Decarbonisation is one option for Fonterra bosses to consider as they strive to make the co-op a national champion

Rabobank’s  latest   survey    of farmer   confidence found dairy farmers more upbeat about the fortunes of the agricultural economy  than meat and wool  producers.  Dairy farmer net confidence rose to -29% (-33% previously).

Improving demand is the key reason for optimism among  dairy farmers. That’s  largely  because global demand for dairy has held up well during the course of Covid-19 with many consumers opting for simple, familiar, stable food products such as dairy during the pandemic.  And   since the last survey,  Fonterra has  lifted  the lower bound of its farmgate milk price pay-out range for the 20/21 season.

Then there is  Fonterra’s  performance  under   the  stewardship of  Fonterra chief executive Miles  Hurrell,    who  has succeeded  in  turning  the  co-op’s fortunes  around   after  two   grim  years.

Now,  as  the  global  economy  stumbles  into  a  pandemic-induced  recession,  the  dairy  industry  more than  ever   has   become   the  main prop  in sustaining  NZ’s  export capacity.

The  question  is   whether   Fonterra  – as  the  major  player  in  the  industry  – can accelerate   the  progress  it  has  recorded  under  Hurrell’s  leadership.

Sio makes a tierful announcement (with a funding fillip) for Pacifika languages and (with Shane Jones) delivers $10m to Pacifika churches

Churches – or 27 Pasifika churches, to be ethnic-specific – are to benefit from the government largess being distributed in the name of the Covid-19 response and recovery programme.

These churches will receive a total of nearly $10 million in government funding for renovations and improvements, “to improve facilities for the communities they serve and create jobs”, as Regional Economic Development Minister Shane Jones and Pacific Peoples Minister Aupito William Sio explained.

Provincial Growth Fund money for the renovation of town halls, war memorials, Pasifika churches and marae were earmarked in May as part of at least $600 million refocused on projects with more immediate jobs and economic benefits as part of the Covid-19 recovery.

The churches that applied are spread throughout the regions – from Balclutha to Oamaru and up to Hamilton, Jones said.

A good question to ask is how many missed out on getting a helping hand from taxpayers and why did they fail to be given the government’s blessing.

Creativity blossoms in the shadow of the virus (with seed money from taxpayers who may not be aware of their generosity)

We have acknowledged on previous occasions that the Point of Order Trough Monitor was not calibrated to pick up every example of dubiously spent public money.

But when our monitor misses examples of eyebrow-raising grants, investments, loans and what-have-you, other monitors and watchdogs are on the job.  The Taxpayers’ Union for example.

The other day it drew attention to Creative NZ’s track record for funding some pretty odd art projects.

The Taxpayers’ Union has focused on the value of the Arts Continuity Grant, which it describes as a COVID-19 response fund which has so far paid out $16 million in grants to a variety of questionable short-term arts projects.

Many of the descriptions of the projects funded under this programme are described as “frankly, incomprehensible” and:

“It’s hard to see how bureaucrats in Creative NZ can make an objective judgment on which projects are worthy of funding, and which aren’t.

“The resulting handouts speak for themselves. Creative NZ is fighting COVID-19 by spending taxpayer money on plays about menstrual cycles, Māori ‘healing theatre’, and ‘Indigenised Hypno-soundscapes’. That’s madness and it reflects terribly on the Minister of Arts Culture and Heritage – who happens to be Jacinda Ardern.

“These grants are massively unfair to taxpayers, with the benefits skewed toward politically-connected Wellington weirdos. Handouts for fringe interest groups mean less money is available for tax relief that would reward productive work.”

Point of Order visited the Creative NZ website and learned that this continuity fund

“ … is offered to support a short-term arts project, or the stage of a project, that can be delivered within a changed and evolving environment as a result of COVID-19. Projects can include the creation and/or presentation of new work. Existing projects submitted to our suspended funds can be reframed and resubmitted. Applications will be accepted on a rolling basis with weekly decision-making.”

Sums up to $50,000 have been on offer.

Let the record show Seddon House was bought for $400,000 – and then let’s wonder if it will be renamed

It’s great to get prompt feedback – and that’s what we got in response to our raising questions about the Government’s $22 million investment in a bit of real estate in Hokitika.

A Beehive press officer contacted us to question our headline, which said: DOC staff in Hokitika could have been housed for a song a few years ago – now it will cost us $22 million.

The Beehive staffer said this suggests the Govt is spending $22m buying Seddon House when it could have been bought “for a song” some years ago.

But this (he contended) was misleading because: 

“The vast bulk of the $22m is going towards the restoration of building with only $400k on the actual purchase.”

The Beehive staffer acknowledged this  detail wasn’t included in the announcement on the website.

He also sent us the background notes that  accompanied the full press release to the Greystar on Saturday.

DOC staff in Hokitika could have been housed for a song a few years ago – now it will cost us $22 million

“Going for a song” was how the former Hokitika government building known as Seddon House was advertised in 2014.

