Power for the south

July 13, 2020

Love many fat royal people today.

That’s the mnemonic by which I can still recall sixth form geography’s lesson on the six factors which affect the location of industry – labour, market, finance, raw materials, power and transport.

When it comes to power, the market in New Zealand is distorted by averaging of transmission costs across the country. That is one of the major reasons Rio Tinto has decided to close the Tiwai aluminium smelter next year and Richard Harman points out it is Auckland votes that did the damage:

. . .Opposition from the city, and particularly its business community, to proposals, put up in 2016 to change the way consumers paid for the transmission component of power pricing killed off what could have been a $20 million cost-saving for the smelter.

That might have been enough to save it. Rio Tinto’s loss on the smelter last year was $46 million. . . 

NZAS has argued that it is forced to pay for investment in the country’s power supply network that has no relevance to it, such as upgrades in the North Island when it is based at Bluff.

In 2017 a company press statement said NZAS paid  around nine per cent of Transpower’s transmission charges to consumers, “including paying towards the $1.3 billion spent on upgrading the grid in the upper North Island since 2004 without receiving any additional benefit to its business.”

“When it comes to transmission charges, we believe you should pay for what you use,” said then-CEO   Gretta Stephens.

“This isn’t what is happening now, so we are committed to working with the Electricity Authority and Transpower to achieve a more sustainable method of pricing transmission services.”

Stephens was therefore ready to endorse an Electricity Authority proposal in May 2017 to radically overhaul the transmission pricing regime and essentially make it a user-pays system. The further a consumer was from their power generator; the more they would be likely to pay.

The smelter uses only about 40km of Transpower lines because the main transmission lines from Meridian’s Manapouri power station to the northern outskirts of Invercargill are owned by Meridian.

The total length of all transmission lines owned by Transpower is 12,000km.

So in proposing that this imbalance be addressed, NZAS, told the Electricity Authority in 2017 the smelter had been located in its current position to allow for port access and to minimise the need for transmission.

“Auckland, by comparison, grew organically because of the natural advantages the location has for residential living,” the company said. “These advantages did not include nearby economic energy resources.

“As a result, considerable expense has been, and continues to be, applied to transporting electricity to Auckland.

“Because of these characteristics, the economic cost of providing transmission services for NZAS is considerably lower than the economic cost of transmission to Auckland”.

Southern individuals and businesses have been and are continuing to subsidise those in the north.

The Electricity Authority then produced a new transmission pricing proposal which would have seen NZAS’s transmission costs drop by 34 per cent to $40 million a year. But to help pay for that, the Authority proposed increasing the transmission costs to Vector, the former Auckland Electric Power Board, by 44 per cent or $50 a household a year.

There was an immediate uproar. . . 

The uproar came from a much bigger voting block than the one in the south and the north won.

Steven Joyce is one northerner who understands this:

Nearly 5 per cent of the Southland workforce will likely lose their jobs — a massive body blow. For Aucklanders having difficulty comprehending what that means, a shock of a similar magnitude in that city would be 40,000 people losing their jobs at once.

The Finance Minister is conveniently trying to hide behind the skirts of Bill English, reminding everyone that Bill said “no more” to Rio Tinto after 2013, and as current minister he’s just sticking with the line. It’s weird how trapped he feels by an 8-year-old decision.

If it helps at all, the Bill English I know wouldn’t have handed out $10 million to a bungy jumping company in Queenstown. If desperate times warrant that much being handed to a single private tourism company, or a ludicrous $280m to support New Zealand Post, Southlanders will legitimately ask why not $30 or $50 million for 2600 jobs in their region?

A very good question and if the smelter was in Northland does anyone doubt that it would get the money?

The smelter has as good a case as the tourism or film sectors, and a considerably better case than what has become a glorified courier company. The international market for aluminium has crashed as a result of Covid-19 decimating the car- and plane-making industries.

More egregiously, the electricity for this and other Southland businesses comes from just up the road at Manapouri, yet Southland is made to pay to have power circulated around the rest of the country. The request for help is more a case for stopping an unfair levy than for a fresh subsidy. Southland is not the only region, and aluminium not the only regional industry that is up against it. . . 

