The Crooked Tower of Debt

I am no economist nor financier. I am aware of the perils of the economy, having brought my first house in the 80’s, paying 22% interest on the mortgage. I had some savings which I had daringly invested in a very buoyant share market. Then came Black Monday, October 19^th 1987. In the USA it was the biggest one day fall in the history of the stock exchange and the financial world collapsed.

In New Zealand, we had been swept up in the delirium of the free market, and the following day, October 20^th, we woke up to learn that much of the newly created wealth of the 1980's was an illusion. I had lost all of my savings.

That event was starting to become a memory when blow me down, Monday September 15^th, 2008 the bankers Lehman Brothers declared bankruptcy, and insurance companies and banks began falling like flies. Governments quite literally began printing money to prop them up.

In 2013 the stock market finally recovered. In the first six months it gained more points than any year on record.

In order to try and keep some insight into what the economy is doing, I subscribe to several newsletters. You can imagine my concern when, recently reading statements like, "This just in: The crooked tower of debt is growing taller and leaning further over.”  “...the economy gets more and more out of kilter…more and more dependent on inflation… And the feds need to tell bigger and bigger whoppers to keep it from collapsing.” Says one commentator, “It will be like watching to see how many beer cans a drunk can stack before they all fall down.”

Unsettling questions are being raised in these briefings and updates. Questions like, Is there an economic storm brewing? Are we about to feel the full force of another global recession?

Ahead of the 2008 Great Financial Crisis, the financial sector in the US was rife with greedy, grubby hands finding inventive ways to make a buck off customers. Hmm, does it remind you of what recently happened in Australia? An investigation uncovered that most major banks had been doing some pretty dodgy things…and many of these banks have satellites or subsidiaries in New Zealand. 

ABC Australia reported ‘The commission heard evidence of appalling behaviour, including that banks were charging the dead and institutions were badgering disabled people to buy worthless products.’

One news service, Money Morning, notes concern about debt: government, corporate and household. “The world is now full of debtors…up to their eyeballs in easy money”, they say, “By up to their eyeballs, I mean global debt currently sits at over three times the entire globe’s GDP.”

Bank of New Zealand Senior Economist Craig Ebert notes we are looking at a slowing economy, which might struggle. According to BusinessNZ's executive director for manufacturing, Catherine Beard, the drop in manufacturing activity to its lowest point in over six years is obviously a concern.

84% of first-home buyers in Auckland now suffer below-average incomes after housing costs as do 52% of renters. Auckland holds the most job opportunities. New Zealand has low real wages, and they don’t seem to be getting much better. Why? Mass immigration has contributed to GDP growth — but not so much to GDP. In other words, more people, more cars, more demand — but more competition for jobs, pressure on wages, and in real terms, little growth. 

I have to stop, I'm scaring myself. I wonder if my KiwiSaver will be okay in the bank that fought for more than three years to keep its role in New Zealand's biggest Ponzi scheme quiet, and stop a regulator telling out of pocket investors the details?

#globaldebt  #economicstorm 

Westminster model of democracy outdated

These days there seems broad agreement that democracy is a system of governance where power and civic responsibility are, ideally, exercised directly by all citizens.

Unfortunately the practice is different. The people typically exercise their power through elected representatives who belong to parties and are either in Government or Opposition.

Before I go any further let me make it clear I do not belong to any political party, and nor am I exercising any judgement on various political party policies. My comment is simply raising the question of whether the current model of government is an effective use of the array of people who put themselves forward in the best interests of NZ Inc.

The majority of members of parliament are backbenchers who are not in cabinet or state ministers and are, for all intents and purposes rubber stamps, who must obey their parliamentary whips (appropriate choice of word) and leaders with respect of how they vote. That means, if an MP has a personal view on a matter they must subsume that and ‘follow the leader’. To do otherwise is to commit political suicide.

Franklin experienced that first hand in the past over the issue of our community being chopped up into bits and farmed out to other local bodies. The community had made it clear how they felt but the MP was required to vote with the party against community wishes.

In essence, the system also marginalises constituents whose MPs are in the ruling part(ies), Government MPs do not get enough opportunity to stand up and truly represent the interests of their respective constituencies. Ironically, their opposition counterparts get far more leeway.

Workplace culture is a powerful force that will see the business strategic plan either succeed or fail, no matter how good the strategy is. Culture is the high velocity oil that helps the finely tuned engine achieve peak performance.

