What are the benefits?

June 6, 2018

The decision to ban future offshore petroleum exploration was a political one that didn’t go before Cabinet:

The Cabinet has made no decision on ending oil exploration, documents being released today will show, with April’s announcement made on the basis of a political agreement between the coalition parties.

On April 12, Prime Minister Jacinda Ardern led a group of ministerial colleagues into the Beehive theatrette to confirm news that the Government had decided it would offer no new offshore permits for oil and gas exploration, with onshore permits offered in Taranaki for as little as three years.

Although the news was delivered by ministers affected by the decision and in a forum usually used to discuss decisions made by the Cabinet, politicians made the decision in their roles as party leaders.

Today the Government will release a series of documents generated in the making of the oil and gas exploration decision, but it has already confirmed to Stuff that no Cabinet paper was created and that the Cabinet has not voted on the matter. . . 

We already knew this major decision with large and detrimental economic, environmental and social impacts was made without consultation with affected parties.

Now we know it was a political decision made without even consulting with Cabinet.

That is no way to run a government or a country.

But wait, there’s more and it’s worse – MBIE produced a paper that warned of the detrimental impacts of the ban  which include but aren’t limited to:

* Increased risk to security of future gas supply to major gas users, most notably Methanex at a time when New Zealand has its lowest reserve to production ratio since the Maui reserve re-determination of 2003. The lead time from exploration success to commercial production takes years, so it is not possible to simply turn on gas supplies once they become tight.

* Increased gas prices to consumers following an tightness in future gas supply.

* Increased uncertainty for major gas users in the industrial sector that rely on gas as an input to their processes.

* A negligible impact in reducing domestic greenhouse gas emissions but a likely increase in global gas emissions (from methanol produced from gas in New Zealand being displaced by methanol produced from coal in China). It also removes the opportunity, both domestically and internationally, of any future gas discovery being used to displace coal.

A negligible impact in reducing domestic greenhouse gases and a likely increase in global gas emissions?

This isn’t thinking globally, actIng locally. This isn’t thinking at all.

* Increase perceptions of sovereign risk as this would mark a Marjory policy shift.

* Potentially accelerating decommissioning timeframes, alongside the associated Crown liabilities (measured in the hundreds of millions of dollars) for a portion of these decommissioning costs that represent the amount of taxes and royalties that have effectively been overpaid over the life cycle of the field’s production. . . 

* A detrimental economic impact on the Taranaki region. Methane alone contributed 8 percent of the regional economy of Taranaki in 2017. Methane will be the first company affected by future tightness in gas supply. . . 

To sum up, the ban increases risk around security of supply, costs to consumers and global gas emissions and reduces Crown revenue from future royalties and decreases economic activity in Taranaki.

Added to the detrimental impacts MBIE lists, are decreasing trust in the government and increasing jitters over the Labour, NZ First, Green coalition which now looks more like an Ardern-Peters-Shaw dictatorship.

If it can do this to the energy business and Taranaki without warning or consultation what might it drop on other businesses and other areas?

And the benefits?

I can’t think of any that justify the economic, environmental and social sabotage of the ban and the way it was delivered by decree.

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Rural round-up

February 10, 2018

Claims costs soar – Annette Scott:

Farmers have so far lodged 44 Mycoplasma bovis compensation claims with the Ministry for Primary Industries.

While MPI would not give the total value of the claims farmer Aad van Leeuwen said his claim so far was for $4.5 million and that was likely to be tripled.

And despite the law saying compensation for losses made as a result of MPI exercising its powers should leave farmers no worse off, the ministry was likely to make offers to farmers even when they could document actual loss figures.

There is also little likelihood of payments being made quickly. . .

Labour’s 100 days fails farmers:

Labour’s first 100 days in Government has earnt it a dismal report card as far as farmers are concerned, National’s Primary Industries spokesperson Nathan Guy says.

“The Labour-led coalition has been in government for over 100 days now, yet all they have to show for it is the announcement of a series of expensive reviews and rebrands all the while staying silent on the big issues facing the sector right now.