Some people see a silver lining in the smelter closure in the potential for cheaper power. But the electricity the smelter uses is generated in Southland, upgrading transmission lines to get it to the northern North Island would cost many millions of dollars.

If those costs were averaged over the country it would be rubbing very expensive salt into the wounds the smelter closure will inflict on Southland, its labour force and economy.

But it’s not only Southland that is facing big jobs losses.

The Marsden Point refinery bankrolls a similar proportion of high-paying jobs in Northland, and the refining company is making near-identical noises about closure.

Meanwhile, Taranaki is continuing to come to grips with the Government’s pre-Covid oil and gas exploration ban placing an artificial sunset on its biggest industry, and associated companies like Methanex and the ammonia urea plant.

Outside of heavy industry, the Covid-19 border controls have put on ice a series of other sectors that normally contribute to New Zealand’s wealth and jobs.

The $5 billion we earn annually from international education is dwindling to nearly nothing — and that leaves schools, universities and other providers short $1b a year for tuition fees alone.

Tourism limps along on one domestic cylinder, which sparks up in the school holidays but is insufficient to sustain many of the companies reliant on it.

The tech companies that succeed in the world despite our isolated location are wondering how long they can operate from their New Zealand base while being physically cut off from their customers.

And the foresters are suffering from whiplash, feeling alternately loved and loathed, sometimes almost in the same press release, as the Government has somehow got itself to the point where it will decide when forests are planted and where they can be sold. No wonder politicians were belatedly cuddling up to the farmers this week. Food is in danger of becoming our only export sector, so let’s call a truce in the regulatory hostilities and pretend all that talk about the need to diversify away from agriculture was just a bad dream.

The more other export industries falter, the more important agriculture becomes.

Which brings us to the bigger problem that the smelter closure underlines. Exactly how do we plan to make money to pay off this huge debt the Government is running up on our behalf?

How will we fill the massive hole in our exports left by tourism, education, aluminium and oil and gas? And exactly how do we plan to magic up 2600 replacement high-paying jobs in Southland?

Our economic response to Covid-19 is looking ridiculously haphazard. If the Government likes you, you get a bucket of money. If they don’t, then tough luck.

We first need a level playing field, and then we need to focus on increasing the competitiveness of all our businesses. We also need, to paraphrase a certain Australian Prime Minister, to get out from under the duvet and start re-engaging with the safer parts of the world again.

Right now we are being way too cavalier with our whole economic fabric. We could wake up and find whole regions permanently crippled — the ultimate irony for a Government that claims to “champion the regions”.

And, given that our biggest power consumers will have gone, and taken with them their outsized contributions to the costs of the electricity grid, we may not even have cheap power to make us feel better.

Taking big electricity users out of the market won’t make power cheaper. If the big users who contribute most to the energy companies’ coffers go, the cost will be spread across fewer, smaller users including households.

Given the fall in the price of aluminum, even a lower power price probably wouldn’t save the smelter.

But the smelter’s closure should provide the impetus to stop the southern subsidising of the north’s power.

Finding new businesses to soak up the people left unemployed when the smelter closed won’t be easy.

But it could be less difficult if everyone paid the actual cost of getting power which would make Southland much more attractive than Auckland to any enterprises where electricity costs were significant.

Southland has the labour, a variety or raw materials, good transport options and finance is reasonably mobile. It might be further from many markets but much cheaper power could well compensate for that.

So much power is generated in the south, far less will be needed down here without the smelter. This is an opportunity to ensure it stays here and southerners get lower prices to benefit households and the businesses that could soak up at least some of the workers left jobless when the smelter closes.

But what’s the chances of cheaper electric power for the south when political power is in the north?


Subsidies begat subsidies

November 5, 2019

Why is the south subsidising power delivery to the north? Steven Joyce opines:

I hold no brief for Rio Tinto or its aluminium smelter but I am a fan of Southland, and I don’t think Southland is getting a fair deal.

It’s worse than that.  Southland looks like it might be getting lined up for the “Taranaki Treatment” from the government.

Rio Tinto is once again reviewing the future of the smelter, which directly and indirectly, pays the wage packets of about 3,500 people in a region of roughly 100,000. . .

