Category: Business

Source: Radio New Zealand

Jetstar has axed a number of New Zealand flights as the war in the Middle East drives up the price of jet fuel.

A Jetstar NZ spokesperson said 12 percent of scheduled services had been impacted, including some services between Auckland and Christchurch as well as Auckland and Wellington, and some international flights between Auckland and Sydney and Auckland and Brisbane.

The changes were temporary, the spokesperson said, due to the rise in jet fuel prices and other rising costs.

All impacted customers had been contacted directly, the spokesperson said, and most had been offered same-day travel.

It comes after Air New Zealand announced it was cancelling four return flights to Samoa.

Air New Zealand said it had nine services to Samoa each week and described the change as “minimal”.

It said like other airlines it was dealing with unprecedented volatility with jet fuel prices due to the conflict in the Middle East and was adjusting schedules to manage the impact.

Air New Zealand earlier said that it would cancel around 1100 flights from early March through until early May, but that most passengers would be moved to flights on the same day.

Reuters reports jet fuel prices have soared from US$85-90 per barrel to US$150-200 per barrel in recent days leading to a number of airlines including Air New Zealand increasing fuel surcharges.

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Source: Radio New Zealand

Employment confidence has risen to a two-year high as people’s perceptions about job availability improved.

The Westpac-McDermott Miller Employment Confidence Index rose 1.8 points to 95.6 in the March quarter. However, a reading below 100 means pessimists still outweigh optimists.

Westpac senior economist Michael Gordon said perceptions about job availability – a measure closely related to the unemployment rate – continued to improve this quarter.

“The survey results, taken on their own, would be consistent with the unemployment rate having reached its peak, and perhaps even begun falling, in the early part of this year,” Gordon said.

He said recent evidence also pointed to a pick-up in businesses’ hiring intentions as the economy started to get back on its feet.

However, the survey found households were still cautious about current and future pay rises, and about job security over the year ahead.

Confidence was highest among private-sector employees, rising 7.5 points to 103.5, according to Imogen Rendall, Market Research Director at McDermott Miller.

“In contrast, public sector employees’ confidence dipped slightly by 1.2 points to 95.6,” Rendall said.

Regional confidence was led by Gisborne/Hawke’s Bay, Canterbury and Southland.

Confidence in Auckland and Wellington remained subdued, although the capital posted a sharp rise from 80.5 to 90.8.

Gordon cautioned that the survey period – 1 to 12 March – was during the early days of the Iran conflict, when households and employers may not yet have been aware of its full economic consequences.

“As such, it’s unclear whether this confidence will be maintained in the months ahead, in what is an uncertain and rapidly evolving situation,” he said.

The survey was carried out in early March with a sample size of 1550, and had a margin of error of 2.5 percent.

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Source: Radio New Zealand

Investment app business Sharesies says updated economic modelling indicates the lift in the default contribution to KiwiSaver will fall short of a no-frills retirement for nearly half of retirees.

From 1 April, new default employee and employer KiwiSaver contributions come into effect, with an increase to 3.5 percent from 3 percent, with a National Party proposal to further increase to 4 percent in two years’ time, followed by increments of 0.5 percent in following years, taking the contribution to 6 percent, or 12 percent on a combined basis.

“The Government needs to be commended for raising contribution rates,” Sharesies KiwiSaver head Matt

Macpherson.

“However, averages don’t tell the whole story, which is why we turned to real world data to see the impact on everyone and not just the average person.

“What was clear is that rising contributions mainly benefit those who can already afford it.”

Macpherson said the voluntary contribution scheme, which attracted matching contributions from employers, disadvantaged people on low incomes, who were not able to save for retirement and therefore received no employer-contribution.

He said one way to improve the situation would be to make employer contributions compulsory for all New Zealanders in work.

“No matter which pathway we opt for, our numbers show that relying just on increasing contributions risks entrenching inequality.”

What the report says

The Sharesies report indicates half of its members would fall short of a no-frills retirement lifestyle, as defined by a Massey University assessment of at least $705 a week for “basic standard of living which includes few, if any, luxuries.”

