Wednesday's Top 10 with NZ Mint: Starbucks, Google, Amazon grilled over 'legally, but immorally' low tax bills; Ayn Rand and the battle between 'makers' and 'takers'; 'How the shareholder value cult failed'; Chocolate shortage?; Dilbert

Here's my Top 10 links from around the Internet at midday in association with NZ Mint.

As always, we welcome your additions in the comments below or via email

See all previous Top 10s here.

My must read is #4 on management theory and the cult of shareholder value.

1. 'Legal but immoral' - Starbucks, Amazon and Google faced up to a grilling by a British parliamentary committee this week over their low tax payments.

This will increasingly become a theme of the next few years.

Cash-strapped governments will pressure multi-nationals using tax havens and 'aggressive' tax management techniques to pay their fair share on their territory.

If they don't, the regulatory harrassment will intensify. Germany is about to force Google to pay newspapers for publishing news snippets in their search results.

At some point consumers and workers in these countries (and companies) will also rebel.

Tax is now firmly on the agenda for corporate responsibility. It's a question every employee should ask any employer: Are you paying your fair share of corporate tax?

Here's the Telegraph with the juiciest exchanges:

The US companies were branded a disgrace by MPs who uncovered information about Starbucks’ “sweetheart deal” with Dutch tax authorities and attacked Amazon in the face of revelations about a $252m (£142m) French tax probe.

The fiery exchange, led by Public Accounts Committee chairman Margaret Hodge, saw all three companies accused of siphoning profits away from Britain by using a complex web of accounting strategies that were cynical and “unjust”. “We are not accusing you of being illegal,” said Mrs Hodge, “we are accusing you of being immoral.”

MPs also expressed shock at revelations that Starbucks had signed a secret deal in the Netherlands – where it has its European headquaters – to pay a discount rate of corporation tax.

2. Meatless Monday - Further to my link on the 'de-growth' idea from yesterday, here's news that Los Angeles is promoting 'Meat Free Monday' as a way to reduce obesity, cut carbon emissions and improve freshwater use.

3. A referendum on Ayn Rand - Bloomberg reports the election result may well have been the Republicans' referendum on their adherence to the (in)famous ideas of arch-libertarian Ayn Rand.

Romney’s running mate, Wisconsin Representative Paul Ryan, has built his political philosophy on Rand’s work; for years, he gave away copies of her novels as Christmas presents and made them required reading for his staffers. His belief that the U.S. is increasingly divided between “makers” and “takers” informs his policy positions on everything from Medicaid to food stamps.

Ryan’s language echoes Rand’s, and it’s worth remembering how her work came to occupy such a vaunted position in modern Republican thought.

In her 1957 novel, “Atlas Shrugged,” Rand advanced a clear distinction between virtuous “producers” and unethical “looters” and “moochers.” In Rand’s view, the stability of American society was threatened by the non-productive, who used altruism to stake a claim on the wealth generated by producers. In the novel, the moochers have become so powerful that the producers are no longer willing to work on their behalf. Facing oppressive regulation and taxation, the producers go “on strike,” retreating to a secret hideaway in Colorado. Without them, society begins to collapse.

As an alternative to this dark future, Rand proposed objectivism, her own philosophy of limited government, rationality and ethical selfishness. Only absolute laissez-faire capitalism, she argued, would give producers the freedom to work to their full potential. Along the way, the economy would thrive, but for Rand that wasn’t the point. What mattered was that individuals could lead lives of independence and integrity, even if they contributed nothing to the common good.

Among the many ironies of Ryan’s attraction to Rand is that “Atlas Shrugged” depicted politicians as among the worst moochers of them all, followed closely by their business allies. Another is that religious readers were once among Rand’s fiercest critics. Not only did they reject her atheism, but they were troubled by the divisive language of her work. It was one thing to celebrate the winners in capitalist society; it was another to attack the losers and blame them for all social ills. Rand claimed that selfishness was a virtue and altruism a vice.

Yet today, even politicians who claim a deep religious faith seem little troubled by these concerns. Rand’s division of Americans into moochers and producers, dependents and independents, is no longer controversial -- it reflects conventional wisdom in the Republican Party. This election may well determine if that philosophy can withstand the scrutiny of American voters.

