Encouraging Signs

Not Yet Living Within Our Means, But Progress Nonetheless

And now, a good news story.  One of the things that has bedevilled the New Zealand economy for decades is the dearth of capital.  As a nation which has practised “socialism without doctrines”, as historian Michael Bassett put it, we have not saved, nor valued, nor husbanded sufficient capital.  Why save, when the state taxes and distributes, with the goal of creating cradle to the grave security? 

Consequently, the Balance of Payments has run at a deficit for a long, long time.  This econometric statistic measures whether NZ Inc is trading at a surplus or deficit, whether as a nation it is making more than it spends, or whether it is relying upon others outside New Zealand to fund our lifestyles in aggregate.  The perpetual deficit is a record of our having become accustomed to living standards way beyond our national means. 

Gradually this situation is changing.
  New Zealanders are starting to save.  In particular, they are investing not just in New Zealand, but offshore.  In the long run this has to be a very good thing. In recent decades, particularly since the deregulation of the economy in the nineteen eighties, New Zealand institutions and the government has borrowed offshore to fund deficits and compensate for the lack of available domestic savings.  Whilst initially getting us out of a hole, it has had a long term perverse effect.  Our Balance of Payments has become more and more difficult to keep in surplus due to the cost of servicing offshore borrowing and investment in New Zealand.  Funds remitted offshore every quarter in profits or interest payment made it harder and harder to live within our means. 

Now, however, the Balance of Payments (still in deficit) is starting to take a different shape.  According to the NZ Herald

New Zealand’s investments overseas increased by about $5 billion over the past year, while the amount of money flowing into the country also lifted.  Statistics New Zealand released data today showing New Zealand had money invested in about 100 different countries as at the end of March this year.  Those investments amounted to $163.9 billion, up from $158.4 billion in the year to March 31, 2012.

In the long term this has to be a good thing–provided, of course, our offshore investments are sound rather than speculative–which appears to be the case.

Some examples of offshore investment include Kiwis buying shares on foreign stock exchanges and Kiwi companies setting up overseas subsidiaries.  Of New Zealand’s total investment abroad, 64 per cent was into five countries – Australia, US, UK, Japan, and the Netherlands.

Australia held its position as New Zealand’s biggest trading partner, with investment there rising by $2.5 billion to reach $48.2 billion at March 2013.

The returns from these overseas investments will help reduce our Balance of Payments deficit and eventually (hopefully) bring it into surplus—not just occasionally, but structurally.  There is a long way to go.  International investment in New Zealand is presently twice the amount we have invested offshore.  Eventually this needs to be reversed.  There are many things which could derail this advance.  But we will take this small victory and press on, hopefully to even bigger and better things. It will be good for our grandchildren and our great grandchildren.

A Man of Principle

A Politician Not For Turning

Most politicians are seen as venal and self-serving.  They will do anything, say anything to get their name and their “brand” in the public’s mind.  But not the mercurial Winston Peters.  Here is a politician of different stamp, not only with deep convictions, but one willing to pursue and investigate wrongs, exposing the corruption and evil actions of his own class. 

We have long admired his campaign against selling 8,000 hectares of (not-so-prime-farmland-at-the-time) to Chinese company Shanghai Pengxin last year. Land is precious to New Zealand, argues Mr Peters.  We should not be selling it off to foreigners.  Peters has the evidence to prove his point.  He has personally tramped over every hectare of the Shanghai Pengxin farms at not inconsiderable personal cost.  He has seen what has happened to the land.
  “‘Rape’ is not too strong a word”, he fumes.  Those farms have been destroyed.  “Why, once they were populated with lots of starving dairy cows, the banks were foreclosing, farmers were being kicked off the land, Animal Welfare idiots were up in arms and the farms were about to go back to primeval bush.”  In other words, they were a typical kiwi farm of my generation–the kind our grandparents grew up on.  “That’s our heritage, right there, gone,” he insists. 

Mr Peters knows that he has been criticised for ignoring the parlous economic state of the 19 Crafar Farms, now owned by Shanghai Pengxin.  “I care for animals just as much as the next Noo Zillander,”  he reminds us.  “It’s just that going broke on a farm, being forced off the land by the bank manager, and seeing the thing go back to wilderness is an iconic Kiwi story.  It is the true Kiwi right of passage.”  He points out that Taranaki gates and rusting number 8 fencing wire is such an important part of our heritage.  Now it is being lost to “bloody furriners”.  He thinks it is a travesty that we have again lost out on the preservation of one of our icons. 

“I personally tramped over every square foot of those Crafar farms.  Not one rusting Taranaki gate.  Not one thistle or bit of ragwort anywhere.  Only big fat lazy corporate cows.  When I was a kid we used to marvel at the wonderful yellow ragwort flowers that used to cover the hillsides.  That beautiful sight has been lost to the next generation.  That’s what comes of selling farmland to furriners.”

Mr Peters is now well into his seventies.  He remains a stirling example of a principled politician.  He is one whose principles cannot be bought, either by voters, or donors, or by corporates whom he despises–especially foreign ones.  He is his own man.  His latest crusade is against the Harvard University Pension Fund buying 1300 hectares of prime Otago farmland.   “It’s a fact that New Zealand history holds Otago in a special place.  It’s our heritage.  That Mckenzie fellow who stole sheep for years has the whole countryside named after him. He’s a folk hero.  I bet you my toupe those greedy Americans are not going to be stealing any sheep.  They have no understanding of this country, of our culture and ethos.  For them it is all fat greedy profit.”

