Whoa there, before saluting the Ardern government for keeping so many people in work

Stats  NZ  figures  this  week indicated the  country’s  unemployment  was  3.3%  of  the  workforce  in the  June quarter, or 0.1% less  than in the  March  quarter.

So  should we give  three  cheers to the Ardern  government for sustaining employment at   such  a  high  level    through  the  Covid  pandemic?

Given  how wages have increased – for  example,  in the manufacturing sector by  8%  over the  past year – surely  you have to concede  the  economy  is  ticking along very nicely under  this  government?

First, let’s check out  the  number  drawing  benefits.

In  March  there  were 278,238  people  drawing  a  main benefit.  That’s 11.1% of  the  working  age  population. Continue reading “Whoa there, before saluting the Ardern government for keeping so many people in work”

Recovering our relationships with China, ASEAN and Samoa while grappling with climate change and protecting the kauri

Buzz from the Beehive

New Zealand’s relationships with China, the ASEAN countries and Samoa were embraced by speeches and announcements that flowed from the Beehive after Disarmament Minister Phil Twyford had delivered his Statement to the 2022 Review Conference for the Treaty on the Non-Proliferation of Nuclear Weapons.

Trade Minister Damien O’Connor addressed the China Business Summit, Foreign Minister Nanaia Mahuta departed for the Indo-Pacific region for a programme of talks on security and economic issues, and the PM announced the launch of a new climate change partnership with Samoa and confirmed support for the rebuild of the capital’s main market.

The PM’s announcements were accompanied by $15 million to support Samoa’s response to climate change and $12 million toward the rebuild of the Savalalo Market in Apia

Ministers with a domestic focus meanwhile were getting on with telling us about their legislative and regulatory agendas and other programmes.

A major item was the launch today of New Zealand’s first National Adaptation Plan, designed to ensure communities have the information and support they need to prepare for the impacts of climate change.

But our lives will also be affected – for better or worse – by:- Continue reading “Recovering our relationships with China, ASEAN and Samoa while grappling with climate change and protecting the kauri”

Govt is chuffed as consultations begin on income insurance scheme – but the Nats point out it’s a new tax

A double dose of Covid announcements from The Beehive – regarding rapid antigen tests and booster shots – was accompanied by two spending decisions to help specific groups,  arts and culture and Pacific people, in the name of the recovery from Covid.

There have been announcements regarding the country’s economic wellbeing, one to welcome news that unemployment has fallen to record low levels, the other to tell of a programme to lift Southland’s economic performance.  The Southland Just Transition Work Plan can be downloaded from the Southland Just Transition website: https://southlandjusttransition.nz/

And there has been an announcement to remind us what day it is.  It’s World Wetlands Day today.  Hurrah.

Then there has been news of consultations beginning on an income insurance scheme.  This perhaps belongs among the economic announcements but also qualifies as a “labour market” initiative – and a big one.

But is it a good one?

Not according to the Nats, who are hollering about the tax-gathering and profit-draining aspect of the scheme.    Continue reading “Govt is chuffed as consultations begin on income insurance scheme – but the Nats point out it’s a new tax”

We can be cheered by low unemployment rather than be vexed by rising CPI – but the data need a closer look

Taxpayers are dishing out $633,000 to help a venture described as “a long-running penguin rehab facility which has been hard hit by the tourism downturn” and $2.8 million to restore native forest habitats in the Catlins.

The Jobs for Nature funding for Otago’s Penguin Place and The Hokonui Rūnanga Catlins Biodiversity Project was announced yesterday by Conservation Minister Kiri Allan.

Some readers might wonder about the prudence of this sort of spending but Finance Minister Grant Robertson assured Newstalk ZB’s Mike Hosking that government spending is not contributing a significant amount to inflation.

“We continue to be careful with our spending but the reality is if you were to cut health spending that doesn’t change the price of petrol. We have got to be pretty careful of not cutting our nose to spite our face.

