Across the Ditch: With Australian radio FiveAA.com.au’s Peter Godfrey and EveningReport.nz’s Selwyn Manning. This week Peter and Selwyn discuss the rise and controversy surrounding Uber V Taxis + Dairy Exports & New Zealand’s current account deficit blowout + New Zealand’s Blackcaps beat India in the World Twenty-20 match and face Australia tomorrow (Friday). UBER: Yes Uber is operating in Auckland and Wellington. It has caused, in part, Auckland Airport (both domestic and international terminals) to lock-down its taxi pick up areas to taxi companies that successfully won a tender. A few weeks ago Auckland Airport Ltd also initiated a new tender bid and it is making a lot of noise that the company that wins the tender will be recognised as providing a safe, efficient and trustworthy service for travellers. It seems the move is in part designed to clear the taxi ranks of budget operators and also most likely Uber. There is no way the Airport company can stop people arranging a ride with Uber to the airport. But a quick look on the Uber site shows a fare from central Auckland out to the International terminal will cost around NZ$41.56. The budget taxi operators can do this for around $30.00 but sometimes their vehicles do not carry eftpos or credit card transaction equipment. Sometimes too the vehicles have passed their best. A ride from the Auckland CBD to the international terminal in a Auckland Co-Op Taxi will cost over $60.00, and Corporate Cabs are well above this. NZ’S ECONOMY UNDER STRAIN: New Zealand’s current account deficit ballooned out by $221 million in the December quarter to a total of $1.9 billion dollars. The deterioration of the current account deficit was caused in part by the value of exported goods falling by $554 million from September 1 to December 31. The drop was led by plummeting dairy sector returns, due significantly to the continuing collapse of global milk powder prices. The whole milk powder price dropped this week by 0.8 percent to US$1971 per tonne. Kiwi farmers need the price to be US$3000 per tonne to break even. On top of the collapse of milk powder prices, butter dropped by 2.8 percent and cheddar cheese was down 5.6 percent. With the Kiwi dollar treading water at around 66 to 67 US cents, many farmers are facing insolvency. Consequently the narrative has shifted from how to trade out of the mess, to how much is the farm worth on the open market. The collapse of the ‘white gold’ market is estimated to have driven between 20-30 percent of farmers against the wall. Politicians of the New Zealand First and Labour parties have been urging the Government to intervene. Yesterday, Fonterra, the global dairy export giant, announced the “permanent closure” of its South Island Kaikoura site . Mark Leslie, Fonterra’s Director of New Zealand Manufacturing, said: “While it is difficult for the people involved, we have a responsibility to our farmer shareholders and unit holders, and our customers to be as efficient as possible across our business, especially given the low milk price.” Beyond Milk. Import values also declined, softening a potential big hit from poor export returns. The lower than normal import total was attributed largely to lower prices paid for imported crude and petrol. Statistics New Zealand reported yesterday (Wednesday) that the annual current account balance was a deficit of $7.7 billion (3.1 percent of GDP). New Zealand has struggled with its current account deficit since the majority of the country’s banks became foreign-owned. Also, outsourcing to overseas owned providers of state-subsidised healthcare and continuing care for the elderly, has also ratcheted up the level of indebtedness the country’s public and private entities, and citizens, owe to overseas interests. A poor current account means Kiwis will continue to pay higher interest rates for foreign-sourced capital. CRICKET: NZ’S BLACK CAPS BEAT INDIA IN WORLD TWENTY-20. New Zealand clobbered India in the Cricket on Wednesday winning the 20 over match by 47 runs – NZ was 126 for 7. India was all out for 79 runs. The Blackcaps took India’s batters apart with a spin-bowling attack. After the win, NZ Cricket said the team would be rising early at 6am to travel North to the edge of the Himalayas to the hillside city of Darashalla. There they will find snow, the Dalai Lama, and our old rival Australia. It should be a great game between the Trans Tasman rivals tomorrow (Friday) at the Himachal Pradesh Cricket Association. As Peter always says, let the best team win!
Across the Ditch was Recorded Live on 17/03/16. It broadcasts live each week on Australia’s radio FiveAA.com.au and webcasts on EveningReport.nz, LiveNews.co.nz, and ForeignAffairs.co.nz.
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