Sharesies report indicates a modest increase in the default contribution rate to 4 percent would be helpful, but “still insufficient to close the retirement savings gap for most members.

“At National’s proposed 6 percent default setting, with matched employer contributions . . . the median weekly income from KiwiSaver funds would increase from $708 to $798.”

However it says even that would fall short of a no-frills lifestyle for 40 percent of pensioners, or more than 2 out of 5 people.

“Strikingly, even a young personʼs balance, with more time for returns to compound, still falls short and we can see this because the Sharesies database tends to skew younger,” Macpherson said.

Sharesies findings also aligned with the 2022 Review of Retirement Income Policies, which emphasised 40 percent of people over 65 and over relied almost entirely on NZ Super.

“Given that our sample is younger, which would in theory make our projection more optimistic, this strongly

indicates that a significant proportion of members will not have enough for a basic retirement,” the Sharesies report says.

“Furthermore, while increasing the contribution rate does improve outcomes, a significant share of members would still not reach a basic standard of living in retirement.

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Source: Radio New Zealand

New Zealand is an expensive country, Reserve Bank chief economist Paul Conway says, with many products priced well above the OECD average.

And some things – such as construction services, household utilities and some food items – are among the most expensive in the OECD.

Conway spoke to the National Financial Advisers Conference in Auckland on Wednesday.

He said inflation had been one of the most obvious economic disruptions over the past few years, particularly over the pandemic, when demand combined with a lack of supply sent inflation soaring at the sharpest rate in decades.

He said people were still asking why everything felt so expensive, even though inflation was much nearer the Reserve Bank’s targets than it had been.

Conway said, since the start of the pandemic, overall prices had risen by 26 percent and the price of some essentials had increased much more.

Wages rose 32 percent but that increase was probably not evenly felt – people who moved jobs were more likely to have received larger wage increases.

Conway said that for the past five years, one or more of a range of everyday household essentials that were hard to avoid had been increasing strongly in price at almost every point. “That included prices for council rates, construction services, some foods – including meat and butter, and insurance.

“Because households cannot easily avoid some of these costs, this has no doubt added to the sense of a ‘cost-of-living crisis’.”

Rates, insurance and gas had jumped particularly in recent years.

Tobacco products were among the most expensive in the OECD and milk, cheese, eggs and fruit prices were well above the average. Seafood, clothing, and meat were slightly below average.

“For services, the price of construction in New Zealand is the highest in the OECD and more than double the average. This is undoubtedly a handbrake on housing and infrastructure development here. In fact, the price of ‘capital formation’ – which covers machinery, equipment and construction – is 70 percent above average in New Zealand and also the highest in the OECD. The price of housing services and utilities in New Zealand is also assessed as being the most expensive in the OECD.”

He said low and stable inflation mattered for the cost of living but it was not the whole story.

Monetary policy – such as the official cash rate set by the Reserve Bank – could help to anchor prices but not make New Zealand affordable on its own. He acknowledged that inflation ended 2025 just above the Reserve Bank’s 1 percent to 3 percent target band and was likely to be more elevated because of the Middle East conflict.

He said what mattered for households was their purchasing power.

Before 2020, the purchasing power of wages in New Zealand was growing faster than the OECD average on the back of strong employment growth and favourable terms of trade.

“Today, while wage purchasing power is around average across all 38 OECD members countries, it is about 20 percent below the average of the more advanced OECD economies that we typically compare ourselves to.”

Productivity the key

For there to be continued sustained improvements in purchasing power, there would have to be more productivity, he said.

Real per capita income in New Zealand was below the OECD average, he noted. It had been about 80 percent of the average until the mid-2000s then increased to more than 95 percent by 2020.

“Since 2020, real income in New Zealand has fallen back to around 90 percent of the OECD average and the income gap vis-à-vis Australia has widened. Purchasing power, as measured by real income, has not kept pace with the rest of the OECD nor Australia since the beginning of the pandemic.”

Wages had declined less compared to the OECD average and were at best average, he said.

