Talking your book

http://www.stuff.co.nz/business/opinion/2548814/Smart-electricity-sets-a-complex-regulatory-challenge

I don’t always agree with Colin James, but he has really picked up on the contradictions that abound in our current electricity setup. Or perhaps more of a stick-up, as in “stick em up”. Personally I was a little surprised to receive a letter from my provider telling me about a 10% plus hike in my rates, on the very same day that the government is telling them in no uncertain terms that now is not the time to be hiking rates. Err, excuse me?

I have to say, I am looking forward to distributed generation – prices are rising, and subsidies are increasing. But I want a smart house – certainly starting with a meter that tells me the details behind what my usage is, not just my retailer. And as for Brian Leyland, who advises us that ripple supply is all we need – I wonder what planet that guy is on. Is he indicative of the far-sighted people that have been making all our long term decisions about infrastructure? That makes me truly fearful…

 

A sensible opinion is out there – don’t Hide it!

http://www.stuff.co.nz/dominion-post/communities/the-wellingtonian/2323319/Alarm-bells-over-rates-reform

It’s good to see that not everyone is totally blinded by the attractiveness of the message. This article at least is backed by a little bit of investigation and thought. Well done Gordon Campbell. One of his comments:

Crucially, the measure has a ratcheting down effect on community services.

The debate needs balance, just as the decision making needs both sides being argued. Local government shouldn’t go becoming all Keynesian, but nor should it stick to roads and rubbish, as some would have it. Here in Welly we like our Stadium, we like our events, and we love our improved waterfront (apart from a few hardy souls). I like the fact that people have opinions – but I wish they would engage in a decent discussion, rather than sound-bite sized slanging matches.

It’s also a shame that the majority of us are too busy getting on with life to really engage in the discussion.

This amalgamation is going to be very interesting for local government across the country – but I have spoken to quite a few in the industry around the country, who seem blissfully unaware that it could impact on them. I look forward to that changing.

I also look forward to more of us telling our councils what level of services we are happy with. As an example, it probably costs me, on average, about $25 a month for the library services that the city provides. So for the cost of 1 novel a month (or maybe 2 magazines), I get the entire network of libraries and services. Not a bad deal, really. I should use it more, and ensure I am actually winning on the deal – wouldn’t be difficult.

What I don’t want, is some populist messaging central government politician telling me what I can have. But to ensure I don’t get that, I have to make sure I get heard for myself. As do we all.

 

Yes… yes, he is

http://www.stuff.co.nz/entertainment/tv/dancing-with-the-stars/2336135/Josh-Kronfeld-slams-Paul-Henry

I just have to agree with Josh on this one…

 

The best no. 11 – it’s close

Good on Chris Martin for his performances during the India series. It’s interesting how often he gets dropped, usually when the team as a whole has under-performed. Some interesting stats at this point in his career:

48 matches, 160 wickets at 33.48, economy 3.41 and strike rate 59.6 balls

But now look at the figures for one DK (Danny) Morrison:

48 matches, 160 wickets at 34.68, economy 3.30 and strike rate 62.9 balls

There’s really nothing in it…  unless – well how about the batting?

Morrison 379 runs at 8.42; high score 42 (held then world record 24 ducks)

Martin 80 runs at 2.28; high score 12 n.o. (23 ducks)

You’d think that Danny has it by virtue of his batting, except for the fact he was sometimes referred to as Danny Duck. Again, hardly anything to separate them. Fascinating stuff. Perhaps the key bit of advice for Chris Martin is not to participate in any last wicket batting heroics – Danny scored 14 * in a last wicket stand of 106 with Nathan Astle to save a test, but it was the last thing he ever did for his country’s cricket team… thank goodness the rain saved us from seeing this happen in Wellington this week.

Great to hear that Martin plans to keep playing – so I thought I’d check the bowling stats for his next target on the list – none other than CL Cairns. After 48 matches, Chris Cairns had 167 wickets @ 29.23, and he managed another 51 wickets in the next 14 matches, to end with 218 @ 29.4; econ 3.28; s.r. 53.6 balls.

It would be some effort to get close to those numbers, but all the same, Martin deserves his spot. As for the best number 11 – well I only compared the 2, but I’d go for an honourable draw.

 

hey lets cap all costs at CPI….

Back to the inane comments… Hide demonstrating his ability to appeal to the masses with the “keep costs down” message.

Well, like everyone I find the message attractive. My power bill really annoys me. And my groceries. And we’ve all talked about the price of petrol for a year or two now. And every quarter when I pay my rates bill it feels like a large bill, so of course I’d like to make it lower.

But my taxes are a much bigger burden, and I don’t see any of them being offered back as a rebate for local government costs (especially those that have been transferred or imposed – water quality, dog chipping, RMA, etc).

