Food miles economist takes award

Posted Fri, 31/08/2007 - 1:00am by admin

Published in the National Business Review of 31 August 2007

A Lincoln University economist's work in the so-called food miles debate has won her the annual Economics Award presented by the NZIER in association with the NBR.

Professor Caroline Saunders and her colleagues have debunked charges that New Zealand's food exports hurt the environment at Lincoln University showing that even after being transporting nearly 20 000 kms, the produce had fewer carbon emissions than if grown in the UK.

Her report said that "food miles is a very simplistic concept, and is misleading as it does not consider total energy use, especially in the production of the product."

She adds, "food miles is a contrivance - it got picked up by some bodies as a way to boost their own products," she says.

Fifty per cent of New Zealand's exports are in food and beverages, and about a third of these go to European Union markets, so "the potential risk is significant."

Comparing CO2 emissions on a life cycle assessment - that is, including production as well as transport - Saunders and her colleagues were able to show that the UK used twice as much energy per tonne of milk solids produced than New Zealand.

The figure for lamb was four times as high in the UK, and New Zealand also rated better for the production of apples and onions.

Survey backs public broadcasting

Posted Fri, 31/08/2007 - 1:00am by admin

Published on line by the National Business Review 31 August 2007

A survey of New Zealanders' attitudes to public broadcasting shows that its contributions are valued highly and may be used to support the current charter arrangements and taxpayer funding.

The Ministry of Culture and Heritage commissioned the project through Wellington research agency Synovate and it includes a telephone survey of 500 New Zealanders which has a margin of error of ±4.4%.

Public broadcasters were identified as Television New Zealand, Maori TV, Radio New Zealand and NiuFM (which includes 531PI and other radio stations for Pacific Island groups).

The two radio networks and Maori TV are publicly owned and publicly funded and have charter obligations, but TVNZ is only in part a public broadcaster. While it has charter obligations, it is also a commercial broadcaster and its size and range of programming dwarf all the others.

The survey sought to exclude private and community broadcasters to "measure the collective contribution from the public broadcasters," but there are question marks over what was actually measured.

In essence what did those who responded understand by the term "public broadcaster'? Did it include TV3, and radio networks like NewsTalkZB and Radio Live, all of which have a strong news and current affairs focus, and did it extend to more entertainment oriented formats like Hauraki, the Breeze, and C4?

More time for capital growth centre

Posted Fri, 10/08/2007 - 1:00am by admin

Published in the National Business Review of 10 August 2007

Wellington's publicly funded Industry Development Centre has won another six months of time and more public money to prove it can attract enough private sector support to be self funding.

The centre aims to revive the region's manufacturing base. An experienced German industrial manager, Wolfgang Marbach, has been appointed to run the centre.

When the centre opened in February it had funding for six months of operation from NZ Trade and Enterprise and the Foundation for Research, Science and Technology. It was also backed by the regional development agency, Industrial Research Ltd and Wellington Institute of Technology where it is housed.

It was said then that the centre had to win the financial backing of private sector companies for it to continue.

Nearly six months on, around $55 - $60 000 has been raised from the private sector. That's short of the target, but enough to encourage the public agencies to commit to another six months worth of support, the regional development agency's acting chief executive Phil Lewin said.

"In effect we have done enough to get more time to finish the job," he said.

"There are good vibes and there is goodwill and positive feedback in the Hutt Valley, but that's not enough. The next six months are critical. We have to prove that there is a viable basis for the centre to continue.

Retail chains shun Buy Kiwi Made campaign

Posted Fri, 10/08/2007 - 1:00am by admin

Published in the National Business Review of 10 August 2007

Consumers want to buy Kiwi but the chain stores are reluctant starters

Ten days out from the official launch of the advertising campaign for the government's Buy Kiwi Made campaign, none of the county's major retail chains have signed up have signed up to use the associated Buy New Zealand Made logo to attract customers.

