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Friday, 20 June 2014

Energy: renewable generation up, solar in schools

Mill Creek Windfarm (green dots).
National has set an ambitious goal of 90% of electricity generation coming from renewables by 2025. The most recent New Zealand Energy Quarterly Survey shows that we're on track to hit this target - up to March this year, 79% of our electricity comes from renewable sources. This is largely thanks to the growth in geothermal generation and some wind. The NZEQ states:
Quarterly thermal generation continues to decline, down 26% from the same quarter last year. In the quarter, production from the Huntly plant rebounded, but remains well below the levels seen throughout 2012 and early 2013 when the country experienced a severe drought. Quarterly gas generation remains low, down 22% from the March 2013 quarter. Geothermal generation remained at high levels. In the quarter, geothermal generation was 16% of the country’s total electricity generation.
We're reaching the maximum of what we can tap in the geothermal space, which means other forms of generation will take precedence. Wind energy continues to expand. Mill Creek Windfarm recently opened in Wellington, adding another 59MW of generation. That leaves solar energy, where installations of home systems are booming due to falling prices. The challenge with solar energy though is that it's still more expensive than wind or geothermal per kW hour. Despite this, since 2008 Genesis Energy has run its Schoolgen program to bring solar energy to schools. One school in Upper Hutt, Plateau School, is part of this program and has regular updates on the Schoolgen website. Long-term solar will be part of the

Tuesday, 17 June 2014

New rifles for the NZDF

New Zealand soliders with Steyr rifles. From Wikipedia.
Minister of Defence Jonathan Coleman has announced that the Government has given approval for the NZDF to seek a replacement for the Steyr rifle. This is good news as it is now reaching the end of its lifespan.

This is great news for the Upper Hutt community, as the army continues to be one of our major employers in our area and defence is top of mind for many citizens as a result.


The Government has given approval for the Ministry of Defence to conduct a competitive tender process to purchase an new rifle to replace the Steyr rifle with a new fleet of up to 8,800 rifles and associated accessories. The NZDF will trial short-listed weapons against the NZDF user requirements and a recommendation will be made to Cabinet early next year. The new rifle is expected to be introduced into service by 2016-17.

Monday, 16 June 2014

National Volunteer Week

National Volunteer Week is celebrated around New Zealand from the 15-21 June, and this year’s theme “Naku te rourou nau te rourou ka ora ai te tangata; With your contribution and my contribution the people will live”, captures the importance of volunteering as a fundamental building block of society.

About a third of all New Zealanders get involved in their communities through volunteering for an organisation – providing millions of volunteer hours each and every year – helping our country to function, contributing to the strength and resilience of our communities, and making a significant economic contribution.

We’re proud of New Zealand’s leading role in the efforts made by our volunteers – that’s why National is committed to initiatives including Community Organisation Grants (a government-funded community driven scheme to support community groups with a total of $12.5 million to distribute throughout New Zealand), the Community Internship Program, and are investing to support emerging social enterprises. National is committed to backing our kiwi volunteers through the Support for Volunteering Fund which distributes $502,000 each year to Volunteering New Zealand, regional volunteer centres, and volunteering projects.

Friday, 13 June 2014

Provisional tax changes good news for small business

I'm very pleased to see Revenue Minister Todd McClay stating that the provisional tax system was not "fit for purpose". Provisional tax is a nightmare for small business, a problem I've come across myself. Todd has proposed an overhaul of the system, something many will be welcoming.

When you're running on a very limited cash flow or are depending on one customer to pay up, it can be quite stressful - as well as the pain of trying to forecast what tax you should pay for a coming period. The overhead isn't exactly productive use of your time.


A simpler pay-as-you-go regime, while potentially creating more administration work, would be easier to manage from a cashflow perspective.

Wednesday, 11 June 2014

Amalgamation: the Ratepayers Report

Upper Hutt City Council's chamber building.
The Taxpayer's Union and Fairfax have produced the Ratepayers Report on the financial positions of New Zealand's territorial councils. They've looked at a lot of metrics, the most interesting to those who own a house being the average annual rates bill. For Upper Hutt it's $1,733, one of the lowest in the country, and for Hutt City it's $2,006.