4. 'Management theory was hijacked in the 1980s' - Here's Simon Caulkin writing at the Guardian about the how the shareholder value movement from the 1980s (quite closely linked to the Rand-ian revolution talked about above) is killing capitalism from within.

We know what makes companies prosper in the long term. They manage themselves as whole systems, look after their people, use targets and incentives with extreme caution, keep pay differentials narrow (we really are in this together) and treat profits as the score rather than the game. And it's a given that in the long term companies can't thrive unless they have society's interests at heart along with their own.

So why do so many boards and managers, supported by politicians, systematically do the opposite – run companies as top-down dictatorships, pursue growth by merger, destroy teamwork with runaway incentives, attack employment rights and conditions, outsource customer service, treat their stakeholders as resources to be exploited, and refuse wider responsibilities to society?

The answer is that management in the 1980s was subject to an ideological hijack by Chicago economics that put at the heart of governance a reductive "economic man" view of human nature needing to be bribed or whipped to do their exclusive job of maximising shareholder returns. Embedded in the codes, these assumptions now have the status of unchallenged truths.

The consequences of the hijack have been momentous. The first was to align managers' interests not with their own organisations but with financial outsiders – shareholders. That triggered a senior management pay explosion that continues to this day. The second was that managers abandoned their previous policy of retaining and reinvesting profits in favour of large dividend and share buyback payouts to shareholders.

5. Chocolate shortage? - This would worry me. How would we all exist without Whittakers' Dark Ghana chocolate to get through the day?

Here's Bloomberg with good look at the supply/demand outlook for the magic beans.

Cocoa demand will exceed production by 101,000 tons this season, Macquarie Group Ltd. estimated in September. Rabobank International predicts a 122,000-ton shortfall. Global output will drop 2.9 percent to 3.85 million tons, led by smaller harvests in Ivory Coast, Ghana, Indonesia and Nigeria, Macquarie says. The four nations produce 74 percent of the world’s beans.

The shortages will be among the topics analyzed by the International Cocoa Organization at its first-ever summit in Abidjan, Ivory Coast, on Nov. 19.

6. How Economists got inequality wrong - Harvard's Jonathan Schlefer writes about the assumptions many economists have about wage equality and the 'market''s ability to set wages and avoid unemployment.

Since in the real world managers rarely have any sure idea how to use more capital and less labor, or vice versa, markets cannot determine how much workers earn. An old union joke (or anyway, union organizer's joke) underlines this point. Question: "What's the value of an assembly-line worker?" Answer: "It's the steering wheel." Everyone from the executive suite to the shop floor contributes as a team to production. Markets may determine what cars sell for but cannot tell how much of that value each team member contributes. Somehow, minimum wages, personnel departments, union bargaining — social custom, in other words — decide earnings.

As long as economists stick to their assumption about production, it will imply that markets determine wages, and do so most efficiently. Progressive economists will recognize that income inequality can harm economies — in their efforts to overcome it, clueless Americans borrowed extravagantly against supposed home values and helped cause the financial crisis. But given their fanciful assumption, these economists will continue to balk at direct and practical remedies for inequality such as negotiating more equitable wage structures. This assumption will continue to tie economic thinking in knots.

7. Controlling NZ's brand in China - Andrea Fox at Stuff follows up in this report on problems with Chinese importers of apparently New Zealand-made baby formula.

Dairy processors are calling for urgent industry-government combined action to stop the New Zealand dairy brand being damaged by pretenders blending and packaging infant formula and dairy products claiming to be Kiwi-made.

Canterbury dairy manufacturer and exporter Synlait said it is aware of at least 35 "front company" brands that have been created claiming to be New Zealand manufactured.

Open Country Dairy chairman Laurie Margrain said his export company has been becoming increasingly concerned over the past year with the "proliferation" of companies blending, packaging and claiming to be New Zealand product for export.

8. The BRICs miracle is over - Here's Ambrose with another stunner from the Telegraph.

The catch-up boom in China, India, Brazil is largely over and will be followed by a drastic slowdown over the next decade, according to a grim report by America’s top forecasting body.

