Open mike 11/12/2024

Written By: notices and features - Date published: - 50 comments
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50 comments on “Open mike 11/12/2024”

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  1. 1

    I've watched The Working Group's Final Show 2024, with guests including Gerry Brownlee, Moana Maniapoto, Willie Jackson, David Seymour, John Tamihere and others.

    They were all asked highlights/low points.

    Two comments were made that highlighted a key difference in views.

    Maniapoto mentioned "being good ancestors".

    Tamihere was asked about the rise of the Maori party scaring centre NZ making it hard for Hipkins to win. His reply was he doesn't care about Hipkins, what they are building is a 'forever movement. 25% of babies born will whakapapa to their Maori descent. When will they build bridges to us as they burnt the existing ones down.'

    Contrast that with the tory obsession with debt, tax, surplus, balance sheets and other esoteric fictions. Too narrow a focus on one or two year forecast.

  3. 3

    Some good news as to milk prices for 2025 (rising demand in SE Asia) are up to a record $10 (many have been struggling with the high cost of debt and higher feed and fertiliser cost).

    Of late, the industry has been in transition – maintaining production with lower herd size and Fonterra moving to focus on higher returns for milk production (sell off of brands) as preparation for the future of farming under our future UNFCCC arrangements.

    https://www.treasury.govt.nz/publications/research-and-commentary/rangitaki-blog/feu-special-topic-outlook-dairy-exports

    2. 3.2

      Good news for whom? Not the general NZ public for which dairy has become a luxury item. There's always an excuse to sting us with global rates.

      1. 3.2.1

        One wonders why no one has determined on supply to the local market at a lower price than the 95% exported.

        They could do half rate here and it would have little impact on the total return.

        But export revenues and the jobs etc.

        1. 3.2.1.1

          Trade agreements likely prevent local subsidisation.

          I've always felt this is a crock though as the local dairy can buy stuff cheaper from the supermarket than they can directly from the wholesaler. Seems corporate discounts are fine when they want them to be but not OK when they do not.

    4. 3.4

      It's a far smaller company, diminished over a decade.

      I sure hope – for NZ's sake – this is the upturn point.

      The comparison to Kerry's in Ireland is still important.

    1. 4.1

      Plus huge costs for entirely necessary refurbishment of the port facilities, and almost certainly some work to accommodate the new expensive ferries.

      But the Nats are ignoring the on-land costs.

    1. 5.1

      Still fixated on brown women, I see.

      Debbie Ngarewra Packer would be a far better finance minister than Nicola Willis even if that is a very low bar. Just ask the small businesses in Wellington how the economy is going.

          1. 5.1.1.1.1

            I am from Miramar, I don't want a second tunnel. The busses are fine because they go through the bus tunnel not the car tunnel.

            The problem isn't the tunnel, it's the traffic lights by St Marks School because there are a ton of people trying to go E-W and N-S. It all backs up from there and back through the tunnel into Ruahine Street.

    2. 5.2

      Try reading the article properly.

      Then tell it to the source.

      Outside Parliament, Packer stood by the figure, which came from a 1News debate between Act Leader David Seymour and journalist Bernard Hickey, who writes the The Kākā, a popular Substack.

      Hickey pointed to the 2023 reports from IRD and Treasury on the effective tax rates paid by ordinary New Zealanders and the wealthiest households.

      “The estimate is that the richest 40% of New Zealanders only pay an effective tax rate of 10% because of a lack of that capital gains tax,” Hickey said.

      “We could have gotten $200b in extra tax revenues if only there had been a fair tax system which meant that capital gains were taxed at the same rate as every other type of income,” he said.

      Hickey told the Herald that the figure had been a “broad estimate of the backward looking capital gains from 2017 at that point when there could have been a CGT to 2023″.

      “If there had been a CGT and if those capital gains had happened, applying the top tax rates or 33% and 39% then you would have had that number,” he said.

      He went on to add

      if there had been a CGT, there probably would have been less capital gain because behaviour would have changed.

