Mallard looks like a sitting duck but the Nats may prefer to wait to bag the PM as well

Back  in   March   the  NZ  Herald  carried  a  report  headlined  “Mallard mess  needs  sorting”.  It  was  written   by  Audrey  Young, then  the political  editor.

The  Labour Party  didn’t  heed the  warning  and  now  this failure is  leaving  a  bigger mess:  on Tuesday night Speaker Trevor Mallard  accused a former parliamentary staffer, to whom he had apologised for claiming he was a rapist, of sexual assault.

In the aftermath, National Party leader Judith Collins again called for Mallard to be removed as Speaker of the House, describing his behaviour as a disgrace and contending he was “temperamentally unfit” for the role

Meanwhile  Prime  Minister Jacinda Ardern  has  boxed  herself  into  a  corner.  She has expressed  “overall”  confidence   in  Mallard  as  Speaker  of the  House,   so  she  can’t sack  him.

But  the  longer  he  stays,  the  more  damage can be done to  Labour. Continue reading “Mallard looks like a sitting duck but the Nats may prefer to wait to bag the PM as well”

Public service pay will get scant lift from Robertson – but let’s see if the Budget can keep govt’s poll support in the clouds

The  Ardern   government  is  cruising  along with  poll ratings  still far  above those of  its  opponents  and a  leader   enjoying  almost cult  status.

Her  deputy, Grant   Robertson,  wears  a  matching  suit  of  political  armour,  although one-time Labour  Minister (and then ACT  leader) Richard  Prebble contends  he is   the worst  finance minister  since  Rob Muldoon.

Until  now  the  government  has  been borne   along   on  a  cloud  originating  in  the successful  deflection  of  the  Covid  pandemic.  Its  policies  have  escaped   any   deep  scrutiny from  mainstream media,  partly  because of  preoccupation  with  the  pandemic,  and  partly because of  the  teflon  aura surrounding Ardern.

Even   when  there  is a  stumble,   as  happened this  week with her  speech  on NZ-China  relations  and  the  latest  chapter  in the  Mallard story, she  is  within hours  back  on  her  cloud. Continue reading “Public service pay will get scant lift from Robertson – but let’s see if the Budget can keep govt’s poll support in the clouds”

Two big announcements awaited from Fonterra – one deals with dairy payout, the other with the co-op’s capital structure

So what  are  the  chances Fonterra’s  payout  to its farmer-suppliers  could  top  $8kg/MS the  soon-to-end  current  season?

That would give a  timely  boost  to  the  rural economy  and give  farmers  the kind  of  surge  in incomes  which  would encourage them  to  step up the  pace  of  adapting their dairy farming practices as  the  country  moves  to meet its  climate  change goals.

In March, Fonterra raised its forecast milk price for this season to between $7.30 and $7.90kg/MS with a mid-point of $7.60. That was up from $7.14 last season.

But now, after several  good  results  from the fortnightly GDT auctions, and indications from futures contract prices, the  speculation  is that the payout  could go  higher.

While the GDT index slipped 0.7% at the latest auction this week, the price of whole milk powder, which has the most impact on what farmers are paid, gained 0.7% to an average US$4115 (NZ$5756) a tonne while skim milk powder, the second-most important, rose 2% to US$3433/t.

Butter prices slumped 12% to US$5035/t, weighed down by extra volume on offer. Continue reading “Two big announcements awaited from Fonterra – one deals with dairy payout, the other with the co-op’s capital structure”

The  bid  for Infratil  from  Australian  Super was a fizzer – and now we can see why that’s been great for shareholders and NZ

One  of  the  busiest  companies  on  the  NZX,  investment company Infratil,  has  underlined that  not  all  of the  sharpest  operators in NZ business have  deserted Wellington   for  the brighter  lights  of  Auckland.

This  week  the  company  announced it has executed a conditional agreement to acquire between 50.1% and 60% of Pacific Radiology Group, a comprehensive diagnostic imaging business,  from its existing doctor shareholders for a total consideration of up to $350m.

Pacific Radiology is the largest private diagnostic imaging service provider in NZ, operating 46 clinics in the South Island and lower North Island and employing 90 radiologists.

The acquisition enterprise value of $867m implies an EV/EBITDA multiple of 12.6-13.3x.

Infratil chief executive Jason Boyes says the Pacific Radiology acquisition, if completed, will sit well with Infratil’s other high-performing, high-quality assets, and builds on its investment last year in Qscan Group, a leading diagnostic imaging business in Australia. Continue reading “The  bid  for Infratil  from  Australian  Super was a fizzer – and now we can see why that’s been great for shareholders and NZ”

Polls show Labour on a high and the economy is in good nick as Robertson polishes Budget 2021

Labour  MPs  are a  happy bunch  of  campers. Party polling  is  solid, their  leader  has gained  recognition round the  world  that few other NZ prime  ministers have  enjoyed, and  their  opponents  are  in disarray.