“The minister Damien O’Connor is raiding $17 million out of the Primary Growth Partnership fund to rebrand MPI, at the expense of vitally important research and development funding – which is now being put on hold. . .

Animal genetics ‘Olympics’ a first for NZ:

About 1000 people will this month travel to New Zealand for three prestigious animal recording and genetics conferences.
For the first time, the World Congress on Genetics Applied to Livestock Production (WCGALP) will hold its four-yearly conference in NZ.

The congress will be combined with the annual conferences for the International Committee for Animal Recording (ICAR) and Interbull – the leading event for research and development in animal improvement, milk testing, DNA parentage analysis, genomics and genetics. . . 

Labour of love for the environment:

Protecting and nurturing the environment for our future generations is a key commitment in the refreshed strategy, Dairy Tomorrow. Many farmers already have their sleeves rolled up doing inspirational environmental work throughout New Zealand. They include third generation dairy farmer Andy Palmer.

It was a chance remark he made back in the late ‘90s that got Andy started on what has become a labour of love spanning two decades. And it’s a passion that’s resulted in an extraordinary legacy of lush riparian planting of native species on his farm near Temuka, which he owns with wife Sharon Collett. . .

Data from new smart sensors can help growers drive yields and cut costs:

Cutting-edge wireless sensor technology now available to UK growers that measures precise humidity, moisture and temperature points, is set to equip farmers with the data they need to help drive improvements throughout their businesses.

Agriculture is becoming increasingly data-driven, and sensing technology is becoming instrumental to the way farmers grow crops.

Access to precise, detailed data is helping farmers to make better, more informed decisions: tailoring cultivation, avoiding produce and crop damage, and reducing costs. . .

Rights granted for peach variety – Sally Brooker:

A new variety of peach has been bred by North Otago orchardists Helen Brookes and Terry Fowler.

The couple achieved the feat at their smallholding at Georgetown, just east of Duntroon, in the Waitaki Valley. They have been granted plant variety rights from the Intellectual Property Office for their ”Sweet Perfection” peach.

The orchard was more of a horticultural interest than a commercial venture, Dr Brookes said.

”We used to and still get a number of visits from organisations to see what we do here. . .


Where did the lollies come from?

December 22, 2017

National left office with an economy that many other countries would envy:

There was confirmation today that the new Coalition Government has inherited a strong economic growth story from the previous National-led Government, National Party Finance Spokesperson Steven Joyce says.

“Stats New Zealand’s report of 3 per cent growth for the year to September together with upward revisions to recent growth figures paint a clear picture of a strong economy over the last few years,” Mr Joyce says.

“They have revised New Zealand’s growth figures for the 2014, 2015, and 2016 calendar years to 3.6 per cent, 3.5 per cent and 4 per cent respectively. That’s a highly respectable growth story in anyone’s language.

“GDP per capita has also been revised upwards in those years. We’ve had 8.3 per cent in real GDP per capita growth over the last five years.

Mr Joyce says the figures released today finally put to bed the fallacy that New Zealand was having a ‘productivity recession’.

“In addition, the figures today show that the construction industry remains strong with the largest quarterly growth since March 2016. Road and rail infrastructure was a key driver, with the largest increase in ten years.

“New Zealand has now experienced 18 quarters of consecutive economic growth; and has grown in 26 out of the last 27 quarters, all the way back to December 2010.

“These figures provide clear confirmation that the new Government has inherited a very strong economy driven by the strong economic plan of the previous Government.

“The Labour-led Coalition needs to take heed of softening business and consumer confidence numbers since the election and make sure their policy changes don’t muck this story up.”

The incoming government is showing great delight in spending the money the strong economy has generated but if it understands how that was achieved, it’s not showing that, as Bill English pointed out in the adjournment debate:

I must say, it has been a bit rich sitting here listening to the moral awesomeness and self-congratulation of the Labour Government over the family incomes package when they opposed every single measure that it took to generate the surpluses that they are handing out. That is why they won’t get the credit they expect from the New Zealand public, because the New Zealand public know it’s a bunch of people who found the lolly bag and ran the lolly scramble without having any idea where it came from. 