According to an NBR report at that time, Barfoot & Thompson was listing Seddon House at $295,000, down from $1.2 million in 2008.  It had a rateable value of $340,000 and had last changed hands in 2002 for $90,000.

Its value today?  We can only guess, but Hokitika has been described as “the most affordable” suburb in the Westland district and has a median house price of $274,700.

We checked out those property figures after learning the government has earmarked Seddon House in Hokitika (“once a hub for government on the West Coast”) for government use once again.

A hub for government sounds impressive, although the press statement referred only to DOC staff  working from there.

A brick, timber and corrugated iron construction, Seddon House is a Category 1 historic place on the New Zealand Heritage List Rārangi Kōrero.  It will undergo seismic strengthening and be refitted for use as offices for the Department of Conservation (DOC), which will lease the building.

So how much does it cost to find new office space for around 85 DOC staff?

Brace for a nasty surprise, dear taxpayer.

Covid news not bad; political and economic news not good

This far into the epidemic it’s interesting what we know and extraordinary what we don’t. Which is more significant: the knowledge or the ignorance?

So what is happening:

• Daily cases in many European countries are rising sharply but recorded death and excess mortality rates are not – so far.
• In the US, the daily case and death rates have been falling for two months, from a late summer bump.
• And in Australia and New Zealand, we are seeing just how hard it is to eliminate the disease.

The data has lots of possible interpretations, which certainly helps if you’ve got a particular case to support.  But one piece of good news is that the fear factor is coming in at the lower end of expectations.

We know about politicians seeking power – but they could be the source of generating power, too

A press release from the Beehive triggered our recollection of a bit of science about the energy-generating properties of methane.  According to an article in the Journal of Environmental Management a few years ago, livestock manure contributes an estimated 240 million metric tons of carbon dioxide equivalent of methane to the atmosphere and represents one of the biggest anthropogenic sources of methane.

Considering that methane is the second biggest contributor to global warming after carbon dioxide, the article said,

“ … it is imperative that ways and means are developed to capture as much of the anthropogenic methane as possible. There is a major associated advantage of methane capture: its use as a source of energy which is comparable in ‘cleanness’ to natural gas.”

We bring this to readers’ attention in light of

• The initiative by Parliamentry Services to cut Parliament’s carbon footprint by installing solar and improving energy efficiency, and
• The power-generating potential of – is there a more delicate way of expressing this? – political bullshit. 

Once known as “mother’s ruin”, it is made all over NZ – including Reefton (where there’s govt funding in the financial mix)

The West  Coast has been the focus of two lots of good news from the Beehive in the past 24 hours or so.

Prime Minister Jacinda Ardern and Associate Health Minister Peeni Henare officially opened Te Nikau Hospital and Health Centre in Greymouth and then turned the first sod at the Buller Health Centre site in Westport.

Meanwhile we learned the Reefton Distilling Company had been granted a loan of almost $1 million from the Provincial Growth Fund.

The loan was one of three newly announced spending and/or lending decisions:

• Climate Change Minister James Shaw has allocated $50 million from the Clean Powered Public Service Fund to replace, or convert, coal boilers in schools with clean energy alternatives. He has named 18 schools in the latest batch to benefit from this funding.
• The Reefton Distilling Co will receive a $928,000 Provincial Growth Fund loan to help move its distillery to bigger premises and buy the equipment it needs to expand operations.
• Te Komanga Marae Trust has received more than $1.54 million to restore and enhance the native flora on the Kōwhairoa Peninsula Historic Reserve at the entrance of Whangaroa Harbour.

Being fond of a good gin, the team at Point of Order has kept on eye on the West Coast distillery since late in 2017 when we read:

A new business is looking to turn pure West Coast rainwater into gin, liqueurs and eventually whisky.

Reefton Distilling Co. will open its doors next year in the West Coast town that shares its name, co-founders Patsy Bass and Sean Whitaker said.

Six people would be employed, including the co-founders, in the first 12 months of operations.

In February 2018 the news was that Reefton Distilling Co had passed the minimum target for its current capital raising and co-founder Patsy Bass hoped it would  hit $1.5m by the time it closed later that month.

An update earlier this year was headed Reefton Distilling Co reaches $2m investment target

A West Coast distillery has raised more than $2 million to expand its Little Biddy Gin operation. 

Reefton Distilling Co reached its first target of $2m within two weeks of releasing its public investment offer. 

The company opened in October 2018 and scooped six awards in its first six months. 

Founder and managing director Patsy Bass said securing the minimum $2m of equity investment now provided the company with access to several debt financing options to expand the business and build new premises. 

 At that time the company had applied to Development West Coast for $1.85m of commercial finance to fund land, buildings and fit out costs.

The business had quickly outgrown its current space and had new premises under contract, with due diligence nearing completion.

According to the report which advised us of these developments:

Bass said the new site would allow Reefton Distilling Co to employ up to 50 people and expand its range of products, including its much-awaited Moonlight Creek Whisky.

