23/05/11 - Budget 2011: $1.5m to complete trail from Cape Reinga to Bluff

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The Department of Conservation will receive $1.5 million in Budget 2011 to help the Te Araroa Trust substantially complete the Te Araroa Trail Long Pathway from Cape Reinga to Bluff, Conservation Minister Kate Wilkinson says.

The funding has been reprioritised from Vote Tourism and will enable the Trust to substantially complete a number of  sections of the trail totaling 244km.

“The trail will be refined and improved over time, but the progress that the grant makes possible will be sufficient for the Te Araroa Trust to consider opening the trail towards the end of this year,” Ms Wilkinson says.

“New Zealanders and visitors from all around the world will be able to stretch their legs and put this public trail through the nation to the test in the coming 2011/12 summer season.

“The new funding and the opening of the trail will provide a boost to many of our small towns and regional economies, providing another attraction for tourists that will encourage them to spend more time in our stunning country.

“The Te Araroa Trail complements the New Zealand Cycle Trail, cementing us as an outdoors tourism destination while also providing greater opportunities for New Zealanders to get out and enjoy our conservation estate."

(Source Beehive)

Our comment

When you visit New Zealand, try out this new trail, in full or part, and enjoy our country!

22/05/11 - No rest for the ageing (Opinion)

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One of my recurring nightmares is waking up on my 65th birthday with nothing to do, forced to shuffle off to the park and feed seagulls.

I'm not alone. A Ministry of Social Development survey in 2009 revealed 90 per cent of people aged 65 wished to remain in active employment for non-economic reasons. Two-thirds also cited economic motivations for a desire to remain in the workforce.

However, another survey from 2006 revealed only 43 per cent of New Zealand men aged 65-69 were employed, most of them fulltime. Although this is a high number by historical standards, it is important that half of those who want to work are not doing so.

The trend has been a sharp rise in the average retirement age across OECD nations, partly driven by government policies such as increasing the eligibility age for pensions and tightening eligibility criteria for early retirement.

A major driver of this change in policies is the demographic time bomb sitting underneath most OECD nations. In New Zealand, we have five workers for every one of us over 65.

By 2050, based on current fertility and immigration patterns, there will be just two, and in New Zealand everyone who reaches 65 gets a pension.

The cost of this rising tide can be seen already. Thursday's Budget revealed superannuation costs almost doubling in nine years from $6 billion in 2006 to nearly $12 billion in 2015.

Saving more is not the answer; you must save more than your peers. If there are many old people with money and a small number of young people with labour to sell, the price of labour will become prohibitive to all but the wealthiest retirees, leaving the rest of us to empty our own bedpans.

The solution is to keep working and it seems most of us want to do so. The problem is not with the supply of grey hair in the workforce, the problem is the demand.

Many employers are reluctant to take on or retain older workers. Part of this is assumed to be prejudice but part of it is economic.

Older workers in senior roles are vulnerable when there are younger, cheaper employees waiting in the wings. It is often easier to restructure older workers out of the business than retain them in a less senior role or make the effort to retrain them.

Those successful in remaining in the workforce are those who have specialist skills or those who are self-employed. The most important retirement plan may not be to save more but to plan ahead, to ensure we are positioned to leave the workforce in our own time and on our own terms.

It is always good for youth to be reminded that there is nothing more fearsome than a brash older gentleman in a hurry, tanning a few hides before their time is up.

(Source NZ Herald, Damien Waterstone)

19/05/11 - Mum faces removal with NZ born child after marriage fails

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A migrant mother who is fighting to stay in New Zealand with her 2-year-old child says Immigration New Zealand will be denying her son his right to stay and have regular contact with his Kiwi father if she is deported.

Ferisita Sapalia, an Indonesian national, has been told by Associate Immigration Minister Kate Wilkinson there will be no ministerial intervention to give her permanent residence after her marriage broke up during the time her application was being processed.

The minister has asked her to take the matter to the Family Court, even though both parents have agreed to the boy, Elgar, being raised in New Zealand under Ms Sapalia's custody and have signed a deed of settlement stating that the father, Yves Dombrowsky, will pay $160 a week in child support.

