Business and Commerce News

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 years. But now productive capacity and the labour market are becoming relatively tight. Reflecting this, inflation pressures in some parts of the domestic economy have started to become more apparent. Although falling import prices due to the rising exchange rate have so far kept CPI inflation low, those reductions are unlikely to be sustained. If domestic inflation is left unchecked, the CPI may start to rise to uncomfortable levels.

“Data since December have pointed to stronger activity than we then thought in areas such as household spending, construction and the housing market, further fuelling inflation. Further inflation pressure is likely in the next few months from areas such as construction costs and energy. Interest rates have been stimulating demand as shown in further solid growth in household credit.

“On balance, these developments strengthen our view, foreshadowed in our December Monetary Policy Statement (MPS), that it is now prudent to begin returning interest rates to levels that will have less stimulatory effects on demand. By historical standards we do not expect that a large adjustment in interest rates will be necessary.

“By raising interest rates now, we hope to avoid having to increase interest rates more aggressively later on.

“The New Zealand dollar has risen sharply, and we are aware that this has placed pressure on the export sector. However, as yet this has not had much effect on spending in the local economy. In time this will happen, probably reducing the need for interest rates to rise as much as they otherwise might. We will need to monitor these trends, and will be reviewing the OCR in early March with the release of our next MPS”.

Awakeri couple Alan and Viv Barr, were announced the winners at a function in Awakeri last night. They have won a study trip to North America, one of Fonterra’s key market regions and go forward to compete in the national final in New Plymouth on June 12.

Alan and Viv started in the dairy industry in 1986 when they took up the position of 50/50 sharemilkers for Alan’s parents on the Barr Family Farm. The couple currently own a 130 hectare milking unit and 58 hectares of support land on which they run a 500 cow split calving intensive farming system.

Despite their success, Alan says they still see opportunities where they can fine tune their system.

“Strategies for our business will change in response to industry changes and we need to keep up-to-date with what is happening so we can react appropriately and maintain our standards.

“We also aim to achieve similar levels of production and profit while slowly moving away from the day-to-day management of the farm. Gaining a balance between family and the business is a priority for the future but we also want to give our children a taste of the farm business.”

The judges found the Barr’s were a very well rounded business couple who showed general excellence in all aspects of the judging criteria. They had well defined business and personal goals and a clear focus as to where they wanted their family to be in the future. They achieved a high standard in the financial section by demonstrating a depth of understanding of financial goal setting, planning, implementation and monitoring.

Winners of the RD1 Farm Manager award were Reporoa couple Wayne and Suellen Pamment. The judges found they demonstrated an excellent knowledge and understanding of the property they manage considering the short time they have been there. The couple did not enter the dairy industry until March 2002. The key to their success was their goal setting, financial knowledge and understanding.

Recipient of the Holden Lifetime Achievement award was John Lawrence Murray, who was awarded an M.B.E for ‘Services to Dairying’ in 1992. During his time as Chairman of the Bay of Plenty Herd Improvement Association, John was one of the driving forces behind merging the Herd Improvement Council and the autonomous Herd Improvement Associations throughout New Zealand into a unified organisation of the Livestock Improvement Corporation.

Awards Chairman and Fonterra Director Jim Van der Poel says by promoting and highlighting excellence and innovation, and the exchange of information between entrants and the farming community, the awards help to share best practice across all of Fonterra’s suppliers.

Westpac’s Head of Agri Business Karen Silk says, a key factor evident among successful entrants to the dairy excellence awards such as Alan and Viv, is their clear focus on establishing personal goals and driving their business to meet these goals.

“The goals tend to be focused on either improving lifestyle or financial situation. While the awards offer the opportunity for entrants to benchmark themselves against other participants, more importantly it encourages revisiting or establishing personal goals. They then identify new ways to ensure that their business delivers to these goals, rather than the business delivering an unplanned outcome,” Karen said.

