Subject: 2 November, 2008 
----- WYSIWYG NEWS ------------------------------ 
Copyright, Brian Harmer.

Summer, according to the National Institute of Water and 
Atmospherics, will be warm and settled. Of course, the same 
experts predicted an average to warm spring. I was away for 
most of spring but my spies tell me it was cold and 
characterised by rain and gales. Ah well. Since our trip to 
the South Coast last weekend, there has been no good weather, 
with rain and strong winds on most days. Today, Saturday, as I 
write, rain is flying past my window, impelled by North West 
winds gusting to 120 km/h. The house is shuddering under the 
onslaught, and the flap in fume extractor over the stove is 
thrashing itself to death. Despite the weather, we needed to 
go out this morning to the local builders supply store. As 
usual, the car park was full, and the only visible concession 
to  the weather was the relocation of the usual fundraising 
sausage sizzle stall to the Eastern side of the entrance 
portico. Inside, people were cheerfully buying all manner of 
goods from Christmas lights to garden tools. I am not sure 
whether there was any evidence of the economic downturn, 
though perhaps that might have been more measurable at the 
cash registers. We were babysitting our two Hutt Valley 
grandchildren, so I took them to the children's play area in 
the store where they clambered up, over and through the 
equipment provided, until that palled. Fortunately, Mary 
completed her shopping about then. So we could return home for 
morning coffee.  
(Continuation on Sunday) Pursuant to a recent health scare, I 
have resumed some form of exercise. Today was walking along 
the Hutt River Bank. No wind to speak of, though there is a 
heavy overcast. The river is high and brown, and judging by 
the wreckage in the foliage at the edges, it was a few metres 
higher overnight. Muddy pools remain in various folds in the 
landscape, but apart from that it is a reasonable, if somewhat 
cool day. As we walked Northwards from the Ewen Bridge, we 
could hear pleasant melodies from a spool wind instrument. I 
guessed a recorder, but on our way back down the other side of 
the river a bit later, after crossing the Melling Bridge, we 
discovered a merry flautist, practicing his music in the 
shelter of the gazebo which is part of Govind Bula park 
opposite the public library and St James Church. My guess is 
that he needs a place to practice, but could not reasonably do 
it at home. His gentle music certainly enhanced the pleasure 
of our walk. This afternoon, as I bring this week's edition to 
its conclusion, the weather has changed again. A perfectly 
clear blue sky and the lightest of breezes presents a perfect 
picture. Perhaps our lone flautist conjured it up. 
 
----  
Any text above this point, and all subsequent material in 
parentheses, and concluded with the initials "BH" is the 
personal opinion of Brian Harmer as editor of this newsletter, 
or occasionally "GS" will indicate an opinion from our 
editorial assistant. In all cases they are honest expressions 
of personal opinion, and are not presented as fact.  
 
All news items (except where noted otherwise) are reproduced 
by kind permission of copyright owner, Newstalk ZB News. All 
copyright in the news items reproduced remains the property of 
The Radio Network Limited. 
Sponsorship this week is courtesy of long time reader and 
occasional correspondent, Ivan Rowe. I remember getting strong
encouragement from Ivan back when I was starting out on my 
doctoral thesis. Thanks Ivan for your support over so many 
years. 
----  
On with the News. 