That’s a lot of jobs and there will be more in businesses which service and supply the smelter and it’s staff, but that by itself isn’t a justification for subsidising Rio Tinto. But there’s a but:

But actually they have a legitimate point – or at least, the people of Southland do.  People and businesses in Southland, including the smelter, pay too much to get their electricity delivered to them.  More correctly they subsidise the delivery of electricity to everyone else, and they are sick of doing it.

The lower South Island produces much of New Zealand’s power, and at the lowest cost, but they see no benefit from having the big hydro power stations in their neighbourhood.  Electricity is expensive to shift around so it should make sense to set up your business near a power station, but it’s not because electricity transmission costs are currently averaged across the country.

If you live over the road in Te Anau from New Zealand’s biggest power station, you are not just paying to have your power delivered to you, you are paying to get it delivered to people in Auckland, 1700 kilometres away on a whole other island.

Given the loss of energy and cost of sending power so far that doesn’t stack up environmentally or financially.

And as Auckland grows, it needs more power. Transpower, which runs New Zealand’s electricity grid, has spent several billion dollars over the last decade upgrading their network and keeping the lights on, much of it for the benefit of Aucklanders.

 And Southland people and the smelter have been paying for a lot of that.  

And we’ve all been paying for the subsidy to Rio Tinto because the south is subsidising the north’s power.

The previous government put together a new Electricity Authority to, amongst other things, sort out a fairer price for electricity transmission. It’s taken a while because it’s controversial.

In 2016 the authority put up a fair proposal that would have saved Southlanders a lot of money. The smelter would pay around $20 million a year less than it does now in transmission charges, and other Southland power users would get a commensurate reduction.

That would be better for the company and other southerners than subsidising the smelter.

But people in Auckland and Northland who would pay a bit more kicked up a big public fuss and so did politicians, including New Zealand First.  The Authority went away to check its sums again. It has now come up with another, watered down plan. It still improves things for Southland, but only about half the amount as previously.  And its still a few years away from coming in.

Tanspower should not have bowed to political pressure to change it’s  mind about people paying the trues cost of power just because for once the south would gain and the north would lose.

So it’s not surprising the smelter is getting antsy, or anybody else in the deep south. Southlanders pay higher petrol prices because the population is smaller and there is less competition.  They pay higher electricity prices because they are subsidising getting power delivered to Auckland.

On energy costs they never win. And they risk large industries leaving – industries that should be attracted to their part of the country because of the abundant cheap electricity that is generated there.

Thanks to the mnemonic Love Many Fat Royal People Today I can still    recite the factors affecting the location of industry – Labour, markets, finance, raw materials, power and transport.

The market in the south is smaller, but if you’re exporting that, and transport are not a big consideration. Finance is mobile, the south has plenty of Labour so it’s just subsidised power that makes the north more attractive.

If the south wasn’t subsidising the north’s power at least some   of the businesses which locate in Auckland, would choose somewhere nearer where the power is generated instead?

That would have the added bonus of slowing Auckland’s growth.

Meanwhile the trendies in Auckland and Wellington opine that we’d be better off without the smelter anyway for all sorts of thinly argued environmental reasons. Of course it’s not their lives that would be up-ended if it goes.

All this is grimly familiar to Taranaki people, who have had one of their largest highest-paying industries sacrificed on a Greenpeace-inspired oil and gas ban that is now generally accepted will do absolutely nothing to reduce climate change. Because of the complex interplay between coal, gas and electricity, it may be making things worse. It’s certainly lifting gas and power prices.

And it is not just industry that is at risk in Taranaki and Southland. There was news out this week that the aggressive new water policy the Government wants to impose on food producers will disproportionately affect people and economies in places like Taranaki and Southland. . .

Our self-styled champion of the provinces might be a bit miffed that provincial people don’t show appropriate levels of political adulation when he shows up with the taxpayers’ cheque book and sprays $10m here and $10m there. The truth is his largesse is poor consolation for the damage other things are doing to the economic prospects of regions like Southland

We shouldn’t subsidise the smelter. Rather we should stop forcing Southlanders to subsidise Aucklanders. 

We should also revert to a more gradual water plan that gives farmers time to adapt, and we should let Southland retain control of SIT. Then we should get out of the way and let the sensible practical Southlanders get on with making a success of their province.

This illustrates how subsidies begat subsidies.

