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Norman on the economy

Written By: - Date published: 8:03 am, March 12th, 2016 - 58 comments
Categories: Conservation, economy, farming, farming, russel norman, sustainability - Tags: , , ,

Russel Norman is still commenting on politics – and he’s still making a lot of sense:

Oil was always speculation. Gambling on bulk milk is turning in to an economic disaster, and the intensive farming methods required are trashing the environment. Lose lose.

Why is NZ not playing to its strengths? Smaller scale organic milk production (see “Per tonne, organic milk powder sells on the international market for more than NZ$14,000. By comparison, conventional milk powder prices languish at NZ$2900”). Sustainable and safe farming methods that preserve our environment, and therefore our “clean green” image and our tourism industry. And of course, while we’re dreaming here, early adoption and development of renewable energy sources, public transport, and other aspects of a green economy.

We could be planning and innovating and leading the world, but we need to change the government to do it.

58 comments on “Norman on the economy ”

  1. saveNZ 1

    +100 Russel Norman + Anthony Robins

    NZ should be diversifying into more diverse areas as well as diversifying each area. Government has a history of not being able to concentrate on more than a couple of economic areas at a time.

    At present it is Dairy and Property. Dairy is heading down the gurgler while putting thousands of farmers close to bankruptcy. This could easily be predicted – of course – commodities are cyclical. Fonterra should have diversified and looked at areas of higher Yield – organic milk is obviously a winner when worldwide it is growing far faster than conventional farming. But apparently Fonterra, (even though charging consumers more for organic milk) failed to give organic farmers extra revenue or incentives to go into this market. Fonterra could have concentrated on higher value products and IP but instead wasted the opportunity in a group think, with the government.

    Property and ‘infrastructure’ is now the big government mantra. Don’t worry about getting the balance right or working out long term implications – just dump as many migrants into Auckland and change as many laws as possible to let them and NZ developers go for it in any way they like. Retirement homes, McMansions, ‘social bond’ high rise specials. I have a feeling they want a “Thai’ feel to Auckland – slums mixed with glistening high rises, the largest possible house on each section and 5 lanes of traffic all across and around the city so that it take hours to get out. Of course our government does not believe in public transport like the Thais, so don’t expect any extra buses or trains apart from the much touted rail loop around Sky City.

    What is the other big export out of Thailand? Oh yes Tourism. Lets see how sustainable that is, when you start having Tsunamis. Might find that market stops like the Thais. Not a good idea to put all your eggs in one basket with climate change.

    In addition the NZ tourism market and ‘clean, green image’ of NZ is being destroyed by the ad hoc, non innovating and non sustainable government and business management of the above.

    The government should be looking at IT, science and so forth, and keeping them ethical and loyal. NZ is actually good in surprising export areas that never get promoted, or are promoted to cronies only. Even media and film could be areas NZ tried to promote. I’m not talking about tax breaks and changing our laws for Warners and having a special friend like Peter Jackson or Julie Christie, I’m talking about pushing jobs into that area with state funding of NZ programming (like Australia that kick started their industry) to create opportunities for other film directors and their crews.

    With the rise of neoliberalism, companies feel zero loyalty to their employees or even the governments that take them in. Just heard a well known internationally owned gaming company is shutting it’s doors in Auckland and moving all or much of their business to, wait for it, Nigeria!! This is a international start up firm that apparently used a lot of migrant labour bought them into NZ never gave anyone a pay rise, just kept wages as low as they could, and now their ex employees are signing up to the dole. How’s that working for a sustainable business plan by government?

    In the future, quality is going to be as important, as quantity. The environment and the purity and safety of it, will also play a key role.

    Will anybody learn any lessons?

    • Chooky 1.1

      +100… the Greens economic policy makes the most sense ….and a pity Russel Norman is no longer in parliament to articulate it…come back Russel Norman

      • James Shaw seems pretty effective too, tbh.

        • Smilin 1.1.1.1

          More of them both is what this advertising dunderhead political wasteland needs
          Get the people who really do know what is needed in power not a bunch of sellout yes men for the TPPA and get rid of these fucking ambassadors and national boundaries .And save the country some money
          Who says we need american fast foods
          Why not McMaori Hangis, Kiwi sushi

    • One Two 1.2

      Unlike Nz,Thais have a culture of their own. It belongs to all of them, and they know what it represents. Thais are also self sustainable through traditional village structures which are the backbone of local Thai society

      Thailand primary industry was being severely damaged by the neo liberal owned western sponsored, Shinawatra governments.