When the report of the Parliamentary inquiry into bullying (Parliamentary Culture) was released, the Speaker said “The stressful, 24/7 nature of parliamentary work that was typically marked by power imbalances and immense loyalty made it open to bullying and harassment behaviour”.

Commentary after the release of the report referred to politics being ‘robust’ hence the bullying culture.  I understand the word ‘Robust’ to mean, strong and healthy, vigorous. The report described anything but healthy, with a quote from an interview noted in the report of inquiry summing up the true meaning pretty well, “Just because it’s politics and people are passionate doesn’t mean any of us can behave like arseholes....”

We have 120 MPs who are, ostensibly, elected by us (directly or through party votes) to represent us in the best interests of NZ Inc. However, once they reach parliament they are obligated to follow party political dogma and if they contemplate any dissention they are ‘whipped’ into line. And the whole culture of the environment in which they work is toxic.

Such a culture and practice would not be tolerated in corporate environments which pride themselves as Great Places to Work.

 

First published in the Franklin County News Thursday 4th July 2019

Local Opinions Matter

There has been quite a lot going on one way and another, but I will focus on community engagement through consultation, the type we have been invited to participate in over the last few months, and speed.

Our opinions on a variety of plans and topics have been invited including cats, dogs, water, trade waste, sports investment plan, annual budget, stopping marine pests, how much capital banks should have, the right to end your life with dignity, fireworks, speed limits, the next big dormitory suburb in our community, and use of rural land, to name a few that I have noticed.

Often there is outrage from campaigners and lobby groups that they feel they are not being listened too, their views were not taken into account during the decision making process and that consultation does not work.

The opportunities we get are mostly to provide feedback on proposals and looking to understand our concerns and the aspirations for our community. Furthermore there is an expectation that there is an obligation on us as citizens not to take democracy for granted and to engage in matters which will affect us.

However I do worry that rural, less populated communities have their voice overwhelmed by the urban dwellers. This was illustrated in the results of the Fire Works Ban consultation. The Council published a detailed analysis of the near eight thousand responses. As I recall round 73% of the responses were from urban dwellers. How do we get our rural voice heard in any significant volume amidst what we already know to be a very ill-informed urban view of agriculture and what that community does do?

And there is yet another issue which has been illustrated by the speed sign consultation. Apparently 90% of the roads in the proposal to reduce speed limits are in rural areas to counter the number of deaths and injuries on Auckland’s roads. Speed is attributed as a major factor, and the topic of speed limits is an emotive and polarising issue. Changes need to make sense to people and be backed up by evidence.

The number of fines handed out as a result of being caught speeding last year was more than three times higher than in 2017 and 20 times more than it was in 2013. The numbers are mind boggling. In 2018 there were 1,191,484 speeding infringement notices issued. That means on over a million separate occasions, drivers simply ignored the safe speed road signs. And why?

Research in NZ has shown that drivers in general, and novice drivers in particular overestimate their driving skills. As one researcher noted, drivers, “... have poor insight; they overestimate their skills and underestimate the difficulty of driving.”

Other research showed that drivers tended to overestimate the time savings at high speeds and underestimate the time savings at lower speeds. However most drivers were aware that increasing speed above 100km/hr would use more fuel.

So in short, drivers generally don’t give a damn about road speed safety signs; believe they are much better drivers than they really are; overestimate the travel time saved through speeding; and although they know speed will cost them more petrol, they do it anyway.

So we think reducing the road safety speed limits will make a difference how?  

 

First published in the Franklin County News p14 May 9th 2019

Is there enough land to feed us?

Think about how much food you eat each day. Now think about how big the human population is and how much food is needed to feed all of those people.

One thing is universal and that is our need to eat to sustain our lives. Without food we can no longer exist. We fail to realise that by allowing our cities to grow without interruption, we are literally and rapidly starving ourselves. Urbanisation is threatening food supplies all across the planet.

The rapid loss of agricultural land is prevalent throughout the world, and clearly shows that crops cannot compete with the sprawl characteristics of cities. Urban centres have forgotten that their existence is totally dependent upon the rural areas surrounding them. The continued rise in population rates is so adversely affecting the carrying capacity of the planet, making aspects of food production much more worrisome and problematic.
With almost half of New Zealand’s land area committed to pasture and crops we could assume there is still plenty of land to spare.

Economist Shamubeel Eaqub raises serious concerns whether New Zealanders have been lulled into a sense there is plenty of land to go around in our supposedly lightly populated country.