“Importantly, this is compared to all 38 current OECD member countries, which includes several emerging economies. Compared to the 30 OECD member countries in 2010, average incomes in New Zealand sit around 20 percent below the average.”

He said productivity growth would be the single most powerful determinant of higher real incomes and better purchasing power over the long run.

“New Zealand’s productivity performance leaves much to be desired and has lagged other OECD economies. Further, productivity growth in the New Zealand economy fell significantly following the global financial crisis and has been negative in the wake of the pandemic.

“While low and stable inflation is a key ingredient in lifting productivity and improving purchasing power, it is insufficient on its own. By anchoring prices, monetary policy creates the conditions for growth. But sustained gains in purchasing power require structural improvements in the economy.”

Measures to improve resilience

He said a more fragmented and unpredictable global economy would raise the stakes for ensuring New Zealand’s structural policies were resilient, adaptive and fit for purpose.

“We are in a new era of heightened geopolitical risk and persistent uncertainty, with the conflict in the Middle East a timely reminder of how quickly geopolitics can disrupt the global economy. At the same time, cross-country flows of trade, capital, and people are shifting, governments are becoming more interventionist, and the rules-based order that once underpinned global integration has weakened considerably.

“This is not a temporary shock that we can simply wait out. It’s a durable shift that makes the global economy more difficult and dangerous for small economies like New Zealand. We are more exposed to external shocks, fragile global supply chains, and shifts in global rules and norms over which we have little control.”

He said sustaining living standards would depend on structural policy settings that built resilience into the structure of the economy by encouraging flexibility, investment and adaption.

“A more resilient and flexible economy would mean monetary policy does not have to work as hard, or be as aggressive, to stabilise inflation as shocks wash through the economy.

“While monetary policy plays a critical role in responding to shocks, it cannot solve New Zealand’s ‘cost-of-living crisis’. Low and stable inflation underpins economic stability and is critical for sustained gains in purchasing power. But monetary policy does not create prosperity directly. It creates the conditions in which prosperity can endure.

“Improving the purchasing power of New Zealand households requires improved productivity. Productivity gains support stronger real wage growth, while competitive markets help keep price increases in check… stronger productivity raises the economy’s speed limit – allowing faster growth without inflation. A more resilient and flexible economy also means monetary policy doesn’t need to be as aggressive to keep inflation stable when shocks hit.”

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Source: Radio New Zealand

Some Meridian customers have complained of increases in the cost of the power they use for their electric vehicles – but interest in electric cars overall is booming.

A number of EV owners have taken to social media to question increases in the power company’s Electric Vehicle Power Plan.

One was told that when his plan renewed on 1 May he would be put on a new fixed rate plan, which would mean more than 50 percent increases on the day and night rates, and a 30 percent increase on the daily fixed charge.

Another said the increase could add hundreds to his monthly power bill.

Meridian said some customer plans were changing.

“Our EV plan offers a fixed rate for two years and we recently communicated with some customers whose term is coming to an end about their new offer. As you know, beyond our own costs there have also been substantial increases from lines and distribution networks over the last couple of years and this is another flow-on effect of that.”

Mike Casey, chief executive of Rewiring Aotearoa, said he had been contacted by people about the changes, too.

“What is driving these increasing costs is probably not actually Meridian themselves, but the cost to transport the electrons or the power from the power plants all the way to your home, and that’s namely the poles and wires.

“What we’ve seen very recently is the Commerce Commission allowing for much higher expenditure and much higher charging of customers for the maintenance and the growth of our poles and wire network in New Zealand.”

He said it would have been nice if the power company had “read the room a little bit” in the context of fuel prices increasing quickly.

“We have a really big opportunity here to convert a lot of drivers over to electric, and the news that energy into electric vehicles is also going up isn’t really what we want to be hearing right now.

“We want to be trying to encourage as many drivers into electric vehicles as possible because they will save a lot of money.

“The key thing here is even with the prices going up, the savings potential is absolutely huge. All this increase in Meridian’s prices are absolutely dwarfed by what’s going on the fossil fuel market at the moment, so I hope that New Zealanders, even though they see price rises on both options, that they realise how small one price rise is compared to the other price rise at the moment.”

