Brexit apparently good for New Zealand says British Minister


As we watch Britain lurch ever more unsteadily towards Brexit, arguing with itself and with the French and German officials at the same time, U.K. officials are already starting to think about the trade negotiations with various Commonwealth nations waiting to be started. Come whatever eventually will on 01 November 2019, there is a British Government official saying that New Zealand has nothing to fear from Brexit and that the United Kingdom wants rapid talks to get underway once the process is done.

That will depend on how well the next several weeks go and what kind of U.K. we have on 01 November 2019. Will it be a U.K. that has some how managed to secure a Brexit deal against the shadow of the infighting, the legal uncertainty and the politicking? Will it be a U.K. now on the cusp of falling to bits as it reckons with a dodgy new post Brexit reality? Or will something nobody has foreseen happen?

On one hand trade deal between the two countries would be great and I suspect conducted on far more friendly terms than an American trade deal – if we ever get one with Washington – is likely to be done. On the other, I cannot help but get the feeling that it will be lost in the hullabaloo that is going increase by orders of magnitude, drowning out rational conversations especially if there looks like being no serious prospect of an exit deal that Britain AND the E.U. can live with.

New Zealand needs to be realistic. As much as we are liked and respected in London, there are plenty of other bigger, more interesting fish for the U.K. to cook, which will compete with New Zealand for the attention of U.K. Trade Secretary Liz Truss. Canada, Australia, India among others are going to be actively seeking out U.K. officials to put a good word in their ears about doing a deal with their countries.

But before any of this happens, we need to know what form of U.K. we are going to wake up to on 02 November New Zealand time. We need to know that they will be in a position to negotiate, which might not be so easy if a no-deal Brexit occurs and they find hard borders springing up around them. And if they can start negotiations, will the terms of reference involve things New Zealand holds dear like Pharmac’s independence, whether there will be changes to visas for New Zealanders with U.K. connections and so forth.

Another question is whether Britain goes to the polls again or not. And after the votes are counted will it still be shades of navy blue of the Conservatives or the bright deep red of Labour, or will the Liberal Democrats have managed to smudge their colours all over the country?

Time will tell.

 

“Over tourism” in New Zealand?


Recently reporter Brook Sabin opined about a New Zealand that he says has gone from being a nice little country off the beaten trail to being over touristed mecca that has lost or is in the process of losing its glory. His opinion piece for Stuff detailed a number of festering problem areas in New Zealand, which got me thinking about whether New Zealand is over touristed.

When I was doing Year 13 Geography at school, we had to look at an “economic process” as a class and were given the choice of one of the following: industrialization, tourism and a couple of others. At my school we did tourism. The tourism process focussed on two areas of interest – Queenstown and the Gold Coast. We examined the pull factors such as the mountains and scenery in Queenstown, and the beaches and warm climate on the Gold Coast.

One memory that stands out from the Queenstown segment of this study was being shown a progress chart for the foreseeable future. It showed Queenstown on an accelerating curve up to the end of the 20th Century (given that this was taught in 1999, I think it could be classified as foreseeable future). Once it passed the 20th century the chart showed continued acceleration for a few more years before breaking into fourĀ  different potential directions. One suggested growth would just keep on going; a second suggested it would slow down, but not stop completely; a third suggested it was going to flatline indefinitely in the near future from physical limitations and the fourth suggested things would start to run in reverse before very long. I think in 2019, the second possibility is the current front runner followed by the third if we are not careful.

Queenstown has a number of major problems that are increasingly interconnected:

  1. It has used up nearly all of the flat land available to it and is now starting to put pressure on neighbouring places such as Wanaka. In turn Wanaka has gone from being a sleepy town that becomes active during holidays and every second year for the Warbirds over Wanaka airshow to effectively a dormitory suburb of Queenstown. The same goes for Arrowtown, a sleepy picturesque town known for its lovely autumn photography of deciduous trees shedding their leaves.
  2. The rapid growth has not been matched by infrastructure. Queenstown roads, water and sewerage networks are under increasing pressure to the point that Queenstown Lakes District Council recently applied for permission to discharge sewerage directly into Lake Wakatipu, which is half of the overall tourist attraction.
  3. Tourists, tourists, tourists. We need tourists to come and spend money and go home with great memories of a friendly nation, but many attendant problems such as freedom camping, dumping of waste and ignorance of protocol around tourist attractions.

