The facts:
NZ is the third fattest country in the OECD (astounding). The productivity and health costs associated with this are huge – and growing.
Auckland University and Otago University medical schools undertook a joint research project into ways to influence consumer behaviour around the purchase healthy foods. Three groups were set up; 1) control group, 2) a group given very targeted information and education about the outcomes of healthy purchases, and 3) a group that were given information and a 12.5% price discount. The result: no change from control group (expected), no change from the group given a high level of education and information only (surprising), however, a 11% increase in the purchase of healthy food by those who received a 12.5% discount.

After consultation with a lead member of this research team, we decided that one of the best ways to influence buyer behaviour and promote healthy choices was provide a price incentive. This works. Six months after the study had finished and prices returned to normal for the third group, the researchers found the majority in this group were still making healthy purchase decisions.

So, education alone will not work in changing the eating habits / purchase decisions of the vast majority of NZers. A price incentive does. If anyone has a more effective way to directly target the obesity problem then I am very interested in hearing, because while it is a problem now, it is set to become an epidemic within a short space of time.

As an aside, we did briefly consider a ‘fat tax’ on unhealthy foods, however, ‘unhealthy’ is very difficult to define (under many definitions, milk and cheese are ‘unhealthy’) and so we decided that in this case, it is easier to remove a tax than add one.

1. NZ$19.9 billion – revenue
2. NZ$622m – gross profit (before tax)
3. NZ$149m – tax credit
4. NZ$771m – net profit (after tax)

In the past five years, Fonterra has reported $2.3b of before-tax profit on $86b worth of revenue – and not paid any tax.! In fact, they have claimed $198m worth of tax credits.

It does need to be noted that the reason Fonterra’s profit is low compared to revenue, is at least partially explained by the fact they’re paying out a significant amount to the farmers.

In light of the record milk solids payout to co-operative members, however, it will be interesting to see how much tax dairy farmers pay this year. Especially considering in 2009 (latest figures I have from the IRD) over 9,000 dairy farmers (52%) declared a loss, and 67% declared a net trading income of $20k or less. I hope for the sake of the country, a very important industry, and the farmers themselves, that this year net trading income is considerably higher for the vast majority. Wouldn’t bet the farm on it though…

Someone obviously misjudged Key’s popularity and booked Napier’s Municipal theater (hate to think how much that cost – and I do believe the cost is attributable as well). The Municipal has a capacity of around 1,000. Tremain and Foss advertised the meeting widely though billboards and full page newspaper ads.

Well, around 120 people turned up, bolstered by a class of Auckland University students in Napier on a field trip. The theater looks empty with 300 seated, and so was, i am told, embarrassingly sparse. Around 50 peaceful protesters also turned up with signs and songs, so ‘the man of the people’ went in through the side door.

During the meeting Key was grilled by unhappy teachers and grumpy constituents, and copped an earful from Steiner staff who have been treated very poorly by Mrs Tolley. He then left via the side door.

All in all, not a successful event. If Foss and Tremain can only rustle up around 80 supporters from across the region (the rest were there to have their say and the aforementioned students) then things perhaps aren’t as rosy as maybe they appear. I am told that when Foss saw how many protesters had turned up he went very pale. Obviously concerned that such a poor turnout inside and a fantastic turnout outside might harm his career.

As an aside, 24 hours later i attended my daughter’s primary school play at the same Municipal theater: 1,000 parents and school supporters enjoyed the performance. Now that was the only decent show in town this week.!

Aside from the obvious contradiction there (‘not trying to please people… but about creating a system that people feel is fundamentally fair’: in my experience, people are pleased with a fair system, and not with one that isn’t), I don’t think anyone would disagree with the sentiment. As Revenue spokesman, I get many e-mails from people who believe they are being ‘ripped off’ by a discriminatory child support regime.

Three points I would make however:
1. Two and a half years ago Dunne said he would complete a review of the system in 6 months. What took him so long?
2. Dunne’s IRD is undertaking a round of redundancies (16 front line staff in Napier alone) and yet they are about to restructure the child support system… Does that mean ‘more with less’? Give me a break.!
3. Most importantly, Dunne has said that the changes to the system will be in legislation introduced to Parliament in the next few months. There are only four sitting weeks left this term. This is incredibly important legislation because over 200,000 NZ children rely on child support payments. I hope like hell this isn’t something that Dunne and the Nats are planning to introduce under urgency.

I am not saying there doesn’t need to be changes to the child support system, because there quite obviously does (of the approximately $2b in child support debt, under $200m is actually principle). But any legislation reforming the child support system needs to go through the proper parliamentary process; e.g. public select committee where all NZers can have their say.

The real shame of all this: if Dunne had done what he said he would do, then we would have had this whole system reformed months ago. Wonder why he hasn’t…

I really got to know Sir Paul when working at AUT University as the Director of Strategic Development. Sir Paul was the Chancellor of the university and his office was beside mine. In fact, he had a major hand in me getting the job. I was outside the Vice Chancellor’s office waiting for my interview and Sir Paul walked past and said ‘Hello Stuart. What are you doing here’? I told him and when the Vice Chancellor came out Sir Paul started extolling my virtues (I had also caught up with him a couple of times when I was standing in Epsom in 2005). Needless to say I got the job.