He said charging an electric vehicle off the normal grid would cost the equivalent of about $1.50 a litre. “If you charge an electric vehicle off your rooftop with your solar, you’re probably paying close to $1.15 a litre … compared to what $3.30, $3.50 a litre, whatever it might be at the moment, you can see there’s still incredible savings by going electric.”

Westpac New Zealand managing director of institutional and business banking Reuben Tucker said demand for electric vehicles through the bank’s greater choices home loan top up and other loans for electric vehicles had soared.

“In the last two weeks the number of applications for EVs through these products has roughly doubled,” he said.

“We’re the only bank to offer interest-free lending on EVs and chargers, which is a key way we can help customers manage higher living costs not just now but in case of future events.”

Trade Me said people were also motivated to look for ways to become independent with their homes.

Searches for “off-grid” properties were up 68 percent year-on-year in the last month.

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Source: Radio New Zealand

The logging industry is warning some companies could be on the brink as the conflict in Iran pushes up the cost of diesel.

Logging operators say it’s increasingly difficult to get logs to port and if the situation drags on, export-reliant regions like South Canterbury and the west coast of the North Island could face shutdowns.

“The costs of shipping have risen dramatically, with rates going from roughly 33 US dollars per cubic metre into China for March, through to about 45 US dollars in April. It’s a perfect storm just right now.”

Forest Management group director Glenn Moir said that would put some companies on the brink.

“I can see that if it does continue we’re going to face some real pressure in the higher cost forests, so the ones that are further away from the market and have steeper country, just to make it economic.”

There had been some huge cost pressures going through the chain. The industry was diesel dependent, and it took 12 litres of diesel to produce one tonne of logs.

Higher diesel prices meant a 25 percent increase in costs across their operations for logging contractors.

“The industry can’t sustain that.”

Talks were continuing with everyone involved, including forest owners, to try and get some agreement on what could be done in the short-term.

The costs of shipping were also rising dramatically, Moir said.

“It’s a perfect storm right now.”

Moir said until the war in Iran started, 2026 had been looking like a fantastic year for the forestry industry, with export prices rising and domestic demand growing.

“All that turned on its head three weeks ago, and we’re struggling a little bit now with these rising costs.”

The government’s latest Situation and Outlook for Primary Industries report showed forestry exports were forecast to rise 2 percent this year.

The industry employs 42,000 people around the country and is the sixth-largest export owner.

While the Chinese market was declining, there was growing demand for New Zealand logs from India, Moir said.

“… and the FTA towards the end of last year really helped that.”

The forestry industry were a resilient bunch.

“We’ll work together and get through this. It is going to be pretty tough, especially if we move to Level 2 under the National Fuel Plan.”

Impact on older New Zealanders

The head of Age Concern Auckland said soaring petrol prices were making the basics of life even more difficult for already vulnerable elderly people.

The government announced yesterday around 143,000 people would receive up to $50 per week through the in-work tax credit to help with fuel costs.

But beneficiaries and superannuitants would not qualify.

Age Concern Auckland chief executive Kevin Lamb said increases in superannuation, in response to the high cost of living, were not agile enough to meet the sudden rise in petrol prices.

Superannuitants would miss out as trips to the doctor or medication started to eat into basic budgets for food and essentials, he said.

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Source: Radio New Zealand

It’s an easy alternative for most, fuel prices jump so you make use of public transport, or pedal power, but for many small towns around New Zealand it’s simply not an option.

Petrol prices have increased by almost $1 per litre on average in the past month, according to price tracker Gaspy, and diesel even more, as global energy markets react to Iran’s military grip on the Strait of Hormuz following the war launched by the US and Israel.

But for those in the small rural towns, they have little choice but to carry on.

Richard was in Featherston fuelling up at the sole Mobil station. Diesel was at $2.99 while 91 sat at $3.29 per litre.

When asked how he was feeling about the price rises he said, he didn’t know. Why? because he doesn’t look at them.

“Never have, not for years, as soon as it went over $2 it was a waste of time looking at it.”

He said no point fighting what you can’t change.

