Social Credit and the Taxpayers’ Union’ find common ground – but on an electoral issue rather than monetary reform

Social Credit – yes, we have found signs of life – is braying that the Taxpayers’ Union has started promoting Social Credit policy in the run up to this year’s general election.

It’s a fair bet it is not monetary policy on which common ground has been found.

No, it’s electoral reform.

The Taxpayers’ Union on Friday called for the adoption of Recall, a process that would enable voters to force elected representatives to stand down and face a by-election.

Social Credit is chuffed because Recall has been a central plank of its policy for more than 40   years.

A Recall poll could be invoked in cases where MPs or local body politicians were acting contrary to the promises they made to voters during an election campaign, or where there was a substantial level of disquiet about their performance.

The Taxpayers’ Union announced last Friday it had launched a joint campaign with the Auckland Ratepayers’ Alliance and Rodney-based Northern Action Group calling for Labour and National to include the introduction of a recall option in their election manifestos’ local government policies.

Its press statement noted that Local Government New Zealand had confirmed recall elections were contained in LGNS’s 2017 “Local Government Manifesto”.  The foreword had been written by the then LGNZ President, Lawrence Yule, now Shadow Local Government Minister. Continue reading “Social Credit and the Taxpayers’ Union’ find common ground – but on an electoral issue rather than monetary reform”

US election campaign: virus shrinks the hoopla and strips Trump of his ability to manipulate crowds

Americans are midway through the political convention season leading to the elections on November. This time, tradition has been largely discarded. Last week the Democrat convention was made for television, adhering to medical advice on containing the Coronavirus.

This week the Republicans are having a bob each way with a mini convention attended by some 300 people before President Donald Trump “accepts” the party nomination on Wednesday.  He will be speaking from the White House. Why not?

The Democrats and supporters seemed pleased by last week’s affair which seemed more like a telethon. Speaker after speaker endorsed Joe Biden and his running mate Kamala Harris.  Only two speakers set the place on fire – first, Michelle Obama with a fiery attack on Trump, and second, her husband Barack, who at times seemed close to tears as he warned viewers of the dangers to democracy should Trump win again.

Biden gave a measured, sensible speech, light on policy but heavy on emotion. He disappointed the critics who expected him to depart from the script and wander off into highways and byways – a typical characteristic. Continue reading “US election campaign: virus shrinks the hoopla and strips Trump of his ability to manipulate crowds”

Trump’s (pre-Covid) economy gives clues for election strategy

One of the interesting things about the (pre-Covid) US economy was that, on the surface at least, it didn’t change all that much between Trump and Obama. Or so argues economist Pierre Lemieux in The Trump Economy: Three Years of Volatile Continuity for the Cato Institute.

His assessment on economic growth:

“Under Obama, the average annual growth [in real GDP per capita] starting in 2010 was 1.4%. Under Trump, it averaged 2.0%, though the upward trend slowed in 2019, falling to 1.8%, which is roughly the same level as 2017. These data are consistent with the continuation of a slow recovery from the Great Recession.”

And on labour markets:

“Overall, the poverty and unemployment picture improved slowly from 2009 to 2019, with no radical break when the occupant of the White House changed. The Obama economy and the Trump economy seem to be the same economy. This observation applies to many other measures of American prosperity”

OK.  An important general point – that presidents’ short-term influence on the economy is usually overrated and the influence of longer-term market and policy settings is underrated – is usefully made.  But you still ought to look at the changes in those settings to draw some conclusion about possible longer-term economic and political impacts.

Lemieux’s analysis identifies three substantial policy divergences between the two administrations.

Comprehensive tax reform in 2017 is the first.  This pushed down the cost of capital and increased investment. Lemieux cites evidence that it spurred economic growth in the following year by 0.8 percentage points.

But the tax cuts were not backed by reduced government spending.  So rising government debt, further boosted by Covid payouts, will require a response at some point.  The choice on how this is done – either spending restraint or higher taxes – remains a key dividing line between America’s political tribes.

The second divergence is on regulatory policy. Trump’s administration actually managed to stop (rather than just slow) the growth in the stock of regulation.

“… the Trump administration has roughly capped the total volume of federal regulations at, or slightly over, the 185,000 pages [in the Code of Federal Regulations] they comprised at the end of the Obama presidency”

The process was probably more shuffle than standstill but, even so, it represents a decisive change of intent from the sweeping regulatory surges in areas like resource use, financial services, healthcare and energy policy launched by enthusiastic politicians of all stripes and predating the financial crisis.  And it almost certainly needed a clear lead from the top (plus some excellent regulatory economists on the ground).

The third area is Trump’s break with the orthodox consensus on world trade.  

Managed stability has been replaced by an attempt to batter concessions out of China, win votes from the losers of globalisation, and challenge China’s bid for geopolitical hegemony.  The best you can say about the economics is that so far he seems to have got away with it (despite increased trade barriers reducing US GDP by an estimated 0.4%).

