logo
A prescription for dismay, disbelief

A prescription for dismay, disbelief

Everything is going up.
The costs of butter, milk and cheese, fruit and vegetables, rents, rates and electricity are rising, some of them faster than belief. Annual inflation has lifted to 2.7%, according to the consumer price index.
There can be no doubt New Zealanders are grappling with the escalating cost of living. The government says it is all about cutting costs for Kiwis, something we have seen with its policies and its energetic drive to cut the public service and put thousands of skilled workers out of jobs.
However, despite its much-vaunted approach to trim things, some of which didn't need much pruning, the coalition is still releasing big pots of money for projects which have its favour and tickle its fancy, or the fancies of its cadres.
As a consequence of that favouritism, something else is going up. Advice be blowed, let's have a third medical school in New Zealand at a time when the government has been doing everything it can to minimise the importance of, and squeeze the life out of, Dunedin's desperately needed new hospital.
Until Monday afternoon's announcement that the University of Waikato's persistent and somewhat personal bid for a medical school had been approved, there had been perhaps a hope that surely common sense might prevail and the government wouldn't, after all, go along with the proposal.
Such sanguine thinking, however, was always held in check by the knowledge that this government has already shown several times that logic, facts and evidence to the contrary will not stop it supporting something which it is hell-bent on delivering for its followers.
At the heart of Waikato's proposal was something few could disagree with — that the country urgently needs to do something about the state and delivery of rural healthcare. Access to timely and effective medical services for those communities has been a big concern for many years, one which has only continued to grow.
But does it take a spanking new medical school costing several hundred million dollars, and growing, to ensure rural targets will be met? No.
There is no reason why the medical schools at the University of Otago and the University of Auckland could not have been funded to train more doctors at a significantly lower cost than launching a new school, a point they clearly made to the government.
Even the Treasury advised against the wisdom of proceeding with this pet project, as did the Ministry of Education and the Tertiary Education Commission, warning that the expense, the duplication and the logistical challenges raised red flags for them. In spite of that, the government and Waikato University forged on regardless.
Health Minister Simeon Brown announced a development with costs which have changed significantly from those pledged by the National Party before the last election.
Then, National said it would provide $280 million for the new school and the university would need to find $100m. Now, the government will disburse $82.85m towards it, and Waikato will have to stump up more than $150m. The final cost, of course, is bound to be higher than current expectations.
A lot has been written about links between National and the university and its vice-chancellor Neil Quigley, and also with consultant Steven Joyce, a former National government minister. Without getting too deeply into that, we are concerned that this is little more than an overt example of pork-barrel politics.
We are also troubled and disappointed, yet again, at the lack of transparency around the government's decision-making, particularly over health matters. Whenever it makes pronouncements which it knows are likely to be contentious, the accompanying documents seem to take ages to surface — if they ever do. That in itself probably speaks volumes about the consideration of the evidence.
It's difficult to stay calm and reasoned and attempt to rise above the feeling this government cares not a jot for the South.
When one sees what a charmed life this Waikato proposal has apparently had through the coalition's approval process, and compare that with the absolute shambles it has promulgated with the new Dunedin hospital and its obvious level of disinterest in the project, it is hard to remain philosophical.
Once again, this government has let us down.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Te Pāti Māori, Greens outraged at 'marginalising' passport changes
Te Pāti Māori, Greens outraged at 'marginalising' passport changes

