Dec 15, 2017 - Mr Renner is also President of Business Central, representing businesses in the lower North Island and upper South Island. He replaces outgoing BusinessNZ President Tony Sewell of the Canterbury Employers’ Chamber of Commerce (CECC).
New Vice-Presidents are Andrew Hunt of the Employers & Manufacturers' Association (EMA) and Andrew Leys of the Otago Southland Employers' Association (OSEA).
Dec 14, 2017 - Rubicon's proposal to sell a 45 percent stake in local Clearwood manufacturing business falls within the independent adviser's valuation range. The forestry biotech's shareholders will vote on the transaction at a special meeting in Christchurch on Jan. 12 on whether to approve the sale of its interest in Tenon Clearwood Ltd Partnership for US$14.2 million, which is the cost of its investment in the company in April, plus its share of the reduction in the company's net debt since then. That is estimated to be worth a combined US$15.3 million. The buyers include affiliates of Rubicon's two biggest shareholders, Knott Partners and Libra Fund LP.
Rubicon's independent directors have recommended investors take the deal, with Steve Kasnet saying the deal fell within Grant Samuel's independent valuation range of the stake, the exit would provide funds to make two looming payments on its ArborGen business, and simplify the company's structure providing the opportunity to cut costs.
"We believe that these three factors – the removal of any overhang in the stock price relating to uncertainty as to the funding source of the deferred ArborGen acquisition and subordinated debt payments, simplifying Rubicon to be a pure-play on the ArborGen business, and the achievement of cost savings, will all be beneficial to building positive momentum in the RBC share price," Kasnet said in a letter to shareholders. "The sale will then make Rubicon a ‘pure-play’ for investors on the ArborGen business upside, and with Rubicon’s financials moving forward then only being ArborGen-based, investors will have greater transparency of ArborGen’s financial results."
Grant Samuel valued Clearwood at between US$51.3 million and US$61.5 million, with Rubicon's stake worth between US$13.6 million and US$18.2 million.
"In Grant Samuel’s opinion, based on the analysis of the merits outlined above, the terms of the proposed transaction are fair and reasonable to the shareholders of Rubicon not associated with Knott and Libra," the report said.
If the deal doesn't go ahead, Grant Samuel anticipates Clearwood will need more capital to reduce its level of debt.
Grant Samuel has valued the business twice in the past 12 months in relation to the sale of former NZX-listed Tenon's business sales. The most recent of those was earlier this year, ending an 18-month process run by an investment bank.
Kasnet said because the offer was the same price as the earlier transaction, the independent directors chose not to run another sales process as there was no benefit to shareholders.
Rubicon shares were unchanged at 19.5 cents, and have dropped 11 percent so far this year.
Dec 14, 2017 - The New Zealand Productivity Commission today released its draft report - Measuring and improving state sector productivity. “The state sector spends more than $40 billion every year on public services. Measuring productivity is essential for knowing if the money is being well spent.” Says Chair of the Productivity Commission, Mr. Murray Sherwin.
“Constantly improving productivity across an economy is the essential source of improved incomes and wellbeing. While most businesses have a pretty good idea of their productivity performance, the public sector is much less likely to focus on its productivity. In part, that is because it can be harder in the public sector to measure what is being produced.”
“The Commission has worked with government agencies to develop a number of case studies. These illustrate the methodological issues encountered when measuring the productivity of public services. We found that much of the data required to measure productivity already exists. It can be dispersed and not readily accessible but those matters can and should be fixed.”
“Measuring productivity is not an end in itself. Rather it’s a starting point for discussing better ways of doing things. Stimulating innovation in the state sector is key to improving productivity. There are many examples of local innovation but they don’t tend to spread very far or fast. This needs to change if we want a more efficient and effective state sector.”
The inquiry terms of reference asked the Commission to provide guidance on how to measure productivity in “core” public services (health, education, justice, social support) and provide advice on developing the systems, culture and capability to measure and improve state sector productivity.
Submissions on the draft report are due 1 March 2018.
| A Productivity Commission release || December 14, 2017 |||
Dec 13, 2017 - The appointment of Adrian Orr to be the new Governor of the Reserve Bank of New Zealand (RBNZ) appears to be a good move by the Minister of Finance. To be really effective, however, Mr Orr will need to take seriously the issue of our sustained overvalued exchange rate over the last decade which has played a role in holding back export growth.
“We are hopeful the appointment of someone from has worked inside the RBNZ, but also had a very successful career outside since, signals a willingness for reform within the bank, given the review and the new Government’s pre-election promises of changes to targets and the decision-making model, says Dr Dieter Adam, CE, The Manufacturers’ Network.
“Under the previous Governor’s leadership we saw consistent comments around the role of the currency in holding back growth in exports. We did not, however, see much credible action to change the situation. We understand that under current settings, the RBNZ has limitations as to what it can do to address the exchange rate level and volatility. With a new Governor more willing to act within existing means and the potential for wider reform, there is an opportunity to make strides to address the challenge.