If transmission costs were levied where they fell, Rio Tinto would have cheaper power without subsidies and the rest of the south would also save on their energy bills.

 

 


Alastair Scott Nat candidate for Wairarapa

April 26, 2014

Alastair Scott has been selected by the National Party to contest the seat of Wairarapa.

Alastair Scott, 48, is owner and director of Wairarapa’s Matahiwi Estate winery. He is also Chairman of Henergy Cage Free Eggs, a director of Transpower, Councillor of Massey University, and Trustee of the Wairarapa Region Irrigation Trust and NZ Scout Youth Foundation.

His successful business career sits alongside a strong track record of community involvement as a founding Trustee of  ‘Kiwi Can’ Charitable Trust Wellington, Deputy Chair of the Wairarapa Chamber of Commerce, and a Member of the Wairarapa Development Group.

Mr Scott is a father of three. He lives between residences in Masterton and Wellington with partner RobynNoble-Campbell and their blended family.

A successful business career and a strong track record of community involvement are far better credentials for an aspiring MP than most candidates standing for parties, and many sitting MPs,  on the left.


Rural round-up

November 8, 2013

‘Farmers understand need to improve water quality’:

PRIMARY INDUSTRIES Minister Nathan Guy believes most farmers are environmentalists and understand the need to improve our water quality.

Speaking at the launch of freshwater proposals yesterday, he said farmers want to leave the environment in a better state than they found they found it.

“Farmers recognise the importance of our freshwater resource and understand there will be costs; and they have shown they want to work constructively,” he says. . .

China helps lifts co-op’s returns:

Meat co-op Alliance Group has reported a net profit before restructuring costs and tax of $10.9 million for the year ending 30 September 2013. The co-op’s turnover for the year topped $1.4 billion

After providing for restructuring costs of $2.5 million and tax of $2.8 million, the company recorded a net profit after tax of $5.6 million.

The company’s balance sheet is also strengthening with an equity ratio of 61% and an operating cash flow surplus of $89 million.

In announcing the result, Alliance Group chairman, Murray Taggart, said the return to profitability was a positive result, albeit at an unsatisfactory level, and follows a year with widespread drought conditions and lingering economic weakness in key export markets. . .

Wild pigs a potential TB risk in Waikato:

Reports of wild pigs being illegally released and the risky disposal of their remains has prompted a Waikato farmer to speak out about the bovine tuberculosis (TB) threat it potentially poses to domestic cattle and deer.

Pigs can carry TB and spread the disease when infected carcasses are scavenged by wild animals, mainly possums and ferrets. Bovine TB-infected possums are responsible for the majority of new herd infections in TB risk areas.

Local farmer and Waikato TBfree Committee Chairman John Bubb expressed concern over the reported practices on behalf of herdowners in the region.

“People need to consider the possible consequences of dumping wild pig remains that could be infected with TB,” said Mr Bubb. . .

Public perception vital in a crisis – Hugh Stringleman:

Rescuing Fonterra’s reputation after its botulism scare is problematic, crisis communications researcher and adviser Professor William Hallman says.

“The first thing they taught me as a psychologist is that perception is reality,” Hallman said.

“The fact that it was a false alarm is important, but reputation isn’t entirely based on facts.”

Hallman is head of the Department of Human Ecology at Rutgers, the New Jersey state university.

He was contracted to provide information to the Fonterra independent inquiry into the whey protein concentrate recall on best practise in crisis communications, his principal area of expertise. . .

Southern land producing quality wool – Alan Williams:

Good, clean Southland pasture through spring and early summer helps Jeff Farm produce lambs’ wool to the standard required by United Kingdom fabric manufacturer Camira.

“We put the wool in from 10,000-12,000 lambs and most of it gets accepted,” farm manager John Chittock said.

The wool has to have 0% vegetable matter (VM) and be pesticide-free to meet Camira’s exacting standards under the Wools of New Zealand (WNZ) contract.

“At this time of year we don’t have any problem with the VM. The country here is pretty clean and we don’t have to do anything special with them,” Chittock said.

Mixed response to buffer zone compromise – Richard Rennie:

Western Bay of Plenty landowners have gained a compromise on proposed buffer zones sought by Transpower around electricity lines on their land.

