Rural round-up


Rural communities under threat from carbon off-setting farmers say – Bonnie Flaws:

Rural communities are being hollowed out as carbon investors buy up farm land at prices well over those farmers might pay, Pahiatua sheep and beef farmer Lincoln Grant says.

School closures were just one symptom of the trend towards increased pine plantations on former sheep and beef farms, he said. Tiraumea school, north of Masterton, is one school that closed its doors two years ago after changing land use led to dropping role numbers.

As farming families sold up and moved away, jobs went with them. . .

The challenge of meeting environmental rules – Peter Burke:

Complying with new and stricter environmental requirements is for farmers a major challenge worldwide.

When Rural News reporter Peter Burke was in Ireland last year, he met up with Professor Tommy Boland of University College Dublin (UCD) who, like colleagues in NZ, is looking to find practical solutions that farmers can use to reduce their environmental footprint and somehow meet the new standards of policy makers and politicians.

Tommy Boland has been to New Zealand several times and understands the situation in this country.

He says both countries are recognised for their efforts and achievements in environmental pasture-based meat, milk and fibre production, while leading the way in developing new approaches to ensuring future sustainability. . .   

Study beefs up meat’s importance:

New research highlights value of New Zealand’s red meat sector as the industry launches its general election manifesto. 

The red meat sector’s contributes $12 billion in income to the economy and employs almost 5% of the full-time workforce.

The study commissioned by the Meat Industry Association and Beef + Lamb shows the meat processing and exporting sector is also responsible for $4.6b in household income and represents a fifth of New Zealand’s productive sector. 

The release of the research by S G Heilbron Economic and Policy Consulting coincides with B+LNZ and the MIA launching a joint manifesto ahead of the election.  . . 

Terrible news: the avocado crime gangs are about to strike again – Hayden Donnell:

For four years running, at the exact same time of year, New Zealand has been savaged by gangs of avocado thieves. Hayden Donnell sounds the alarm about the country’s most predictable crisis.

They come every year like clockwork. As winter starts to bite, and our summer produce hits its peak price point, the thieves rouse themselves and head out to pillage. They always have the same target. They usually have the same MO. In the dead of night, they steal our avocados.

This year, their timing couldn’t be worse. Most New Zealanders are still reeling from the Covid-19 lockdown. We’re slowly readjusting to normal life: blinking like stunned owls at the white lights of the newly reopened retail stores. Struggling to remember the way to our offices. The last thing we need is another crisis. . .

Silver Fern Farms no available direct to customers with Gourmet Direct partnership:

Silver Fern Farms’ full retail range of natural, grass-fed, premium red meat products are now available to be ordered online and delivered direct to consumers across New Zealand thanks to a new partnership with Gourmet Direct, a nationwide e-commerce business specialising in premium New Zealand meat products.

Silver Fern Farms’ Group Marketing Manager, Nicola Johnston says the partnership with Gourmet Direct was a natural fit, with online shopping becoming more popular than ever following the Covid-19 lockdown.

“At Silver Fern Farms we are thrilled to partner with Gourmet Direct, who have developed a loyal customer base which values their selection of premium meats, product quality and superior customer service. . . 

Rail supporting Hawke’s Bay drought relief:

KiwiRail is helping the drought relief effort by shifting stock feed for free from the South Island to parched farms in Hawke’s Bay.

“On top of the Covid-19 crisis, the prolonged drought in parts of the North Island has put some farmers and stock under great stress,” KiwiRail Group Chief Executive Greg Miller says.

“We move dairy products, beef, lamb, horticulture and viticulture for the rural sector so it is one of our most important customers, and we’re pleased to support it now at this time of need. . . 


When unions write policy


Anyone who doubts what unions get from supporting Labour need look no further than policy  to reopen Hillside Workshop:

. . . In November 2012 about 90 Hillside Engineering Workshops employees were made redundant in the South Dunedin facility’s partial closure, after KiwiRail failed to find a buyer for it.. .

Several factors including changing demand and union intransigence which prevented the business modernising to compete in the 21st century, were responsible for Hillside’s demise.

