Warning! NZ disposable income down

Link received Mon, 6 Apr 2015 at 1:00 p.m.

█ Message: Wouldn’t read this in local media !!!

—

### marketoracle.co.uk Apr 05, 2015 – 01:28 PM GMT
Economics / Asian Economies
New Zealand Economy – There’s Trouble Brewing In Middle Earth
By Raul I Meijer
For the second time in three years, I’m fortunate enough to spend some time in New Zealand (or Aotearoa). In 2012, it was all mostly a pretty crazy touring schedule, but this time is a bit quieter. Still get to meet tons of people though, in between the relentless Automatic Earth publishing schedule. And of course people want to ask, once they know what I do, how I think their country is doing.
My answer is I think New Zealand is much better off than most other countries, but not because they’re presently richer (disappointing for many). They’re better off because of the potential here. Which isn’t being used much at all right now. In fact, New Zealand does about everything wrong on a political and macro-economic scale. […] I’ve been going through some numbers today, and lots of articles, and I think I have an idea what’s going on. Thank you to my new best friend Grant here in Northland (is it Kerikeri or Kaikohe?) for providing much of the reading material and the initial spark.
To begin with, official government data. We love those, don’t we, wherever we turn our inquisitive heads. Because no government would ever not be fully open and truthful.

This is from Stuff.co.nz, March 19 2015:
New Zealand GDP grew 3.3% last year

New Zealand’s economy grew 3.3% last year, the fastest since 2007 before the global financial crisis, Statistics NZ said. Most forecasts expect the economy to keep growing this year and next, although slightly more slowly than in the past year. For the three months ended December 31, GDP grew 0.8%, in line with Reserve Bank and other forecasts. That was led by shop sales and accommodation. That sounds great compared to most other nations. But then we find out where the alleged growth has come from (I say alleged because other data cast a serious doubt on the ‘official’ numbers) […] while the economy ostensibly grew by 3.3%, disposable income was down. That’s what you call a warning sign.

….Meijer’s commentary continues in reference to recent New Zealand news stories:

Stuff: Dairy Slump Hits New Zealand Exports To China
Radio NZ: Export Drop Rattles Companies
NZ Herald: World Dairy Prices Slide 10.8% On Supply Concerns
Radio NZ: World ‘Awash With Milk’
NZ Herald: Stress Too Much For Farmers
NZ Herald: Hot Properties: Auckland Valuations Out Of Date Within Months

He ends by citing NZ Herald: New Zealand’s Economic Winds Of Change:

Chaos theory calls it the butterfly effect. It’s the idea that a butterfly flapping its wings in the Amazon could cause a tornado in Texas. The New Zealand economy has plenty of its own butterflies changing the weather for GDP growth, jobs, interest rates, inflation and house prices. [..] One of the flappiest at the moment is the global iron ore price. It’s barely noticed here but it’s an indicator of growing trouble inside our largest trading partner, China, and it is knocking our second-largest partner, Australia, for six. It fell to a 10-year low of almost US$50 a tonne this week and is down from a peak of more than US$170 a tonne in early 2011.
[…] President Xi has reinforced the contrasting effects of the changes in China on Australia and New Zealand by encouraging consumers and investors to spend more of China’s big trade surpluses overseas. Tourism from China was up 40% in the first two months of this year from a year ago, and there remains plenty of demand from investors in China for New Zealand assets.
The dark side of this tornado in New Zealand after the flapping of the butterfly’s wings in China was felt in Nelson this week. The region’s biggest logging trucking firm, Waimea Contract Carriers, was put into voluntary administration owing $14m, partly because of a slump in log exports to China in the past six months.
That’s because New Zealand’s logs are now mostly shipped to China to be timber boxing for the concrete being poured in its new “ghost” cities. The Chinese iron ore butterfly has flapped and now we’re seeing Gold Coast winter breaks become cheaper and logging contracts rarer.

█ Read full article

Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

—

Posted by Elizabeth Kerr

Garrick Tremain, excellence

2 & 9 August 2013 (lowres)

garricktremain.com

The Swann
Fonterrorism

● Whereabouts of Michael Swann assets?
People can contact Dunedin police on (03) 471-4800 or via the anonymous Crimestoppers line, 0800-555-111.

—

Posted by Elizabeth Kerr

Winston Peters on the regions

[thejackalman.blogspot.com]

### ODT Online Fri, 9 Aug 2013
Cuts in South ‘sick joke’, Peters says
By Dene Mackenzie
New Zealand First leader Winston Peters arrives in Dunedin today determined to talk to as many people as possible about the local and regional economy. When contacted in Wellington, Mr Peters said he was concerned about the lack of regional development throughout New Zealand, particularly in areas where significant infrastructure had been paid for long ago by the taxpayers.

