Monday, May 12th, 2008
Rising food prices around the world have dominated the news for the past several weeks. Riots have taken place in many countries as prices rise beyond what families can afford. Here in New Zealand, the rising price of dairy products is at the sharp end, but for the world’s poorest its the price of grain which is critical.
So with food prices rising, there must be a shortage, right? Surely it means more people competing for the same amount of food. This is the conventional view from the market but it’s not true. There is no shortage of food in the world. The problem is the price. The world’s poorest cannot afford to pay for food which is why every night 850 million humans go to bed hungry, with this number rising rapidly.
Last year, the grain harvest worldwide was 2.1 billion tonnes. It was 5 per cent higher than the previous year so with more food surely the price should be falling. But no. Less than half of this bumper harvest is available as food for human need. Most of the rest goes to feeding animals for meat production (760 million tonnes) and providing the growing demand for biofuels (100 million tonnes)
So there is plenty of food but the poor can’t afford it. Hungry kids in developing countries can’t compete with SUV drivers in countries like New Zealand or the appetite for meat in developed countries spurred by the growing middle class in India and China. We are all surely now aware that the grain needed to produce a single tankful of biodiesel for an SUV would feed a family in a developing country for a year.
There have been the predictable calls for genetic engineering to improve food production but just as with the so-called green revolution in the 1960s this is a facade. The food is there but we’ll all die waiting if we leave it to the amorality of the market to sort the problem.
Other calls for countries to open their markets to free trade are just as predictable and just as self-serving and futile. It is the free-market policies demanded of developing countries which go to the very heart of the problem. Pricing food on a world market favours those who can pay more to sustain a higher standard of living with the non-food use of food.
But there are good-news stories amid the gloom and suffering. We are in the middle of Fairtrade fortnight promoted by Trade Aid. It should be an encouragement to all of us to do even the small things we can as individuals to promote a better world in defiance of traditional market forces.
What makes Fairtrade products different is that they are imported from certified producers, usually co-operatives, which ensure a better return direct to the growers. For example, coffee growers in Guatemala and Ethiopia typically receive 10% to 15% more for their products from Fairtrade buyers. In some cases, depending on the world price for coffee, growers have gained up to three times what they otherwise would have received via local markets. Likewise, buying Fairtrade olive oil, dates and almonds from Palestine supports local communities under oppressive occupation.
The benefits go much further. More local schools and medical clinics being built. Sustainable development is taking a big step forward in areas where Fairtrade products are sourced at fairer prices.
These products are now widely available but our supermarket chains are reluctant to stock them. Next time you are in the supermarket look for the Fairtrade logo and ask the staff what fair trade products are stocked. A small dig in the market ribs of those addicted to profit-based economics will help lots of people get a fairer go.
Another good news story is Uganda. Amid the world-food crisis, this country in central Africa, which has had such a bloody, turbulent transition from colonial rule, is largely riding out the food crisis by ignoring years of bad advice. Uganda’s rice output has increased 2 1/2 times since 2004 and is expected to reach up to 180,000 tonnes this year. Amid rising food prices globally, the cost of rice in Uganda is much the same as it was before the food crisis.
The reason is tariffs. Against the neo-liberal advice from the likes of the World Bank and International Monetary Fund, tariffs have increased the price of imported rice and dramatically stimulated local food production.
The country is much closer to self-sufficiency and food security and points the way forward for developing countries. There’s an important lesson here for New Zealand, as well.
Monday, May 5th, 2008
After eight years of Labour in government how much longer will it take? How much of the economic good times do we need? How many more years before our children can crawl out from under the slag heap?
These are the questions that should have been put to Associate Minister of Social Security and Employment Ruth Dyson last week when the Child Poverty Action Group released its report revealing 180,000 of our children living in poverty.
Instead, the minister simply said the Government had already done a great deal by lifting more than 100,000 children out of poverty through Working For Families but they appreciated more needed to be done. She said she respected the report and its authors and the Government would need time to consider the recommendations. End of story. It was out of the news within 24 hours with no hard questions. The minister got away with just a few comments to assure us the Government was concerned about poverty. And there will be some moves in the Budget but they will amount to nothing more than tinkering at the edges of the issue.
The truth is that Labour has no intention of lifting these children out of poverty because these 180,000 kids are the children of beneficiaries. The Government counts on the lazy prejudices in the community to keep pressure off itself and keep these children in poverty.