That the Chinese-made wagons KiwiRail bought in preference to locally made ones have had problems is no reason to resurrect the workshop.

The government has no business in a business like this.

It would be returning to the bad old days of subsidised industry.

KiwiRail was one of the last Labour government’s big spending mistakes.

It is continuing to cost the country far too much money which would be better spent in many other areas.

The only reason to continue throwing good money after bad is political payback for union support.

That’s what happens when unions write policy.

It might be good for them but it won’t be good for the country.

Education is another area where unions are flexing political muscles:

The country’s biggest teacher union has overwhelmingly rejected the Government’s $359 million education policy.

The announcement today by NZEI that 93 per cent of teachers and principals voted “no confidence” in the policy could potentially scupper the Government’s Investing in Educational Success plans.

The policy, announced in January, has divided teachers and principals and only minutes before NZEI’s announcement the Minister of Education revealed a memorandum of understanding has been signed with a number of principals from other organisations across the country.

NZEI president Judith Nowotarski said 73 per cent of the more than 25,000 members that voted rejected the proposed new roles outright, rather than trying to change the policy through negotiation. . .

This is another example of the pressing need for a professional body to advise and advocate on educational matters rather than an industrial one.

A professional body would have the best interests of education and pupils front and centre rather than their political views as the union does.

Some unions are affiliated to Labour and have voting powers. Some support them with money and people-power for campaigns. Some support them by fighting National government policies.

Policy they like, and possibly write, is their payback.

If it was an employers or business group doing that for National and against Labour it would be called corruption and buying power.

When unions do it, it’s just business as usual.




What would it do if it was a private company?


KiwiRail is asking the Government to help pay for the cost of replacing the broken-down Cook Strait ferry the Aratere.

The company has still not worked out what went wrong, but is adamant it has not cut corners on maintenance of the ferry which lost one of its propellors near Tory Channel on 5 November. . .

KiwiRail was one of the last Labour government’s most expensive mistakes.

Labour paid far more for the company than it needed to and a great deal more than it was worth.

It’s performance since it became an SOE has been dismal and now it’s asking for more taxpayer funds.

What would it do if it was a private company and was faced with an unexpected major expense?

This is an argument for privatisation – in part or in full.

Regardless of what led to the loss of the propeller, the taxpayer shouldn’t be adding to the already large sum of money it’s spent on the company.

Exhibiton Express


Kiwirail is celebrating 150 years of rail in New Zealand with a tour of the country by its Exhibition express.

A powerful KiwiRail engine is pulling new scenic carriages and four themed containers, each packed with fascinating displays about rail in New Zealand. Stopping at 12 locations across the country, there will be family fun, prizes and giveaways. Entry is free and everyone is welcome.

The schedule is at the link above.

The train will be in Oamaru today from 10 – 4.

If there’s going to be an investigation . . .


Labour  is asking the Auditor General to investigate KiwiRail’s tendering and procurement process for rail wagons.

If there’s going to be an investigation into KiwiRail it ought to cover Labour’s decision to pay nearly $700 million for the business in 2008.

The sale of the century for the previous owners Toll Holdings has left the government – and the public of New Zealand – with a very expensive liability.

Protectionism favours few, costs many


Unions and some of Dunedin’s citizen’s are agitating for KiwiRail to buy new wagons from Hillside Workshop.

Roger Kerr explains what’s wrong with that:

Here we are seeing the same old protectionist fallacy. Assuming KiwiRail has got its numbers right, building rolling stock here at higher cost would mean its customers would face higher prices across the board. They would grow less and create fewer jobs.

Many of the customers would be in the export sector. The badly needed rebalancing of the economy would be hampered. And of course KiwiRail would be an even bigger drain on taxpayers.

More than 20 years after the painful but necessary reforms of the late 1980s and early 90s some people still haven’t got the message – protection favours few and costs many.

