Twin blows dent confidence in ministerial ranks, so will  they affect morale among party faithful?

Is  the  government imploding?

Prime Minister Chris Hipkins  has  had  to sack  one of his  more effective (and  likeable) ministers, while another  (from the Green Party)  has  insulted  many of  the  adult  population.

For  his  part, Hipkins had appeared to  be shaping  up well since he took over the top job. Furthermore, he has been succeeding in turning  around Labour’s plunging poll ratings.

But  now  with the Nash disaster  and the Davidson insult, alongside  the nationwide strikes of  teachers, plus  the cost-of-living crisis, it may take  something  of  a  political miracle to recover.

Stuart  Nash was  already on a final warning, when Stuff revealed he had emailed business figures, including donors, detailing private Cabinet discussions. Hipkins said the most recent scandal was “inexcusable” and this incident alone would have seen Nash sacked.

He described the call as “black and white”, but he was still “gutted” to see Nash go.

Continue reading “Twin blows dent confidence in ministerial ranks, so will  they affect morale among party faithful?”

Mahuta’s talks succeed in warming up high-level relationships in Beijing, and she opens way for visit by PM

In what has been one of her most important diplomatic mission, Foreign Minister Nanaia Mahuta  has opened the door  for  a visit  to Beijing by Prime Minister Chris Hipkins later this year.

Such a mission is regarded as vital with a new Prime Minister  Li Qiang settling into office. NZ’s last contact at prime ministerial level was in 2019 when what was a planned extended Jacinda Ardern mission had to be  cut short.

Since  then tensions have deepened between China (which is New Zealand’s largest market) and  the US (NZ’s  traditional defence partner).

So as Mahuta said on her return from a four-day visit to China, NZ’s relationship  with the leaders in Beijing “is very important and complex”.

It  requires “continual management” to make sure the two countries do not lose sight of each others’ views and perspectives.

Mahuta  had  talks with Foreign Minister Qin Gang  and the  message she received is  that the relationship is strong; China appreciates New Zealand’s “objective and friendly approach” and is keen to pursue opportunities to increase trade and economic co-operation.

Continue reading “Mahuta’s talks succeed in warming up high-level relationships in Beijing, and she opens way for visit by PM”

The big question for Labour: Will Hipkins have any more success than Ardern did with the top priority policy issues?

Chris  Hipkins,  after  he became prime minister, committed  to defeating the  cost-of- living crisis. He  proceeded to make a  bonfire of policies  that were at  the  heart of Jacinda Ardern’s administration. 

But, as   Richard Prebble pointed out this week, “the government has not just U-turned, it has repudiated the policies it claimed were essential”.

The number one priority  for her  government, Ardern proclaimed, was to eliminate child poverty. She identified so closely  with the issue that she took responsibility herself for the task.

So what progress was  made?

StatsNZ data released this week shows no real change in all areas used to measure child poverty rates in New Zealand.

This prompted  a loud wail  from the Child Poverty Action Group, which  says  it is  the leading  voice on the issue.

Its press release said: “Latest figures measuring child poverty rates in Aotearoa New Zealand are a sad indictment on the country with no real improvement in policy that could turn things around”.

Continue reading “The big question for Labour: Will Hipkins have any more success than Ardern did with the top priority policy issues?”

Westland Milk puts heat on competitors as global dairy demand  remains softer for longer

Hokitika-based Westland Milk Products  has  put the heat on dairy giant Fonterra with  a $120m profit turnaround in 2022, driven by record sales.

Westland paid its suppliers a 10c premium above the forecast Fonterra price per kilo, contributing $535m to the West Coast and Canterbury economies.

The dairy company, which is owned by the big Chinese dairy outfit Inner Mongolia Yili Industrial Group, said its revenue increased 27% year-on-year to a record $1.04bn, for  a net profit of $39m, or 69c per kilo of milk solids.

The result was against the background of milk prices hitting $9.40kg/MS during the year.

CEO Richard Wyeth said the company’s strategy of focusing on high-value product sales, leveraging off the West Coast’s reputation as a source of premium dairy products and ingredients, was paying dividends.

“This is the first time in our company’s 85-year history that we have surpassed the $1 billion dollar revenue mark,” Wyeth said.

