5/10

February 8, 2018

Only 5/10 in Trans Tasman’s political quiz.


Rural round-up

October 6, 2017

Methane, nitrous oxide levels can be reduced – Nicole Sharp:

Methane and nitrous oxide levels can be reduced on-farm and mitigation options are already available for farmers.

AgResearch science impact leader Robyn Dynes spoke to a group of rural professionals in Invercargill recently about what mitigation options were available to reduce greenhouse gases.

Methane is produced by cows when feed is digested by rumen microbes and 87%-92% of it is produced in the rumen.

Four options either available to farmers at present or being worked on would help reduce methane levels, Dr Dynes said. . . 

Focus goes on safety – Yvonne O’Hara:

Central Otago wool harvesting workers and contractors have contributed to an industry-first online health and safety education resource.

Members of the New Zealand Shearing Contractors Association’s ”Tahi Ngatahi” working party were in the region last week to hold three focus groups to ”flesh out” content for the series of short and sharp videos and other information for the online units.

The group hopes the resource will be launched in April or May next year. . . 

Westland shareholders back governance changes:

Westland Milk Products shareholders today strongly endorsed a package of changes designed to improve and update the co-operative’s governance.

Westland Chairman Pete Morrison said, “Shareholders at today’s Special General Meeting in Hokitika approved the changes with 93.5% percent in favour. This will ‘future proof’ the structure and tone of the governance of our co-operative, and better equip Westland for the opportunities and challenges ahead of us.”

Morrison said one of the key recommendations in the report, a programme to identify and upskill potential shareholder directors, was well received, with feedback from shareholders during the consultation and at the SGM emphasising that continuity and succession planning was important. . . 

Dairy sector strong as it gazes at uncertain future:

Trans Tasman Political Pulse

INSIGHTS ABOUT THE NEWS – The dairy sector may be facing a future filled with political uncertainty, but the Fonterra result shows it is working from a strong base with potential to grow further and strengthen the wider economy.

As reported in Trans Tasman’s sister publication The Main Report Farming Alert, Fonterra delivered a solid result, marked by foodservice sales growth into China. Its returns ensure farmers’ protability is back close to long-run averages of $990/ha, with a further lift of protability projected in the current season.

The dairy industry is a vital engine for the economy, but it needs solid Govt backing, particularly as it competes in global markets. Currently, 87% of all NZ dairy exports are restricted by quotas or tariffs of more than 10%. . . 

B+LNZ and MIA concerned by UK media reports of a EU-UK deal on WTO quotas:

Beef + Lamb New Zealand and the New Zealand Meat Industry Association are concerned by reports that the EU and UK have reached a “deal” to split the EU’s WTO tariff rate quotas following Brexit.

“Given the importance of the European Union and United Kingdom for New Zealand’s sheep and beef exports, stability and certainty is vital,” said James Parsons, Chairman of Beef + Lamb New Zealand. “The tariff rate quotas form part of the EU’s WTO commitments and are legally binding rights and obligations. . . 

PGG Wrightson Plants its Future Growth With Promapp:

A PGG Wrightson, a New Zealand Stock Exchange listed company and a leading provider of products, services and solutions to growers, farmers and processors, has announced that it is now deploying Promapp business process management software across its recently expanded Retail and Water division.

In a strategy designed to support the organisation’s ongoing focus on effective service delivery, business improvement and risk management, Promapp will provide the organisation’s staff with a centralised repository for storing and managing critical processes as well as an enhanced facility for reporting on the status of processes, improvement actions and risks. . . 

No automatic alt text available.

Farmer – I”m more than you think: mechanic, meteorologist, scientist, machine operator, financial planner, agronomist, computer operator, animal caretaker, family.


Rural round-up

August 29, 2017

A2 Milk outperforms once again – Keith Woodford:

The a2 Milk Company (ATM) took a big step forward with its 2016/17 results which were released on 23 August. Sales were up 56 percent from the previous year to $549 million, and post-tax profits tripled to $NZ90 million. The market was impressed.

Everyone knew that a strong result was in the offing, and so the shares had already risen 50 percent over the preceding three months, and almost trebled in value on a 12-month basis. The share price then rose another 15 percent over the following three days to close at $5.74 at week’s end.

The most important messages within the annual report were not about the present but the future. The picture drawn by CEO Geoff Babidge was of a fast-growing company with no debt and lots of free cash in the bank to fund ongoing developments. . . 

A School of Rural Medicine to be established:

The Government will establish a new School of Rural Medicine within the next three years to produce more doctors for our rural communities, Tertiary Education, Skills and Employment Minister Paul Goldsmith says.

“Every New Zealander deserves quality healthcare services, and we want to grow the number of doctors in rural and regional areas to make it easier for people in those areas to access other key health services,” Mr Goldsmith says.

“The new School of Rural Medicine will be specifically geared toward meeting the challenges faced by high need and rural areas of the country, and will produce around 60 additional doctors per year. . . 

Primary industries feel under siege as prospect of Labour-led government firms:

INSIGHTS ABOUT THE NEWS – The divide between regional and urban politics is being thrown into ever sharpening contrast as the election campaign unfolds. Agricultural industries and rural communities feel under siege in the looming election.