This is a lesson Candians have yet to learn too. Dan Gardner writes about Canada’s failure to make the most of its potential for increased food production:

Canadian consumers pay far more for dairy and poultry products than they would in a free market. Supply management also makes it difficult or impossible for producers to achieve the economies of scale needed to drive costs down. Perhaps worst of all, it impedes trade liberalization.

“Our government will also continue to open new markets for Canadian business in order to create good jobs for Canadian workers,” the Conservatives promised in the Speech from the Throne. That’s good. Canada is a trading nation and the steady expansion of free trade is very much in our interest. But then came this: “In all international forums and bilateral negotiations, our government will continue to stand up for Canadian farmers and industries by defending supply management.”

And what’s the affect of supply management?

Who pays? Consumers who often don’t know they are. Who benefits? A small number of farmers who are highly organized and concentrated in certain ridings. Politicians who swear to defend the status quo get the gratitude of the former without incurring the wrath of the latter — while any politician who dares to even consider change gets no gratitude and lots of wrath.

“Look at us,” Larry Martin suggests, “and look at New Zealand, sitting out there in the middle of the ocean, not close to anything.” In the world of food, New Zealand is a “superpower.” And yet, thanks to daring reforms in the 1980s, New Zealand’s farmers owe almost none of their income to government support. “You think, ‘if we could do even half of what they have done wouldn’t we be in great shape?’”

Yes, those “failed” polices of the 80s made our economy freer and are one of the major reasons we’re getting the benefits from increased demand for commodities.

Instead of producing things the world doesn’t want or need at considerable cost to the domestic economy through subsidies, we’re following market signals to produce what the world wants to buy.

Hillside  workers should stop wasting their energy trying to return to the bad old days of protectionism. Instead, they should concentrate on developing the flexibility to produce what someone wants to buy at a price they’re prepared to pay.

KiwiRail is already costing the country too much, we can’t afford to add to those costs by subsidising Hillside.

Hat tip: Offsetting Behaviour & Something Should Go Here who both discuss Gardner’s piece.

Why would you want to spend more than you need to?


More than 20 years since we were dragged kicking and screaming into the real world without subsidies but unions, Labour and Green MPs  still don’t get it.

Why would KiwiRail get a New Zealand company to build its new wagons unless it was the best option for the company?

It’s a business, not a charity.

We taxpayers have already wasted millions more than we needed to buying the company, why pour more good money after bad?

If the companies which build wagons can’t compete in that business without subsidies they should put their skills to use in areas where they can be competitive without taxpayer or SOE assistance.

A dog of an idea


In a list of Labour’s spending excesses, Duncan Garner writes:

Michael Cullen spent twice what he had to buying back KiwiRail from Toll.

The purchase suited Labour for political reasons. They campaigned on KiwiSaver, KiwiRail and Kiwibank. But it was not good value for money – taxpayers’ money. Cullen would never have spent his own dosh on such a buy-up.

I note KiwiRail is now valued at half what Cullen paid for it . .

In her Listener column Joanne Black writes:

My elder daughter and I are much excited at the moment by what name we would give a cat . . . Naming a dog? That would be so much easier. If I had a dog I’d call it Kiwirail.

Apropos of this, like Whaleoil, I’m not impressed with Otago University’s decision to grant Cullen an honorary degree.

Wasted opportunities


The nine years from 1999 to 2008 were ones of wasted opportunities.

Successive Labour led governments squandered the surpluses, concentrated on redistribution rather than growth, created huge liabilities for future generations (ACC, KiwiRail . . . ) and turned middle and upper income families into beneficiaries.

In doing so they lost sight of their aim to return New Zealand to the top half of the OECD.

The New York Times’ Economix blog has a post asking: What Happened to Argentina?

A century ago, there were only seven countries in the world that were more prosperous than Argentina (Belgium, Switzerland, Britain and four former English colonies including the United States), according to Angus Maddison’s historic incomes database.

 New Zealand was one of those former British colonies and we too have lost ground since then.

This week’s Idealog newsletter  points out that every country to the left of New Zealand on this graph was poorer than us in 1909, all the ones above us are wealthier than we are now.