One day soon I’ll have a crack at spelling out why the idea is silly from an infrastructure point of view – just think about the bulk of spending being on roads, and the cost components that go into roadworks…  but that is for another day.

Today, all I want to ask is whether Mr Hide is also going to remove the legislative obligation for Councils to act responsibly in the long term interests of their comunity. Because there is a very real chance of a direct conflict between capping a rates increase, and a need for spending on assets for safety/risk mitigation reasons. The very next time something happens…

I know that the response is meant to be about prioritising – cut back to only the essentials. And I agree that the local Government barons and earls are not good at doing that: saying ‘no’ to someone or something is hard, especially when you have to eyeball the people to whom you are saying ‘no’… But I am also saying that, when all is said and done, most things that are provided are a direct response to ratepayer needs and wants. Maybe I don’t want some of the things; but someone somewhere has championed the cause, and that’s usually why they are happening.

Of course it is also easy to make a meal of the Beckham style stuff-ups, but show me a business that doesn’t try things? Personally, I’d rather see people try and fail (as long as they learn from it) and move on.

So, Mr Hide – how about it? Can you promise to cap my power, groceries, petrol, taxes….

 

amalgamation… at last!

yep, bring it on. Sort out those pesky Aucklanders. We now have a couple of years (maybe more) to do stuff while they wheelspin. That said, it’s gotta happen.

My comments include: the costs of change will be significant, and since it is imposed, I think the taxpayer could pick up a large share of the change costs. In the meantime, those cumbersome LTCCP’s are now a complete waste of time and money. Please, someone, let them stop work on that and get on with the priority of amalgamating.

Don’t expect too much in savings – you’ll never prove it and what I wanna see is regional decisions and planning – fix raods, and other big ticket issues, as a region.

And for those pessimists, who see it as all black – I’m including you, David Wilson, if you look for the worst in everything, that’s all you’ll find. There’s a lot of good in this – it’s about the execution. For those who say the ‘local’ will be lost – I assume then that you want to go back to pre-89 days, and a few hundred councils????

Change.

It’s what you make of it.

 

$1.5B = a good start

Glad to see the announcement, following through on another election promise. Interesting to choose 25 towns (or combos). The devil is in the detail, but I hope some people are able to get on with some real projects, and quickly. Please please, no more bureaucrats slowing things down with talk and policies and rules.
I maintain that a strict equity view by the government might not work – depending on how a ‘dividend’ is defined and required. If all that was needed was to borrow money, may (including local government) could have already built networks.
I, like many, now want to see what the rural solution looks like; and of course international links and peering issues still need to be solved.
And the mobile version cannot be ignored, there is room for it all (don’t forget a mobile network is a good customer for a fibre backhaul backbone).
When the telcos start whining, just offer to buy their fibre…

 

So – are things good or bad, or what?

NBR headline last week:

Fewer New Zealanders heading for Aussie Niko Kloeten | Friday March 20 2009 – 12:26pm A drop in the number of New Zealanders heading to Australia has helped net migration improve, but fewer short-term visitors are coming here, Statistics New Zealand said today. Monthly permanent and long-term (PLT) arrivals exceeded departures by 3600 in February 2009, up from a net inflow of 2000 in February last year.

Them are quite large numbers – if you take in the following simple chart of net PLT migration (the excess of arrivals over departures) on an annual basis for recent years, courtesy of Stats NZ:

 

It was only last year that we were all bemoaning demographic change – the aging western world, meaning fewer workers supporting the increasing numbers of retirees; wishing we could attract all our talent back on shore; and worrying that Oz was stealing people because of better economic conditions. At one point I suggested that our country could be a safe haven for climate change refugees, given the mostly benign conditions we are likely to experience.

Then we forgot all that, because we’re all desperately worried about keeping our jobs, in the face of the recession formerly known as the Global Fiscal Crisis; but now labelled the Great Depression.

So help me out – is the improvement in net migration going to be good for us?

I guess it is a truism – that NZ’s economy always does well in bad times, although in the past that meant war, and I don’t think we want to wish that on anyone. We are seeing the migratory equivalent of the ‘flight to safety’, perhaps. Be interesting to watch this trend over the next few months. If the headlines that I glanced at meant what I thought, some people are already thinking this will translate back into revitalised property markets.

The question in my mind most often is: so how often have people (especially businesses) stopped to assess the latest data, and to review their own plans and strategies? And what have they done differently as a result? I’m just not convinced that enough people have actually had a real jolt yet. Time will tell I suppose.

 

Better than average

As a sports fan, and cricket watcher, you have to admire the talent of the touring Indian team. More than that, the value of experience. If the numbers are any indication, we are in for a scary time. Our fresh young team has a total of 8,000 test runs under the belt, with over 5,000 of them belonging to just 2 players: Vettori and McCullum. The Indian team playing at Hamilton has over 42,000 test runs, with almost 23,000 of them resting with their 2 most experienced players: Tendulkar and Dravid, of course.

