The Government has today released a further Discussion Document as part of its review of the regulatory framework that will apply from 2020, which sets out final views on the approach to UFB fibre services, and new proposals for copper services for feedback.
The Government has departed from the previous combined copper and fibre regulated asset base proposal. The key changes are:
· The final decision is that UFB fibre will be regulated under a traditional utility style building block model framework. The initial valuation of the UFB fibre network will be determined by the Commerce Commission based on unrecovered historic costs. For an initial period until 2023, Chorus will be regulated under a revenue cap with anchor products. The price of the initial voice and broadband anchor product (100/20Mbps) will be set based on 2019 prices, adjusted for inflation. The form of control can be reviewed by the Commission from 2024, subject to approval by the Minister. Unbundling is required with prices set commercially until 2024, when the Commission can investigate whether or not prices should be set on a cost-oriented basis.
· The proposal is that copper will be de-regulated and the Telecommunications Service Obligation (TSO) will be removed where UFB or other fibre is available.
· In other copper areas, prices will be set at 2019 prices with no inflation adjustment and the TSO will remain in place.
“The proposal to treat copper and fibre separately in the regulatory framework is a change from the Discussion Document in July 2016. This raises some additional complexity for regulatory implementation, such as cost allocation, that we will need to consider carefully. In addition, it raises questions around incentives to invest in the high cost rural areas currently served by copper. We look forward to engaging further on this, to ensure that customer needs are met, along with consideration of whether investors can earn a fair return,” said Vanessa Oakley, Chorus General Counsel and Company Secretary.”
A copy of the Discussion Document can be found here www.mbie.govt.nz/telcoreview. Chorus looks forward to considering today’s announcements in more detail, participation in the review and completion of legislation this year.
Energy and Resources Minister Judith Collins has today announced a Market Study into fuel prices/returns to be undertaken by the Ministry of Business, Innovation and Employment (MBIE).
The Fuel Market Financial Performance Study, which is expected to be completed by the end of June is designed to determine how fair petrol and diesel prices are at the pump.
“MBIE data shows that fuel margins have more than doubled over the last five years. The Market Study will report on fuel company returns and will include in-depth analysis of oil companies’ finances.
The Study will focus on the returns on average capital employed against cost of capital, across different parts of each business. It aims to determine if companies are making super-normal profits or not. Other financial benchmarks may also be used.
“The advantage of a Fuel Market Financial Performance Study is that it can be done reasonably quickly and it will help to build a more informed picture of the overall performance of the fuel market. However, it will require the industry to cooperate with MBIE.
“I have spoken to the oil companies this week and I am very confident that they will work with MBIE and provide the required information in a timely manner. It is in the best interests of everyone, including oil companies, to make sure New Zealand has quality, reliable and reasonably priced fuel,” Ms Collins says.
The terms of reference for the Study are being consulted on with industry and will be finalised and released shortly.
| A beehive release | February 9, 2017 ||
Size matters to CEVA. The world's fourth largest logistics company has just moved into what it claims is one of the biggest sheds in the southern hemisphere, a half-kilometre-long storage and distribution facility equivalent to eight MCG playing fields in size.
Netherlands-based CEVA Logistics occupied the new $80 million single span building in Melbourne's western suburbs in August last year, part of a rationalisation that has also seen it consolidate into similar, although smaller, "super sites" in Brisbane and Perth.
"There's huge demand for this site," said CEVA's Australia and New Zealand managing director Carlos Velez Rodriguez.
The building acts as a staging, storage and distribution point for companies as varied as General Motors Holden, Mazda, Michelin and Continental tyres, NBN Co's equipment, items for Caltex's service station convenience stores and Accent shoes.
> > > Continue to full article
Honda and Hitachi are teaming up to lower the cost of electric vehicle manufacturing. The motorThe motor pictured is from Honda's NSX supercar.
As electric cars become more common, manufacturers are battling to find new ways to improve their hardware and lower costs. Over at Honda, the desire to improve its battery-powered cars has led to a new partnership with Hitachi, which has a long history of building motors for electric vehicles.
Given the global push toward tighter emissions standards and the growing popularity of electric vehicles, both Honda and Hitachi are looking to lower the cost of mass producing motors. Should they be successful, the partnership could lead to cheaper electric cars for the masses – a situation where everyone wins. To make it happen, the two companies have signed a memorandum of understanding to generate a "technological synergy" between supplier and manufacturer designed to "strengthen their competitive advantage and business foundation for the motors at the core of an electric vehicle."
Although the project will initially be based in Japan, there are plans to expand the joint venture with manufacturing and sales operations in North America and China. The two companies will be working in tandem, but they won't be exclusive – Hitachi will keep working with other manufacturers, and Honda will continue to use motors it builds in-house in Japan in some of its cars.
