Saturday, May 31, 2008

Who's milking the economy?

More and more, milk is looking like liquid gold.

Thanks to a rise in Fonterra's payout forecast for the 2007-08 season from $7.30 to $7.90 a kilogram of milk solids, the average New Zealand dairy farmer will earn $790,000 this year from milk, before operating costs, interest payments and tax. (Fonterra is a global supplier of dairy ingredients that is co-operatively owned by more than 11,000 New Zealand dairy farmers.)

Although Westpac senior economist Doug Steel says every New Zealander will benefit, as more money is injected into a slow-to-negative economy, the supermarket shopper has little to rejoice about.

The price of milk - now about $3.25 for two litres - could rise, says Fonterra Brands managing director Peter McClure. "[But] butter and cheese won't go any further just now."

Kiwis' plunge in confidence the worst

What do New Zealand, Latvia and the United States have in common?

According to Nielsen, which surveyed 500 New Zealanders just before last week's Budget announcement of tax cuts, the three countries have suffered the biggest falls in consumer confidence.

In New Zealand, confidence has fallen 18 points (from 115 points to 97 points) in the past six months - more precipitously than in any of the other 50 countries surveyed. (When the survey started three years ago, the average for the countries surveyed was 100 points.)

In the latest survey in New Zealand, about half of those questioned thought the country was in recession.

Wednesday, May 28, 2008

Social network that brings you cash

There seems to be no end to the social networking sites being set up. This is one of the latest, which I have just joined:




Tuesday, May 27, 2008

Kiwi dollar hits three-week high

The kiwi dollar closed at $US0.7895/05 today, after hitting a three-week peak of $0.7929 earlier in the day.

The dollar advanced as two separate surveys - by the National Bank of New Zealand and the Reserve Bank of New Zealand - pointed to persistent inflation, which lessened the likelihood the Reserve Bank will cut interest rates in the near future.

(The National Bank's business outlook survey in May showed respondents expected inflation to average 3.44 percent during the next year, up from 3.29 percent in the April survey.)

Sunday, May 25, 2008

NZ faces chaos, says financial adviser

When did New Zealand last have a tax cut? I have to say that I can't remember. I do, however, remember the publicity that surrounded it. There was, for example, a television commercial in which a comedian walked through an airport departure lounge, or some such place, asking people how they were going to use the extra money.

Extra money? Well, yes, for a few weeks, or even for a few months, one does seem to have a little more money than before in one's pocket. But then prices go up, and one's pay goes up - until, eventually, one is pushed into the next tax bracket, and finds oneself paying tax at a higher rate again. And in no time at all, the tax cut becomes meaningless, and is forgotten.

Unsurprisingly, this is what many people are saying in the wake last week's national budget from the Labour Government. The budget raised all tax thresholds from October 1, giving most workers from $12 to $28 a week extra. These sums will rise to between $21 and $55 a week in 2011, the Government says. But by then, of course, anything could happen.

(The rises for pensioners - and I am one of those - are $23.84 a fortnight for singles and $45.88 a fortnight for couples.)

Some of the most interesting comments on the budget have come from Palmerston North financial adviser Kathy Jarrett, who says not even $100 extra a week would fix the financial mess that New Zealanders have got themselves into.

This mess is a result, she says, of an inability to budget and an inability to distinguish between wants and needs, and has been at least 20 years in the making.

Now, she says, the bubble has burst, "and everyone is screaming like a stuck pig". And the chaos society faces, 18 months to two years down the track, could be worse than the Great Depression, she warns.

She advises people to stash their cash, grow vegetables, make sure their boss loves them, and try to save a reserve of six months in mortgage payments.

The era in which people could remortgage their home to buy a new car, and remortgage it again to fix the kitchen, are over, she says.

Underlining Ms Jarrett's comments is an article by Ruth Laugesen in today's Sunday Star Times. This quotes a finding by Roy Morgan New Zealand that nearly 150,000 New Zealand households are at "extreme risk" of missing mortgage repayments and losing their homes. Those at "extreme risk" are defined as those spending more than 30-45 percent of their income on interest payments alone.

Wednesday, May 21, 2008

New Zealand's broadband abysmal

I sometimes wonder why so much publicity is given to the statistics on the conversion of New Zealand internet users from dial-up to broadband.

As a former dial-up subscriber who switched to broadband a couple of years ago, I can vouch for the improvement. But if you asked me how much better broadband is than dial-up in New Zealand, I would have to say "Not a great deal".

Broadband is still slow, though not, of course, as agonizingly slow as dial-up was. I am still unable to watch a full-length documentary without waiting for an hour or more for the thing to download. Even watching a short news clip severely taxes my patience.