The State-owned enterprise had wanted zones on existing lines inluded in a district plan change, which put it offside with horticulturalists, farmers, and even Western Bay of Plenty District Council.

The dispute was destined to be heard in the Environment Court after Transpower appealed the council decision to follow the recommendation of a commissioner, which was to note the buffer areas in planning documents.

Federated Farmers has arrived at a compromise on the changes being sought by Transpower, with the proposed buffer zones significantly reduced. . .

Great Start for 2014 Dairy Awards:

Nearly 100 people have entered the 2014 New Zealand Dairy Industry Awards since entries opened a week ago, up 10 on the same time last year.

“The signs are promising that the 2014 awards are going to be a boomer,” national convenor Chris Keeping says.

“What is really satisfying is the number of people who are entering for a second or successive time. We work really hard to make sure all entrants – not just the winners – gain real value and benefits from their experience and so it is heartening to see that about half the entries so far are from those that have entered in the past.” . . .

#gigatownoamaru has had a great start too.

 


Rural round-up

June 8, 2013

Rules more of a worry – Marty Sharpe:

Farmers are more concerned about the economic and regulatory impacts from climate change than its physical and climatic effects, a study has found.

The study, by University of California PhD candidate Meredith Niles, involved 313 farmers in Hawke’s Bay and 177 in Marlborough.

Niles found that:

– When it came to concerns for the future, farmers were “very concerned” about more economic and policy matters such as regulation, higher fuel and energy prices, new pests and diseases and more volatile markets. . .

Meat consolidation is happening already – Tim Fulton:

The number of New Zealand sheep meat exporters using European lamb and beef quota in the past decade has fallen on the back of mergers, financial failures and new tactics. Tim Fulton reports.

A shake-up of meat processing has been churning away for years with barely a farmer involved, New Zealand Meat Board figures indicate.

The evidence for this, if not the explanation, is in the annual record of companies granted access to European sheep and goat meat quota – and also in the pattern for quota-linked United States beef and veal.

In 2003 the tally of our sheep and goat meat merchants in Europe could fill a sheet of A4 paper, listed alphabetically from Abco Meats to Wrightson. . .

Farming through future eyes – Sue O’Dowd:

Taranaki farmers planning the transition of their farms to the next generation can get help at a forum later this month.

A scheme that provides training for farmers in areas like governance, transition planning, financial systems and establishing health and safety programmes will be explained at a seminar in Hawera on June 20.

It is being hosted by the Taranaki branch of the Institute of Directors, and speakers will include 2012 Dairy Woman of the Year Barbara Kuriger, of New Plymouth, and Bay of Plenty corporate farmer Trevor Hamilton. . .

No deal likely for Feds, Transpower – Richard Rennie:

Despite Horticulture NZ reaching an agreement with Transpower over power line buffer zones on growers’ properties, Federated Farmers is not intending to follow the same path.

The grower group has signed a Memorandum of Understanding with Transpower agreeing to work with it on issues of access and land use under lines and pylons.

The memorandum follows long-running conflict between growers, farmers and Transpower as it seeks to adjust council district plans to ensure buffer zones exist around transmission infrastructure.

The conflict has been most intense in Western Bay of Plenty, with the issue about to be heard by the Environment Court. . .

Appointment of CEO At Deer Industry NZ:

Deer Industry New Zealand (DINZ) is pleased to announce the appointment of Dan Coup as its new chief executive.

DINZ Chairman, Andy Macfarlane, noted that Coup, currently Trade and Economic Manager at the Meat Industry Association (MIA), has a unique background, combining an honours degree in genetics and molecular biology with an MBA. Together with his experience at MIA dealing with trade and market access issues, he is well-positioned to leverage off the outstanding work completed by outgoing chief executive, Mark O’Connor. O’Connor departs after 13 years to run his family-owned investment business. . . .

‘Mantis’ and ‘Shrimp’ the new farming robots in Oz:

Moving carefully along a row of apple trees, two of Australia’s newest agricultural workers check if the fruit is ripe or the soil needs water or fertilizer.

Meet “Mantis” and “Shrimp”, agricultural robots being tested to do these tasks and more in a bid to cut costs and improve productivity in Australia’s economically vital farm sector, which exported the U.S. equivalent of $38.8 billion of produce in 2012.

