Bank, govt aim at demand, what about supply?

May 18, 2015

The Reserve Bank and the government are both trying to take the heat out of the Auckland housing market.

The Bank announced proposed changes to the loan-to-value ratio (LVR) policy to take effect from 1 Octobere:

They will:

  • Require residential property investors in the Auckland Council area using bank loans to have a deposit of at least 30 percent.
  • Increase the existing speed limit for high LVR borrowing outside of Auckland from 10 to 15 percent, to reflect the more subdued housing market conditions outside of Auckland.
  • Retain the existing 10 percent speed limit for loans to owner-occupiers in Auckland at LVRs of greater than 80 percent.

The government is  taking extra steps to bolster the tax rules on property transaction.

FInance Minister Bill English and Revenue Minister Todd McLay say the Government is taking extra steps to bolster the tax rules on property transactions – including those by overseas buyers – and to help Inland Revenue enforce them.

The tax measures are also expected to take some of the heat out of Auckland’s housing market and sit alongside the Reserve Bank’s latest moves to address associated financial stability issues, Mr English says.

“Taken together, they will help Inland Revenue enforce existing tax rules, provide it with extra resources and ensure that property investors pay their fair share of tax – whether they’re from New Zealand or overseas.”

The Budget this week will confirm that, from 1 October this year, the following will be required when any property is bought or sold:

  • All non-residents and New Zealanders buying and selling any property other than their main home must provide a New Zealand IRD number as part of the usual land transfer process with Land Information New Zealand.
  • In addition, all non-resident buyers and sellers must provide their tax identification number from their home country, along with current identification requirements such as a passport.
  • And to ensure that our full anti-money laundering rules apply to non-residents before they buy a property, non-residents must have a New Zealand bank account before they can get a New Zealand IRD number.
  • In addition, a new “bright line” test will be introduced for non-residents and New Zealanders buying residential property, to supplement Inland Revenue’s current “intentions” test. Under this new test, gains from residential property sold within two years of purchase will be taxed, unless the property is the seller’s main home, inherited from a deceased estate or transferred as part of a relationship property settlement.

“Tax rules are complex and affect people in different ways, so we will consult on these measures before they take effect on 1 October,” Mr English says.

The “bright line” test will then apply to properties bought on or after 1 October.

To further ensure overseas property buyers meet both existing tax requirements and those of the new test, the Government will investigate introducing a withholding tax for non-residents selling residential property.

Officials will consult on these details with a view to this withholding tax being introduced around the middle of 2016.

Mr English reiterated owner-occupiers of residential property will not be affected by the new measures when they sell their main home, or if property is inherited from a deceased estate or transferred as part of a relationship property settlement.

“It’s important to reiterate that these changes will not apply to New Zealanders’ main home, although existing tax rules will still apply in  addition to these new measures,” Mr English says.

“It’s equally important that people buying residential property for gains meet their tax obligations, whether they are from New Zealand or overseas.

“The combination of collecting IRD numbers and introducing this new bright-line test will help ensure that non-residents pay their fair share of tax in New Zealand.” . . .

New Zealand National Party's photo.

These measures should go someway to dampening the demand side of the pressure on Auckland property prices.

More needs to be done to increase the supply of houses.

This could be done by building more houses and by people moving from Auckland to other areas.

Immigration Minister Michael Woodhouse is considering incetivising immigrants to settle in the regions:

The Government is set to give skilled migrants, investors and those planning to bring businesses to New Zealand extra points if they settle outside of Auckland.

Skilled migrants and those applying to live in New Zealand under entrepreneur visas already gain 10 points in the immigration points system if they say they intend to settle outside of Auckland. That could soon get a boost.

“Those entrepreneurs, those innovators who could make a contribution to regional development, it is possible for us to bump up the points settings to incentivise that,” says Mr Woodhouse. . .

 It’s not just immigrants who could make a contribution to regional development.

If some of those bemoaning property prices in their home city opened their eyes to opportunities outside Auckland they could move out of Auckland.

They would get a house for much less than they could hope to pay in the city, find how much easier life is when there are fewer people clogging the roads and in improving their lives would free up houses in Auckland for those who can’t or won’t move.