It is not just Queenstown though, that is struggling. Whilst Queenstown has become in some respects a victim of its own success, there are many other tourist attractions as well where the numbers of tourists are reaching problematic levels. One such place is the Tongariro Crossing in the middle of Tongariro National Park/World Heritage Area. Day in day out in all weather, good and bad there is a steady line of tourists snaking across Mordor. Most come prepared and have an idea of what they are getting into, but some come thinking its just a couple hours walk and get stuck. With the tourists also come litter problems, people having to airlifted off because they ignored warnings about track conditions and so on.

Small locations like Franz Josef on the West Coast and Tekapo in inland Canterbury, where the permanent population is only a couple of hundred people struggle with over crowding. Franz Josef has the busiest helipad in New Zealand sending dozens of flights up to the glaciers each day almost from dawn until dusk. Down at the small airstrip near the Waiho River single and twin engined light aircraft are coming and going constantly flying over the glaciers and Mt Cook. Numerous tourist buses trundle through daily, plying the same route. Once a sleepy town at the foot of the Southern Alps, like Wanaka, it is no longer quiet unless the Waiho River has knocked out the bridge.

New Zealand prides itself on its environmental sustainability. Compared with many nations we are comparatively clean and green, but the notion we are 100% pure clean is so wrong, I have actually tried complaining about it being misleading advertising. We are most certainly not 100% pure and the faster that silly campaign ends the better. People coming to New Zealand expend significant carbon just getting here, never what they do once they have arrived. The waste that comes out of rental cars is considerable – food, tourist advertising, abandoned clothing items among other stuff which will fill a skip within a week.

I initially actually thought Mr Sabin was being a pessimist, but unfortunately there is more truth to his words than I think most of us New Zealanders want to admit.

 

 

 

Kiwi Build facade still there: No building behind it


Those living in Christchurch could be forgiven for looking at the gutted Kiwi Build programme and thinking that it reminds them of certain derelict facades left behind in the post-earthquake central business district. Battered, clearly having seen better days and with literally nothing of substance behind it, Kiwi Build’s future was announced yesterday after months and months in the repair shop. So what will become of the scheme that was going to promise 10,000 houses a year or about 100,000 all up?

In a press conference that was perhaps fitting for its size given the time, money and resources invested in Kiwi Build by the Government, Minister in charge Megan Woods was keen to make sure New Zealanders know that Kiwi Build still exists. She acknowledged the problems with the promises made and drastically marked down the number of houses expected – an interim target of 1,000 as opposed to the 100,000 that had been promised when the then Housing spokesperson Phil Twyford had basically plucked the number from thin air in 2017.

Kiwi Build was never really going to happen. The number promised was unrealistic and would have tied up our building sector in unaffordable delays to major projects. Phil Twyford should have understood this – and probably did – but instead of quietly admitting Kiwi Build was unrealistic, he let it drag out for months, showed his incompetence and finally lost the Housing portfolio. Dr Woods understood Kiwi Build was not realistic, but she was new to the portfolio and needed time to get up to speed on it, as well as figure out what to do with the facade of a grand idea that was attached to nothing.

Rather than set targets, Dr Woods could be looking at why councils have unused housing that could be made available. In Christchurch, rather than build a wad of new houses, how about appropriating the ones that were uplifted and transported to Yaldhurst from the eastern suburbs.

I want all New Zealanders to have warm healthy dry accommodation. Rather than a straight jacket one size fits all mentality, we should be looking at a diverse housing mix, including single bedroom flats as well as apartment options. Not all of us need a 3 bedroom stand alone house sitting on 1/3 acre such as my parents property in Bryndwr, Christchurch. And rather than promoting urban sprawl which consumes good arable land that is best left for agriculture and so forth, apartment blocks 3 or 4 stories high, such as that which a friend in Sweden lives.

What Kiwi Build eventually gets remembered as, we do not yet know, but we do know that the facade of it is not going to have any respectable structure behind it for sometime yet. Just like certain facades in Christchurch.

 

 

 

National and Labour wrong about debt limits


When I was growing up I was taught – as was everybody else I know – that if you borrow money, you repay it. A rule that I abide by as best as I can to this day.

Spend within ones limits, unless you borrow money that you acknowledge is not yours and has to be repaid, was another rule that I was taught. For me, borrowing is something I would personally only do in an emergency and only if I could repay in full as soon as the problem has passed.

I will admit now, I did one economics paper at University only because it was suggested that I do one. To this day I do not know why because I knew when I enrolled in it I was not going to pass. I knew I was not interested in it in the least. I was correct on both accounts. I failed, made a conscious decision not to retake it and never looked back. So one might argue that I therefore know nothing about economics and am probably not the best person to judge the apparent bipartisanship in Parliament when it comes to raising debt limits. It might also be argued that running a country’s finances is a lot more complex than a private bank account.