Australia is one of the leaders in the field and, with a minimum wage of about $15 U.S. an hour and a limited workforce, has a big incentive to use robots and other technology such as unmanned aircraft to improve efficiency. . .


Feds fear Transpower land grab

March 15, 2012

Federated Farmers is concerned Transpower is attempting to use councils’ district plan processes to nationalise up to 42,000 hectares (ha) of private property.

The issue has arisen because the SOE is requesting that Western Bay of Plenty District Council create 32 metre wide buffer zones either side of its transmission lines on private land under the district plan.

The buffer zones will restrict landowner rights and normal farming activities within a vast swathe of private land, without compensation.

“It is deeply concerning Transpower is trying to use district plan processes to achieve a result it ought to get through negotiation with landowners,” says Willy Leferink, Federated Farmers electricity spokesperson.

“Developments in the Western Bay of Plenty District potentially set a major and disturbing precedent. Federated Farmers Bay of Plenty province has submitted strongly against the proposed buffer zones and is organising landowner groups to support the cause.

“If Transpower has its way there, it will control 64 metre wide strips of private land. In comparison, a typical two way urban road is around 14 metres wide. Why does Transpower need so much land?

“We believe this is a disingenuous way of gaining substantial commercial benefits at landowners’ expense, using the community-owned Resource Management Act (RMA) process. Federated Farmers thinks Transpower is trying to sidestep compensation to landowners.

“Some people are telling me Transpower is trying to exploit a loophole in the RMA, which says no compensation is payable when landowners are affected by District Plan rules.

“There is no way Federated Farmers will accept a State Owned Enterprise forcing legal landowners into the farcical situation of applying for resource consents to use their own land because it has been labelled a transmission buffer zone.

“If applied nationally, we are talking about tens of thousands of hectares of private land potentially affected and regulated. That is a lot of disgruntled people if Transpower doesn’t wish to sit down and negotiate terms with landowners. . . “

Transmission lines on farm land, and compensation for them, has been a contentious issue for some time.

This looks like Transpower is trying to get councils to give them more rights over the land their lines cross than the landowners.


Rural round-up

February 20, 2012

Council and Transpower overstep mark with buffer zone proposal:

Federated Farmers is opposing the Western Bay of Plenty District Council’s moves to create buffer zones of up to 32 metres either side of electricity transmission lines.

“Federated Farmers strongly opposes the creation of these Electricity Transmission Buffer Zones, because they are solely designed to protect transmission line companies’ interests and circumnavigate individual easement agreements with landowners,” Federated Farmers Bay of Plenty provincial president John Scrimgeour says.

“Transpower says it wants these buffer zones to ensure safety and supply continuity. However, Federated Farmers feels the width of the zones is excessive, as is the level of proposed regulation around them.

“We believe the resulting raft of new rules for earthworks, buildings and subdivision within those zones would hamper landowners’ ability to farm, without meeting Transpower’s original goals. . .

Dairy farmers are better-off  with  industry competition:

All New Zealand dairy farmers are better off because Synlait Milk and other independent dairy companies exist, says Synlait Milk Chief Executive John Penno.

“While independent dairy companies make up a very small portion of the industry, the competitive pressure that Synlait Milk and others bring has brought about faster change within Fonterra than would have occurred had competition not emerged,” Penno said.

Competition between New Zealand dairy companies is not about the international markets. It is all about competition for farmer’s milk. Because of competition, Fonterra pays farmers more for their milk, which forces independent dairy companies to develop their businesses faster to keep one step ahead, says Penno. . .

Visit to top kiwi farm impresses Swedish delegation:

Members of a Swedish delegation will go home with positive views of New Zealand agriculture after visiting an award-winning farm in the Waikato

On February 9, delegates from the Swedish Parliamentary Committee on Environment and Agriculture were hosted by the New Zealand Farm Environment (NZFE) Trust on Gray and Marilyn Baldwin’s organic dairy farm near Putaruru.

The Baldwins and their sharemilkers, Hamish and Jane Putt, were Supreme winners of the 2009 Waikato Ballance Farm Environment Awards. . .

