CTU economist shakes the confidence we place in confidence surveys

CTU economist Bill Rosenberg has pitched into the question of ‘business confidence’ and whether it is really falling.

Writing in his 100th CTU Economic Bulletin, he asks whether business confidence surveys are anything more than opinion polls among some chief executives about what they think of the Government of the day or to get their impressions (“which may not be any more accurate than yours or mine”) of where the economy is going?

Rosenberg acknowledges that business decision-makers need confidence when thinking about investing or hiring new staff, to decide if they can take a punt on whether they can increase sales to justify the additional cost.

But in practice confidence cannot be directly observed and survey results are affected by many things that may be irrelevant to those decisions, he says.  Its relevance therefore comes down to whether stronger investment and employment follows higher confidence ratings.

The evidence that it does do this “is at best weak; often it is just not true”.   Continue reading “CTU economist shakes the confidence we place in confidence surveys”

Is Twyford making a case for “three strikes and you’re out”?

When Labour’s Phil Twyford put a written question to Amy Adams, the Minister Responsible for Housing New Zealand Corporation, just before the general election last year, he was given a straight answer.

He asked for the net number of disposals of Housing New Zealand properties or houses since 18 October 2016, if any?

In reply, Adams said Housing New Zealand informed her it only records and reports information by month.

“For the period 1 October 2016 to 30 June 2017, there were 1,094 disposals and 1,275 additions, resulting in a net increase of 181 houses. This data is subject to final audit.”

Continue reading “Is Twyford making a case for “three strikes and you’re out”?”

Forestry reappraisal triggers memories of a time when NZ was a world leader

Export log prices  have  climbed to their  highest level in  25 years, reaching  $135 a  tonne, according to  reports  this week.  It’s a  boom  which authorities believe will not be shortlived,  because  local mills  are  having to compete hard  to secure supply  for the domestic  construction market against exporters seeking to meet strong demand from China.

Forestry may have had a  bad rap  as  a  result of  recent floods  which have  deposited  large  quantities of  wood on farms and  beaches on the  East  Coast. It’s an industry, however, which  employs  20,000 people  and  annually is worth about  $5bn, or about  3% of GDP.

The industry’s future is being reappraised, partly because of the NZ First initiative  to   promote the  planting  of 1bn  trees,  but also partly  because other  pillars of  the  country’s  export  framework—dairying, for  example—face  the implications of  reaching “peak cow”  (as  Primary Industries  Minister Damian  O’Connor puts it).

In  seeking to  regenerate  enthusiasm for  forestry,  the  Minister of Forests,  Shane  Jones,  in effect has to  start from scratch, re-establishing  a  ministry  (in Rotorua)  and  rebuilding  the   expertise in  silviculture  for which  NZ  was once renowned.

Paradoxically it was a  Labour government which abolished  the Forestry Ministry that had been responsible for  the  development  of the huge plantation  forests — in Kaingaroa, the East  Coast  and  Otago —  which  not only  supported the initiation of the export log trade, but also the  wood  processing  plants at  Kawerau  and Tokoroa, and sawmills  elsewhere.

When  the Rogernomes  entrusted  the  industry  to  “market forces”,   they in  effect  buried  the  NZ  Forestry Service’s  goal  of  making  wood products  NZ’s biggest export industry   by  2020.

With the disbanding of the ministry  NZ largely lost the fourth generation of foresters brought up by post- war figures like Bert Entrican and Lindsay  Poole,  who had helped make this country a world  leader in forestry.

They lost, too, the institutional memory behind the planting of  the Gisborne and Nelson forests on erodable land, knowing it should never have been clear-felled, an issue not in the minds of forest companies eager  to make a buck.

Health targets come down – and so the critics fix their sights on David Clark

Health Minister David Clark this week dropped the nation’s health targets.

The  targets  (which a previous  Labour  government had  started) had been  re-focussed  by the  National  government in 2009 on six  areas: increased immunisation, faster cancer treatment, shorter stays in emergency departments, improved access to elective surgery, helping smokers to quit and raising healthy kids.
Clark  says they have not been measuring outcomes — instead, they are measuring  activity.

His move to dump them – which apparently did not go to Cabinet – was attacked  by the Opposition, which  said dropping the targets meant there was less accountability and this would lead to more illnesses and deaths.
Continue reading “Health targets come down – and so the critics fix their sights on David Clark”

Housing Minister Twyford is told to be succinct – but quality is beyond the Speaker’s control

Speaker Trevor Mallard chided Housing and Urban Minister Phil Twyford yesterday for “developing … the habit of putting additions on answers after he has answered the question”.

Parliamentary questions should be succinct, Mallard reminded the Minister. The answers should be succinct too.

And once a question has been answered a Minister doesn’t need to add to it, “especially in a way that’s likely to lead to disorder or discomfort in the House”.

That’s a nice way of saying Ministers shouldn’t embellish their responses with politically charged taunts.

Play the ball, not the player, in effect. Continue reading “Housing Minister Twyford is told to be succinct – but quality is beyond the Speaker’s control”

Why Brexit will be well down among EU summit concerns (except for the British)

LONDON CORRESPONDENT:  As Europe drifts into a hot and torpid summer, there are signs that politics are not what they used to be.  Events are harder to manage when the balance of opinions underlying political formulae change and rising forces must be accommodated. Nowhere more so in dealing with migration – or the underlying questions of identity and society which it poses.

A New Zealander going to Europe after a long absence cannot fail to notice how different the streets of the cities look.  But the numbers show that there is a strong case to be made for the capability of modern societies to assimilate large numbers with great speed and success.

The accompanying political correctness can be tiresome and, to some, offensive.  The indigenous minorities which feel they have been crowded out have so far been safely ignored (a recent documentary on an obscure London regional TV channel was entitled ‘Last Whites of the East End‘). Continue reading “Why Brexit will be well down among EU summit concerns (except for the British)”

From the flight deck at Air NZ to the cream of the country’s companies?

Shane Jones might trample over ministerial conventions but his comments  have  resonated beyond Wellington and especially in the regions.  First he  had a  swipe   at  Air NZ which, apart  from the main trunk Auckland-Wellington-Christchurch, is expensive.  Then he hammered Fonterra, voicing what many, if not most, dairy farmers would say, about the  giant  co-op.

Now, if reports circulating in the farming community are confirmed, Jones might have a dual target since Air NZ’s Chris Luxon is being mooted as a possible replacement for Theo Spierings as CEO at Fonterra. Continue reading “From the flight deck at Air NZ to the cream of the country’s companies?”