Wayne Mapp’s forgetfulness

The Editor,  The Dom Post,  Wellington


Former Minister of Defence Wayne Mapp’s answer when asked how he could forget mention of something as important as civilian casualties in an SAS Afghanistan report is bewildering. Read the rest of this entry »

Dave Armstrong satirically on WCC Library discussion

The Editor,  The Dominion Post,  Wellington


Dave Armstrong’s satirical depiction of the Library conversation (28/07) at WCC as an argument over bikkies hits the mark.  Read the rest of this entry »

Rod Oram: Now we can see our future


From Newsroom this report of good news prospects over the next decade or so for New Zealand, from Rod Oram, economist.KPMG

Rod Oram: Now we can see our future

Rod Oram

© Provided by Newsroom

Three big announcements this week heralded our healthy and profitable future. Those standing in the way, argues Rod Oram, are as out of step as the Think Big world from which they hail.

This was the week we saw the future – and it was good.

It is a healthy and profitable future of deeply sustainable harvesting of land and sea, of clean energy and of 21st century industries and transport.

Three announcements in three days heralded this future:

– The primary sector won the backing of the government for its sustainable farming roadmap, Fit for a Better Future. This has strong buy in from many in the sector and government for the transition to farming practices that help restore ecosystems, which in turn will earn higher premiums from customers.

This Newsroom report describes the announcement; this report from the Primary Sector Council describes the ecological and cultural framework for the strategy; this is the Council’s overall report and the government’s strategy in response; and this recent Newsroom column describes New Zealand’s role in this global revolution to regenerative farming.

– The great potential of the fishing and aquaculture sector was documented in this report from the Aotearoa Circle prepared by KPMG. Further evidence is offered by NZ Trade & Enterprise in a recent report on open ocean aquaculture.

– The closure of the Tiwai Point aluminium smelter opens up a pathway to 100 percent renewable electricity and zero-carbon industry and transport. They will be far more valuable, and less polluting, than the smelter’s production of aluminium.

The first two transformations will take a decade or so and the learning of many new skills in production and out in markets. But the capital investment will be modest. The third will take several decades and much capital. But the technology we need is increasingly economic and available. Transpower recently published this report on how we can develop such an electricity system.

One of the hardest transitions is for the people of Southland. The smelter has generated jobs and economic activity for almost 40 years. But the region’s GDP is some $6 billion a year, whereas the smelter contributed just $91 million in wages and $58m in local spending last year. There are plenty of new opportunities for Southlanders in all three transformations. They will deliver far more for them than the smelter did.

They can also take heart from Taranaki. It is acting boldly to embrace clean energy and new industries to more than make up for the demise of the oil and gas sector over the coming decades. Its over-arching plan is its 2050 roadmap. Two key components are its National New Energy Development Centre and its initiative on zero-emissions hydrogen as a source of clean energy.

Northland is also facing a similar challenge with the owners of the Marsden Point refinery signalling the end of production of fossil fuels. Instead it will likely become an importer and distributor of petrol, diesel and jet fuel from far larger and more efficient refineries overseas, as this Newsroom article describes.

The refinery and Taranaki can’t compete in their radically changing global sector. There is a glut of oil and gas from far cheaper places to explore, develop and produce fossil fuels. Moreover, the global sector is beginning to realise it will never sell all the reserves it has already found. For example, BP and Shell recently wrote off US$50b of assets because production and consumption trends and increasing competition from clean energy are diminishing their sector’s prospects.

The case for the smelter’s closure is different but equally conclusive. Thanks to the hydro-electricity it uses, it produces aluminium with a carbon emissions footprint one-third of the industry’s global average, according to Rio Tinto’s RenewAl brand pamphlet.

But problems arise from that for Tiwai Point: the industry average is skewed by use of coal-fired electricity in some plants; that leaves plenty of competition to Tiwai Point from hydro-powered plants elsewhere in the world with cheaper electricity than it uses; three of those plants are massive, modern and owned by Rio Tinto; it has great leverage over those electricity suppliers because they don’t have other customers to sell to whereas its electricity suppliers in New Zealand do.

Tiwai Point is the fourth of Rio Tinto’s four plants globally supplying its RenewAl brand. But Rio Tinto seems incapable of earning a tiny premium for Tiwai’s aluminium, which is superior in purity and carbon footprint, to cover the somewhat higher electricity costs. In today’s market conditions, Rio Tinto’s far bigger hydro smelters abroad can make up for the loss of supply from Tiwai Point.

Some people worry about the loss of the aluminium exports when the smelter closes next August. But they typically run at around $1b a year, depending on the global price of aluminium. That’s only just over 1 percent of total exports. Moreover, the smelter imports some $450m of alumina each year from Australia as its raw material. So the net impact on our trade balance is around a negative 0.5 percent of our total trade.

Remarkably little of the value the smelter has generated for its owners over the past 40 years has stuck to the ribs of the New Zealand economy. Given it’s a wholly-owned, toll-processing plant, its owners can profit elsewhere in their global value chains when conditions are right.

Conversely, the closure of the smelter is a benefit in terms of the ending of its 1.5m tonnes a year of emissions and the 1.3m free carbon credits a year it gets from the government, which at current prices are worth some $45 m.

Moreover, it’s a relief that Rio Tinto is closing the plant because it has long banked on its balance sheet hefty reserves to remediate the land the smelter has polluted. In the 10 years it’s been trying to sell the smelter, there were fears it would do so to a small, inexperienced and under-capitalised player which would not fulfil those responsibilities.