This is why we’re so disappointed that the previous government failed to see through its stated aim to return New Zealand to the top half of the OECD, and why we’d like to see John Key’s government commit itself to achieving the task. This isn’t about wanting more toys, overseas holidays or dining out more often; it’s about being able to afford the education, health care, infrastructure and quality of life that we want for ourselves and our loved ones. We must reverse this slide.

This point was also made by Don Brash in a speech entitled New Zealand’s Economic Outlook: Can We Ever Catch Australia?

Far from raising New Zealand into the top half of the OECD, we actually sank back a rung or two over the nine years that Labour was in office.
This is extremely serious.  If we continue to languish in the bottom third of OECD countries – even worse if we continue to slide backwards – the things which have made New Zealand a pleasant place to live and work will gradually disappear.  We won’t be able to afford the healthcare which those in richer countries take for granted, nor the standard of education which richer countries take for granted.   Income distribution will become progressively less egalitarian – as we’re forced to pay our most skill
ed people some approximation of the lifestyle-adjusted incomes they can earn abroad – with all the social implications of that.   

Economic growth isn’t about wealth for wealth’s sake.

It’s about earning the money to afford the first world services and infrastructure we need.

Afford doesn’t mean borrowing to saddle future generations with debt. It means earning what we we need by increasing economic growth.

The difficulties we face in doing that are many.

Labour not only wasted the opportunities provided by surpluses when they were in power, they increased public spending to a level which isn’t sustainable. That is now adding to our debt and holding back the recovery.

Thanks to them benefits are no longer regarded as temporary assistance for people in need as most ought to be, they’ve become “entitlements” to which people feel they have a right regardless of whether or not they need them. Working/welfare for families, interest free student loans and paid parental leave are all examples of that.

Another of the barriers to growth is illustrated by the hysterical reaction to the suggestion by Gerry Brownlee that the government does a stock take of mineral resources under public land. Anyone would think he was suggesting clear-felling every tree and turning every national park into an open cast mine.

All he’s doing is sensibly suggesting that we ought to know what we’ve got. Once we do can we make intelligent decisions on what, if anything, we do with it.

Every centimetre of every part of the DOC estate is not pristine wilderness. Some of it  is weed and pest infested wasteland  – the weeds and pests on which threaten native species. Some might well be more attractive if it was mined and replanted than if it is left untouched.

We’ve had nine years of going backwards. We can’t afford to waste opportunities now and among the opportunities available is the mineral wealth which lies beneath the ground.

If it is possible to use some of that, without damaging the environment, we should do so to help foster the economic growth which will enable us to fund the first world services we need but can no longer afford.

Kingston Flyer to be grounded?


KiwiRail has been asked to save the Kingston Flyer  but it has declined because the operation isn’t commercially viable.

The company has enough problems with modern trains and tracks without saddling itself with an historic tourist attraction.

It would be sad to lose the Flyer, but if there’s a case for supporting it, it’s not the role of an SOE to be its saviour.

Labour’s rail dream taxpayers’ nightmare


Transport Minister Steven Joyce says the Labour government spent more than a billion dollars on KiwiRail  last year. It’s now valued at just $388 million.

Mr Joyce says that, in opposition, National was very concerned at the purchase price paid by Labour for the rail company and nothing has happened since to change that view.

“We now need some hard-nosed realism about future investments.  We need decisions that make sense when stacked up alongside other modal options, including sea freight and roading.

“We want to encourage an environment where rail can operate as efficiently as possible, with strong commercial imperatives to provide the greatest benefit to the New Zealand economy.

“There will be an expectation that investment in the predominantly freight-based national rail network anticipates a commercial rate of return. Any taxpayer subsidies to the freight side of the business should be provided transparently and should not be at the expense of other transport modes.”

Labour’s dream has turned in to an expensive nightmare for the taxpayer but at least the National government is awake to the problem and won’t be  blinded by ideology when seeking solutions.

Kiwi now an albatross


The billion dollar train set Labour bought with our money is now worthless.

They named it after the wrong bird – it’s now AlbatrossRail.

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