Rural round-up

August 15, 2018

Appeal decision a win for irrigators but more work needs to be done:

An appeal to Environment Canterbury’s Plan Change 5 nutrient modelling rules has been resolved with a major win achieved for irrigators, says IrrigationNZ.

A Hearings Panel on the Plan Change proposed a new requirement that would have effectively required that all older spray irrigation systems in Canterbury be replaced with new ones by 2020. It was estimated that this change would cost irrigators $300 million.

All parties to the appeal agreed that an error in law had been made when the Hearing Panel introduced this as a new requirement because no submitter had asked for this change.

INZ carried out testing on 300 irrigation systems in Ashburton and Selwyn districts over two summers recently which found that older spray irrigation systems can achieve good levels of water efficiency if regular checking and maintenance is carried out

First M bovis case confirmed near Motueka in Tasman – Sara Meij:

The first case of M. Bovis has been confirmed in the Nelson region.

Biosecurity New Zealand said on Tuesday a property near Motueka, in the Tasman district, had tested positive for the bacterial cattle disease.

Ministry of Primary Industries (MPI) said the affected property was a mixed sheep and beef farm.

The farm was identified through tracing animals from known infected farms and it was now under a Restricted Place Notice, which meant it was in “quarantine lockdown”, restricting the movement of animals and other “risk goods” on and off the farm. . .

At the grassroots: farmers contribute too – John Barrow:

I recently returned a little disappointed from the Local Government New Zealand conference in Christchurch.

From a dairy farmer’s perspective I was disappointed at the lack of recognition of the cost of farming and issues we are facing – all the emphasis was on urban.

The conference theme was We are Firmly Focused on the Future: Future Proofing for a Prosperous and Vibrant NZ. . .

Draft report on review of Fonterra’s 2017/18 base milk price calculation:

The Commerce Commission has today released its draft report on Fonterra’s base milk price calculation for the 2017/18 dairy season.

The base milk price is the average price that Fonterra pays farmers for raw milk, which was set at $6.75 per kilogram of milk solids for the season just ended.

The report does not cover the forecast 2018/19 price of $7.00 that Fonterra announced in July.

The Commission is required to review Fonterra’s calculation at the end of each dairy season under the milk price monitoring regime in the Dairy Industry Restructuring Act (DIRA). . .

Four does go into one – Sonita Chandar:

Teamwork is the secret to success for the Southland farm judged the best dairy business in the land. Sonita Chandar reports.

Despite three of the four partners living in the North Island the success of a Southland farming business can be attributed to exceptional teamwork and good clear lines of communication.

Each partner brings strengths to the table but no one is above the others. They are all equals, make decisions as a group and share in the spoils of their collective success.

MOBH Farm, an equity partnership made up of Kevin Hall, Tim Montgomerie, Jodie Heaps and Mark Turnwald, won two category awards as well as being named the supreme winner at the 2018 Dairy Business of the Year awards (DBOY). . .

Farmers rally around Cancer Society fundraiser at Feilding Hogget Fair – Paul Mitchell:

The rural community is banding together to get behind the Cancer Society, with personal connections running as deep as their pockets.

The annual Hogget Fair at the Feilding Stockyards on Wednesday is one of the biggest in New Zealand. For the second year running, farmers will donate sheep to help those who are doing it tough.

The money raised from selling the sheep will go directly to supporting Manawatū-Whanganui cancer patients. . .

Rare heifer triplets thriving on Taieri farm – Sally Rae:

Holy cow – it’s a girl. Or in the case of a heifer calving on a Taieri dairy farm last week, it was a gaggle of girls, handful of heifers.

The first-calver produced a very rare set of heifer triplets on the Miller family’s farm at Maungatua. Andrew Miller and his father Jim had never encountered triplet calves before.

Andrew was particularly amazed the Kiwi-cross calves had all survived and were now doing well in the calf shed. . .