Monday, 27 October 2008
~~~~~~~~~~~~~~~~~~~~~~~

FREE HEALTH CHECK UPS ON DUNNE'S AGENDA
---------------------------------------

United Future leader Peter Dunne will highlight his party's 
free annual health check up policy in Auckland tomorrow. Mr 
Dunne will be in Onehunga Mall at lunchtime with a large 
political pressure chart, showing where his party sits on the 
pressure spectrum. As he talks with people on the street, he 
will be hooked up to a big pressure kit that connects to the 
graph and shows what his political blood pressure measurement 
is. The public will be offered free blood pressure checks. 
 
(Mr Dunne is, I regret to say, my MP. He is one of the very 
factors that would raise my blood pressure. - BH)

OYSTERS AND COUNCIL REACH COMPROMISE
------------------------------------

Bay of Islands oyster farmers and the Far North District 
Council have reached a compromise over the bill for court 
costs. Twelve oyster farms in the Waikare Inlet were closed in 
2001 because of water pollution. The farmers sued the Far 
North District Council for sewerage system failures but lost 
their case and were ordered to pay the council more than 
$300,000 in court costs. Bill Guest from the group Farmers of 
New Zealand says the farmers offered $200,000 and mayor Wayne 
Brown and his council have forfeited the rest. Mr Guest says 
the next step will be to find the cause of failures and get 
the oyster farms reopened.

KEY DEFENDS PLAN TO HELP REDUNDANT WORKERS
------------------------------------------

National is responding to criticism of its soon to be revealed 
assistance programme for people caught out by the financial 
downturn. Full details of the policy will be outlined later 
this week but it will provide financial support to workers who 
lose their jobs and face problems meeting their financial 
commitments. The Greens believe the plan will be flawed and 
create inequities among beneficiaries, but National leader 
John Key says it is aimed at giving confidence to those 
temporarily unemployed to ensure they maintain their 
commitments. He says the plan reflects a compassionate 
government.

LABOUR PLANNING CHANNEL FOR PACIFIC ISLANDERS
---------------------------------------------

A new television channel is planned for Pacific Islanders. 
Labour released its Pacific Policy this afternoon and says the 
free-to-air network will be a priority for Labour. It will 
feature Pacific-focussed programmes and be a mixture of 
English and Pacific languages. Pacific Affairs Minister Winnie 
Laban says the Pacific identity is very central to New 
Zealand's identity and the channel is a hugely exciting step 
forward. The new Pacific channel could run on the TVNZ 
Freeview network, or as a free-to-air channel on Sky.

(Anyone who doubted the contribution of the Pacific Islands to 
NZ need only examine the list of names of the All Blacks for 
the last twenty years or so. Of course there's much more, but 
they are very much a part of our society. - BH)

RMA IN KEY'S SIGHTS
-------------------

National leader John Key says his party's plans for 
infrastructure spending will include measures to cut down on 
the Resource Management Act's red tape. The party's 'Building 
for a Brighter Future? infrastructure plan makes $8.6 billion 
available for new infrastructure projects over the next six 
years. Mr Key says National would spend $3.6 billion more than 
Labour over that time. He says $1.5 billion will be spent on 
broadband, $700 million on the Waikato Expressway and $500 
million on schools. "New Zealand needs better-quality 
infrastructure to strengthen our economy and to deliver New 
Zealanders and their families the jobs, quality of life, and 
financial security they deserve. "National's policy is clear. 
More capital funding balanced by more efficient approvals to 
give Kiwis better bang for their buck." Mr Key claims Labour's 
budget for new capital spending is not enough to future-proof 
New Zealand or strengthen the backbone of the economy. He says 
too much time and money is being wasted on government 
processes and the RMA. "A Labour-Green government spells 
infrastructure paralysis by analysis. Those parties are wedded 
to the bureaucratic processes of the RMA and have 
categorically ruled out the legislative reforms needed to get 
New Zealand moving again. They simply cannot deliver the step 
up in infrastructure investment that New Zealand needs." Mr 
Key says National will set a target to invest at least 40 
percent of the Superannuation Fund in New Zealand to further 
increase the pool of capital available for developing 
infrastructure. He says National's infrastructure plan will 
create jobs and growth opportunities for businesses while 
providing in the medium-term, the conditions and assets to put 
the economy on a strong growth path. Mr Key plans to announce 
more specific infrastructure projects before the election.

MORE DOCTORS UNDER LABOUR'S HEALTH POLICY
-----------------------------------------

Labour is promising to increase the number of doctors being 
trained, fight obesity and the diseases caused by tobacco and 
alcohol, and strengthen regulation of the aged care sector. 
The party has released its health policy in east Auckland. 