As The Dominion Post reports that both Upper and Lower Hutt have low levels of debt compared to the rest of the region. The Taxpayer's Union's spokesman Jordan Williams comments:

"We cannot find a correlation between bigger is better or the converse," he said.
"So if cheaper rates is [driving the push for amalgamation], at least from a residential perspective, you may be better to stick with what you've got."
It's my personal view that the status quo works very well for the Hutt Valley - but ultimately the decision on amalgamation is to be by the wider community through a referendum.

Monday, 9 June 2014

Labour Cost Index versus Quarterly Employment Survey

Last week on Prime's Back Benches, Labour List MP Andrew Little stated that  "46% of the working population can't get a pay rise". This is pretty worrying to hear, but take a closer look and the measurement being used and it doesn't actually say that.

The claim is based on a misreading of the Labour Cost Index (LCI). The LCI measures inflation (as an increase in what businesses pay for their staff) in the labour market. It's one of Statistics NZ's wider measures of inflation - most people would've heard of one of the other measures Statistics use -  the Consumer Price Index (CPI). As I've mentioned here before, there's plenty of criticism of CPI because people feel it doesn't always relate to what they actually pay for things they need, it's a "basket" of goods. It's a general measure of consumer prices.

The same goes for LCI. It's a guide that which Statistics NZ uses to measure the inflation of wages and rates that businesses pay for their staff. It measures the changes in salary and ordinary-time wage rates for a fixed quantity of labour. Of course most people get paid more when they are more productive, or they have been given a promotion or they have changed jobs. But the LCI specifically doesn't measure this, as it wouldn't produce a useful measure of inflation over time.

If you want to see if the working population is getting a payrise, look at the Quarterly Employment Survey (QES, just to add another three-letter acronym in to the mix). The previous Labour government made sure QES is used, by law, to set the superannuation rate and parental leave entitlements. Clearly the QES was their standard to make sure that New Zealanders receiving the pension received increases that would match what working New Zealanders earned, so they can pay their bills.

Thursday, 5 June 2014

Yeah Science!

I blogged back in April on the success of Taita based firm Aviat Networks in increasing their spend on research and development and hiring more staff as a result. This is one of the many success stories I'm seeing in Rimutaka.

Research and development is part of the wider picture for science in New Zealand. The government is committed to investing on science. Since 2007/08, spending on science - including funding for the Crown Research Institutes (CRIs), contestable mechanisms through the Ministry of Business, Innovation and Employment (MBIE) and Performance Based Research Funds (PBRF) and the previously mentioned business-led mechanisms to support research and development. Then there's the Primary Growth Partnership funds, which are growing our investment in primary industry specific research.

Traditionally this is not something New Zealand has done well in, compared to other "small advanced" economies. The Government has committed to increasing its expenditure on science to 0.8% of New Zealand's GDP (from the current 0.56%) as fiscal conditions allow. Spending by business on R&D is also low, and Government is helping to leverage that higher through more focused use of Government investments and focusing on improved knowledge exchange through initiatives such as Callaghan Innovation and new forms of company incubators. It is critical for New Zealand's future that we continue on this path.

Wednesday, 4 June 2014

The other Lewis Holden

Hat tip Chris Bishop, candidate for Hutt South
The Dominion Post reported this morning that I was looking into buying back the Dominion Museum for Minister Chris Finlayson!

Joking aside, as David Farrar pointed out the other day, there are two Lewis Holdens - one is the CEO of the Ministry for Culture and Heritage, the other is myself. It's pretty strange given that Lewis and Holden are hardly common names. Add to that the fact we live in Wellington.

I met the other Lewis Holden years ago when I worked as an energy analyst for the Ministry of Economic Development. Lewis Holden Snr was the deputy secretary of the ministry at the time, and our e-mail addresses and phone numbers were often confused. There's a few stories about this that I'll save for a later day.

The image has now been changed to the correct Lewis Holden.

Tuesday, 3 June 2014

Best terms of trade since 1973

From Statistics New Zealand
New Zealand's terms of trade - a measure of the purchasing power of New Zealand’s exports abroad - is the best it has been since 1973.

This is significant because, as most students of history will tell you, 1973 was the year New Zealand lost access to the United Kingdom, a market upon which our entire economic prosperity had depended on.


Strong performances by the diary and meat export sectors has helped push our terms of trade up by 1.8%. An increase in our terms of trade means New Zealand can buy more imports for the same amount of exports.

Meanwhile, the prices we pay for imported goods also fell. Interestingly, the volume of imports actually increased, meaning we imported more but paid less for it.