January 2004

RBNZ prepared to constrain asset bubbles
The Reserve Bank today revealed that in rare circumstance it is prepared to adjust monetary policy to constrain extreme asset price bubbles, whereas normally the Reserve Bank is only required to ensure consumer price stability. In a text prepared for the Canterbury Employers' Chamber of Commerce, Reserve Bank Governor Alan Bollard said using monetary policy to [...]

Manufacturing activity eases after seasonal rush
New Zealand manufacturing conditions eased during December, according to the latest ANZ-Business NZ Performance of Manufacturing Index (PMI). New Zealand recorded an overall PMI value of 54.0 for December 2003 (a PMI reading above 50 points indicates expansion and below 50 indicates decline). While this was 10.4 points down from the November value, this is consistent [...]

Programme boosts pacific people's business skills
A new training programme aimed at helping Pacific people improve their business skills is being piloted by New Zealand Trade and Enterprise (NZTE) from next month. NZTE Business Development Group Manager Hans Frauenlob says the five-month pilot programme aims to improve the management capability and productivity of Pacific people's businesses and to increase the number of [...]

Interest Rate Hike A Blow To Dairy Farmers
Today’s quarter-point interest rate rise will cause more pain for dairy farmers already facing the prospect of sharply lower incomes next season, said Kevin Wooding, Chairman of Dairy Farmers of New Zealand (DFNZ). The increase in the official cash rate to 5.25 percent will add to borrowing costs, and most analysts say it will put more [...]

Commission waits Unison price increase explanation
The Commerce Commission is awaiting an explanation from Hastings based electricity lines business Unison on its pricing structure. Commission Chair Paula Rebstock said that Unison’s self assessment against the price path threshold, set by the Commission last year, indicated that Unison had breached that threshold due to price increases. In December 2003, the Commission asked Unison [...]

Value of December Quarter Imports Falls
The seasonally adjusted value of imports for the December 2003 quarter fell 1.0 percent, when compared with the September 2003 quarter, according to Statistics New Zealand. Over the past three years, the import trend has remained relatively flat as the New Zealand dollar has generally appreciated. A higher exchange rate generally has a downward influence [...]

Carter Holt Harvey in Strong Position
Carter Holt Harvey today announced its December result, ending a solid year for the company. Operating earnings before interest and tax (EBIT) were $315 million for the year ended 31 December 2003. This was down 5% on last year due primarily to industrial action at the Kinleith Mill and lower forest sales volumes. EBIT for the [...]

Official cash rate increased to 5.25 per cent
The Reserve Bank today increased the Official Cash Rate from 5 per cent to 5.25 per cent. Governor Alan Bollard said “An increase in the OCR appears warranted to ensure that inflation remains comfortably within the target range over the medium term. “The New Zealand economy has experienced a period of impressive growth over the past two [...]

Fonterra Delivers Solid Performance In First Half
Good demand in international markets coupled with improved commodity prices enabled Fonterra to achieve a solid operating performance in the six months to November 30, 2003, while reducing its debt, costs and demand for working capital, Chairman Henry van der Heyden said today. In contrast to the same period last year, when Fonterra had a significant [...]

NZSF Appoints Two Further Investment Managers
The Board of the Guardians of New Zealand Superannuation today announced the appointments of Fisher Funds Management and Allianz Dresdner Asset Management. Fisher Funds Management has been appointed to manage a portfolio of New Zealand equities with a focus on smaller companies. The mandate requires all holdings to be outside of the Top 10 companies listed [...]

BP and Ports of Auckland reach agreement on tank farm sites
BP Oil New Zealand (BP) and Ports of Auckland (POAL) have reached agreement on BP's early exit from its leases in the Western Reclamation, Freemans Bay. Under the agreement, four sites in Hamer and Brigham Streets reverted to POAL ownership as at 1 January 2004. A fifth site will revert after June 2004. BP will continue to [...]