1News

time34 minutes ago

  • 1News

Te Pāti Māori, Greens outraged at 'marginalising' passport changes

Te Pāti Māori says the Government's changes to passports are an attempt to whitewash the national identity. The Government confirmed on Friday that New Zealand's passport is being redesigned to place the English words above the te reo Māori text. The new look won't start being rolled out until the end of 2027. Since 2021, passports have had "Uruwhenua Aotearoa" printed in silver directly above New Zealand Passport. Internal Affairs Minister Brooke van Velden said the positioning of text on passports will change to reflect the Government's commitment to using English first. She said the redesign, which would be unveiled later this year, was being done as part of a scheduled security upgrade, ensuring no additional cost to passport holders. ADVERTISEMENT Te Pāti Māori co-leader Debbie Ngarewa-Packer said the change diminishes the visibility of tangata whenua. "Our passport is not just a travel document, it's a statement of who we are as a nation. So, the stripping down of te reo Māori, or marginalising our indigenous identity, reflects this Government's sad obsession with erasing Te Tiriti o Waitangi and dragging us back to a monocultural past," she said. Ngarewa-Packer said the move undermined Aotearoa's reputation as a leading nation in recognising indigenous rights. "Restoring our reo took a long time. I mean imagine doing this in Ireland, imagine doing this to the Welsh. This was hard fought for. It's not re-ordering of words, the reformatting is deliberately done to undermine the mana [and] to sideline us tangata whenua." Not 'a positive vision' - Greens Green MP Benjamin Doyle. (Source: Green Party MP Benjamin Doyle said the move is not what New Zealanders need from the government. ADVERTISEMENT "We are seeing day by day, the rights and dignities of minority communities being stripped away while they leave the majority of New Zealanders suffering under the Government's current decisions," Doyle said. "This is not a positive vision for Aotearoa, this is not a positive step towards unifying kotahitanga and it's not benefiting anyone. Really, its just dog-whistling politics. It's the tail wagging the dog." The ACT Party celebrated van Velden's move on social media, saying the change would "restore English before te reo Māori - without costing taxpayers". The change comes as part of a deliberate push by the coalition to give English primacy over te reo Māori in official communications. New Zealand First's coalition agreement with National stipulates that public service departments have their primary name in English and be required to communicate "primarily in English" except for entities specifically related to Māori. It also includes an as-yet-unfulfilled commitment to make English an official language of New Zealand.

Is there anything we can actually do to bring down butter prices?
Is there anything we can actually do to bring down butter prices?

1News

time8 hours ago

  • 1News

Is there anything we can actually do to bring down butter prices?

The alarming rise of butter prices has become a real source of frustration for New Zealand consumers, as well as a topic of political recrimination, writes Lincoln University professor of agricultural economics Alan Renwick. The issue has become so serious that Miles Hurrell, chief executive of dairy co-operative Fonterra, was summoned to meetings with the government and opposition parties this week. After meeting Hurrell, Finance Minister Nicola Willis appeared to place some of the blame for the high price of butter on supermarkets rather than on the dairy giant. According to Stats NZ, butter prices rose by 46.5% in the year to June and are now 120% higher than a decade ago. The average price for a 500g block is NZ$8.60, with some local brands costing over $10. But solving the problem is not a matter of waving a magic economic wand. Several factors influence butter prices, few of which can be altered directly by government policy. ADVERTISEMENT And the question remains – would we want to? Proposals such as reducing exports to boost domestic supply, or cutting goods and services tax (GST) on dairy products, all carry consequences. A key factor driving butter prices in New Zealand is that 95% of the country's dairy production is exported. Limited domestic supply and strong global demand have pushed up prices for a range of commodities – not just milk, but beef as well. These increases are reflected in local retail prices. Another contributing factor is rising costs along the supply chain. At the farm level, producers are receiving record prices for dairy. But this comes at a time when input costs have also increased significantly. It is not all profit. Weighing the options Finance Minister Nicola Willis. (Source: Getty) Before changing rules around dairy exports, the government must weigh the broader consequences. ADVERTISEMENT On the one hand, high milk prices benefit 'NZ Inc'. The dairy sector accounts for 25% of exports and employs 55,000 New Zealanders. When farmers do well, the wider rural economy benefits – with flow-on effects for the country as a whole. On the other hand, there is the ongoing challenge of domestic food security. Many people cannot afford basic groceries and foodbank use is rising. So how can New Zealand maintain a food system that benefits from exports while also supporting struggling domestic consumers? One option is to remove GST from food. Other countries exempt dairy products from such taxes in an effort to make staples more affordable. This idea has been repeatedly reviewed and rejected – including by the 2018 Tax Working Group. In 2024, it was estimated that removing GST could cost the government between $3.3bn and $3.9bn, with only modest benefits for the average household. Fonterra or supermarkets? File photo. (Source: ADVERTISEMENT Another route would be to examine Fonterra's dominance in the supply chain. There are advantages to having a strong global player. And it is not in the national interest for the company to incur losses on domestic sales. Still, the structure of the market may warrant scrutiny. For a long time there were just two main suppliers of processed dairy products – Fonterra and Goodman Fielder – and two main retailers – Foodstuffs and Woolworths. This set up reduced the need to compete on prices. While there is arguably more competition in manufacturing sector now, supermarkets are still under scrutiny and have long faced criticism for a lack of competition. The opaque nature of the profit margins across the supply chain also fuels suspicion. Consumers know what they pay at the checkout and what farmers receive. But the rest is less clear. This lack of transparency invites speculation about who benefits from soaring prices. In the end, though, the government may not need to act at all. As economists like to say: 'Nothing cures high prices like high prices.' While demand for butter is relatively inelastic, there comes a point at which consumers reduce their purchases or seek alternatives. International buyers will also push back – and falling global demand may redirect more supply to domestic markets. High prices also act as a signal to producers across the globe to increase production, which could happen relatively quickly if there are favourable climatic and other conditions. ADVERTISEMENT We only need to look back to 2014, when the price of dairy dropped by 48% over the course of 12 months due to reduced demand and increased supply, to see how quickly the situation can change. Alan Renwick is a professor of agricultural economics at New Zealand's Lincoln University. This article was republished from The Conversation under a Creative Commons Licence.

