Blair and Boris – who would have thought it?

At last, a glimpse of bipartisan analysis in the chaos engulfing Boris Johnson’s premiership.

Say what you like about Tony Blair, but he is a serious politician.  What he says is worth taking seriously.  

It is also not great for Boris.  And worse for everyone else.

Continue reading “Blair and Boris – who would have thought it?”

Transitory inflation retires but does not recede

His reappointment as conductor of the world’s monetary orchestra safely in the bag, US Federal Reserve chairman Jay Powell let us know that the current bout of “transitory” inflation was a little more than that.

“It is probably a good time to retire that word”, he told the world.

As euphemisms go, it may not acquire the notoriety of the Nixon White House’s description of a previous statement as “inoperative”.

Continue reading “Transitory inflation retires but does not recede”

Boris’s budget tests limits to destruction

Gosh, politics is a rum game.  Britain’s PM, Boris Johnson, took some big risks and triumphantly shattered Britain’s political status quo during the Brexit turmoil.  But last week’s budget statement set the country’s economic parameters in anything but a Thatcherite way.

The difficulty is less in the government’s post-Covid financial tidying up, and more in its approach to long-term problems.  And these look like they might become more urgent – and sooner.

Continue reading “Boris’s budget tests limits to destruction”

So how does the housing boom end?

It’s an old adage that a speculative market collapses not when prices get crazy but when the last person who insists prices are crazy gives up in despair.  

Worth bearing in mind when London’s Financial Times tells us that the pandemic has fuelled “the broadest global house price boom in two decades”, even bigger than the one which preceded and helped trigger the 2008 global financial crisis, and which is understandably reviving concerns about financial stability.

Continue reading “So how does the housing boom end?”

Climate change just got cheaper – or maybe not …

Britain’s fiscal watchdog – the Office of Budget Responsibility (OBR) – has some good news.  It thinks the cost for the UK of getting to zero carbon could be much less than anticipated:  

While unmitigated climate change would spell disaster, the net fiscal costs of moving to net zero emissions by 2050 could be comparatively modest.”

Under its ‘early action scenario’ government net debt would rise by a mere 20% of GDP in the years to 2050 from the current 105%.  That almost seems encouraging when compared with the near-30% of GDP increase responding to the Covid pandemic , and the roughly 50% surge which followed the global financial crisis.

Continue reading “Climate change just got cheaper – or maybe not …”

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”

Covid: everybody loses – at first

As we emerge from the Covid panic phase, you might think that the situation bears an increasing resemblance to the slow motion crises of the 1970s and 80s.

Recall the political economy big picture. The old system had had a good run.  Patterns were familiar and tools had developed to manage political pressures – a nudge here, a subsidy there, a few more jobs in state forests or on the railways, an occasional long-term policy artfully planted and left to mature.

But as growth slowed, economic pressures built and became unmanageable in the old framework.  Political confusion ensued: the slogans stopped working because the voters’ demands couldn’t be reconciled.

This suggests we need to figure out what people expect of government as a result of the Covid crisis – and how that might be orchestrated and channelled through the voting system.

Continue reading Covid: everybody loses – at first

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

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.

Continue reading “Covid news not bad; political and economic news not good”

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.

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