Europe's prognosis is even worse, with France trapped in depression with near zero growth as far as 2025 and Britain struggling to raise its speed limit to 1pc over the next three Parliaments.

The US Conference Board’s global economic outlook calls into question the "BRICs" miracle (Brazil, Russia, India, China), arguing that the low-hanging fruit from cheap labour and imported technology has already been picked.

China’s double-digit expansion rates will soon be a romantic memory. Growth will fall to 6.9pc next year, then to 5.5pc from 2014-2018, and 3.7pc from 2019-2025 as the aging crisis hits and investment returns go into "rapid decline".

9. Too Big To Fail bank lobbyists win again -America has delayed introducing the higher capital requirements (which means less leverage and bank profits) set under Basel III.

And now Reuters reports the Europeans are reluctant to impose higher capital requirements on their shaky juggernauts.

10. Totally Jon Stewart on the 'Spyfall' of David Petraeus.


We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.


Regulators and politicians lecturing others on morality -- priceless.

So they seem to be getting down to the level of some Ryandies then.

Unbelievable. Politicians grilling corporates about their own tax system. What do morals have to do with a tax system? Either you are complying with the requirements or not. Who votes these idiots in?

Interesting thought from Marc Faber along similar lines to Ayn Rand:
In order to exercise control over the population, governments throughout history have made people dependent on government largess.
A government can make an increasing number of people dependent on its generosity by providing more and more benefits to a larger and larger share of the population. Because of these “freebies,” people will go along with the government’s enlargement as a percent of the economy.
The masses believe in their free lunch and because the business elite knows it can profit from the growth in government. However, there comes a point at which the “nanny state” becomes unviable. Raising taxes to pay for the freebies become problematic. Fortunately for the governments, they have a Treasury and/or a central bank that can print money and monetize the government’s debts.

I wouldnt have put Marc Faber in Ayn Rand's loopy camp, but there you are....

Didn't she end up on Welfare?

Yep, she tried to keep it secret though.

It would seem that for most reality is too tough to confront

#6 - there is another interesting statement in that article when read in conjuction with #3 and #4:
In the 1990s, a whole subfield of economics reached "virtually unanimous agreement," as a survey in the Journal of Economic Perspectives noted, that in the context of technological change, markets themselves inevitably drove U.S. income inequality.  As a result, we have come to rely on progressive taxes and social programs to soften income inequality.
So, can we deduce then that - Rand's fiction which spurned the academic posturing and neoliberal machinations of the Chicago School - is at the heart of the recent period of growth in transfer payments?
In other words, objectivism produced more 'looters' and 'moochers' - and diminished the supply of 'virtuous producers'?
Looters being the unproportionately paid senior executives of industry and finance - have turned the virtuous producers in to moochers (i.e. working welfare recipients).


Trickle down in the dumps: The unintended consequences of Randian fiction in practice.
It was an era where fads were so readily adopted by the growingconsumerist culture - and of course fiction was so very "in" as Hollywood entered the highest office :-).

#7. Strange inarticulate article

  • (a) Dairy processors are calling for urgent industry-government combined action to stop the New Zealand dairy brand being damaged by pretenders blending and packaging infant formula and dairy products claiming to be Kiwi-made
  • (b) Open Country Dairy chairman Laurie Margrain said his export company has been becoming increasingly concerned over the past year with the "proliferation" of companies blending, packaging and claiming to be New Zealand product for export.
  • (c) Fonterra, makes up nearly 90 per cent of the New Zealand dairy industry, and sells milk powder "domestically to companies which blend infant formula and other product for export to China".
  • (d) Synlait and Open Country said they only sold milk powder to overseas manufacturers.
  • (e) The government ministry did not respond to calls
  • (f) Fonterra had no immediate comment.

Are the knock-offs occurring in NZ or in China. Article doesnt say. Seems they are happening in NZ. So who is doing the knock-offs? The article suggests Fonterra is complicit in it.
Synlait and Open Country only sell to "o/s manufacturers". What? Milk Powder Manufacturers?, or Food Manufacturers who use it as a food ingredient.