It is well understood that for the past eight years Labour has maintained benefits at the grim levels of the benefit cuts of National’s Ruth Richardson in her 1991 mother of all budgets. But beneficiaries and their children miss out at every stage.
The Working For Families package has lifted many families of the working poor out of poverty but the children of beneficiaries get just a few crumbs.
Instead, middle and even high-income families receive a whole lot more for their children.
Putting it bluntly, Labour prefers to give a 10 per cent cut in business tax rates than lift these children out of poverty. Labour prefers to plan tax-cut handouts to benefit working families than lift these children out of poverty. Labour prefers to allow massive repatriation of profits from the likes of Telecom than lift these children out of poverty. Labour prefers to give generous Kiwisaver tax handouts to middle and high-income earners than lift these children out of poverty. And on and on it goes.
Labour has unofficially designated the children of beneficiaries as the undeserving poor. These kids might get an extra half ladle of gruel in the Budget but like Oliver Twist they will get no more.
The same Labour politicians who hammered National Party governments throughout the 1990s as uncaring and uncompassionate are now wearing the same clothes.
The CPAG report packs a lot of punch. It’s a heavyweight challenge to whoever is in power. Its detailed, thorough analysis explodes the usual anecdotal myths about poverty and sheets the responsibility home to the policymakers.
The links between poverty, poor housing, poor health, educational underachievement and general social deprivation are starkly presented in the report.
Paediatrician Dr Innes Asher who spoke at the report launch was irate. She gets angry at seeing children brought to Starship Children’s Hospital with diseases and infections we usually associate with poverty in the Third World. Here in this rich country of ours, kids are as sick as the government policies which keep them ill.
The effects of poverty cycle on through education. The long tail of underachievement in our schools is the long tail of poverty. Despite this, the Ministry of Education focuses on changing teacher attitudes and introducing personalised learning as the solutions to under achievement. Even today, the Minister of Education, Chris Carter, trots out the meaningless mantra that the differences within schools are greater than the differences between schools. He believes poverty is a side issue and it’s important for the Government to believe this myth because any other interpretation would force dramatic changes in policy.
Instead, Labour has made a conscious, deliberate decision to sacrifice the children of beneficiaries in favour of what Don Brash would have called middle New Zealand.
Interestingly, the CPAG report launch was attended by the National Party’s flinty social welfare spokeswoman, Judith Collins, who listened silently through the presentations. It could be that National, in its attempts to brand itself as compassionate and caring, will develop some policies to outflank Labour on the Left. They have done so several times recently on other issues such as their decision to invest heavily in broadband. They could hardly do worse than Labour in supporting the children of beneficiaries.
Monday, April 28th, 2008
What a delight to see the people of southern Africa act decisively where their governments have failed.
Ten days ago, the Chinese ship, the An Yue Jiang, was left stranded outside the South African port of Durban after local workers refused to unload its cargo of arms bound for Zimbabwe’s Mugabe regime.
The cargo included 3080 cases comprising three million rounds of ammunition for AK-47 assault rifles and 69 rocket-propelled grenades, as well as mortar bombs and tubes. These are vital supplies for the campaign of state terror being waged by the mad, megalomaniac Mugabe, the Idi Amin of Zimbabwe.
The South African government had approved the arms transfer across its territory to the land-locked regime without a scruple. South Africa’s Defence Secretary January Masilela said it was a normal transaction between two sovereign states (China and Zimbabwe). “We are doing our legal part and we don’t have to interfere.”
The head of South African government communications Themba Maseko said the country could not stop the shipment from getting to its destination as it had to be seen to be “treading very carefully” in its relations with Zimbabwe as it was helping facilitate talks between the opposition Movement for Democratic Change and Mugabe’s Zanu-PF grouping. The same mealy-mouthed comments have been repeated ad nauseum over the years while Zimbabwe’s agony continues.
Compare that with the plain speaking of the South African Transport and Allied Workers Union (SATAWU). Its general secretary, Randall Howard, said: “SATAWU does not agree with the position of the South African government not to intervene with this shipment of weapons. Our members employed at Durban Container Terminal will not unload this cargo and neither will any of our members in the truck-driving sector move this cargo by road.”
He said the ship should return to China. “South Africa cannot be seen to be facilitating the flow of weapons into Zimbabwe at a time when there is a political dispute and a volatile situation between the Zanu-PF and the MDC.” What a fresh breath of principled common sense.