Dairy debate is getting really interesting – Allan Barber:

My piece last week supporting the OIO decision on the Crafar farms deal provoked a lot of comment, most of it negative, but also, interestingly, it sparked a sometimes acrimonious debate between several respondents about the Israeli – Palestinian situation. Now that was something I didn’t expect, not considering myself to be remotely competent to cover that sort of global issue.

Since my piece appeared I have picked up some really interesting columns by Fran O’Sullivan in the NZ Herald and Rod Oram in the Sunday Star Times which took diametrically opposing views on the same topic, O’Sullivan in support and Oram totally against. . .

Hawke’s Bay shearers head to world champs:

Two Hawke’s Bay shearers will represent New Zealand at the world shearing championships, to be held during the Golden Shears in Masterton, later this month.

It is an upset for David Fagan who was the favourite heading into the final shear-off, the Southern Shears, in Gore at the weekend. . .

RD1 gets behind Dairy Women’s Network:

In an exclusive agreement, RD1 has committed to sponsoring the Dairy Women’s Network regional groups. The partnership is aimed at growing the reach and effectiveness of these groups over a three year period, helping to increase the success of women in dairying.

RD1 CEO Sarah Kennedy, now a leading woman in the dairy industry, sees some direct correlations between the two organisations.

“RD1 and the Dairy Women’s Network aspire to add value to dairy businesses. We also both have nationwide networks with a strong regional focus” says Kennedy. “The Dairy Women’s Network regional groups are not only the heart of that organisation, they are the grassroots of our industry, much like the RD1 store network. . .

Dairy Women’s Network partners with training leader AgITO:

Dairy Women’s Network has announced its partnership with one of New Zealand’s largest and most respected industry training organisations, AgITO. The partnership was formed in an effort to open up further education possibilities for New Zealand dairying women.

“We are very excited about this partnership,” said Kevin Bryant, Chief Executive for AgITO. “It gives us the opportunity to further support and help upskill women who are such an important group in making the daily business management decisions within the dairy industry.”

According to Mr Bryant, AgITO has a number of qualification options suitable for dairy women who are looking to further develop their careers or gain skills and knowledge in specific key areas from improving milk quality to business management and planning. . .


Transpower’s talking to farmers

March 21, 2010

Transpower must be taking farmer discontent over pylons on their properties seriously.

We got a phone call this afternoon inviting us to a meeting with the company to discuss any issues we might have.

In the old days when power was a public utility most farmers didn’t expect any compensation for the inconvenience of pylons on their land.

Forntunately few are so angry they’ll have a stand off when there’s a power failure. But many now feel that they should receive some sort of payment for putting up with pylons.

Federated Farmers has been working with Transpower to get agreement. The meeting we were invited to suggests that some sort of progress is being made and the company is genuinely willing to listen to farmers’ concerns.


It’s about property rights

January 31, 2010

Waikato farmer Steve Meier isn’t the best advertisement for landowners in the debate with Transpower over pylons on their land.

Auckland lost power for several hours and if reports are correct, his actions may have been at least in part to blame.

But moving from the details of that farm and that farmer, to the general principle, do farmers have a point in the on-going debate with Transpower?

The Herald editorial doesn’t think so:

It is the luck of the draw that the pylons are on their land and that more will come in the planned $830m network upgrade. Like the homeowners who will be uprooted by the Waterview Connection roading project, the farmers are paying the price of living in the middle of the route to the future; unlike the homeowners, they are not entitled to compensation, which is hardly unfair, since their actual loss is minimal.

But it’s not the actual loss that’s in question. It’s property rights.

If any landowner has to put up with other people, or the state, doing or putting things on their property, it compromises their property rights, regardless of whether it’s a quarter acre section in town or several thousand acres in the country.


Yes, Yes, Yes, No Crisis

June 11, 2008

Is this the Clayton’s crisis – the one we have when we’re not having one?

 

Energy Minister David Parker  says we’re not having one:

 But Transpower CE Patrick Strange  says there is.

We as an industry are very concerned. We are risk averse, so things concern us….it is serious when we call on New Zealanders to be prudent with their [power] use. For the electricity industry, we call that serious.”

 

At a meet the candidates meeting when he was first seeking election in Otago in 2002 Parker said one of the reasons he was standing for Labour was because of Max Bradford’s power reforms.

