What’s she hiding?

April 9, 2019

Government Statistician Liz MacPherson is facing a contempt of parliament charge after refusing a select committee request for information on last year’s census:

In an unusual move, a select committee invoked a standing order compelling Statistics NZ chief executive to produce the number of partial responses were received in Census 2018.

This is not a partisan request, the whole committee is seeking an answer.

National state services spokesman Dr Nick Smith said the committee unanimously decided such an extraordinary measure was required after MacPherson again refused to answer on the basis it would require “extensive contextual information”. 

“It is the first time ever that I have seen a select committee having to use its powers to require a public servant to provide an answer to a basic question.

“I can only draw the conclusion that Stats NZ has something to hide.”

This is public information. The refusal to supply it begs the question: what is she trying to hide and why?

Last year’s census was a shambles and the failure to provide parliament with the information requested does nothing to improve confidence in it.

 


CGT based on dodgy stats

April 5, 2019

Assertions about the impact of the proposed capital gains tax are based on dodgy numbers.

Troy Bowker writes:

The Tax Working Group (TWG) used an unreliable survey by the Department of Statistics as the basis for its argument that the majority of the proposed capital gains tax (CGT) will be paid by the top 20 per cent of households measured by wealth.

Repeatedly, since the final report was published, Sir Michael Cullen has quoted the “statistic” to the media that 82 per cent of the assets that will be subject to CGT are owned by the top 20 per cent of New Zealand households measured by net worth.

He goes on to state (as factual) the second 20 per cent of wealthy households will be responsible for another 11 per cent , then only 4 per cent for “middle” New Zealand.

In reality, this information is based on what most reasonable people would describe as little more than guess work.

It has been used for political purposes to argue that the majority of the public have nothing to worry about, and it will be mostly the “rich” that will pay CGT.

If it is correct (which it isn’t), it’s a very good argument for Labour and the Greens who desperately want to see a comprehensive CGT implemented.

The problem for those wanting CGT is that the data is completely unreliable and should never have been used. We need to know why public officials used it in the first place when they knew, or ought to have known, it was dodgy statistics. . . 

The stats came from the annual Household Economic Survey (HES) carried out by Statistics NZ.

It was done by conducting interviews of 8000 households, out of approximately 1.7 million households, in New Zealand. That’s only 0.47 per cent of households — s a ridiculously low sample size.

The other reason it is unreliable is most of the information provided is unverifiable. The Department of Statistics asks all sorts of questions about the assets and liabilities of each household and records the answers given. People can guess, underestimate or overestimate or not even volunteer information.

As you can imagine, it’s an extremely invasive and intrusive process that attempts to delve into the most personal financial information of New Zealand homes.

By the Department of Statistics own admission, it contains data that is so unreliable they cautioned against its use. . . 

In spite of the caution Treasury used them in its report to the TWG.

It beggars belief that Treasury decided to use this information in its report to the TWG.

Senior Treasury officials who wrote this report to the TWG obviously knew the information couldn’t be safely relied upon.

Hidden in the fine print of the Treasury report, it states “care should be taken when interpreting wealth estimates because the confidence intervals around any point estimates vary widely”.

In layman’s terms, this is like Treasury saying to the TWG: “You probably shouldn’t be using this information as we really don’t know if it’s accurate and some of it’s completely unreliable.”

This raises some very serious questions about the probity of the process that need answering by Finance Minister Grant Robertson, and the TWG chair Michael Cullen (who is still on the Government pay roll). Hopefully he’s still being paid to answer the question of why the TWG used this data.

Did the TWG specifically request Treasury to dig up statistics to support the political argument that only the top households would pay CGT? Did the TWG know the data they were using was largely unreliable? Treasury obviously had concerns about using it and told the TWG in its report. So why did the TWG use that data? Does the Finance Minister now accept this data is unreliable and shouldn’t have been used for political purposes to justify Labour’s proposed CGT?