Alongside the workers, the local Anglican bishop Rubin Phillips applied to the Durban High Court to prevent the arms reaching Zimbabwe. The court upheld the application as the required government permit had not yet been issued.
Banned from Durban, the ship first sailed north towards Mozambique and then back south around the cape and headed towards Namibia and Angola. It had numerous options, according to Lloyd’s Marine Intelligence Unit, because there are 32 ports in Africa south of the Equator where its $R9.88 million cargo could be unloaded. However, once the Durban port workers had highlighted the issue it rapidly became a rallying point for groups across Southern Africa deeply frustrated and embarrassed at the lack of action by their government to deal with their tyrant neighbour.
Angola and Mozambique both said the ship was not welcome in their ports and Zambia called on all countries to stop the arms reaching Zimbabwe. At the time of writing, it appeared the ship was returning to China friendless and isolated.
Meanwhile in Zimbabwe, Mugabe’s ruling Zanu-PF party has prevented the country’s Electoral Commission releasing the results of the March 29 presidential election. The opposition Movement for Democratic Change won the majority of parliamentary seats and by all credible accounts also won the presidency. However, Mugabe has forced a recount in 23 constituencies, most of which were won by the MDC’s Morgan Tsvangirai.
And while the election result is officially stalled, the violent crackdown against opposition supporters has been reinvigorated.
Zimbabwe church leaders have issued a joint statement calling for international intervention to help end the country’s election crisis. They reported people being tortured, abducted and even murdered in the crackdown. Random and systematic acts of violence against MDC candidates, activists and supporters have resumed. It’s business as usual for Mugabe and his thugs.
This appeal falls on deaf ears in South Africa where blind loyalty is thicker than blood for South African President Thabo Mbeki. His government is wholly complicit in the crime against humanity being perpetrated in Zimbabwe. Just as South Africa’s own population suffers from a ruling ANC, which has become corporate and comfortable, so the suffering people of Zimbabwe find few friends in South Africa’s corridors of power.
What the South African workers did was probably illegal but it was the right and courageous thing to do. As the saying goes when injustice becomes law, resistance becomes duty. Theirs was a principled act of international solidarity. Let’s give a big cheer for the wharfies in Durban.
Monday, April 21st, 2008
In my first year teaching, I took a mixed group of Form 3 and 4 students for a five-day tramp around Lake Waikaremoana. Another first year teacher and his wife made up the three adults. It was part of what the school called wider living week at the end of every second year when students had a choice of outdoor activities.
It was the first of many great experiences and whenever I come across former students, the things they remember the best are not the hours in the classroom but the experiences they had on tramps and camps. These trips can deeply enrich and extend their world dramatically in just a few days.
Nowadays, teachers must complete detailed risk assessments before any significant outdoor activity but there was no special training for teachers at the time of my first tramp. The fact I’d done the particular tramp before was seen as a bonus rather than a requirement. Common sense was seen as the best guard against tragedy and it remains so today.
Thankfully, I’ve only had one real scare taking students into the bush. I was with a group tramping up to Lake Waikareiti to stay the night before tramping out the next day. We found a lone possum trapper in the hut whose heart must have sunk into his boots when 20 teenagers and assorted adults descended upon his peace and quiet deep in the Urewera bush.
The following morning, we gathered for a final briefing and counting-off before setting off. At the front was a recently arrived Afghani boy who it turned out had not understood the instructions. He didn’t want to be constrained by the slower pace of the group and took off from the front and disappeared along the track. The first rule with an incident like this is to secure the group before dealing with the problem. We did so and the main group waited while myself and a couple of students dropped our packs and set off at pace to catch up with him. We didn’t. After five minutes it was clear he was still well ahead so we returned and got the main group moving again. The next four hours tramping out were possibly the worst of my time teaching. He could easily have missed the track at any number of places and become lost. It was a mixture of relief and anger to see his grinning face at the road end. He was probably more in danger from me than the bush. I could have throttled him.
Back at school, it became another thing to go on the checklist for future camps but despite the best planning and attention to detail there will be times when combinations of circumstances put students in danger in the outdoors. We can minimise the risks but we will never eliminate them. No matter what we learn from last week’s tragedy where six students and a teacher drowned in a flash flood at Tongariro, we need to remember this. But besides more attention to safety these days. there have been changes which are reducing opportunities for the bulk of students to enjoy the outdoors.
