it was in power in the noughties, interest rates were in double figures, well above current rates.

There were several reasons for that and the big one which politicians could have influenced was high government spending and mismanagement of public money.

If Little and Shaw want to keep interest rates low they should be supporting the current government’s efforts to keep a tight rein on its spending and developing policies which would continue that.

That is far better policy than either stiff-arming banks or using more taxpayers’ money to prop up Kiwibank.

Green bank risks putting us in the red

The Green Party wants to establish a Green Investment Bank.

The Green Party will establish a Green Investment Bank as a first step in accelerating New Zealand’s transition to a smarter greener economy, Green Party Co-leader Dr Russel Norman announced today.

The Green Investment Bank will be an enduring, government-owned, for-profit bank partnering with the private sector to fund new projects ranging from renewable energy and biofuel production to new clean technologies.

“Like Kiwibank before it, the Green Investment Bank will combine the best of the public and private sectors to accelerate New Zealand’s transition to a smarter, greener economy,” said Dr Norman. . .

Like Kiwibank this would be a bank subsidised by taxpayers in competition with private businesses.

As the Taxpayers’ Unions asks – what could go wrong?

The Taxpayers’ Union is disappointed that the Green Party have announced plans to risk $120 million of taxpayers’ money on a so called ‘green investment bank’.

“Despite successive failure, why do politicians think that they can manage a bank better than the experts?” asks Jordan Williams, Executive Director of the Taxpayers’ Union. “The Green Party claims that their bank will be ‘for profit’ but if green technologies were so profitable, what’s stopped commercial banks getting in on the action?”

“The Green Party have a history of incorrectly forecasting high returns in green technologies. In 2001 the Party trumpeted its superannuation fund investing in a wind farm company. Since then, the shares have lost 96% of their value.”

“Does Russel Norman really think that bureaucrats will make profitable decisions with $120 million of taxpayer money, when the Green’s can’t even get it right with their own?”

“We all support developing green energy, but people should pick winners with their own money not be forced to risk nearly $70 per household taken via the tax system.”

The Green plan is to raise the money for the bank by doubling the tax on oil companies.

. . .The party would raise the overall tax take on oil companies to 70 percent from 46 percent, something it says will bring New Zealand in line with the international average. The bank would be expected to cover operational costs from investment returns. The bank will have to be financially self-sufficient, achieving a target rate of return at or above the government’s bond rate, the paper said. . .

Fuel taxes are already high and they impact on everyone directly or indirectly.

Have they thought what the resulting increase in fuel costs would do to motorists and the transport industry?

All investment carries risk.

If people want to risk their own money in investments, green or otherwise, that’s up to them.

If the business case stacked up existing banks would be happy to back them without the need for taxpayer intervention and higher taxes on oil companies which would hit us all and hit the poor hardest.

That would be much better than a government-owned bank which would risk putting us in the red.

 

Who’s paying for satisfaction?

Kiwibank has been named Major Bank of the Year in Roy Morgan’s annual Customer Satisfaction Awards.

That’s good for the customers but what state is the business in when it needs  hundreds of millions of dollars in capital?

Customer satisfaction is what all businesses should deliver, but who’s paying for it at Kiwibank – it’s customers or the taxpayers?

Please tell me it isn’t so – updated & updated again

Trans Tasman is reporting that Michael Cullen will be appointed to chair NZ Post and KiwiBank when Jim Bolger retires.

A loyal National Party member has just phoned to tell me he and others who spent nine years working to get Cullen’s hands off the reins are furious about this and I share their views.

There must be someone better equipped for these roles than the man who overtaxed and over spent for nine long years, leaving our economy far less able to weather the recession than it would have been had his policies been directed at growth rather than redistribution.

SOEs have been underperforming and need highly skilled leadership and that requires someone with a far greater regard for other people’s money than Cullen.

When the idea of Cullen chairing an SOE was  first mooted, blue tinted bloggers were united in their opposition. If the first to react are any indication they haven’t changed their minds: 

Fairfacts Media asks what is John Key playing at?

Kiwiblog says it’s a crappy move

UPDATE: SOE Minister Simon Power has announced:

“Hon Dr Michael Cullen has been appointed to the board of New Zealand Post, and is expected to become deputy chair in the medium term. 

UPDATE 2:

Fairfacts Media thinks Cullen deputising Bolger is too good to be true

At No Minsiter Psycho Milt  is amused but Lou Taylor isn’t.

Keeping Stock thinks John Key is up to something

UPDATE 3:

Roarprawn reckons it’s a poisoned chalice.

Cactus Kate was forced to seek solace in oysters and Moet

Barnsley Bill’s vote has been lost  and Not PC wonders why  he gave it to National anyway.

Whaleoil is disgusted then has second thoughts  and thinks John Key has snookered Labour.

UPDATE 4:

The red rag was thrown and the blue blogs roared, but what if we’re wrong and it’s really a cunning plot?