In small town Eketāhuna there is just one gas stationed, owned by the same people as the Four Square, a book store, a couple of op shops and an information centre.

It’s at least 30 minutes to the nearest grocery store.

One local said having a car was essential.

“I think people are going to have to look at car sharing, or going without a car.

“I’ll have to extra careful, probably only go into Masterton for essentials, maybe once a fortnight rather than once a week.”

Even doing that creates a difficulty, trying to pay for two weeks worth of groceries in a bid to save fuel costs, she said.

“It’s not great, it’s pretty scary.”

There’s also no public transport in Eketāhuna to alleviate the stress, something Kevin Ashwell from Woodville knows all about.

He owns Woodville Mart and said the situation was dire, the main road is closed for roadworks on top of a fuel crisis keeping people away.

“It’s cruel, it puts the price of everything up.

“I’ve never seen so many people short of money, they are now ‘do I pay the insurance?’, ‘no,I won’t because I can’t afford it’ and that’s not going to get any better with a fuel price increase.”

“We have no alternative, we have to drive.

“Everyone uses fuel, we don’t have public transport, no trains, busses, we can’t get a taxi.”

In Paihiatua, Kevin Laskey was seeing a different side of the crisis. He’s owned Laskey’s Auto and petrol station for 26 years and said the last two weeks had been very interesting.

“Record sales on some days and then not much sales the next days when the fuel prices jumps, I’ve never seen it jump 30 odd cents before in one hit.”

He said supply had been ok, but he was astonished by how differently people were purchasing.

“We have the supermarket fuel dockets, 8 cents a litre off at New World, and that’s doubled, everyone is using them if they can to save a little bit.

“People are sorta hearing that there is going to be a price increase and all of a sudden the sales goes up.”

Lucky for Laskey he also sells bike parts, which are also coming in handy.

“I just had a customer come in and buy a bikeseat to get the old bike going so he can ride out to Fonterra, so that’s going to happen potentially more and more.”

In Masterton, one man said he was just trying to keep his vehicle going, well, cause he had to.

“I put $25 in and it’s not even showing.

“I’ve gotta keep the bloody thing going, can’t do much about the situation … I’ve got to drive.”

He laughed as he said he can’t cry about it, as that wouldn’t help either.

Wellingtonian Dean Tredray was in Greytown with his 1946 Chevrolet Pick up. He said the fuel prices didn’t bother him.

“I’d be happy to pay double to stop them, to stop the Iranians.”

Tredray also had no plans of changing his habits.

“Fuel is like beer, you have to have it”

It’s not the same story for Aimee. She’s become a frequent flyer at the Foxton Waitomo trying to keep her tank as full as possible for the cheapest price.

“I’ve sort of got a plan right now, if my lever or metre goes down just one line I’ll fill it up.

“Instead of buying some snacks for my kids I have to cut down, and that really breaks my heart because I want to feed them more, that’s their joy, the food.”

She was worried what she would have to cut next if the prices continued to rise.

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Source: Radio New Zealand

The inflationary effects of higher oil prices is already being felt in the construction sector.

The industry is still licking its wounds after a lengthy downturn and while recent economic growth numbers suggest there is a gentle recovery underway in residential, commercial construction has yet to really take flight.

Apollo Projects executive director Paul Lloyd said his company has had a positive 12 months, but there’s sector-wide concern that projects in the pipeline could be put on hold. Cost increases are already weighing on firms.

“I’ve already seen, for one of the materials we buy, a 30 percent increase coming through for something that is both freighted and made from a base product of oil and and this is where it’s going to get really messy,” he said.

“Even drainage pipe is oil-based, it involves a lot of heating and production. So that’ll start to move. It’s pretty much everywhere, isn’t it?

“Even a 2 or 3 or 4 percent increase overall, that can be the margin of a project, and then all of a sudden you’ve got contractors, and there’s subcontractors, and the whole pyramid starts to topple – it doesn’t do anyone any good when that happens.”

Cost pressures a drag on an already-strained sector

Construction sector leader at advisory firm BDO, Nick Innes-Jones said head contractors are likely not as well-prepared as they might have been in the past to endure an economic shock of this magnitude.