And now the government is in for a dram or two of the action.

Rural Communities Minister Damien O’Connor and Regional Economic Development Minister Shane Jones have announced the company will receive a $928,000 Provincial Growth Fund loan to help move its distillery to larger premises and buy the equipment it needs to expand operations.

Shane Jones said the craft distillery was growing rapidly.

“The distilling company began operating only two years ago but it is already proving hugely successful, so much so that it has outgrown its existing premises.

“Demand for the distillery’s international award-winning products is increasing and the $1.86 million expansion project will allow it to keep up with that demand, grow production and host more tourists,” Shane Jones said.

O’Connor said the relocation and fitout of the distillery would provide local construction jobs and significant spending in the region. Construction work is expected to be completed in the first quarter of 2021.

“The expansion has created another seven to eight fulltime jobs, with more expected to be created in early 2021, in addition to existing fulltime permanent staff and casual workers.”

The new development will also provide education and training opportunities for youth through part-time employment, work experience and internship programmes.

Oh – and let’s not forget the environmental benefits.

Shane Jones said the Reefton Distilling Co was also increasing its environmental sustainability.

“The distillery is already working with the Department of Conservation to grow its sustainable use of native botanicals to flavour spirits, as well as collecting rainwater, considering solar energy and using a bio-mass boiler to power its stills.”

The gin business is booming, of course, and we are sure the 50 or so other distillers will be heartened to know where to go if they need a financial tonic.

Once upon a time the stuff they are producing was known as Mother’s Ruin,  although we are sure all of the Kiwi products are of a hugely superior quality.  We are willing to put this confidence to a taste test and are contemplating an application to the PGF for the money we would need to conduct the first Point of Order quality trial.

Latest from the Beehive

 25 SEPTEMBER 2020

Tuvalu Language Week theme promotes community resilience in the face of COVID-19

The Minister for Pacific Peoples, Aupito William Sio says the 2020 Tuvalu Language Week theme of “Fakatili Te Kiloga Fou” which means “Navigating

International sport back up and running in New Zealand

The Government is welcoming today’s announcement that the West Indies and Pakistan cricket teams will tour New Zealand

Better health care for West Coasters as Te Nikau Hospital officially opened

The Government has delivered a new hospital for Greymouth and is starting work on a much needed new health centre in Westport, ensuring local communities will benefit from better access to high quality integrated health services.

Government backing local with PGF loan

A West Coast distillery will benefit from a Provincial Growth Fund investment that will enable it to expand its operations and create jobs in the town of Reefton, Rural Communities Minister Damien O’Connor and Regional Economic Development Minister Shane Jones have announced.

 24 SEPTEMBER 2020

Primary sector exports and jobs up again

Primary sector exports and jobs are up again, demonstrating the sector’s underlying strength amid the COVID-19 global pandemic and US-China trade war, and supporting New Zealand’s economic recovery.

 Clean energy future for more schools

Schools across Aotearoa New Zealand will be supported by the Government to upgrade to run on clean energy, the Minister for Climate Change James Shaw announced today.

The sum of $4000 remains a puzzle but the beneficent Beehive is braying about the millions is has dished out

While announcements on new policy or critiques of opposition policies  flow from the Labour Party, the Beehive website in the past day or two has brought news of government spending decisions.

This has drawn attention to some of the array of troughs available for oinkers hungering for a financial lift.

The press officers engaged in this work, alas, have been much too busy to answer Point of Order’s questions to Finance Minister Grant Robertson – or even to acknowledge receipt of our emails.

We sought clarification about a figure Robertson used while mocking the Nats for bungling their fiscal costings …

“On Friday National threw out a desperate economic policy that included $4.7 billion of tax cuts that would give Judith Collins $4,000 at a time when New Zealand needs to be investing in services like health and education for our future.”

Is something missing, we inquired? $4000 of what?

No answer.

We await information, too, about the Treasury’s establishment of a new team to provide a policy costing service to the political parties currently represented in Parliament. Has this team been established, for how long has it been operating, and which parties have used its services?

No answer.

While we patiently hope for enlightenment, we can pass on news of government spending that has been blared from the Beehive.

$4bn hole in National’s fiscal programme raises questions about Treasury’s data-checking role and independent monitoring

Speaking as Labour’s Finance spokesperson, rather than Minister of Finance, Grant Robertson was quick to crow about the discovery of “a basic error” which left a $4 billion gap in National’s economic plan.

“If National can’t even do the basics required on their own policy costings, they cannot be trusted to run the country. Making mistakes like this have real world consequences that New Zealand does not need in this challenging time in our history.”

Robertson was harking back to an announcement a few days earlier, when (he gloated)

“ … National threw out a desperate economic policy that included $4.7 billion of tax cuts that would give Judith Collins $4,000 at a time when New Zealand needs to be investing in services like health and education for our future.” 

This is  a tad puzzling, prompting a question we sent to the people who despatched the press statement:  giving Judith Collins $4000 of what?  We await a response.