Continue reading “Westland Milk puts heat on competitors as global dairy demand  remains softer for longer”

National’s Luxon may be glum about his poll ratings but has he found a winner in promising to raise scholastic achievement?

National Party leader Christopher Luxon may  be feeling glum about his poll ratings, but  he could be tapping  into  a rich political vein in  describing the current state of education as “alarming”.

Luxon said educational achievement has been declining,  with a recent NCEA pilot exposing just how far it has fallen: a staggering two-thirds of students are unable to meet the minimum standard in reading, writing and maths.

“National will not allow this to continue. National will make sure every child leaving primary and intermediate school can master the basics so they can succeed at high school and lead fulfilling lives,” he said.

This is  something that will resonate  with parents. It follows last  week’s  strike by tens of thousands of teachers who were demanding – wait for it – better pay and conditions.  In  forcing the closure of schools across the country, the  teachers  had apparently  little  concern  for the plight of their pupils.

For  some time   it has been evident that  standards in state schools  have been slipping.  Blaming it on Covid is too simplistic. Continue reading “National’s Luxon may be glum about his poll ratings but has he found a winner in promising to raise scholastic achievement?”

Major issues on the table in Mahuta’s  talks in Beijing with China’s new Foreign Minister

Foreign Minister Nanaia Mahuta has left for Beijing for the first ministerial visit to China since 2019.

Mahuta is  to  meet China’s new foreign minister Qin Gang  where she  might have to call on all the  diplomatic skills  at  her  command.

Almost certainly she  will  face  questions  on what  role NZ  might  seek  to  play in the AUKUS defence pact involving Australia, the UK and the US.

President Joe Biden’s National Security Council co-ordinator for the Indo Pacific, Kurt Campbell, was  reported  this week as saying the US is looking for other working group partners now that the ‘critical components’ of the Indo-Pacific alliance have been launched. Continue reading “Major issues on the table in Mahuta’s  talks in Beijing with China’s new Foreign Minister”

Dairy giant Fonterra posting a big lift in profit  underlines the importance of the dairy industry as NZ’s main export earner

Dairy giant Fonterra  has posted a 50% lift in net profit to $546m, doubled its interim dividend, and is proposing a return of capital of  50c  a share, injecting  a  note of optimism  into the nation’s  dairy industry.

Fonterra’s strong performance is against a backdrop of market volatility. It underlines  to the  rest of the country  how  vital the dairy industry is proving once again  as  NZ’s leading  export earner – and shows how  absurd  has been the lobby group Greenpeace’s protest action today  at Fonterra’s HQ in Auckland on the  climate change issue.

For Fonterra’s  farmer-shareholders  the co-op has demonstrated  how  under its  current  leadership it is  now  operating  more effectively  than it did in the  previous decade, and is once  again the  nation’s  main export earner.

CEO Miles Hurrell said  the co-op’s scale and diversification across channels and markets had enabled it to navigate through disruption and make the most of favourable market conditions in a number of areas.

“While milk powder prices have softened recently, impacting our forecast Farmgate milk price range, protein prices have been high, and this is reflected in the lift in earnings,” he said.

The co-op has forecast a milk price of $8.20 to $8.80 per kg for the current season.Earnings per share came to 33 cents. In proposing a return of capital of 50 cents per share and per unit, it said this is subject to completion of the sale of Soprole. It has also upgraded its full-year normalised earnings forecast from 50-70 cents per share to 55-75 cents per share.

 Hurrell said the outlook for NZ dairy remained positive.Return on capital came to 8.6%, up from 6.1% in the comparable period.

The lift in earnings was down to the co-op’s scale and ability to move milk into products and markets where there were favourable prices, he said.

“With whole milk powder prices down, we moved more milk into skim milk powder and cream products to optimise our farmgate milk price. “We also made the most of favourable margins in our cheese and protein portfolios, by moving a higher proportion of current season milk into these products which has benefited our earnings.”

Fonterra’s ability to capture these higher margins was reflected in the Ingredients channel performance, with normalised ebit up $494m, or 118%, on the same time last year to $911m.