 

When questioned at another meeting when he was an MP about why he hadn’t done anything to change the system he was so opposed to he said something to the effect that once something was entrenched it was too hard to change.

 

 He has a point there, sometimes when a policy is embedded it is difficult – for practical or political reasons – to do much about it and it becomes one of those dead rats MPs and their parties have to swallow. That is the reasoning National is giving for agreeing to continue with interest-free student loans – there would be no real practical impediment to changing the policy but it would do too much harm politically to even contemplate it.

 

 The power system is different – it was a very unpopular policy when it was introduced and if anything it’s even more unpopular now.

 

 The idea of competition might offer consumers choice in theory, but in practice it’s too much hassle to exercise that choice and change your energy supplier unless you’re really, really unhappy. Even there what do you gain when you get six from one and half a dozen from the other?

 

 The other flaw is that the companies are businesses which need to make profits which they do by selling power. There is nothing wrong with profits and a profit motive but power companies make a profit more easily when demand is high because the price goes up so there is absolutely no incentive for them to encourage conservation or alternative generation. The more profit they make, the better the dividend the Government receives from its SOEs so its desire to avoid the political consequences of power shortages conflicts with its desire/need to receive more money.

 

 And let’s not forget there’s an election soon.

 

The Government is understood to be concerned that the elderly in particular may panic and try to conserve power at the expense of their health. It also does not want to be responsible for telling voters in an election year that they must cut their consumption.

Parker yesterday denied downplaying the situation, saying the Government had been “absolutely transparent” about the hydro-lake levels.

He admitted politics did play a part. “I suppose politics is involved in everything in an election year.”

[Update: Truthseekernz opines that the marekt model isn’t working and points to energy consultant Bryan Leyland saying the market system has cost consumers $7b over 10 years.

 

And Keeping Stock comments on the irony of power companies campaigning for power savings.]


Hickey accepts Cullen’s challenge

May 28, 2008

Bernard Hickey blogged this morning in Show Me the Money that every day from now until the election he’s going to accept Michael Cullen’s challenge to identify some pointless or wasteful Government spending that could be cut.

 

This includes spending by state-owned enterprises and jobs being offered by all manner of agencies and quangos. This is going to be fun because there is a lot of low-hanging fruit.

The good doctor believes the government runs a tight ship and critics won’t be able to find much in the way of cost savings from government spending to fund tax cuts or to help reduce the inflationary pressures that are keeping interest rates high. He has challenged National and any other proponent of income tax cuts (although I am not one right now) to explain how they will be able to afford tax cuts without massive cuts in government spending and services.

My sense is that nine years of strong government spending growth have created an atmosphere where bureaucrats employ extra people, pay for more consultants and launch more projects without asking the basic question: Do we really need to do this and will we create more value for the economy by doing this than by allowing the private sector to use these resources?

 His first example was Transpower’s new website winterpower watch which was difficult to find and didn’t tell him what he needed to know.

 

He asked for other suggestions and this afternoon added Housing New Zealand staff’s weekend conference at the luxury Tongariro Lodge which has been widely reported in the MSM and on blogs including kiwiblog  and No Minister.

In the same post Bernard wonders why the Government is looking for a fulltime web communications advisor.

 I don’t get it. I can understand IRD and ACC and a few other government departments that deal with the public need fulltime webmasters to run sites that provide services to the public. That could actually be quite useful and efficient.

But the MSD is an policy advice body. It deals with ministers and other bureaucrats. Surely it’s not that hard. You put all the advice and research up on the site using the basic publishing systems already there. It’s either publicly available on the Internet or it’s available only to other bureaucrats via an Intranet. Do we really need someone doing this fulltime?

Here’s the most interesting gem from the job description. It explains why the MSD wants a fulltime web manager.

The Knowledge Sharing and Communications unit is based within the CSRE group in National Office and has a team of nineteen staff. It includes a Library team to provide effective and proactive library and information services to all Ministry staff.

Just the communications unit within the MSD, let alone the MSD head office, has 19 staff!

Add these examples to the areas ripe for culling suggested by The Hive and me and the potential for tax cuts might increase from just enough for a block of cheese to an amount that could buy a whole cow.

 

 

 


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