Govt. buildings should be environmentally and economically responsible
Kiwi businesses hope the new nine-story building being constructed in Thorndon for the Ministry for the Environment will use New Zealand-made fittings and furniture, says Business NZ Chief Executive, Simon Carlaw. The building is required to meet environmental sustainability criteria. Mr Carlaw wonders whether economic sustainability is also part of the brief, with New Zealand rather [...]

Television Advertising Breaks Records
Television advertising revenue totalled $591.7 million ($516m in 2002) for the 12 months to 31 December 2003. This is an increase of $75.7 million or 14.7 per cent over the same period in 2002 and breaks last year’s record return. Revenue for the quarter ending 31 December 2003 was $176 million compared to $151.1 million [...]

Pacific Radiology applies for clearance to acquire Wakefield Radiology
The Commerce Commission has received an application from Pacific Radiology Limited to acquire the radiology services, business and assets of Wakefield Radiology Limited. Pacific Radiology provides radiology services in Christchurch, Nelson and the Hutt Valley, while Wakefield Radiology has clinics in the Wellington and Wairarapa regions. In considering the application, the Commission’s role is to determine whether [...]

Rescuing Unions
The Employment Relations Law Reform Bill is aimed at rescuing unions, says Business NZ. Chief Executive Simon Carlaw says it’s the only understandable explanation for the bill. “The bill fundamentally changes employment rules in a complicated, roundabout way that would make sense only to lawyers and union bosses. Perhaps the unions hope no-one will try to understand [...]

Ports of Auckland Volumes Index Update
The calendar year finished on a high for Ports of Auckland with December showing another month of increased cargo volumes. Total container volumes* were up 5% to 659,532 TEUs for the 12 months to end-December 2003 (as compared with the 12 months to end-December 2002) and also up 5% for the month of December 2003 compared [...]

Uniform Conditions Helps Unions Hurts Low-Skilled
A new report by the Australian Centre for Independent Studies (CIS) highlights how union-driven changes to employment law can have particularly harsh effects for low-skilled workers, New Zealand Business Roundtable executive director Roger Kerr said today. Policy analyst Kayoko Tsumori’s paper ‘How Union Campaigns on Hours and Casuals are Threatening Low-skilled Jobs’ looks at the push [...]

Consider Tax Implications of Changing Incomes
Farmers facing significant changes to their financial situation this year should start thinking about the tax implications sooner rather than later, says Tom Lambie, President, Federated Farmers of New Zealand (Inc). “There are options open to both farmers who may have extraordinary income from the forced sale of capital stock and those whose incomes are likely [...]

PowerSwitch uncovers NZ?s best electricity deals
The latest PowerSwitch survey, conducted by Consumers' Institute, has found consumers could be paying up to $300 a year too much on their electricity bills. The survey, carried out last week, showed that Energy Online was offering the best prices to Auckland Central and Manukau households, and these could be as much as $200 a year [...]

Antitrust Policy Found to be of Little Benefit
An important study just published in the respected Journal of Economic Perspectives should be of interest to all those involved in competition policy in New Zealand, Roger Kerr, executive director of the New Zealand Business Roundtable, said today. The article, ‘Does Antitrust Policy Improve Consumer Welfare? Assessing the Evidence’, asks whether there is any hard empirical [...]

Nine Work Stoppages Ended in September
Nine work stoppages ended in the September 2003 quarter, according to latest figures from Statistics New Zealand. Five complete strikes and four partial strikes took place in the September 2003 quarter, compared with the four complete strikes and one partial strike in the previous quarter. The nine work stoppages in the September 2003 quarter involved [...]

Imbedded Generation & Efficiency Focus A Solution
Electricity retailer and generator TrustPower says large power price increases beyond this year remain a possibility, unless New Zealand focuses on building new generation close to where power is consumed, and uses electricity more efficiently. Chief Executive Keith Tempest says there is no point in spending huge amounts building transmission lines to transport power long distances, [...]

Retail Sales Decrease 0.4 Percent in November
Seasonally adjusted total retail sales decreased 0.4 percent in November 2003, compared with October 2003, according to Statistics New Zealand. This is the first monthly decrease since March 2003 and follows increases of 1.4 percent in October 2003 and 0.4 percent in September 2003. Seasonally adjusted sales for the core retailing group (which excludes the [...]