“We’ve come up off a lower base over the last couple of years,” he said.

“It’s pretty tough and it’s going to get tougher and tougher because, the activity slows down and having come off slower years, they might not just have that balance sheet to get them through that tougher period.”

Innes-Jones said subcontractors in particular are vulnerable.

“They’re obviously getting more squeezed on margin and if the industry then also slows down, I think there’ll be many out there that will not be able to see it through, especially if the Middle East war is prolonged.”

Risk tossed around like a hot potato

“Historically, clients and lawyers – they want to take the risk away and put it onto the contractor, because that’s what we should be good at, but it gets to a point you simply can’t,” Lloyd said.

“And so it’s going to be really interesting to see how teams negotiate contracts to fairly split risk.”

Lloyd said if demand does slow or projects are put on hold, there is a risk contractors will drop their prices in an attempt to keep busy, but that benefits no one.

“You’ll put a price in for a tender today, you may not engage one of those subcontractors for six months, and while they gave you a price when you tendered, they’ll go, ‘look, it’s no longer relevant,’ and it could be 20 percent higher.”

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Source: Radio New Zealand

The minister responsible for fuel security says he has received proposals from import terminals to open up more diesel capacity, but any recommission of tanks would be a while off.

Associate Energy Minister Shane Jones said almost half of Marsden Point’s available storage was being used, and there had been a proposal to refurbish unused and empty tanks to boost diesel storage.

The tanks had been empty since the closure of the refinery in 2022, with Marsden Point now operating solely as an import and storage terminal for refined oil.

Jones said he had spoken to Rob Buchanan, the chief executive of Channel Infrastructure, which owned and operated Marsden Point.

“He said that there could be two tanks that could be repurposed, and he has sent through a proposal to us. However, because of the degradation since the closure of the refinery, it will take time,” Jones said.

“They have put forward a proposal to work, as I understand, with the Crown, to refurbish some storage tanks. Then the officials are working through, ‘do they think it’s a sensible thing to do and what it’s likely to cost the Crown and Channel if we were to work together?'”

He expected to receive that advice from officials “sooner, rather than later”.

Jones had also spoken to the chief executive of the Port of Taranaki, who had told him there could be up to three days of storage there.

“But two thirds of the potential storage is owned by Methanex, so I’m in no hurry to chase Methanex out of New Zealand,” Jones said, adding Taranaki would also need some new infrastructure.

“I think Marsden Point are confident, if they can get some regulatory relief. Taranaki said they have to build a new bund, because the regulations have changed. So look, I think that if we’re going to do this, we need to strip away the regulations without creating a public nuisance, and also arrive at a point where we can, if not share the costs, work out how soon it can be done.”

Combined, Jones estimated it would add “several days” to diesel storage capacity, with costs going towards the refurbishment and then purchasing the diesel.

Those costs, Jones expected, would be shared between the Crown and Channel.

A spokesperson for Channel Infrastructure said Channel was aware of Jones’ comments, but it did not comment on discussions with any of its customers.

“Channel has identified some very preliminary options for significantly increasing diesel storage capacity at Marsden Point,” the spokesperson said.

The spokesperson said Channel had almost 300 million litres of fuel storage in service at Marsden Point, and an additional 350 million litres of tanks that “could be converted” to provide additional fuel storage if required.

“The government’s Fuel Security Study concluded that the best way to improve New Zealand’s resilience was to increase the in-country storage of fuels that are critical to keeping our economy moving, and Channel stands ready to put all efforts into safely assisting with additional fuel resiliency measures, should we be asked to provide them.”

Fuel importers were required by law to hold 28 days’ worth of petrol, 24 days of jet fuel, and 21 days of diesel.

From 2028, the minimum requirement for diesel would increase to 28 days, if the fuel importer had more than 10 percent of the market share.

In 2024, the government stopped work on procuring 70 million litres of reserve diesel stock, saying it carried significant capital cost and Cabinet would need a robust understanding of options and their impacts before making decisions.

The fuel would have been funded through the Petroleum or Engine Fuels Monitoring Levy.