If you are a market liberal, you ought on balance to prefer the Trump mix – although you would be entirely justified in having some conniptions with regard to opportunism and lack of consistency.

And you might also want to use this analysis to evaluate how a Biden or Trump presidency might approach things after the November election.

First up, the case for more continuity.  Despite the rhetoric, both parties will at bottom be relying on workers and businesses in the private sector to generate post-Covid recovery by adapting to changed economic conditions.  Both are likely to spend freely to support those economically hurt by the pandemic (although it’s also reasonable to expect the winner to direct more pork towards ‘his people’).  Both are likely to favour strategic competition with China over market integration. No one wants to tackle the national debt before the market makes them do it.

And now the differences.  

Biden Democrats see a much bigger role for government in the recovery and are already talking about higher taxes on the usual suspects (business and the rich) to pay for extra spending on green subsidies, childcare and unionised jobs.  One can also safely predict a resumption of normal service from the regulatory bureaucracy. Trump and his allies seem less likely to take this path.

So in some ways, Covid might be clarifying the economic choices facing Americans  in November.  Which will surely be helpful after all that continuity.

Monitoring (or is it oversight?) gets good results in Westland but the Canterbury DHB requires strong medicine

Central government monitoring seems to have done the trick on one side of the Southern Alps.  Local Government Minister Nanaia Mahuta has declared she is satisfied “the close monitoring” of the Westland District Council by an Oversight Committee can draw to a close.

he had written to the council in July and September last year, expressing concerns about poor processes, dysfunctional governance and management, non-compliance with policies, and natural hazard management. Later in the year she established an Oversight Committee comprising key government agencies to support the council as it worked to improve its performance.

But she seemed curiously disinclined to call it monitoring.

In a statement on November 26 she said:

“The Council has heard the extent of the concerns raised and has taken steps to respond. Westland have demonstrated they are establishing governance committees to provide transparency of decision making, putting in systems and frameworks for policies and processes, and learning from pas t experience”.

But she said there was benefit “from a level of oversight” and had tasked an existing group to provide support to the council to support necessary changes.

Continue reading “Monitoring (or is it oversight?) gets good results in Westland but the Canterbury DHB requires strong medicine”

More than just a favoured few should benefit from lending and wage subsidy changes to help businesses

 The business sector generally– rather than a few individual companies being favoured with grants or loans from an array of troughs – are the beneficiaries of two new government  pronouncements since Point of Order last checked the Beehive website.

First, the Government is offering to underwrite larger bank loans to businesses through  its Business Finance Guarantee Scheme.

The cap on loans offered under the scheme is being raised (hugely) from $500,000 to $5 million and the scheme is being broadened to enable businesses to use the loans for purposes beyond cashflow.

Second, eligible businesses can apply for a two-week wage subsidy of up to $1,171.60 per worker from today.  This is designed to help cover wages as part of the government’s plan to protect jobs and support the economy.

Applications for the new wage subsidy will be open on the Ministry of Social Development website from 1pm today.

Finance Minister Grant Robertson and Social Development Minister Carmel Sepuloni say the new wage subsidy and the current Wage Subsidy Extension – which is open for new applications until 1 September – will support an estimated 930,000 jobs.

But here’s the thing:  the government has put aside more money for wage subsidies than is being taken up.  Continue reading “More than just a favoured few should benefit from lending and wage subsidy changes to help businesses”

It’s the beta-casein and premium product that makes a big difference between a2 Milk and Fonterra

Investors  this week took  the  phenomenal result  for a2 Milk   in  their  stride, but  it  may have produced  a few blinks  round   the   nation’s  dairy farms,  particularly  with  the  farmer-suppliers  of  Fonterra. 

Take – for example – a2 Milk’s  earnings  per share  of  52.39c  and contrast them with Fonterra’s 17c per share  in 2019,  or  its  net  profit  of $385.8m   versus  Fonterra’s loss  of $605m.

There  are  other  mind-blowing  figures  from  a2 Milk: total revenue  of  $1.73bn, up  32.8%; ebitda of $549.7m, a  rise of 32.9%;  and operating cash flow of $427.4m. Not to  mention  a  cash  mountain  it has  built up of  $854.2m.

As  one commentator has  put it, a2 Milk with its record growth intrinsically linked to the China market, is a success story   New Zealanders should both celebrate and learn from.

Even  its  Dunedin founders through its  early  years  from 2000,  Dr  Corrin McLachlan  and  Howard  Paterson, might be  astonished  at  its  latest  result.

Continue reading “It’s the beta-casein and premium product that makes a big difference between a2 Milk and Fonterra”

Parker doubles up on his response to court ruling but the PM has yet to post news of jobs for Simpson and Roche

Latest from the Beehive

It’s there now,  up on the Beehive website – the official pronouncement that the Government is increasing the number of defence force personnel supporting the Managed Isolation and Quarantine System and maritime border.