There is now a strong tendency for outdoor education to focus on high-energy, high-adrenalin events rather than the outdoor experience in its own right. Students tackle high ropes courses, canoeing, rock climbing, abseiling, canyoning, white water rafting etc. There is a feeling that unless the experience is seen as exciting and adrenalin pumping it won’t appeal to students used to the instant gratification of video-games, cellphones or digital movies.
There’s nothing inherently wrong with these activities but they require specialist staff which pushes up the cost and they are out of reach of many. Needless to say schools are not funded to provide comprehensive outdoor education and at many schools it is an opportunity restricted to a few senior students.
In coming weeks, there will be many questions asked about the Tongariro tragedy which will focus on the skills of the teachers and supervisory staff, the quality of the equipment and the safety procedures. This is fine to ensure we keep outdoor activities as safe as we can but its likely to bypass the wider issue of why most New Zealand teenagers don’t get these opportunities.
There is a lot of talk about the outdoors being a birthright for every New Zealand student. This is true, but we need to rethink the types of outdoor activities and their funding so that all students get the chance to benefit. Outdoor education doesn’t have to imitate a movie. The best outdoor experiences speak for themselves.
Monday, April 14th, 2008
It is $10 billion and growing by the day. Like a big boil on the backside of the community, it is painful for the victims, worrying to most of us and embarrassing for the Government. It is the millstone of shame our politicians have put around the necks of young New Zealanders. It is student debt and a story of intergenerational theft.
My parents grew up in the 1930s depression and neither had the opportunity for tertiary study. However, their generation voted consistently for governments which made tertiary education free for 50 years. They ensured their children would receive the educational opportunities they were denied. Disaster followed in 1984 as political power transferred from the generation of Prime Minister Rob Muldoon to the post-war generation of Dave Lange, Roger Douglas, Helen Clark and Phil Goff. These Labour politicians set about looting the legacy of their parents and denying free tertiary education to their children.
In their excited neo-liberal rush to user pays, they raised tertiary fees. These were small increases at first, but once governments had forward momentum, they were ramped up to the point where students needed to borrow for polytech or university courses.
The student loan scheme was born, and here we are today with half a million New Zealanders $10 billion in debt. This ignominious milestone was passed last week.
Governments claim they cannot afford to fully fund tertiary education because lots more young people study beyond school these days and it would cost the Government too much. The first part is true but the second is not. It is simply a matter of priorities.
New Zealand can easily afford free tertiary education for everyone. The Government has been running budgets of several billion in surpluses for several years now. These alone could pay tertiary fees and a whole lot more besides.
As if to prove it, Labour and National have lined up for a tax-cut showdown in election year. Each is proposing several billion dollars in election bribes masquerading as tax cuts.
Another practical way to pay for free tertiary education would be to renationalise Telecom. The massive profits from this single company alone would have covered the student fees for everyone these past 20 years had it not been sold by the same politicians who brought us student debt. Somehow, it is more important to the Government for wealthy shareholders to share Telecom’s spoils among themselves rather than return them to the community.
Labour says it has done a lot in recent years to ease the burden on students, most notably by removing interest from student loans. However, in practice, it has allowed tertiary fees to rise at well above the rate of inflation – 5 per cent yearly increases are standard.
At Tangaroa College, in Otara, in 2005, we estimated the tertiary fees for our seventh formers leaving for study at $240,000 for their first year. These were students from low-income areas and the very people needed to receive the opportunities my generation’s parents provided for us.
Its a tragedy that the strongest supporters of tertiary fees still hold sway despite most of the public being on the side of students. These are the likes of the Business Roundtable, which has argued for tertiary fees to treble in size as the Government winds back its contribution from about 75% of the cost to just 25%. They suggest tertiary education is no different to buying a car. Just as we have a choice between a Lada and a BMW, we should enjoy the same choice in education.
But like all choices, how much choice you get depends on how much you can pay. For the wealthy, it is a BMW education for a professional career, while for the poor it is a McEducation for a McJob. There is already ample evidence that young people from low-income communities are turning away from higher-quality tertiary education because of the cost.
It is heartening to see the level of disquiet in the community continuing as it has from the outset. This means each political party will pull some new policy from the bag before the election. Labour will probably write off some debt if students remain in New Zealand and work in their first few years after study, while National proposes to give discounts on debt to students who pay the debts off more quickly. Other parties are suggesting writing off debt for those who have skills which are in short supply.
