Archive for May, 2012

National not so super as it sticks to pledge

The Govt took a pounding from the commentariat over its failure to deal with the costs of superannuation, which will rise by 30% over the next 4 years from $9.58bn in the current year to $12.36bn in 2016. John Key is holding fast to his pledge there won’t be any change to the superannuation scheme […]

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Transport: KiwiRail to benefit from asset sales funds

The Govt is still pumping big money into KiwiRail. The Budget revealed the Govt is appropriating $250m of capital for KiwiRail’s turnaround plan, the final round of a 3-year $750m funding package. It also indicated the Future Investment Fund being set up to absorb the proceeds of partial asset sales will provide the $250m.

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Education: Parata’s class-size blunder

Education Minister Hekia Parata blotted her copybook this week (and John Key didn’t like it). The Education Minister, who some had been touting as a high-flier looked anything but, as she scrambled to untangle arcing wires over teacher funding which might have led to some schools losing up to seven teaching posts.

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Politics: Govt achieves budget goals, while fighting brushfires

The Govt achieved its primary goals in the Budget, keeping a sense of stability and forward momentum, holding course towards eliminating the fiscal deficit by 2014, and winning support from international credit rating agencies. At the same time several brushfires broke out, not least in education, where the Govt was caught out in a classic […]

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Play of the week: small surplus in 2014, not many dead

It’s the week after the Budget and we seem to be going through the usual events. Complaints the Treasury forecasts are hopelessly unrealistic? Check. To be fair – well, to put the Treasury on a level playing field with other forecasters – everyone’s forecasts are wrong at the moment, and are more wrong than usual.

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Call for changes to tax structure

Former Future Fund chairman David Murray, says Aust has nothing to show for its record terms of trade, because the tax structure is too steep for companies and individuals, and not deep enough for consumption. Murray wants corporate tax cut to 20%, saying a better-designed tax system – with lower personal tax rates, a higher […]

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Agriculture: Fonterra payout fall not so bad

At first glance, it looked as if Fonterra’s cutting its milk price payout this season and its forecast for next season was another heavy blow to the country’s economic prospects. The total payout this season will mean around $500m less for the NZ economy this year.

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Labour: citizenship decision returns to haunt Jones

The decision of Shane Jones back in 2008 to grant citizenship to a Chinese businessman, over-riding the advice of officials, has come back to haunt the Labour Party. Jones this week conceded he knew there were serious questions about the true identity of the Chinese applicant known as William Yan.

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Euro crisis: Key gets inside track with european leaders

John Key heads to London, Brussels and Berlin next week for talks at a critical time in European history. Among the leaders he is due to meet include the most powerful woman in the world Angela Merkel.

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Play of the week: stayin’ alive

It’s only words, as the late Robin Gibb, of castrati disco balladeers the Bee Gees, once warbled. Gibb shuffled off this mortal coil this week, which triggered mourning among numerous disco bunnies of a certain age, and celebration and dancing in the streets by lovers of decent music.

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Education: budget’s big winner

Education is a big winner in this year’s budget, with an extra $511m earmarked for new initiatives over the next 4 years. An additional $60m will boost new teacher recruitment and training. There will be a shift to post-graduate qualification for new teachers. A new appraisal system is to be developed on teacher quality, and […]

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Justice ministry lures top lawyer

Justice CEO Andrew Bridgman has scored another coup by recruiting Frank McLaughlin, a partner in Chapman Tripp, as a Deputy Secretary. Earlier he lured Nigel Fyfe, NZ’s leading trade negotiator in the Ministry of Foreign Affairs & Trade, to be a deputy secretary and oversee the expansion of the public defence service.

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PM caught in media crossfire

Given the battering the Govt has taken this year, it’s not surprising John Key has been caught in a media crossfire suggesting he is feeling jaded and frustrated. This week he noted in a radio interview “the media are in a more aggressive mood and hostile mood towards us. I am not bent out of […]

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Budget: more austerity, but a glimmer of light

The dark economic cloud hanging over Europe is casting a long shadow over next week’s Budget, putting fiscal forecasts into question. Treasury is bracing itself for a wave of criticism its forecasts are hopelessly optimistic, as happened with the previous two budgets (though few of the critics can show they would do any better).

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Play of the week: over reactions

John Key suckered the media this week. Mind you, it wasn’t just the media. He used the same tactic he and his Govt have used against other opponents. It is a kind of negative tease, aimed at prompting an over-reaction, and it is extraordinarily effective.

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Talks to set timetable for NZ Afghan withdrawal

Crucial decisions on the withdrawal of troops from Afghanistan are expected to be framed at the ISAF conference in Chicago called by President Barack Obama on May 20 and 21. NZ will be represented by Defence Minister Jonathan Coleman and Foreign Minister Murray McCully. The talks will focus on how the transition from ISAF to […]

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Searching for an “elephant” gas field in Great South Basin

Fresh hope a drilling campaign may yet be mounted in the search for an “elephant” gas field, at least the size of Maui, which could lead to a $10bn plant to export LNG, stems from the decision of Shell Oil to become operator of a joint venture exploration in the Great South Basin.

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Finance: stability of NZ banks contrasts with European “ fragility”

NZ’s financial stability has improved, but the fragility in the Northern Hemisphere is far from over. In his latest financial stability report Reserve Bank Governor Alan Bollard warns any disruption to global funding markets is a “key” risk to NZ banks.

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Politics: Nats get back on top of political agenda

After losing momentum as a result of the Banks’ affair, the Govt got back on top of the political agenda this week, with its pre-budget announcements on welfare reform and changes to student allowances.

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Play of the week: an unconventional convention proposal

With the Govt in hot water -well, ok, lukewarm water, given the ineptitude of the opposition parties – over the Sky City National Convention Centre proposal, one has to wonder whether Ministers and business executives involved have really thought this one through.

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Economy: mixed signals in latest data

Economic data this week pointed to encouraging trends in some sectors, less favourable in others. The National Bank’s monthly survey reported business confidence has continued to improve, led by the retail and services sector. Residential building consents rose to their highest monthly level in 2 years in March, amid growing demand for new houses in […]

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Asset sales could source capital for KiwiBank

Critics of the Govt’s plan to sell off state assets were thrown a curve ball by John Key when he suggested some of the capital derived from the partial privatisation of energy SOEs might be applied in meeting the capital needs of KiwiBank.

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Economic debate – student loans: interest, or none?

Treasury documents flushed out by news media during the election campaign gave good reasons to consider reinstating interest on the student loan scheme, and fast. By then student debt had exceeded $12bn and was forecast to grow to more than $14bn over the following three years.

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Politics: coalition party rocks Govt’s boat

John Key was absorbing a lot of flak this week for not standing down ACT leader John Banks from Cabinet. Banks, always a lightning rod for political controversy, has been trying to bat away allegations about anonymous contributions to his mayoral campaign in Auckland in 2010.

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Play of the week: that’s incredible

We were asked to swallow a lot this week. Start with the latest in the ongoing soap opera involving ACC, Michelle Boag and Bronwyn Pullar. A tape of a crucial meeting between the parties apparently showed that the ACC’s claim Boag and Pullar threatened them with adverse publicity wasn’t true.

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