Big savings on offer for New Zealand seniors
Seniors across the country are today being invited to join New Zealand Seniors Card, an innovative new shopping and travel programme. Designed exclusively for people over 55, Seniors Card will be launched today at Carter Observatory, recognising the vital role seniors play in the national economy. Chris Herron, General Manager of Seniors Card, said the programme offers [...]

Steady Trend in Guest Nights Continues
The underlying trend in total guest nights in short-term commercial accommodation has been steady since August 2002, according to Statistics New Zealand. In November 2003, the trend level in total guest nights was 2 percent higher than the level in November 2002. Actual total guest nights were 2.5 million in November 2003, a 1 percent [...]

Food Prices Fall in December
Food prices fell 0.4 percent in December 2003, according to the latest figures released by Statistics New Zealand. Price decreases were recorded for grocery food, soft drinks and confectionery; and meat, fish and poultry. These decreases were partly offset by higher prices for fruit and vegetables; and restaurant meals and ready-to-eat food. Grocery food, soft drinks [...]

Construction Prices Drive CPI Increase
The Consumers Price Index (CPI) increased by 0.7 percent in the December 2003 quarter, according to Statistics New Zealand. The housing group continues to make the most significant upward contribution to the CPI, with prices rising by 2.2 percent. The increase in the December quarter also reflects higher prices for electricity and international air travel. [...]

Pacific Blue To Offer International Connections
Pacific Blue today announced, that in conjunction with its sister airline, Virgin Blue, it will offer flight connections to and from New Zealand and Australia so that international Guests and their luggage will be able to connect seamlessly between the two networks. Bookings for connecting flights can now be made on Pacific Blue's website (www.flypacificblue.com), through [...]

Investment income boosts ACC surplus
Strong equity markets, careful investment and solid scheme performance lifted the Accident Compensation Corporation to a better-than-expected surplus of $279 million in the six months ended 31 December 2003. The first-half surplus compares with $23 million in the same period of 2002. Chief Executive Garry Wilson said the scheme had performed well with improved processes benefiting claimants [...]

Phoenix Organics Admits Labeling Breach
Phoenix Organics admits labelling likely to breach Fair Trading Act In a settlement with the Commerce Commission, Phoenix Organics Limited has admitted the labeling of its 275ml Organic Orange, Mango and Apple Juice product was likely to breach the Fair Trading Act and has published a public apology on its website. Due to problems with the supply [...]

Commerce Commission cautions car dealers
The Commerce Commission is cautioning car dealers that interest-free deals that are not truly interest-free risk breaching the Fair Trading Act, an offence which can attract fines of up to $200,000. Director of Fair Trading Deborah Battell said that if an offer is advertised as being interest-free, then there must be no extra cost to the [...]

Greens Upside Down on Free Trade
Free trade is not bad for New Zealand says Tom Lambie, President of Federated Farmers of New Zealand (Inc). Mr Lambie was responding to claims by Green Party Co-leader Rod Donald that allowing international ships to shift domestic cargo around New Zealand is bad for the economy. “The removal of the restriction of coastal shipping to New [...]

Warning for Overdimension Vehicle Pilots
The recent tragic accident between a stock truck and a British tourist’s vehicle is a reminder all drivers of agricultural vehicles to take care on the road. Summer brings many visitors to rural areas at a time when specialist agricultural vehicles such as tractors, spreaders, harvesters, balers and silage wagons that exceed the standard vehicle [...]

Dairy Exports Rise
The updated value of merchandise exports for November 2003 is $2,379 million, according to Statistics New Zealand. This is 3.0 percent lower than the figure recorded for November 2002. However, the underlying trend for the merchandise exports value has been rising over recent months, despite an appreciating exchange rate. The main contributors to the lower exports [...]

Motorists Seek Reasons For Increasing Fuel Prices
"Motorists are asking what are the reasons for the continuing increases in petrol, especially when the New Zealand dollar remains so high and continues to strengthen" George Fairbairn, AA Director of Public Affairs said today. The Automobile Association today stated that motorists want the fuel retailers to provide the details of these increases, when fuel prices [...]