I would think China.  We I assume simply sell them the milk solids.  Though I wouldnt put it past a chinese manufacturer to import  some formula and "blend it" with home grown produce and sell it as NZ.

have heard there is a brisk market in used/empty cans... - who need photoshop

iconoclast This might answer some of your queries
Ioland's website says the company is based in the Chinese city of Ningbo but has its formula manufactured by Sutton Group, an Auckland-based contract manufacturer.
Attempts to contact Ioland by phone and email were unsuccessful.
James Shortall of Sutton Group would not confirm or deny whether the firm made Ioland products.
Some formula was being rejected by Chinese authorities because of different testing regimes in China and New Zealand, and Sutton Group was confident babies would be safe consuming all the products it made, Shortall said.
Chris Claridge, managing director of Christchurch-based infant formula exporter Carrickmore Nutrition, said some of the product rejections in China were "questionable", but the coverage of the insufficient iodine levels in Ioland products was a concern as it tarnished all New Zealand infant formula brands.
A large number of Chinese baby formula companies were creating "false fronts" by registering in New Zealand, giving the impression they were Kiwi firms, Claridge said.
Michael Barnett, independent chairman of the newly formed New Zealand Infant Formula Exporters Association, with 10 founding members, said the group was working to set standards for exporters, while establishing a "line of communication" with Chinese authorities.
A spokeswoman for the Ministry of Primary Industries said its figures for non-compliant food exports to China did not match some of the figures in the Chinese media reports used in this story, but the ministry was concerned about any New Zealand-made products being denied entry to overseas markets.

I have been thinking that the shareholding value movement could also be dysfunctional because of the financial system artificially creating excess credit. My idea is only half formed. It goes something like this. Companies have not been taken over by those that are more profitable and efficient but by those with access to more credit leverage, i.e. financial instruments that have artificially created more money.  
This has led to companies replacing their efficient management team who had indepth knowledge of their production processes and customers with managers who are financiers. Worse because this process artificially boosts companies values these new managers can and do demand higher salaries. The companies respond by short term profit maximising measures that in the long term undermine the company, they attack their workers and exploit their customers. The managers existence and enormous salaries ensure there is no reversal of this process. 

Some good thinking going on.  There are consequences to having the financial economy eclipse the real economy instead of enabling it (as finance can do).
Companies under heavy debt load get warped and refocused away from their core business onto the cashflow problems of the debt.
I am not so sure this feeds a high salary process into management.  The people sucking the money are financiers not managers.  I have seen plenty of IT companies where almost all management go down with the ship through this process.

Thanks for the reply Ralph and you guys underneath. I was thinking that excess credit might be artificially increasing companies values, at least in the short term. Managers use these higher values to demand higher salaries. As I said I'm not sure if I have thought this idea all the way through. It has its basis in Steve Keen's analysis and trying to explain the huge divergance in salaries between managers, CEO's etc, and workers.
Also counterfactually Germany has a different business model that doesn't allow much Anglosaxon style leveraged buyouts and they have kept there specialised export focused industries and have less gap between managers and workers salaries. Also here in NZ Tait electronics shares are held in a trust that only allows sale to charities and it is growing strongly.

I guess to some degree it depends on who qualifies as a "manager".  The middle class in the western world is slowly disappearing and I would suggest middle managers haven't done well in the last ten years.  But if managers means CEO's, company directors and that very small gorup then it makes more sense.
Ulitmately I trace it back the huge pay disparty at the top of the economic heap to a moral failure.

Yep, Bain capital and the myrid of equiv's comes to mind....I think the same was done here with Repco?  It was bought out by a private equity fiorm and stripped of assets and loaded with debt, assuming because there was no competition that it would work. I think it was then onsold  by the private equity firm and along came super sheap to compete...



"stripped of assets and loaded with debt" does that not sound like NZ inc ?

