Island Life: Q+A. Fill in the blanks.
145 Responses
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Sacha: Are you thinking of New Zealand Farming Systems Uruguay? Definitely an interesting idea, and it will be good to see how it turns out - obviously there is room for application of the model all over the world, provided there is sufficient capital and experience available to make each venture work.
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Yeah, that looks like it - wrong country, right model. Thanks, Simon.
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I'm sure the government have plans for R&D - just not a tax credit based approach. I guess we'll see when the Budget arrives.
Your faith is touching. They're already hinting strongly that nearly everything is going to be on a static, or dropping, budget for the coming year. Education, Health and Justice are, from memory, the areas that English has said will be getting the only budget increases. R&D just isn't a priority for National. If it was, they would've left the R&D tax credits alone, if only for the fact that, as an existing scheme, its costs were lower than the expense of designing and implementing a replacement.
That farming JV is interesting. I'd never heard of it before. Certainly a good idea, but looking at their 2008 annual report I wouldn't be counting on it to contribute much of anything to NZ's balance of payments for a little while. And, again, it's a heavy reliance on a single industry. That's not healthy for an economy. Yes, primary produce is always in demand, but pricing (and thus returns) is very, very fickle. Diversity is good, and it would be incredibly foolish to pretend that simply diversifying the industry to other shores is any kind of substitute for encouraging solid, high-tech development within NZ.
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Matt: It perhaps wouldn't be so poor if Uruguay wasn't going through pretty severe drought at the moment.
But that's the problem with primary production. I've never heard of a software/pharma company downgrading earnings forecasts because there wasn't enough rain in the quarter, or whatever.
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I've never heard of a software/pharma company downgrading earnings forecasts because there wasn't enough rain in the quarter, or whatever.
Electronic Arts reported a one billion dollar loss over the last year though. Everyone has ways to lose money.
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Everyone has ways to lose money.
Yes, that's very true. But if your economy is heavily biased toward one particular form of industry you're in deep trouble if something strikes that industry. NZ's a foot-and-mouth infection away from being in very, very deep shit economically.
The current economic crisis is somewhat unprecedented in its scope, having screwed over a very broad swathe of industries including includes primary produce. The general rule about diversity breeding resistance has held in past downturns, though, and is a lesson that NZ still hasn't really learned despite all the fancy talk by Labour about "building a knowledge economy." I guess we should be thankful that National's admitting in deed, if not in word, that they're not going to seriously bother even trying.
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It's the most glass half full I could be about primary production, unlike the member for Dipton. You don't see the software, creative or hi-tech industries having to mount glossy tv campaigns just to get young people to consider working in them, either.
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But if your economy is heavily biased toward one particular form of industry you're in deep trouble if something strikes that industry.
Conversely you do quite well if that doesn't happen. I wouldn't turn away the next Microsoft springing up here just because of the risk of our economy taking a bit hit if they have a bad year.
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You don't see the software, creative or hi-tech industries having to mount glossy tv campaigns just to get young people to consider working in them, either.
That's mostly because those industries don't have the PR advisers that agriculture does. It's not that they're attractive career choices, it's purely because they're well behind the 8-ball about getting people involved. We've got a serious shortage of IS and computer science students, as well as electronic and mechanical engineering. I alluded earlier to Motorola, and a significant reason that they chose Australia over here was that our tertiary system just isn't turning out sufficient numbers of suitably-qualified people to make having a major high-tech R&D facility a viable proposition. Our loss, and one that's not going to change in a hurry.
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But if your economy is heavily biased toward one particular form of industry you're in deep trouble if something strikes that industry.
Conversely you do quite well if that doesn't happen.It's very foolish to rely on good luck to protect something as important as the national economy. So far, though, that seems to have been the prevailing attitude from Wellington. "It won't happen to us. We'll be fine." A wonderful carry-over of the "She'll be right" attitude for which Kiwis are world-renown, and one that's distinctly unhealthy when viewed from a resilience perspective.
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I don't think it's foolish. Risky maybe. And therefore has benefits if it does well and losses if it doesn't. As long as you're willing to accept that.