'Brought to its knees': Why NZ can't shake the recession
'Brought to its knees': Why NZ can't shake the recession

Otago Daily Times

time13 hours ago

  • Otago Daily Times

'Brought to its knees': Why NZ can't shake the recession

By Susan Edmunds of RNZ New Zealanders were told to "survive til '25" for the economy to pick up - but now one major bank economist says it's probably going to be 2026 before any real improvement happens. Kiwibank's latest Annual Regional Note shows small improvements across the country, but weak scores overall. The national average score has lifted from three out of 10 to four. Southland and Otago top the table at five. Otago was boosted by a recovery in international tourism and improvement in employment. Northland, Taranaki and Gisborne went backwards. Taranaki had the biggest fall in employment of anywhere in the country, at 8 percent. Northland reported a double-digit drop in building consents. Retail sales remain below their average levels over the past decade in most regions, as weak household confidence weighs on consumption. Kiwibank said Wellington recorded the steepest annual decline at a -3.3 percent, while regions like Waikato, Northland and the Bay of Plenty experienced a slight improvement on last year. 'Wellington is just more pessimistic' Wellington's score improved from a two out of 10 to a three out of 10 while Auckland lifted from a three to four. "Wellington is just more pessimistic," Kiwibank chief economist Jarrod Kerr said. "It's gone through a lot in recent years. You can see it in their activity, you can see it in the housing market. You can see it in the economy, the city has been brought to its knees and it's been struggling to shake the pessimistic vibe." He said both Auckland and Wellington were well below average. "If you look across the regions, some of them have gone backwards and others are improving but it's not good. "When you look at the South Island things are better, people are definitely more optimistic in the South Island but even then the top scoring regions get a five out of 10." He said the report helped solidify the view that rate cuts to date had not been enough to turn around the economy. "We're really crawling out of this recession rather than regaining our footing and looking to grow from here. We're still struggling across the entire country." He said Kiwibank customers last year had talked about needing to hold on until this year. "We are halfway through the year and, yes, things are better but only by a little bit." Worse off than Australia New Zealand was worse off than Australia, he said. "Their economy is much stronger than ours but in their terms it's soft… where everything washes out is the labour market and, you know, the unemployment rate tells you a lot. Our unemployment rate is over 5 percent and theirs is pretty close to 4 percent." Part of the reason was the more aggressive interest rate hikes from the Reserve Bank, he said. "We were much more aggressive in our rate hikes than in Australia. We were much more aggressive on inflation than across the Tasman. "I think both the RBA and RBNZ made mistakes as I think every central bank did through the Covid period, we overstimulated in hindsight but at the time it was the right thing to do. And then we had to deal with the inflation problem." He said the Reserve Bank had kept the official cash rate at 5.5 percent for too long as it worked to tackle inflation. "We had a really bad recession last year, which the Reserve Bank openly orchestrated, they said 'look, we need a recession to get inflation back down'. The Australians didn't orchestrate a recession, they didn't slam the economy into the floor." Kerr said recovery was still coming but he had hoped it would have started more obviously by now. "We're hoping it takes off in the second half of this year as more and more people refix on to lower rates. Then it's more of a 2026 story now."

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store