Leader Helen Clark told people at a Tongan community event 
that as soon as economic circumstances permit, Labour will 
look at reducing the cost of doctors' visits further, focusing 
on the over 65s and those aged between six and 17. Health 
Minister David Cunliffe said Labour will increase the number 
of training places at medical schools, creating an extra 50 
places in 2010 and a further 50 places in 2011. The policy, 
which has no costings attached, also sets out Labour's plans 
to target waiting lists, making its priority shorter waiting 
times for treatment in cardiac, cancer and orthopaedic 
services. It proposes establishing a one-stop-shop for primary 
health care in rural areas and addressing staffing issues in 
maternity care and the aged care sector. The party is also 
promising to provide free annual health checks for 
intellectually disabled people with high support needs. Labour 
says it is committed to screening and wellness programmes 
including new initiatives such as the B4 school checks for 
four year-olds, bowel cancer screening and HPV vaccination 
against causes of cervical cancer The party says it will 
strengthen work force development and regulation in the aged 
care sector and ensure that the audits of facilities are 
publicly available.

RACE FOR MAORI SEATS NOT OVER YET - HOROMIA
-------------------------------------------

Labour's Maori MPs are vowing they are not going to give up 
the Maori seats without a fight. Polls show the Maori Party 
could pick up possibly all seven of the seats, effectively 
becoming king-makers after the election. But Maori Affairs 
Minister Parekura Horomia has had enough of all the talk. He 
says Labour is committed to the Maori seats, and the Maori 
members will not be rolling over. The race for Parekura 
Horomia's own seat - Ikaroa Rawhiti - is almost neck-and-neck, 
with the latest poll showing Maori Party candidate Derek Fox 
with a slight edge.

(In fact the latest reported poll from that seat shows Mr 
Horomia being about 4% ahead.  - BH)

LABOUR GETS BACKING FROM MARITIME UNION
---------------------------------------

The union for sea and port workers believes Labour's 
employment relations policy will go a long way to help protect 
its members. Among the policy's promises, Labour wants to 
introduce new statutory minimum standards for redundancy 
compensation. Maritime Union general secretary Trevor Hanson 
says the employment outlook appears to be worsening because of 
the international economic situation. He says there will be a 
lot of workers who do not have redundancy protection, 
especially those not in unions. Mr Hanson says the union also 
supports Labour's retraining policy.

(Now there's a surprise - Not! - BH)

NATS ASSISTANCE PLAN RIDICULED BY CULLEN
----------------------------------------

Labour has slated National's plans for New Zealanders who get 
caught out by the current financial crisis. National Leader 
John Key is due to release details this week of a Government 
assistance plan for people who lose their jobs and face 
financial difficulties. He has indicated it will be targeted 
at those likely to get back into the workforce quickly. 
Finance Minister Michael Cullen says he will have to see the 
details but the announcement seems odd and he suspects it will 
be some sort of mortgage repayment under-writing arrangement. 
He says it would need an army of bureaucrats to administer.

PACIFIC ISLANDS TO BE DESERTED BY AIR NZ?
-----------------------------------------

Air New Zealand is holding the axe over services through South 
Pacific islands to the US, saying it needs bigger subsidies to 
keep them going. The Cook Islands Government is being asked to 
come up with an extra three million dollars, on top of the two 
million dollar subsidy it already provides. Routes to Los 
Angeles via Tonga and Samoa are also at risk. If the service 
to Samoa is dropped, tuna exported to the US would have to be 
shipped through Auckland, costing the country millions. Air 
New Zealand says the flights' performances have been declining 
and it is seeking the advice of Governments on whether the 
services should continue.

(This has the look and feel of blackmail. The government of 
Western Samoa has apparently taken the initiative to seek 
alternative providers. - BH)

GLOBAL CRISIS TURN INVESTORS OFF RENTAL PROPERTY
------------------------------------------------

Interest in rental properties continues to wane, according to 
the latest ASB Investor Confidence survey. The number of 
people buying them as investments has dropped almost 10 
percent since 2003. It is now sitting at 15 percent. ASB's 
Head of Investment Services, Jonathan Beale, says rentals have 
slipped into third place behind term deposits and savings 
accounts. He doubts the popularity of rental properties will 
drop much more, as they re usually seen as a long term 
investment. Term deposits now account for just over 20 percent 
of investments held -the first time they have topped the 
survey since it began eight years ago. Mr Beale believes the 
global financial crisis has spurred the change from 
traditional favourites like savings accounts and rental 
properties, because they are seen as a safe bet.

Tuesday, 28 October 2008
~~~~~~~~~~~~~~~~~~~~~~~~