“Obviously we are prudent with what we do but there are a lot of things we do need to be investing into in New Zealand. We have got to keep doing those.”

The penguins should be grateful their wellbeing is regarded as an essential investment. Continue reading “We can be cheered by low unemployment rather than be vexed by rising CPI – but the data need a closer look”

Two perspectives on the NZ economy – the business outlook (grim) and Robertson’s emphasis on resilience (ebullient)

Listen  to  economists, and  you  will hear  that New Zealand is ploughing through rough  waters. Inflation expectations  are soaring, business  confidence   is  falling, investment intentions   are  down.

In fact, the  ANZ  Business  Outlook data  for  November record declines in all forward-looking activity indicators except employment intentions.  A net 9% of firms expect lower profits ahead.

This is likely related to extreme cost pressures, with a net 89 % of  firms   reporting   higher  costs.

If you want an antidote to this pessimism, listen  to  Finance Minister  Grant  Robertson in Parliament – the  story he tells is very  different.

Answering  a  “patsy” from Mana  MP Barbara Edmonds,  Robertson  celebrated the  resilience of  the  NZ  economy  which – he  said – had been demonstrated by last week’s Statistics New Zealand job figures for the September 2021 quarter.

The data showed the unemployment rate fell from 4%  in June to a record-equalling low of 3.4% in the September quarter, last recorded in December 2007.

Whoopee. Continue reading “Two perspectives on the NZ economy – the business outlook (grim) and Robertson’s emphasis on resilience (ebullient)”

The people represented by Poto Williams loom large in consultations on Police’s Tactical Response Model

Latest from the Beehive

Poto Williams  –  a few months ago – was telling us who had influenced her refusal to support the general arming of police.

At that time, a man who admitted murdering Constable Matthew Hunt during a routine traffic stop was on trial.  He was denying the attempted murder of a second officer.

A Hamilton officer had been injured by a firearm during a routine traffic check earlier that  month, police in Hamilton and Auckland had been confronted by armed offenders, and Police Association president Chris Cahill was calling for more frontline police to be armed because of a growing number of criminals carrying guns.

Poto Williams’ reason for sticking to her guns (so to speak) and for resisting any clamour for the general arming of the police?

The Māori and Pacific Island communities she represents did not want it, she insisted.

Williams told Newstalk ZB’s Mike Yardley she supported police officers being armed when they needed to be, but did not think it should extend to the permanent arming of the force.

This was because she had listened to overwhelming feedback from the Māori, Pacific Island and South Auckland communities who didn’t want it.

The communities she represented – Māori and Pacific – who were telling her “loud and clear” that the general arming of police and the Armed Response Teams (ARTs) were a real concern to them and had been distressed to learn armed police were routinely patrolling their streets, she said. Continue reading “The people represented by Poto Williams loom large in consultations on Police’s Tactical Response Model”

Child poverty group presses for more govt help as demand for benefits and food grants surges

So   how  is  the  team  of  five  million  looking after  its   latest  encounter  with  Covid-19  and  its  more  transmissible  Delta  strain?

The  majority    will  be  relieved  to  have  escaped  its  clutches.

On  the  other  side  of the  ledger,  the virus  has  had  a powerful  impact  on  lower-  income  groups.

One  lobby  group,  noting the current lockdown triggered the largest weekly increase in numbers of people receiving benefits since the first lockdown last year, says the government isn’t doing enough to help affected families.

The latest MSD reporting also shows food grant numbers near the end of August were double what they were at the same time last year, when Auckland was in a level 3 lockdown. Continue reading “Child poverty group presses for more govt help as demand for benefits and food grants surges”

NZ economy must remain nimble and agile, says Robertson – but then NZ went into lockdown and a hobble was applied

It   seems   an aeon  ago,  but it  was  only  last  week that  New Zealand’s wellbeing-focused government was  contemplating   how  to connect the country safely   with the rest  of the  world.   Now, achingly,  the  question is how  long the  lockdown  will last.

