Thursday, 10 March 2016

Is the John Key spell over media starting to crack?

Claire Trevett: Key faces more colds as farming sneezes

The prompt for that was Fonterra's announcement that the milk price forecast had dropped to $3.90 a kilo. Photo / Mark Mitchell
10 March, 2016

It was an ominous sign when Prime Minister John Key wandered into his weekly post-Cabinet press conference and announced, "I've got a bit of a head cold."
The very next day Labour's Grant Robertson was asking Finance Minister Bill English about Key's observation that "when the primary sector sneezes, the New Zealand economy catches a cold".
The prompt for that was Fonterra's announcement that the milk price forecast had dropped to $3.90 a kilo.
So far National has been almost dangerously cavalier in the face of questions on the farmers' plights. English and Key have made reassuring noises but at times sounded almost laissez-faire about the state of the dairy sector.
English conceded the fall in the milk price has brought the dairy sector into the "severe" forecast of Treasury. But his response to questions about Fonterra advising its suppliers it would not pay them for up to three months rather than one month amounted to saying suppliers could like it or lump it, Fonterra was acting within the law.
Law or not, it was an astonishingly unsympathetic approach given the struggle smaller suppliers now face in waiting for payment.
Despite the apparent determination to appear zen about the price of milk, you can bet National's feet are paddling like the clappers beneath the surface. That is because when the farmers sneeze, National gets a cold. That sneezing is becoming a chorus and they're certainly not saying "bless you".
The Government is almost helpless to lift the milk price. But as talk of farmers being forced to walk off their land and farm values slumping grows it is a fair bet National's rural MPs are copping it about the chops from their constituent farmers.
National is the traditional party of farmers but Labour has sensed blood and Parliament has been treated to the sight of its two urban liberals, Grant Robertson and Jacinda Ardern, taking up the cudgels on behalf of the farmers. Robertson mocked Key for his prediction in 2014 that dairy prices would "bottom out" soon. In return, Key mocked Robertson for his failed leadership bids and scoffed about him putting on a show of being "the friend of the farmer", adding it was "not going to fool anyone."
Key might want to look as if he's taking it more seriously. National will not be overly concerned Labour will run off with the farmers' votes. The greater concern is the fate of the votes of those downstream from the farmers. When the farmers stop spending, so does the spending of those who service the farmers. It's a bit like the little old lady who swallowed the spider to catch the fly. If the farmers aren't buying tractors, the tractor sellers aren't buying new shoes and the shoesellers aren't buying icecreams. On and on it goes.
When it comes to the farmers, a greater concern to National is that more sinister Pied Piper, NZ First leader Winston Peters.
Peters has spent the past year since his Northland win rolling about the country trilling, "Help is on its way." He has seeded himself as the guardian of the protest vote in the regions. The current conditions are ripe compost for Peters to flower.
Unlike the Northland byelection, he doesn't even have to bother trying to convince those rural people they're hard up any more. Admittedly the solution Peters has put up so far is for New Zealand to recommence free trade talks with Russia and bugger being part of the international condemnation of Russia over the Ukraine. To that, all Key had to say was Peters might be better off supporting the Trans-Pacific Partnership if he wanted to help the farmers.
But National is on weak ground here in several respects. Peters has made the most of wedge politics between Auckland and the regions. If there is a swarm of foreigners to buy up cut-price farms Peters' old fashioned rhetoric about the evils of foreigners might sound a lot better to rural dwellers than National's more nuanced mumbling about foreign investment helping regional growth.
He might only chip away one or two points in the polls from National. But the stronger he gets, the more likely National will have to deal with him if it wants to stay in Government after 2017.
That's a lot of head colds ahead for Key. He might want to revisit his ban on pseudoephedrine-based cold medications.

Opinion: Government's 'everything's fine' spin is wearing thin

As a modern democracy, we are so used to political spin that it can be hard to see straight at times
10 March, 2016

Successive governments have certainly spun all sorts of negative news, and there’s no doubt they all engage in it, but I would argue the current government takes it to a new and almighty art form.

For some ministers it seems to roll off the tongue, such as many of those who have been telling us for a long time that everything in Christchurch is ticking along nicely. 

Somehow, to the rest of New Zealand these ministers are able to explain away the fact that five years after a set of deadly earthquakes, it is normal to have the central city still resemble a car park and hundreds of people living in garages, on couches and in cracked and damaged homes.

Just recently the same people tried to pull our legs by telling us that the amount of mental health funding for the traumatised of Christchurch was perfectly enough. This despite the fact it was less than any other district in the country – none of which have been recently ravaged by natural disasters.

Apparently, on Valentine’s Day, minister of heath Jonathan Coleman had a brainwave in light of another serious quake: “I was sitting up in Auckland and thought, this is going to be big in terms of the health sector,” he told Stuff.

No kidding. But can I suggest instead what I think happened instead: the inequity of mental health funding in Christchurch being unable to service enough of that population, and particularly its poor little kiddies, caused a public outcry, which prompted a rethink, which prompted $16 million extra to service a desperate need.

The Valentine’s Day earthquake simply provided cover for this political expediency.

In a similar vein, we have been constantly told to “calm our farms” about, well, farms, as many struggle to operate in a flooded global marketplace.

Every time the dairy sector receives more bad news, the Deputy PM is wheeled in to reassure us that all is OK, and that in the “broader context”, all is well.
Never mind that the “broader context” in New Zealand is an economy very reliant on the prosperity of dairy farmers.

Today, to National Radio, Bill English has had to concur that a set of extremely scary economic indicators do actually have a basis in reality.

Yes, Fonterra is about to cut farmers incomes by $400 million due to falling global prices.

Dairy shipments have indeed fallen 13 per cent in the last quarter. OK, farm prices could fall by as much as 40 per cent by 2018.

Sure, farm debt has reached $38 billion, defaults on loans have increased by almost 50 per cent, there are as many as a dozen farmer suicides each year and thought to be rising, and huge numbers of farms have been put up for sale.

But where mere mortals might have started hyperventilating at this kind of picture, Mr English took a much more sanguine view.

"The indications are it will have some impact, but it won't have such a big impact on the broader economy as it does on the industry itself," he told the state broadcaster.

This seems a rather rosy-hued view of the situation, to put it mildly.

While it is true that the Government can’t do much about global markets, and the saturation thereof, there are things it can do here that would, say, more actively promote diversification, actively disincentivise more production and/or intensification, and work more closely with Fonterra and the banks to ensure the country’s investment in the sector isn’t unnecessarily squandered.

The best minds of the country could be called upon to come up with answers to the challenges ahead.
At the very least, a more honest conversation, without the endless smoothing over the very jagged reality of dairy farming in the current climate would be a great start, instead of the endless spin, spin, spin we’re more used to.

1 comment:

  1. Awesome writing.. perfect 'wedge week' and time to 'share' too!