Instead, the government decided to explore other options to increase the diesel reserves from 21 days to 28 by 2028, and commissioned the Ministry of Business, Innovation, and Employment to study New Zealand’s fuel security requirements.

Under questioning from Labour’s energy spokesperson Megan Woods in the House on Tuesday, Jones said there was “no budget, no proposal that I could credibly take forward to my colleagues” on the reserve diesel stock.

New Zealand First has continued to blame Labour for the closure of the refinery in 2022, and has been attempting to tie the “degradation” of the storage capacity to the closure.

New Zealand First leader Winston Peters went as far as to suggest the refinery was “deliberately shut down, with the government’s connivance”.

In 2021, Labour had the option of providing a loan or subsidy to keep the refinery open, but then-minister Woods said there was not a strong case.

“There does not appear to be a clear case for maintaining refinery operations for fuel resilience reasons, except to address an exceptional ‘no fuel imports’ scenario,” she wrote in a 2021 Cabinet paper.

“This is an unlikely scenario, but not entirely implausible, therefore I believe the option of maintaining refinery capacity warrants an active decision by government.”

In the House, Jones accused Woods of making an “active decision” to close the refinery.

“If you close down 700 million litres of storage, 70 million is a mere drop,” he said.

Labour has repeatedly said the closure was a business decision made by its private owners, not a government decision.

“At most, you’d be talking about five days of unprocessed crude oil, in addition to whatever we have in terms of processed fuel onshore. Five days in the grand scheme of what we’re dealing with at the moment isn’t very much,” said Labour leader Chris Hipkins.

“There are certainly other things the government could have done over the last two years to increase our resilience. Marsden Point would be right at the bottom of that list.”

During Question Time, Peters asked the prime minister if all the “anxiety” around supplementary reserves would be relevant if “they hadn’t shut down Marsden Point?”

“It was a critical piece of national infrastructure and that was a decision of a previous government,” Christopher Luxon responded.

Luxon was then made to withdraw the comment, after Hipkins raised a point of order to argue the previous government had made no such decision.

On Tuesday, Woods told RNZ she was supportive of proposals for more storage space.

“Absolutely, and I would hope the government’s looking at that right now,” she said.

But she accused the government of being “short sighted” for scrapping the 70 million litre strategic reserve plans, which were to be a “worst case scenario” to ensure critical services like fire engines, ambulances, and food distribution could keep running.

That would have been in place this year, Woods said, whereas the government’s increased requirement for 28 days of diesel holdings would not come into place until 2028.

“One of the reasons the government scrapped that strategic reserve and got rid of the request for proposals that was out there, they said it was cost. It’s several million dollars to build that facility, in terms of being able to hold it, but there was up to $100 million of built-up levy sitting in the Petrol Levy fund, essentially that had built up over Covid that we were proposing to use for that,” she said.

“Instead, the government has gone for an option where the fuel companies themselves will hold this additional diesel, which will cost motorists more for diesel at the pump, and it will be two years’ delay.”

ACT leader David Seymour has previously disagreed with Jones on the economics of keeping the Marsden Point refinery open.

But he saw the merits on using more of its storage capacity.

“The reality is it would probably be a levy on the fuels themselves. But if that was to be proposed, I think we would look at it very carefully on the costs and benefits. I think the world just changed, and we can see that having some more independence is probably not a bad bit of room to have.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Industry groups and local government leaders are calling for the resurrection of a Buy Kiwi Made campaign as alarms sound over new job losses and factory closures.

McCain Foods announced on Tuesday it would close its Hastings processing plant weeks after Watties proposed cuts and closures in Hastings, Dunedin, Auckland and Christchurch.

Central Hawke’s Bay mayor Will Foley said the news came as shock, and he did not know how many people were affected.

But once factory workers and those across the supply chain were factored in, it would number in the hundreds, he said.

“If you think of all the contractors that grow the crops, harvest the crops, the trucking companies, the logistics of moving the crops from farm to factories and from there to our supermarkets, you’d be talking about hundreds and hundreds of people impacted. Specifically losing their jobs, perhaps not as many on day one, but the longer term impact we’ll be getting into the hundreds, if not a thousand across Hawke’s Bay.”