“Our currency remains significantly higher than long term averages, both on the Trade Weighted Index and critically, against the Australian Dollar, where much of our manufacturer's export revenue comes from.
“The RBNZ’s recent work to introduce macro-prudential tools, such as the loan-to-value ratios have been a positive move to address concerns on financial stability while giving the Bank more freedom to act on interest rates. We would encourage the incoming Governor to continue down this path, particularly in continuing investigation of debt-to-income rations.
“Addressing the currency challenges our tradable sector has faced over the last decade are key to helping to improve our export success and the transition to a more productive and high value economy. Let us not forget, however, that the use of updated targets and additional tools by the RBNZ alone won’t suffice to meet the challenge. The Government needs to make decisive policy changes to address the economic fundamentals behind – first and foremost - the misallocation of capital into property speculation, high levels of household debt, and the absence of any significant productivity growth in the real economy of New Zealand." says Dr Adam.
| A Manufacturers Network release || December 13, 2017 |||
Dec 11, 2017 - New Zealand exporters need to maintain a dialogue with Government about issues encountered in overseas markets at a time when New Zealand is looking to expand, and possibly reshape, its trade law framework, says Daniel Kalderimis, partner and head of Chapman Tripp’s International Law practice.
"International trade policy is entering choppy waters, and the rise of China, the Trump Administration’s America First philosophy and Brexit will all bear directly on New Zealand in ways that are difficult to predict.
"Although the prognosis looks good post the APEC Summit for the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), there will be continuing uncertainty until the agreement is signed.
"If CPTPP comes into force, export businesses should engage in medium to long-term planning to ensure the smooth operation of global supply chains," Kalderimis said.
So far, we have not seen a retreat from globalisation and liberalised trade that we feared when President Trump was elected, he said.
But there are changes in the wind.
"There is an emerging view that free trade agreements (FTAs) need to address global issues such as climate change and rising inequality and there may be a trend away from investor-state (as opposed to state-state) dispute settlement clauses, which allow corporates to sue governments."
Governments will always do things to support their own constituents, and sometimes that may mean protectionist or complicated rules that increase expense for exporters, said Tracey Epps, trade law consultant at Chapman Tripp and former senior advisor in the Ministry of Foreign Affairs (MFAT) Trade Law Unit.
"But systems are in place that allow the government to address those kinds of actions, as evidenced by New Zealand’s successful claim in the World Trade Organisation (WTO) against Indonesia earlier this year.
"There are benefits to businesses engaging early and well to bring sticking points to the attention of relevant officials."
The WTO system is extremely valuable for New Zealand, and as a small country we rely heavily on a rules-based system, she said.
"A real concern at present is that the WTO’s dispute settlement system is under threat from US actions in blocking the appointment of members to the Appellate Body."
Also valuable is New Zealand’s growing network of FTAs, she said. "New Zealand negotiators will have their work cut out for them in Geneva to ensure continued agricultural market access on favourable terms to the United Kingdom and the EU27 following Brexit."
The lawyers were commenting on the release of Chapman Tripp’s publication, International trade law - trends and insights.
DEC 11, 2017 - The NEM.io Foundation, the organisation behind the NEM blockchain technology, is setting up shop in New Zealand as part of what it says is $US40 million global expansion plan, and has been in New Zealand promoting a $US90 million ($130m) global development fund that it says will help kick start local blockchain companies.
The NEM.io Foundation is a Singapore based not-for-profit organisation whose purpose is “to introduce, educate, and promote the use of the NEM blockchain technology platform on an international scale to all industries and institutions.”
NEM has its own cryptocurrency, XEM, that is says is “recognised as one of the top ten cryptocurrency by market capitalisation.”
A NEM.io Foundation team, led by Jason Lee, global director, partnerships and strategic alliances is hosting a series of introductory events in Auckland, Wellington and Tauranga throughout December. The team also presented at the Blockchain Summit Auckland 2017.
A spokesman said that, in addition, the NEM.io Fondation team had been engaging with the Blockchain Association of New Zealand, universities and various blockchain companies and startups interested in the building on the NEM blockchain via the global development fund.
The head of the NEM.io Foundation in Australia and New Zealand, and a council member of the NEM.io Foundation, Nelson Valero, said the global development fund would help businesses, academics and developers feel empowered about the NEM blockchain technology and its potential to disrupt the way they manage information and data.
Lee said all applicants for funding had to be active members of the NEM community, but that this meant, “simply getting involved in conversations on our online forums.”
However, “If you are new to the community, you must have an endorser whom you think will be able to help you quality and contribute to your blockchain project,” he said.
The Foundation’s New Zealand initiative follows the opening of a NEM Blockchain centre in Kuala Lumpur as a joint initiative with the Australia-based Blockchain Centre (a not-for-profit sponsored by Blockchain Global and IBM). It says the centre will be a knowledge and innovation hub that will serve as an accelerator, incubator and co-working space.
The foundation claims to have a unique implementation of blockchain technology. “NEM is built from scratch as a powerful and streamlined platform for application developers of all kinds, not just as a digital currency,” it claims.