Whereas  last  week   the  headlines (like   this one from Newsroom) chorused “Covid success  weighs on Ardern’s  shoulders”, feelings among the  team  of  5 million might now be  deepening over why  such  a  relatively  small percentage  of  the population  is   fully  vaccinated. 

Or  why  the  elderly, in particular, are  not  queueing  for  booster  shots.

NZ,   by  some counts, has  had the slowest  vaccination rollout in the developed world.

The  PM’s  insistence that her government’s Covid response and recovery path has been dictated by the “best evidence we have about how to protect people’s lives and livelihoods’’  accordingly rings  a  bit  hollow. Continue reading “NZ economy must remain nimble and agile, says Robertson – but then NZ went into lockdown and a hobble was applied”

Aucklanders will fund the expansion of the screen industry as ratepayers (via their city council) and taxpayers

Aucklanders will be chuffed to learn the film studios they own as ratepayers are to be given a share of the millions of dollars the government is eager to pour into the film industry.

Mind you, they mightn’t be so chuffed to learn they will be financing the expansion  of the studios as taxpayers and as ratepayers.

Auckland Film Studios, in West Auckland, has received funding for a major expansion through the Government’s Infrastructure Reference Group’s (IRG) COVID-19 Response Fund.

The Government is investing $30 million of a total $35 million project to construct two 2,000sqm sound stages and development of further workshops and offices, to expand capacity at the Auckland Council-owned studios in Henderson.

The project will be undertaken by Auckland Unlimited Limited, the region’s economic development agency, with co-funding provided by Auckland Council.

Social Development and Employment Minister had the privilege of joining Economic and Regional Development Minister Stuart Nash in making the announcement and providing the rationale:

“Our screen industry employs around 16,200 people and contributes $3.3b to GDP per year,” she said… 

And:

“This development will see a material increase in the number of purpose-built sound stages available in New Zealand and increase our capacity to produce more content for domestic and international audiences.

“It is also a significant investment for Henderson and the wider Auckland region, creating more employment opportunities in the area. This includes 100 initial construction jobs, as well as up to 300 new jobs in the screen sector when the stages are completed next year.

“It will also provide more creative opportunities for New Zealanders in the film and television industries which will help them realise their potential here at home,” Carmel Sepuloni said.

She thus joined the cast of government politicians of all stripes whose critical faculties perhaps become bedazzled by the floodlights when the question of propping up movie moguls as well as smaller film makers is examined.

The  government pays out millions of dollars in subsidies to the screen industry every year.  The question is whether this money should be spent elsewhere.

In February last year, Matt Nippert in the NZ Herald revealed that Sir Peter Jackson’s Wellington-based Weta Group was receiving more than $40 million of the annual sum.

The Government insists this spending is beneficial to New Zealand, especially for the country’s tourism industry.

New Zealand Initiative economist Eric Crampton challenged this:

“What we’re not seeing are the other industries that might be here employing people instead if we didn’t have massive subsidies going into the film sector and diverting people into those areas,” Mr Crampton told TVNZ 1’s Breakfast.

“It’s hard to imagine any industry in the country that wouldn’t argue that if they could just get a 20 per cent rebate on everything that they spend in the country with opportunity for another five per cent back if they can show that there is enough benefit to New Zealand – every industry would love to have that kind of arrangement,” he says.

“It just feels a bit odd that we’re giving, according to Nippert’s findings, as much money to Weta Workshop as were giving to Radio New Zealand a public broadcaster,” he says.

Crampton said around $170 million was spent in subsidies to international films.

He noted that other industries are affected because they can’t get the people they need in the right jobs.

He cited the video game industry, which had been complaining it couldn’t get workers “because they’re all being sucked in to video animation in the subsidised film industry,”

The PM – of course – disagreed.

But if the TV One report gave a full account of everything she told them on the subject, her support for the subsidies is rooted in belief and on hearsay:

She says she believes the flow on affect of the film sector is worth it for New Zealand. 