Fonterra's 'Good Bacteria' Adds Value to Yoghurt in South Africa
The idea that certain foods can remedy a variety of illnesses is far from new. However, the increasing attention paid to the link between diet and health in recent years has led to a rise in the demand for "functional" foods - foods that are not only nutritious, but actually improve health and wellbeing. The runaway [...]

Funding to accelerate growth of Innovators Online
The Innovators Online Network (ION) has received a New Zealand Trade and Enterprise grant of just over $12,000 to expand its support of new high technology ventures. ION is an online network and forum established in 2002 for innovators, entrepreneurs and business mentors after a Waikato Management School research project found small and medium sized enterprises [...]

Westpac Sketches Out New Territory for Banks
Westpac’s challenging the attitude that banks are all the same with a new advertising campaign featuring doodled illustrations demonstrating its focus on customer service.Developed by New Zealand’s Saatchi & Saatchi, the campaign addresses the service basics, depicting ways that Westpac is adding value with its products and services.Westpac’s General Manager Marketing and Products, Michelle van [...]

Zero student loan in 2004
A zero student loan option through industry training is a tertiary education pathway that students and parents of students should consider in 2004", says Darel Hall Executive Director of the Industry Training Federation. According to Ministry of Education figures, 150,575 students borrowed through the Student Loan Scheme in 2002. Government spending on student loans for the [...]

Support for Varroa Pest Management Proposal is Vital
New Zealand Bee Industry Group Chairman Milton Jackson is urging South Island beekeepers to make submissions to the Minister of Agriculture in support of the proposed Varroa Pest Management Strategy (PMS).Before Christmas 2003 the Minister of Agriculture notified the proposal for the Varroa Pest Management Strategy with the objective of maintaining the South Island varroa [...]

Feed Surplus Option for South Island
A bumper season with plenty of surplus feed, in the Manawatu and Rangitikei regions provides an opportunity for farmers in dry areas of the South Island, says Shelley Dew-Hopkins, President, Manawatu/Rangitikei Federated Farmers of New Zealand (Inc) "There is concern that the current feed surplus may be wasted, and so I encourage farmers in dry areas [...]

Farmers Request Rural Fire Vigilance
The recent spate of fires in rural Canterbury has again highlighted the need for care during the dry summer months says John Aspinall, Rural Fires Spokesman for Federated Farmers of New Zealand (Inc)”The recent Canterbury riverbed fires have placed lives and property at risk, as hot nor-west winds can fan a spark into a major [...]

Asquith Group applies for exemption under EIR Act
The Commerce Commission has received an application from the Asquith Group for an exemption under the Electricity Industry Reform Act 1998 (the EIR Act) in relation to ownership separation provisions. The Asquith Group seeks an exemption from s 17 of the EIR Act, which prohibits cross involvements in electricity lines and supply businesses, in relation to [...]

Rural Schools: If They Ain't Broke Why Fix Them?
The rules for rural school network reviews seem to be changing - and not for the better says Federated Farmers of New Zealand (Inc) Vice President Charlie Pedersen. “FFNZ members no longer have confidence that rural school reviews are based on education outcomes. Despite concern expressed to Minister of Education Trevor Mallard by many groups, the [...]

Farm Safety: Watch those Water Hazards
Farms are great places to spend the school holidays but visitors must remember that as a workplace there are hazards to be aware of says Federated Farmers of New Zealand (Inc) Vice President Charlie Pedersen.”Parents and Guardians need to take particular care with children who may be unaware of the dangers on farms. “Waterbodies in the [...]

SIA Takes Delivery Of Ultra Long-Haul Aircraft
Singapore Airlines (SIA) ushered in 2004 with the arrival of its first ultra long-haul aircraft - the SIA A345 LeaderShip - at Singapore Changi Airport today. The SIA A345LeaderShip will offer the longest non-stop commercial service in the world when it commences operations between Singapore and Los Angeles on 3 February 2004. "Today is a significant moment for [...]