Rural round-up

March 1, 2015

Northland water storage study shows potential:

Primary Industries Minister Nathan Guy has welcomed the commissioning of a new report to examine the potential of water storage and infrastructure in Northland.

“This study will identify areas where improved water supply and potential water infrastructure could deliver economic growth and other benefits to Northland,” says Mr Guy.

“The study is an important step in a joint project involving the Ministry for Primary Industries’ Irrigation Acceleration Fund, Northland Regional Council, and economic development agency Northland Inc.

“More reliable irrigation will help develop sectors like farming and horticulture, meaning more local jobs and exports.” . .

 Dramatic figures show human cost – Neal Wallace:

In the three hours it took for the Otago launch of the Safer Farms project on February 20, 16 farm workers filed work-related injury claims with ACC, a statistic that reinforced farming as New Zealand’s most dangerous occupation.

Each year on average 17 people were killed and 20,000 people would lodge a claim with ACC for a farm-related injury and those dramatic statistics aside, the Government’s focus of improving farm safety would bring the sector into line with the legal obligations of other businesses.

Workplace Relations and Safety Minister Michael Woodhouse said 120 people had been killed on farms since 2008, with the 20 who died last year four times as many as the forestry or construction industries.  . .

 We’re in business. Mobile milking approved & the milk is flowing – Milking on the Moove:

Two weeks ago The Ministry For Primary Industries approved my Risk Management Programme!

It’s a huge achievement & it means that mobile milking & more specifically mobile milk processing is possible in New Zealand.

This now opens up a huge range of possibilities for us to develop some pretty radical and truly sustainable dairy farming systems.

I made my first delivery on the 10th February to our first and only customer C1 Espresso in Christchurch. . .

Fonterra’s global reach – Keith Woodford:

[This is the third of five articles on Fonterra written in early 2015 and published in the Fairfax NZ Sunday Star Times. This one was published on 15 February 2015. Earlier articles in the series were titled ‘The evolution of Fonterra’ and ‘Fonterra’s Journey’ ]

Within Fonterra, there is inevitable tension as to its role on the global stage. From a farmer perspective, Fonterra is a business with assets of about $20 billion (about half equity and half debt) which processes the milk produced by five million New Zealand cows. It then markets the resultant dairy products across the world.

Most of the value of these dairy products lies in the farm gate price of the milksolids contained therein. Accordingly, ask any of Fonterra’s farmer owners as to what they most expect and demand of Fonterra, it is likely to be that this farm gate price is maximised. . .

Rural course revamp leads the way:

The highly-respected Kellogg Rural Leadership programme for 2015 has begun at Lincoln University with a new structure and fresh content. A group of 23 participants working within primary industries from around New Zealand started the revamped six-month course in late January. It includes three residential components and an industry-based project. 

“The changes introduced this year include a shortened six-month programme and a second course starting in June. This provides better options for different seasonal sector commitments,” Kellogg Rural Leadership Programme general manager Anne Hindson said. . .

Breeding oomph back into our apples – Laura Basham:

Roxy and Big Daddy are set to make it big. They are colourful characters, and tasty.

They have been in the making for 20 years and now it’s planned to put them on the international market.

The pair are new apple varieties, the darlings of Nelson orchardist and breeder Bill Lynch who reckons there are too many boring, tasteless apples on supermarket shelves.

He wants to put some oomph into the industry that has been his life and leave a lasting legacy, not only for his orchardist son, Dan, but for other growers and the country. . .

 


Rural round-up

November 17, 2014

Primary exports tipped to rise:

The Ministry for Primary Industries is forecasting an eight percent lift in primary export earnings in the next four years.

In its briefing for incoming ministers, MPI is projecting export values from agriculture and horticulture, fisheries and forestry to grow to $40.7 billion by 2018.

However, export earnings will have to grow at an average rate of more than five percent a year if they are to reach the government target of doubling the value of primary exports by 2025.

Despite China putting the brakes on milk powder imports, which has contributed to the current slide in dairy prices, the ministry is predicting dairy export revenue to lift from just over $18 billion to $18.4 in 2018, on the back of higher production. . .