“Much of this is unused. It is not being expanded to help regions grow. I’ve listened to this psycho-babble for 28 years. The last person to have a regional development plan was Jim Anderton.”

Mr Peters quoted cuts in the regions to state housing, hospital services, schools, government departments and social services. “The infrastructure is there in places like Oamaru, Dunedin, Timaru and the West Coast.” The spending of money in Christchurch and Auckland was a “vote-gathering exercise”, he said. It was a “sick joke” that so much of New Zealand’s exports came from Otago and Southland – along with other regions – but they were being neglected.
Read more

—

Posted by Elizabeth Kerr

Call for campaign on exports

The Chamber of Commerce says while exporting continues to be concentrated on commodity agriculture, New Zealand has many innovative and creative businesses with the potential to be successful global players.

### idealog.co.nz Friday 11 Nov 2011 at 9:29 am
Leadership
Call for government-business partnership to campaign on exports
By Idealog
The Chamber of Commerce is calling for the incoming government to rethink its approach to exports, joining forces with the private sector to campaign to sell more to the rest of the world. Spokesman Michael Barnett said the traditional focus of increasing exports of conventional merchandise goods needed to shift up the value chain to high-tech, knowledge-based products, the export of services and the returns from outward direct overseas investment. “We believe the best way to improve New Zealand’s export performance is for the incoming government to establish an innovation-focused government-business partnership tasked to lead a campaign to sell more to the world.”
Read more

—

Posted by Elizabeth Kerr

Port Otago downgraded to regional status only

UPDATED

### ODT Online Tue, 17 May 2011
Maersk to drop weekly service to Australia
By Simon Hartley
Shipping giant Maersk, Port Otago’s largest customer, is dropping its weekly direct Southern Star transtasman service to Australia, the country’s largest trading partner. While the financial ramifications for Otago exporters are unclear, Port Otago will lose 10%, or about 22,000 TEUs (twenty foot equivalent container units), during the next year.
Read more

(16 May) News of Port of Otago’s downgrade filtered through on (Black) Friday.

It has yet to hit Otago Daily Times’ reporting with any force . . . we might get some analysis if we’re lucky, or interested.

Maersk. Fonterra.
Two cosy words that when read together spell no accident.

It’s been in the offing. Maersk has pulled the rugs on a number of New Zealand ports, Otago included – no doubt to ratchet lower port charges, not merely to facilitate freighting of New Zealand exports into Asia.

It’s far from clear what the costs of reducing local ports of call (in favour of long distance trucking and rail freighting to the North Island’s port of Tauranga) will be for exporters in the Otago Southland region.

We noticed, with suspicion, it was Lyttelton that walked away from a merger with Port Otago. We knew it wasn’t all down to [pretext] #eqnz.

We note too – sadly, for the regional economy – that Otago is frightfully good at exporting raw, not processed, logs. Such a very happy picture we have left of what POL is good for, apart from calls by oil boats and cruise liners.

We lost transhipping with no warning. Wonder if ORC is ruffled or upset. Who knew.

ODT has hidden or failed to surface with the implications of the Maersk decision, preferring to run a diatribe about KiwiRail and “inland ports” for Otago. It’s not as if the subjects are not connected. We expect the local newspaper to make the major news statements and connections palpable, in a timely manner.

A whole weekend has elapsed. Further, Maersk’s decision is in no way surprising, there was ample time for ODT to research the background.

Clues. Fonterra has been using POL logistics to prototype and determine how inland ports can be rolled out across New Zealand.

Worries. Port Otago has been on an export ‘growth wave’, not of its own making, for some years. Does the port board know how to create growth of its own or diversify its activities to meet the challenge dumped on it by (cosy) Maersk and Fonterra?

Did the port company properly attend to risk management before Black Friday?

(Aside) POL chief executive Geoff Plunket reiterates – as we learned from POL’s Peter Brown a few years ago – the company is of the view that State Highway 88 (Dunedin to Port Chalmers) has sufficient capacity to take all trucking freight. Public safety didn’t come into the equation then, and it doesn’t appear to now. But how many trucks won’t be using SH88 at all in the near future.

Lots to think about. Investigation required. News media, DCC, EDU, ORC, Otago Chamber, POL, exporters, port workers, unions, KiwiRail . . . it’s your time to start digging.

****

Friday 13 May
nzherald.co.nz Maersk changes to benefit NZ exporters
voxy.co.nz Maersk Line NZ Strengthens Links With Key Regional Hub Ports

Monday 16 May
odt.co.nz KiwiRail backs inland ports

****

Related Posts and Comments:
21.2.10 So where’s the media explosion?
26.2.10 Port Otago: “Next generation” project
27.3.10 Why should Port Otago dredge?
21.4.10 SH88 realignment
21.7.10 SH88 realignment – update

—

Posted by Elizabeth Kerr