As reported in Trans Tasman’s sister publication The Main Report Farming Alert, weeks ago the chances of a Labour-led government seemed unlikely, but now the chance of this happening seems possible with policies which could prove ruinous for NZ’s main export industries.

Labour will tax users of water, including farmers (but not those companies using municipal supplies). Both the Greens and Labour are committed to bringing agriculture into the emissions trading scheme and say the carbon price should be higher. They have not stated how high they want animal emissions to be taxed. . . 

Hawke’s Bay Regional Council to vote on ending Ruataniwha funding, writing-off $14M debt – Jonathan Underhill:

(BusinessDesk) – The Hawke’s Bay Regional Council will vote this week on whether to stop any further investment in the Ruataniwha Water Storage Scheme and write-off a $14 million debt owed by its investment company.

The vote on Wednesday comes as a result of a report into options following the Supreme Court decision to reject a Department of Conservation land swap need to create the storage scheme reservoir. 

The council’s investment arm, Hawke’s Bay Regional Investment Co (HBRIC), owes $14 million to the council made up of $7 million of charges and $7 million of cash advances, according to the council report. For its part, HBRIC has an intangible asset of $19.5 million on its books related to the feasibility and development costs of RWSS. This was funded with the $14 million advance from the council and $5.5 million from external debt. . . 

Feds Wonder Why We Would Need A Tourist Tax?:

Labour’s suggestion of taxing international visitors to raise funds to pay for tourism infrastructure raises questions about why we can’t find the money already from existing tax.

Federated Farmers has been concerned about the pressure councils, particularly small rural councils, are under to maintain services for tourists, including public toilets and other facilities.

“We agree that tourism is placing increasing pressure on our nation’s infrastructure and these costs are being unfairly borne by regional economies.

“But surely it is possible to find the additional targeted funding for councils in need from within this already increasing area of tax take?” Federated Farmers president Katie Milne says. . . 

Behind the hype of lab-grown meat -Ryan F. Mandelbaum:

Some folks have big plans for your future. They want you to buy their burgers and nuggets grown from stem cells. One day, meat eaters and vegans might even share their hypothetical burger. That burger will be delicious, environmentally friendly, and be indistinguishable from a regular burger. And they assure you the meat will be real meat, just not ground from slaughtered animals.

That future is on the minds of a cadre of Silicon Valley startup founders and at least one nonprofit in the world of cultured meat. Some are sure it will heal the environmental woes caused by agriculture while protecting the welfare of farm animals. But these future foods’ promises are hypothetical, with many claims based on a futurist optimism in line with Silicon Valley’s startup culture. Cultured meat is still in its research and development phase and must overcome massive hurdles before hitting market. . .

Wine exports reach record high:

The export value of New Zealand wine has reached a record high according to the 2017 Annual Report of New Zealand Winegrowers. Now valued at $1.66 billion, up 6% in June year end 2017, wine now stands as New Zealand’s fifth largest goods export.

Over the past two decades the wine industry has achieved average annual export growth of 17% a year states the Report. “With diversified markets and a strong upward trajectory, the industry is in good shape to achieve $2 billion of exports by 2020” said Steve Green, Chair of New Zealand Winegrowers. . . 

More Kiwis than ever are enjoying speciality cheese:

As Kiwis prepare to celebrate New Zealand Cheese Month, sales data shows we are enjoying more locally made cheese than ever before.

Nielsen data shows supermarket sales of New Zealand Specialty cheese have increased in value by 6% in the 12 months to August 2017 . What’s more, in the first quarter of 2017 Nielsen says 771, 383 Kiwi purchased specialty cheese, an increase of more than 20% compared with the same period in 2014 .

Every October the New Zealand Specialist Cheesemakers Association (NZSCA) members host a variety of tastings, inviting cultured Kiwis to events across the country to meet cheese makers and taste their wares. . . 

Largest ever Bayer Young Viticulturist of the Year National Final:

2017 sees the largest National Final ever held for the Bayer Young Viticulturist of the Year competition. Taking place next Tuesday 29th August at Villa Maria in Marlborough, there will be a total of six national finalists representing six of our wine regions: Tim Adams – Auckland/Northern; Ben Richards – Hawke’s Bay; Ben McNab Jones – Wairarapa; Laurie Stradling – Nelson; Anthony Walsh – Marlborough and Annabel Bulk – Central Otago.

Bulk is the first woman in the competition since 2011, so it is great to see viticulture is very much a serious career option for both men and women. . .  


Rural round-up

August 23, 2017

Hard work earned admiration of all:

WHEN it came to work ethic, it would be hard to look past legendary North Otago market gardener Reggie Joe.

For more than 45 years, Joe’s Vegie Stall on State Highway 1 at Alma has been a landmark. From humble beginnings as a small roadside stall with an honesty tin, the business expanded to a busy operation, attracting a loyal following of customers.

His wife Suzie acknowledged it was his garden and customers that Mr Joe put first, followed by his family for whom he did it all.

His ambition in life was simple; to create a better future for his four children. Having known hardship firsthand, he was determined they would receive a good education.

Mr Joe died peacefully, surrounded by his family, in Dunedin Hospital on June 8, aged 82. . . 