Anyway, figures released yesterday show that the number of broadband subscribers in New Zealand rose from 683,500 to 757,100 in the six months to December 2007, which places this country in the 19th position in the list of 30 OECD countries.

But when, oh when, are we going to get the promised high-speed fiber-optic-delivered broadband?

Tuesday, May 20, 2008

New Zealand closing down?

Today's news that "hundreds more South Island jobs in the meat and seafood industries are hanging in the balance" (The Dominion Post) coincides with the news that "the net outflow of New Zealanders going to Australia on a permanent or long-term (PLT) basis is at its highest level in nearly seven years" (New Zealand Press Association).

Yesterday, New Zealand's largest meat company, PPCS, axed 136 jobs at the Burnside venison-processing and skins plant near Dunedin. Meanwhile, in Nelson, fishing company Sealord said as many as 320 mussel factory jobs could be scrapped.

The cuts by PPCS, which closed the Oringi sheepmeat plant near Dannevirke in the North Island last week and sent 460 workers down the road, are not expected to be the last. Meatworkers Union general secretary Dave Eastlake says the company, which suffered a $40-million loss last year, is expected to wield the axe again.

Perhaps it's not surprising that people are leaving the country in such large numbers to seek a better life in Australia.

Figures released today by Statistics New Zealand (SNZ) show that the net PLT outflow to Australia in the year to the end of April was 30,600. It was the highest annual net outflow to Australia since the June 2001 year, and compared with 24,000 in the April 2007 year.

Last month, the net PLT outflow to Australia was 3200, up from 2500 in April 2007.

Sunday, May 18, 2008

Scissors out for emissions trading scheme

As I expected, New Zealand's emissions trading scheme (ETS), designed to combat climate change, has been modified as rising prices have made life more difficult.

Prime Minister Helen Clark has already acknowledged the "pain at the pump" by delaying the introduction of transport into the ETS, putting off until 2011 the expected 6c to 8c rise in petrol prices that is likely to result.

Miss Clark has also indicated that local bodies will not be able to impose, all at once, the 5c-a-litre regional fuel levy allowed for in legislation currently going through Parliament.

And now National Party leader John Key, in his announcement today that "National will not support the Climate Change Bill going to a second reading in Parliament", says "the ETS must strike a balance between New Zealand's environmental and economic interests. It should not attempt to make New Zealand a world leader on climate change. Kiwis simply can't afford to pay the price for that particular experiment".

A call for "balance" always sounds reasonable. But as I have always pointed out, establishing a "balance" during a period of economic decline inevitably means that more and more must be sacrificed on the environmental front. And ultimately, an environmental sacrifice that would have been resoundingly rejected at the beginning of the "balancing" process must be made to appear acceptable in the light of "new, harsher economic realities".

Friday, May 16, 2008

ANZ Bank fee a rip-off

Something I do every day, without fail, is go to ClickSense, a get-paid-to-click programme, click on a few links, make a few cents, and then go on to attend to the rest of the day's business.

This takes only two or three minutes, and results in my receiving a check for about $US7.50 now and then. It's not a huge sum of money. But it's money I have worked for, and money I don't want to lose. So I was annoyed, when I presented my last check at the ANZ Bank in Palmerston North, to be informed that the bank now charges a currency conversion fee of $NZ5 per check. This meant that, instead of receiving $NZ9.67 for my $US7.60, I received $NZ4.67.

There were several other factors that also irritated me:

1. The bank has never charged a conversion fee in the past.

2. Other banks don't charge such conversion fees. (I checked at the ASB and Kiwibank.)

3. A check is an instruction to a bank to pay someone a certain sum of money. It is not an instruction to a bank to pay someone whatever is left after the subtraction of a fee.

Needless to say, I will not present any more such checks to the ANZ, but will open an account at New Zealand-owned Kiwibank as soon as I have enough money to make a reasonable deposit. And that means that, as a result of the loss of some of my custom, ANZ will lose far more than $5.

Incidentally, while looking on the net for complaints about the ANZ, I found the following, dated August 23, 2006, at www.acfonline.org.au/articles/news.asp?news_id=911:

Five community groups from Australia and Papua New Guinea today filed a formal complaint against the ANZ Bank over its financial support of logging companies that are engaged in human rights abuses and environmental destruction in PNG...

Tuesday, May 13, 2008

Want the No 1 position at Google?

I have submitted my jameskirkup.com website to this service, and eagerly await the results. I'm not sure, though, that I would be prepared to bid for keywords to keep the website in the No 1 slot at Google, as the site is, after all, a site I have created for a friend.