The  government  has  steered  the  country   through  the Covid-19  pandemic  with  little  of  the  strife  that  has  ravaged  other  populations.

What’s  more   the  economy is  in good  shape, despite   the   damage  suffered  by  key sectors like  tourism, aviation  and   international  education.

The  Labour  camp   is  confident  Grant  Robertson  will  maintain  the  political  momentum  when he  delivers  the   budget next  month.  After  all,  he  did  not  hesitate to  spend  up  large to  sustain incomes  when the  economy looked  as  it  would nosedive   during lockdowns. Overall, the  economy  kept a  surprising  equilibrium   despite  the  pandemic’s  buffeting,  and slippage in GDP  in the final  quarter last year.

Not  that  satisfying  the  range  of  demands  for  higher  spending  will  be  easy.  Problems  like child  poverty, housing  shortages,  and inequality have  intensified  since  Labour   took office.

Failing   infrastructure  has  underlined  the  need  for all  those  “shovel-ready”  projects  promised in the run-up  to  last year’s election, but  yet  to  be launched. Fortunately  for  ministers,   they  have escaped  the  obloquy heaped  on  predecessors  when  they trot  out  the familiar banality beloved  of   Beehive staffers  (“work is  going on in that  space”,  Cabinet  is  seeking advice  on that”, “I have  called  for  a  report”). Continue reading “Polls show Labour on a high and the economy is in good nick as Robertson polishes Budget 2021”

Dragons-and-taniwha speech raises questions about NZ’s future in Five Eyes – and about the extent of Cabinet’s endorsement

Question of the Week:  Will  New Zealand  be  expelled  from Five  Eyes,  following  Nanaia Mahuta’s  speech  on  foreign policy?

NZ Herald’s  political editor  Audrey  Young,  in  a  report  on  Thursday,  wrote:

“NZ  faces the  prospect  of  expulsion   from  the  Five Eyes intelligence alliance, according  to Con Coughlin, defence editor for  the  Daily Telegraph in the  UK.

Coughlin   said  attempts by the other Five  Eyes  countries  (Britain, the  US, Canada  and  Australia) to present a  united  front  against  China  have been thwarted by the  NZ  government’s  preference for  maintaining  cordial ties with  Beijing.

He  referred  to  Jacinda  Ardern  as  “NZ’s  tiresomely woke Prime Minister”, saying  she has a preference  for  “cosying up to China’s  communist rulers”.

“Thanks to  Wellington’s  naïve  decision to prioritise trade  with China over its membership of the elite  Five Eyes intelligence-sharing  network, Ardern  can expect her country’s isolation to deepen even further as  NZ  faces  the very real prospect of expulsion  over its pro-Beijing stance”.     Continue reading “Dragons-and-taniwha speech raises questions about NZ’s future in Five Eyes – and about the extent of Cabinet’s endorsement”

Centralisation is prescribed for our health system – but funding is an issue and see what has happened in transport and education

Health  Minister  Andrew  Little  says   the reforms the  government has  announced this week will  mean for the  first time  New Zealand will  have  “a  truly national  health  system”.

The  new  system  will consist  of  a  national  health  organisation,  a  Maori health authority,  and a  new  public  health authority to  centralise  public  health  work. The  Ministry of  Health  will remain  in  over-arching  control.

It  is  a  major  structural  reform, going even  further  than the  raft of initiatives proposed in the Heather Simpson  report.

So  will  Andrew  Little  be  top of  the  pops, the  only  minister (so far) in the  Ardern  government to deliver  a  radical new policy  to  reform  a  key  government  service?

Initial  reactions  seemed  highly  in favour.  The  Dominion-Post’s headline ran “Overhaul of  DHBs Welcomed”.  The NZ  Herald  was  even  more  vivid  in  its  imagery:  “The  faces  of  failure”, it  shouted, “Health overhaul  to end ‘postcode lottery’  comes too  late  for  these  loved ones”.

The  message  was  clear:  good  riddance  to  the  district health boards (generally known as DHBs). Continue reading “Centralisation is prescribed for our health system – but funding is an issue and see what has happened in transport and education”

The view of Mahuta’s speech from across the Tasman: we are selling out our neighbours – and the West – to pander to Beijing

Foreign Minister Nanaia Mahuta was  probably expecting  her speech this week  on New Zealand’s policy  towards  China  to be  widely  read, but not to have  produced  the  savage   reactions  it  did in some  quarters.