ACC CHANGES WOULD CUT CAR REGISTRATION COSTS
--------------------------------------------

Labour says its planned changes to the ACC scheme would see 
car registration costs drop by $80 by next year. Helen Clark 
and ACC Minister Maryan Street have released the party's 
policy in Motueka this afternoon. They say Labour would 
introduce an immediate law change to push the full funding of 
residual claim accounts back from the planned 2014 deadline to 
2019. Ms Street says it is become increasingly clear the 2014 
date, together with the increased cost of claims, will place 
too high a burden on the public. The result will mean lower 
payments on some ACC levies, including a drop by an average 
$80 for the cost of registering a vehicle. That is due to come 
into effect by the middle of next year.

NO PAROLE FOR NON-WORKING INMATES - KEY
---------------------------------------

National is vowing to have parole denied to prison inmates who 
refuse work or training programmes. Leader John Key says 
currently one in 20 prisoners capable of work refuse to do it. 
He believes they should not be eligible for parole. He does 
not believe the move would lead to a boost of inmates in the 
prison system and is confident most inmates would ultimately 
end up in work. Mr Key says National would increase the number 
of inmates in industry skill programs from 2,500 to 3,500 at a 
cost of around $7 million. He also wants to double the current 
number of prisoners on drug and alcohol rehabilitation 
programmes, which would cost $3.4 million.

NEW MOBILE COMPANY ENTERS MARKET
--------------------------------

A new mobile company is promising to undercut Telecom and 
Vodafone. In an unconventional launch, the company called 
Black and White staged a fake protest outside Telecom's 
headquarters in Auckland. A handful of student protestors 
holding up signs saying "no more long term contracts" yelled 
and cursed Telecom for having expensive prices. Telecom staff 
looked out their office windows expressionless as Black and 
White's CEO promised cellphone users better deals The company 
is offering no term contracts with international roaming in 
more than 120 countries.

TELECOM TO DITCH FLY BUYS
-------------------------

Telecom will finish its relationship with rewards programme 
Fly Buys on December 31. Telecom general manager of marketing 
David Craig says the decision is based on a range of factors. 
He says it is not a reflection on the Fly Buys programme. Mr 
Craig says Telecom will focus its investment in bundles of 
calling access and broadband services. He says Telecom is 
spending more money in its new services than it was on Fly 
Buys.

POLICE BACK REGISTERING PREPAY PHONE USERS
------------------------------------------

The days of criminals hiding behind the anonymity of prepaid 
cell phones could be numbered. Police are supporting a 
proposal for all prepaid customers to be registered on a 
national database in a bid to trace criminal activity. 
Detective Senior Sergeant Darrin Thomson says the criminal use 
of prepaid cellphones is on the rise and a register of 
cellphone users would make life much easier for police. He 
says if a national database base helps police catch more 
offenders, then it would be good for the community. Mr Thomson 
says creating a database of cellphone users is no different to 
being on the White Pages or Yellow Pages. 
 
(Being in the white or yellow pages is not yet compulsory, as 
far as I know. - BH)

AXA FREEZES MORTGAGE FUNDS
--------------------------

AXA has frozen three mortgage funds worth $225 million. The 
company has suspended withdrawals from its Mortgage 
Distribution Fund, Mortgage Investment Fund and AXA Investment 
Portfolio. Interest.co.nz managing director Bernard Hickey 
says it is due to uncertainty around the Government's deposit 
guarantee scheme, which does not cover managed funds. He says 
there is fear people will take everything out of mortgage 
funds and invest in guaranteed banks or finance companies.

CONTACT "REAPING WHAT IT SOWED"
-------------------------------

An advocate for shareholders says the consequences of Contact 
Energy's actions should send a warning to other companies. 
Investment banking company Forsyth Barr has downgraded the 
company's share value and is predicting it will lose 30,000 
customers and $80 million by Christmas after the decision to 
raise prices by 10 percent and the failed attempt to almost 
double directors' fees. Bruce Sheppard, chairman of the 
Shareholders' Association says it was not difficult for 
shareholders to join the dots between the fee increase and 
higher power prices. He says it is a lesson in what a company 
should not do. "They (Contact Energy) lost 5,000 customers on 
Friday, being the day after the meeting. Now that could be 
either the beginning of the run or it could be the spike of 
anger." Mr Sheppard says the association warned there would be 
a negative backlash and believes Contact is reaping what it 
sowed. He says when times are tough, people are more likely to 
vote with their feet. 
 