The money came from taxes generated from the work and ingenuity of taxpayers under three terms of National-led government’s careful stewardship.

The words and actions of the incoming government give no cause for confidence that the respect for, and careful stewardship of, taxpayers’ money will continue.

 

 


Labour throwing money at wrong end of education pathway

December 7, 2017

The government has announced some details of its fee-free tertiary education policy:

From 1 January 2018 all New Zealand students who finish school in 2017, or will finish school during 2018, qualify for a year of free provider based tertiary education or industry training.

This policy will also benefit those who aren’t school leavers. Adults who have previously studied for less than half full time year of tertiary education or industry training also will qualify for fees free. . . 

This includes overseas students and those studying courses which may or may not have personal benefit but appear to be of  little if any benefit to the country:

Labour must explain why it believes taxpayers should be paying more for people to study golf, homeopathy and skydiving, National’s Tertiary Education spokesperson Paul Goldsmith says.

“The Government was reluctant to provide any detail on its multi-billion fees-free policy and now we know why – today’s announcement has confirmed a return to the bad old Labour days of funding international hip hop study tours and family reunions.

“Under the criteria outlined today, fees-free study options will include a Diploma in Tournament Golf from IGQ Golf College, a Diploma in Naturopathy and Herbal Medicine from the New Zealand College of Chinese Medicine and a Diploma in Commercial Skydiving.

“While it makes sense that golf students ‘have an in-depth understanding of golf theory’ is it really a high priority for new spending?

“This is just bad policy. This is on top of the Government’s own estimates showing hardly any more students will be enrolling because of this policy, when Labour has justified this spending by saying it wants greater participation in tertiary education.

“Most of the 80,000 students that will benefit would have enrolled anyway and were prepared to make some contribution to the cost of their study because they saw the lifetime value in it.

“New Zealand’s tertiary education system is already heavily subsidised and the average student loan is paid off in less than seven years. This policy will just give even more money to people who will earn high incomes and should contribute something to the cost of their education.

“The policy represents a colossal missed opportunity and grossly untargeted spending. Surely it would be better to invest public money into targeting the very small group for whom cost is a barrier?

“And with all the money being sucked into supporting every full-time student in their first year, it leaves nothing to invest in the tertiary institutions themselves so that they can deliver world-class education that equips the next generation of Kiwis to be internationally competitive.

“The tertiary education sector has been left in the dark for months and it’s only now getting the details of this major policy. It gives the sector less than a month to prepare for the changes – and all for a policy that acts as a solution to a problem that doesn’t exist.” 

About 80,000 students will qualify for the fee-free year but how much will it cost and how many extra students will enrol because of it?

The Government expects its $339 million first year fee-free tertiary education policy will see an additional 2000 people enter into study or training next year.

That’s nearly $170,000 per extra student, who may or may not go on to finish the course which may or may not be of any more than recreational value.

Meanwhile New Zealand’s literacy score has dropped for the first time in 15 years.

The government can’t be blamed for that result but it can be challenged on why it’s throwing money at first-year tertiary students when it would be far better used much earlier in the education pathway to improve the literacy of school children.

It probably wouldn’t take $170,000 per pupil and it would be addressing an urgent need which the fee-free policy is not.

Labour is throwing money spraying it round the upper end of the education pathway when there’s urgent need for more to be spent at the lower end, carefully targeted at children who are failing at primary school.


Satire or serious?

November 29, 2017

Act’s newsletter Free Press says it’s learned from a usually reliable source what’s in the secret coalition document:

First Things First: Why is it Secret?
It is very damaging in a democracy for Jacinda Ardern to keep secret what the Government has pledged to its coalition partner. Why the secrecy? There are significant new extra spending promises. Labour does not want the Treasury to know or the extra spending will be added to the Treasury forecasts due to be published shortly.