The passage below is from the 1on40 homepage:

Use 1on40's 100% FREE submission service and YOUR site will be NUMBER ONE on Google, Yahoo and 38 other TOP search engines for FREE.

Use our search engine submitter once. Experience the revolutionary FREE service and watch your web site shoot to the FIRST result of Google, Yahoo and 38 other TOP search engines in 120 days for your 5 keywords, then pay us (bid) to stay at NUMBER ONE position. YOU try our service, see how it works for yourself without risk. EARN from the results and then finally pay a small fee (bid) to carry on being NUMBER ONE on Google plus 39 other TOP search engines.

This FREE offer only exists while we are BETA testing our service. Try it now for FREE before we release the ‘paid for service’.

Pay nothing for our unique service until you see your web site at the NUMBER ONE position on Google and the other 39 TOP search engines for the 5 keywords. Get top result for once - FREE.

Once at NUMBER ONE position we will leave YOUR web site there for 7 days to prove our ground breaking service. Then you need to start paying us (bidding), for our 'THEN PROVEN' service and carry on having tested our service without risking your money like you would on other ‘hyped up SEO services that underperform or simply do not work’.

It costs nothing to give us a try... You have to see it work to believe it, therefore we don’t charge you a dime until you have - GUARANTEED.

Monday, May 12, 2008

Signs of desperation in NZ housing market


"Vendor must sell," "mortgagee sale," and "All offers considered," are appearing more often in residential retail advertisements these days, Quotable Value says in its latest report.

This report shows that national property value growth fell to 4.9 percent in the 12 months to the end of April, compared with 6.5 percent in the 12 months to the end of March.

The national average house sale price is $388,465, compared with a peak price of $406,176 last October.

Quotable Value spokesman Blue Hancock says that, with the number of property listings still high and buyer demand falling, house prices are likely to fall further in the next few months.

Sunday, May 11, 2008

Employment in NZ shows stunning decline

The weekend brought some shocking employment figures from Statistics New Zealand.

These showed that in the March quarter the seasonally adjusted number of people employed dropped by 29,000, or 1.3 percent, to 2.14 million. This was the largest percentage decline in employment in 19 years, and takes employment back to the levels of early 2007.

The fall is from a record high in the December quarter, when the 3.4-percent unemployment rate was the lowest since the Household Labour Force Survey started in 1986.

Brilliant website for share market investors

This website has received the following press release from Sharesight, which has been under development for the past year:

At last, the DIY share investor has a straightforward, affordable and independent online service that calculates their true share returns. It also automatically produces the information to fulfil accounting and IRD tax requirements.

Sharesight (www.sharesight.co.nz) is a new online share portfolio management tool developed in Wellington for the New Zealand and Australian markets.

NZX's head of information products, Columba Cryan, said, "In New Zealand, the share market is an under-rated investment choice for private investors. What we need are more tools that make it an easy and transparent option. Sharesight's strength is its use of complex currency, dividends and tax data to enable investors to simply and accurately calculate returns and related tax exposure."

Internet entrepreneur and Xero chief executive Rod Drury said the site was an impressive offering: "Sharesight is looking very slick. I've been looking for a Web 2.0 style portfolio manager, and this looks like it will hit the spot."

Sharesight managing director Tony Ryburn says the website was born out of personal frustration.

"I wanted to manage my own share portfolio, but I found preparing data for my tax returns and the accounts of my family trust was a time-consuming nuisance."

Mr Ryburn said that, even worse, he did not really know the true performance of his portfolio, and did not have enough data to properly assess the performance of shares he might purchase in the future.

Sharesight solves this problem by giving users up-to-date information on their investments, taking into account currency fluctuations, dividends, splits, tax credits and more.

Because it was built by software developers who are also share investors, the site is intuitive and easy to use. Being under continual development, users' needs can be easily met.

A substantial share portfolio can be recorded in Sharesight in a few minutes because most of the required information is entered automatically from historic and current data provided by the NZX and ASX. Each customer's data is backed up and stored securely.

Sharesight is offering a 30-day free membership to all users. Monthly subscriptions start from $5.

For more information, go to www.sharesight.co.nz

Wednesday, May 7, 2008

New Zealand's great railways debacle

How the times have changed! Not so long ago, the buzzword was "privatization". The Government's job was to govern, not to run enterprises that could be run much more efficiently by private enterprise, we were told by those in thrall to the Chicago School of Economics.

So I read the opening sentences of today's editorial in The Dominion Post with a feeling of slight incredulity.

"The experiment of private ownership of the New Zealand railways has come to an end," the editorial begins. "It has been a costly one, and not only in the demands it has made on the public purse."

The editorial goes on to point out that "New Zealand has made a long-term commitment to environmental sustainability". This means that "rail has the potential to play a big part" by taking freight off the roads, "where it travels in cardon-emitting trucks".