(Regrettably the attempt to raise directors fees did not fail. 
It was passed. For now, under the harsh glare of intense 
public scrutiny the company have chosen not to implement it, 
but with a clear legal mandate, are free to do so at any time 
in the future with no requirement to tell anyone. I predict it 
will get implemented by stealth. - BH)

EMISSIONS SCHEME FIRES UP LEADERS' DEBATE
-----------------------------------------

The televised debate for the leaders of the minor parties is 
being described as an interesting exercise in how politicians 
may or may not work together. The leaders of the Greens, New 
Zealand First, Act, United Future and the Progressive Party 
lined up for the discussion on TVNZ last night. Political 
commentator Richard Griffin says Act leader Rodney Hide seemed 
to be largely out of step with the others when it came to 
discussions on the economy. He says the other leaders believed 
the ideas Mr Hide was putting forward to fix the financial 
crisis would not work. During the debate on the emissions 
trading scheme, Act and New Zealand First locked horns with Mr 
Hide demanding the scheme, which passed into law just a few 
weeks ago, be abolished. New Zealand First leader Winston 
Peters argued the country will pay a hefty price if it does 
not meet its international obligations. "If we get rid of the 
emissions trading scheme we'll be out of Australia's market, 
we'll be out of the EU, we'll be out of Japan. This country 
will be in a far worse crisis than we currently are." But Mr 
Hide said the economy will suffer anyway as companies move 
offshore to escape additional costs imposed by the emissions 
scheme.

Wednesday, 29 October 2008
~~~~~~~~~~~~~~~~~~~~~~~~~~

PLAN TO WIDEN TUNNELS FOR FREIGHT TRAINS
----------------------------------------

Prime Minister Helen Clark has announced a plan to enlarge 
tunnels on railway lines north of Wellington to allow more 
rail freight in and out of the capital. Miss Clark says the 
project could be brought forward under Labour's economic 
stimulus package and much of the widening would take place on 
the Kapiti Coast between Paekakariki and Pukerua Bay. The 
tunnels are currently too small for some freight containers, 
meaning they are having to be removed at Palmerston North and 
driven into Wellington by truck. Miss Clark says the project 
will cost around $150 million and will improve journey times, 
reliability and capacity for freight trains in the North 
Island.

FARMERS WANT ACTION ON WATER
----------------------------

Federated Farmers wants all political parties to focus far 
more on the productive sector. President Don Nicolson says 
several political leaders who took part in this week's debate 
on TV One said that in the current international financial 
crisis, the government should spend more money on 
infrastructure as a way to stimulate the economy. But Mr 
Nicolson wants to see that spending on dams rather than cycle 
lanes. Mr Nicolson says water grows grass and grass produces 
food which can be sold to pay the nation's bills. He says if 
New Zealand's enormous water resources were structured to 
capture water in the right place at the right time, farmers 
would be able to convert more grass into food and fibre with 
the result of more export receipts. Mr Nicolson says while 
building new houses, classrooms and cycle lanes may be helpful 
for some, it is not going to increase exports to set up the 
country for greater success. He says storing water now as part 
of the response to the financial crisis will reduce risk for 
at least the first half of this century.

FED SETS UP CURRENCY SWAP ARRANGEMENT
-------------------------------------

The US Federal Reserve and New Zealand Reserve Bank have set 
up a temporary reciprocal currency arrangement. The swap line 
aims to address ongoing elevated pressures in US dollar short-
term funding markets by providing US dollar liquidity to New 
Zealand markets in amounts of up to $US15 billion in exchange 
for New Zealand currency. The reciprocal currency arrangement 
has been authorized through to April 30, next year. Reserve 
Bank head of communications Mike Hannah says while there is no 
need for it right now, it is another tool with which banks can 
use to access cash if markets become dysfunctional. The Fed 
has similar arrangements with other central banks including 
Australia's.

NZ'S TRADE DEFICIT RISES
------------------------

New Zealand's overseas trade deficit climbed to $1.18 billion 
in September. Statistics New Zealand figures show it is the 
biggest monthly deficit since November 2005. For the year to 
September, the deficit is $5 billion, or 11.9 percent of 
exports. The value of imports rose by 24.1 percent or $845 
million to $4.4 billion, out striping the $3.2 billion of 
exports. The largest increase was in petroleum and products 
which increased 35.3 percent of $162 million to $522 million. 
The largest contributor to the category was diesel. Fertiliser 
imports also jumped 293.7 percent to $130 million. The figures 
also showed that the New Zealand dollar fell 2.5 percent in 
September compared with the previous month.

ACT WANTS TO REPLACE DHBS WITH COMMITTEES
-----------------------------------------

ACT wants the nation's district health boards disbanded and 
replaced with smaller committees in each region. MP Heather 
Roy says it is a farce to have 21 DHBs replicating services 
nationwide. She says they are elected under a phoney 
democratic process, where their only job is to implement the 
Government's health policy. ACT would cut in the number of 
managers working at hospitals and return the General Medical 
Subsidy, whereby doctors are paid a fee for service. There 
would also be a one-off $500 million payment to clear the 
waiting lists.

Thursday, 30 October 2008
~~~~~~~~~~~~~~~~~~~~~~~~~