These are very serious questions that need to be answered and answered publicly.

The reality is, we don’t have enough reliable information to draw any conclusions at all about which households will pay the most from the proposed CGT.

We do know, however, that there are hundreds of thousands of farmers, business owners, lifestyle block owners, bach owners and sharemarket investors who will pay a lot more tax if Labour are successful in implementing CGT.

There are an awful lot of hardworking ordinary Kiwis who don’t consider themselves wealthy who will pay CGT if Labour are successful in convincing Winston Peters to support it.

For Labour to use these dodgy statistics to mislead the public would be to underestimate the intelligence of the voting public of New Zealand.

The CGT debate has a long way to go. But Labour need to come clean and be honest about the many hundreds of thousands of middle income Kiwis who will pay CGT. They also need to answer some serious questions about how, and why, the HES was used to support the main argument on fairness by the TWG.

This proposal is the most significant tax reform in many years in New Zealand and we deserve better than public officials using dubious and unreliable data to support a preconceived political agenda.

Significant tax reform should not be based on dodgy stats for both ethical and practical reasons.

Ethical because it’s wrong to base assertions on wrong numbers, and practical because if the stats are dodgy there can be no certainty about the outcomes.

It’s not just who would pay how much that matters, but how much tax a CGT would raise.

If the stats on which the assertions of who would pay what are dodgy the conclusions on how much that would raise are also completely unreliable.

The TGW was told any proposals must be revenue neutral – that is, the amount raised by any new tax would be offset by cuts to old ones.

There can be absolutely no certainty about how much it would raise and therefore how much other taxes could be lowered if the whole proposal is based on numbers based on guesswork.

Almost all those favouring a CGT do so based on an ideological and political idea about fairness. 

There is nothing fair about assertions based on dodgy numbers and a tax full of loopholes that would disincentivise investment and sabotage the economy.

 


Rural round-up

March 29, 2019

Agricultural sector productivity growth – Michael Reddell:

In the last few weeks, presumably simply by coincidence, I’ve had various comments and emails about productivity growth in the agricultural sector.    The most recent one finally prompted me to dig out the official data and check that my impressions were still supported by the data.  They were.    Agricultural sector productivity growth was very strong, but has been much more subdued for some time now.

There are two main measures of agricultural sector productivity: labour productivity (in effect, output per hour of labour input) and multi-factor productivity (in effect, the residual after what can be attributed to growth in labour and capital inputs has been deducted). In principle, MFP is superior.  In practice, estimates rely more heavily on the assumptions used in the calculation (although –  diverting briefly –  to the various readers who have sent me a recent piece by GMO on TFP/MFP, I reckon there is less to that critique than the authors claim). . . 

No trade wobbles in China for Fonterra – Paul McBeth:

 (BusinessDesk) – Fonterra Cooperative Group hasn’t faced any issues getting its products into China, where its business hit some speed wobbles when the butter market slowed.

The world’s biggest dairy exporter counts China as one of its most important markets and has been a beneficiary of a burgeoning middle class in the world’s most populous nation. . . 

Lamb exports climb to record levels:

Lamb exports reached record levels in February 2019, bumping up overall meat exports to a new monthly high, Stats NZ said today.

Lamb exports were $391 million in February 2019, a new record for any month. The previous high was in May 2018 ($367 million).

This month’s rise was driven by higher prices, as quantity was little changed from May last year. . . 

Apiculture New Zealand supports Minister’s call for unity:

Apiculture New Zealand supports the Minister for Agriculture’s plea for greater unity to address existing challenges around bee welfare and biosecurity, food safety and export regulations, and welcomes the Minister’s commitment to supporting the industry.

This follows a meeting by Apiculture New Zealand with the Minister late last week on the commodity levy results.