More to farming than gumboots – Sally Rae:

A Teacher’s Day Out was held in Otago last week, organised by New Zealand Young Farmers’ Get Ahead programme.

It highlighted to secondary school teachers the vast range of opportunities the primary sector affords school-leavers. Agribusiness reporter Sally Rae went along on the bus trip.

Party lines and horses.

That’s what East Otago farmer Jim Lawson recalls during his early years on the sheep and beef farm, as he holds his smartphone in the sheep yards of the family property, Moana, while son Rob demonstrates weighing hoggets through an auto-drafter.

The 2336ha property, running 10,000 stock units, has been owned and operated by the Lawson family since 1950. . .

‘Appaws’ for animal welfare research contribution:

A Massey University scientist has been honoured for his work in refining the ways animals are used in scientific research, testing and teaching.

Professor David Mellor was presented with this year’s National Animal Ethics Advisory Committee (NAEAC) Three Rs Award.

NAEAC deputy chair Dr Peter Larsen said the award covered all areas of animal welfare research.

“The concept of the Three Rs, from which the award takes its name, is to replace and reduce the number of animals used in research, testing and teaching, and refine experimental techniques to minimise pain or distress.  . .

Farm sector singled out by WorkSafe:

The agricultural sector is being targeted by WorkSafe New Zealand over its high accident rates.

In its briefing to its new Minister Michael Woodhouse, WorkSafe said agriculture was one of the worst industries in terms of health and safety.

The report said in 2013, there were 20 deaths from workplace accidents in agriculture – more than the forestry, construction, and manufacturing sectors combined.

Half of those deaths were from quad-bike or tractor accidents.

WorkSafe said there was a poor understanding of risk in the industry and it will be launching a targeted initiative next year to address the issues. . .

Red meat sector welcomes conclusion of Korea FTA

The recently-concluded free trade agreement (FTA) with Korea will provide a major boost for New Zealand’s red meat exports there, according to the chairmen of Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA).

Earlier today, Prime Minister John Key and Korean President Park Geun-hye announced that the FTA negotiation had been concluded.

“This deal is great news for sheep and beef farmers and meat exporters,” said Beef + Lamb New Zealand Chairman James Parsons. . .

Business Forum welcomes NZ Korea FTA:

The New Zealand International Business Forum (NZIBF) welcomes the much anticipated conclusion of the New Zealand Korea Free Trade Agreement.

“This negotiation has been a marathon and we are delighted Trade Minister Groser and his officials have got it over the line” said NZIBF Chairman Sir Graeme Harrison.

Korea is a significant trading partner for New Zealand and a number of key export sectors including dairy, meat and kiwifruit stood to be severely disadvantaged if New Zealand could not achieve a more level playing field with its key competitors in the Korean market notably Australia, Canada, the European Union and the United States all of whom have already concluded FTAs. . .

Zespri welcomes Free Trade Agreement with South Korea:

Zespri welcomes the announcement of the Free Trade Agreement (FTA) deal with South Korea and the significant outcome that has been achieved for the kiwifruit industry.

Over the past year, Zespri growers have paid approximately $20 million in tariffs into this important market.

“It is hugely satisfying that the industry can focus on building sales in the South Korean market, which will benefit both New Zealand and South Korean growers, as well as South Korean consumers,” says Zespri Chief Executive, Lain Jager. . .

Wine Industry Welcomes South Korea Trade Deal:

New Zealand Winegrowers has warmly welcomed the announcement of the conclusion of the free trade agreement between New Zealand and the Republic of Korea.

Commenting on the news, NZ Winegrowers CEO Philip Gregan said ‘The negotiators have achieved a great outcome for the wine industry. Tariff free access into South Korea at the time the agreement comes into force represents a significant boost to our export ambitions in one of the key Asian markets.’ . .

 

 

Yealands named World Champion at the International Green Apple Environment Awards:

Yealands Family Wines has claimed the overall World Champion title at the International Green Apple Environment Awards held in London last night. The prestigious ceremony was held at the House of Commons, in the Palace of Westminster and celebrates environmental best practice.

Yealands Family Wines competed against more than 500 global nominations from a range of industries, taking home the Australasia Gold Award, as well as the supreme “World Champion 2014” title.