All up, the joint venture will be worth ¥5 billion (US$44,750,000) with Hitachi shouldering 51 percent of the load. The new (unnamed) joint venture company will be formally be signed into action at the end of March 2017, with work set to begin in June.
This isn't the first time Honda has joined arms with another manufacturer or supplier for cheaper, more advanced alternative powertrains. Earlier this year, the Japanese giant and GM teamed up to develop lower-cost hydrogen fuel cells, although that US$85 million deal represents a more significant investment than the Hitachi tie-up.
| Source: Honda by Scott Collie ||
Building consent data released today by Statistics New Zealand shows building consents are at their highest level since 2004. However, the industry needs to readdress the way it looks at skills training if it is to meet future demand.
To the year ending December 2016, 29,970 new homes gained building consents. This is the highest number since 2004 but still well below the high of 1973 when about 40,000 new homes were consented.
Almost all regions showed good growth particularly Manawatu/Whanganui (49%), Northland (43%), Hawke’s Bay (32%), Nelson (34%) and Otago (29%). Auckland fell just short of the 10,000 mark with 9,930 consents which was a 7% increase on 2015. The only regions to have negative growth were Southland (-1%) and West Coast (-17%).
Building and Construction Industry Training Organisation (BCITO) Chief Executive Warwick Quinn says he expects this upward trend to continue in 2017. Quinn says this rate of construction is at New Zealand’s long-running normal rate of 6.5 builds per 1,000 people and a response to the record low rate of construction during the global financial crisis (GFC). In 2011 the build rate fell as low as 3.1 builds per 1,000. Quinn says the number of homes that weren’t built during the GFC is double the number that weren’t built during all other recessions combined and New Zealand is still playing catch-up.
While the turnaround is welcomed, Quinn says 30,000 consents per annum is the new normal based on our population, but that level does not replace the shortfall developed during the GFC. He says New Zealand built about 45,000 fewer homes over the past 10 years compared to the previous ten, yet the population grew by about 480,000.
“It is no surprise to anyone that Auckland is the worst affected with about 4-5 years of backlog based on historical build rates. Other regions have significant backlogs as well including Bay of Plenty (3.7years), Northland (2.7years) and Tasman/Marlborough (2.5 years),” says Quinn.
Quinn says that while BCITO has a record 10,000 apprentices in training more are needed to meet building demand.
“While 10,000 apprentices is a new milestone for us it is also our new normal and must be increased if we are to successfully fill the skills gap in construction,” Quinn says.
“We tend to get a surge in apprentice numbers each year from about March and it will be interesting to see if that continues in 2017,” says Quinn. “Most of our growth comes from those firms that traditionally have apprentices, but in order to get the increase in apprentice numbers that we need, we also need to increase the number of employers who train. In order to do that we need to ensure training programmes align more closely with their business and meet employees expectations”.
BCITO has been working closely with the Tertiary Education Commission and the New Zealand Qualifications Authority in order to progress this. At the end of 2016 BCITO got the go ahead to pilot an alternative skills model that is aimed at increasing the number of firms that train and attract more people into the trades. Quinn says there has never been a better time to get into construction with a strong forward work projection and great job security.
| BCITO release | February 9, 2017 ||
The Taxpayers’ Union says that the focus on petrol margins earned by fuel companies, is a classic ‘bait and switch’ by politicians to avoid questions about the enormous taxes they impose at the pump. Responding to Energy and Resources Minister Judith Collin’s announcement of a market study into fuel prices/returns to be undertaken by the MBIE, Jordan Williams, Executive Director of the Taxpayers’ Union, says:
“While an examination into petrol company fuel margins is welcome, it is a bit rich to blame high fuel prices on the fuel companies when the amount of tax on fuel is nearly 20-times the reported profit by fuel companies on a per litre basis.”
“Z’s net profit on fuel is around 5 cents per litre. In comparison, at the current price of 91 octane total tax is 97 cents per litre.”
“If MPs were genuine in their desire to find out who is rorting motorists, they’d be examining petrol taxes, not just fuel margins. Until they do, their concerns about petrol prices are little more than crocodile tears.”
| A NZTaxpayers Union release | February 9, 2017 ||
Uninitiated can wreck their public service careers by mishandling them
Jargon in its politically correct form it is now being actively promoted and thus its adoption officially encouraged.Instead of relying on jarring clunky acronyms or neologisms, made-up new words, the new jargon is dangerous in that it is comprised of everyday words that have become re-purposed.
Peter Isaac is the author of The Definitive Bureaucrats’ Survival Guide to Workplace Jargon and also The New Gobbledygook. This selection cites the face-value innocuous words that in recent years, months even, have suddenly become perilous to their unindoctrinated users.