In our examination  of  the  speech, Point  of  Order  drew  attention  to how  Mahuta  had  delivered  a  poke  in the  eye  to  NZ’s  allies — and  sure  enough,  this  was  the feature   which got most  attention  across the  ditch.

At  home  the ACT  party was  fired  up by  praise  for the  speech  from  China.  It  found this approval,  coming from a communist dictatorship, as “deeply concerning”.

ACT’s Foreign Affairs spokesperson Brooke van Velden says it’s hard to imagine how Nanaia Mahuta could fail harder than being praised by a communist dictatorship and shunned by  democratic allies.

She  noted international media are commenting that NZ has “broken with its Five Eyes partners as it pursues a closer alliance with China” and that “Five Eyes becomes four”. Continue reading “The view of Mahuta’s speech from across the Tasman: we are selling out our neighbours – and the West – to pander to Beijing”

The world is keen on our dairy products, which is great for our economy – but what happens when we start culling the cows?

Although  global  trading patterns  are still recovering from the  Covid  pandemic, the  positive  outcome   for  New Zealand   is  that  it  has  strengthened  demand for  the  kind of foodstuffs we produce.

In particular  the   dairy  trade is booming  and  though  the current  production season is beginning to tail off, Fonterra’s latest global dairy auction showed  demand, far  from  falling off, is  still  very  strong,  with  prices  for  whole  milk  powder   51%  higher  than at the  level they were at  this time  last  season.

Dairy products are the country’s largest commodity export and Fonterra estimates milk payments to its 10,000 farmer suppliers for this season would contribute about $11.5 billion to the economy.

The  encouraging  factor   for those  producers  is  that  there  is  every sign  the   high prices  being  earned  at  present  will  be  sustained  into  the  next  season.

Last month, Fonterra raised its forecast milk price for this season to between $7.30 and $7.90 kg/MS, with a mid-point of $7.60.  Some  analysts  are   forecasting $7.70 for this season, ahead of Fonterra’s mid-point.For next season, the  forecasts  range between $7.30   and  $7.50.

While the global dairy trade price index slipped 0.1% from the previous auction a fortnight ago, prices for whole milk powder, which has the most impact on what farmers are paid, gained 0.4% to an average US$4097 (NZ$5713) a tonne.

What  may  be  an irritant  for  the  industry, currency  movements  are  taking  some  of the  gloss  off the  prices  being earned.

With the rising Kiwi currency, the latest auction brought overall prices -2.0% lower in NZ dollars. The key WMP and SMP prices were virtually unchanged in US dollars. The best performer was cheddar cheese, up +1.2% in US dollars but even that was not enough to record a gain in NZD.

The   strong  market  is largely driven by China where a wealthier population and an increased focus on health and wellbeing after the Covid-19 pandemic is stoking demand for better nutrition.

North Asian buyers were back in force, taking up their usual positions as the major buyer.

At the latest auction, 99% of the whole milk powder on offer was sold. There were slight  downward movements  with both of the cream group products. That was  attributed  in part to  the extra volume of butter on offer.

Fonterra  indicated previously it is producing more butter to take  advantage of the  high return for it. That was  sensible,  with butter topping $US5,100  a  tonne.

Given the  outstanding  work  of  the  dairy  industry,  how    will  the  government  react  when  it   comes to   deal  with  the  Climate Change Commission’s  proposal  to  cut  dairy cow  numbers  by  15%?

Here’s hoping Transport Minister applies Transmission Gully lessons (and delays) to Light Rail project in Auckland

The Transmission Gully interim review has found serious flaws at the planning stage of the 27km highway, “undermining” the successful completion of the four-lane motorway north of Wellington, according to Infrastructure Minister Grant Robertson and Transport Minister Michael Wood.

Grant Robertson said the review found the public-private partnership (PPP) established under the last National government lacked the proper rigour and consideration.

The review was focused on how the project was awarded for the agreed price, whether the price was realistic, and whether the risks then identified were appropriately considered.

When  announcing  the  review  in  August last  year,  the  government said Transmission Gully would open by September 2021 but will cost another $208m to build, taking  the  cost  to $1.25bn.  Originally the  project’s  cost  was put  at $850m,   but Covid lockdowns  set it spiralling upwards.

At  that point in 2020 the government was  said  to have   “slammed” the delays and increased costs.

But hey – remember  that  Phil  Twyford  had   already  had  three  years as  Transport  Minister  to  expedite  the  project .  Yet all he  did was  order  a  review. Continue reading “Here’s hoping Transport Minister applies Transmission Gully lessons (and delays) to Light Rail project in Auckland”