But there is a deeper concern.  Mr Peters is even more suspicious of the intent and motives of the Harvard University Pension Fund than he is of the Chinese investors.   “I learnt early on, never to trust the Yanks,” he says.  “They have a long, tarnished history of buying things outside the US and then transporting them back home.  Look at what they did to London Bridge.  Don’t be surprised if they pack every one of those 1300 Otago hectares up into containers and ship it back to Harvard where pointy heads will try to replicate a Noo Zilland high country farm.  The Yanks are even more dangerous than the Chinese.  They have the technology.”

Peters believes he knows what will happen.  The Americans will uplift the Otago farms and relocate them back in the grounds of the prestigious Ivy League university.  Then the Chinese will steal the technology “because that’s what they do” and they will eventually transport the Crafar farms back to the Middle Kingdom.  “You mark my words, within ten years those Crafar farms will have disappeared.  There will just be a huge empty hole in the ground.” 

He warns that this will always be the end result of selling land to foreign, non-resident corporates.    “The government is selling our kiwi birthright,” he mutters.  “A day is coming when there will be no ragwort, no thistles to be seen anywhere, let alone Taranaki gates.  All in the name of dirty profit.” 

(My name is Winston Peters, and I approve this message.)

Raggle Taggle Leaders

Deafening Silence

We expect a chorus of indignation and outrage swelling to a climactic crescendo in Parliament this week.  Something truly terrible has happened in the land–the kind of thing so bad that mothers clutch their children to their breasts in mortal dread. 

A Maori tribe has sold–yes sold!–land given to it as part of a treaty settlement.  Te Uri o Hau was awarded some land near Mangawhai just north of Auckland which consisted of 616 hectares of forest in prime coastal land.  They are selling off a third (230 hectares).  Who is going to stand up to protest? 

Well, we expect that the Mana Party, the Green Party, and probably the Maori party are going to express moral outrage at the betrayal of Maori being disenfranchised from their land with which they have a deep spiritual connection, and in communion with which Maori hear the ancient spirits talking to them.
  Now it will be gone for good.  With whom will the mokopuna–and generations yet to come–commune now?  Their birthright is being stripped from them.  They will be alienated from their own Maoritanga.  We expect the Maori Council will rush the now well-beaten path to court seeking an injunction to stop the sale.     

But wait.  It’s worse.  Is that possible?  Alas, it is.  The traitorous hapu, Te Uri o Hau have sold the land to foreigners.  To outsiders.  Expect Winston Peters, the champion of national economic autarky, to arise to his feet in Parliament and thunder against precious coastal land being alienated from the people of New Zealand and sold to foreigners.  The grossly incompetent Overseas Investment Office approved the sale.  The government is betraying us all. 

Peters will be followed hard on heels by David Shearer, leader of the Labour Party decrying not just the destruction of prime forest in order to clear the land for sale–a traitorous economic act to be sure–but to see the Chinese in control of coastal land just north of Auckland where Aucklanders love to slurp coffee and wine in boutique sea side cafes of a weekend is just too much for the ordinary Kiwi bloke to stomach.  It’s an insult to our national mana and confirms that the Government is indeed betraying us all.

One of his colleagues will whisper in Shearer’s ear that his press secretary had it wrong.  The land had not been sold to the Chinese.  It has been sold to an American.  Ah, well.  That’s different.  But no.  Wait.  Not just any American–a multi-billionaire.  An exploiter of the downtrodden masses.  This odious man is taking precious land from poor, animist, taniwha loving Maori and using it for his own exploitative venal purposes.  Marx and Lenin and Mickey Savage would be turning in their graves.

Before Shearer has even had a chance to wipe the egg off his face and sit down, Red Russel, co-leader of the Greens will join the fray.  Russel cites reliable sources that have told him the purchaser of the land, Mr Kayne an odious man from California who runs a firm called Kayne Anderson Capital Advisors (and doesn’t that name say it all, Mr Speaker) is not just a capitalist exploiter, he is a climate desecrater.  I have been told, Mr Speaker he insisted that the land be cleared of trees before he expropriated it from New Zealanders.  The global warming meter has gone off the scale.  The wicked Mr Kayne is willingly complicit in the destruction of the planet.  And he is coming to live here!  In New Zealand.  What will that do, Mr Speaker to our Clean Green brand?  Huh?  Have you thought of that Mr Speaker?  Oh, sorry.  Of course you have not.  You cannot think. I rest my case.  Anyone who disagrees with me or doesn’t understand my soaring logic cannot think by definition.  I am my own self-autheticator of my own facts.  No-one else counts.

Will we hear the chorus?  No.  Not at all.  We will be deafened by silence.  But if Mr Kayne had in fact been the CEO of KungShu Capital Advisers, out of Beijing we would have required ear plugs to get some rest.  Therein lies exposed the jingoistic hypocrisy of the raggle taggle collage of opposition parties masquerading as national leaders in our Parliament.  Their hypocritical silence serves as loud and clear condemnation. 

Meanwhile, let’s give genuine credit where it is due.  Firstly, a big thumbs up to Te Uri o Hau which sold the land in the first place.  With an eye to prospering their own, they plan to use the proceeds to invest further into dairying, where, they argue they have more competitive strengths.  Moreover, they believe, according to the NZ Herald, that under Mr Kayne’s ownership the local community would benefit substantially from the sale. 

Te Uri o Hau said the development . . .  would add about $5.9 million to the local economy and the complex would create about 30 jobs.

What development?  What complex?  Hah.  An international golf course (a la Cape Kidnappers and Kauri Cliffs).  Now you are talking!  Top marks Te Uri o Hau.  More power to you.  Thanks, boys.  Job well done.