#6 - the take-down or climb-down may work for the materials-bashing industries, but try applying it to activities where the individual's output is closely tied to the number and state of their neurons:
- creative arts - visual, literature, film, MSM, bloggerising, not to mention thee-ate-her or the one where the fat ladies sing.  Does NOT include the 'repeaters' who infest most newspapers.
- IT - coding, implementing, architecting, soothing, consoling, not to mention building the consultants' wing for that new shiny Tier 1 product
- and less neuronic but none the less Muscular - Professional Sport!
The common thread is that in every last one of these types of economic activity, the output of/contribution to goals is fairly closely tied to individual ability however measured, and this completely upends the production-line example so glibly advanced in the clip.  The evidence on the ground of zero to miniscule Union penetration of said activities is another testament to this tie.
Common Taters are of course invited to extend/laugh at/debunk this list.

To me the problem highlighted by item 1 is that if you have to compete against these people the fact that they pay little or no tax is a major advantage. Basically the tax component of the business can be more than any notional money you might make. If they do not have to pay any tax and you do then you are at a major disadvantage in the market place. The fact that they are not paying is one thing, but what is worse is that they drive out those that do because they can't avoid it. Or do not want to avoid it. So the big get bigger and markets become less and less competitive.
Legally soon we will only be able to buy music from 2-3 suppliers - at any scale- 80% plus of the market. The same will go for books maybe soon most things- this is not free market competition, this is something else

and yet we encourage foreign investment.  So our stupids take the cash and run leaving real NZ businesses to compete against those not paying tax.
Interesting the comments though....just how long will such activity survive...
Remember cadbury's cock up, 'palm oil is good stuff"....we as consumers should vote with our feet.

Plan B: absolutely correct. one could cynically call it competition. How does a taxable $1 (pre-tax) compete with a tax-free $1 (un-taxed). Simple. It can't. Never will. The very same game is played out in the auckland housing market, every day, every month.

Sometimes I wonder if it were wise to let China into the WTO whilst still be allowed to run a merchantilist trade policy.

Friend in Asia tells me that NZ banks are about to offer huge numbers of NZ dairy farms for sale, anyone else heard anything? A NZ Real estate friend told me things are getting despirate with many farms unable to cover costs before drawings and interest. He thinks that there are over 350 larger dairy farms for sale and no buyers. Will Key allow rural NZ to be taken over by the Chinese to save the banks?
 I searched trade me and got 390 farms over 100 hectares
 Me real estate friend told me sheep farms are close behind as prices have collapsed. he expects sheep farms to be impossible to sell as there are no profits.

I'd assume that the banks cant sell them unless the OIO allows it?
It must be me but if NZer farmers cant make money (yet have decades if not generations of experience at it) at this debt level / farm price then how the hell will a foreign investor?
I really dont understand....
If you have wads of USD you want to get out of China (say) sure....but getting it back when you sell? or getting a return that makes sense?  So dodgy deals maybe....
NB Sheep farms can be sold, at maybe half what they are so called valued at today.....maybe less.

OIO threshold was raised significantly by National. Be surprised if any individual farm came near it. Agree hard to figure foreign rationale but we are assuming foreign owners are more astute than NZ business people. Greed, hubris and stupidity have no national borders.
Now if i won the lotto....I'd do a PDK...of course I'd have to do lotto.....LOL.
When you think its a huge piece of real estate and yet  what some houses in expensive suburbs are "worth" the mind boggles....
or maybe......
nice.....dont want the grapes mind....

Let them feel the pain for another year yet :-) is a fantastic resource as they don't take the old adds down. There are properties I have seen that have been for sale since 2007.

Oh Im not that serious.....
Of course the pain is mutual....if their prices drop a long way, say 75% then I'd expect my house value to do the same thing.
The real bugger is the rates....those wont drop 75% in fact they will go a lot higher....all that debt out there in council land....that really worries me.
Feel for those ppl of course...some shattered dreams in there.

Andrew, I've seen a few ads recently for the Patoka farms. And what has become of Graeme Hart's ones?

The balance not sold are listed on an individual basis (including mention of share milking arrangements).

Plenty of spam today so I might as well share it around. A useful piece by George Friedman where he continues his flip flop on Iran. Pretty pro American also and while I perhaps agree, some caution should be taken given he has been off the mark before.
Richard Duncan on China. Not spruiking his book this time.