Elgar was born in New Zealand.

Ms Sapalia, 28, married Mr Dombrowsky, 44, a New Zealand citizen originally from France, in 2008 but they separated last November - six months after she lodged a residency application under the family (partnership) policy.

Ms Sapalia felt she was being punished for her honesty.

"If we had kept our mouths shut for a few more weeks, chances are I would have gotten my permanent residency - but I thought it was only right to inform them of a change in the circumstance of our marriage," she said.

"Now I have put my son in a situation where he could be kicked out of New Zealand with me.

"I am just totally surprised that Immigration does not take into consideration the best interest of the child."

Ms Wilkinson has asked the couple to give the Family Court about their view on where their son should live.

Ms Sapalia says she can't understand why a letter of support from Mr Dombrowsky and the deed of settlement cannot be accepted as "an agreement" on where they wanted their child to be raised.

"If Elgar is forced to leave with me, Immigration will break up the family even more because he can't have regular contact with his father," she said.

"Children with one parent who is a foreigner also face risk of abduction and ransom in Indonesia."

A spokesman for Ms Wilkinson said yesterday that a deed of settlement was not a means of circumventing immigration laws.

"In all custody-related matters, it's the responsibility of the parents to come to an agreement in light of immigration realities, either between themselves or through the Family Court," he said.

"The minister can reconsider where circumstances change and new information, such as the opinion of the Family Court, is presented to her."

Ms Sapalia had until August, when her visitor visa would expire, to explore immigration options that might allow her to stay here lawfully, he said.

A Removal Authority decision last year said that the best interests of New Zealand-citizen children did not necessarily determine whether parents could stay here.

Head of Immigration New Zealand Nigel Bickle said having a child who was a New Zealand citizen did not automatically give the parent a right to reside or remain here.

The department did not keep statistics on how many parents with citizen children had been removed or deported, he said.

(Source NZ Herald, Lincoln Tan)

What is happening with the Human Rights in this case? Today an article was published in CathNews New Zealand stating that, "New Zealand’s human rights eroding says Amnesty", inclusive of this comment, "The Government has failed to formally safeguard human rights for all New Zealanders by continuing to refuse to legally entrench the New Zealand Bill of Rights Act, allowing for the possible enactment of legislation that could be inconsistent with its provisions. The Act also fails to give legal recognition to economic, social and cultural rights". Well, this is a great example!

16/05/11 - Budget increases funded by cuts

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Thursday's Budget will be sold as a tough Budget for tough times. Speeches by the Finance Minister Bill English and Prime Minister John Key indicate its overarching narrative will be along these lines: The economy has some serious structural weaknesses that need to be addressed.

But it has also been hit by two very big shocks in the space of three years - the gravest global financial crisis of the post-war era and earthquakes that have inflicted greater physical destruction, relative to the size of the economy, than the disaster that struck Japan. In both cases these shocks hit when the economy was either already in recession or as near as makes no difference.

All this has laid waste the Government's accounts at a time when the international financial markets, on which our low savings rates make us especially reliant, are intolerant of the combination of rapidly rising Government debt and high levels of international debt.

This requires a fiscal belt-tightening, so for the first time in many years there is no new money on the table.

Any spending increases ministers want to undertake will have to be funded by cuts elsewhere.

That compares with an allowance of $1.1 billion for new operating initiatives in the two previous Budgets and around $2 billion a year under the previous government.

But the imperative of "setting out a credible path back to fiscal surplus" will be aided by a strong economic recovery, underpinned by record high commodity export prices, very loose monetary policy and the need to make good $15 billion worth of damage to Christchurch.

English has indicated that the operating deficit for the 2010-11 year, before valuation gains and losses, will be around $16 billion, or 8 per cent of gross domestic product, up from $11 billion forecast last December.

Three-quarters of the way through the year it stood at $10.2 billion.

The direct costs to the Crown of the earthquakes, which have already accrued and have to be booked up front, are estimated to be $3 billion in the current year and $2.5 billion next year.