      And that such periods (of high CG) are not that common

      “To assume you would have that number of capital gains every year in a straight line is ambitious to unlikely,” he said.

  7. 7

    if there had been a CGT, there probably would have been less capital gain because behaviour would have changed.

    Yes, investment into productive industries would have been far greater.

    But when we have a PM who recently made around $900,000 tax free by selling property, the example is not lost on all the speculators.

    As someone once said, the NZ economy is real estate, with other bits tacked on.

    Oops, meant to be a reply to SPC at 5.2

  9. 9

    The Post has an opinion article from Craig Rennie, NZCTU economist, on Treasury reframing the government books to look better than under the current system. Paywalled, would love it if someone could give an archived link, I'm reading and quoting from the library paper copy in front of me.

    " We were supposed to go from deficit to surplus in 2028. Chris Bishop said the government is 'not going to be a slave to surplus'…The government books are even more in the red than forecast -by $669 mi inside just 3 months…[so the deficit for the year may be] nearly $3 bi worse than expected. A larger Operating Balance before Gains and Losses translates into…more borrowing or bigger cuts to government spending."

    Rennie points out the obvious downwards financial spiral of more borrowing, less government spending, growing unemployment and loss in consumer confidence, which lead to lower tax intake.

  11. 11

    Fascinating. One year on from tearing up a really good deal on future proofing the Cook Straight link, it's clear Willis has zero idea what to do. She has dithered for a year and now put this out for consultation, a new entity set up now conveniently removed from herself.

    It's worth noting she made the decision to cancel IRex with no consultation and to replace it she now wants consultation.

    All the while undermining Kiwirail by creating huge uncertainty and creating a new ministry with which to stop Kiwirail doing anything:

    https://www.rnz.co.nz/news/political/536339/watch-live-government-won-t-reveal-cost-of-new-cook-strait-ferry-plan

    1. 11.1

      Ferries? So only that they plan to buy 2 new ferries some day but don't know how much or who will build them.

      So apart from forming a new committee to explore things, and maybe consult a bit and giving a new job to Winston Peters to lead things,

      we are no further ahead that we were yesterday or last month or a year ago.

    2. 11.2

      Well the very best way to show how brilliant you are at all things economic, is to not give any information on, well , anything really.

    3. 11.3

      Willis criticised Kiwi Rail for hiring outsiders when they were the experts, then hired consultants basically to agree that they can delay replacement with an intensive (costly) focus on maintenance (and toleration for fewer sailings in future years).

      There is nothing new here, just removing Kiwi Rail from the decision-making process. Like the ports it is to be managed into serving the new company (obviously set up to operate the ferries).

      It reminds one of the late 1970's when NZPO had to end its development plans to run its own courier post and instead provide the base service to private companies to profit from.

      New Zealand Couriers was bought by Freightways Group in 1977 just before this development. Freightways continued to buy up its competition during the 1980s, and its dominance made it difficult for new players to get established after road transport was deregulated in 1982–83

      From around 1980 courier services were allowed to compete with the government-owned Post Office.

      Not exactly, coz the PO was not allowed to operate a courier service.

      New Zealand Post joined the courier market in August 1989 as CourierPost, and later introduced ‘track and trace’ technology.

      https://teara.govt.nz/en/mail-and-couriers/page-5

      Now Freightways and NZPO have 80% of the market.

      Here it seems there will be a second ferry operator – one that could be sold off by the government.

    4. 11.4

      They probably tried desperately to find some 2nd hand ferries over the last year… now that ship has sailed (as predicted by experts), it's all back to square one (minus at least 500 million NZD).

      Also interesting to hear it will be a lot cheaper than the old plan, without actually having done anything yet (no new ship contracts negotiated, probably not much planning on the new new terminals either).

      Are they getting smaller boats? Are they rail enabled?
      What has been taken from the previously planned terminals to make them significantly cheaper (on paper)?