Running out of Other People’s Money
Already the treasury forecast will show Labour’s election spending promises were understated and there is a blow out. Add the new secret spending promises and New Zealand’s credit rating is at risk. A credit rating decline means everyone’s mortgage payments go up.

Second
There are or were 38 pages to the Labour-New Zealand First agreement. As the PM has almost admitted it has been edited down to 33 pages and Labour is trying to get it lower. The missing five pages are still part of the coalition agreement but both governing parties have conceded it will be very damaging if they are ever published.

The Two Governments Agreement
What is in the agreement? In effect the document creates two governments, A Labour/Green government and a New Zealand First government. Winston Peters is granted a veto over the Labour/Green government but in the New Zealand First government his powers are untrammelled.

Labour/Green Government
The government budget must be submitted to NZ First (Winston) for approval
Labour has agreed to a 10 percent a year increase in the Foreign Affairs budget.
Labour has agreed that NZ First manifesto promises will have priority. The Northland port and railway, for examples
New Zealand First nominations will be approved. For example to the port inquiry.
No concessions can be made to the Greens without prior approval from New Zealand First, think Kermadecs
No new policy not contained in the coalition agreement can be advanced by Labour Ministers without NZ First approval.
All government appointments must be approved by NZ First
New Zealand First Government
Foreign Affairs budget to be increased and Mr. Peter’s Foreign Affairs budget requests cannot be vetoed. Mr Peters can spend his budget how he chooses.
All budget requests from New Zealand First Ministers that have been approved by Mr Peters must get priority.
As Minister of Foreign Affairs Mr Peters has the sole right to nominate all Ambassadors and other diplomatic posts not just Washington and London but he cannot be stopped from appointing his mates to be consuls as he tried with Owen Glenn.
As Minister of SOEs Mr Peter’s has the sole power to appoint all the chair and directors of every SOE. Dozens of appointments.
New Zealand First can nominate, over three years, six people to be knights (or, theoretically, Dames) and its nominations will be favourably considered for other honours.
New Zealand First will appoint the next Chief of Defense
A provision requires all Ministers to refer any request from or to a New Zealand First Minister to go through Mr Peters office.
The PM has agreed that she will not dismiss any New Zealand First Minister, MP or appointee without Mr Peter’s approval and the PM has also agreed to dismiss any NZ First minister, MP or appointee if asked to by Winston Peters.
Unbridled Power
No previous Prime Minister has had the power and patronage that Winston Peters has been given. He can appoint his cronies to be Ambassadors, SOE chair and directors and he can give them knighthoods. He has an iron grip over his party. Winston in effect controls the government budget and can spend billions of dollars on his pet projects while vetoing the plans of both Labour and the Greens.

Snookered
No wonder the Prime Minister, who foolishly thought none of this would become known, is desperate to keep it secret. We suspect that at some stage some of the document will have to be released but as the PM is now denying even the existence of five pages of the secret deal it may be years before we know.

We Need Some Responsible Adults Here
The Secretary of the Treasury should demand to see the full 38 pages. If the government will not let the Treasury see the full secret coalition agreement then the Secretary of the Treasury must tag the Government accounts saying that the Treasury had asked and been denied access to the full coalition agreement and future spending may be significantly greater than the forecast.

For the country’s sake I hope this is satire, but I think it’s serious.

We’d know which it is if the document was released to the public as Peters said it would be but Jacinda Ardern is refusing to do.


How many trees?

November 23, 2017

We visited a farm 10 years ago and listened in bemusement as the owner explained his plan to plant trees.

The land had been cleared of scrub and planted as pasture when the then-government was encouraging such development in the 1970s.

But in spite of the fertiliser poured onto it, sheep didn’t thrive on the pastures.

The farmer looked at other options and settled on trees.

We went back again last week and were no longer bemused. In the decade since we’d first visited, many hectares had been converted from pasture to forestry and trees were thriving where sheep wouldn’t.