In addition, the Treasury will revise down the forward track for GDP and therefore tax revenue - partly because of the earthquakes but mainly, it admits, because it overestimated the strength and pace of the underlying economic recovery.

"Achieving a zero net increase is even more difficult than it may sound," said Westpac chief economist Dominick Stephens.

"Operating costs naturally rise from year to year, due to wage increases and general inflation. A freeze on spending in nominal terms translates to outright cuts in real terms."

Foreshadowed policy changes to KiwiSaver tax credits and Working for Families would not deliver the cost savings needed to deliver a "zero Budget" in the coming fiscal year, to June 2012, Stephens said.

The Government has said it will seek an electoral mandate for the changes.

The election is still six months away so the earliest the KiwiSaver tax changes are likely to take effect is April next year.

And the Government has indicated changes to Working for Families would be phased in over an extended period.

ASB economists estimate health and eduction will get between $600 million and $800 million in new spending, which will have to be matched by spending cuts elsewhere.

"We expect that net core Crown debt will increase to 32 per cent of GDP by 2015, compared to 28.5 per cent expected at the December forecasts," they said in a Budget preview.

"However, net core Crown debt does not include agencies outside of the core Crown operations such as the Super Fund, EQC and ACC. Given the Super Fund and ACC have made gains of $5 billion relative to December forecasts, the increase in net Crown debt will be less pronounced."

Ratings agency Standard & Poor's noted after the February quake that net Government debt had been forecast to peak at a level only half the median for AA-rated sovereigns and was a plus for the credit rating.

ASB expects the subsequent increase in the net debt profile to be tolerated by the rating agencies. The additional debt had arisen from a one-off event and would be largely used to fund infrastructure, rather than a blowout in operating spending.

"This should leave rating agencies comfortable that the underlying fundamentals of New Zealand's ability to repay debt remain intact, and the plan to return to surplus over the coming years is credible."

BUDGET 2011: RED INK

• Operating deficit for 2010-11 year around $16b or 8 per cent of GDP
• This is up from $11b forecast last December
• Costs to the Crown of the earthquakes are $3b this year and $2.5b next year

(Source NZ Herald, Brian Fallow)

08/05/11 - Immigration New Zealand's contribution to growing the economy

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(06/05/2011) Good morning ladies and gentlemen.

Thank you for joining me at today’s breakfast briefing. All of us have a vested interest in immigration and I’m pleased to share with you some specific actions the Government is taking to enhance Immigration’s contribution to the economy, service improvement and changes to business migration.

Thank you for those opening comments Nigel. I’ve worked closely with Nigel since he became Immigration New Zealand head in February 2010. Nigel has been at the forefront of lifting Immigration New Zealand’s performance levels to become much more customer focused and aligned with the Government’s policy direction. Thank you your dedication and the hard work of your staff.

This morning I will update you on improvements in immigration policy and Immigration New Zealand’s performance, the steps we’ve taken to improve immigration’s value and our future focus.

Many of Immigration New Zealand’s key stakeholder organisations are in the room today and I’m confident that you will acknowledge the partnership approach that Immigration is now taking to provide tangible improvements to help support New Zealand’s economic growth. As Minister I acknowledge that although INZ has made significant advancements, there is still some way to go.

Lifting immigration’s economic contribution

Considering the economic challenges the country faces, lifting immigration’s economic contribution takes on more importance. New Zealandwent into deficit in 2009 after several years of surpluses and the economic situation has been compounded by the September and February earthquakes.

Currently, we’re borrowing $300 million dollars a week to keep public services ticking over – and this cannot continue and new spending will be directed only to a few areas of highest priority, mostly health and education.

This month’s Budget will outline a credible path which will return New Zealand to surplus while continuing to support the most vulnerable and maintaining public services. The Government has pitched its focus squarely on the economy and jobs, and that is likely to continue.