But none of these policies will do the job. It is reassuring that at least the Green Party and the Maori Party recognise the importance of free tertiary education. The boil must be lanced.
Monday, April 7th, 2008
It is difficult to quantify the size of Helen Clark’s blunder when she signs the free-trade agreement with China today because although we don’t know the precise details, it is abundantly clear the agreement will be bad for New Zealand workers, bad for Chinese workers and a slap in the face for Tibetans struggling under China’s yoke.
The Government claims New Zealand will benefit from millions of dollars in extra trade which will grow our economy and make us richer. We are told we should be thrilled to be the first developed country to sign such a deal with China.
However, while trade will increase and, on paper, the economy will grow, it will not improve the standard of living of New Zealanders. In fact, for many of the most vulnerable it will be disastrous.
Back in the late 1980s New Zealand enjoyed a trade surplus with China. We exported more than we imported. This reversed dramatically when import tariffs were removed or phased out.
There was a flood of cheap imports from China which turned the trade surplus into a billion-dollar deficit. When the Government began negotiations for the free-trade agreement in December 2004 the deficit with China was $1.5 billion. A year later it had grown to over $2b. Our exports stagnated while China flooded the country with sweated imports.
Tens of thousands of jobs were lost from our manufacturing sector as New Zealand companies went to the wall. Some survived only by shifting their manufacturing base to China. Others transformed into importing companies and helped fill the shelves of The Warehouse with cheap junk we think we need.
But these bargain goods carry a very high price. The Ministry of Economic Development has estimated 16 jobs are lost for every $1 million of imported products we could make here.
A simple calculation shows about 50,000 jobs lost to Chinese imports alone. As more tariffs are phased out under the free-trade agreement we can expect as many as 20,000 more New Zealand workers to lose their jobs, with many more families driven below the poverty line.
None of this seems to concern the Government. To our politicians this is free trade on one of those fictitious level playing fields. The Chinese economy is built on long hours, child labour, forced labour and poverty wages. Is it free trade when New Zealand workers are expected to compete with workers paid less than $1 an hour for 16-hour days? Is it free trade when China operates prison labour camps where as many as seven million inmates work without pay and nothing in the way of health and safety standards, to produce goods to compete with New Zealand products? China has repeatedly refused to sign up to even the most basic of labour standards under the International Labour Organisation, such as bans on forced labour and the right to organise independent trade unions. Those Chinese who dare to speak out are silenced.
Why would New Zealand give preferential trade status to a regime like this?
Helen Clark had a different view back in November 1998. She decried National leader Jenny Shipley putting trade ahead of human rights and said we have had this pitiful simpering about there being a distinction between business issues and issues of human rights and democracy. If that value had been applied in 19th century England and North America, then we would still have slavery, because the representatives of those who employed slaves would claim that there was no connection between that issue and their business values.
A year later, in the speech from the throne, the newly elected Labour Government told us that legitimate issues of labour standards and environmental concerns need to be integrated better with trade agreements.
But all this has gone out the window. They were just pious platitudes. The Clark Government is dealing with these 21st century slave-owners, buying their products at reduced rates and helping the regime bolster its stranglehold on democracy and human rights.
And what about the Tibetans? The Government said it was very concerned at the reports of repression and violence in Tibet. Helen Clark said she was waiting for more information. It was a way of buying time and praying the Chinese army would crush the Tibetan struggle quickly so the story would drop from the headlines long enough for her to arrive in Beijing with her 150-strong delegation for her performance as the deal-making queen of international trade.
She may as well sign in the blood of Chinese workers and Tibetan freedom fighters.
Monday, March 31st, 2008
A couple of weeks back a union member called me in some distress. She had begun work at 4.30 in the morning but was not given a break until 11.45. She was tired and angry.She works in the departure lounge at Auckland International Airport serving food and drinks. It’s hard enough being on your feet all day, trying to engage in a friendly fashion with customers without the added burden of continuous work for many hours.
In the middle of last week I had another call from the same worksite. Another member was in trouble for taking an unauthorised break.
First, she had become embarrassed because a new co-worker, on her first day at work, had not received a break for six hours. Failing to find a supervisor she told the new worker to just take her break. Later, when she similarly took her own break (after seven hours work), she was confronted by an angry supervisor who dressed her down in front of other staff for taking her break when she hadn’t been released to do so.