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Aging population will affect local government

July 24, 2013

University of Waikato demographer, Professor Natalie Jackson, presented the inconvenient truth on demographics to Local Government New Zealand’s annual conference.

Professor Jackson said over the next two decades, all growth in 56 of New Zealand’s territorial authorities (84 per cent of the total 78) will be in the 65 years-plus age bracket.

By 2031, an estimated 91 per cent of territorial authorities (TA) will have more elderly than children. This figure currently stands at just 15 per cent. This will have a major impact on employment, housing and infrastructure in much of New Zealand.

This, Prof Jackson says, is the inconvenient truth of population ageing, already well advanced across the developed world. . .

The government is not going to force amalgamations on councils but reorganisation was discussed.

. . . Ganesh Nana, Chief Economist at BERL said “Economies of scale make sense, where there is synergy and, importantly, where communities are comfortable with the change being proposed.”

The panel also recognised issues caused by changing demographics where some areas will have declining populations, whilst other grow.

LGNZ President, Lawrence Yule, said “This makes it more of a challenge for smaller councils. The inevitability of change means that councils will be finding innovative approaches to deliver their services.”

“The answer to “is Bigger Better?” will be very different depending on where you are and what challenges you are facing as a council – but one thing is certain – there will be changes ahead for local government in New Zealand.”

Some amalgamations are inevitable to get economies of scale but could a different approach to doing what they have to do also work?

For example, do councils in close proximity have to duplicate everything they do, or could one specialise in certain areas and its neighbour or neighbours tackle others?

This wouldn’t work where each council had different policies but could it where policies are set by central government rather than councils or would distancing staff from elected representatives cause more problems than it solved?


Rural round-up

July 10, 2013

Fonterra price scheme proves popular – Jamie Gray:

Fonterra’s guaranteed milk price (GMP) pilot scheme for the current season has proven so popular that it has required scaling, the co-operative dairy giant said.

Fonterra said 328 farms have applied to supply 37 million kg of milk solids for the scheme but that it had maintained the size of the pilot at the targeted 15 million kgMS, about one per cent of its total milk supply.

As a result all applicants were scaled to 40 per cent of their requested kgMS, with a minimum threshold of 10 per cent of a farm’s production. . .

Synlait Milk sets share price at $2.20 a piece:

Synlait Milk will sell shares at $2.20 apiece before joining the NZX later this month, valuing the dairy processor at $322 million and making it the 43rd biggest company on the exchange.

The Rakaia-based company plans to raise $75 million of new capital, and existing shareholders will sell $38.7 million, or 17.6 million shares, in a secondary offer, listing on July 23, Synlait Milk said in a statement.

Cornerstone shareholder Bright Dairy and Food won’t participate in the offer, reducing its holding to about 39 percent from the 51 percent it acquired in 2010 after Synlait abandoned an earlier plan to go public because of tepid investor appetite after the global financial crisis. . .

Huge opportunity with Icebreaker – Sally Rae:

Nicola Simpson is a firm believer in taking opportunities as they come.

She was on holiday with her family at Pounawea when she checked her emails and found a message ”out of the blue” asking if she would be interested in joining merino clothing company Icebreaker.

It meant moving from Wanaka to Auckland, a city where the family had lived before, but it was a ”huge opportunity”, she said. . .

LGNZ Welcomes New Dairy Accord:

Local Government New Zealand has welcomed the new Sustainable Dairying: Water Accord released at Parliament today.

The Accord, which involves two tiers of “accountable” and “supporting” partnerships between a number of dairy industry bodies and agri-businesses, also lists 15 regional and unitary councils as “Friends of the Accord.” . . .


Councils should stick to knitting

December 10, 2012

Local Government New Zealand president Lawrence Yule has welcomed  comments  from Auditor General Lyn Provost on local authority Long Term Plans:

It notes councils’ financial strategies in their Long Term Plans (LTPs) are characterised by:

  • reducing or deferring spending
  • stabilising or reducing overall debt.