LABOUR UNVEILS REDUNDANCY ALLOWANCE
-----------------------------------

Labour says it will give workers who are made redundant during 
the recession a job search allowance for up to 13 weeks. 
Unemployment is forecast to rise as the international 
financial crisis hits home, and both major parties are 
planning similar policies to help workers. Labour says people 
who are made redundant after at least five years in the 
workforce will receive a weekly allowance. The amount will be 
similar to the unemployment benefit. It will not be available 
to people who are unemployed for reasons other than being made 
redundant. Labour estimates the policy will cost no more than 
$50 million a year. National is due to release its job 
allowance policy tomorrow.

KIWIS BECOME "JUSTIFIERS" AS ECONOMY BITES
------------------------------------------

In the face of recession, New Zealanders are justifying, 
Britons are crash dieting and Aussies have their heads stuck 
in the sand. Advertising company M&C Saatchi has studied 
attitudes to recession across New Zealand, Australia and UK 
and identified eight consumer types. CEO Nick Baylis says the 
biggest group in New Zealand is justifiers, who want to spend 
but need a good reason first. He says the justifiers are 
followed closely by scrimpers, who want the same lifestyle at 
a lower price. Mr Baylis says Australia has a lot of ostriches 
with a "head in the sand, I don't care" approach. He says the 
UK's biggest group is crash dieters - people who are taking 
the downturn seriously, bargain-hunting and cutting costs. Mr 
Baylis says while 64 percent of Britons and 36 percent of 
Australians are feeling pessimistic about recession, only 25 
percent of New Zealanders are. He says traditionally New 
Zealanders believe they are quite insulated and protected from 
the world given the nation's geography and self-sufficiency.

PHARMAC TO BE MORE OPEN ABOUT DECISIONS
---------------------------------------

More information about how Pharmac makes funding decisions 
will be available to the public from now on. The committee 
which makes recommendations to the drug-buying agency about 
which medicines to fund has made changes to its operations 
following an internal review. Chief executive Matthew Brougham 
says more information on pharmaceutical funding applications 
and the minutes of subcommittee meetings will be published. He 
says it should give the public and stakeholders more 
confidence in the committee's operations and Pharmac's 
decisions.

(More confidence? First you better get some. Any organization 
that screws down public access to medications on the grounds 
of cost but then announces annually underspent budgets is 
unlikely to  win a lot of friends outside of treasury. - BH)

GREEN HEALTH POLICY FOCUSES ON PREVENTION
-----------------------------------------

The Green Party is pledging to move the focus on health 
spending to prevention, rather than treatment. The party has 
launched its preventive health strategy at Wellington 
Hospital. It is promising to introduce a levy on soft drinks, 
insulate all cold and damp homes in the country and introduce 
free wellness checks for all New Zealanders. It would also get 
rid of ads for unhealthy food before 8.30pm and have gardening 
and cooking taught in all primary schools. Green Party health 
spokeswoman Sue Kedgley says there needs to be a fundamental 
shift to focus on the root causes of illness, like poor diets 
and poverty.

(I suppose that might make sense if indeed there were any 
excessive focus on cures. The self righteousness of some of 
the Greens' policies nauseates me - BH)