A small curiosity – the cumulative average of our team is 280.5 runs, and we scored 279 in the first innings. In case you were wondering, the cumulative average for this India team is 372, or about 10 runs per player. A lot depends on the little master, but I can see India strolling past that average tomorrow. Notwithstanding that, the kiwis are competing better than I had hoped, thus far. In recent years we have fallen over badly in our second bat, so I have everything crossed that we knuckle down and grind it out. Actually no – I think the way to play these days is with confidence, because that is how these guys do best. After recent efforts, you have to be a bit like the Aussies, and believe that the next guy in will deliver, if you miss out. Not that I advocate being sill – Ryder demonstrated the right way to go about it.

Ryder is shaping up to be a special player, if he can keep a level head. Here’s hoping. It’s early days, but he is demonstrating the returns that we have all been hoping for from Taylor.

And James Franklin? If the selctors stick with him, his luck has got to even out over time. Surely. Surely?

 

Recycling – a flawed funding model

There has been a lot of impassioned debate about the – apparently – beloved green bins, and the nasty council proposing to do away with them. Petitions being signed, and by golly we’ll stop them, yessirree. There must be something wrong with me, because I always found those bins to be a proverbial pain in the posterior. Difficult to lug around, too small, never hold all your recycling anyway, so you have all sorts of junk in bags piled up on/around the bin… and on it goes. And how often would you get home in the evening to not find your bin, because the darn thing had blown away.

So for me, it would be good riddance to the green bin. Except I am in an apartment building, and we have commercial collection from a range of wheely bins already. Works for me, thanks.

Maybe one day someone will explain to me what the big deal is, and why we should keep those bins. Until then, I’ll assume it’s because of erroneous thinking – that the bin is somehow free, and so is the recycling collection. Therefore, people trying to retain the green bins are actually saying they want to keep the ‘free’ recycling service.

My view

First point, of course: recycling is not free. It is paid for out of a charge imposed on waste – the stuff that gets landfilled at the tip. It’s all there, in the council reports. The cost of recycling varies from one paragraph to another, but let’s say it is $2.4 million per annum, for the grand total of 13,000 tonnes. That cost gets recovered from the 100,000 tonnes that goes into the landfill – or a cost premium per tonne of $24. With me so far? Good. It is a good policy, in as much as the council wants to discourage waste into the landfill – so it sends the price signal: you have to pay to dump stuff. The council wants to encourage recycling, so it sends the price signal – they won’t charge you directly.

But the flaw in the model is when – if – it is successful. As waste volumes go down, the cost per tonne goes up. All good you say? Not really, because at a certain point people will stop paying, and just throw their rubbish somewhere like the side of the road: instant Greece… And this issue gets compounded if recycling volumes rise appreciably – again it’s what you want, but the cost will increase too. I’ll try to demonstrate with a couple of simple graphs.

 

Here is the recycling cost added on to the waste stream, for a range of waste volumes. At current volumes, it doesn’t look too bad. But as recycling volumes increase?

…starts to make the cost per tonne fairly unattractive, causing unwanted behaviours.

So the debate needs to be about the way the service will be funded, and the current choices are pretty simple – user pays (whether cross-subsidised by waste or charged directly); or rates. The council tries to apply costs directly to users where it can, meaning it would prefer to keep away from rates. And that should work for most people – you can directly control how much you have to pay, based on how much rubbish/recycling you create. After all, some couple in Kaikoura has managed to reduce their waste to 1 little bag for a whole 6 months. The counter that people usually proffer, is that poor people pay a higher proportion of their income on these things, so it isn’t fair. To that I say – there are ways to support the bottom deciles, so don’t design a whole system around the lowest common denominator. Design it for – I dunno, the top 80%, and provide those failsafe support systems as the exceptions (and make sure they are easily accessible, of course). The actual break point might vary by issue, based on more scientific analysis than I just did here, but the principle can still apply.

As to wanting to encourage recycling by making it ‘free’ – well that just proves we are all inherently lazy and selfish. We’re happy to do the morally good thing (waste less, recycle more) as long as it doesn’t inconvenience us too much. It’s sad but true, and I am as bad as the next guy. In a pure world I’d like to pay for what I create, which means I’ll pay for my recycling. I’d like to think that as volumes of recycling go up, I can benefit from processing economies of scale that mean the cost per tonne goes down.

I do understand that recycling is currently much more expensive than simply landfilling – $185 per tonne to recycle versus $82 per tonne of landfill. It also takes more time and effort to separate, but those things should not put me off doing the right thing.

I’m not hopeful…