“Using NEM in your application is as simple as making RESTful JSON API calls allowing you to configure your own ‘Smart Assets’ and make use of NEM’s powerful blockchain platform as your fast, secure and scalable.
“Configured for your use, NEM is suitable for an amazing variety of solution classes, such as direct public transactions via streamlined smartphone app, efficient cloud services that connect client or web applications, or a high-performance permissioned enterprise back-end for business-critical record keeping.”
Dec 11, 2017 - Foreign Affairs Minister Winston Peters has announced New Zealand’s next High Commissioner to Nauru will be career diplomat Nicci Simmonds. “New Zealand and Nauru enjoy a good relationship and the High Commissioner will play an important role in strengthening our engagement around mutual interests,” says Mr Peters.
“New Zealand contributes approximately $2.3 million in development assistance to Nauru each year with a focus on building greater self-reliance through improving educational achievement, protecting Pacific fisheries and increasing access to renewable energy.
“New Zealand is also looking forward to Nauru hosting the Pacific Island Forum Leaders’ Meeting in 2018, and to attending Nauru’s milestone celebration of 50 years of independence at the end of January 2018.”
Ms Simmonds, who is Unit Manager in the Pacific Branch of the Ministry of Foreign Affairs and Trade and manages the Papua New Guinea, Solomon Islands and Nauru team, will be based in New Zealand.
Dec 8, 2017 - Higher sales volumes for chemicals and plastics producers helped lift manufacturing in the September 2017 quarter, Stats NZ said today.
The total volume of manufacturing sales rose 0.3 percent in the September 2017 quarter compared with the June 2017 quarter, when adjusted for seasonal effects. This follows a 1.0 percent increase in the June 2017 quarter.
Six of the 13 manufacturing industries saw sales rise in the September 2017 quarter. The largest movements were chemical, polymer, and rubber product manufacturing, up 3.7 percent, and transport equipment, machinery and equipment manufacturing, up 2.8 percent.
“The September quarter’s rise in chemical, polymer, and rubber product manufacturing sales followed a sizeable 8.5 percent fall in the June 2017 quarter,” manufacturing manager Sue Chapman said. “This industry includes the manufacturing of fertiliser, plastics, and rubber products.”
Meat and dairy product manufacturing sales seasonally fall in the September quarter, with sales volumes down 0.5 percent. This followed an 8.0 percent rise in the June 2017 quarter.
The actual volume of total manufacturing sales was unchanged from the previous September quarter. When price changes are included, the value of manufacturing sales was $25.3 billion in the September 2017 quarter, up $2.0 billion from the September 2016 quarter.
Dec 7, 2017 - An article published today in the Reserve Bank Bulletin reviewed the policy responses by overseas central banks to house-price collapses. It was originally written by a contracted researcher, Maitland MacFarlan, as part of the Bank’s general consideration of risks around housing markets.
The article considers several episodes of house price collapses around the globe over the last 30 years, a period that encompasses the Nordic financial crises that began in the late 1980s, the Asian financial crisis of the late 1990s, and the more recent global financial crisis (GFC). The paper focuses on the policy responses to these problems and lessons that current policy makers can derive from these experiences.
The article observes a strong association between housing busts and banking crises, while noting that not all housing busts lead to a more generalised financial crisis, and not all financial crises are accompanied by house price collapses. Housing market crashes have highlighted the need for borrowers and lenders to take more forward-looking, longer-term perspectives on their exposure to market developments.
Dec 7, 2017 - A new arrangement signed recently will simplify New Zealand's meat product exports to Egypt, the Ministry for Primary Industries (MPI) said today. Under the new arrangement, Egyptian authorities will no longer have to visit each individual meat premise that wishes to export to Egypt.
The arrangement was signed by MPI Director-General Martyn Dunne and Egyptian Deputy Minister for Agriculture Dr Mona Mehrez in Wellington.
"This the first time Egypt has agreed this type of arrangement with any country, and is a clear demonstration of the strength of New Zealand's meat regulatory programme and our good relationship with Egypt that has developed through years of export, engagement and audit," says Mr Dunne.
"It's pleasing New Zealand's meat regulatory programme meets the expectations of the Egyptian Government. New Zealand has a world class meat regulatory programme, and signing of the arrangement with Egypt further reinforces this"
The signing was part of a visit by Dr Mehrez and a delegation of senior Egyptian veterinarians to learn about New Zealand's meat regulatory programme and explore opportunities for collaboration.
This arrangement will make it easier for New Zealand exporters to access the important Egypt market for New Zealand meat products. In the year to 30 June 2017, we exported about $52 million worth of meat products to Egypt.
"New Zealand is proud of its long history of agricultural exports to Egypt," says Mr Dunne. "We are committed to growing this important trade, a key part of which is through simplifying exporting processes. This arrangement is a great example"
"Both New Zealand and Egypt have committed to working together to identify areas we can cooperate in, particularly in animal health and husbandry," says Mr Dunne.
"We look forward to deepening New Zealand's trading relationship with Egypt even further through sharing our respective knowledge and experience"