TOUGH ECONOMIC TIMES SET TO THAW
--------------------------------

The ASB's quarterly economic forecast suggests there is light 
at the end of the economic tunnel. Chief economist Nick 
Tuffley says during the last quarter, the events overseas took 
everyone by surprise, dramatically snowballing and culminating 
in large falls in equity markets and the freezing up of credit 
markets in the US and Europe. He says while the markets have 
calmed to some extent, volatility will remain a fact of life. 
Mr Tuffley says governments have responded swiftly to the 
chain of events with US and European governments and their 
central banks developing comprehensive rescue packages to 
stimulate credit markets and restore confidence. "The 
commitment from the governments involved has demonstrated that 
they have the willpower to do whatever is necessary to restore 
order.? But he says it is likely to be some time before 
markets start to function entirely normally and there will 
continue to be vulnerabilities. Mr Tuffley says New Zealand 
has weathered the storm better than many other countries, but 
many have still felt the pinch. He says one consequence is 
that global credit will be more difficult to obtain and lower 
consumer demand through the weaker US and European markets 
will flow through to lower demand for New Zealand's exports. 
"Although New Zealand cannot completely escape these global 
impacts, we have some buffers to help absorb the impact. The 
New Zealand dollar lost considerable ground this year, 
providing insulation against weaker global demand." But Mr 
Tuffley says recent tax cuts, interest rates drops and falling 
oil prices also set the scene for a better new year. "Bit by 
bit we will have more money in our pockets and the dollar will 
go slightly further than it has been recently." Mr Tuffley 
says it will be a very slow recovery with many challenges 
ahead on the global front that have not yet emerged. He says 
that key to the recovery will be managing cash flows and 
business relationships. He says it will also be a good 
opportunity to look at personal financial affairs and examine 
what can be done to come out on the other side fitter and 
stronger.

Friday, 31 October 2008
~~~~~~~~~~~~~~~~~~~~~~~

CHANGE IN CHILD RESTRAINT LAW MOOTED
------------------------------------

The Government is being urged to amend the child restraint 
law, which is being described as inadequate, out of date and 
unsafe. Drivers are required to ensure children under-five are 
properly restrained in an approved child restraint when 
travelling in a vehicle. Paediatric Society president Rosemary 
Marks says children older than five only need to use a seat 
belt or restraint if one is available. She says while 
seatbelts offer some protection in the event of a crash, they 
are designed to fit the anatomical structure of an adult. Dr 
Marks says child car restraints and seat belts are essential 
for children.

NATIONAL OUTLINES REDUNDANCY POLICY
-----------------------------------

Workers made redundant will under a National government get an 
accommodation allowance of $100 a week and a $60 boost to 
their Working for Families tax credits. National has unveiled 
its answer to Labour's plans to help out workers who lose 
their jobs because of the global recession. National's offer 
will run for four months and is slightly more generous than 
Labour's, which allows workers to go on the unemployment 
benefit immediately for up to 13 weeks. To qualify for 
National's package, workers will have had to have been in the 
same job for six months.

VECTOR & POWERCO ORDERED TO DROP GAS CHARGES
--------------------------------------------

Vector and Powerco have been ordered by the Commerce 
Commission to further reduce their gas distribution charges. 
The commission is accusing them of "earning significant excess 
profits". Powerco has been ordered to reduce its price by 11.1 
percent and Vector by 3.7 percent. The cuts are on top of a 9 
percent reduction imposed on Powerco and 9.5 percent for 
Vector ordered by the commission in October 2005. The 
commission says it is concerned about the potential for abuse 
of market power by suppliers of monopoly services where 
competition is limited.

SURVEY SHOWS BUSINESS CONFIDENCE PLUNGE
---------------------------------------

Business confidence plunged in October to record its largest-
ever one month fall. The National Bank's Business Outlook 
survey shows a net 42 percent of respondents expect business 
conditions to deteriorate over the coming year. There has been 
a 44 point turnaround from September. Every sector is gloomy 
about the future with retailing recording the biggest drop in 
business confidence, down 50 points, Construction -33, 
manufacturing -31, agriculture -30 and services down 55 
points. Firms' own activity expectations fell from plus 17 to 
minus 11, the second lowest on record (the all time low is 
minus 19 in April 1988) and the largest intra-month decline. 
Chief economist Cameron Bagrie says a growing number of 
employers intend to have fewer staff with employment 
intentions dropping to an historical low (a net 21 percent of 
respondents expect fewer staff, down 15 points). He says 
investment intentions are also at an historic low at minus 13 
and profit expectations fell to a net minus 32 percent. Export 
intentions went from plus 29 to plus 11. The survey says 
policymakers are working hard to stabilise the economic 
environment and there have been unscheduled coordinated 
interest rate cuts, liquidity injections, government 
guarantees and bailouts. Mr Bagrie says such stabilisation is 
critical. "Credit ? the creation, facilitation, circulation - 
is the life-blood of the global economy. "None can be blamed 
for not knowing what to make of it all, or what to do next. A 
large chunk of the hand-wringing in this month's survey is due 
to uncertainty itself, which brings no good to anyone. Facing 
exceptional times we should hardly be surprised to see 
exceptional movements in confidence." Mr Bagrie says the 
figures unfortunately suggest the New Zealand economy over the 
next 12 months will head backwards.


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