Benefits of immigration - growing our economy

The Government has a comprehensive economic plan to help New Zealand achieve those goals and immigration must play an important role in helping to drive that plan. The following numbers reinforce immigration’s economic contribution:

Most of you will be aware that one in four New Zealander workers are migrants. The reality is that New Zealand society is changing and we need to be at the forefront, ensuring that New Zealand remains an attractive destination for workers, students, tourists and capital.

Migrants fill acute skills shortages, removing constraints that prevent our businesses growing.

If we were to close off immigration entirely by 2021:

• Population would drop by 9.6 per cent
• GDP would drop by 11.3 per cent
• The available labour force would drop 10.9 per cent
• The export sector would drop by 12.9 per cent.

It’s important to highlight the economic value of Immigration here:

Immigration recognises the strategic importance of the tourism and export education sectors and the direct links they provide to employers. More on this shortly.

Given these compelling figures, my number one priority has been to ensure Immigration is contributing to the Government’s economic growth agenda.

Ultimately this is about attracting the people NZ needs and making quality decisions quickly. We are doing that by:

I’ll go into detail about these areas, and announce some new changes to the Business Migration Package and export education shortly. When talking about where Immigration is going and the improvements we’re seeing, it’s important to provide some context around the situation the Government inherited.

Immigration under the previous Government

I’m not overstating the case by saying Immigration was in a very poor state when I became Minister.

Following the Mary Anne Thompson affair, the Office of the Auditor General was asked to investigate the state of Immigration NZ. What they uncovered was a ticking time-tomb. The Auditor General’s report was one of eighteen external reviews that led to 226 recommendations for change.

In brief the OAG report found an unacceptable variation in quality of decision making between branches, training provided to staff, use of delegations, procedures for reducing back logs, and systems and practices for decision making and quality control.

I’m pleased to say today that of the 226 recommendations only ten remain to be fully implemented. This is a reflection of the change process undertaken by Nigel and his team as well as repositioning their relationships with you the stakeholders.

When talking about Immigration New Zealand’s performance, some context is required about its workload. More than 500,000 application decisions are made each year. This includes more than 130,000 temporary workers; over 90,000 students; about 45,000 new residents; and 750 refugees under our annual Refugee Quota Programme.

Immigration receives about 1 million phone and email enquiries a year and in the last twelve months its website recorded 9 million visits. Given these volumes, it is crucial to overhaul Immigration New Zealand's customer focus.

Quite simply, making good and timely decisions on visa applications, removing unnecessary business processes, lifting quality and improving customer satisfaction should be a basic function for Immigration New Zealand.

I’ve worked to develop simple metrics and targets to measure improvements in Immigration New Zealand’s services.

Over the past 20 months I have been driving them to deliver across specific areas including:

In early 2009 the Auditor General’s report found 21 percent of decisions were poor or questionable, while Immigration’s own reviews found 25 percent were poor or questionable.

With Immigration focussing on improving the quality of decisions, now 87 percent of decisions are rated as good, 7 percent questionable and 6 percent poor.

Timeliness of decision making has to be a major focus, for many Immigration New Zealand customers this is the key metric. Initially, improving the quality of decisions was the focus for the department so timeliness took a hit.

Immigration New Zealand’s old targets made the service look good on paper:

A major effort went into improving performance in processing student applications.

Last year the Palmerston North branch was experiencing a severe backlog with 6,658 applications on hand. Today it’s down to 3,485.

We promised to process 90 percent of student applications within 30 days and we’re currently delivering on that, but we can improve further.

So the targets are now 80 percent of applications processed on average within 30 days and we’re starting to see progress. As at March 2011, 81 percent of work applications, 89 percent of student and 91 percent of visitor applications were being processed on average in 30 days.

In June 2010 only 76 percent for work, 73 percent for student and 89 percent of visitor applications were being processed in 30 days. Over the past two years employer satisfaction has increased from 70 percent to 90 percent and overall client satisfaction has risen from 68 to 80 percent.

Yes, there’s still more work to do, however the figures make it clear – the department’s performance in key areas is improving and the mechanisms in place will ensure it continues to make progress.

How we are increasing immigration’s economic value

The steps taken to improve its performance have been complemented by the changes made to increase immigration’s economic value.

