Fonterra’s milk-price news is soured by chairman’s critique of the co-op’s earnings performance

At last a ray of sunlight into  the  country’s cowsheds:  giant  dairy co-op Fonterra has lifted its forecast farmgate  milk price  to $6.30-$6.60kg/MS, up from $6-$6.30, on the back of   strong  global  demand.

The good news extends to next season, with ANZ  economists  predicting – because dairy commodity prices are improving more quickly than expected – the  forecast for  2019-20   could go as  high  as  $7.30kg/MS.

And there is  something  else  Fonterra suppliers might get a  bit of  a glow from: the  recognition   by  Fonterra’s  top brass  that the  co-op  has not been  performing anywhere  near  where it should be.   They’ll  be looking for a   sharp improvement,  even  if  the  co-op has a long  way to go to  match  the   achievements of  smaller outfits   like  A2 Milk and Synlait.

Kelvin Davis dishes up an $8.2m serving from the PGF trough for projects in his home patch

The Point of Order Trough Monitor was keeping an eye on Tourism Minister Kelvin Davis, while he was back on his home patch yesterday dispensing largesse from the Provincial Growth Fund.

The latest offerings amounted to $8.2 million.   This brings the grand total of PGF funding for the region so far to almost $100 million.

Davis issued a press statement to affirm what we suspected: he was on a mission to further flaunt his government’s munificence.

The statement was headlined Government investment in Far North’s future.

The political pitch dripped with promise of a better tomorrow: 

Chorus of transgender protest greets decision to follow democratic process – but how big is the choir?

In a press statement headed Shock at Minister decision to defer birth certificate change, trans community organisations have expressed shock at Internal Affairs Minister Tracey Martin’s decision to defer legislative proposals to introduce an administrative process for changing gender markers on birth certificates.

Ahi Wi-Hongi, National Coordinator of the transgender organisation Gender Minorities Aotearoa, said this issue is not new.

“It is over 11 years since the Human Rights Commission’s Transgender Inquiry called for a simpler process.”

It might surprise Wi-Hongi to learn there was shock in the general community when the public learned what MPs on a select committee had done.  They had endorsed proposals not only to allow public records to be changed at the behest of an individual who wanted the change, but to allow these changes to be made without any check on the validity of or justification for an applicant’s request for change.  

The Trough Monitor: speech-muzzling Massey will benefit from the latest serving of PGF money

The Point of Order Trough Monitor alerted us today to a handout which will benefit – among others –  the university which banned former Opposition leader Don Brash from its campus on spurious security grounds.

The ban brought Massey’s compliance with Section 161 of the Education Act into question, although Point of Order was left wondering  who (if anybody) actually enforces the law which deals with academic freedom:

It is declared to be the intention of Parliament in enacting the provisions of this Act relating to institutions that academic freedom and the autonomy of institutions are to be preserved and enhanced.

For the purposes of this section, academic freedom in relation to our universities includes —

The freedom of academic staff and students, within the law, to question and test received wisdom, to put forward new ideas and to state controversial or unpopular opinions.

In the performance of their functions, the councils and chief executives of institutions, Ministers, and authorities and Crown agencies “shall act in all respects so as to give effect to the intention of Parliament as expressed in this section”

This aspect of the legislation is incorporated in a Massey University policy document which informs staff members of the standards of conduct expected of them as university employees.

Never mind.  There’s plenty of money in the Provincial Growth Fund and it has to be spent somewhere.

Pressure builds as the Brexit deadline approaches

LONDON CORRESPONDENT:   As Britain prepares to formally leave the European Union on March 29, little seems to have changed despite frenetic activity.   A dozen or so MPs have defected to form a new cross-party political grouping; there are fresh challenges to Labour party leader, Jeremy Corbyn …

But the choice facing the UK is exactly the same as it was at Christmas: accept lousy terms in return for a smooth sort-of-exit or leave without an agreement and try to patch up the useful bits of the broken relationship.

The hard choice arises because the EU is not offering reciprocity in the new relationship.  It wants the UK to compromise its sovereignty, comply with EU market rules, limit its ability to trade freely with other countries and pay money as the price of preferential access to each other’s markets.