There will be other properties where forestry with, or instead of, farming is a good option.

But the government’s pledge to plant a billion trees in 10 years seemed at best optimistic if not unrealistic.

It’s not surprising that the number has already halved:

Regional Development Minister Shane Jones is already backtracking from his promise to plant a billion trees in 10 years, National Party Economic Development Spokesperson Simon Bridges says.

“From his statements earlier today it appears he’s realised that the pledge of a billion new trees is entirely unachievable and now he’s attempting to back away from it,” Mr Bridges says.

“His problem is that the target is recorded unambiguously in both the Labour-New Zealand First coalition agreement and the Speech from the Throne on the new Government’s programme.

“Now he wants to count around 50 million trees that are already planted every year, about half of the billion he’s committed to over a decade. These are happening regardless of his slush fund or the kind of Government in power.

“So his first action is to cut his target in half. Not exactly impressive.

“He needs to immediately stop using his slogan of 1 billion trees to be planted because it’s completely untrue. He should also stand up in Parliament and correct the Speech.

“This backsliding is becoming a pattern for this Government. They want to count trees that are already being planted in their tree target and houses already being built in their housing target. It’s all very underwhelming.

“The reality for Mr Jones is that even planting 500 million trees over a decade, if that’s what the new marketing catch-cry will be, is unlikely.

“After all, the new Government has also committed to slashing the necessary immigration needed for our workforce and the nurseries will find it difficult to gear up for both private and public sector forestry expansion

“All he will do is displace existing private sector activity. The forestry industry should tell him he’s dreaming.”

Doubling current planting, whether it’s done by the private or public sector will require a lot of land, a lot of labour and a lot of seedlings.

The pledge will deliver a new bureaucracy but it will need a lot more than that to plant even half a billion more trees.

And the experience of the farm forester we visited shows that landowners are best to make decisions on what’s best for their land without political encouragement.

 


Labour’s got wrong priority for education

November 17, 2017

The biggest priority for education spending is the long tail of under-achieving children, especially those who don’t manage even basic literacy and numeracy.

The National-led government spent a lot of money working with young people who were destined for a lifetime on benefits knowing investing more now would save much more in both financial and social costs over their lifetimes.

This approach ought to be taken with education, giving one-on-one help to the children who aren’t school-ready when they turn five.

That’s the children who can’t speak English or have poor language skills, even if English is their first language; those who come to school hungry and with other health needs; those who haven’t had the emotional, intellectual and material support all children deserve and need to ensure they are ready and able to learn when they get to school.

At the same time, children already at school who are struggling with numeracy and literacy need more help.

Then there’s children with special needs who for their sake and others in their classes need more help than a single teacher with a room full of children can possibly give them.

Helping these children requires more teachers and teacher-aides. It also requires better teachers.

Teacher unions insist all teachers are good teachers. They’re not, like any other group. They are spread on the bell curve with some excellent ones, some duds and most in the middle.

Putting more money into more training and support to improve teaching standards is another priority.

Teachers aren’t particularly well-paid in comparison with other professions. Part of the fault for that lies in the union insistence that all teachers are equal and refusal to countenance performance pay.

That aside, pay rates that make teacher salaries competitive with pay rates for other occupations which compete with them for recruitment would help.

The new government is determined to alleviate child poverty. Ensuring all children achieve at school so they have what they need to succeed when they grow up should be part of that.

Instead, Labour’s first priority is spending even more on those who mostly need it least, tertiary students.

The taxpayer already pays more than 70% of the cost of tertiary study.

If more help is needed, it should be targeted at those who really need it; at areas of study where there are graduate-shortages and in loan write-offs for professionals willing to work in hard-to-staff places.

The average graduate earns around $1.5 million more over a lifetime than non-graduates who will be paying more tax to help them into better paid jobs.

In opposition the parties in government were strident about the ills of inequality.

How hypocritical that one of their first moves, giving tertiary students fee-free education will make inequality worse.

 


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