Attracting skilled migrants to fill the skills gaps that exist in our labour-force are critical to improving our productivity. Make no mistake, the Government’s number one priority is to place New Zealanders into jobs, but when there are no suitably skilled or qualified Kiwis available, migrants meet that demand.

In spite of the global economic downturn, the market for skilled migrants remains keenly competitive. We still face strong competition from countries such as Australia, Canada, the United States and Germany. This competition will intensify as the world economy moves out of recession.

The Government has introduced new visas and policies to attract skilled migrants and transition them into the workforce. Launched last year, all 300 places for the Silver Fern Visa, which is aimed at skilled young migrants, were filled in 30 minutes. Our continued focus is on attracting the skilled migrants our economy needs.

Increasing Business Migration

One important economic driver immigration can capitalise on to help stimulate growth is business migration.

Upon becoming the Government, we identified significant gaps in the existing business migration policies.

Now we have a package that makes New Zealand very attractive to business migrants, and in 19 months we have attracted over $562 million in potential investment capital.

To date $142.5 million has been transferred and invested in New Zealand and an additional $167.25 million has been approved for funds transfer. Applications from investors worth an additional $252.5 million are being processed.

Since the policy has been operating, it’s attracted several times the amount of potential investment capital compared to the previous Government’s policy.

To ensure we’re getting the best return from this package we reviewed the Investor Migrant policy settings and I’m pleased to announce today some of the changes that will be introduced from mid-2011.

Some of the key changes include:

I am confident the various changes will attract even more very high-worth investor migrants to New Zealand.

It will also provide incentives for wealthy migrants to upgrade their investment. These investors also have more capital and a greater ability to support New Zealand businesses. Yes, this package is about attracting investment, but what’s equally important is that we are attracting people with commercial nous, experience and global networks.

Immigration New Zealand is working closely with New Zealand Trade and Enterprise to link high-worth migrants in the Investor Plus category with New Zealand businesses.

The marketing of our Business Migration Package will also be smarter and will target key OECD markets including the United Kingdom and the United States. We’re also looking at the major developing markets in India and South East Asia.

Supporting Export Education and Tourism

Many people here already know and appreciate the value of the export education market.

As previously mentioned, it contributes around $2 billion dollars a year to our economy from approximately 90,000 foreign students. It also supports about 32,000 jobs and providers received nearly $600 million in fees last year – it’s a significant earner for New Zealand so we need to act smarter and ensure we are providing a top quality product to fee paying students.

Immigration has a crucial role to play in export education and it can help increase its value by streamlining its processes and reducing red tapewhile maintaining the system’s integrity.

We have introduced numerous changes in export education to simplify the system:

INZ’s timeliness in processing student applications impacts on many education providers.

Last July I spoke at an education providers conference, Study Auckland, and it was clear we weren’t meeting timeliness standards. I told Immigration New Zealand this was not good enough and they needed to lift their game significantly. I’m pleased to say that over the past year they have been improving and it is my expectation that Immigration will process 80 percent of student applications within 30 days.

However as Immigration New Zealand moves into its peak processing periods, it must maintain its performance.

We are competing with other countries for foreign students. If processing times are too slow, we risk losing students to a faster competitor. Reducing processing times will enhance New Zealand’s reputation as a study destination.

We’re looking at reducing bureaucracy further by changing how we deal with applications. We’re seeing what other jurisdictions do, particularly in the India market, for example more succinct decline and PPI letters; declining fraudulent applications outright and banning the applicant from reapplying and working more closely with accredited institutions to fast-track bona-fide students.

In further changes, work visa holders will be exempt from having to apply for a Variation of Condition on their visa if they undertake formal training that leads to a qualification.

Other significant policy work on export education is underway and I will be making announcements on those in due course.

Tourism

Like export education, tourism is significant earner for New Zealand – it’s worth over $9 billion to our economy - and immigration makes it easier for the millions of tourists who visit yearly. Quicker processing times for tourists that need visas will only benefit the sector.