Now in their 20th year, the Green Apple Awards have become established as the UK’s major recognition for environmental endeavour among companies, councils, communities and countries. The awards are organised by The Green Organisation, an independent, non-political, non-activist, non-profit environment group dedicated to recognising, rewarding and promoting environmental best practice around the world. . . .


Rural round-up

November 3, 2014

Reducing injuries and fatalities on our forest blocks:

“The Independent Forestry Safety Review has recommended a three-year action plan to drive improvements in the forestry sector. The action plan will leverage the commitments to a new safety culture and a better safety record made by the forestry sector during the Review process. It will be a document against which the actions of the sector – at all levels – can be measured.

“The Panel Review believes the first action that needs to be undertaken is the development of a Safety Charter and an agreement by leaders across the industry to meet the mandatory health and safety and employment standards already in place.

“In the 21st century being unable to achieve these basics is simply not acceptable and has a negative impact on the culture of a workplace and the ability to work safely. It sends terrible signals to workers about how they are valued and the priorities of their employers. It also has a direct impact on safe working practices.

“The Panel Review believes all participants in the forestry sector need to make a concerted effort to improve the basic standards on the forest block to reduce the numbers of serious injuries and fatalities. If there are industry participants at any level that cannot or will not meet the standards, they should consider exiting the industry. . .

 

Minister welcomes Forestry Safety Review recommendations:

Workplace Relations and Safety Minister Michael Woodhouse welcomed the recommendations of the Independent Forestry Safety Review and outlined the Government’s initial response.

“The Government supports the findings of this review and acknowledges everyone who played a role in this critically important work. The safety record of the forestry sector is not acceptable and Government agencies are committed to working in partnership with industry to build a safe, sustainable and professional forestry sector,” Mr Woodhouse says.

The Government’s initial response released today sets out how the Review’s findings and recommendations will be addressed, including through the Working Safer reforms already underway.

“The Government supports the establishment of a Forestry Leadership Action Group (FLAG) with industry, worker and government representation. . .

Westland Milk Products proposes new investment share for its farmer shareholders – Fiona Rotherham:

 (BusinessDesk) – Westland Milk Products, New Zealand’s second biggest dairy cooperative, is proposing a new capital structure that would see its shareholder farmers issued with investment shares annually on top of the existing milk share.

The move follows the Hokitika-based cooperative admitting it didn’t deliver an industry competitive result for shareholders in the 2013/2014 season. Westland reported record revenue of $830 million for the season, up 46 percent on the previous year but the $7.57 per kilogram of milk solids payout was well under Fonterra’s $8.40 per kgMS final payout.

Chief executive Rod Quin said the board signalled a year ago that the capital structure of the cooperative was under review and that had now taken place. The outcome was a proposal to issue investment shares that reflect the value of retentions to shareholders. . .

 

World’s first NZ Inc. farm in the high tropics, higher than the Remarkables:

Waikato farm development organisation Dairy Solutionz (NZ) Ltd. will open the first ever New Zealand-technology demonstration dairy farm in the high tropics – 2800m above sea level – next month.

After a year of development, Corpoica’s 117ha, 300-cow demonstration dairy farm is milking the first of its herd in the Narino region in the south of Colombia.

At that altitude close to the equator, the weather is very similar to the Waikato, rye grass and clover flourish, says Dairy Solutionz chief executive Derek Fairweather.

The $2m development was funded by the Colombian government and Corpoica, the equivalent to AgResearch in New Zealand. . .

 

Closing looms for Dairy Woman of the Year nominations:

There are just two weeks left to nominate someone for New Zealand’s biggest industry award for women in dairying.

The Dairy Women’s Network’s Dairy Woman of the Year Awards close on 15 November 2014.

Sponsored by Fonterra, the prestigious award includes the chance to attend the 12-month Breakthrough Leaders Programme run by Global Women, worth $25,000.

DWN chief executive Zelda De Villiers said the Dairy Woman of the Year Award celebrates and advances women who are making a difference in the dairy industry, in their dairy businesses and in their communities. . . .