These are just the latest in a long history of problems for staff taking breaks at this site. The union has raised this issue with management so often it’s become a pointless exercise. I have said to them so many times that these practices are unacceptable and all workers deserve to be treated with dignity and respect. It’s a message which falls on deaf ears. I’m sick of hearing myself saying it.
Last April the union pointed out to the company it was breaching its own contract by giving only 10 minutes of paid breaks during an eight-hour shift instead of 20 minutes. They reluctantly relented and from the following day began giving 20 minutes of paid breaks.
It didn’t last long, however. They have now changed the rosters so that most workers do just a seven-hour shift to avoid the company having to give the extra break.
If this company’s actions sound childishly pathetic to you then you are in good company. Would any reader put up with this nonsense at their workplace?
The company is short-staffed but rather than pay decent wages to attract more staff the workers exist on or close to the minimum wage with Dickensian-type work conditions. Needless to say, staff turnover is very high but there is a supply of new staff, partly courtesy of Work and Income New Zealand who refer women re-entering the workforce to this worksite. The workers are mainly women and mainly Maori, Pacific or from recently migrated ethnic minorities.
Many readers will have passed through the departure lounge and will have seen these workers and have probably even been served a drink or a snack by them. They are a wonderful bunch of people.
Maintaining a strong union presence at a site like this is very difficult where workers change on a regular basis and are on rostered shifts over seven days of the week and 20 hours a day. However, union membership is rising and hopefully these appalling practices can be put to an end.
Last week, it was refreshing to see an announcement from Labour Minister Trevor Mallard and fellow Cabinet minister Maryan Street saying the Government is proposing to amend the Employment Relations Act to guarantee minimum meal and refreshment breaks along with breastfeeding opportunities for working mothers.
The real question is, why has it taken so long for such basic conditions as these to enter the law.
Business New Zealand chief executive Phil O’Reilly says employers are in favour of adequate meal and rest breaks but he said he has not seen any evidence that requires a new law. He says that in thousands of workplaces across the country employers and employees make sensible arrangements without having written rules. This is true, but there are problems in workplaces up and down the country. And it’s not just a few rogue employers who are the problem. The evidence is there for anyone who cares to look.
For a start, I suggest Phil O’Reilly visit Auckland airport and talk to these workers. As with businesses generally, the rights of workers come a distant second to profit for shareholders.
And who are the employers at the airport who run the oppressive operation I’ve described earlier? The workers are employed jointly by Auckland International Airport Limited (AIAL) and Host Marriot Services Corporation (HMSC).
HMSC is an international company running similar ventures around the world and is well-known for providing poor working conditions and keeping unions out of their businesses.
AIAL on the other hand is still locally owned. Among the shareholders are a who’s who of New Zealand business people as well as the Auckland and Manukau city councils.
The shareholders won’t do it so a law change is needed to give workers like these a break.
Monday, March 17th, 2008
There’s been plenty of petty politics around the government’s announcement of a $500 million fund for research in primary production but precious little analysis of what it means.
We are told that with interest and matching contributions from the private sector the fund could produce up to $2 billion invested over 15 years.
The Prime Minister has called it a “quantum leap forward” for scientific research and innovation. She describes the New Zealand Fast Forward Fund as part of a drive to transform the economy into an innovative supplier of high-value goods and services.
National leader John Key has condemned it as a “gimmick” and threatened to scrap the fund if National leads the next government.
More considered criticism has come from those who point to the narrow focus of the fund. It is devoted almost exclusively to primary production which brings in around 57% of our national income. The government’s logic is that we are investing in our existing strengths but this only serves to emphasise the underlying structural weakness of our economy.
In earlier times we sought to develop a self-reliant economy. The idea then was we were too dependent on primary product exports to Britain and needed to expand into markets elsewhere and promote manufacturing so we made more here and reduced our dependency on imports. We were told we needed to diversify our economy away from reliance on primary produce. We had tariffs to protect fledgling industries from cheap imports, financial incentives to develop new manufacturing plants and planned national infrastructure to support this developing economy. This same model was used to build every highly developed economy in the world.
New Zealand abandoned all this common-sense with the advent of neo-liberal economics and globalisation. The new fashionable theory says the world is becoming one large free market and countries should develop their economies based on what they do better than anyone else. China for example has become the world’s largest manufacturer, closing down factories in other parts of the world. Here the Warehouse has led the charge to bring in cheap Chinese imports and force kiwis out of relatively well-paid manufacturing jobs.