The Government has bought the railways for $665 million from Toll Holdings, whose stewardship of the rundown network is described in the editorial as "relatively benign". In contrast, the previous owners, Sir Michael Fay and David Richwhite of Midavia Rail Investments, nearly finished it off.

"They destroyed our rail transport industry," Labour MP Shane Jones told Parliament at the time. "Having got [access to] it, they asset-stripped it...they left it as a hovel."

Letter-writer Bob Kay, in the same issue of the paper, estimates the entire privatisation and repurchase exercise has cost the taxpayer $2.3 billion.

Tuesday, May 6, 2008

Wage rates up in New Zealand

In some sectors of the community, the recent rises in food and fuel prices have not been felt so keenly.

Figures from Statistics New Zealand today show that salary and wage rates rose by 0.7 percent in the March quarter, and by 3.4 percent in the year to date. The latter rise is the largest annual increase since 1992.

Of course, for a semi-retired person like myself, on a casual contract at my company, there is never any pay rise. To increase my weekly income, I have to put money into long-term investments and wait for the interest.

While on the subject of pay rates, I would like to quote from a letter in today's Manawatu Standard. It is from a Dr Bevan Jenkins, a surgical registrar at Palmerston North Hospital, who explains why junior doctors are striking:

"I earn $24 an hour and receive no overtime [pay] for after-hours work. If I quit and joined the burgeoning group of locum doctors, I would get a minimum of $75 an hour. The difference is too great; it is as simple as that."

Traffic Wonderland a little different

Every now and then, among the thousands of traffic exchanges, you find one that stands out - one that seems to offer something a little different. One such exchange, which caught my eye yesterday, is Traffic Wonderland.

It describes itself as the "first traffic exchange to bring you a free traffic exchange widget", and continues:

"Add your free traffic exchange widget to all your websites and blogs... Get your ads seen on other members' websites and blogs for free... Join today and get your free traffic exchange widget html code in the member's area... All members' widgets will have their affiliate link embedded at the bottom of their widget to help build their downline on autopilot."

Here's my widget:



kiwidollar.com


Monday, May 5, 2008

Gaming machines to fleece the desperate

The times are tough, but not so tough that people have stopped feeding money into gaming machines.

Figures from the Department of Internal Affairs show that people aged over 18 in Palmerston North, New Zealand, have already spent an average of $306.79 per person on gaming machines (known locally as "pokies") in the current financial year that ends on June 30.

Meanwhile, David Coom, manager of the central region of the Problem Gambling Foundation, says he expects the looming economic crunch to increase gambling among problem gamblers, as they become even more determined to hit the jackpot.

Families on a fast track to disaster

Yesterday's news was unsurprising, but still appalling in its implications: A New Zealand family on the average wage now spends $15 a week more than it earns, as a result of skyrocketing living costs.

The situation has thus changed dramatically since 2004, when the same family earned $23 more than it spent on its bills.

The findings are by Bernard Hickey, the managing director of financial website interest.co.nz, and show that the Government would have to deliver a tax-cut package of $4 billion to restore household budgets to 2004 levels.

Needless to say, neither Labour nor National is promising relief of such magnitude.

Mr Hickey shows that weekly expenses for a household on the average income have risen by $193 since April 2004, while net income has increased by just $156 a week. (During the same period, the calculation is that gross incomes have risen from $63,400 to $72,000 a year.)

Mr Hickey says families are either tapping into the equity in their homes or accumulating debt on their credit cards as they struggle to make ends meet.

But how much longer can this go on for? How soon will we be seeing people living in shacks, tents, and packing crates?

Kiwibank takes wing at awards night

Kiwibank has cemented its position as New Zealand's bank of the future by winning the Supreme Award in Wellington's Gold Awards for top businesses in 2008.

"The judges believed Kiwibank was a huge contributor to the Wellington economy and was a very focused and effective business," Gold Awards director John Dow said at the weekend.

The bank's strengths in communication and understanding its client base had clearly contributed to its success, Mr Dow said.

Thursday, May 1, 2008

ETS 'could cost 22,000 jobs'

Further criticism of the Government's emissions trading scheme (ETS) has come from the New Zealand Institute of Economic Research (NZIER).

The NZIER says the scheme could cost the country 22,000 jobs and almost $6 billion over the next 17 years - nearly three times as much as the country would pay if it simply bought the carbon credits needed to meet New Zealand's commitments under the Kyoto Protocol on the world market.

The Manawatu Standard reports that "the institute refuses to say who funded its damning report, prompting speculation it was commissioned by major emitters who stand to be penalized under the scheme".