      Unlike NZ, the populace understood what was being done to them. Thaksin was exiled andYingluck faces a prison term

      Yingluck was accused of malfeasance under Section 157 of the Criminal Code and Section 123/1 of the 1999 Anti-Corruption Act.

      She is accused of failing to stop the rice scheme which caused 500 billion baht in damages to the country. If she is found guilty, she could face up to 10 years in jail.

      • David 1.2.1

        “Thaksin was exiled andYingluck faces a prison term”

        By a military junta…..

        • One Two 1.2.1.1

          >95% of Thais support the military

          Thailand, along with other SE Asian nations are removing the rot of western interference, which is what the Shinawatra governments represented

          Do you have any comment on that, David ?

    • Draco T Bastard 1.3

      NZ should be diversifying into more diverse areas as well as diversifying each area.

      NZ, and every other country for that matter, needs to fully developing their economy up to the point of self-sufficiency. This isn’t really optional considering future resources shortages. Sure, we could develop that afterwards but it’s going to be easier to do it now.

      With the rise of neoliberalism, companies feel zero loyalty to their employees

      Companies have never felt any loyalty to their employees. Neo-liberalism hasn’t changed that but it has allowed them to show it as unemployment increases.

      Will anybody learn any lessons?

      Probably not because the lessons aren’t ones that they want to learn as they go against their ideology.

  2. weka 2

    “We have been like a rockstar trashing a hotel room up until now. Now it’s the morning after, and if we don’t change, we are going to get voted off the island”

    Kenny Ausubel, Co-Founder of Bioneers

  3. Ad 3

    +1,000
    Our economy is holding up, but absolutely no thanks to this government.

    • adam 3.1

      Is it, holding up that is

      I’m seeing deflationary pressure in a big way.

      Having property worth a bucket load more than it is in reality, does not an economy make.

      But fully agree, we still have an economy, despite this government .

  4. saveNZ 4

    Another ‘unmentioned’ economic factor being hidden by the government is the rise of drugs and gangs into NZ. From Granddaddy Herald…

    “ASIAN CRIME syndicates “dominate the organised crime landscape in New Zealand”, alongside local gangs, according to a classified police document released under the Official Information Act.

    “Over the next three to five years it is almost certain that New Zealand Adult Gangs and Asian Organised Crime groups will continue to exploit existing opportunities, as well as increase their involvement in criminal activity locally,” according to the 2013 National Drug Intelligence Bureau report.

    Police have been aware of organised crime in the Asian community in New Zealand since the late 1980s. From behind a facade of legitimate commerce, the groups work across a range of illegal businesses from money laundering, drug imports and prostitution to credit card fraud, extortion and paua-smuggling.

    Back in the 80s and 90s they were relatively minor players, but the growth of P in the past decade gave them a huge opportunity. When gangs like the Headhunters saw the profits to be made from methamphetamine, they needed criminal contacts to buy the drug, or its main ingredient, pseudoephedrine, from a source country like China. Quickly, the Asian-organised crime groups in New Zealand became crucial players in the drug trade and, over time, their international links made them the real power-brokers.

    “Having strategic alliances is basic economics,” says Detective Superintendent Virginia Le Bas, who is in charge of all organised crime operations in New Zealand. “And it’s all about money.”

    She prefers the term Transnational Organised Crime Groups, as opposed to Asian Organised Crime, as many of those involved now were born in New Zealand, or have lived here for many years.

    “And they are the ones with the contacts offshore. But I don’t think there is one big network throughout New Zealand.”

    New Zealand did not register on the international drug market until the millions of dollars being made from methamphetamine grabbed the attention of bigger players overseas. Police here do not call them “triads”, as they’re referred to in popular culture, as the hierarchy here is a fluid, molecular structure rather than the traditional pyramid but the links to notorious international syndicates are real. Gangs like Hong Kong-based 14K, rival Sun Yee On, Water Room, and Big Circle have all had a presence here, as well as Malaysian, Thai, Taiwanese and Vietnamese gangs.

    There is plenty of business to go around. Police and underworld sources agree that the organised Asian criminal groups “sit around the board room table together” with the local gangs, rather than starting a turf war, in the interests of making money.”

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11604108

  5. Bearded Git 5

    “Per tonne, organic milk powder sells on the international market for more than NZ$14,000. By comparison, conventional milk powder prices languish at NZ$2900”

    I just hope Labour are picking up on these numbers and writing an economic policy right now to put in their manifesto supporting organic milk (and maybe other products) production. This would make economic sense and would help the regions.

    Of course the Greens, as ever, are far ahead of them.

    • tc 5.1

      Are fonterra taking organic milk again ?

      They stopped doing it years ago in my neck of the woods to focus on the lowest common denominator commodity market and screwed over organic milk producers.

      Time to smash this top heavy boys club up into niche value added segments. Plenty of fat can be trimmed to give farmers a much better deal.

      • David 5.1.1

        How are you going to find the billions you will need to build the plants to produce the value added products, and how are you going to handle being a competitor to your existing customers?

        • Draco T Bastard 5.1.1.1

          Easy – the government creates the money to research and develop and build the necessary plant.

          The existing non-organic farmers can be put out of business through good regulation that prohibits non-sustainable practices such as GMOs, importing feed and excessive use of fertilisers.

          • David 5.1.1.1.1

            Ah, I see, just print it. So not only have you nationalised the dairy industry, you have outlawed all the existing operations. Nice one.

            Do you think all the companies like mine who provide the technology to build these plants are going to accept your mass-production dollars to provide equipment?

            Do you think perhaps there might be an issue with a nationalised industry funded this way getting a bit of kick back from the international markets?

            • dv 5.1.1.1.1.1

              Ah, I see, just print it

              David where do you think the 100 billion debt we have now comes from.

              • Macro

                I know! I know!
                It grew on trees!

              • David

                Well, if it was just printed, why is it a problem?

                • Draco T Bastard

                  1. The private banks print it and then charge interest on it. Logical result is that it can never be paid off as the interest ever accumulates.
                  2. If the money was paid off there’d be no money in circulation.
                  3. Government should never, ever delegate he creation of a nations currency to the private sector as they’re incentivised to over create – which they do, with abandon creating asset bubbles and when the bubble pops they get bailed out by the taxpayers.

            • One Two 5.1.1.1.1.2

              ‘companies like mine’

              No David. That’s a line you’ve been given to regurgitate

              Neo liberalisation is dead. The decaying corpse is whats pretending to be the global economy

              It’s been exposed as the lie it always was, and every single day more people are seeing whats going on, and taking action

              Bankers will be hung by the neck when they crash the global economy this time

            • Draco T Bastard 5.1.1.1.1.3

              So not only have you nationalised the dairy industry, you have outlawed all the existing operations.

              The existing operations are unsustainable and thus need to be outlawed ASAP.

              Do you think all the companies like mine who provide the technology to build these plants are going to accept your mass-production dollars to provide equipment?

              Why should we be concerned if you do or not? Others will. Or, more likely, the same people will just working for themselves or in a cooperative or for the government.

              Do you think perhaps there might be an issue with a nationalised industry funded this way getting a bit of kick back from the international markets?

              Again, who cares?

    • gsays 5.2

      Couldn’t agree more b g.
      Why not the whole milk supply?
      Then the lamb, beef, porkand chicken markets.
      Vegetables, grain etc.

      Clearly the current way is part of a race to the bottom (cheapest), a circuit breaker is needed.
      Not the same old same old.

    • Draco T Bastard 5.3

      Labour and the rest of the opposition should be writing up plans to go full organic. That would be staring with buying out the farmers who are in too deep.

  6. UncookedSelachimorpha 6

    Fresh water ecologist Mike Joy points out in his book “Polluted Inheritance” that you can have the same profit from many dairy farms at about 40% lower stocking than most actually practice – with far lower environmental impact. He believes farmers stock high to increase the capital (real estate) value of the farm (because properties sell by milk solids produced, more than profit produced).

    This situation is caused by pollution being free to the polluter.

    • tc 6.1

      Country calendar has done a few episodes on farms that have done exactly that over the past years.

      Better quality milk, animal welfare, pastures and less outgoings on fertilisers, animal remedies etc.

      A no brainer now the inevitable slump in milk powder has landed the debt backed dairy farms in more shit than they stick in our waterways.

    • Well, that, and people not understanding that sustainable profitability is far more important than output.

    • Stuart Munro 6.3

      It’s the same psychology that caused a lot of overfishing – and the massive overcrowding of slaveships – a kind of dumb risk aversion.

  7. Colonial Viper 7

    I remember when huge increases in bulk dairy production and massively increasing dairy farm debt didn’t occur, during the Helen Clark Government.

    Oh wait, yes it did.

  8. Steve Withers 8

    Hold on a minute!

    The Greens are a fringe, loony party. Who cares if they are correct all the time? Very few indeed, or they would be the government today.

    Talking about climate change and sustainability and a diverse, locally-based economy over 20 years ago…..the “fringe” Greens have repeatedly made the mainstream parties look like dribbling idiots over the long term.

    Voters don’t much care…..though to be fair, the vapid media narrative regarding the Greens’ policies over the long haul gives them little reason to.

      • Draco T Bastard 8.1.1

        You’ve been playing too much WoW.

        • David 8.1.1.1

          WoW has better economics than the Green party….

          • Draco T Bastard 8.1.1.1.1

            And yet WoW creates money without limit. Every time a mob is killed or a quest completed money is created.

            Of course, it also has taxes in the form of repairs to armour that takes money our of circulation. No where near as much as created of course but there you go.

            WoW’s economy is as delusional as the one we have.

            • Stuart Munro 8.1.1.1.1.1

              It’s probably better planned in fact – game economies are designed to foster participation by lowering entry costs. Neo-liberalism allows monopolists to raise participation costs to make some activities exclusively elite property.

  9. Draco T Bastard 9

    We could be planning and innovating and leading the world, but we need to change the government to do it.

    This.

    We need to stop doing the stuff we did in the 19th century and enter the 21st.

    National seems to only do the easy stuff that they think they understand and that leaves them doing shit that research and knowledge shows is wrong.

  10. OneTrack 10

    C’mon Russel, start your own farm, with your own money, and show those silly traditional farmers how it should be done. Oh. Wait.

  11. saveNZ 11

    Even banking analysts agree…

    “Moynihan has for some years commented on the need for New Zealand to remain a low cost, pre-dominantly grass-fed, producer.

    That has largely fallen on deaf ears as production – and costs – have ramped up through a raft of measures, including use of supplementary feeds, off-farm grazing and higher stocking rates per hectare.

    “The industry was growing at such a pace in terms of lifting production and in terms of the number of new farms – particularly over the last decade,” Moynihan said.

    “With that growth inevitably comes a period of consolidation. “What this particular downturn will do is refocus our energy on competitiveness inside the farm gate because we are still a long way from our markets and there is a lot of competition out there. That’s where the core focus needs to be,” she said.

    “It is still a good industry but we did lose sight of the fact that we needed to be very competitive so that we can get through these periods that we are experiencing now.”

    In 2008-9 farmers geared up in terms of their production costs to capture higher milk prices, on average.

    “What I think this particular downturn is going to cause is a re-assessment of what the New Zealand farming system looks like,” she said.

    Resilience and the ability to survive downturns was imbedded in the grass-fed farming system, Moynihan said. “I think that we will see a change – not necessarily back to the way we were – but a change to cope with what will inevitably happen as a result of this downturn. That’s going to be quite a shift and that’s where it will be quite painful.”

    Moynihan said she expected farmers to take a “more holistic” approach to land use, moving away from dairy as the first port of call.”

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11604153

  12. Cowboy 12

    It’s all very well for Moynihan to bag farmers farming models but they were only responding to the economic signals of the day. The forecasts that Moynihan and the like put out have proved woefully inaccurate and the consequences of those errors will be wide reaching.

    • Draco T Bastard 12.1

      It’s all very well for Moynihan to bag farmers farming models but they were only responding to the economic signals of the day.

      Yes, the financial system is wrong and gives the wrong signals. That said, the farmers have been egging on that particularly failed financial system so, yeah, they carry a lot of the blame.

    • weka 12.2

      High cost farming (economic and environmental) that is dependent on export markets that have no commitment to us is always going to fall over at some point. It’s inherently unsustainable no matter what the economists are saying in any given year or decade and it’s even more so now that we have climate change.

      • Draco T Bastard 12.2.1

        +1

        Most economists wouldn’t know what an economy was if they tripped over one

  13. Smilin 13

    Cracka Russ with that kind of clarity you might be able to do two jobs PM and Greenpeace because the time its taken Dickhead Key to get past himself and realize he has ruined this country you could have fixed all this shit ie 2008 till now .
    Pity this country is full of capitalist totalitarian arseholes in power who owe big time to this country .
    you could easily do it. We still need that great way you have of showing Key and co up for idiot sellout bastards they are

    8 yrs of lies more lies, corporate welfare, destruction of the environment, Crime, police resources cuts, education mismanagement ,Destruction of the need for Railways, giving away the natural resources of the country, THE ECONOMIC ZONE pilfered,
    Workers rights , The failure to govern the country in a sound and legal manner etc

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