Primary industries feel under siege as prospect of Labour-led govt firms:

INSIGHTS ABOUT THE NEWS – The divide between regional and urban politics is being thrown into ever sharpening contrast as the election campaign unfolds. Agricultural industries and rural communities feel under siege in the looming election.

As reported in Trans Tasman’s sister publication The Main Report Farming Alert, weeks ago the chances of a Labour-led government seemed unlikely, but now the chance of this happening seems possible with policies which could prove ruinous for NZ’s main export industries.

Labour will tax users of water, including farmers (but not those companies using municipal supplies). Both the Greens and Labour are committed to bringing agriculture into the emissions trading scheme and say the carbon price should be higher. They have not stated how high they want animal emissions to be taxed. . . 

Farming leaders pledge to make all rivers swimmable – Gerard Hutching:

Farming leaders representing 80 per cent of the industry have pledged to make all New Zealand rivers swimmable, although they don’t say how or by when.

Confessing that not all rivers were in the condition they wanted them to be, and that farming had not always got it right, the group said the vow was “simply the right thing to do”.

Launching the pledge by the banks of the Ngaruroro River in Hawke’s Bay, spokeswoman for the group and Federated Farmers president Katie Milne said the intent behind the commitment was clear. . . 

Swimmable means swimmable:

Agricultural leaders have, for the first time ever in New Zealand, come together to send a strong message to the public.

We are committed to New Zealand’s rivers being swimmable for our children and grandchildren.

DairyNZ chair, Michael Spaans, says “this is a clear message from New Zealand’s farming leaders that we want our rivers to be in a better state than they are now, and agriculture needs to help get them there.

“I have joined my fellow leaders to stand up and say that I want my grandchildren, and one day my great grandchildren, to be able to swim in the same rivers that I did growing up. . . 

Farmers’ river pledge welcomed:

A new pledge by farming leaders to improve the swimmability of New Zealand’s rivers has been welcomed by Primary Industries Minister Nathan Guy and Environment Minister Dr Nick Smith.

“This pledge from farming leaders shows the real commitment farmers have to tackling these long term issues,” says Mr Guy.

“Farmers are closer to the land to the land than nearly anyone else, and they care deeply about leaving a good legacy for their children. . . 

Hundreds expected for launch – Sally Rae:

When a book on the history of the Wilden settlement is launched this month, it will also serve as a reunion.

Wilden — The Story of a West Otago Farming Community — has been written by Dunedin man Dr David Keen.

The driving forces behind the project were retired Wilden farmer Bill Gibson, now living in Mosgiel, and Neil Robinson, from Wanaka.

In the late 1860s, the discovery of gold at Switzers, now Waikaia, further sparked West Otago’s development. . . 

Keen advocate of the tri-use sheep – Sally Rae:

Growing up on a sheep and beef farm in Invercargill, Lucy Griffiths and her siblings were not allowed to leave home without  a woollen garment.

The many benefits of wool were drummed into them from an early age, not only as a fibre to wear but also as one to walk on and use in innovative ways.

But somewhere since then, strong wool had “lost its gloss”, and Mrs Griffiths wants to play her part in re-educating consumers about those benefits.

She is one of three new appointments to the board of Wools of New Zealand, a position she felt was a “big mantle of responsibility”. . .

Dispath from NZ no. 3 conflict, collaboration and consensus – Jonathan Baker:

New Zealanders are generally though of as pretty relaxed; but having spent ten days here it’s clear that the current debate around farming is anything but. From the Beehive (NZ’s parliament) to the kitchen tables of farmers, there is a very strong sense of tension. Most I talked to present farmers on one side and ‘townie’ environmental groups on another.

The main cause of the tension is the state of New Zealand’s water quality. This issue has jumped up the public agenda over the last 10 years and is now a pretty substantial issue in the upcoming election. Environmental groups, notably Greenpeace have done much to start this debate and the impact of their ‘dirty dairy’ campaign can even be felt in the UK. . .

My great-grandfather fed 19 people, my grandfather fed 26 people, my father feeds 155 people I will feed 155 and counting . . . embracing technology a family tradition.


Meanwhile in other news

May 12, 2016

While the Panama papers and examining the entrails of The Bachelor are getting headlines the government books are in a healthier state than forecast:

The $167 million operating balance before gains and losses (OBEGAL) surplus for the nine months to 31 March was $334 million better than forecast, Finance Minister Bill English says.

Core Crown revenue was $206 million higher than forecast, largely due to core Crown tax revenue being $702 million higher than forecast by the Treasury in December.

These aren’t big numbers in relation to the government’s total finances. But given the global financial position and the impact of low dairy prices, this is an achievement.

This was partially offset by core Crown interest and dividend revenue being $456 million lower than forecast.

Mr English says because of sustained, moderate growth in the economy, the Crown accounts are in good order ahead of the delivery of Budget 2016 later this month.

“We’ve been successful in turning an $18.4 billion deficit in 2011 to a surplus last year. In Budget 2016 our focus is shifting more to repaying debt.

“Budget 2016 will reflect this Government’s continued commitment to responsible fiscal management. At the same time it will build on the good progress we’ve made over the previous seven Budgets, with further investment in a growing economy and public services.

“We measure success by results, rather than the level of spending.”

It’s not what they’re spending but the impact that spending that matters.

One area that always takes a lot of spending is welfare.

