Zespri lifts profit to $290.5m after selling $3.5bn of kiwifruit but is running into headwinds

Like  the  dairy  industry’s  Fonterra, the  kiwifruit  industry’s  giant  Zespri  has  had  a  golden  year.  It  has  reported  record returns  for 2020-21, with  a  net  profit  of  $290.5m (up $90m  from the  previous  year)   after  achieving total fruit  sales revenue  of  $3.5bn  (up 14%).

It  further highlights the strength of NZ’s rural  economy during  a  period  when the  Covid-19 pandemic  underlined the  fragility of  global  trade.

Zespri’s  global sale volumes were up 10% on last season to 181.5m trays.

The company said increased sales, the ongoing expansion of Zespri SunGold kiwifruit production and great quality fruit lay behind the strong returns.

CEO Dan Mathieson said the results would see earnings spread through many regional communities in NZ.

“We’re delighted a record $2.25bn will be returned to the NZ kiwifruit industry. The unity of our industry allowed us to respond effectively to incredibly difficult conditions around the world”.

Bad weather and travel plans – Faafoi visits Canterbury (and announces modest help) but Woods’ event is postponed

A fresh announcement from the Beehive hadn’t actually been posted on the website, when we checked this morning.  It announced government help (modest) for flood-stricken Cantabrians.

Another unposted statement was weather-related, too, and came from Energy and Resources Minister Megan Woods.  In this case, the statement was followed by advice that the event which triggered the statement had been postponed due to “weather events,  

We shall dutifully observe the embargo and keep the news under wraps until the event has been rescheduled.

Other weekend statements announced the opening of Samoa language week and brought news of a digital training programme for elderly Kiwis winning an overseas award. 

And today we have been apprised of two new reports which deal with emergency housing.  

 The Acting Minister for Emergency Management, Kris Faafoi, has been in Canter bury where he announced the Government has contributed $100,000 towards a Mayoral Relief Fund to support Canterbury communities impacted by the weekend’s flooding.

Jobs for the boys (including a Nat) – govt sets up two panels to work on the reclassification of DOC’s stewardship land

It’s great to see former Cabinet ministers – two of them elderly white men – landing jobs as members of panels set up to work on the reclassification of “stewardship land”.

Moreover, it’s great to see the government’s fondness for diversity resulting in a former National cabinet minister, Christopher Finlayson, being among the appointees, along with former Labour ministers Philip Woollaston and Mita Ririnui. Remember them?

They have been appointed to two “independent” expert national panels tasked with coming up with revised classification recommendations to the Conservation Minister.

“Stewardship land” is the term given for land allocated to the Department of Conservation  when it was formed in 1987. It includes former State forest and Crown Land that were considered to have conservation value.

We are talking about a hefty chunk of the country.  Around 30% of conservation land is stewardship areas, approximately 2,508,000 ha – or 9% of New Zealand.

Rio Tinto strikes a deal with the Ardern govt on cleaning up its mess – and it brings Ngai Tahu into an array of commitments

Should we really be cheering news of a giant global company picking up the tab for cleaning up its own mess?  Surely that’s what it should be doing.

But hey, we are talking about Rio Tinto, a company widely criticised by environmental groups around the world and at least one national government for the environmental impacts of its mining activities. Or so we are told by Wikipedia.

And it has been a dab hand at persuading governments in this country to help power its aluminium smelter operations near Bluff at a modest cost.

But the PM, helped by some of her ministerial team., has urged the company to do something about its toxic waste and – hurrah – the company  has obliged.

The company has made a raft of commitments, including recognising Ngai Tahu (at least by the looks of things) as an organisation akin to a co-governor.

In fact, in the press statement from the Beehive Ngai Tahu is listed ahead of the central and local government bodies involved in the agreement.

Investors respond perversely to F&P Healthcare’s record profit and booming sales – but staff will benefit from the cheering result

Auckland-based medical equipment manufacturer Fisher & Paykel Healthcare has posted a record full-year result, as the pandemic drove unprecedented demand for its products.

Its net profit for the year to March rocketed 82%  to $524m, as sales increased by more than half to $1.97bn.

It  is proving  one of the  country’s  most successful business enterprises.

But even  its  founders, including  the  legendary Sir  Woolf  Fisher,  would have been astonished  at its  latest  remarkable  performance.

Led  by  its  outstanding CEO, Lewis Gradon, the  company’s  latest result  was driven by an 87% increase in sales of its hospital products, including its Optiflow and Aviro systems, which have proven to be effective in treating people who have Covid-19.

Sales of its hospital hardware and consumables  continued to track Covid-19 hospitalisation surges in countries around the world.

The pandemic had also accelerated the company’s expansion into different global markets, with significant growth in the North America, Europe, Asia Pacific regions.

The strength of the result saw the company look to reward all of its staff with a profit-sharing bonus of $29m.

China, CER, co-operation and Covid-19 will be on the agenda when Anzac leaders meet in Queenstown

Scott Morrison  may  be  looking for a  break  after a  tough year  when he arrives in Queenstown at  the weekend,  but there’s  a  heavy  agenda  awaiting him.  It’s time  for Australia  and  NZ  to  rekindle  the  spirit  of  CER,  as  they battle the  aftermath  of the Covid pandemic, and  confront an  increasingly assertive global  power  in  China.