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And then it becomes a question of who benefits from the upside and who hurts from the downside. Privatising profits and socialising losses, anyone?
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Not a situation that changes just because you diversify your economy more.
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I don't think it's foolish. Risky maybe.
When did "risky" become "foolish" in the CDO/CLO fiasco? They're very closely linked, and it's often only in hindsight that one sees that what appeared to be "risky" was, actually, "really bloody stupid." At the level of macroeconomic direction involved in running a country, "risky" and "foolish" aren't concepts that should be readily entertained. I don't want governments trying to run the country as an exercise in crossed fingers and fervent prayers, but that's what "risky" and "foolish" choices are, effectively, doing. Diversifying the economy is prudent, and prudence is, really, about the best we can hope for from any of our elected servants.
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Typically, large rewards in the market arise from risk - taking. If you're not taking a risk then someone else has probably already done it in the same way that you're doing it.
It's all very well to play it safe, but you won't tend to get the big rewards in your economy (or the big losses). As long as you're happy with that, good on ya. I'm personally not opposed to the state taking measured risks from time to time.
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Cue comments about the state playing in the market, communist forms of government, etc. The state isn't there to take risks, profitable or otherwise. It's there to set the frameworks within which the private sector (and I'll include SOEs here) can take risks.
Steering the country down a potentially foolish path because it also might prove very profitable, when there's a path that carries far lesser risk traded against almost no diminution in potential reward, is just stupid beyond measure.To put it another way, the dairy industry makes enough money right now to not need government assistance to try and get into other ventures that may make money. Other industries, with enormous profit potential and far less exposure to climatic and marketplace risk, do need government assistance to try and become self-sufficient. Trading on their success does not need to impact on dairying in any significant way, except in the minds of farmers who care for nothing beyond the well-being of their own bank balances. What is good for farmers is not necessarily good for the country.
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Yes, that's very true. But if your economy is heavily biased toward one particular form of industry you're in deep trouble if something strikes that industry. NZ's a foot-and-mouth infection away from being in very, very deep shit economically.
Or a declaration of carbon trade war by the G8.
Cue comments about the state playing in the market, communist forms of government, etc. The state isn't there to take risks, profitable or otherwise. It's there to set the frameworks within which the private sector (and I'll include SOEs here) can take risks.
DFC worked well when it stuck to what it knew, until it got drunk on the irrational exuberance of the mid-1980s.
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I came across this the other day whilst reading Geoff's letter to the Listener. Second and third letters, the last one being from Rodger (the dodger) Kerr. Its about the role Stephen Jennings played in the reconstruction of capitalism in Russia. Interesting alternative views.
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Whenever I see his witterings, I can't help thinking of lovestruck Roger chasing the demented damsel Coddingtonswallop across the lush lawns of parliament. Such a romantic heart, such a stunted mind.
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Re The boot camp idea - Paula Bennett's "experts can say what they like, but we think they work." and David's "Based on what?"
I work in the social field and my initial reaction to boot camps was they don't work for anyone except the people running them - they seem to really get off of them. Principal Youth Court Judge Andrew Becroft said boot camps just make them fitter so they can run away from the cops faster. etc etc
But I have been doing some research on this and while it is generally true that most boot camps have neutral or negative results some do have positive results. US programmes like Vision Quest get positive results and it seem the key is less hard core military style and a more individual therapeutic approach and especially a longer term follow up. This is supported by evidence.
I am coming to think the wilderness experience carefully done can help crack through to the core of who you are - a deconstructing experience really but the challenge then is how do we help someone reconstruct themselves - in their way.
I have heard from contacts in the military they are privately horrified at the idea - they know the classic military approach was not designed to reform people - in my opinion its designed to turn them into obedient killers. They are clearly not the right people for the job. It seems it will happen regardless of the wailing and gnashing of academics - so I see it as a opportunity to do it differently and in that regard I agree with Paula Bennett - but do we have the creative courage to shape boot camps into barefoot camps? To use wilderness experiences as a starting point toward change rather than a punitive punishment that gives the hard liners a sense of short term satisfaction.
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