The government is taking the investment approach which means spending more in the short term for longer term social and financial gain.

A report from Deloitte and NZIER says that the investment approach needs to become a mainstream way of working across more of the social sector.

State of the State New Zealand 2016: Social investment for our future advocates broadening the use of the social investment approach to manage New Zealand’s future fiscal challenges and support better outcomes for Kiwis.

NZIER Deputy Chief Executive John Ballingall says the State of the State takes a close look at government finances and the burdens New Zealanders could face in the future.

“A combination of our ageing population, low productivity and revenue growth, and the need to reduce government debt will impose huge fiscal pressures in coming decades – particularly in social spending. More importantly, too many people in New Zealand are experiencing poor life outcomes and too many of their children are at risk of following them,” says Mr Ballingall.

Deloitte partner and public sector leader Dave Farrelly says it’s the sum of these factors which drove us to focus the report on social investment, an approach to funding social services focusing on root causes to prevent the need for these services in the future.

“For example, with social investment the task is not to deliver the next 100 prison beds for the same cost as the previous 50. It’s to remove the need for those new prison beds altogether,” says Mr Farrelly.

“Today social investment is like a start-up – a small number of people are working incredibly hard to bring a big bold vision to life. Tomorrow, social investment needs to become a mainstream way of working,” he says.

In the six months of research for the report, Deloitte and NZIER spoke to some of the most senior and influential leaders in the public, non-government and private sectors – all of whom provided a unique perspective on social investment.

State of the State proposes a package of bold reforms to realise the aspiration for social investment in New Zealand. The recommendations are:

1. Release, every four years, a government-wide statement to define the outcomes and targets for at-risk New Zealanders
2. Establish a new agency to commission specialist social services for people at risk of poor life outcomes
3. Embed the social investment approach to funding quality and sustainability in the new agency’s operating model
4. Enable better access to government-held data and detailed evaluation reports

“We suggest a structural reconfiguration that some will find challenging, while acknowledging we don’t yet have all the answers,” says Mr Farrelly.

“But we must be bold in tackling these challenges today to maintain our way of life in the future,” he concludes.

Social investment is working and the reforms Social Development Minister Anne Tolley is promoting will do more.

Trans Tasman notes:

. . . The reform being pushed through by Tolley is perhaps the most far-reaching undertaken by the Govt and could stand as its greatest legacy if it achieves its goals. Already it has made some headway in improving the lives of Maori children who are more than twice as likely as Pakeha children to grow up in households experiencing hardship, and fare worse in most indicators. A report by the University of Otago-based Child and Youth Epidemiology Service shows increasing numbers of Maori pre schoolers are getting early childhood education. There’s also been a halving of school suspensions for Maori students, an increase in immunisation rates, fewer young Maori smoking,and falling hospitalisation rates for Maori children for injuries from assault, neglect or maltreatment. Tolley is understood to have secured an additional funding, probably of the order of $500m in this year’s budget for the reform. . . 

Turning around benefit dependency and all the financial and social costs that go with it will not be neither easy nor cheap but the investment approach is working and it’s a much better story than many of the others which are getting attention at the moment.

 


NZ 3rd for material living standard

July 31, 2015

Trans Tasman points out that child poverty lobbies are wrong on living standards:

Lobby groups which bleat about child poverty in NZ took a knock this week when independent research showed NZ households have the third highest material living standard in the world for households with a teenager. The research also dealt a blow to those who contend there is growing inequality in NZ society. Using a new measure for wellbeing, Researchers at Motu Economic and Public Policy Research found NZ ranks just behind the US and Canada, and ahead of Aust and all the Scandinavian countries.
Motu is a not-for-profit, non-partisan research institute and received funding for this work from the Marsden Fund of the Royal Society of NZ. Dr Arthur Grimes, one of NZ’s most respected economists, says “our new measure focuses on actual consumption of households, which is a better measure of living standards than income. What we found is that we have very high material wellbeing levels. I think this should call into question the widespread negative impression of living standards in NZ compared with other developed countries.” Grimes and Motu researcher Sean Hyland worked from a dataset of household possessions for almost 800,000 households over 40 countries, including all OECD countries.
“Our results show NZ is still a great place to bring up children, at least in material terms. Not only do we have wonderful natural amenities, but contrary to what GDP statistics tell us, most kiwi families have a high standard of material wellbeing relative to our international peers” The study also looked at the degree of inequality in household material wellbeing, which fell in most countries, including NZ, over the period 2000-2012. In 2012, NZ ranked twentieth of 40 countries in terms of inequality, with levels similar to those in the US, Canada and the UK.
Grimes points out most public policy concern is with the living standards of ordinary people, especially those closer to the bottom of the wealth distribution curve, whose living standards are well captured in the data. “If we look across the Tasman, Australia’s households are not quite as wealthy as their NZ counterparts but inequality in Aust. is lower than that in NZ. Overall, these figures suggest we may need to reassess how we look at this country’s economic performance.”

This doesn’t mean everyone has enough nor that we can ignore the needs of those who don’t.

But it does contradict the people who keep trying to tell us that inequality is growing and that up to one in four children are living in poverty.


Slower growth still growth

July 10, 2015

Chicken Little would feel right at home with opposition politicians and media who are wanting us to believe the sky is falling.