The statement sits alongside –

  • A typical spending statement from Shane Jones (the Government will invest $14.6 million in upgrades to Route 52 between Central Hawke’s Bay and Tararua District);
  • News from Damien O’Connor that the Government is investing $6.8 million to help upgrade the main road through Motueka;  and
  • News from Winston Peters and Ron Mark (New Zealand will deploy additional personnel to the Republic of Korea, increasing the size of the New Zealand Defence Force deployment there from six to nine personnel).

Around 500 more defence personnel are being deployed closer to home as the government hastens to buttress the Managed Isolation and Quarantine System and more firmly secure the maritime border. This lifts the total to about 990 defence personnel at managed isolation facilities and will bring the total Defence Force personnel supporting the Covid-19 response to around 1200 (the largest military contingent since Timor-Leste, the government wants us to know).

But we can find no official written record of something else announced yesterday:  Helen Clark’s former top adviser, Heather Simpson, is being brought in to lead a new group that will support the Ministry of Health as it ramps up testing at the border. Continue reading “Parker doubles up on his response to court ruling but the PM has yet to post news of jobs for Simpson and Roche”

Great news from Kupe (if drilling permits could be acquired) – NZ has bigger gas and oil reserves than previously reported

In these  days  of  doom  and  gloom  over the  impact of the  Covid-19  pandemic, any outfit  which can trigger  a  ray  of optimism   deserves a  salute  from  the  rest  of the  country.

Fisher & Paykel  Healthcare, for  example,   reported  this  week that in the  four months to  July 31 it recorded a 390% lift  in the  sales of  its hospital  respiratory care  products,    compared with  sales in the same period  the previous  financial  year.  This  remarkable  performance reflects a changing trend in clinical practice to lead with nasal high flow therapy for treatment of Covid-19 patients in hospital. Global  sales   for  the Auckland-based  company of both invasive ventilation and Optiflow consumables in July have returned to similar levels to the peak it saw in April.

No  wonder  this   is   the  top capitalised   company  listed  on   the  NZX, valued at  over  $20bn.

In a  very  different  field,  but  like  the  F&P Healthcare report barely getting a mention  in the mainstream  media,  was   the  announcement   that  reserves  in  the  Kupe  gas and oil field  offshore  in  Taranaki  are  significantly   greater  than previously  reported.  This  means the  field’s  life  is  likely  to be  extended beyond  the 15-20  years  expected  when  it first  came on  stream   in  2009. Continue reading “Great news from Kupe (if drilling permits could be acquired) – NZ has bigger gas and oil reserves than previously reported”

Fingers crossed about the border being made Covid-tight but let’s salute the further assault on Taumurunui’s housing shortage

Our daily check with the Beehive website revealed nothing new until this afternoon, and then we found just one new announcement.

It came from – guess who?

Yep.  Shane Jones was again demonstrating his munificence, providing $7.78 million for the Ruapehu District Council to “jump-start” its Housing Options programme.

But a statement with much greater national significance had been made by Housing Minister Megan Woods and despatched to the Point of  Order  email intray.

Woods advised us the government is reducing its reliance on private security guards and increasing its use of Defence Force personnel, especially in the highest risk facilities, to fortify the Managed Isolation and Quarantine System and maritime border and further bolster (we hope) protections against community COVID-19 spread.    

The defence personnel will staff higher-risk security areas such as entry and exit points and public areas.

But the private sector isn’t being forsaken. Woods said:

Continue reading “Fingers crossed about the border being made Covid-tight but let’s salute the further assault on Taumurunui’s housing shortage”

Jones mucks in with a $19.5m loan to help with the mushrooming of a Te Mata company

Commercial mushroom growers can be a feisty bunch, a Newsroom report in 2017 suggests. We wonder, therefore, how rival companies will respond to the Government’s favouring one of their number with a $19.5 million loan to increase its production (to their detriment in the marketplace, we imagine).

In a report which dealt with an industry row over the importing of plant manure from Europe that contained traces of horse and chicken poo, Newsroom observed:

The deeper you dig into this murky world of manure, the more you find a tale of intrigue involving anti-competitive behaviour, a government department under threat of a judicial review now dragging its heels on an import licence it’s already granted and revoked,  job losses, and worse – production stalled on tonnes of high-quality super-food vegetables that could drive mushroom prices down and become a thriving export industry. But there is also a deep-seated fear from a wide range of New Zealand farmers and food producers who know that it doesn’t take much of a bio-security slip-up to devastate an industry. 

Mercer Mushrooms was importing substrate – or mushroom compost – from The Netherlands. To get the substrate into New Zealand Mercer had persuaded the Ministry for Primary Industries to re-write the import laws on this product.

Continue reading “Jones mucks in with a $19.5m loan to help with the mushrooming of a Te Mata company”