“You ask anyone who works in the industry whether or not it makes a difference… the flow on affect is huge,” the Prime Minister said today.

“The film industry is completely unique.”

A few months later, Stuff alerted its readers to a Treasury warning that New Zealand taxpayers must fork out $1 billion in subsidies to the film industry in the next five years  – money the Government will have to find by ratcheting down new spending in other departments.

Despite these eye-watering costs, Finance Minister Grant Robertson is happy with the scheme, saying it’s the cost of having a film industry.

A large portion of the subsidising would ease the cost of the Lord of the Rings TV adaptation, made by Amazon Studios, which is owned by Jeff Bezos, the world’s second richest person.

The author of the Stuff, report, Thomas Coughlan, noted:

This massive cost is because the subsidy scheme is uncapped, meaning there’s no limit on the amount of money the Government would have to hand over.

He referenced a repetition of Treasury’s warning in the Government’s December forecasts in 2020, although again no specific sum was mentioned.

And he mentioned the answer to a Written Parliamentary Question from ACT deputy leader Brooke van Velden from Economic Development Minister Stuart Nash, who acknowledged Treasury was forecasting the Government to be on the hook for $1 billion dollars from 2021 to 2025, “or an average of $200 million per annum”.

“This fiscal forecast includes an estimate of expenditure based on known productions including the Lord of the Rings television series and Avatar sequels,” Nash said.

It was also expected to attract an estimated $4.4b of international production spend into the New Zealand economy.

Coughlan reported that the subsidies have run massively over the budget envisaged just a few years earlier.

In 2017 the scheme was given $55m a year for the years 2017-2021. But by 2019, the scheme already required topping up. An extra $155m was approved for the rest of that year – and a further $206m was approved in the 2020 Budget.

Nash said the scheme had baseline funding of $50.6m a year going forward.

But every dollar above that must drain new budgets.

This means that each year Robertson will have to find about $150m extra for the scheme and each dollar will have to come at the cost of increasing spending somewhere else.

These trade-offs will be significant; In the 2020 Budget, all new spending in the Education portfolio totalled $165.2m.

Film subsidies, however, were given $185m for the same year – $140m for films from overseas companies, and $45m for local productions.

Robertson said he was comfortable with the pressures and trade-offs that the subsidy required him to make.

“Once you’re into the game of film subsidies you have to be in it – the rest of the world is in it and if you want a film industry this is part of the price you pay.”

Earlier this year, the public learned of the government sweetening its deal with  Amazon for filming the Lord of the Rings TV series in New Zealand.

Under a Memorandum of Understanding Amazon will get an extra 5 percent from the Screen Production Grant in addition to the 20 percent grant the production already qualifies for.

Amazon plans to spend about $650 million on season one of the show meaning it would be eligible for a rebate of over $160m.

 Auckland will soon be better able to bid for  a slice of the action.

Latest from the Beehive

The Economy

 Wages up, unemployment down

The Government’s efforts to secure the recovery has seen more Kiwis in jobs and higher wages, with unemployment falling to pre-COVID levels and more people in work.   
Stats NZ figures show unemployment rate fell to 4 percent in the June quarter from 4.6 percent in the March quarter, the lowest rate since December 2019. This compares with The Treasury’s Half year Economic and Fiscal Update forecast unemployment rate of 5.2 percent.

Employment rose by 28,000 in the quarter, and the total number of people in work is now 63,000 above where it was in the December 2019 quarter before COVID.

The average hourly wage rose 4 percent to $34.76 an hour, compared with a 3.3 percent rise in inflation, meaning more money in New Zealander’s back pockets.

“This positive result shows the Government’s plan is delivering, giving households and businesses the confidence to spend and invest and accelerate the recovery. An extra 63,000 people are in jobs since September 2020, when unemployment peaked at 5.2 percent,” Grant Robertson said.