The worries about clean-up have been heightened by Rio Tinto’s failure to deal with a potentially toxic by-product of smelting which it stores in an old riverside paper mill at Mataura in Southland. The Environmental Defence Society recently filed for declaratory proceedings in the Environment Court seeking to force Rio Tinto to move the 9,500 tonnes of ouvea premix.

Also on the positive side, the 13 percent of the nation’s electricity supply the smelter uses will be consumed by others. This initially will likely reduce electricity prices slightly and delay the building of some new generating capacity.

But the lower prices will encourage a faster switch from fossil fuels to electricity for some industrial uses, such as milk drying. In turn, that increased demand plus a growing take up of electric vehicles will stimulate more investment in generation and in a modern smart transmission grid which can encourage small-scale, local generation and trading.

Short-term market signals alone can’t drive these essential and valuable transformations in energy, industry and farming. Astute strategies by businesses and supportive policies from government are essential. While many key players in business and politics are on to these vital tasks, others are still in denial.

For example, NZ First has killed the government’s programme to help the transition to a low emissions light vehicle fleet; and the National Party and the politicised Federated Farmers rubbished the Primary Sector’s strategy announced this week, even though the strategy is supported by all the sector’s associations and main co-ops and corporates.

Those politicians are just like the smelter and refinery — legacy assets from the Think Big era which are no longer fit for purpose. The economic case for moving on is crystal clear. So too is the political.

Virus ignorance has led to a major shakeup in NZ politics

The Editor,  The Sunday Star Times,  Auckland



There was a similarity between the demise of the Nats’ Hamish Walker and that of Labour’s David Clark.  In both cases, they have been downed by a serious flaw in the approach to the virus by their respective party leaderships. Read the rest of this entry »

Labour needs a wealth tax

The Editor,  The Dominion Post,  Wellington


The work of French economist Thomas Piketty, author of “Capital in the 21st Century”, has shown that to reduce inequality requires taxing high wealth (assets).  This is now mainstream thinking.  The Greens proposed tax on wealth in excess of 1M$ is a modest attempt to take advantage of this new realization.  There is still work to be done to determine what $$ thresholds should apply.

The description of this modest tax as a ‘far-left’ policy is laughable, but also provides a chance to look at an important indicator of “who we are” here in Aotearoa New Zealand.  A wealth tax is so main stream today that not to adopt this kind of tax indicates intent to increase inequality.  Is Labour still intending to characterize its government as ‘well-being’?  The adoption or not of some form of a wealth tax will be the main indicator of ‘who they are’ this election.


Richard Keller

published Mon, 13/07

Email to Grant Robertson recommending David Slack’s recent article.

Grant Robertson

Minister of Finance

Hello Grant,

Did you see David Slack’s article this week?  I would recommend it to you as he speaks metaphorically about you and your long (to be, retrospectively as it was) career as finance minister.  It may seem unrealistic to extrapolate a continuous 25 year rein as Finance Minister in the context of New Zealand politics.  But the metaphor is applicable in the sense that the surrealistic denial which is characteristic of our present time, within your Labour government’s time, is bringing us to a time of critical decision making now.   Now!   Now will determine whether there can be much of a future, much of a real (non-surreal) future politics in New Zealand and the world.

Slack’s reference to the $30B (yes, ‘B’) which your government has yet to commit shows you have at least a chance to make decisions which can put us in the right direction.  Rod Oram has today mentioned three positive recent developments, not least of which is the closure of the Tiwai Aluminium smelter in the South.  Other opportunities exist and are necessary, such as….

.Funding transport options which trash the total domination of the personal motor car.

.funding a local recycling capability (which, because everyone has to put out the trash and recycling every week -every week!- would bring home the importance of personal national responsibility).

.developing restorative agriculture which would eliminate dairy farming based on feed lots, and encourage plant based diets as well.

There will be others.


Richard Keller


Clark and Walker done in by ignored political party shortcomings

The Editor,  The Herald,  Auckland


It seems there is one similarity between the demise of the Nats’ Hamish Walker and that of Labour’s David Clark.  In both cases, they have been downed by a serious flaw in the approach to the virus by their respective party leaderships. Read the rest of this entry »

Response to Scoop Wellington chain on plans for the public library

The purpose (in the larger cultural/historical picture) of closing or even demolishing the library (and also building a giant white elephant convention centre) was (is still) to destroy the very concept of a ‘public’ library. Read the rest of this entry »

The Wind Band Composer in the 21st Century

The Wind Band Composer in the 21st Century Read the rest of this entry »

Response to so-called ‘fast track’ Covid-19 bill

Hello Mr Webb,

I know you know that the National Party has won the most seats of any party in parliament for four successive elections primarily because they have made it clear they would do nothing significant about climate change.  However, the Labour Party has seemed to say that climate change is our ‘nuclear-free’ moment.  But this bill has not given much attention to climate change; no so-called ‘fast track’ has any substance without significant attention to climate change.  The slogan is mis-named as ‘shovel-ready’ but the only meaningful projects are ‘future ready’ ones.

Below are a few of the many disappointments in this bill.
  • The short public submission period made it difficult for people to meaningfully engage in the process.
  • An overwhelming number of submissions called for climate change to be included in the Bill as a bottom-line. The amendments in the Select Committee report improve the bill but do not do enough to ensure that fast-track projects support Aotearoa’s transition to a zero-carbon future.
  • The Select Committee report moves to diminish the role of mana whenua by moving consistency with Te Tiriti and Treaty settlements from a requirement to a ‘consideration’.
  • Every New Zealander has an important role in protecting the environment, and should not be excluded from having a say on projects that will impact our environment and climate resilience for years to come.
Richard Keller