GF's in la la land....I mean really....make believe stuff.
"But it is not clear how long Russia's energy power will last. It is built on the absence of significant energy in the rest of Europe. However, new technologies have made it likely that Europe will find energy resources that don't depend on Russia or third-party pipelines. If that happens, Russia's political and financial positions will weaken dramatically. Russia has a weakening hand, and it can't control the thing that weakens it: new technologies. "
that and other fantasy...
RD on the other hand seems far more switched on...

You might like this one on Denmark then. Yes Denmark is probably in a similar boat to us debt wise, but it seems they are spending it more wisely. Default on the debt and you still own the solar collection.

Sort of....I agree on the NET idea, every time I look at batteries for storage it makes no sense If I can "sell" my excess energy into the grid at a bit below retail (say 20cents v 23cents)  that to me makes it a win-win.  Selling it into the grid at say 53cents and the retail is 23cents makes no sense at all....tahts just a regressive tax.
The only thing that makes sense for storage is maybe to use something like a water filled trombe wall heated with hot water panels.

there might be some hope?
"If you want something to be dirt cheap ya godda use dirt"

yes....brilliant...however its cost might be best suited to the grid deploy rather than household...but thats OK.
Some of the best things are,
1) low cost
2) abundant non-rare/special materials.
Something to watch....
Now if I had some $s I'd be interested in that as an investment.

Mr Gates has beat you to it! :-(

One of the first comments is on the scarcity of Antimony, which appears to be justified. Although some of that is used in lead acid batteries.
You can only hope the the invention and invention process will lead to further breakthroughs.

Press release from NZ First:
New Zealand First says it has caught the Government “red handed” with a dodgy new system of fast tracking visas for members of a major Chinese airline’s frequent flier’s club – despite being warned that international criminals belong to these clubs.
Rt Hon Winston Peters raised the issue in Parliament, producing confidential Immigration New Zealand papers that show both the Minister and officials had met China Southern Airlines to discuss the proposal.
“This new plan simply means that visas are rubber stamped for Gold and Silver cardholders of China Southern Airline’s frequent flyer club. All the visa requirements are waived.
“It is interesting to note in the proposal that the most important feature for the airline’s clients is to avoid questions relating to financial backing and employment history.”
Mr Peters also produced an internal memo from the Intelligence, Risk and Integrity Division warning that China represents a ”huge set of risks” and suggesting that officials had not learned anything from a recent scandal over student visas.
“This memo also shows that China Southern Airlines compliance over flight passenger lists for checking has been patchy and but for political tolerance the company would have received significant fines.
“This is clearly an abuse of both New Zealand border controls and the visitor visa system and it is being driven directly from the Minister’s office.
“It is disgraceful for the Minister to confirm in Parliament today that he’s prepared to weaken our border security to simply attract a few more tourists.
“Immigration New Zealand is simply carrying out the will of a Government that allows just about anyone and anything into New Zealand. This alarming situation cannot continue,” says Mr Peters.

Sorry Winston but I don't care. If anyone is a criminal they will be arrested in due course.
For the salary tax payers give you I would have hoped you were doing something more useful than spending your time on this.

Ralph: Maybe you should care. While Gareth Vaughan carries the cudgels about the ease with which foreigners can use and abuse new zealands company registration system, there is total silence on the matter of turning a blind eye to the ease of opening bank accounts in nz, accomodating the flood of hot-money, without question as to it's origin, and provenance of that money, whether it is genuine tax-paid funds, and the person bringing it in is the legitimate owner.

I do not think so.
Firstly, we are not in any position to be the world's financial policeman.  Even if we wanted to be we do not have access to the chinese banking system to get that kind of information so any "regulations" would seem to be meaningless tokenism.
Secondly, you are connecting an entry visa to a flood of "hot money" (whatever that really means) without any evidence at all.
Thirdly, I see no reason why opening bank acounts should be hard, especially because of point one.
Generally speaking, I am not afraid of immigrants.

If the rules are different for Chinese compared to any other ethnic group, then we have some serious prostitution of NZ by the National Government going on.
Is it just coincidence that Chinese visa rules are being relaxed at the same time a very large number of dairy farms appear to be coming on to the market.  The increase in farms, especially large farms, being advertised in the rural press has being noticeable of late.