 

Employers Encourage Staff to Enter Dairy Awards:

Encouraging staff to enter the 2015 New Zealand Dairy Industry Awards will assist their progress in the dairy industry.

Richard and Joanna Greaves have always had staff members enter the awards – the Sharemilker/Equity Farmer of the Year, Farm Manager of the Year and Dairy Trainee of the Year competitions – and expect two of their staff to enter the 2015 awards.

Entries in the awards are now being accepted online at www.dairyindustryawards.co.nz and close on November 30. . .

 

Trans-Tasman Partnership to take equestrian events to new level:

A new trans-Tasman business partnership between New Zealand and Australia’s top two equestrian event organisers has been announced to take the sporting attractions to a new international level.

Event Pro, the company behind New Zealand’s Farmlands Horse of the Year Show, and Equine Productions, which owns Australia’s most successful equine exhibition Equitana, have established a joint venture.

The companies’ managing directors Kevin Hansen, Event Pro, and Rod Lockwood, Equine Productions, said together the companies planned to grow the equestrian event market across all aspects of the sport with a focus on attracting greater international adventure tourism. . .

 

 


New Cabinet announced

October 6, 2014

Prime Minister John Key has announced the Cabinet for his third term:


“There is a lot of work ahead to continue implementing our plans to build a stronger economy, reduce debt and create more jobs,” Mr Key says.

“The new Ministry builds on the experience of the past two terms in office, and combines experience with some fresh talent.

“A number of Ministers have had significant portfolio changes, reflecting the need to give Ministers new challenges as well as providing a fresh set of eyes in some portfolio areas.”

Mr Key says a number of Ministers have been promoted either to the front bench, or further up the front bench, to reflect their strong performance in recent years and their promise for the future.

“Paula Bennett has been promoted to number five in the rankings, and picks up State Services, Social Housing and Associate Finance in addition to retaining her Local Government portfolio.

“Dr Jonathan Coleman becomes Minister of Health, and also picks up the Sport and Recreation portfolio, which will link nicely together.

“Amy Adams and Simon Bridges are promoted to the front bench, both with significant new responsibilities. Ms Adams becomes Justice Minister and Mr Bridges Transport Minister.

“Christopher Finlayson remains Treaty Negotiations Minister and Attorney-General, while picking up significant new responsibilities in the intelligence area. He becomes Minister in Charge of the NZ Security Intelligence Service and Minister Responsible for the GCSB, working closely with me in my new role as Minister for National Security and Intelligence.

“In this role I will continue to be responsible for leading the national security system, including policy settings and the legislative framework. Mr Finlayson will operate within the framework I set and exercise ministerial oversight of the NZSIS and GCSB, including approval of warrants.

“Officials have examined models used overseas and what we are adopting is very similar to what is seen with our closest partners.

“Housing continues to be a key area of focus for the Government, and a Ministerial team of Bill English, Paula Bennett and Nick Smith has been assembled to lead that work. Mr English will have direct responsibility for Housing New Zealand; Ms Bennett will focus on social housing, while Dr Smith will work on housing affordability and construction issues. The Social Housing portfolio will have responsibility for the government’s social housing functions, and for its relationship with the social housing sector.

Other changes include:

Gerry Brownlee becomes Minister of Defence, while retaining the role of Leader of the House and his Canterbury Earthquake Recovery and EQC portfolios.

Anne Tolley becomes Minister for Social Development.

Dr Nick Smith becomes Minister for the Environment.

Nikki Kaye becomes Minister for ACC.

Michael Woodhouse becomes Minister of Police. He also becomes Minister for Workplace Relations and Safety – a new portfolio title to reflect the modern focus of what had previously been the Labour portfolio.

Jo Goodhew becomes Minister for Food Safety.

Mr Key says, in announcing his new line up, three new Ministers will be appointed. Maggie Barry is to go straight into Cabinet as Minister for Arts, Culture and Heritage, Minister of Conservation and Minister for Senior Citizens. Louise Upston and Paul Goldsmith will be Ministers outside Cabinet holding a variety of portfolios.