Immigration is also helping the tourism sector grow by tapping into new markets. The entry last month of China Southern Airlines into the New Zealand market with a thrice-weekly Guangzhou – Auckland route was a major coup for tourism.

Chinais one of New Zealand's fastest growing visitor markets. 123,000 people visited last year adding $365 million to the economy. Last month China Southern announced it would fly daily from later this year increasing the expected number of visitors on China Southern Airlines to 50,000 a year, worth an estimated $150 million to the economy.

This decision was made easier after Immigration New Zealand committed to providing a faster and more efficient service to meet the increased demand by increasing staffing, streamlining application processes and havinga Visa Acceptance Centre (VAC) in Guangzhou. VACs will also be established simultaneously in Beijing and Shanghai. The ability of Immigration New Zealand to respond quickly to the needs of an emerging market is testament to its flexible and adaptive approach.

Immigration New Zealand’s international footprint is steadily expanding with the recent opening of a new office in the New Zealand Consulate in Mumbai, the recent upgrade of Ho Chi Minh City to a full Branch and a new South African branch was opened in Pretoria last year.

The future for Immigration New Zealand

So, how will the immigration service look in the future? It will be one that is less focussed on processes and rules rather much more customer focused, agile and responsive to employer needs. This re emphasises the need to make quality decisions in a timely manner.

Immigration New Zealand is already in the process of implementing a new operating model. This may ultimately mean a new way of working but will be focussed on aligning Government’s goals and stakeholders’ requirements.

Over the next year to eighteen months you should expect to see changes in the areas of health screening, streamlining labour market processes and working with accredited employers and licensed advisors as trusted agents for INZ.

A new IT system will also allow Immigration New Zealand to provide more online functions and adopt a more risk-based approach.

Enhanced online capacity means we can streamline applications and reduce processing times by triaging low-risk people and high-value migrants while maintaining the system’s integrity.

Looking ahead, changes could be made in health screening. Do we need medical certificates for international students? Are there other areas where Immigration could change its criteria while not putting our health system at risk?

These areas, and others where New Zealand can gain a competitive advantage in attracting skilled migrants, will continue to be looked at.

The challenge ahead is to provide an immigration service that continues to meet the requirements of its current stakeholders but is proactive enough to meet our future requirements. Immigration NZ recognises that this is a partnership exercise and will engage your support to ensure that your service needs are met. These challenges are not insignificant and need to be viewed against current fiscal constraints.

Immigration New Zealand is moving in the right direction to build trust and the sort of service our international visitors, students, temporary workers and new migrants expect and deserve.

Now it is our turn to make these tools work better for New Zealand. For me, this means ensuring we achieve the best possible value from immigration.

Thank you

(Source Beehive, Dr J Coleman)

07/05/11 - Highlights Investor Migration Instruction changes

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Investor migration changes are detailed below with the change and the reason for the change:

Residence requirements during the investment period

Required transfer times for investment funds

Definition of acceptable investment

Bank bonds and equities are not acceptable investments

Business experience required under policy

Calculating the value of investments made by investor migrants

Funds transfer through foreign exchange companies

Exclusion of residential property as an acceptable investment

06/05/11 - Business migration hits $562m – changes to increase investment further

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Over $560 million in potential investment capital is poised to flow into the New Zealand economy, and changes to the Government’s business migration scheme will increase investment further, says Immigration Minister Jonathan Coleman.

Dr Coleman confirmed today the Government’s business migration scheme has attracted over half-a-billion dollars in potential investment. Changes have also been made to the policy to increase its appeal to investors.

‘’We launched this package 19 months ago and the take-up rate has been incredibly encouraging. It’s attracted $562 million in potential investment which shows the package is very appealing to business migrants,’’ Dr Coleman says.

‘’Since the scheme’s been operating, it’s attracted several times the amount of potential investment capital compared to the previous Government’s policy. We’re committed to policies that attract investment which helps to grow our economy.’’

To date $142.5 million has been transferred and invested in New Zealand under the Business Migrant Policy and $167.25 million has been approved for funds transfer. Applications from investors worth an additional $252.5 million are being processed.