Despite a report commissioned by the Ministry of Economic Development showing that 31% of consumers, and 39% of retailers, feel it is either 'difficult' or 'very difficult' to identify goods made in New Zealand, retailers aren't keen on joining the 'kiwi in a triangle' scheme.

Buy New Zealand Made director Samantha Seath says 680 manufactures "are on board, and we've got about 20 retailers so far." She said that no retail chains have joined although the campaign was "in discussions" with one chain, understood to be the Farmers group.

The Retailers Association's Chief Executive John Albertson, who is on the steering committee of the Buy Kiwi Made campaign, said that to be successful the campaign has to get the support of the buyers from the major department and chain stores.

In the last five weeks the Ministry of Economic Development has been contacting retailers by email but Mr Albertson says that hasn't resulted in "every chain leaping in and wanting to be part of (the campaign).

What makes a good annual report?

Posted Fri, 10/08/2007 - 1:00am by admin

Published in the National Business Review of 10 August 2007

John Bishop analyses the winners of the Institute of Chartered Accountants best annual report awards.

The annual report judged the country's best is one of its longest.

At 220 pages the 2005/06 report from the Wellington City Council is more than twice as long as the best report from a listed company, Auckland International Airport Ltd, at 86 pages.

Christchurch International Airport Ltd won the best small to medium sized enterprise category and its annual report is only 66 pages.

According to the judges in the Institute of Chartered Accountants Annual Report Awards Wellington City Council's report was clearly written with the target audience in mind.

"This distinguishes it from a lot of other annual reports. Its report maintains an attractive format with substantial content. Readers interested in a particular area of the Council's operations can zoom in to the relevant part of the report and get a complete picture."

On the first page the report states that it is a snapshot of the council's activities. "It's our way of making ourselves accountable to you - the people of Wellington."

The massive report is colour coded. Of the twelve colours used, four are shades of green with the accounts, the biggest section at 66 pages, in grey.

The core of the report is the nine achievement areas with their 44 sub categories and 84 sub sub categories.

New direction for EECA

Posted Fri, 03/08/2007 - 1:00am by admin

Published in the National Business Review of 3 August 2007

The new head of the government's energy efficiency agency has a new approach: he wants to make customers the focus of the agency's business.

Mike Underhill, a 59 year old electrical engineer, has been in the top job at the Energy Efficiency and Conservation Authority for three months, and he's talking about a new direction rather than a new structure.

"Engineers and economists have a great ability to make things complicated. I want to take the debate away from them and focus on the customers and changing their behaviour."

Mike Underhill was Chief Executive at lines company, WEL Energy in Hamilton, and was previously the top man at EnergyDirect in the Hutt Valley. He's long had an interest in energy efficiency.

In the past, Underhill says, attention was all on the supply side. The answer to increasing demand was always to build more power stations.

"New Zealanders used to wonder why we bothered with energy efficiency, and governments have been lukewarm at best. New Zealanders now want to do something about climate change, the environment and that includes energy efficiency and politicians also want action.

"We have to figure out how to change the behaviour of the people who use energy. Twenty years ago heat pumps seen as complex, expensive and unnecessary. Now they are a desirable and fashionable consumer item.

Lines business wants rejigged regulations

Posted Tue, 31/07/2007 - 1:00am by admin

Published in the National Business Review of 27 July 2007

Powerco, New Zealand second largest electricity lines company, is seeking changes to the regulation of natural monopolies to give more certain returns to investors.

The company says the present system discourages investment, and that the Commerce Commission focuses too much on customers' interests in prices and not enough on their interests in security of supply through adequate investment in infrastructure.

Powerco commissioned international advsiors, CASE Associates to prepare a submission to the government's review of regulation of utility industries and Parts 4 and 4A of the Commerce Act.

The report prepared by Dr Pinar Bagci, a Kiwi now working internationally, advocates a change from the current system of ex post regulation to an ex ante regime.

The changes would see electricity lines businesses like Powerco trade off the rate of return on capital for greater certainty of a return.