This season’s dairy payout was low and next season’s might not be much better but banks aren’t going to be forcing farmers out of business.

Providing farmers are prudent and work with their banks they’ll get through.

Dairying is a large part of the economy and those who service and supply farmers will find business tougher as farmers spend less, but the impact of that still won’t push us into the recession some of the gloomier forecasters would have us believe is coming.

Trans Tasman puts it into perspective:

“Complacency” is what Labour finance spokesman Grant Robertson called John Key’s attitude to the economy this week. His leader Andrew Little went further, saying NZ faces a “perfect storm” of economic bad news. Both called for the Govt to do something, although just what remained a bit vague, apart from a generalised call for more spending to stimulate the economy. Key’s “What? Me Worry?” persona can grate at times, but this is all a bit over-egged.

Much of the egging came from the media, of course, with broadcasters being the worst. One has come to expect a certain amount of arm-wavy economic illiteracy from TV news, but what was more surprising was hearing Radio NZ follow suit, discussing the economy as if a recession 
is imminent.

Essentially there is a buy-in to the Green Party co-leader Metiria Turei’s claim the Govt needs to “start spending again” to avoid a recession. It’s a statement which appears oblivious to the Govt loosening the fiscal purse strings in the May budget, and also of the fact no reputable economist thinks a recession is imminent. Rather, it is a slowdown from a bit more than 3% to probably around 2% growth in GDP.

This means both Treasury and the Reserve Bank’s most recent forecasts are wrong, and not in a minor way. The presumption of 3% GDP growth this year, and for the next two years, now looks just that – highly presumptuous.

But it is not a recession. Growth is still happening. It is just considerably slower than expected. Interest rates and the NZ dollar are adjusting – finally – to take account of this.

Growth may be slowly, but slow growth is better than no growth and still, thankfully, there’s no imminent danger of the sky falling.


Quote of the day

May 22, 2015

. . . An enormous gulf has opened up between what used to be the core Labour voter, particularly in provincial regions, and the metropolitan elites, with their state-funded salaries and public sector pensions. The consequence is the current generation of Labour politicians are stumped when it comes to enunciating policies for the delivery of a better life for working people.

There is now a fundamental unease in the NZ population the collectivism inherent in the original concept of the welfare state doesn’t necessarily deliver the results originally envisaged. It is based on evidence the safety net the welfare state was intended to provide has been turned almost into a lifestyle for many who spend years on benefits. Now when the Govt says testing for spending effectiveness (in welfare programmes) will be core to the new processes it is introducing, and funding will be re-prioritised to providers to get results, Labour doesn’t seem to have an answer, or an alternative. . . Trans Tasman


Quote of the day

May 1, 2015

. . . Even among some voters friendly to National there is querulous criticism the Govt does not have a “plan.” The demand is for more “visionary” policy. This is to overlook the essence of conservative philosophy: what it is not necessary to change should not be changed, a conservative attitude is always the baseline for true progress.

This Govt’s success stems from the policies it has implemented in putting NZ back on the road to sustainable growth. NZ has now experienced solid economic growth for five years and it has been achieved without any inflationary pressures building up. Even though the dairy industry has been hit hard by plunging global prices, the rest of the economy is showing no sign of slowing up. But the Govt now has to battle a media which views the current state of the Govt, and its leadership, through a different lens. . . Trans Tasman


Quiet revolution in Budgeting process

January 30, 2015

Trans Tasman notes Finance Minister Bill English is driving a quiet revolution in the Budgeting process:

Cabinet Ministers are getting to grips with the new spending processes Finance Minister Bill English is introducing in this year’s budget. Where departments previously put in bids for the amount they thought would be needed to finance particular programmes, they will now be expected to match the bid with an assessment of the return on the investment. This follows the changes initiated in delivering better public services, when departments were instructed to publish results their programmes were achieving. In effect the Govt is seeking to revolutionise the way ministries operate.

It requires different departments to work together, rather than in isolation, particularly in the field of health and community services. The Govt accepts the new processes will have to resolve complex problems such as privacy issues but the objective is to push Ministries towards targeting the money available to achieve tangible results. The Govt argues it has a duty to ensure funds raised from taxpayers are applied to maximise outcomes, rather than just for “nice-to-haves” Ministers or bureaucrats advanced in competition with each other.

The duty becomes more onerous as the Govt strives to bring the Crown accounts back into long-term surplus, without any nasty spending blow-outs from programmes initiated in earlier years. An example where unintended consequences can spring out of the woodwork to damage spending projections lies in Employment Court decisions related to the care of aged people and the definition of work, as well as in pay equity. One decision concerned the definition of work as including driving to and from the places where aged-care providers are working, and another involves the principle of equal pay, with the concept aged care workers should be entitled to the same hourly rates as those in the Corrections Department. How the Govt deals with these complex issues will have long-term budgetary impacts.

National is often criticised for having no plan by people who don’t understand that a lot of what it is doing is being done quietly, like this requirement for a return on taxpayer investment.

 


Radical incrementalism is working for NZ

December 12, 2014

Quote  of the day from Trans Tasman:

. . . The trust voters have in the Govt has been built up over six years of patient delivery of what National promised. And the trust will only be eroded when the Govt stops delivering on what voters expect of it.