In New Zealand, so the theory goes, we are good at farming so let’s stick to our knitting so to speak and put the emphasis there. As a result our economy is bipolar based on primary production at one end and servicing at the other.
Last week’s government announcement continues down this dangerous, one-way track. We are seriously at risk like trampers on an exposed ridge. There is nothing better on a fine day but as soon as the wind whips up and the weather closes in you have to find shelter quickly. We have no shelter. We’ve destroyed most of it these past 20 years.
Our farming and political leaders are in a heady space at the moment seduced by high dairy prices. All manner of farmland is being converted to intensive dairying at an alarming rate with just next year’s profit margin in mind. Politicians are little better being addicted to thinking ahead only as far as the next election. We have no risk assessment for any of this short-termism.
What will happen here when countries such as China shift their production to domestic consumers ahead of international trade? What will happen when high dairy prices slump in the face of cheap imports from countries where labour and land are much cheaper? What will happen when the price of fuel rises such that our efforts to export from these islands (which are further from international markets than any other country) are uneconomic? What will happen when global warming makes the cost of sending protein around the world unsustainable? Or makes much of the country unsuitable for current farming practices?
In all these scenarios we are stuffed. All our eggs are in the one basket. How can our economy not collapse?
It’s interesting to think that the very people who talk about sensible investors having a balanced portfolio of investments are pushing our economy onto a single investment strategy with at best an uncertain future. It’s all bound to end in tears.
It’s not as though we’re even helping feed a hungry world as various farming spokespeople like to suggest. The hungry can’t afford our food. We are feeding the obesity epidemic instead.
It’s true the government’s research funding is looking ahead 15 years but its 15 years into a long narrow tunnel. It is a perilous path. Farming is more likely to be our Achilles Heel than our saviour.
There is already a chilly breeze out here on the ridge.
Monday, March 10th, 2008
The debate over ownership of Auckland Airport has been an interesting diversion this past week although it’s easily trumped by the more significant discussion on the future of our rail network.
Early in the week the government signalled its opposition to a possible 40% takeover of the airport by the Canadian Pension Plan Investment Board. It issued an order in council to emphasise cabinet ministers considering the proposed takeover must take into account whether the overseas investment “will, or is likely to, assist New Zealand to maintain New Zealand control of strategically important infrastructure on sensitive land”.
Business interests are fuming. They have labelled it “populist xenophobia”, “reckless” and even “socialist” (if only!) It’s nonsense of course. Every self-respecting country has much tighter rules on foreign ownership of strategic assets than New Zealand. Australia for example protects the likes of its banks and airports. New Zealand on the other hand sold our banks to Australia and every year more than two billion in bank profits crosses the ditch from kiwi wallets to enrich our Aussie cousins.
The more justified criticism is the government’s move coming so late in the piece. It’s been a year since takeover talk was first mooted but our Minister of Finance has been silent till five minutes to midnight.
National’s John Key has been squirming. Instinctively he supports private ownership of everything and has already announced policy to part-privatise what’s left of our major assets such as Solid Energy. But because public opposition to the airport sale is so widespread he says National supports the airport remaining in New Zealand hands.
Many commentators have suggested the public mood has changed to oppose privatisation of state assets but there has been no change. Every major privatisation undertaken by Labour and National in the past 24 years has had a solid majority opposed to it. Most people instinctively understand we would all be better off with 100% of the shares of essential infrastructure in public ownership. Selling assets means that instead of us all being shareholders, with the shares held in trust by the government, only a few wealthy corporates and a miniscule minority of “mum-and-dads” benefit.
Overlooked in the airport kerfuffle is the nonsense that suggests it matters whether the airport is owned by foreign capitalists or the home grown variety. Do we really expect local capitalists to be better stewards of our assets than foreigners? There is no evidence to say they are.
Think for a moment about the activities of our own Michael Fay and David Richwhite. These two kiwis were at the heart of many of the major privatisations of state assets over the past two decades. For example they were part of the group which bought New Zealand Rail and promptly ran this critical asset into the ground. They made pots of money in the meantime and then sold out just before the share price crashed. They left taxpayers to pick up the $270 million tab for upgrading the rail lines after 15 years of neglect. It’s hard to believe any foreign capitalists could have acted in a more self-serving manner. The disgraceful state our rail network should be seared on the national consciousness as a fundamental lesson in the danger of private greed over national service.