He spent much time in his office and I was always popping in asking advice and chatting. He was a man of incredible wisdom, knowledge and insight. I learned much from simply listening. He was a mentor on many levels.

I remember once when I was working on AUT’s proposal to purchase the Carter Holt Harvey site to build a South Auckland campus. Our executive team was trying to get hold of Graeme Hart, whose Rank Group owned the site. This was proving close to impossible until we asked Sir Paul to try his luck. Within literally 5 minutes, Sir Paul was talking to Graeme. As it turned out the country’s richest man was a huge fan of Sir Pauls. We all were.

We kept in touch after I left to pursue political dreams. He did me the incredible honour of coming down to Napier and opening my electorate office. Amazing.

One of the last times I saw him was Christmas when a friend came into my office and wondered if it was at all possible for me to ask Sir Paul to sign a Maori dictionary for her high-achieving grandson. I phoned him up and of course he was very happy to do this. I called in and had a great chat. Sir Paul was happy to do anything for anyone despite the fact he had more letters after his name than than the Oxford dictionary (ONZ, GCMG, GCVO, CF, QSO) – and that doesn’t include his university degrees (two from Oxford).

He was such a humble gentleman. A true knight and a wonderful man. In fact, he really was a great Kiwi bloke.

English, Adams and Bennett are all farmers (2 South Island drystock and 1 Waikato dairy), hence the irony of being lectured on debt and tax considering the farming sector has around $40b worth of debt, or a quarter of NZs total debt (most held by overseas-owned banks), and many in the farming community are masters at ‘optimising’ their own tax obligations.

Obviously all three would be subject to a capital gains tax when they sold their farms (I know Adams and Bennett have more than one farm, but unsure about English). So I was left wondering who these three cockies are representing – the NZers they claim to speak for, or their own back pockets..? Call me cynical, but I suspect its the latter.

Some things, it appears, never change: the National party is, once again, the party of the landed gentry working to feather their own nests and buggar the rest. Another irony is that the four Labour speakers (Cunliffe, Parker, Jones and yours truly) all come from a business background. Hmmm. The farmers lecturing the businessmen on debt, taxes and the economy. Go figure…

Dunne won a seat for Labour in 1984 that he was never supposed to win, thanks to Bob Jones and the NZ party splitting the Nat vote, and he has held on ever since.

In recent times he has flipped flopped between National and Labour with no apparent political philosophy except a desire for a ministerial salary. He rages against Labour’s tax policies and yet as Revenue Minister under Dr Cullen he probably had a minor hand in Labour’s tax policy development.

The one Bill he put up as part of supply and confidence agreement with the Nat’s will get approximately 1 vote in it’s second reading.

But most importantly, he achieves exactly 0% in any poll, thus underlining his irrelevance in today’s political scene. He also knows that he will be beaten by Charles Chauvel this election; why, because the right vote will be split due to his own vanity. History does repeat.

Lord please bless me with the judgement to know when it’s time to go, and allow me the good grace to leave with my dignity and my pride intact. Too late for Peter Dunne.

For example, as a country we are approximately $169b in debt, however, about 86% of this is private debt, with the majority invested in the housing market. The value of the investment property market is about $200b, and yet this returned -$500m in revenue to the govt. last year.

Now imagine if a good chunk of this money was invested in the productive economy as opposed to housing i.e. people investing in businesses and companies that created wealth, jobs, foreign exchange etc.

Interest rates would be lower, USD-NZD cross rate lower, people wealthier, more jobs, deeper capital markets and we might have avoided the worst of the finance company collapses.

As it is, the tax incentives around investing in the property market distort this country’s investment profile to such a dangerous extent that we are at risk of losing a good chunk of our manufacturing base.

The CGT is about fairness, tax equity, paying our fair share, but most importantly, it’s about rebalancing the economy towards investment in the productive sector, towards the companies that export, that create wealth, jobs, foreign exchange and that drive this country forward. That requires bold thinking and a vision. And no one from any sector of the community – be it business, or other – believes that selling state assets is the answer.! Only Labour can deliver an economic vision and an alternative to selling our state assets.

Record commodity prices does not equal more jobs.  Products are commodities because we have failed to add any (or very little) value in NZ.    So the reality is the opposite is happening.  For example, in the forest industry record log prices have meant job losses as forest owners are selling more unprocessed logs overseas and domestic processors are struggling to afford the sharp increases in prices.  We have already seen three mills close in the past 6 months. 

Farm prices, whilst high, are not the panacea to all problems.  The sector is still saddled with massive debt ($42b) which it must address before any expansion is considered.  Besides, how will record wool, meat and dairy prices create jobs?  The works may stay open a few months longer, but I certainly haven’t seen any plans for new processing plants.

The public sector is being asked to find saving of $1b, and we all know that will mean staff cuts, so no new jobs there.

Sure, Chch reconstruction will create employment, but I hope the govt isn’t counting on Chch to pull it out of recession.  That’s simply not sustainable growth.

So where are these 170,000 jobs coming from Mr English?  From post budget TV appearances, he doesn’t seem to know either.  Great plan Bill…

May be some downside risk???  Understatement of the year.!  IRD are the government’s tax collectors.  Would be wise to go with their advice I would have thought.  Govt gone with Treasury. 

Much wishful thinking and crossing of fingers I suspect…