"At present, the Commerce Commission sets up an average price as a benchmark, and says to the ELBs that if you change more then we may inquire into the business. That's an ex post regime, Dr Bagci said.

"But in New Zealand the problem is that no one knows what will happen if the Commerce Commission does decide to inquire. There is uncertainty because there are no rules, and uncertainty deters investment.

Business organisations query carbon policy process

Posted Fri, 15/06/2007 - 1:00am by admin

Published in the National Business Review of of 15 June 2007

Business organisations are using the government's policy on carbon emissions trading to test its commitment to robust policy analysis, regulatory impact statements and effective consultation.

Eight major organisations, Business New Zealand, the Chambers of Commerce, Federated Farmers, the Business Roundtable, the Road Transport Forum, the Major Electricity Users Group, the Wood Processors Association and the Greenhouse Coalition have written to the Minister of Energy, the Prime Minister and other ministers.

Their letter complains that with the detailed design of an emissions trading scheme already well underway, the government intended to consult affected parties at the same time as it was drafting legislation.

An officials' timetable showed six weeks had been allowed for this.

"This is not consultation in good faith. The time frame for developing, consulting on and implementing a policy of this significance to the New Zealand economy needs due process to be followed.

"Due process is specified in the Cabinet Manual and includes the requirement for a regulatory impact statement," the organisations' letter said.

Last week the Minister of Commence Lianne Dalziel said the government had an"absolute commitment to robust policy analysis, effective engagement with stakeholders and proposals for regulation only where there is a clear case to support that approach."

English slates KiwiSaver Two over original scheme

Posted Fri, 15/06/2007 - 1:00am by admin

Published in the National Business Review of of 15 June 2007

Boosting retirement savings without also improving the economy was the wrong approach, National's Deputy Leader and finance spokesman Bill English told business leaders this week.

He said savings were important,, but the country's wellbeing was not all about preparing for retirement.

"We need a productive economy to invest in. We need to focus on growth ...and ensure there are plenty of growing businesses in New Zealand needing capital."

Praising the $1.2 billion of business tax cuts as "a good piece of policy", Mr English said KiwiSaver Mark Two had been forced upon Michael Cullen by circumstances.

"He, like me, has been sceptical about the use of incentives to boost savings, but he had to find way of dispersing the surplus.

"I'd have preferred to see the mark one version - the one without incentives - get up and running before it was turbocharged.

"Fiscally the mark two version is very expensive. It's going to take $1.1 billion out of households, and the fiscal cost to the government is $1.2 billion.

The update on KiwiSaver is forecast to be only 50%, and the Reserve Bank was people to draw down on term deposits to get into KiwiSaver.

The KiwiSaver scheme would not provide a large pool of capital, and would not lower the current account deficit.

The missing bits in the Budget

Posted Tue, 29/05/2007 - 1:00am by admin

Published in the DominionPost on 29 May 2007

In its early days, the Labour led government talked about leading New Zealand back to the top half of the OECD in living standards.

How many times was the term 'living standards' (or standard of living) mentioned in Dr Cullen's budget? Not once.

The government used to talk about the innovation society and the knowledge economy. Innovation gets two mentions, both of them innocuous. The 'knowledge economy' is not mentioned.

"Prosperity"? One reference - to KiwiSaver and future retirees.

Growth is used seven times, but never given as a goal or objective.

Last year Ministers were talking up the new agenda of economic transformation. SOEs Minister Trevor Mallard was proposing that the government's own businesses could lead the way.

Now boosting savings is being touted as the way forward, and much of the budget publicity and analysis has centered on Kiwisaver and compulsory funding.

Certainly saving more will cut consumption and boost investment, but any reduction in demand for imports is not going to remove the current account deficit of $14.4 billion (December 2006 figures) very quickly.

More savings will also boost the pool of investment capital available. But that won't happen quickly either. Contributions to Kiwisaver start at one percent and move to a top rate of four percent, while Australians are paying nine percent already.