Funds have been directed into various investment vehicles ranging from bonds, shares and securities to Auckland Airport, Fonterra and even a chicken farm.

‘’To ensure we’re getting the best return from this package, we reviewed the policy settings to ensure that  the changes that come into effect from mid-2011 will provide more incentives for wealthy migrants to upgrade their investment,’’ Dr Coleman says.

‘’Not only are we attracting valuable capital, but we are attracting people with commercial nous, experience and global networks. Over time the aim is to see more migrant capital invested in New Zealand’s productive sector.’’

Dr Coleman says the Government’s scheme makes it easier for people to invest money in New Zealand without compromising the security and integrity of the immigration system.

Background information

The Government’s business migration scheme offers two investment categories:

• Investor Plus – minimum investment of $10 million for at least three years
• Investor – minimum investment of $1.5 million for at least four years.

Some of the key changes to the business migration scheme includes:

• Reducing the residence requirements for Investor Plus migrants during the three year investment period from 73 days to 44 days per annum.
• Investment opportunities will be expanded by allowing migrants to invest in entities established by parent organisations to raise funds. Migrants will also be allowed to invest in bank bonds and equities.
• More flexibility is being provided around the requirement for business experience. Instead of previously having to meet both conditions, business migrants only need to meet one of the following criteria - to have owned or managed a business with five full time employees or to have owned or managed a business with a minimum $1m in annual turnover.
• Migrants will be allowed to transfer funds through foreign exchange companies which recognises the emerging international trend in funds transfer.
• Residential property is to be included as an acceptable investment. Safeguards are required so that residential property investments create economic growth and increase the total housing stock available to New Zealanders.

06/05/11 - Aussie apple exports on track

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Ending a 90-year ban on apple exports to Australia has taken a step forward with a biosecurity report across the Tasman saying imports should be allowed.

Australia imposed restrictions in 1921 to protect apple trees from the fire blight pest.

Late last year, the World Trade Organisation said the restrictions were unscientific and broke international rules, and in February, Australian Prime Minister Julia Gillard said the country would implement the WTO rulings.

The Biosecurity Australia draft report this week said apple imports from New Zealand should be permitted subject to a range of quarantine conditions.

Pipfruit NZ chief executive Peter Beaven said: "It's probably a sense of relief as much as anything that at last we've got what looks to be a scientific-based analysis.

" Pipfruit NZ had not finished reading the report and some clauses needed clarification but Beaven said there was nothing that rang any alarm bells.

The report said that when taking into account New Zealand's standard commercial practices for export grade fruit, there was appropriate protection from three pests - fire blight, European canker and apple leaf curling midge.

"Therefore, no additional quarantine measures are recommended, though New Zealand will need to ensure that the standard commercial practices detailed in this review are met for export consignments."

Pipfruit NZ said it would work closely with government officials and the scientific community to examine the document and make a submission during a 60-day consultation period.

Beaven said there could be some small opportunity for trade towards the end of the year.

"But on the basis of this analysis I'm confident now that we'll certainly be able to commence trade by next year."

The Australian market could grow to 500,000 cases and was worth potentially $30 million a year, he said.

"I think we'll get there relatively quickly, there's a lot of transtasman trade and a lot of people in the fruit industry have got existing relationships because of avocado and kiwifruit trade and so forth."

China had recently gained access to Australia and made the first apple imports to the country in about 90 years, Beaven said.

Australia's per capita consumption was less than half that of New Zealand and the industry here could offer a complementary variety mix, he said.

"We've always said that we don't believe that we pose a threat to the Australian industry, although it's been very hard to convince them of that of course," he said.

"I think it might take a little time but we're definitely holding out the olive branch and offering to jointly promote."

Snow Hardy, general manager at fruit marketing company ENZA, said Australia was a fantastic opportunity.

"Australia's a lot closer than our traditional export markets and it's a much bigger population base to sell our fruit into," Hardy said.

"So it's going to become a key market for us going forward I believe," he said.