Obituary 

Poroporoaki: Dr Kihi Ngatai OSM

Ngāi Te Rangi, Ngāti Ranginui and Ngāti Pukenga mourn the loss of a Māori horticultural pioneer, with the passing of Dr Kihi Ngatai OSM.

Along with his late wife Maria, the couple planted the first kiwifruit vines in the Tauranga region more than 40 years ago.

“He was a true visionary and will be sadly missed by his whānau and the wider community,” said Minister for Māori Development Willie Jackson.

 Screen industry

Government support screen industry with funding for sound stages in West Auckland

Auckland Film Studios in West Auckland has received funding for a major expansion through the Government’s Infrastructure Reference Group’s (IRG) COVID-19 Response Fund.

The Government is investing $30 million of a total $35 million project to construct two 2,000sqm sound stages and development of further workshops and offices, to expand capacity at the Auckland Council-owned studios in Henderson.

The project will be undertaken by Auckland Unlimited Limited, the region’s economic development agency, with co-funding provided by Auckland Council.

Conservation

Protecting unique land for generation next

An $8 million investment over four years will result in Queen Elizabeth II National Trust work with government agencies, councils and others to provide legal protection of Jobs for Nature-funded projects through Open Space Covenants.

That will ensure the biodiversity gains from the Crown’s investment in Jobs for Nature are protected and sustained on private land and allows QEII to legally protect hundreds of hectares of private land with high biodiversity value, Sonservation Minister Kiri Allan said.

An Open Space Covenant is an agreement between QEII and a landowner to protect an area forever. The landowner continues to own and manage the protected land, and the covenant and protection stays on the land, even when the property is sold to a new owner. QEII drafts the legal documents, pays for survey costs and shares the cost of fencing with the landowner, often alongside a contribution from another agency like the regional council.

A new form of legal protection, at this stage called a restoration agreement, will also be developed for Jobs for Nature projects that do not have strong enough existing biodiversity values to meet the Open Space Covenant criteria. Such an agreement may be more suitable for native revegetation or wetland restoration projects.

Fiji 

New Zealand’s support for Fiji’s COVID-19 response continues with vaccine delivery, operational support

Foreign Minister Nanaia Mahuta has announced further support for Fiji, including funding support for nursing staff and 100,000 doses of vaccines due to arrive in country yesterday.

New Zealand has funded 100,000 doses of the AstraZeneca vaccine directly from the Spanish government in order to meet Fiji’s immediate vaccine requirements.

Earlier this year New Zealand committed to providing up to 500,000 doses of vaccine to support Fiji’s rollout. Fiji’s vaccination programme is progressing well with 25% now fully vaccinated, and first doses provided to 82% of the population

New Zealand is also funding the recruitment of 190 Fiji graduate nurses, for a three month period, to provide surge capacity across the health system including at Fiji’s isolation facilities.

Bee-keepers are among the winners in our Covid-affected economy but – with 141,000 unemployed – hardship is inevitable

 LATEST FROM THE BEEHIVE

A Newroom article with a somewhat emotive headline (Dad-of-eight laid off in lockdown: ‘We’re not seeing an economic recovery’) contrasts the grim findings of hardship in a Salvation Army report with Prime Minister Jacinda Ardern’s hailing New Zealand’s relatively strong job market as the “envy of many countries”.

The job market data were surprisingly encouraging.  The seasonally adjusted unemployment rate dropped to 4.9 per cent in the December 2020 quarter, down from a Covid lockdown-driven peak of 5.3 per cent three months earlier.

But that’s not what Salvation Army social workers are seeing out on the street, according to the welfare organisation’s state of the nation report.

Apprising us of the report’s findings, Newsroom adds:

It’s not what Dave Letele and his team at BBM Motivation in south and west Auckland are seeing. And it’s certainly not what unemployed father-of-eight Ray Milovale is seeing. Continue reading “Bee-keepers are among the winners in our Covid-affected economy but – with 141,000 unemployed – hardship is inevitable”