Posts
Today
was the first time that anyone on public media has used the C-word
A
collapsing economy, falling commodity prices, local government debt
and a government that is determined to sell off strategic assets
while still amassing huge levels of debt: these stories epitomise the
true position of New Zealand today.
NZ:
"The economy is collapsing and (Finance Minister) Bill English
in July this year promised 20,000 - 30,000 new jobs a year."
Government
breaks jobs pledge, says CTU
6
September, 2012
The
president of the Council of Trade Unions says the Government has
broken a pledge to create more jobs.
New
Zealand Aluminium Smelters on Wednesday announced that a total of 100
jobs at its plant near Bluff in Southland are likely to be cut by
November, rather than over five years as it had previously planned.
Last
month state-owned Solid Energy made staffing cuts in Huntly and
suspended operations at its Spring Creek mine on the West Coast.
And
job losses are likely at Norske Skog which plans to halve production
at its Kawerau newsprint mill.
Council
of Trade Unions president Helen Kelly told Radio New Zealand's
Morning Report programme says the Government could do more to cushion
the economy from the global financial crisis.
"The
Government is a major player because it buys things, because it
employs people, because it owns things. It should have a plan using
all of those things to generate a jobs-led growth strategy.
"The
economy is collapsing and (Finance Minister) Bill English in July
this year promised 20,000 - 30,000 new jobs a year."
Labour
accuses Govt of forgetting need for jobs
The
Labour Party says the Government is so consumed by its plan to sell
off state-owned assets that it's forgetting about the need to create
jobs in the economy.
Labour
leader David Shearer says unless New Zealand Aluminium Smelters gets
itself into the black the Tiwai plant may have to close, which would
be tragic for Southland.
Falling
aluminium prices worldwide and high energy costs forced New Zealand
Aluminium Smelters to reduce output by 15% earlier this year. In the
last financial year, the Tiwai smelter lost $20 million.
Mr
Shearer says financial difficulties at the smelter also put a dent in
the Government's plan to sell shares in state-owned power company
Meridian.
The
smelter is Meridian's biggest customer, and if Tiwai Point succeeds
in its attempt to negotiate a lower electricity price, Mr Shearer
says, the power company's revenue - and eventual share price - will
fall.
Green
Party co-leader Russel Norman says New Zealand Aluminium Smelters'
parent company Rio Tinto could be using the announcement on
fast-tracking staff redundancies as a way of negotiating a cheaper
electricity deal.
Tiwai
plant secure, says PM
Prime
Minister John Key is confident the smelter will not close. He says
the job losses at Tiwai Point reflect current trading conditions and
lower international aluminium prices.
"There
are a number of ways in which the company might be be able to
accommodate the changes. Some of those are changes to its overall
cost structure itself, and that's partly what the company is doing
here."
Mr
Key says the company's electricity negotiations with Meridian are
sewn up for the next three years.
Water
hui organisers untroubled at Crown's absence
6
September, 2012
The
spokesperson for the Maori King says the Prime Minister was never
going to be invited to a national hui on water rights.
The
Maori King, Tuheitia, will host the meeting at Turangawaewae marae in
Ngaruawahia on 13 September for Maori to discuss water rights
following a Waitangi Tribunal report on the matter.
Prime
Minister John Key said on Wednesday the Crown won't be represented at
the hui and no National Maori MPs will be allowed to go.
The
King's spokesperson and National Summit chairman Tukoroirangi Morgan
says the Prime Minister's attendance was never even considered when
the idea of the national hui was being mooted.
He
told Radio New Zealand's Morning Report programme it was immaterial
and inconsequential that Crown representatives won't be there....
Commodity
producers suffer as prices fall
6
September, 2012
Companies
and workers in the raw commodity sector are pessimistic about the
future as a cooling global economy forces job cuts and streamlines
production.
In
the latest job losses, New Zealand Aluminium Smelters, owned by Rio
Tinto, announced cuts at its plant near Bluff in Southland on
Wednesday, saying they would take effect by November this year.
The
cuts were to have occurred over five years through natural attrition,
but are now being fast-tracked. Thirty-five jobs have been lost since
August last year and a further 65 are expected to go.
The
price of aluminium is the lowest it has been since the depths of the
global financial crisis, contributing to a $20 million loss at the
Tiwai Point aluminium smelter at Bluff, despite its reputation as one
of the most efficient in the world.
These
difficulties are not confined to the aluminium industry, as the price
of copper steel nickel and coal all slide.
Last
month state-owned miner Solid Energy announced job cuts and suspended
operations at it Spring Creek mine. Chief executive Don Elder said
coal prices had taken "a massive dive off a cliff" in early
July "that virtually nobody was expecting".
Norske
Skogalsoplans to halve production at its newsprint mill in Kawerau.
Whakatane mayor Tony Bonne is involved in projects to promote the
Eastern Bay of Plenty which he hopes will counter the setback.....
Council
debt 'hidden' by internal borrowing
6
September, 2012
Local
government analyst Larry Mitchell says many councils are hiding the
true extent of their debt by internal borrowing.
Mr
Mitchell publishes league tables rating the financial performance of
councils.
He
says councils used to have sinking funds they could not touch which
were to be used to to replace infrastructure.
But
he says they can now raid those reserves to finance other needs and
have done so with a vengeance.
Mr
Mitchell says council balance sheets around the country show debt
ceilings have been reached and there is no capacity to borrow.
He
says the Audit Office should be insisting councils show their
internal borrowings in their annual reports and plans.
I believe the fall in commodity prices is only a secondary reason for planned redundancies. This isn't about VIABILITY, as much as SALEABILITY, of Solid Energy... http://fmacskasy.wordpress.com/2012/09/05/the-real-cause-for-solid-energy-mass-redundancies/
ReplyDeleteMy own personal feeling is that there are different things going on.
ReplyDeleteIn addition to the asset sales project and the obvious shennanigans there is the undeniable global situation where the Chinsse economy is slowing down and the world is moving into a period of deleveraging and deflationary depression.
The outlook for a sale does not look good in this context hence the back room deals and attempts to make Solid Energy more saleable.
Your scepticism is wellfounded. Thanks for your excellent research and article