Many of our urban communities grew up as support centres for the agricultural community around them. Pukekohe would be an example. But is it the best use of land? What happens to our ability to produce food when that high quality land is taken out of production? Once it has gone into houses, you don’t get it back.

According to Landcare research only 5% of our land is fertile and versatile enough to produce food without the need for ‘significant manipulation’. Examples of ‘Manipulation’ include fertiliser and irrigation. So would the population be prepared to let farmers use more fertiliser and develop more irrigation to produce the food lost as a result of urban sprawl? Given their view of agriculture has been negatively well conditioned by shrieking lobby groups supported by mainstream media, I’m confidently predicting the answer is ‘No’.

Without doubt, good quality food is a necessity.

Horticulture NZ tells us that productive land to the south of Auckland is a mere 4,300 hectares. Taking the land out of production over the years could cost up to 4,500 fulltime jobs and mean fruit and vegetable prices in Auckland would go up 58%.

From 2002 to 2016, NZ’s vegetable growing area declined by 30%. The area of land devoted to agricultural fell by almost a million hectares in the decade to 2012. For the growth of 100,000 extra people, about 2,100 hectares of residential area is required.

New Zealand has limited national information on how quickly our versatile land is shifting to urban use. Auckland will gain another 26,000 people a year between now and 2050. Not only is the soil lost, but the population that needs feeding from the remaining land will have grown by a third. And with a city bursting with people there is the associated demands for more roads, motorways and upgraded sewers and storm water systems.

The research agency Motu recommends shifting from meat and milk production to horticulture, requiring at least 100,000 hectares more horticultural land and possibly up to 250,000 hectares.

Estimates suggest that by 2050 food production will need to have increased by 60% on 2005 levels to feed a growing global population.

In the last past 40 years, earth has lost one third of its arable land. Research has calculated that nearly 33% of the world’s adequate or high quality food producing land has been lost.

Published in the Franklin County News, Thursday 14 March 2019, page 6, Conversations, "Is there enough food to eat."

 

Pukekohe Project Plans Hard to Find

I read late last year about a regeneration programme for Pukekohe. The information did not give me the ingredients necessary to get excited about our future, well Pukekohe’s anyway.

Apparently great development is going to be ‘Unlocked’ (with a capital ‘U’).

The information certainly confirmed much of what we already know, special housing developments, rapidly increasing population, the need for better transport connections, attracting more investment.

Yes we know a strong local economy is vital, and the cornerstone to much needed employment, but what is the answer to the “So what” question?

The Maori word ‘Panuku’ in English is a verb meaning “to move, move on”. To move on is an encouraging but rather vague indication of, what exactly?

I searched the Auckland Council website and found the Panuku Development Auckland page which told me it was about shaping spaces for Aucklanders to love. Great news I was on the track. There was a Project Map tab so I naturally clicked to see where we featured. Well the news is, we don’t. Franklin isn’t on the map.

But I was not giving up. I clicked on the Projects tab and scrolled down the list of great photographs with location labels but there was nothing with Franklin, or Pukekohe, or Waiuku on it.

Then I clicked on the ‘Latest News’ tab and up came an aerial photo of Pukekohe with a label, ‘Panuku to help shape Pukekohe’s future – a new future is being envisaged for Pukekohe’. I clicked on that, excited that I was getting closer to something actually informative about our future, but no it was, disappointingly, word for word the PR statement.

But wait, I spotted some small print right down the bottom of the webpage, ‘Board Reports’ so clicked on it and up popped a heading for future meeting dates (there were none) then a list of previous meeting dates, back a couple of years (well that is as far as I could be bothered looking on a quick scan).

At the time of looking, the last meeting of the Board of Directors was on the   28^th November 2018. The notice advised, ‘The general nature of business will be to consider the Chief Executive’s Report on the company’s operations....’ I thought I would have a look at what transpired at the previous meeting held on 24^th October. Apparently the general nature of business was to consider the Chief Executive’s Report on the company’s operations.

I thought I might go have a look at what was under the date for other meetings before that and found that, yep you guessed it, the general nature of business was to consider the Chief Executive’s Report on the company’s operations.

Having clicked through a bunch of those I got bored and my partner yelled, “Are you ready for some dinner?” and I said “Yes thank you.” Then left the computer with my anticipatory excitement deflated.

I really was interested in finding out, beyond the PR announcement, where we were moving on to.

First published in the Franklin County News, page 4, Conversations, “Pukekohe Project Plans Hard to Find”, Tuesday 5^th February 2019.