This is why many commentators are missing the stand-out element in the political equation. The policy the Govt is following of “radical incrementalism” is what NZers want, and is delivering the rising prosperity most NZers seek. The new normal is low inflation, low interest rates and stable growth which is sustainable. It’s an economic environment unfamiliar to many NZers, but so attractive it is drawing many expatriates back to their homeland. NZ’s performance has been in sharp contrast with Aust’s, and the big challenge for the country will be to keep winning against its neighbour (and we’re talking not just about the Rugby World Cup in 2015). . .

Sustainable growth is something New Zealand hasn’t seen for decades.

It doesn’t mean there are not still problems to address and there are too many people who have yet to benefit from the growth.

But it does mean that radical incrementalism is working for New Zealand.


On the cusp

November 14, 2014

Transfer Tasman asks is economic transformation finally being delivered?

During the election campaign John Key said he believes “NZ is on the cusp of something special” (as Trans-Tasman reported September 18). He was ridiculed by Labour (look what happened to them), by NZ First leader Winston Peters (who was predicting to his suck-it-up audiences the economy would crash in November) and by various “woe-is-me” pundits like Rod Oram. But now some hard data is emerging to suggest Key has a better sense of the way the economy is moving than his critics. Job statistics last week showed NZ’s unemployment rate is now lower than Aust’s, despite inwards migration reaching new highs. Canterbury is driving jobs growth, up 11% over the past year, and reporting the lowest unemployment across the regions at 3.2%.

This week the share market NZX top 50 index punched up to the 5500-mark, a new record high. Investors are chasing high dividend yields, and some of the big companies sitting on cash mountains are obliging them: witness Wellington-based Infratil this week paying a special dividend of 15c a share worth $84m on top of its interim dividend of 4.5c. Other evidence came from the ANZ Bank which headed up its latest Truckometer readings “High speed zone.” The two traffic indices, one concurrent with GDP, and the other providing a 6-month lead on GDP growth, both rose strongly in October, suggesting solid momentum over the second half of the year and into next.

ANZ economist Sharon Zollner in her commentary says “it is going to take more than a halving in global dairy prices to stop this juggernaut.” She sees the NZ economy continuing to vie for the lead in the OECD growth race. But the real kicker in all this is with annual CPI inflation running at just 1%, there is no sign of the engine overheating. This is why NZ might be on the cusp of something special – sustainable growth over the cycle above the long-term trend, without the Governor of the Reserve Bank having to slam on the brakes, and bring the economy to a shuddering halt. So this may be the economic transformation, long heralded, but at last being delivered.

The cycle of boom and bust is all too familiar in New Zealand.

The challenge of sustainable growth without inflation has proved too difficult in the past.

This time there are encouraging signs it could be achieved.

 


Helping to help selves

September 29, 2014

Prime Minister John Key has asked officials to come up with fresh ideas to tackle the issue of child poverty.

. . . Key’s genius is to sense developing problems, define what needs to be done and then act decisively to cauterise them. No better example is the call he has made this week for the DPMC, Treasury and other departments to delve into the issue of child poverty, and come up with fresh advice on how to wrap services into meeting the needs of those families who are struggling.

Left to its own, child poverty could lead to the evolution of a frustrated under-class and long-term a divided society. Key is going to make sure the issue is dealt to and doesn’t become a political headache. He doesn’t belong to the school which believes throwing more money at the problem is the solution. There’s a fundamental tension between ensuring sufficient welfare assistance is available and ensuring incentives to get into work are strong enough. Two out of five children said to be in poverty are in homes where one parent at least is in work.

Working for Families and other welfare measures are tactical measures: the overall strategy lies in more jobs, and, as Key sees it, in upskilling those who lack the skills for the opportunities opening up. Key argues the million NZers who voted for National on Saturday are caring people who will want to see the Govt understands the issue and is working its way through it. But he says those million people will also want to see those to whom assistance is targeted helping themselves. . .

Children shouldn’t be punished for poor decisions their parents make but nor should parents be paid, or compensated, for abrogating their responsibilities.

Only the hardest of hearts would begrudge assistance to the most vulnerable.

But most people work hard for their money and expect that those their taxes help, help themselves if and when they are able to.

Simply throwing money at the problem would entrench dependency and the social and economic issues that follow.


Only National can provide stability

September 12, 2014

Trans Tasman:

Polls midway through the campaign are continuing to point to a win for the incumbents on September 20, but Ministers reckon it will be a “tight finish.” On current polling, the Centre-Right parties appear to be about 15 points ahead of those on the Centre-Left. So is NZ becoming more conservative? Or is the Centre-Right domination of the political landscape due to John Key shifting National to the centre? The answers to those questions may only emerge in time, but after the hard slog through the global financial crisis and the Christchurch earthquakes, NZers have a clear and pressing priority. They overwhelmingly want a stable Govt to deliver steady, if not spectacular, progress.

They are averse to radical, dislocating change, or of “reformers” who want to re-shape their world. . . .

Only National can provide stable government.

The internal divisions in Labour  have been overshadowed by other events and issues in the election campaign.

But they haven’t gone away and are one of the reasons the party is polling so poorly.

The unions and members lumbered caucus with a leader they didn’t want and who some still don’t support.