Every privatisation tells the same story. Whether it’s Air New Zealand, Telecom or our electricity network local private owners are no better than foreign owners. In every example it’s the all too familiar pattern of privatising the profits and socialising the losses.
Our politicians should have learnt by now. Full public ownership is the only way to protect our strategic assets and there is a glimmer of hope that this truth is penetrating even the thickest of parliamentary skulls. We were treated in the past couple of days to news the government has been negotiating to purchase back our railways and ferries from the Australian company Toll Holdings. It’s a welcome sign even if it’s five years too late. Back in 2003 calls were made for Labour to buy back the railways when the government picked up the battered remains after the likes of Fay and Richwhite has milked it dry. Instead Labour sold it to Toll only to find the Australian owners making incessant and increasing demands for subsidies.
The only surprise in all this is the time it’s taken for the stranglehold on common sense to be eased. It’s a welcome change for some debate about private versus public ownership to come to centre stage.
Monday, March 3rd, 2008
Virgin Blue’s Richard Branson has stolen a march on other airlines with a flight from London to Amsterdam on what many describe as the new wonder fuel, biofuel.
He was ecstatic. He fronted the cameras and gushed his excitement. He claimed the flight as the world’s first commercial airline flight powered by renewable energy.
“Today marks a vital breakthrough for the whole airline industry,” said a breathless Branson. It’s not the magic bullet but it’s an important step on the path to sustainable air travel.
It was a story with added colour because the fuel was a blend which included babassu oil produced from nuts picked from Amazon rainforests along with coconut oil.
How green can one get?
Air travel is often and rightly sighted as a major contributor to greenhouse gas emissions and global climate change, and at a superficial level Branson makes an important point.
Fuel produced by biofuels does not release additional carbon into the environment in the way fossil fuel does. Because they are made from plant material already in the environment they don’t add to the amount of carbon in circulation. On the other hand when coal, oil and gas are burned, carbon in the environment increases. In theory if we could convert to biofuels we could use as much as we like without disturbing the balance of greenhouse gases in the atmosphere.
Is this too green to be true?
Yes is the simple answer.
Branson hinted at one of the major problems when he said the company chose not to use fuel from corn oil as this competed with the growth of food needed in a hungry world. This is not a new story. Across the globe land is being set aside to grow crops and already this is having a huge impact on food production and the price of food.
For example, in the United States two years ago, 20 per cent of the whole maize crop was used for biofuel production. With less grain available for food the price of grain- related food around the world is climbing quickly.
We are now being told the age of cheap food is over (if any of us were aware we were in such an age). In a deeply disturbing symptom of the problem international aid organisations are seeking greater donations to help purchase the food they need for existing food programmes even before they look at extending these for the one billion of the world’s population who go to bed hungry every night.
We get a better perspective on Branson’s claims when we see the extent of the land required for biofuel production to replace fossil fuels. Estimates have been made that an eye-popping three-quarters of all the cultivatable land on earth would be required to produce enough ethanol for vehicles in the United States alone.
We should remember also Branson’s biofuel was a mix of 20% renewable and 80% normal jet fuel. He predicts the mix could be increased to 40% renewable in future. In any case, the more biofuel used by aircraft the less is available for essential transport needs.
So let’s get real here. Branson’s biofuel is a boutique fuel which is masquerading as the saviour for air travel. If this is sustainable flying we are on a different planet.
Worse still the production of more biofuel can only result in those least able to pay increases in food prices supporting environmentally damaging air travel. To put it bluntly: the world’s poor are once more expected to subsidise, with their lives, the lifestyles of the world’s rich.
It’s been a very successful publicity stunt and Branson has a lot to gain telling us Virgin Blue is the new green in air travel. The expansion of his company depends on consumer perception. It’s not unlike the re-branding exercise conducted by BP several years ago when they changed to green with yellow trim and included a sunflower motif. It’s disturbing to think we can be so easily taken in with such superficiality to divert us from uncomfortable realities.
Branson claims he is committed to spending all the profits from his airline and rail business to combat global warming by cutting carbon emissions. On the one hand, this is an admirable objective and more research is needed into alternative renewable energy sources. But let’s keep our eyes open. Branson is killing the planet to find ways to save the planet. His carbon footprint is colossal and his proposed solution is unsustainable and self-serving.