The Chinese government is eyeing a stake in New Zealand farmer-owned dairy company Fonterra's new sharemarket-listed fund, according to the Wall Street Journal.
The WSJ said China Investment Corp was "in talks" with Fonterra about potentially investing in the New Zealand dairy company's newly-launched shareholder fund.


I heard a while ago that the Chinese weren't too happy about the 15% maximum Relevant Interest in the Units.
Some suppliers reading the Stuff article may be persuaded to vote for the resolution going to the AGM re the minimum number of farmer elected directors.
In the NZ Dairy Exporter magazine (owned by NZX) Sir Henry is interviewed about shareholder criticism of his remaining on the Board.  Reading it, one can realise what a master of spin he is - gotta give him credit for that.  Ironically on the page beside the interview is an article on the letter sent to the Fonterra Board by more than 20 large (in relation to kg/ms supplied) shareholders calling for Sir Henry to stand down, basically so that John Wilson can have a perceived unfettered chance at running the Board. 
Do we have a situation in Fonterra where these large (in terms of voting power) shareholders will do their best to unseat John WIlson unless Sir Henry goes at the AGM??
The 'Exporter' doesn't have these articles on their website so I can't give you web links.

Can you give some common sense explanations for this unusual request?. It has the potential to taint the government. It smells.

The question is this. It is now established that $120 billion a year is flowing out of China, by both legitimate and illegitimate means. Simultaneously South China Airlines approaches a minister of the New Zealand Government to agree to and condone relaxed visa requirements for an elite group of Chinese citizens, presumably short stay visitor visas, not necessarily seeking immigration or residency. That is an odd request. The airline would hardly initiate that request of it's own volition. The initiative would come from the visa seekers themselves for a reason. In the absence of any explanation one would have to assume that normal visa requirements would trip them up. Should the minister agree to that request it poses the obvious proposition that money has changed hands. Grease. Ease the way forward. The offers (grease, corruption) could take many forms. Access to high level politburo members. Trade access. The simple fact is the request has been made. Can anyone think of any other airline in the world making approaches at the highest government level for dispensation?

There is a lot of ill gotten gain in China. The economy there is slowing and the elite fear a backlash over corruption and graft.
Just getting their loot out is all....same as the Russian oligarchs we welcome. Some nasty characters there.

Its known as money laundering...and yes we should be controlling what happens in NZ...And we have to....if you cant see that well what else is tehre to say....
Crims always look for the easy access and simply joining the frequent flyer club to bypass visa checks is trivial...and mindboggling that it was setup.
A bank account is a legal yes you should be able to prove without reasonable doubt that you are who you say you protects others if nothing else.
For instance its dead easy to open an account and then using stolen passwords from NZers accounts empty them and transfer teh money abroad...

Ralph either has great faith in our administration of checks and balances or is ignorant of what goes on in the world.
He should face up to the fact that there are 2.6 billion in China and India combined. Even the smallest proportion of crooks could easily swamp NZ with dirty money. Jonkey seems to think that this is OK, There is a video on Herald site which is worth the watch as it quote some chilling numbers from JK himself. Bet that few of these residents pay any tax in NZ on the money they bring in as income.

Yeah, we should stop them at the airport and say in a loud voice "Are you a chinese money launderer?"
They are sure to own up.

It is not hot money?
How come the legal amount that Chinese may take out is limited to I believe $US50k in a year , yet somehow they can come in with millions.
Then they are great gamblers and possibly won it at Sky City.

The simple answer Ralph, is to ask them to provide evidence of thier source of funds, a standard requirement these days.
If an entity wants to ship a few mil over here, to buy a property etc. Then let's see where it came from, given the official currency export requirements of China.
You are aware of the USD 50,000 limit, arn't you?
Or are you like the AU banks here, who don't actually give a crap.