Regarding rates, it is noted that “the year-on-year movement is on average five per cent (for Auckland Council the average is 6.1 per cent and for all other local authorities the combined average is 4.3 per cent).

“The findings are in stark contrast to the justification for the recent Local Government Act 2002 Amendment Bill, which has just received the Royal Assent. The Bill was introduced in response to a perceived crisis in the way councils manage their finances,” says LGNZ President, Lawrence Yule.

“The sector continually seeks efficiencies and savings and the audit process will always focus a Council’s attention on this approach. This report shows that these improvements are being made.”

Although the report also highlights the challenges facing councils in funding infrastructure, it states “overall, local authorities are planning to live within their means.”

Debt when used wisely can be a way of spreading the costs of infrastructure over a period of time.

Debt  used wisely can be a way of spreading the cost of infrastructure which has inter-generational benefit over its lifetime.

But that doesn’t mean that the LGA 2002 didn’t require amendments because Ms Provost said:

However, a question remains about what specific information in the LTPs (and in the audited annual financial statements) is most helpful for informing judgements about the financial prudence and long-term financial sustainability of an individual local authority or the sector as a whole.

What constitutes prudence and long-term financial sustainability is a matter of judgement, and there are currently few agreed methods of analysis. As a result, it is difficult to be definitive about the state of an individual local authority or the sector. . .

The AG points out that some capital expenditure is often associated with the need to upgrade systems to meet new standards which reinforces the justifiable complaint from councils about the burden imposed on them by successive governments.

The AG concludes:

As part of the Better Local Government initiative, the Local Government Efficiency Taskforce is considering the nature of planning, accountability, and decision-making of local authorities. We have offered our insights (consistent with those outlined in this report) to the Taskforce. We have also suggested that local authorities present a more strategic focus on the main issues (including prospective financial information and level-of-service intentions), and provide access to supporting data and policies through the local authority’s website.

I continue to encourage local authorities to consistently invest in preparing shorter, clearer, and more informative LTPs, so the community is able to take part in more informed and effective consultation on a local authority’s intentions.

The future sustainability of local government services such as roads, water, libraries, and rubbish disposal are critical to our communities. Delivering on these LTPs in an effective and efficient manner is the next challenge.

The report says:

1.14
In the last two years, local authorities have been good at budgeting for their operational expenditure, but overestimated their likely levels of capital expenditure. We consider this under-expenditure indicative of the challenges of delivering a diverse range of projects each year. However, there is scope for the sector to improve reporting in this area so that it is easier for the users of local authorities’ annual reports and LTPs to understand whether forecast projects have been delayed, whether there is a tendency for conservative overestimating, or whether cost savings have been achieved. In the LTPs, capital expenditure for 2012-22 is forecast at $37 billion. Of this, 59% is to meet increasing demand (often as a result of growth) or to improve levels of service.

1.15
The overestimation of likely levels of capital expenditure in the past two years raises questions about the realism of local authorities’ longer-term assessments of the cost of their asset renewal and expansion programmes, as forecast in the LTPs. This emphasises the importance of robust asset management plans (AMPs) as the foundation of every LTP. . . .

1.18
However, we are concerned that a small number of non-metropolitan local authorities are planning large increases to their debt levels. We assessed these local authorities as financially prudent, but they face greater risks in the accuracy of their forecasting, growth patterns, and ability to deal with the unexpected as their capacity to respond to shocks reduces.

1.19
Conversely, a number of mostly smaller local authorities are planning for little or no debt during the 10-year period. If these local authorities are carrying out large capital projects, this raises some questions about the appropriateness of their financial strategies and equity between ratepayers in paying for long-term infrastructure projects. These two contrasting approaches demonstrate the importance of a clearly described financial strategy that enables the community to understand the current and long-term implications of the local authority’s forecast use of debt, particularly in the context of asset condition and forecast capital expenditure levels. . .