“As we advised the Minister a ‘no vote’ for the commodity levy means we do not have the investment fund needed, nor the collective focus that is characteristic of other primary industries in identifying, deciding and actioning priorities,” says Bruce Wills Chair of Apiculture New Zealand. . . 

First charter ship carrying Zespri Kiwifruit sets sail for China and Japan:

The first charter vessel carrying Zespri SunGold Kiwifruit is heading to China and Japan following this season’s early start to harvest.

The Southampton Star departed from Tauranga Harbour yesterday evening carrying approximately 3,000 pallets of Bay of Plenty-grown SunGold Kiwifruit bound for Shanghai and Kobe. The vessel had earlier berthed in Gisborne where it picked up 1,600 pallets of SunGold Kiwifruit, marking the start of what promises to be another bumper crop. . . 

Dates set for the 2019 NZ Young Viticulturist of the Year:

The Bayer NZ Young Viticulturist of the Year Competition is now in its fourteenth year and to take out the coveted title has become a key goal for many young viticulturists in New Zealand.

The programme aims to grow the wine industry’s future leaders, by stretching them, putting them out of their comfort zone and creating new relationships. It is a fantastic opportunity for Young Vits (30 yrs or under) to upskill, grow in confidence, widen their network and start making a name for themselves within the industry. . . 


Rural round-up

March 13, 2019

Tax recommendations threaten future prosperity:

Federated Farmers is calling on the Government to reject the majority of the raft of new taxes proposed by the Tax Working Group.

“Small business would pay the costs, large business would spend thousands avoiding the costs and tax advisors and valuers would have a field day,” Federated Farmers Vice-President Andrew Hoggard says.

“There is possibly an argument for a Capital Gains Tax aimed at rental properties if there was some sound evidence it would dampen investor speculation, and reduce price pressure and first home buyers being out-bid. But even with that, we haven’t given the tougher ‘bright line’ test rules a chance to really kick in. . .

Despite rising prices farmers are feeling oppressed from all sides and confidence is low. FIckle urban voters are driving a flood of rules and imposing costs that make little sense to the business of farming – Guy Trafford:

The results of the January Federated Farmers farmer survey have recently been published and makes fairly sober reading – especially in the context that prices for most commodities are reasonably sound.

Only 5.1% of respondents expected economic conditions to improve and but nearly 46% expect economic conditions to worsen, this is the worse result since July 2009.

Given the recent rises in milk prices and solid returns coming for sheep and beef farmers this level of pessimism is somewhat surprising and perhaps is a reflection of where farmers heads are at rather than a measure of what the ‘true’ economic conditions are. . . 

Looking to Generation Z for the future of  food – Sarah Perriam:

The rural sector is rapidly changing.

Consumer demand and global trends means New Zealand farmers need to embrace innovation to be able to compete and thrive in this new and exciting environment.

The next generation is vital for success. . . 

Greenpeace billboard ruled misleading  :

Federated Farmers is pleased the Advertising Standards Authority has ruled that a Greenpeace billboard aimed at fertilizer companies and the dairy industry is misleading and takes advocacy a step too far.

“Federated Farmers believes everyone has the right to express strong views but as the ASA Complaints Board ruling underlines, over-simplification of issues and targeting of two farmer-owned companies is misleading and overly provocative,” Feds environment spokesperson Chris Allen says. . .

Zespri. Appoints Bruce Cameron as chairman – Luke Chivers:

While the kiwifruit industry is having its day in the sun it is not short of challenges. Luke Chivers spoke to new Zespri chairman Bruce Cameron about the future.

New Zespri chairman Bruce Cameron is taking over at a time of strong continuity and volume in kiwifruit exports.

He replaces Te Puna grower Peter McBride who has stood down to pursue other primary industry interests, including a Fonterra directorship. . .

Butter prices go into meltdown :

Butter prices fell 10 percent in February 2019 to a 19-month low, Stats NZ said today.

The average price for a 500g block of butter fell to $5.20 in February 2019, down from a record high of $5.79 in January 2019.

