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TVNZ has commissioned a poll by UMR of 1,000 Australians and 1,000 New Zealanders on whether New Zealand should become the 7th state of Australia. It found about 40% of respondents thought the idea was worth debating, but that 71% of New Zealanders and 52% of Australians opposed the idea.

The poll found 37% of New Zealanders believed the economy would be better off if New Zealand was the 7th state, while 27% believed it would be worse off and 25% said it made no difference.

A net 10% of New Zealanders believed the economy would be better off, while a net negative 12% of Australians believed their economy would be better off. The poll found 32% of Australians believed the economy would be worse off, while only 20% believed it would be better off.

The full results of the survey are here on TVNZ’s website.

My view

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Here are my Top 10 links from around the Internet at 10 to 2. I welcome your additions and comments below or please send suggestions for Monday’s Top 10 at 10 to bernard.hickey@interest.co.nz We try to absorb everyone’s workflow energy…

1. End of empire – The Southland Times reports that New Zealand Resorts Ltd, one of the companies in Ross Wensley’s Queenstown property ‘empire’, has been placed into liquidation.  It owns The Club development.

Mr Wensley’s developments have been hit hard by the credit crunch and a drop in apartment prices.

Last year Mr Wensley travelled to the United Kingdom to chase money owed by people who had bought apartments at the Marina Baches complex in Queenstown, leaving his company $23 million out of pocket.

2. Map of doom – Check out this county-by-county interactive chart of mortgage delinquency rates in the United States. It’s from the New York Federal Reserve. If you have any doubts about the scale of the disaster unfolding in the US then you need to look at this. Most of the West Coast, South West and South East have delinquency rates north of 10%.

3. Damaged credibility – Ron Hera makes the case at Seeking Alpha for eventual hyper-inflation in America and the destruction of the US dollar. There have been plenty of doomsayers predicting this, but so far the US dollar hasn’t collapsed and demand for US Treasuries remains strong, partly because all the money printed is sitting idle in Federal Reserve accounts. Hera reckons it’s all about credibility in the long run, rather than financial market confidence now. Eventually, the money printing will kill the US dollar, he says. It’s a long read but well worth it. HT Troy Barsten via email.

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Here are a selection of current stories from agridata.co.nz

Farming confronting technical conundrums

New Zealand’s traditional pasture-based farming system faces a conundrum, a leading scientist has warned. Pastoral genomics scientist Michael Dunbier said we were no longer the world’s lowest-cost food producer, our pastoral system was a major contributor of greenhouse gases, and customers demanded proof that slogans such as clean and green had some validity reports the ODT.

The reality was the our farming systems were contributing methane and nitrous oxide into the atmosphere and nitrate pollution of the soil and waterways. “They are not satisfied with slogans such as free-range or pasture-fed. We need to look carefully at our systems overall,” he said. In addition, resources such as phosphate were being depleted and questions were being asked about the efficiency and sustainability of fertiliser use in general.

Read the rest of this entry »

Processors tip a late flurry of lambs

Meat companies are bracing themselves for a late flurry of lambs as favourable growing conditions over most of the country create a grass market. Processing plants have been working short days because of the slow flow of prime lambs, but Silver Fern Farms chief executive Keith Cooper was confident the forecast number of lambs available for slaughter would be reached reports the ODT.

He said the abundant grass was affecting the flow of lambs from both store suppliers and finishers. There had been a noticeable increase in kill numbers in the past week, he said, and as autumn and winter drew near, farmers would be keen to quit their stock.”We do know stock will come over a period of time, but the risk associated with that is the influx of stock will not be in sync with markeplace requirements. It creates a production-driven model.”

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Farmers living on the edge

A team from AgResearch, led by Dr Neels Botha, reported “shocking” levels of stress after interviews with 60 North Island farmers. “We fear there could be quite a bit of depression in the farming community in the coming years,” said Botha. The 2007 study involved farmers in the Manawatu, Taupo and Rotorua areas, who were all facing new policies from regional authorities reports The NZ Herald.

“In our conversations it became clear that these people are concerned and stressed about potential regulation and changes in policy,” Botha said. Farmers worried for their livelihood experienced shock, denial, anger and fear, he said, which could lead to drinking, increasing isolation and aggression. Unchecked, it could also lead to depression and, in a worst-case scenario, suicide.

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For up-to-date schedule and saleyard prices, see
- Bulls
- Steers
- Lamb
- Wool
- Dairy cows
- Stags

Kiwibank has announced plans to raise up to NZ$150 million of tier 1 capital through a perpetual callable non-cumulative preference share issue opening in early April. It has not set an interest rate yet.

The preference share issue will be similar to tier 1 issues by other major banks in early 2008 when they wanted to raise tier 1 capital to help support lending growth. This avoids Kiwibank’s parent NZ Post asking for a pure equity capital injection from the government at a time when the government is very reluctant to spend more.

Kiwibank was careful to point out the preference shares did not include voting rights or the ability to convert into full ownership at a later date, which would have been a privatisation through the back-door.

Here is the full statement below

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Watch on our video page here.


Watch on YouTube here.

Bernard Hickey delivers an Investing Report in association with BNZ, including a look at who will pay when the global game of ‘Pass the Debt Parcel’ finally ends.

Through 2008 and 2009 governments around the developed world effectively took defaulting debt off the hands of private companies and individuals such as banks and some large companies, and put it on the balance sheet of governments. That seemed like a clever strategy at the time as it avoided ‘Financial Armageddon’, but all it has done is postpone the eventual repayment of the debt and in some cases increase the eventual cost.

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Watch on our video page here.

Watch on YouTube here.

Bernard Hickey delivers an economic weather report in association with BNZ that looks at the ‘new neutral’ for the Reserve Bank’s Official Cash Rate (OCR) ahead of its March Monetary Policy Statement and OCR announcement this coming Thursday.

Economists say the Reserve Bank will not have to lift the OCR as high as in previous recoveries because of new regulations and a change in the funding costs for banks. ASB has forecast the ‘new neutral’ for the OCR is likely to be around 5%, down around 1.25% to 1.5% from the previous ‘neutral’. The OCR has averaged 6% since it was set up in 1999.

Bank funding costs are now around 1.5% higher because it’s more expensive for them to raise money on international markets and they’re having to compete much harder on local term deposit markets. New Reserve Bank liquidity rules are intensifying this search for longer term and more stable funding, but it is helping to increase these funding costs.

This all means that longer term interest rates for fixed mortgages and term deposits are likely to be higher than at the equivalent points in previous cycles relative to the OCR. However, the net effect is for similar longer term rates in absolute terms. The one wrinkle is that variable mortgage rates and short term deposit rates are likely to be relatively lower than longer term fixed rate mortgages and deposits than at previous points in the economic cycle.

In other words, the yield curve is now sloping upwards rather than downwards. That in turn is likely to give the Reserve Bank more traction whenever it tries to slow and speed up the economy because more borrowers will choose variable rates.