My interpretation of that is that councils need to stick to their knitting, and ensure the patterns they use are simple and easily understood by ratepayers.

Hat Tip: Credo Quia Absurdum Est.


Local Govt wants to keep wellbings

July 17, 2012

Local Government wants to keep the environmental, social, cultural and economic wellbeings in the Local Government Act:

Speaking from Local Government New Zealand’s  conference, President Lawrence Yule said a unanimous statement at the LGNZ’s Annual General Meeting sent a powerful message to government that the existing legislation allowed councils to add most value to communities.

“Councils have been criticised by the Government for supposedly working in areas that are not core.  Yet most of these activities are picked up because of the failure of central government and the private sector to deliver them. . .

Successive Central Governments have passed on responsibilities – and the costs that go with them – to local authorities.

But if the private sector doesn’t deliver goods or services it’s usually for a very good reason – they can’t do so at a profit – and if private sector can’t then it would be very surprising if local government could.

“However, the vast majority of council activity and spending is on water, roading and similar activities.

“The four wellbeings are not putting cost pressures on councils, but the fast rising prices for essential supplies such as bitumen for roading are,” Mr Yule said.

“The wellbeings provide clarity.  If they are removed, councils will be open to politically-motivated challenges regarding their activities, which will cost millions.  The lawyers will be the winners; ratepayers will lose out.

“Charging councils with the wellbeings of their communities has been maligned by people who don’t necessarily know as much about local government as they claim.  The current set up works well.

Councils might spend most on core business but the relatively small proportion of the spend on non-core functions and projects doesn’t make them any more affordable.

The four wellbeings might provide clarity to councils, but to many ratepayers they are a licence to increase the size and cost of council which always leads to an increase in rates.


Yule wins Local Govt Presidency

July 30, 2008

Hastings mayor Lawrence Yule has been elected president of Local Government New Zealand.

Wellington mayor Kerry Prendergast, who contested the presidency too, is the new deputy.

Bob Harvey, Waitakere mayor had earlier criticised local bodies supporting Yule’s nomination:

“It’s a brainless stand as the largest urban authority in New Zealand to not think through what the job entails and I’m surprised and amazed at their decision. Local government will be in serious trouble if they don’t come to their sense and realise that the job is beyond the mayor of a small rural district.”

Obviously enough of those who voted realise that size doesn’t matter and a president with an understanding of provincial issues and a deputy who knows about urban issues should ensure the views of all local authorities are understood and represented.

Update: I stand to be corrected on this but I think Yule was electorate chair for Michael Laws when he (Laws) was a National MP. The skills he’d need for that job will be very useful in his new role 🙂


Size doesn’t really matter, Bob

July 28, 2008

Waitakere mayor Bob Harvey says support for a small-town politician’s bid to for the presidency of Local Government New Zealand is “brainless”.

The Sunday Star Times (not on line) says that Hastings mayor Lawrence Yule is running against Wellington mayor Kerry Prendergast. Yule’s bid is supported by the Auckland Regional Council and Environment Canterbury which Harvey labelled misguided.

“It’s a brainless stand as the largest urban authority in New Zealand to not think through what the job entails and I’m surprised and amazed at their decision. Local government will be in serious trouble if they don’t come to their sense and realise that the job is beyond the mayor of a small rural district.”

I wouldn’t call a population of 77,500 small and given the district includes the city of Hastings I’d say it’s more provincial than rural. But of course I’m biased because I live in the Waitaki District which has only 20,000 people and no cities.

However, all that’s beside the point.

What matters is not the size of the local bodies the candidates for the position represent but whether or not they have the skills for the job. I have no idea which of the two would be a better president but I take exception to Harvey’s presumption that the job is “too big for the mayor of a small rural district”.

Harvey might not realise this, but there is intelligent life in the provinces.


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