As a student at the University of Canterbury I would sit in the main cafeteria watching the student debt clock that the University of Canterbury Students Association installed before I started, going up by tens of thousands of dollars an hour, hundreds of thousands of dollars a day and millions each week. I did challenge them on occasion as to the accuracy of the clock and was told rather patronizingly that it was. I asked myself and others whose fault it was that student debt was out of control and how it was going to be recovered. We could not completely agree – some thought it was entirely the Government for removing or undermining social assistance such as the postgraduate allowance, and the emergency unemployment benefit. Others thought it was the tertiary institutions, while still more thought it was students spending up large. Whatever the case it currently sits at $15 billion.

Politicians no longer seem interested in addressing how this debt will be repaid. The most recent figures point to 731,000 people having a debt averaging $21,000 to be repaid. Maybe it is a beast that they have put in the “too hard” basket. But that unwillingness to tackle this makes me wonder why I should trust them with handling the debt that would ensue.

I believe in saving borrowing for a rainy day period or for after a natural disaster where you will have unforeseen expenditures that will not be immediately obvious. After the Christchurch earthquakes, suddenly finding N.Z.$35 billion was not something New Zealand could do in a rush so in that instance we had no choice but to borrow. But how are we paying it back? ARE we paying it back? I hope so, because the more we pay back now, the better position we will be in financially for when the next disaster – be it an Alpine Fault earthquake, the Waimakariri River breaks out or one of the volcanoes in the North Island erupts – hits.

National and Labour’s bipartisanship on letting New Zealand’s government debt level increase is therefore something that I find alarming. It also brings me back to my favourite mantra of “growing the pie, instead of slicing and dicing the pie”, which I have described in recent articles.

If we do decide to increase our debt levels, which National’s Finance spokesperson Dr Paul Goldsmith is quite open to doing, we need to know what instruments we are going to use to raise the money. Raising taxes appears to be a no-no on both sides of the house for a change, with possibly only the Green Party interested in doing so. My own position on taxation can be found in other articles.

 

Infrastructure boom or bust?


Former National Party M.P., Minister for Economic Development and one time Treasurer in the Government of Prime Minister Bill English, Steven Joyce believes that it is necessary for the Government to spend more to stimulate the economy. The comments from Mr Joyce come amid an increasingly turbulent global outlook and signs that the New Zealand economy may be about to stall.

I find it interesting that Mr Joyce, from a party that is traditionally against government intervention in the economy especially where it comes to significant expenditure, seems keen on this Government spending more to stop the economy from stalling.

It is not that I necessarily disagree either, though my preferences for spending priorities will be rather different to his. Mr Joyce and the National Party had a road building programme called Roads of National Significance that they focussed their transport policy on at the expense of other transport modes. $12 billion was set aside for new motorways and extensions of existing ones, particularly around Auckland, but also with significant projects in Christchurch and Wellington.

Whilst some of the projects were definitely needed like the four laning of State Highway 1 from Belfast to Templeton, there were other motorway projects of questionable need which were constructed north of Auckland. If the money had to be spent on roading, there are three potential alternative projects in the South Island that could have gone ahead would have been:

  1. Either a second one lane bridge over the Hurunui River in north Canterbury on State Highway 1 or the addition of a second lane to the existing one;
  2. Making State Highway 70 better able to take trucks, thereby keeping them off the southern part of the coastal stretch of State Highway 1
  3. Replacing the one lane bridges over most West Coast rivers with two lane structures or building a second single lane one next to the existing structure

However a much more meaningful project would be to upgrade the South Island segment of the Main Trunk Line. This would be a useful alternative for freight that might otherwise end up on trucks that cannot or should not be navigating South Island roads, in particular the Kaikoura coastal stretch and the alpine passes. But how much thought have either party given to this? Probably not much.

The Government and National both say that they are concerned about the cost of petroleum to the consumer, but neither have bothered to explore the possibility of biofuel using waste stream product. I have mentioned potential cooking oil and fat, but there may be other sources in the waste stream as well. Depending on the feasibility this could be a potentially significant revenue and job creation scheme – researching the feasibility; developing a blend; getting it tested and certified; finding potential investors in it. The waste stream will not be disappearing any time soon given our consumption habits and the unwanted refuse it creates.

Another idea that has been subject to criticism of late is developing Waste to Energy plants. One mooted for the West Coast has run into trouble after it was found that the Mayor of Buller District Council had gone behind his council to see if it was possible. Whilst I support the possibility of a waste to energy plant, the N.I.M.B.Y.ist under current starting to appear suggests resistance would be strong and not necessarily founded on fact.

So, yes, there are things the Government could invest in, but they might not be what Mr Joyce was thinking.