“In January we saw milk prices fall to a 19-month low. This price fall now looks to be flowing on to other dairy products,” consumer prices manager Gael Price said. . . 


Rural round-up

January 18, 2019

‘M. Bovis’ effects study welcomed to help with impact on farmers – John Gibb:

Federated Farmers Otago president Simon Davies has welcomed a planned University of Otago study on the human impact of Mycoplasma bovis on farmers and their communities in Otago and Southland.

At the human level, some Otago farmers and their families at infected farms had taken a ”massive strike”, and there could be serious long-term effects, including on business viability, in some parts of the country, he said.

Some people who had received ”notices of direction” from MPI, but were later ultimately cleared of infection, had in some cases also experienced stressful disruption to normal farming activities over several months. . . 

Dairy cattle numbers dip again:

The number of dairy cattle has dipped for the second year, while beef cattle numbers increased strongly in 2018, Stats NZ said today.

Provisional figures from the 2018 agricultural production census showed dairy cattle numbers fell 1 percent, to 6.4 million in June 2018.

“This followed a similar small dip in 2017, though overall dairy cattle numbers have been relatively steady since 2012,” agricultural production statistics manager Stuart Pitts said. . . 

Nursery owner finds use for problem baleage – Elena McPhee:

In a win-win situation for both the council and a local nursery owner, baleage swept along by November’s flood and strewn over a rural road for months is being turned into compost.

Trees of the World nursery owner Rodney Hogg said the baleage had been on Riverside Rd, near Allanton on the outskirts of Dunedin, for about two months.

It was ”extremely dangerous” driving along the road, particularly at night, Mr Hogg said . . 

Brexit: Theresa May survives no-confidence vote but what does that mean for NZ trade?:

Market access under a hard Brexit is the major implication New Zealand must watch for after the failure of Theresa May’s deal and the vote against her, former NZ trade negotiation Charles Finny says.

British Prime Minister Theresa May’s government has won a no-confidence vote against it today, called by UK Labour leader Jeremy Corbyn, with 325 votes to 306.

It may come as some solace to Mrs May after MPs crushed her proposed exit deal with the EU by a 230-vote majority yesterday, the biggest defeat the UK government has faced in the House of Commons since the 1920s. 

Former New Zealand trade deal negotiator Charles Finny however says the no-confidence vote has ultimately been a bit of a distraction: it’s the next steps regarding Brexit that are important. . . 

$36 million investment approved to tackle regional erosion:

Te Uru Rākau (Forestry New Zealand) has announced funding of almost $36 million through the Hill Country Erosion Fund (HCEF) to enable much-needed erosion control in the regions.

The HCEF supports proposals to protect our most vulnerable hill country landscapes, where the main treatment is tree planting.

“We’re pleased by the level of interest from councils, with 12 applications received in this latest round – four of which were from regions that had not previously applied,” says Julie Collins, Deputy Director-General Forestry and Head of Te Uru Rākau.

“It shows the importance they are placing on sustainable land management and treating erosion in their regions.” . . 

A win for Win and the Buller show:

When veteran West Coast shearer Sam Win won his latest competition, at the age of 63, it helped solve a little mystery of the whereabouts of the trophy.

“I think I’ve got it at home,” he said.

Thus Saturday’s win at the Buller A and P Show at Patterson Park in Westport was followed by Sunday polishing the trophy, his name engraved as the last winner – in 1997. . . 

Could Wagyu beef protect against heart disease?:

As barbeque season gets into full swing, New Zealand researchers are investigating whether certain kinds of red meat could actually protect against heart disease.

Researchers have recruited men aged 35-55 willing to eat free meat three times a week for eight weeks in the name of science. Participants are supplied with either grass-fed Wagyu beef, grain-finished beef or soy-based meat alternative (they can’t choose which).