      If the boats / terminals are smaller, does it mean the Coalition expect less economical growth? To be fair, they're working hard on that. Or is there going to be an infrastructure bottleneck leading to higher transport prices? How future-proof is the new solution going to be?

      No wonder they don't want to provide any specific information. They look like complete muppets since the announcement last year and clearly continue to do so. I'm a bit surprised Winston sticks his neck out for this shit-show, maybe they called his new role the "Transport-Tsar" (see Yes, Minister).

    5. 11.5

      They say rail freight will be continued, but not how.

      They say Picton Port and Wellington Port will have to contribute, but there's no commitment or commentary from them. It's a necessary share.

      I think it's good it will be a standalone company. It will open private investment potential up.

      Willis has made such a dreadful mess of this and there's still a high chance of a massive accident. Poor.

  13. 13

    That was interesting. Immediately after Question Time Kieran and Chris Hipkins questioned the Speaker about his ruling on the Ammendment made by the Govt re the Public/Private position in relation to the Fast Track Bill.

    Hipkins has very impressive grasp of the issue and marvellous fluency. Top man!https://videos.parliament.nz/ from 14:54

    Bishop put his foot in it by saying "the Speakers ruling was what what the Government wanted."

  14. 14

    Maori representing more than 80 iwi in the National Iwi Chairs' Forum have sent a letter to Chas III, asking for

    'intervention to ensure that the [NZ] government does not diminish the Crown's honour. Please remind them to respect their responsibility to act as an honourable partner on your behalf. We would welcome an opportunity to have regular contact with you or your office to build a closer relationship and realise the Tiriti “promise of two peoples to take the best possible care of each other" '.

    Interesting that they chose international media, The Guardian, to break this news.

  15. 15

    Great Newsroom interview with Robb Carr on the Climate Change Commission in his term there as chair, and in NZ's carbon targets in the future.

    Quoting Carr: “The commission has consistently said, to get this transition to work at the pace and scale we believe it can and should for all of our benefit, yes you need to price emissions and you need to engage with communities and you need to figure out the enablers and barriers and address them.”

    He rips into fossil-fuel industry misinformation, says the time for tree-planting is over, and says agriculture already has tools to reduce carbon footprint, but their uptake varies across farms. And says the Commission created models and data from the bottom up to model the economic and environmental impacts of sustainable energy.

    “I’m just absolutely convinced now that, particularly in the energy sector, for a small island nation to have the possibility of being energy independent in my lifetime… Those technologies weren’t there even 10 years ago at an affordable price."

    1. 15.1

      Incoming news: Federated Farmer's wants the Commerce Commission to act because BNZ won't finance fossil fuel gas station businesses after 2030. Coalition members of the government Finance and Expenditure Committee are upset by BNZ's actions. Chloe schools the government members:

      "Chloe Swarbrick, … a committee member, said the National and Act party members were essentially arguing against free market capitalism.

      BNZ’s decision not to lend to fossil fuel businesses is a commercial decision made by a private company in response to the realities of climate change and existing emissions reduction policies."

      Ouch.

      1. 15.1.1

        This calls for an immediate nationalisation of BNZ (what’s in a name anyway?) to force it to fund their pet projects, which is essentially what they’ve been doing all over the place – the recent CoC-up with the Marsden Fund is a case in point.

      2. 15.1.2

        I think we have found the real reason why the CoC is upgrading Kiwibank.

        The government wants it to be able to handle a lot of rural accounts.

        1. 15.1.2.1

          I can see some very messy situations coming up where banks remove funding / sell up sheep farmers. It's very much a sector that's not viable any more and the recent restrictions on forestry conversion will have reduced a lot of farmer's equity, which makes for difficult conversations with the bank manager.

          The Farmers Union are getting exercised about this because they can see banks becoming reluctant to lend to some farming sectors because of their viability and sustainability.

          We've had State intervention in rural (and house mortgage) lending before, although generally in a development situation. Won't stop sunset industries begging the government (actually taxpayers) to save their sorry arses (and lifestyles)

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