“Our Consumer and Foodservice channels benefited from improved in-market prices, with Foodservice normalised ebit up $81m, or 95%, to $166m.”

However, higher input costs and ongoing pressure on margins have impacted overall Consumer channel performance.

The co-op’s domestic consumer business, Fonterra Brands New Zealand (FBNZ), had been under margin pressure for some time and is not improving as fast as planned.

The performance of Fonterra’s Asia consumer brands has been impacted by weakening currency in the markets they operate, higher interest rates and a declining economic environment in some South East Asian markets.

Fonterra had therefore revised down the valuation of FBNZ by $92m and its Asia consumer brands Anlene, Chesdale and Anmum by $70m.

As a result of market conditions and the impact of impairments, Fonterra’s overall Consumer channel normalised ebit is down $177m to a loss of $94m.

Fonterra said severe storms and flooding across the North Island in January and February temporarily delayed some product getting onto ships

The co-op said it remained focused on inventory management, which seasonally peaks through February and March.

Meanwhile, Greenpeace protested at Fonterra’s Auckland headquarters this morning to raise issues climate change.

“Greenpeace is installing flooding images around the windows that make the Fonterra headquarters look as if it’s underwater,” the group said.

Crime tape being deployed along with the ruined remains of people’s household items, to highlight the liability of Fonterra and the intensive dairy industry for destabilising the climate.”

Australia buys nuclear-powered subs – would NZ  be concerned  if we came under attack and they were defending us?

Australia’s move to strengthen  its defence capability with  five nuclear-powered attack submarines  underlines how  relatively defenceless New Zealand  is  in the  Pacific.

Kiwis  may gasp that the Labor government in Australia recognises  it must outlay $400bn on the  nuclear subs, but this ensures  that Australia is  not  exposed  to any marauding raid.

Part of the deal under the Aukus  umbrella (embracing Australia, the United Kingdom and the United States) is that Australia will regularly host US nuclear-powered submarines beginning within five years, and embedding its military personnel with the US and UK navies, as it begins the process of establishing its own industry.

US President Joe Biden has stressed that the submarines, provided under the trilateral security pact  would be “nuclear-powered, not nuclear-armed”. Continue reading “Australia buys nuclear-powered subs – would NZ  be concerned  if we came under attack and they were defending us?”

Hipkins  shows his quality as  PM in securing a bounce for Labour, but now comes the hard part

Chris  Hipkins has surprised even  some of his  closest  friends  and  backers with the  bounce he has  secured  for Labour  in  public polls  since  he  became Prime Minister. He  has  been put to the test since  he  took  over  from Jacinda  Ardern  in the  top job, and has  shown a  quality that  was  well hidden in  his  previous  portfolios.

It’s  not  just the long  hours  he is  putting into  the  job, but  projecting the human touch  to those  hard hit by Cyclone Gabrielle, or the other disasters of recent weeks as well. Then this week he  was steering the  government in decisions which, as  he  said, will  enable pensioners to start seeing a bit extra in their bank accounts from next month.

For couples over 65, their superannuation payments will now be higher by an extra $102.84 per fortnight between them, while single people living alone will receive an extra $66.86 each payment.

Hipkins  said the package of “bread and butter support” would help people who were “really feeling the bite from the rise in the cost of living”. Continue reading “Hipkins  shows his quality as  PM in securing a bounce for Labour, but now comes the hard part”

Still mixed signals on the export price front, with a worrying cloud on the edge of the horizon

As New Zealand’s  export season gains momentum, there  are some encouraging  signs for the farming  industries  on the price  front.  For good measure, the NZ  dollar  has  eased in value against the  US  dollar.

The ANZ Bank’s world commodity price index increased 1.3% m/m in February, a welcome lift, the bank says, after 10 consecutive monthly falls. Stronger returns for meat and forestry products were the main drivers. In local currency terms the index gained 2.0%.

Dairy prices lifted 0.2% month-on-month in February, with the dairy auctions delivering mixed results. ANZ economist Susan Kilsby says there is a strong expectation that improved economic activity in China will drive increased demand for dairy products, but this is yet to really materialise. Continue reading “Still mixed signals on the export price front, with a worrying cloud on the edge of the horizon”