"The traditional markets with the US, euro and sterling currencies, they're very unfavourable for us at the moment whereas Australia it's very favourable."

However, the industry had to exercise discipline in the first year or two to make sure it got the market set up and working in a way that enhanced rather than eroded returns to growers, he said.

GETTING THE PIP

• Australian apple import ban has lasted about 90 years.
• World Trade Organisation has ruled against the restrictions.
• Australia has committed to implement the WTO ruling.
• Draft biosecurity report says imports should be allowed.

(Source NZ Herald, Owen Hembry)

05/05/11 - More leave than arrive in March

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The net flow of migrants turned negative in March as a jump in departures of Christchurch people amplified a continued trend of dwindling net gains.

Statistics New Zealand reported that departures of permanent and long-term migrants exceeded arrivals by 530 in March on a seasonally adjusted basis.

That is a turnaround from a net gain of 470 in February and of 960 in March last year. It is unusual to record no net gain of population from migration in a month, and this net outflow was the largest for 10 years.

Departures of Christchurch residents more than doubled to 1100 from 500 in March 2010. This counts people leaving the country with the intention of staying away for at least a year.

Even if the 600 increase in Christchurch residents leaving is added back, the net inflow would have been just over 100. It has been declining since October last year. The net gain for the year ended March was 6600.

"Before the earthquake, the trend of New Zealanders relocating to Australia was already in place, given Australia's economic outperformance," ASB economist Jane Turner said.

(Source NZ Herald, Brian Fallow)

27/04/11 - OECD supports capital gains tax, lifting retirement age

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A new report by the Organisation for Economic Cooperation and Development (OECD) argues New Zealand to favour a capital gains tax, and lift the retirement age.

The OECD's latest economic survey of New Zealand, published today, said lacklustre growth reflected structural shortcomings of the economy. As the 2000s progressed, the main sources of rising prosperity had increasingly become commodity-based terms of trade improvements, credit-fuelled capital gains on property, and rising government spending, the OECD said.

Its report focused on ways to improve product market regulation and competition, and took a detailed look at the housing sector and environmental policy. New Zealand's living standards had for some time tracked persistently below the OECD average, mainly because of poor labour productivity, the report said.

Generous universal public pension and student loan schemes may reduce the incentive for households to save, while the tax system biased investment decisions by distorting market signals.

Raising the retirement age, while slowing the pace in benefit payments, could provide large fiscal savings, increase potential output and boost household savings rates, the report said.

With nominal interest income and dividends taxed, the absence of a capital gains tax raised the relative returns to assets with good prospects for price appreciation, which tended to favour property and farm investments.

While the Government had addressed some of the distortions that prolonged the housing boom, it could further reduce the bias towards housing investment relative to other assets by introducing a comprehensive realisation-based tax on capital gains.

Excluding primary residences from tax would diminish the effectiveness of such a tax, but partial exemption or rollover relief could act as a second best solution to facilitate public acceptance.

In the absence of a capital gains tax, the tax of alternative savings could be lowered to level the investment playing field, and more limits could be put on the extent to which property investment losses could be deducted for tax purposes, the OECD report said.

Such measures should be accompanied by higher property or land taxes that could be designed to achieve the same objectives as a tax on imputed rent.

Supply constraints were also seen as contributing to the housing boom, partly due to increasingly restrictive land use regulations.

The lengthy report also said regaining regulatory best practice and improving management of the Government's assets could boost productivity growth.

Increasing government interventions in network sectors had reduced market transparency and stability, distorting competition and increasing risks to investors.

Examples included the ultra fast broadband initiative, which was never subject to a full cost/benefit analysis, and the government's "kiwi share" in Telecom, which may restrain competition and should be eliminated.

If the Government went ahead with partial privatisation of state-owned electricity generators, then entrepreneurship, corporate governance and market transparency would be enhanced, but continued progress toward full privatisation would be needed to reap the full productivity benefits, the report said.

It also noted that policies to pursue inclusive economic growth with sound environmental effects were essential to secure natural advantages in international competition. More efficient water and land management should be a priority.

(Source NZ Herald, NZPA)