In that mediteranean country grease, oops greece, the IMF gave the greasy government 2000 names of greeks who hold $$$ billions in numbered accounts, in countries somewhere to the north of grease, and the Government is now (finally) going to go through the TAX records of each of those names to see if their declared income over the past decade can substantiate the legitimacy of those funds. So, it's surprising what can be done. If it can be done after the money has gone, surely it's possible to do it at the other end of the transaction, as it arrives, for the local border patrol and immigration authorities to ask travellers and transferees who are bringing large wads of money into the country, to produce a tax clearance certificate from the country of origin. If they can't then the money should be held in a government suspense account until it is shipped back out, less of course a suitably large handling fee of (say) 10%, or alternatively they're given a choice of paying a 20% withholding tax to get it in. How fair is that?

I thought my view was pretty clear.
(a) I'm not afraid of immigrants.
(b) I don't think crooks are stupid enough to be honest about where their money comes from.
(c) I don't think a few waived visas is a top priority issue today.
Also, your argument is slightly contradictory.  If a "source of funds" is a standard requirement these days then what's your problem?  And if it's a regulatory requirement that solves the problem then how can any bank (whether Australian owned or otherwise) not give a crap?

You seem to think it is okay to overlook or override a few rules. What other rules do you, or have you, found an inconvenience?

That's a bit weak.
I didn't make the rules, I didn't change the rules and I didn't over ride the rules.  I just think Winston Peters could make better use of my tax payer dollars for the reasons stated above.
There are real problems in New Zealand today and whether some frequent flyer gets a Visa or not shouldn't be on the radar in my opinion.

It's official:
Immigration Minister Nathan Guy confirmed he had met China Southern Airlines in April this year. "Yes, there has been a deal struck with Immigration New Zealand and China Southern that is going to allow high net worth individuals to come into New Zealand"

"One of the key risks is imported criminality, but because this is not a recognised adverse outcome for Immigration NZ it seems to be ignored in visa decision making."
I guess it is also not recognised as an adverse outcome when imported by our own into the corridors of power?

Another 7.7 million reasons to keep Winston in there.
Ever since that Whanau Ora program was announced he's been adamant about the ridiculous idea that it was.  Yet there isn't a single other party in Parliament prepared to stand up and say it.

FFS he's retarded...
Spot the massive un-controlled illegal about banana republic.

Same thing happening in PNG. Australian govt, PNG govt and Aussie banks all turn a blind eye. And if you ask too many questions you could end up dead to boot. Aussie has always regarded PNG as its colonial property for its big companies to loot in concert with corrupt local politicians.
Yamo agrees with Koim’s statement that Australia has anti-money laundering obligations, saying it is very reasonable to request that Australian banks conduct due diligence on their customers.
This due diligence is made up of questions that Koim describes as a “means test”. The test requires banks to ask for tax returns, bank statements, income declarations, salary slips and other means of telling where the money has come from and whether it has been obtained by legitimate means.

"Sorry Winston but I don't care. If anyone is a criminal they will be arrested in due course."

Hmm.  Winston must have been holding on to the internal correspondence waiting for the day the Minister announced the new policy.  Interesting - must be a deliberate strategy in that.  Our very, very, very good friends the Americans will find this frequent flyer no-questions-asked program of interest.  Where's Wikileaks when you need them, eh?  Given its a tourism promotion initiative - must have been consulted on with the PM and his portfolio keepers.  One would also have expected MFAT to be consulted.  Reckon its a bit of a whole of government initiative.
Yep, sets a precedence.

MoM has a decidedly less rosy view of the US, with lotsa links too.  Puts the counter-argument to 'a good day at Home Deport' story somewheres in Interest today, despite my own happy memories of HD.....still have the complimentary Builder's Pencil Sharpener...

The map is not the territory
#8 Point 1 & 2 is that GDP is not reality and/but, just as we excoriate our Treasury's rosy prognostications, most forecasters get the future wildly wrong because they cannot ( do not) account for the unforeseen.
Point 3 - more importantly we live in two worlds: one where Maslow's hirarchy matters and the other (ours) where it doesn't. As long as people need safe water, shelter, food to eat therewill be economic activity plus. In the other world where those basic needs are met by two days of economic activity we will wring our hands and moan about economic growth but it probably doesn't matter.