NZIER numbers are grim for Taranaki householders but Energy Minister doubts they are the real oil

A report from the highly respected  NZ  Institute  of  Economic  Research  contended  the  Ardern government’s ban  on new offshore  oil and gas exploration will reduce the country’s GDP by between $15bn and $38bn, raise prices and shrink investment during the next 30 years.

The $28bn GDP loss incurred in NZIER’s mid-range scenario, if the industry kept operating and achieved only medium exploration success, is roughly equivalent in annual terms to the government’s capital expenditure on schools, or its annual spending on disability services. In Taranaki, real regional GDP falls by between 35% and 53% – or $16bn to $40bn – out to 2050.

A  powerful  argument, one would think,  to  re-consider the  ban?

No  sign of that   from the  government.   It is  sticking to  its  argument the ban, which also bars any onshore exploration other than in Taranaki, is necessary to set a long-term direction for the country’s climate change efforts.  Existing reserves and exploration permits are deemed sufficient to ensure security of gas supply for industry and power generation.

Capital gains tax: hear what Peters (as PM) has to say about something NZ First opposes

Anticipating the release of the Tax Working Group’s report, Point of Order on Tuesday said the  question  of a capital gains tax being endorsed by the government is whether   the concept can be sold to  NZ  First.  Its leader,  Winston Peters,  in the past  has been  vocal in  his  opposition to a  broad-based  capital  gains tax.

Early yesterday, a few hours ahead of the report’s release, the NZ Herald echoed our thinking.

Whatever Sir Michael Cullen recommends in his final Tax Working Group report today may be off the table if Labour can’t get New Zealand First and Winston Peters’ support for it.

Peters has made it clear in the past he is not a fan of a capital gains tax.

Just before the 2017 election, he told TVNZ’s Q&A that a capital gains tax was “off the table.”

“The two factors are – it doesn’t work and the second thing is there is no fairness if you haven’t got capital losses as well.”

The Trough Monitor: dip in for low-emission transport projects and pest eradication

The  Point of Order Trough Monitor,  which keeps a check on how taxpayers’ money is being invested, spent or given away by the Ardern Government, has alerted us to a ministerial invitation to dip snouts into the swill provided for low-emission transport projects.

The latest helping is worth $3.5 million.

Energy and Resources Minister Megan Woods,  the first Minister of the Crown to trigger the Trough Monitor this year when she announced a record boost of more than $11 million for low-emission transport, today opened the Low Emission Vehicles Contestable Fund for a new round of applications.

A few days earlier the Provincial Growth Fund was tapped – perhaps plundered is a better word – to expand predator control in regional New Zealand and bolster the operations of Predator Free 2050.

A $19.5m investment is involved. One objective is to find ways of reducing the use of 1080. 

Phil was full of his housing accomplishments – but see how the demand has burgeoned

Our attention was drawn to the demand side of considerations, in the latest  Public Housing Quarterly Report, after Phil Twyford alerted us to its publication.

The report tracks progress and shares data on public housing and transitional housing supply, homelessness programmes, and other housing support.

The report includes data from the Housing Register, which captures the housing requirements of people who have applied for public housing through the Ministry of Social Development.

There were 10,712 people on the register at December 2018, a rise of 12% during the quarter.

More glaringly, it was 4530 more – an increase of 73% – than the numbers on the register in the December quarter of 2017, when a new government was settling in with a commitment to providing housing for those who need it .

Grass on the A2 side of the dairy fence is looking greener – and the profits plusher

The  contrasting   fortunes of  Fonterra  and  A2 Milk came into the  spotlight   this  week,  after the  latter  reported a  startling 55%  rise in  half-year net profit  to  $152m.  Fonterra  shareholders will be  ruefelly recalling  their  company’s  performance last year  when  it  reported its  first-ever  net  loss  of  $196m.

A2 Milk  shareholders  are  marching to a  very  different  tune.  Despite  one market  analyst  reckoning its shareprice had  become over-priced, buyers  pushed  it up  by  more than  a dollar to  $13.95  as they absorbed  news  of   strong sales growth in all key product segments – infant formula, liquid milk and milk powders.

Sales of infant formula totalled $495.5m for the half – a 45.3%  increase on the previous half, driven by share gains in China and Australia.

The company is accelerating its investment in building brand equity through enhanced marketing campaigns in its key markets of China, US and Australia, alongside continued investments in R&D and further development of its intellectual property.