Supermarkets still making pricing errors
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Otago Daily Times
4 hours ago
- Otago Daily Times
New med school to save $50m a year, govt claims
Nearly $2billion could be saved by 2042 if a new medical school to train rural doctors is created in Hamilton, the detailed business case for the project says. Made public at 6.45pm yesterday, a document dump including the business case reveals the cost of producing GPs at a new medical school at the University of Waikato would be $50million a year cheaper than doing it through existing medical schools. It was announced on Monday the government had decided to approve the country's third medical school, to be built in Hamilton. Over 16 years from 2026 to 2042 the total cost of medical education at Waikato, including capital costs that include building a new school, would be $9.1b, it says. It would cost $10.9b over the same period to increase the intake of students at existing medical schools and $10.2b if a new medical training programme focused on rural health, jointly run by the universities of Otago and Auckland was established. The Waikato option would also be the cheapest for the Crown in terms of its ongoing contribution to operating costs at $37.2m a year, compared with $45.5m a year for increasing intake at existing medical schools. But there are concerns the actual costs are still unknown. Green MP Francisco Hernandez said the government's decision to "dump" the business case after work hours on a Friday was "deeply insulting to the public". "This is not the actions of a government that is confident in the business case — and judging from what I've read so far they're right to not be," he said. Rather than engaging in good faith with Otago and Auckland universities and running an open process for a new graduate programme, the government had "deliberately stacked the deck to produce the outcome they want". "The cost benefit analysis also assumes no further cost escalations — and with the Minister [of Health] refusing to rule out further funding — we just don't know how deep the government's blank cheque will extend to back this flawed proposal," Mr Hernandez said. "Finally, the cost benefit analysis fails to even consider the issue of [the] benefits of training more Māori or Pasifika doctors — perhaps because [Waikato University] vice-chancellor [Neil] Quigley has reportedly ruled out a programme like [Māori and Pacific Admission Scheme] to boost Māori and Pasifika doctors and the government has failed to make that a condition of this handout." Dunedin MP Rachel Brooking said the Waikato medical school was pitched to the National Party as a "present" to them when in office. "Decisions about the future of New Zealand's medical workforce should be made on more robust grounds," she said. "It's important we take the time to analyse the business case before commenting, which we will do in due course." Taieri MP Ingrid Leary said she was not surprised information was redacted from the business case. "I've got numerous official information documents that are heavily redacted and I'm concerned but not surprised that this remains the pattern [of the government]." She said she felt it had been shown the new medical school was "effectively a done deal" well before the public announcement, due to the government's coalition agreements. "The timing of the release of critical documents on a significant issue is deeply cynical and, along with the heavy redactions, makes me wonder what the National government is trying to hide?"
Otago Daily Times
13 hours ago
- Otago Daily Times
High butter prices 'a good thing' for NZ
By Susan Edmunds of RNZ Butter prices might be biting at the supermarket checkout, but there's a warning that anyone hoping they'll fall should be careful what they wish for. The price of butter has increased about 50 percent over the past year, pushed up by high global dairy prices. But economists say that's actually a good thing for New Zealand. Household Economic Survey data shows that in 2023, households spent about $124 million on butter. Between 15 percent and 30 percent of households would buy butter over a one- or two-week period. But the country exported $5.2 billion worth. "It's not nearly worth trying to change the domestic butter game at the expense of our very lucrative export potential," Infometrics chief executive Brad Olsen said. "Being in China at the moment, I've been looking around here ... we are still charging more in our premium export markets than we are seeing domestically. "I mean in New Zealand, butter is $8.50 to $11 depending on who you're talking to or what shop you're going to. I've found an Anchor block in China that was only 454 grams for about $13.52. So the export stuff works for us." India is also a large producer of butter and has comparatively low prices, but Olsen said that was not comparable because farmers there were getting a subsidy of up to a third. In Australia, there was no GST on fresh food. Butter is about 7 percent of total New Zealand exports. "So yes, consumers get hit with higher butter prices in New Zealand," Olsen said. "But we make a lot more as a country from the exports that we send out overseas. And I guess you know, cause there's all this talk of, well, what happens if butter prices were lower ... I do think that there is this conception that if magically butter prices were lower, everything else would be the same too. "And that's just a complete false economy. If you had persistently lower butter prices, then there wouldn't be quite as many people farming. Or they wouldn't be the same profits from manufacturing and similar from Fonterra and what have you. That would mean there would be less money going into the economy across the country, people would have fewer jobs than they would at the moment. And so you might be paying cheaper, better prices. But you might not have a job. "That's the trade-off that, that to a degree we're talking about ... I also think we talk a lot about butter. How much butter does every household in New Zealand consume? Like how many blocks are you guys buying?" Westpac chief economist Kelly Eckhold said it was good for the country overall that dairy prices were high. "Exports of cheese is $3 billion. All these dairy products are rising for the same underlying reason - demand for milk fats is increasing. Butter and cheese in particular are the things the world wants." He said the conversation was influenced by the fact that everyone encountered the retail price but not everyone was exposed to the export earnings. "One thing to think about is the gains from the income are more narrowly shared than the costs that come to all of us. We all go to the supermarket and buy a bit of butter and cheese and milk. "But if I look at employment trends on a regional basis, you can see in the last few months the regions where jobs are growing are Canterbury, Otago, Southland, West Coast, Marlborough ... these are areas that have a much higher agricultural and dairy input. There are more jobs in those parts of the country whereas Wellington and Auckland are very weak. There aren't many dairy farms in Remuera unfortunately." He said a wider problem was not that dairy products' price was rising but that New Zealand incomes were not keeping up. "Prices are being bid up by people overseas who are wealthier than us and their incomes are growing more strongly. "That's why they can afford to pay the prices that are pushing the prices up. The question isn't should we be redistributing further the profits form those sector. The question should be what can we do to improve the incomes of Kiwis so when demand goes up overseas we can keep pace. If we can do something that gets job growth up that's unequivocally better than putting price controls on butter or cheese."