The visit will be the first face-to-face meeting between Ardern and her Australian counterpart since NZ shut its borders due to the pandemic. Morrison last met with Ardern in Sydney in late-February 2020, the day the first Covid-19 case was discovered in NZ.

Ardern,  announcing the  visit, said the Covid-19 recovery, regional and security issues would be discussed.  Those  issues  have  become  more  acute.

On  one  side  there  is  growing evidence that  the  pandemic  arose  not  from transmission  from animals  in  Wuhan, but  from a state-owned laboratory  in that  city.

On  another front,  both  countries  are  making  only  slow progress  with their  vaccination  programmes  (which opens  up  the  issue:  why didn’t  the two  governments  co-operate   in setting  up  a joint programme  to  produce  under  licence  one or  more  of the vaccines?).

The PGF makes way for the RSPF – there’s not so much money and Maori projects will have the inside running

We haven’t had time to add up the sums involved, but the Government has made several announcements in the past 24 hours or so involving the spending or investment of hundreds of millions of dollars.

Mind you, most of the population has been deemed ineligible on race grounds to benefit directly from some of that spending – you could say much of it.  But the government does insist that if Maori do well, we all do well, which means we will all benefit in the long run.

The aviation industry is one beneficiary where ethnicity (so far as we can tell) has not been a consideration in the government’s decision-making.  An additional $170 million is being provided for the Maintaining International Air Connectivity scheme to October 2021.

Another announcement – for regional grants and loans promised before the election – transforms the Provincial Growth Fund and continues its work in developing regional projects, but with less money and a new name, the Regional Strategic Partnership Fund.

Even so, there’s $200 million to be distributed to worthy causes (and Maori projects are being given the inside running).

Maori medium schools are the beneficiaries of $77 million in new capital and Maori communities are the beneficiaries of 15 initiatives to receive $2.8m of funding for renewable energy projects.  This is just a first helping:  in total $14 million will go to renewable energy projects for Māori housing over the next four years.

Our observations are that five of the fresh press statements from the Beehive can be characterised as  …

Budget pumps $1.3bn into railways but almost forgets farmers while Fonterra delivers the economy-boosting goods

Farmers    who  believed   Labour  when it  said  it wanted  to  double  agricultural  exports may have experienced  a  sense  of  disillusion as  they  absorbed the  messages  of  Budget 2021.  While  the  government  is  allocating $1.3bn to modernise rail infrastructure and  build locos  and  wagons in Dunedin,  it  could find  only  $62m  for  agriculture.

Someone  has  calculated  that  the country’s 40,000 farm businesses, if they shared the $62m, would each receive $1550 or $29 a week (less than the ongoing minimum benefit increase).

This  comparatively meagre  sum   is  to be  applied as  follows:

• $37m towards a national integrated farm planning system for farmers and growers.
• $24m towards agricultural greenhouse gas mitigation research and development.
• $900,000 to collect vital statistics on agricultural production, such as greenhouse gas emissions.

Critics may  conclude   the small outlay for agriculture reflects Agriculture Minister Damien  O’Connor’s influence in Cabinet.  Others  may  see it as  evidence  of the traditional antipathy of Labour MPs  towards  farmers.

Parker is unhappy with the tax take from Google but Nash has partnered with it (and other giants) to lift NZ’s digital game

The Ardern government wants New Zealand to have the most digitally enabled small business sector in the world. 

With that aim in mind, yesterday it announced a public-private partnership, grandly called the Digital Boost Alliance which involves 20 influential organisations.  These are committed  to support small business resilience and productivity, and enhance wellbeing and social inclusion via greater digital adoption.

Among them are Google, Facebook, Microsoft, HP and Amazon, five trading banks, Xero, MYOB, Zeald and Datacom, the Mindlab, CertNZ, Spark, Chorus and 2Degrees, the Warehouse Group and MBIE. 

This means the government is partnering with some global giants that – a few years ago – it was planning to hit with a new tax.

At the time, we were told:

This is expected to bring in between $30-$80 million a year for the Government, depending on the tax’s design.

It comes as part of a wider global move, as various other OECD countries explore similar taxation options.

Ardern said highly digitalised companies, such as those offering social media networks, trading platforms, and online advertising, currently earned a significant income from New Zealand consumers without being liable for income tax.

“That is not fair, and we are determined to do something about it.”

More recently, Revenue Minister David Parker is reported to have said Google is not paying its fair share of taxes. He had 

… slammed the internet giant’s reticence about a local tax being imposed on its New Zealand-derived revenues.

How our present and future needs have been balanced – by lumbering each household with $95,000 in govt debt

As  all   the  lobby group  shouting  fades in  the  wake of the  budget,   how    is  the  real  verdict  shaping  up ?

If  from the  Labour  camp,  you’d  say it was  a   financial  triumph,  balanced  but  with a  bold  vision.  And,  as Sir  Michael Cullen asserted,  there  is   “a  real degree of  bravery”  in the benefit  increases.

According  to Sir  Michael,  Finance  Minister  Grant  Robertson

” .. has  done  a  superb  job   in writing a  budget  which  balances  present  and  future  needs,  begins  to  address our  social inequities and  provides a  solid  foundation for  future  sustainable  growth”.

For  Sir Michael,  this  is  just the  beginning:  he  sees this  as the  first  part of a trilogy  of  budgets.  Roll  on  the other  two!

On the  other  side  of the fence, the   drumbeat was  a   bit   more  discordant.  The praise  certainly was  not  quite  so  fulsome.