Throw in the Green Party wanting around half the cabinet positions plus Winston Peters, Hone Harawira, Laila Harre . . .  and you get a recipe for instability and no progress.

Thanks for tuning in tonight. If you want a National Government, party vote National. #Decision14 #Working4NZ


Foreign ownership boosts wages:

September 5, 2014

Trans Tasman on foreign ownership:

The proposed sale of the 13,800ha Lochinver Station, near Taupo to Shanghai Pengxin, which bought the Crafar Farms in a joint venture with Landcorp, reignited the political debate about foreign investment and purchases of Kiwi land. Labour has promised to block the sale if it is not approved before the September 20 election and stop land sales over 5ha except in rare circumstances. Finance spokesman David Parker says land sales to foreigners do not increase output and do not release capital to be reinvested by the NZ owner to create new jobs. Finance Minister Bill English, however, reckons the Govt has struck the right balance between attracting foreign investment and tightening the rules for overseas investment in sensitive land.
Public Disquiet. Chinese investors have been making other investments in the farm sector: they have a minority stake in Blue Sky Meats and the Overseas Investment Office is considering an application to buy Prime Range Meats. Farm leaders have become disquieted. Federated Farmers supports positive overseas investment in NZ’s farming system but is concerned there would be little benefit to NZ if the Lochinver deal is clinched. President William Rolleston says “NZ absolutely needs foreign investment” but only if it benefits the local and national economy. He wants a “substantial and identifiable” benefit test incorporated in overseas investment eligibility criteria. Public opinion survey results this week suggest a majority of voters similarly approve of farm sales to foreigners only when it brings a significant advantage over an NZ buyer such as jobs. Almost 33% want farm sales to foreigners banned.

National raised the already high hurdle foreign buyers have to jump before a purchase is approved and benefits above and beyond those sales to domestic buyers would provide is one of the criteria.

 Better For Workers. An upcoming working paper by Motu Economic and Public Policy Research economists throws some light on the economics by examining how employment in foreign-owned firms affects NZ workers’ earnings. Using data from Statistics NZ’s Integrated Data Infrastructure, which tracks workers as they move between firms, the researchers found workers in foreign firms tend to receive, on average, around 14% higher monthly starting earnings than workers in domestically-owned firms. Compositional differences are the main explanation: foreign firms tend to be bigger and employ workers who would have received relatively high wages regardless of where they worked. The authors also found under-25 year olds get greater gains from joining a foreign firm and smaller losses on exit than older groups, while more highly skilled workers attract a stronger wage premium while working in the foreign-firm sector. In short, foreign firms not only tend to hire more highly skilled workers; they also remunerate these workers more generously.

A very small percentage of land  – around 2% – is in foreign ownership now.

The problem is one of perception based on emotion taking no account of the facts and benefits which include better wages for staff employed by foreign owners.


What matters

August 31, 2014

Trans Tasman on what matters to voters:

The vital factor for NZers as they come to vote are issues which impact on their lives: the trajectory of the economy, jobs, living standards, inflation, house prices, education and health services. Voters’ assessments on the credibility, competency and leadership of the parties weigh equally heavily. And a primary concern is stability of the Govt to be elected under the MMP system. . .

Anyone who understands the issues, the policies, the parties has a clear choice.

A stable, National-led government will continue with the policies which are working in these important areas; a weak unstable Labour-led government propped up by the Green, New Zealand First and Internet Mana parties won’t.

There are major differences in policies too, not the least of which is tax:

Where Labour is talking of raising taxes, National is dropping broad hints it wants to lower taxes by revising tax thresholds to provide some relief for those on low and middle incomes.  . .

The PREFU supported the government’s claims that the books will be back in surplus.

There is no justification for increasing tax rates. If conditions allow, there could be a case for some reductions, if only to counter bracket creep.

The only justification for adding a new tax would be by taking away an existing one.

Labour and its left-wing cling-ons want to increase tax rates and introduce new ones as extras not replacements.

High tax and high spending under the last Labour-led government put New Zealand into recession long before the rest of the world. That they haven’t learned from that mistake shows they can’t be trusted with the public purse again.
In their last five years in government, Labour’s spending increased by 50%, pushing mortgage rates to 11%, causing inflation to exceed 5%, and putting the economy into recession well before the global financial crisis. Now they want to make the same mistakes all over again.

In stark contrast National has spent the last six years working for New Zealand with policies that are working for New Zealanders and this week announced more of its plan for the next three years:

We’re focused on the things that matter to New Zealanders. If you’ve missed any of our policy announcements this week, we’ve summed them up below. If you want more information on any of these announcements visit: www.national.org.nz/plan #Working4NZ


Prudence best recipe for sustainability

August 15, 2014

Trans Tasman previews next weeks PREFU:

. . . What the PREFU will highlight are Treasury forecasts on economic growth remaining robust, but “normalising” after the dairy boom last season, and on fiscal surpluses thinner than those set out in the budget.

There’s no windfall in revenue as there was in 2005 when the Govt of the day, caught by surprise, scrambled to splash out big spending programmes like Working for Families. The economic situation NZ finds itself in during this cycle is very different. Then credit growth was running at around 10%, compared with 4% now, inflation was high, and consumption was fuelled by rampant debt. This time round, the Reserve Bank Governor Graeme Wheeler jumped in early, and has got the surge in house prices under control. Inflation is subdued, wage growth is only moderate, productivity is rising, households are keeping their spending in check, and corporate balance sheets are in good shape. 