Vegetable growing had played a huge role in Hawke’s Bay, including being the home of Watties, which was founded in Hastings in 1934.

The mayor wanted to see a discussion at a national level about the closures and their causes.

“What can we do to address some of these issues and help out the businesses that are still there, because otherwise we’re just going to see this happen again and again.”

Energy and production costs and inflation would all have played a part in the decision, he said.

“A lot of companies and industries affected by Cyclone Gabrielle citied concerns back then about the cost of energy making them contemplate not rebuilding their businesses, as well as the cost of production and such high inflation across the board.”

Foley was keen to see more education and information about the importance of buying New Zealand-made, even if it meant paying a little extra.

“We’re not just losing the more expensive product, we’re losing the whole supply chain and employment and logistics and everything. We might not notice the change overnight, but we’ll notice it eventually as we lose more and more.

“Educating people around buying New Zealand-made and the benefits over and above just buying that product, what it gives to New Zealand Inc is definitely something that should be highlighted and be made more aware to the population after decisions like this,” he said.

The closure would hasten a move away from farming for some, especially those already considering retirement.

Others might consider converting to other types of farming, such as dairy, sheep and beef or apples, while others would look at subdividing for housing – though it would be better to keep productive land for food production, Foley said.

Current issues around fuel supply served as a stark reminder of supply chain vulnerabilities and food security challenges.

“It could be no different with food if similar things happen and supply chains get impacted and ships don’t arrive. We certainly need to try and preserve what we’ve got already and what we produce in this country.”

Buy NZ Made was first launched in the late 1980s with the slogan “Buy NZ Made & Keep Your Country Working”, though organised campaigns to encourage shoppers to buy local date back to the turn of last century.

The concept recieved a boost as part of the co-operation agreement between the Greens and Labour in 2005, after the Green Party negotiated $11.5 million towards a Buy Kiwi Made campaign, with former Green co-leader Rod Donald as spokesperson. After his death, Green MP Sue Bradford led the programme, which included a marketing push and increased use of New Zealand-made products in government procurement.

The National government suspended the programme in 2008 but BusinessNZ continued to run the parallel Buy NZ Made campaign.

Process Vegetables New Zealand chair David Hadfield said New Zealand consumers needed to buy locally grown produce.

“Otherwise they’re going to wake up one day and there won’t be any and then we’ll be relying on other countries to supply us and we don’t know when the next Covid or a bigger conflict will happen and the boats aren’t coming here with product on board.

“We’re learning in a pretty drastic way with fuel at the moment, aren’t we, about what happens when we have to bring it all in?”

While local products could be more expensive, the bulk of the profit was made after vegetables left the processor, he said.

“The grower is getting about 10 percent of what a packet of peas sells for.”

He wanted a closer look at supermarket margins – which differed by department – as well as the role of distribution centres.

“New Zealanders definitely need to be looking at buying New Zealand grown,” Hadfield said, and should pay close attention to labelling.

“Look at where it’s growing, not where it’s packaged, because there’s quite a bit of stuff coming into the country in bulk and then getting packaged to you,” he said.

It was impossible for New Zealanders to compete with countries where growers were subsidised or where pay and safety regulations were very low, Hadfield said.

The government also needed to investigate imported produce and whether there may be cases of dumping.

“I don’t know the government’s done anything through the Commerce Commission or anybody else to look at that.”

In early March, Watties proposed closing factories in Auckland, Dunedin and Christchurch, and shutting down processing lines at one of its Hastings factories.

The move would see 350 workers made redundant, 220 suppliers affected and the end of Wattie’s frozen vegetables, Gregg’s coffee and other household names.

Submissions on the proposal close this week.

In September, Wattie’s reduced its Hawke’s Bay peach production, cutting the contracts of some suppliers in the face of what it claimed was dumping from cheaper markets.

An investigation later found Chinese company J&G International Co. Ltd had been dumping peaches, causing “material injury to the New Zealand industry”.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand