Exports

John Key does what he does best

Key was heading to France and Italy this week but got London added to the trip after Britain voted to leave the EU.

If it had been anyone else, the request would probably have been declined, and if Key hadn’t already been in the UK for the fast-forwarded change of leadership, it may have been cancelled.

The fact that it wasn’t is down to the Key-Cameron personal relationship and their long-standing membership of an elite club of friends, as leaders of successful Conservative parties and traditional allies.

Key and Cameron have been more than text buddies: the last time Key visited Cameron, last year, it was to the private country retreat at Chequers, which is not unusual, but to the birthday lunch for 11-year-old Nancy Cameron.In his Newstalk ZB interview, Key seemed aware that the value to New Zealand of his visit was diminished to somewhere between “neutral to slightly advantageous”.

Were the UK not in such a period of frenetic activity, it clearly may have been higher.

Cameron may have provided some insights and continuity into the likely new administration.

May, currently Home Secretary, will take over [today]. Read more »

There won’t be any donations to Labour from exporters this year

Labour really has a way of cribbing their potential to ask for donations. Nigel Haworth has had a terrible year in trying to get donations, resorting to begging prior to Christmas for $1 and $2 offerings.

But when Labour comes out with anti-business and anti-trade policies, like their opposition to the TPPA, then the prospects of them getting donations from anyone in that sector dries up.

This is especially so when the exporters are actually articulating their anger.

New Zealand exporters say they are concerned that a political consensus on trade has been lost after the Labour Party came out against the Trans-Pacific Partnership.

ExportNZ executive director Catherine Beard said in the past exporters had been able to rely on the support of both main political parties on trade.  Read more »

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Dirty Deeds done with Sheep gets dirtier

Murray McCully’s dirty deeds done with sheep is getting dirtier.

The Green party is showing Labour how to run a good sting on a minister by drip feeding information.

Saudi businessmen who had been thwarted from exporting live sheep for slaughter to the Middle East had wanted to sue the Government for $20 to $30 million compensation, according to just released Cabinet papers.

But instead of being a “party to such discussions” the Government decided to spend at least $11.5 million on a Saudi agribusiness hub.

Until now the Government has said $7.5m had been recommended to spend, including $6m to establish an agribusiness hub and $1.5m on flying 900 awassi sheep for breeding to the Saudi farm of businessman Hmood Al Khalaf.

However according to a Cabinet paper released under the Official Information Act to Fairfax Media, Foreign Affairs and Trade Minister Murray McCully recommended in February 2013 that a further $4m be spent on a “food security platform”.

McCully said that “Saudi parties” had wanted to seek compensation of between $20m and $30m from the Government because they could no longer export live sheep for slaughter from New Zealand to the Middle East.

But the opposing groups had negotiated the figure of $4m “which recognises the intellectual property which the Saudi investor brings to the platform, the services and in-market networks he will contribute, as well as the settlement of the long running dispute”.

An MFAT spokeswoman said to date $2.89m of the $6m for the agribusiness hub had been spent.  She said it was estimated that the Saudi partner, the Al Khalaf Group, had contributed around $80 million in land, labour, and finance towards the project.

Read more »

This Saudi sheep saga is turning into death by a 1000 cuts

The ongoing Saudi Sheep Saga is starting to get some legs with the latest revelations showing that a government tender process was potentially compromised by keeping one tenderer in the loop.

That sounds like corruption to me.

The letter ONE News has shows just how close Brownrigg Agriculture is to Hamood Al Ali Al Khalaf and his business partner, George Assaf.

It’s written by David Brownrigg on their behalf to Foreign Minister Murray McCully.

It says Mr Brownrigg, Mr Assaf and Mr McCully met in November 2011 to discuss “the resumption of a specialised live export sheep trade”.

Mr Brownrigg warns if that doesn’t happen Mr Khalaf “would have no option but to seek commercial redress”.

Two years after that meeting, the tender. The final proposals were in from Brownriggs and industry heavyweights like Deloitte and PGG Wrightson. It was up to Foreign Affairs, Trade and Enterprise and “interested Saudi parties” to evaluate them.   Read more »

Rejoice! David Cunliffe used the C word

As we have seen, every crisis that Labour has focused attention on has magically fixed itself.  Sometimes even before Labour decided a crisis was there in the first place.

So it will come as great news to the boat building industry that Labour have declared their plight worth of their attention.

The crisis will be over before you know it

The New Zealand marine industry is sinking thanks to a falsely high dollar and a Government asleep at the wheel, Labour Leader David Cunliffe said today while visiting Oceania Marine in Whangarei.

“The marine industry is in full scale collapse; hundreds of workers have lost their jobs, a few firms are just hanging on. This is an industry in crisis.

You may now cry tears of joy.  David himself, used the C word.  Calm down everyone – everything will be fine now.

“Industry players say having the dollar at US87 cents makes the industry uncompetitive.

“Labour’s monetary policy will keep the dollar at more competitive levels using savings and implementing changes to the Reserve Bank Act to focus on exports. This would mean a lower average dollar and less volatility so that business can be more competitive.

“Labour’s Alternative Budget released yesterday confirms our commitment to a competitive boat building industry. Read more »

Trade surplus grows as Labour launches policy to solve trade deficits

Labour’s much vaunted ‘big tool’ is turning out to actually be David Parker himself.

In his policy release today he claimed:

New Zealand’s monetary policy system was introduced in 1989 and has remained essentially untouched ever since. Like a 25 year-old computer system, it needs to be upgraded.

Our current monetary policy system was designed to deal with the most pressing issue of that time – inflation – as a reaction to the era of double-digit inflation under the National Muldoon Government.

This single minded focus on inflation, however, has had adverse consequences for the tradeable export sector.

New Zealand now has structurally high interest rates, and a persistently over-valued dollar. This contributes to a large current account deficit and high levels of international debt and foreign ownership.

The over-valued dollar and our high interest rates mean our businesses find themselves less able to compete abroad and undercut by imports at home. Our high interest rates also draw in foreign money, which fuels the housing market.

We have low general price inflation, a housing market which is inflating at rapid rates, while our tradable sector is in deflation.

The Reserve Bank attempts to stabilise house prices with higher interest rates. This strangles our exporters who, despite recent drops in commodity prices, face a rising currency.

That is one of the causes of New Zealand’s long-term under-performance in growth and our high level of international debt.

Underinvestment in our export sector has meant fewer jobs and lower wages for Kiwis, and lower export earnings.

Our export base is narrowing, with manufacturers closing and a greater reliance on raw commodities and in particular dairy.

Read more »