Other Bay of Plenty and South Waikato regional award winners were:

LIC Productivity – Bruce and Sharon Rutledge from Opotiki

Pioneer Business Growth – Corrie and Donna Smit from Whakatane

DTS Environmental Integrity – Alan and Viv Barr

Dairy InSight Human Wealth – Corrie and Donna Smit

Ravensdown Quality Management – Not awarded.

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 on the New Zealand Exchange. The allocation to Fisher Funds Management will be approximately 1.25% of the total assets of the Fund, and the mandate is expected to grow to approximately $120 million by the end of 2006.

“The appointment of Fisher Funds Management reflects our view that there are some excellent investment opportunities in smaller New Zealand companies,” said New Zealand Superannuation Fund Chief Executive Paul Costello. “The allocation complements the holdings of AMP Capital and Brook Asset Management, whose portfolios tend towards larger companies, and ensures the Fund has a diversified portfolio of New Zealand equities,” he added.

The allocation was welcomed by New Zealand Exchange Chief Executive Mark Weldon: “Many of NZX’s smaller companies have performed exceptionally well in the last few years and the additional attention and capital flows directed to these companies is very positive.”

Allianz Dresdner Asset Management will manage a portfolio of international equities, with an initial allocation of NZ$250 million. Allianz Dresdner is an active manager and will complement Barclays Global Investors who manage a portfolio more tightly structured around a global sharemarket index.

Several more active international managers are expected to be appointed by the Fund during 2004

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 operate its lubricant processing plant in Madden Street. This site will revert to Ports of Auckland in 2012 or before, at the option of BP.

BP Managing Director Peter Griffiths said: “We are pleased to have resolved all the issues with Ports of Auckland relating to the early exit of leases in the Western Reclamation.

“BP takes its commitment and responsibility to the environment seriously and all land that reverts to Ports of Auckland meets or exceeds environmental standards under the Resource Management Act,” he said.

Ports of Auckland Chief Executive Geoff Vazey said: “The Western Reclamation is an important part of Auckland’s waterfront and in the future will be used for a variety of people related activities. We are pleased at the outcome of our discussions with BP.”

BP and POAL had been in dispute regarding the level of remediation of the sites, which were used for storing oil and petroleum products in the days when the Western Reclamation was a dedicated “tank farm” precinct.

The agreement now reached resolves all matters at issue between the two parties.

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 than overseas businesses being used for the fit out.

“While it is an interesting observation on the Wellington economy, in that another new building is for a public sector tenant, we understand that environmental consultants are being used to ensure the building measures up from an environmental perspective,” Mr Carlaw said.

“Will Buy NZ Made also be consulted, to ensure the building also measures up in terms of providing work for Kiwi companies? Certainly we would expect the Ministry register the project with the Industry Capability Network, to ensure the best possible return to the economy for the taxpayers’ investment.”

The New Zealand Television Broadcasters’ Council, representing the television broadcast industry, said that the annual increase was the product of strong economic growth and stable audiences for television in competition with other media. The revenue figures are for free to air and pay television.

The NZTBC’s Executive Director, Bruce Wallace said that television served the public well in 2003 and was rewarded with excellent audiences for local programmes, news and current affairs in a year which included the Rugby World Cup coverage. Viewing levels for television were stable compared to 2002 with a small rise evident in the last six months of the year particularly amongst household shoppers with children and in Auckland.

Strong rises in spending on television advertising in the December quarter were reported by Nielsen Media Research in the categories of home improvements, banking and investment, leisure/entertainment, cosmetics, retail and telecommunications.

All companies in the NZTBC increased their revenues from advertising in the highly competitive broadcasting sector and are also reporting continuing strong demand in 2004.

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 the merger has the effect of substantially lessening competition in a market.

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 the bill before it’s pushed into law.

“The union monopoly on collective agreements, the requirement to bargain, the requirement to reach a settlement, the imposed settlements and the forced MECAs with subsequent parties clauses – these are all getting very close to the compulsory unionism, compulsory arbitration and national awards of the ‘70s and ‘80s.

“This period was the worst for industrial unrest in NZ’s history, with work stoppages over this time* nearly five times higher than annual stoppage figures before or since.

“This is a high price to pay to try to boost union membership.”