The study is looking at how the complex lipids (fats) in high quality, unprocessed red meat affect heart health, using the vegetarian protein group as a control. It follows earlier evidence that eating Wagyu beef in moderation may help protect against heart disease. The beef, from specially bred and fed cows, is rich in a fat called conjugated linoleic acid, or CLA, and several other so-called ‘good fats’. . . 


Rural round-up

January 16, 2019

SIT plans takeover of Telford – Giordano Stolley:

The Southern Institute of Technology (SIT) will submit a proposal to Education Minister Chris Hipkins to take over operations of the troubled Telford agricultural training campus in Balclutha.

A statement from the Clutha District Council yesterday afternoon quoted SIT chairman Peter Heenan as saying that he was “encouraged by the support from all parties at the meeting for SIT to pull together a proposal for the minister’s consideration”.

Mr Heenan made the comments at a meeting at the district council offices.

While the statement provided no details of the the proposal, Clutha Southland National Party MP Hamish Walker, said: “They [SIT] are looking to take over operations at Telford.” . . 

Funding call for Telford training farm campus staff:

The Clutha community is trying to raise funds for staff at a financially troubled rural training campus, mayor Bryan Cadogan says.

Dozens of staff at Telford agricultural training campus near Balclutha are stuck without pay while their employer’s future is decided.

The Telford training farm in South Otago is part of the Taratahi Institute of Agriculture, which was placed in interim liquidation late last year.

More than 30 tutors and support staff at Telford had their wages suspended on Friday. . .

Synlait plant registration renewed – Sally Rae:

Synlait has successfully renewed the registration of its Dunsandel plant, allowing it to continue exporting canned infant formula to China.

The registration was issued by the General Administration of Customers of the Peoples’ Republic of China (GACC).

Synlait chief executive Leon Clement said GACC had strict criteria that overseas manufacturers must meet to maintain registration.

New pasture legume hard to fault – Jill Griffiths:

THE PERENNIAL forage legume tedera is on track for commercial release in 2019. Dr Daniel Real, Department of Primary Industries and Regional Development (DPIRD), said difficult seasonal conditions in Western Australia this year had provided the perfect opportunity to demonstrate the potential value of tedera.

“Rain at the end of February created a false break,” Daniel said. “All the annuals germinated but then died, and the dry autumn left nothing in the paddocks. The annuals were non-existent but the tedera was looking good.”

Tedera (Bituminaria bituminosa var. albomarginata) is native to the Canary Islands and was brought to Australia in 2006 through research conducted under the auspices of the Future Farm Industries Cooperative Research Centre. . . . 

Deliberate food contamination needs harsher penalties:

A recent member’s bill which seeks to introduce harsher penalties and offences is good to see, but any action from it will have to be funded and resourced adequately to have any real impact, says Federated Farmers.

The bill is from National’s Nathan Guy and it comes in the wake of last year’s Australian strawberry needle scare which triggered copycat offences here and back over the ditch, says Feds Food Safety spokesperson Andrew Hoggard.

Thousands of strawberries had to be destroyed as needles started showing up in the fruit across stores. The needle scares crushed spirits and trust. . .

How one innovative company is using bees to protect crops from disease – Nicole Rasul:

Billed as an “elegant solution to a complex problem,” Bee Vectoring Technology, or BVT, is a Toronto-based startup that is using commercially reared bees to provide a targeted, natural disease management tool to a range of agricultural crops.

The bumblebee, one of nature’s hardest workers, is the star of the BVT method. Hives that contain trays of powdered Clonostachys rosea CR-7, which the company describes as “an organic strain of a natural occurring endophytic fungus… commonly found in a large diversity of plants and soils all around the world,” are placed near a fledgling field. . .

Cheaper to get your 5+ a day at the end of 2018:

Avocados and lettuces were much cheaper than the previous summer, but egg prices hit a record high in December 2018, Stats NZ said today.