The Spinoff
15 hours ago
- The Spinoff
Windbag: Why the Taxpayers' Union endorsed this Green Party policy
They say politics makes strange bedfellows, and there are few stranger pairings than this. Wellington is the remnant of a failed startup. The New Zealand Company, which established the city, was a for-profit enterprise with a clear business model: sell land to wealthy people, and use the proceeds to bring working-class people to New Zealand for free. In theory, the mix of capital and labour would work in perfect harmony: founding businesses, working the land, and creating a functioning economy that would improve everyone's property values. So what went wrong? There are many factors, but one of the most important was absentee landlords. Many investors stayed in London, hoping the value of their land would increase due to the work of others, while contributing nothing themselves. The New Zealand Company brought more labourers than could be employed by independent businesses, so it had to provide them with work, which eventually drove the company to bankruptcy. From the very beginning of British-style property ownership in Aotearoa, land banking has been one of our biggest problems, dragging down productivity and hindering the growth of our cities. It's still the case today. There are empty lots and surface car parks in the centre city, underdeveloped sections in city-fringe neighbourhoods, and a single family owns almost all of Wellington's remaining greenfield land. The Wellington Green Party is targeting this issue with a policy to change the rates system to be based on land value rather than the current combination of the capital value of buildings and land. Several other councils have already adopted land value rates, including Nelson, New Plymouth, Napier and Whangarei. The Greens found an unlikely ally in their campaign last week when the policy was endorsed by the Taxpayers' Union – which even the Taxpayers' Union seemed surprised by. 'The Greens are right on this one,' executive director Jordan Williams said in a statement. 'Taxing land, rather than housing and development on land, creates the right incentive of avoiding land banking or not putting land to its most productive use, such as housing.' Williams went even further than the Greens' policy, calling for local government minister Simon Watts to embrace land value rates nationwide, saying he 'should reach over the aisle and grab this phenomenal policy'. Alex Baker, the Green-ish mayoral candidate who isn't officially endorsed by the Greens, is also campaigning on a switch to land value rates. This story in The Post implies it's suspicious that Baker and the party could have come up with the same idea separately. It's not. Land value taxes are the big current thing in the Yimby movement. Henry George is Sabrina Carpenter for online urbanists. 'The current setting is inefficient,' Baker told The Spinoff. 'It discourages capital investment, business, new houses and intense developments and encourages the accumulation of under-utilised land. I simply want to change to a system that is more efficient. The long-run impact of that is improved housing supply, which will mean rents come down and quality lifts, which will attract more people and bring down rates.' The alliance between Wellington's Greens and the free-market TPU is rare, but it's not the first time it has happened. The TPU was strongly supportive of the zoning reforms in last year's District Plan, which were led by Wellington's progressive councillors. This ability to form cross-partisan consensus is one of the things that has made the Yimby movement so successful. The TPU sees zoning reform as giving more property owners more rights to develop their land, and land value rates as an economic incentive to do so. The Greens see it as a way to improve housing supply, quality and affordability. The motivations might be different, but the outcomes are the same. 'The TPU-Green coalition is exactly where I see myself as a candidate,' Baker said. 'It's a free-market change. A more efficient tax. But it will result in change, which is something that conservatives who don't want the city to grow or improve will always be against. I expect over time the business community will get aligned with me, because no amount of taking a blunt axe to the council will improve outcomes for the city.' The two conservative councillors who have put up their hands for mayor, Ray Chung and Diane Calvert, both oppose a switch to land value rates. Calvert said debating rates reform was 'like moving deck chairs while the ship takes on water. The real problems run deeper and we need to fix those first. Chung told The Post the policy was 'built on a false ideology that anyone who gets ahead should pay more' – which is not an accurate analysis of how land value rates work. The TPU specifically called out Chung in its statement. 'It is sad to see Ray Chung further disgrace himself by coming out against this policy. We'd urge him to reconsider and put policy ahead of partisanship,' Williams said. Andrew Little, who is widely considered the frontrunner in the Wellington mayoral race, said he was open to the idea. 'Land value-based rates is an idea worth considering,' Little told The Spinoff. 'We can also use rates loading to incentivise better land use, and we should do so to make sure Wellington gets proper housing density in key areas.' Baker is claiming Little's soft support as a victory. He doesn't believe Little would be talking about land value rates if it weren't for his and the Greens' policy. Baker said he entered the race after Tory Whanau left because he felt someone needed to drive the debate from the progressive side. 'I wasn't seeing anything from any other candidates that indicated they would turn things around,' he said. Wellington City Council considered a switch to land value rates last year as part of its rates review, but basically decided to put the idea in the too-hard basket. In the short term, that's probably a fair approach. It's looking increasingly inevitable that a Wellington supercity will be back on the table soon. Porirua and Hutt City voters will both vote in non-binding referendums on amalgamation at this year's election, and the region's chief executives seem to be largely united on the idea. It probably doesn't make much sense for Wellington City Council to upend its rating system right now, given the likelihood of such a major restructure in the next few years. But with the possibility of major reform happening soon, this is the perfect time to have the debate.