Community Now refers only to pressure groups or voters especially in the gender and sexual orientation category. No longer now used to describe and locations or places such as villages, towns, or settlement.
Equity Refers now to opportunities available to, or being currently enjoyed by, minority categories, even if the minority is in fact a majority. Usually refers to women, ethnics, and other groups considered to be disadvantaged. It does not encompass the aged. It was once applied as “social” equity. But the short form has now become standard. It has nothing to do with investment stocks & shares.
ConversationNow substitutes for word discussion. Or sometimes, dialogue. Its application is to avoid conveying any hint at all that one side in the exchange is superior in any way to the other. Or that the exchange might contain any implied threat as in saying “I will talk to him about what he did.” Indicates equality, or “equity.”
He, she, him her, Mr, Mrs Specific gender definitions have turned lethal. This is an area of intense rawness and all the more so because it is mostly unrecognised. If you are referring to an individual simply identify them by using their first and last names. Unless you happen to be demonstrably female yourself, do not use the term Ms because it is considered condescending. In this gender value judgment context you must deliberately sidestep conventional bureaucratic formality and protocol.
Wellness Health has taken on taboo status and fitness now refers to athletes or to business managers and their schemes. Health has been abandoned because it is considered to refer to ill-health, and to convey a biblical image of the halt and the lame. This may be the reason why when the word is actually spoken broadcasting officials pronounce it as ”halph.” Health is also shunned because of its association with health spas and luxury resorts, i.e. not equitable. Wellness is a rare example in the politically correct glossary of concocted jargon instead of the more usual changed meaning .
Evidence Actually now means research. Used as replacement for proof, as in evidence-based. It avoids implying anything pejorative or suspect. It conveys opinion-neutrality. Rarely now refers to anything legal.
| From the This email address is being protected from spambots. You need JavaScript enabled to view it. | Thursday 9 February 2017 ||
Statement by Reserve Bank Governor Graeme Wheeler:
The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 1.75 percent.
The recovery in commodity prices and more positive business and consumer sentiment in advanced economies have improved the global outlook. However, major challenges remain with on-going surplus capacity in the global economy and rising geo-political uncertainty.
Global headline inflation has increased, partly due to rising commodity prices. Global long-term interest rates have increased. Monetary policy is expected to remain stimulatory, but less so going forward, particularly in the US.
New Zealand’s financial conditions have firmed with long-term interest rates rising and continued upward pressure on the New Zealand dollar exchange rate. The exchange rate remains higher than is sustainable for balanced growth and, together with low global inflation, continues to generate negative inflation in the tradables sector. A decline in the exchange rate is needed.
Economic growth in New Zealand has increased as expected and is steadily drawing on spare resources. The outlook remains positive, supported by ongoing accommodative monetary policy, strong population growth, increased household spending and rising construction activity. Dairy prices have recovered in recent months but uncertainty remains around future outcomes.
Recent moderation in house price inflation is welcome, and in part reflects loan-to-value ratio restrictions and higher mortgage rates. It is uncertain whether this moderation will be sustained given the continued imbalance between supply and demand.
Headline inflation has returned to the target band as past declines in oil prices dropped out of the annual calculation. Inflation is expected to return to the midpoint of the target band gradually, reflecting the strength of the domestic economy and despite persistent negative tradables inflation. Longer-term inflation expectations remain well-anchored at around 2 percent.
Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.
View the Monetary Policy Statement: http://www.rbnz.govt.nz/monetary-policy/monetary-policy-statement
Watch the Monetary Policy Statement press conference live-stream at NZT 10am: http://www.rbnz.govt.nz/research-and-publications/webcasts
Listen to the Reserve Bank of New Zealand’s February Monetary Policy Statement, as read by Governor Graeme Wheeler: https://soundcloud.com/te-putea-matua
SkyNews reports that The McLaren group's sports car arm will repatriate production and development of its chassis in a move creating at least 200 jobs.
McClaren has agreed a £50m deal to build a new production and research facility for its carbon fibre sports car chassis in the UK.
McLaren Automotive, a sister firm of the wider group which includes the Formula One racing team, is bringing the work back to the country from overseas in a move creating 200 jobs.
The roles would comprise mainly production staff, with 50 support workers.
The factory is to be housed next to the University of Sheffield's Advanced Manufacturing Research Centre (AMRC) under a partnership arrangement, which includes a training programme for McLaren apprentices.
Full production is due to be reached by 2020.
Mike Flewitt, McLaren Automotive's chief executive, said: "In 1981, McLaren was the first company to recognise the exceptional properties of carbon fibre, and we have designed the highly technical material to be at the heart of every McLaren road and racing car ever since.