“Overall, getting your five-plus (5+) a day servings of fruit and vegetables was cheaper in 2018,” consumer prices manager Geraldine Duoba said. Fruit prices were 3.8 percent lower in December 2018 than in December 2017, while vegetable prices were 7.5 percent lower.

“Bad weather in 2017 reduced the supply of many vegetables, pushing up their prices,” Ms Duoba said. “Growing conditions were mostly more favourable during 2018, boosting supply and lowering prices.” . .


Rural round-up

December 11, 2018

Plant a tree grow a community – Luke Chivers:

Matawai farmers Eugene and Pania King are dedicated to sustainability but it isn’t just about the environment. Luke Chivers reports.

Sheep and beef farmers Eugene and Pania King from Kiriroa Station at Matawai are combining their passion for the land with hard work and whanau support.

The couple have a longstanding connection with their family, their environment and their local community.

“We both grew up in rural New Zealand and a career in agriculture was inevitable,” Pania says.  . . 

 

Wee dog helps child farm safety – Alan Williams:

A serious little dachshund and a devil-may-care miniature fox terrier are the heroes in a new book aimed at making children safer on farms.

Ted the foxy races round doing silly things but Poppy is always close by teaching him to put his think-safe brain on.

“They’re both very small and they highlight just how small a child also is on a farm and through them being out and about I’m trying to help children understand about making good decisions,” author Harriet Bremner said. . . 

Farm safety story book launched in wake of tragedy:

A woman who lost her partner in a farm incident has launched a book to keep children safe on the farm.

Harriet Bremner’s partner James died in a farm machinery incident in Hakataramea Valley in January 2017. Now, her new book, Be Safe, Be Seen, sees her miniature dachshund Poppy take on the challenges of keeping safe on the farm as a little dog.

Primary School teacher Harriet hopes that kids will heed the safety messages in the book and that families reading the book to their children will be reminded to make safe choices at work every day. . . 

Fonterra’s strategic reset interacts with new Board dynamics – Keith Woodford:

Fonterra’s December update shows that the strategic reset is under way, albeit at an early stage.

Key indicators include that the Beingmate JV is being unwound and that Fonterra’s China Farms are under heightened scrutiny. The big shock is that Tip Top is on the market. The ownership of Soprole in Chile must also be under scrutiny, although little has been said publicly.

I will return to those issues within this article, but first it is necessary to understand something of the dynamics within the new Fonterra Board. . .

A2 rings in more executive changes under new CEO Hrdlicka – Paul McBeth:

(BusinessDesk) – A2 Milk Co chief executive Jayne Hrdlicka’s executive team is going through more changes as two senior managers depart – one for early retirement and one to pursue another opportunity.

Long-serving executive Simon Hennessy, who is currently general manager international development, will take early retirement. Relative newcomer Michael Bracka, who heads business development in emerging markets, will leave this month to pursue another opportunity, the company said. . . 

Major breakthrough for Mānuka farming initiative:

A ground-breaking milestone could see more Hawke’s Bay farmers producing high-grade mānuka honey worth millions to the New Zealand economy.

Scientifically-bred mānuka cultivars planted on a 130 hectare trial site at Tūtira, Hawke’s Bay between 2011 and 2013 have produced their first crop of mānuka honey with an average Unique Mānuka Factor (UMF®) value of 7. One sample reached medical grade by exceeding UMF® 10. . . 

Dairy and meat products lead manufacturing fall:

A fall in dairy and meat products pushed overall manufacturing sales down for the September 2018 quarter, Stats NZ said today.

After adjusting for seasonal effects, the volume of total manufacturing sales fell 1.6 percent in the September 2018 quarter. This fall was led by a 6.7 percent decrease in meat and dairy product manufacturing.

“Most meat and dairy products in New Zealand are exported and occasionally, the timing of exports, price changes, and exchange rates can affect manufacturing sales,” manufacturing statistics manager Sue Chapman said. . . 


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