“Two ministers previously outside Cabinet have been promoted to Cabinet. Todd McClay will be Minister of Revenue and Minister for State Owned Enterprises, while Peseta Sam Lotu-Iiga will be Minister of Corrections, Minister for Ethnic Communities and Minister for Pacific Peoples.

“Craig Foss remains a Minister, but will now serve outside Cabinet as Minister for Small Business, Minister of Statistics and Minister of Veteran’s Affairs.

“Chester Borrows will not be appointed to the new Ministry. He will, however, be National’s nominee for Deputy Speaker, and I want to thank Chester for his service as a Minister,” Mr Key says.

A number of Ministers continue largely in their current portfolio responsibilities. These include Steven Joyce in Economic Development, Hekia Parata in Education, Murray McCully in Foreign Affairs, Nathan Guy in Primary Industries, Tim Groser in Trade and Climate Change, and Nicky Wagner in Customs.

“The support party Ministerial and Under Secretary roles have already been announced, but I want to acknowledge again their contribution to the formation of a strong, stable National-led Government.”

Mr Key says the National Caucus will meet tomorrow (Tuesday 7 October) to elect its three whips for the coming parliamentary term.

The new Ministry will be sworn in at Government House in Wellington at 11am on Wednesday morning.

The list of names, positions and rankings is here.

 


Anger at wrong target

September 24, 2014

Where does this anger come from?

. . . Two windows were broken at National MP Michael Woodhouse’s central Dunedin office early on Sunday and lit Molotov cocktails were found outside the National Party office in Invercargill.

A brick was thrown at a picture of Mr Woodhouse in the window at the Princes St office. A window on the Jetty St side was also broken.

The vandalism was ”unfortunate and unnecessary”, Mr Woodhouse said yesterday.

”It coincided with some serious disappointment and disgruntlement that some might have had after Saturday night. But I certainly don’t think it has been anything to do with [any] political party.”

”I want to know my staff feel confident in going to work,” he said. 

This was an act of vandalism which wasn’t necessarily politically motivated but posts and comments on blogs and comments on news websites indicate real anger from the left.

University of Otago politics lecturer Dr Bryce Edwards said he expected the ”political temperature to heat up in this term”.

There was a ”huge amount of emotion” among those on the political Left after National’s sweeping election victory, ranging from ”demoralisation to anger to incredulity”, he said.

”[The vandalism] shows a very exaggerated and extreme outcome of how many on the Left are feeling, but it doesn’t typify it.”

Mr Woodhouse was the victim of those ”lurching for a target to express their disappointment at”, Dr Edwards said.

Demoralisation is understandable but the anger and incredulity show a distinct lack of insight.

I cried when it became obvious how badly National was going to be defeated in 2002 and I cried more the next day.  I was very upset but I wasn’t angry nor was I surprised.

It was obvious well before the election that National hadn’t learned from its defeat in 1999,  nor had it learned how to run campaigns under MMP. On top of that caucus was divided, had too many MPs who were part of the government that lost the previous election and it wasn’t looking like a government in waiting.

We hadn’t earned a win.

These were all factors in Labour’s loss on Saturday. It could have learned from the mistakes National made in the run-up to the 2002 election but it didn’t.

They hadn’t learned from their defeats in 2008 and 2011, they didn’t run a cohesive party vote campaign, there are too many old and too few new MPs and they haven’t looked like a government in waiting.

Anger is part of grief but if, as Edwards says, the left is angry they shouldn’t be targeting that at National for winning. They should be looking inside to understand why they lost.


National working for and in the south #1

September 19, 2014

Fantastic Fact # 1:
This series has come from the Facebook page of Michael Woodhouse MP who says:

For the past 50 days I’ve been posting my 50 fantastic facts about Dunedin and the South. Why? Because I want to bring some balance to the constant negativity from media and some left wing MPs who say ‘Vote Positive’ but talk negative. Yes there have been some setbacks, but on balance we have negotiated our way through really tough times well. Please vote. But please vote for the candidate and the Party that is working hardest for the South and the Country.

Dunedin people have the chance tomorrow to vote for national which will carry on working positively for the city, the south and Dunedin

They also have the chance to vote for Michael in Dunedin North and Hamish Walker in Dunedin South to get two strong, positive voices for the city.


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