"The now-iconic McLaren F1 was the world's first road car to be built with a carbon fibre chassis and every car built more recently by McLaren Automotive has the same.
"Creating a facility where we can manufacture our own carbon fibre chassis structures is therefore a logical next step."
He added: "At the AMRC, we will have access to some of the world's finest composites and materials research capabilities, and I look forward to building a world-class facility and talented team at the new McLaren Composites Technology Centre."
| A SKYNews release | February 8 2017 ||
In the highly competitive world of fabricated structural steel, some local producers and advocates now actively promote reducing the labour component by rationalising building design to enable them to reduce their price and deliver simplicity, says Challenge Steel chief executive Suresh Nagaiya.
“However, Challenge Steel achieves its competitiveness by dealing with one of China’s largest and highly renowned steel producers. Therefore, we can deliver both design complexity or simplicity cost-effectively for the likes of signature buildings.
“The fact that Challenge Steel is now involved in some major rebuilds in Christchurch post its devastating earthquakes shows the level of assurance, absolute quality, and sheer cost-effectiveness we’re able to deliver,” says Mr Nagaiya.
“Thankfully in New Zealand we’re seeing more and more award-winning design in significant public and private buildings. What’s more, steel is now often a very visible component of a building’s celebrated architecture and aesthetics.”
Mr Nagaiya also notes that renowned engineer Dr Peter Johnstone, who’s been in the media a lot following recent earthquakes, advocates that steel not concrete should increasingly be the lead design component in large New Zealand buildings.
Challenge Steel has quickly risen to become one of New Zealand’s largest importers of fabricated structural steel. The CEO says its business continues to grow as public entities and private developments up and down the country demand even more confidence and integrity around quality assurance.
“Challenge Steel is fast getting recognised for establishing a whole new benchmark when it comes to quality assurance and comprehensive product testing, making the likes of developers, procurement and project managers very receptive to our arrival into the local marketplace.
“People are increasingly cognisant of any potential issues and simply can’t afford to procure products that could erode public or consumer confidence in their structures. They naturally want the highest of assurance and we can categorically deliver.”
In recent months Suresh Nagaiya along with Challenge Steel founder and chairman Bert Govan have made trips to China with clients, contractors and prominent engineers showing them the exhaustive processes in action and providing confidence in the product and systems in place.
“We take clients and construction industry experts over to China and they are blown away. They soon see the quality of product being turned out, the robust testing and certification process, and the fact that each steel product is stamped with a unique code to ensure complete traceability. They also see Southern QA’s people on the ground at the fabrication factory. They come back to New Zealand with all the confidence they needed,” he says.
Challenge Steel had its genesis in the Christchurch earthquakes. Its supplier is the Shangdong Iron & Steel Group (Shan Steel) – a wholly state-owned steel conglomerate and one of China’s largest steel makers.
Mr Nagaiya says the motivation of Challenge Steel was to challenge and change New Zealand’s traditional procurement model. They wanted to introduce a lower price threshold into the local steel market and to positively impact on the high construction costs that were negatively impacting on the likes of housing affordability.
“We developed a world-class model over three years that delivers best practice at every step, and we’ve partnered with an array of expert individuals and world-class organisations. As well as manufacturer tests, our products are independently checked both in China and New Zealand, and then potentially by our own city councils. It’s very rigorous.”
Another factor inspiring confidence are Challenge Steel’s key leaders. Last year Tony Sewell and Geoff Cranko joined the board as its two new independent directors.
Mr Sewell is also the current chairman of Business New Zealand, and the former long-time chief executive of Ngai Tahu Property Limited. Geoff Cranko is also the Group Managing Partner of Strategy Design & Advertising and a former CEO of SGS.
Chief executive Suresh Nagaiya is a University of Auckland civil engineering graduate and IPENZ member. As a part-owner of central Auckland project management company, N-Compass, he also brings considerable senior project management experience.
“Challenge Steel is living proof you can deliver both competition and quality into the local steel market. It’s a proposition that’s really resonating and we’re now helping to lift local confidence in imported fabricated structural steel,” says Mr Nagaiya.
| A Challenge Steel release | February 8, 2017 ||
Palace of the Alhambra, Spain
By: Charles Nathaniel Worsley (1862-1923)
From the collection of Sir Heaton Rhodes
Oil on canvas - 118cm x 162cm
Valued $12,000 - $18,000
Offers invited over $9,000
Contact: Henry Newrick – (+64 ) 27 471 2242
Mount Egmont with Lake
By: John Philemon Backhouse (1845-1908)
Oil on Sea Shell - 13cm x 14cm
Valued $2,000-$3,000
Offers invited over $1,500
Contact: Henry Newrick – (+64 ) 27 471 2242