Fairfacts Media doesn’t think the job’s as good as it looks.

Anti Dismal  has a better idea – sell the SOEs.

UPDATE 5:

at NZ Conservative Zen Tiger spots a pirate plot  and muses on the relevance of history

Macdcotor advises Cullen not to trip on the way out.

At Tumeke!  Tim Selwyn thinks it’s unbelievable.

Kiwi unless it suits to use the Aussies

Those Kiwibank ads, putting down the Australian banks, push all the nationalistic buttons.

They obviously aren’t concerned that the ones which use the Fred Dagg voice are doing it without John Clarke’s permission.

But if their point of difference is nationalism they’ve set themselves up for a fall when their actions don’t match their words.

The ODT broke the story that Kiwibank uses an Australian call centre to handle its Kiwisaver customers.

Kiwiblog called it hilarious hypocricy and Fairfacts Media also uses two h words – humbug and hypocricy.

ODT areaders aren’t amused but they do agree it’s two faced. An on-line poll which asked if the bank should use an Australian call centre, unscientific though it might be, was decisive:

Yes, if it makes economic sense got  6% (13 votes);  7% (15 votes) went to don’t care and  87% (180 votes) went to No, not in light of its ad campaign.

A total of 208 votes probably isn’t statistically significant. But it does indicate the bank will have a credibility problem if it’s only Kiwi until it suits it to cross the Tasman for services.

Could Kiwibank become a co-operative?

 The idea of the taxpayers owning a bank was such an anathema to me that I didn’t step foot in a post office for more than two years after Kiwibank was established. So deep is my aversion to it, I still enter one only when there is no alternative.

National made a pre-election pledge that it wouldn’t sell any assets this term and made it clear that if it had plans for any sales after that it would make that quite clear before the next elections so voters would know.

They have more than enough on their hands at the moment without worrying about a possible second term, but when they start to look ahead they ought to consider this suggestion from Peter Macdougall, chair of the NZ Cooperatives Association and a director of Ballance, in the association’s latest newsletter:

Before becoming the Government, National didn’t see why a government should be involved in banking. All the major trading banks in New Zealand, however, are owned offshore and their profits go to their investor shareholders.

 

If Kiwibank were to become a cooperative bank, expanded rapidly into the agriculture sector, would it be supported?

 

I believe it would, I believe it should, and the timing is clearly right – “Kiwibank, owned by New Zealanders for the benefit of its cooperative members”.

I don’t have a problem with foreign ownership but many people do so this idea is worth investigating because it would get the bank off the government’s books while still satisfying those who want it to stay in New Zealand hands.

Aiming at agriculture isn’t silly either because the growing demand for food means that primary producers are likely to lead the recovery from the recession.

There is already a very successful example of co-operative ownership of a bank which is active in rural financing. Rabobank , which is owned by the Dutch, has a triple A rating which shows the model could work.

UPDATE: Anti-Dismal says no and explains why.

3rd debate

A thought before the debate starts: why have it today which is towards the end of Tuesday November 4th – election day  – in the USA and Wednesday November 5th – Guy Fawkes day –  here?

Update # 1: Mark Sainsbury’s tie is purple which is what you get if you mix blue and red.

Both John Key and Helen Clark are diplomatic and positive about Obama’s success.

Update #2: Key gets a point for getting across the message Labour knew about the deficits long before the PREFU and still wants a blank cheque while National has known about the economic situation for a shorter time but all policies are costed.

Updtae # 3: Clark has the climate change rhetoric, Key is more realistic.

Update # 4:  Breaking for ads just as discussion is warming up is frustrating.

Update # 5: What’s normal for one isn’t necessarily normal for everyone. Clark, in answering a question about tobacco, said she’d had a puff as a teenager as everyone does. I didn’t several of my friends didn’t and Key said he didn’t either.

Update # 6: When the discussion got on to pot Clark repeated what she’d said to Paul Holmes,” I was a student in the 60s.” I take it that means yes. Auckland in the 60s was obviously different from Otago in the 70s where and when I was a student.

Update # 7: Have they ever broken the law? Key drove his car on a carless day. Clark admitted to a couple of speeding tickets. No mention of art fraud or pledge cards.

Update # 8: Clark really struggled to answer the question about changing her mind. Key explained it well and gave two examples – Kiwibank and Maori TV.

Update # 9: Key gets a point for explaining that it’s wealthy countries which do better with the environment.

Update # 10: Key got a laugh (I think the only one of the evening) for the story about the little boy who said he knew who he was – Helen Clark’s boyfriend.

Update # 11: Final comment: Clark has a plan – but no costs and still wants that blank cheque. It was all about the government. Key spoke from the heart and about you eg . . . it will show that you care about . . .

She had rehearsed lines.  He wasn’t quite word perfect but had passion and conviction . Should I point out in case you hadn’t noticed that I’m a wee bit biased? 🙂