So the cycle this time will have a flatter, steadier profile, but growth will be at a sustainable pace, lasting longer. The economy is growing another “leg,” with hi-tech exports rising exponentially. For the Govt, the aim is to keep the economy running on a smooth, upward trajectory. Its eyes are on winning not just this election, but in 2017 as well. For this to be achieved, it has to deliver rising standards of living through the whole cycle. It can’t yet risk another boom-bust, of the kind which has dogged NZ over the last half century, if is to capitalise on the reputation it has sought to nurture of being the most prudent economic managers the country has had in the modern era. . .

The improving outlook for the country has been hard-won and is a result of careful management.

The expected outlook for growth at a sustainable pace and lasting longer is encouraging but it’s not assured.

We know what a National-led government has achieved and can be confident they will continue with the same prudent recipe to ensure that growth is sustainable

A prospect of a weak Labour Party leading a coalition propped up by the Green, New Zealand First and Internet Mana Parties gives no cause for confidence.

Policies announced so far are repeating the failed recipe of the past based on the toxic ingredients of  higher taxing, higher spending.


Need to earn respect

August 1, 2014

Trans Tasman on complaints of media bias:

The tawdry cry of media bias, marinated in bitterness and misanthropy, has been held aloft by Labour activitists. They have a point, but not the one they think they are making. How journalists’ view political parties is affected by many factors, and individual political biases and prejudgements is only one of them – and seldom the most important. Almost every journalist in the press gallery has tales of slow or non-existent response from Labour to requests for information, or of interviews/appearances agreed to and then “pulled” at the last minute.

It isn’t a matter of incompetent staff: the almost total turnover in the past three years is only one indication something deeper is the problem. No one knows what is going on because people who should be told are not told, and the big reason for this is internal levels of mistrust are so toxic. It adds up to an organisation – and we use the word ‘organisation’ with some degree of over-stretch here – which cannot do the political equivalent of walk from Mum’s car to the kindergarten gate without having a trouser incident.

And of course this affects coverage. Journalists experience this level of cluster-fornication every day and it has a deep impact. And this is before we get to the public snafus, the destructive and bitter factionalism and the way many electorate candidates are distancing themselves from the current, official election strategy. Almost everything Labour does at the moment sends the message it is in no position to run anything.

If there is a tone of disrespect in how journalists cover Labour – and there very definitely is – it is because Labour is not behaving in a way which earns respect.

Daily displays of cluster-fornication don’t earn respect.

Nor do obvious internal divisions, a predilection for sideshows and failure to learn from mistakes.

Labour is in a mess and that’s reflected in media coverage.

It’s a mess of the party’s own making and the media can’t be blamed for showing it in a negative light when there’s so little positive to focus on.


Gonna tell on you

July 18, 2014

Quote of the day from Trans Tasman:

. . . Meanwhile Dotcom, is now promising to reveal all he knows about John Key just before the election. And it’s pretty damn big, he says. Oh yes. In political terms, this is a bit like the playground “gonna tell on you and my father is a policeman and my aunt is a wrestler and you’re gonna be REAL SORRY!” . . .

This reminds me of Labour’s desperate smear attempts before the 2008 election when they sent Mike WIlliams to Australia to dig the dirt.

He came up with egg on his own face and no dirt at all.

If Dotcom really has something on Key he’d spill it now which would give the opposition a strong foundaiton on which to build an all-out assault.

The only advantage in waiting is to keep himself in the headlines.


The importance of certainty

July 4, 2014

Trans-Tasman notes the appeal of certainty and stability:

National emerged neat and tidy from its election year conference. Delegates went home knowing what they have to do to ensure the party can re-form a governing coalition. It’s this disciplined approach which carries its own message to the electorate, contrasting with the inchoate array of parties lined up on the other side of the fence. Private polling shows within the electorate, opinion is beginning to harden on the parties of the left being so disparate, (even if they gained a majority of seats in the next Parliament), a coalition of those parties would be highly unstable and couldn’t last.

Certainty, along with stability, is the priority for most voters. The difficulty for the parties of the left is they project not just instability, but incoherence in the policies they are espousing. The realisation has grown Labour would have to share power with the Greens, NZ First and possibly the Mana/Internet alliance. How would it work? In the NZ Herald this week John Armstrong noted Labour seems to be increasingly paralysed by the division between MPs who put a priority on economic development and those who want environmental concerns to be very much part of that development.

The Opposition has forgotten what Helen Clark did in the run-up to the 1999 election, staging a reconciliation with Jim Anderton and his Alliance to project a united front and give electors an idea of what a Clark-led Govt would look like (even though it must have savaged her personal pride to cosy up to her old foe). . . 

 The more voters see of what a Cunliffe-led Labour/Green/NZ First/Mana/Internet Party might look like the less appeal it has.

There are enough uncertainties in most people’s lives without adding an uncertain coalition and the instability that would come with it especially when its contrast with the certainty and stability of a National-led government with John Key as Prime Minister.


%d bloggers like this: